As filed with the Securities and Exchange Commission on August 31, 2000.
File No. 33-24041
File No. 811-5646
FORM N-1A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. __
Post-Effective Amendment No. 15 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
Amendment No. 19
(Check appropriate box or boxes.)
NEW CENTURY PORTFOLIOS
Exact name of Registrant as specified in Charter)
20 William Street, Suite 330, Wellesley, MA 02481-4102
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: (781) 239-0445
Ellen M. Bruno, Secretary
c/o Weston Financial
20 William Street, Suite 330
Wellesley, MA 02481-4102
(Name and Address of Agent for Service)
Please send copies of all communications to:
Steven M. Felsenstein, Esq., c/o Greenberg, Traurig, LLP
2050 One Commerce Square, 2005 Market Street
Philadelphia, PA 19103
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):
/_/ immediately upon filing pursuant to paragraph (b).
/_/ on (date) pursuant to paragraph (b).
/_/ 60 days after filing pursuant to paragraph (a)(1).
/_/ on (date) pursuant to paragraph (a)(1).
/X/ 75 days after filing pursuant to paragraph (a)(2).
/_/ on (date) pursuant to paragraph (a) (2) of Rule 485.
If appropriate, check the following box:
/__/ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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NEW CENTURY PORTFOLIOS
Prospectus dated November ____, 2000
Each Portfolio has a specific investment objective. There is no assurance the
objectives will be achieved.
NEW CENTURY CAPITAL PORTFOLIO. The investment objective of the Capital Portfolio
is to provide capital growth, with a secondary objective to provide income,
while managing risk. The Portfolio seeks to achieve these objectives by
investing primarily in shares of registered investment companies that emphasize
investments in equities (domestic and foreign).
NEW CENTURY BALANCED PORTFOLIO. The investment objective of the Balanced
Portfolio is to provide income, with a secondary objective to provide capital
growth, while managing risk. The Portfolio seeks to achieve these objectives by
investing primarily in shares of registered investment companies that emphasize
investments in equities (domestic and foreign), and fixed income securities
(domestic and foreign).
NEW CENTURY AGGRESSIVE PORTFOLIO. The investment objective of the Aggressive
Portfolio is to provide capital growth, without regard to current income, while
managing risk. The Portfolio seeks to achieve the objective by investing
primarily in shares of registered investment companies that emphasize
investments in equities (domestic and foreign).
NEW CENTURY INTERNATIONAL PORTFOLIO. The investment objective of the
International Portfolio is to provide capital growth, with a secondary objective
to provide income, while managing risk. The Portfolio seeks to achieve these
objectives by investing primarily in shares of registered investment companies
that emphasize investments in equities and fixed income securities (foreign,
worldwide, emerging markets and domestic).
[LOGO]
NEW CENTURY PORTFOLIOS
The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
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TABLE OF CONTENTS
Your Guide to the Prospectus............................................ i
THE PORTFOLIOS
An Introduction to Funds of Funds....................................... 1
The Objectives, Principal Investments and Policies of the Portfolios
New Century Capital Portfolio........................................ 1
New Century Balanced Portfolio....................................... 1
New Century Aggressive Portfolio..................................... 2
New Century International Portfolio.................................. 2
Other Investment Strategies of the Portfolios........................... 3
The Investment Selection Process Used by the Portfolios................. 8
The Principal Risks of Investing in the Portfolios......................10
Performance History.....................................................13
Expenses................................................................15
WHO MANAGES THE PORTFOLIOS
The Investment Advisor..................................................17
The Portfolio Manager...................................................17
HOW TO BUY AND SELL SHARES
Pricing of Portfolio Shares.............................................18
Instructions For Opening and Adding to an Account.......................18
Telephone and Wire Transactions.........................................20
Additional Purchase Information.........................................20
Instructions For Selling Portfolio Shares...............................21
Additional Redemption Information.......................................22
How to Exchange Shares..................................................24
Retirement Plan Services................................................26
Automatic Services for Portfolio Investors..............................26
Shareholder Communications..............................................27
Dividends and Distributions.............................................27
Taxes...................................................................27
FINANCIAL HIGHLIGHTS.......................................................29
NEW CENTURY PORTFOLIOS.....................................................32
WHERE TO GO FOR MORE INFORMATION
Annual And Semiannual Reports...........................................33
Statement of Additional Information.....................................33
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YOUR GUIDE TO THE PROSPECTUS
This Prospectus will help you decide whether investing in the New Century
Portfolios is appropriate for you. The New Century Portfolios is a family of
funds. There are presently four portfolios available for investment: the New
Century Capital Portfolio ("Capital Portfolio"), the New Century Balanced
Portfolio ("Balanced Portfolio"), the New Century Aggressive Portfolio
("Aggressive Portfolio") and the New Century International Portfolio
("International Portfolio"). The investment advisor for each Portfolio is Weston
Financial Group, Inc., (The "Advisor").
We divided the Prospectus into four sections to make it easy for you to find the
information you need.
The first section, "The Portfolios", contains a discussion of the objectives,
principal risks, performance history and fees of each Portfolio. In particular,
this section sets forth four important facts about each Portfolio:
The investment goal of each Portfolio,
The principal investment policies of each Portfolio,
The investment selection process used by each Portfolio, and
The principal risks associated with each Portfolio.
The remaining sections of the Prospectus - Who Manages the Portfolios, How to
Buy and Sell Shares and Financial Highlights - provide detailed information
regarding the management of the Portfolios, the services and privileges
available to the Portfolios' shareholders, how shares are priced, how to buy and
sell shares, and financial information.
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THE PORTFOLIOS
An Introduction to Funds of Funds
New Century Portfolios is a family of funds that invest in other investment
companies. With one purchase, an investor can invest in an actively managed
Portfolio of investment companies that are not limited to any one family of
funds. Each Portfolio's objective, and its policy to concentrate primarily in
shares of other registered investment companies, cannot be changed without
approval by the shareholders of the Portfolio.
The Objectives, Principal Investments and Policies of the Portfolios
New Century Capital Portfolio
Investment Objective. The investment objective of the Portfolio is to provide
capital growth, with a secondary objective to provide income, while managing
risk.
Investment Strategies. The New Century Capital Portfolio seeks to achieve its
investment objective by investing primarily in shares of registered investment
companies that emphasize investments in equities (domestic and foreign).
The Portfolio will diversify its equity investments by investing primarily in
investment companies that concentrate in different segments of the equity
markets. For example, the Portfolio may be invested in investment companies that
emphasize growth, growth and income, equity income, small-capitalization,
aggressive, and foreign equities.
New Century Balanced Portfolio
Investment Objective. The investment objective of the Portfolio is to provide
income, with a secondary objective to provide capital growth, while managing
risk.
Investment Strategies. The New Century Balanced Portfolio seeks to achieve its
investment objective by investing primarily in shares of registered investment
companies that emphasize investments in equities (domestic and foreign) and
fixed income securities (domestic and foreign).
The Portfolio will use a variety of investment techniques designed to generate
dividends (including dividends of funds in which we invest that are derived from
interest), interest, and other income. The Portfolio will diversify its equity
and fixed income investments by investing primarily in investment companies that
concentrate in different segments of the equity markets and investment companies
that concentrate in different segments of the fixed income markets. For example,
the portion of the Portfolio that is invested in equities may be invested in
investment companies that emphasize growth, growth and income, equity income,
small-capitalization and foreign equities. The portion of the
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Portfolio that is invested in fixed income securities may be invested in
investment companies that emphasize domestic, high yield and foreign fixed
income securities.
New Century Aggressive Portfolio
Investment Objective. The investment objective of the Portfolio is to provide
capital growth, without regard to current income, while managing risk.
Investment Strategies. The New Century Aggressive Portfolio seeks to achieve its
investment objective by investing primarily in shares of registered investment
companies that emphasize investments in equities (domestic and foreign) or other
securities that are selected by those investment companies to achieve growth.
The Portfolio will select for its portfolio investment companies which seek to
achieve above-average growth through investment in equity securities of
companies expected to appreciate as a result of growing or strong earnings or
the growth or advancement of the company's business, products, etc. For example,
the portion of the Portfolio that is invested in equities may be invested in
investment companies that emphasize capital appreciation, aggressive growth,
growth, growth and income, equity income, small-capitalization,
medium-capitalization and foreign equities. The Portfolio may also invest in an
investment company with a portfolio of debt securities.
New Century International Portfolio
Investment Objective. The investment objective of the Portfolio is to provide
capital growth, with a secondary objective to provide income, while managing
risk.
Investment Strategies. The New Century International Portfolio seeks to achieve
its primary investment objective by investing in shares of registered investment
companies that emphasize investments in equities, but with a focus on securities
in foreign, worldwide, and emerging markets, and with less emphasis on
investments in domestic issuers.
The Portfolio will select investment companies that emphasize investment in
securities of issuers that are located outside the U.S., or which derive a
significant portion of their business or profits outside the U.S. The Portfolio
will select investment companies that invest in companies that may benefit from
growing markets, new products, increasing market share, growth of dividends,
interest, or other income. In selecting such investment companies, the Portfolio
may consider the opportunity for such an investment company to produce current
income through its investments.
The Portfolio will diversify its equity investments by investing primarily in
investment companies that concentrate in different segments of the foreign and
domestic equity markets. For example, the portion of the Portfolio that is
invested in equities may be invested in investment companies that emphasize
growth, growth and income, equity income, small-capitalization and aggressive
equities.
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Other Investment Strategies of the Portfolios
The Advisor may invest a portion of each Portfolio's assets in those investment
companies that use different versions of so-called defensive strategies to
minimize risk. These defensive strategies may include the purchase of low
volatility stocks, a combination of stocks and bonds or convertible bonds, money
market funds, cash and cash equivalents, as well as high dividend paying stocks.
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.
In addition, each 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 that invest
in foreign stocks and bonds, real estate and other tangible assets, as well as
investment companies that concentrate their assets in one segment of the
equities market.
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 investment companies does not eliminate investment risk. When the
Advisor has identified a significant upward trend in a particular market sector,
each Portfolio retains the right to invest in investment companies which
concentrate in that particular market 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.
Currently, the law limits the amount of the investment of New Century
Portfolios' assets in any investment company to 3% of total asset value of any
such company. 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 New
Century Portfolios 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 each Portfolio's assets. (The underlying investment company may be
allowed to delay redemption of its shares held by an investment company, such as
New Century Portfolios, 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 by the 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 % 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, New Century Portfolios' ability to invest
is restricted. In that case, the Portfolios could be forced to select
alternative, and perhaps less preferable, investments. This restriction applies
to New Century Portfolios 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 may 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 will 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.
Underlying Funds. The underlying funds in which the Portfolios invest reflect a
broad spectrum of investment opportunities including equities, fixed income,
domestic, foreign and emerging markets. The funds may invest in various
obligations and employ various investment techniques. The following describes
some of the most common of such obligations and techniques.
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Industry Concentration. An underlying fund may concentrate its investments
within one industry. Because investments within a single industry would all be
affected by developments within that industry, a fund which concentrates in an
industry is subject to greater risk than a fund which invests in a broader range
of securities. Also, the value of the shares of such an underlying fund may be
subject to greater market fluctuation than an investment in a more diversified
fund.
Illiquid And Restricted Securities. An underlying fund may invest up to 15% of
its net assets in illiquid securities for which there is no readily available
market. Illiquid securities may include restricted securities the disposition of
which would be subject to legal restrictions. During the time it takes to
dispose of illiquid securities, 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 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 such information may
be less reliable. Foreign securities are subject to heightened political, social
and economic risks, including the possibility of expropriation, nationalization,
confiscation, confiscatory taxation, exchange controls or other foreign
governmental restrictions. All of these risks are heightened for investments in
emerging markets.
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. Although such contracts tend to minimize the risk of loss due to a
change in the value of the subject currency, they tend to limit any potential
gain which might result should the value of such currency change favorably
during the contract period.
Repurchase Agreements. Like the Portfolios, underlying funds, particularly money
market mutual funds, may enter into repurchase agreements. If the seller should
default on its obligation to repurchase the securities, the underlying fund may
experience delays 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.
Loans Of Portfolio Securities. An underlying fund may lend its portfolio
securities equal in value up to one-third of its total assets. The loan is
secured continuously; however, 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 will incur a loss as a result of the short
sale if the price of the security increases
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between the date of the short sale and the date on which the fund replaces the
borrowed security. The fund may be required to pay a premium, dividend or
interest.
Risk Factors Regarding Options, Futures And Options On Futures. Successful use
by an underlying fund of options on stock or bond indices, financial and
currency futures contracts and related options, and currency options will be
subject to the investment manager's ability to predict correctly movements in
the direction of the securities and currency markets generally or of a
particular segment. If a fund's investment manager is not successful in
employing such instruments in managing a fund's investments, the fund's
performance will be worse than if it did not employ such strategies. In
addition, a fund will pay commissions and other costs in connection with such
investments, which may increase the fund's expenses and reduce the return. In
writing options on futures, a fund's loss is potentially unlimited and may
exceed the amount of the premium received.
Certain derivative positions may be closed out only on an exchange which
provides a secondary market. There can be no assurance that a liquid secondary
market will exist for any particular option, futures contract or option thereon
at any specific time. Thus, it may not be possible to close such a position and
this could have an adverse impact on a fund. When trading options on foreign
exchanges or in the OTC market many of the protections afforded to exchange
participants will not be available and a secondary market may not exist.
Leverage Through Borrowing. An underlying fund may borrow to increase its
holdings of portfolio securities. 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%, even if disadvantageous. 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
and fees which may exceed the interest and gains, if any, received from the
securities purchased with borrowed funds.
Money Market Securities. Each Portfolio may invest limited amounts of uninvested
cash, generally aggregating less than 1% of assets in money market securities.
Money market securities include marketable securities issued or guaranteed as to
principal and interest by the government of the United States or by its agencies
or instrumentalities and repurchase agreements (secured by United States
Treasury or agency obligations).
The cash 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.
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
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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.
Investments in Individual Securities. 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. The Advisor will not invest in
individual securities without prior approval by the Board of Trustees. While it
is not currently the intent of the Portfolios, each Portfolio also retains the
right, when the Advisor deems appropriate, to invest in investment grade fixed
income securities.
Portfolio Turnover. Each Portfolio presently estimates that its annualized
portfolio turnover rate generally will not exceed 200%. High portfolio turnover
might adversely affect a Portfolio's performance due to additional transaction
costs (such as brokerage commissions or sales charges) and adverse tax effects.
(See "Taxes".)
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The Investment Selection Process Used by the Portfolios
Each New Century Portfolio is diversified among various asset categories, as
follows:
Capital Balanced Aggressive International
Portfolio Portfolio Portfolio Portfolio
EQUITY:
Growth X X X X
Growth and Income X X X X
Small Company X X X X
Aggressive X X X
Foreign Equity X X X X
FIXED INCOME:
Government Treasury Bonds X
General Corporate Bonds X
High Yield Bonds X
Worldwide Bonds X X
The Advisor prescribes ranges for the level of investment that must be
maintained within each asset category and from time to time may reset such
ranges. The ultimate exposure within the range for each asset category is
determined by a number of macro economic factors and the relative performance of
each category. For example, a category that is performing more strongly will be
overweighted, and a category that is underperforming will be underweighted. The
relative performance of the categories and the weighting to each category is
monitored continually and is adjusted periodically to maximize the Portfolio's
risk-adjusted performance.
Once the ultimate exposure within the range for each asset category is
determined, the universe of all retail and institutional mutual funds is
reviewed to select those mutual funds, within the appropriate category, that
exhibit superior performance, consistency of investment style, acceptable levels
of risk, and management tenure. The Advisor
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manages the actual mutual funds that are held by the Portfolios by using
continual screening and comparison programs to maximize return at an acceptable
level of risk.
Trend Analysis. The Advisor will monitor and respond to changing economic and
market conditions and then, if necessary, reposition the assets of each
Portfolio. The Advisor uses a number of techniques to make investment decisions,
one of which is trend analysis. Trends are analyzed by using a variety of
technical and fundamental indicators, such as the direction of interest rates,
economic growth and various moving averages. The Advisor manages risk through
diversification and asset allocation, and by monitoring activities of underlying
funds in which each Portfolio invests.
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The Principal Risks of Investing in the Portfolios
Risks in General. Domestic and foreign economic growth and market conditions,
interest rate levels and political events are among the factors affecting the
securities markets of the Portfolios' investments. There is a risk the Advisor
will not accurately respond to the direction of these and other factors and, as
a result, the Advisor's investment decisions may not accomplish what they were
intended to achieve. You could lose money investing in the Portfolios. You
should consider your own investment goals, time horizon and risk tolerance
before investing in the Portfolios. You should also consider the following
factors before investing in the Portfolios:
Investment Companies. The Portfolios concentrate (invests more than 25% and up
to 100% of the value of its assets) in the shares of registered open-end and
closed-end investment companies. Thus, each Portfolio is affected by the
performance of those companies. Investing in investment companies does not
eliminate investment risk. Loss of money is a risk of investing in the
Portfolios. (See "Investments in Investment Companies and the Investment Company
Industry" and "Underlying Funds.")
You should recognize that you may invest directly in mutual funds. By investing
in mutual funds indirectly through the Portfolios, you will bear both your
proportionate share of the expenses of the Portfolios (including operating costs
and investment advisory and administrative fees) and similar expenses of the
underlying funds. In addition, you will bear your proportionate share of
expenses related to the distribution of the Portfolio's shares and you also may
indirectly bear expenses paid by an underlying fund for the distribution of its
shares. Each Portfolio has the right to invest in investment companies which
charge a "sales load" and other sales charges. Each Portfolio will seek to
minimize such charges, but they can reduce the Portfolio's investment results.
(See "Investments in Investment Companies and the Investment Company Industry.")
Industry Concentration. Each Portfolio may invest in investment companies which
concentrate in a particular industry. These companies tend to have greater
fluctuation in value than other investment companies. (See "Underlying Funds.")
Fixed Income Investing (Balanced Portfolio).
Credit Risk. The Portfolio could lose money if the issuer of a fixed income
security cannot meet its financial obligations or goes bankrupt.
Interest Rate Risk. The value of the Portfolio's investments in fixed income
securities may fall when interest rates rise.
High-Yield Securities. High-yield securities, also referred to as "junk bonds,"
are considered to be more speculative than higher quality securities. They are
more susceptible to credit risk than investment-grade securities. This is
especially true during periods of economic uncertainty or during economic
downturns. The value of lower quality securities is subject to greater
volatility and is generally more dependent on the
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ability of the issuer to meet interest and principal payments than is the case
for higher quality securities. Issuers of high-yield securities may not be as
strong financially as those issuing bonds with higher credit ratings.
Market Capitalization (Aggressive Portfolio). The Portfolio may invest in
investment companies which concentrate in a particular size company issuing
stock. Companies may be categorized as having a small, medium, or large
capitalization market value. The potential risks are generally higher with small
capitalization companies and lower with large capitalization companies.
Therefore, investors should expect underlying funds which invest primarily in
small-capitalization and medium-capitalization stocks, such as the investment
companies in which the Aggressive Portfolio may invest, to be more volatile
than, and to fluctuate independently of, broad stock market indices such as the
S&P 500(R) Index ("S&P 500").
Foreign Investing (International Portfolio). Foreign investments may be riskier
than U.S. investments because of factors such as unstable international
political and economic conditions, currency fluctuations, foreign controls on
investment and currency exchange, withholding taxes, a lack of adequate company
information, less liquid and more volatile markets, a lack of government
regulation, and legal systems or market practices that permit inequitable
treatment of minority and/or non-domestic investors. Investments in emerging
markets may involve even greater risks such as immature economic structures and
lesser-developed and more thinly traded securities markets.
The Portfolio will invest primarily in international mutual funds that invest
significantly in foreign securities. Foreign securities pose certain risks not
posed by domestic securities because foreign economic, governmental, and
political systems may be less favorable than those of the United States. Foreign
governments may exercise greater control over their economies, industries, and
citizen's rights, which can have an adverse impact on investments. Other risk
factors related to foreign securities include: rates of inflation, structure and
regulation of financial markets, liquidity and volatility of investments,
taxation policies, currency exchange rates, and accounting standards. In
addition, a fund may incur higher costs and expenses when making foreign
investments, which could impact the fund's performance. If an underlying fund
invests primarily in a particular country or region, it may be adversely
affected by the above factors or events particular to that country or region.
Foreign securities in which the underlying funds invest may be listed on foreign
stock exchanges and may trade on weekends and other days when the underlying
funds or the Portfolios do not price their shares. As a result, an underlying
fund's net asset value ("NAV") may be significantly affected by trading on days
when the Advisor does not have access to the portfolio and shareholders cannot
purchase or redeem shares.
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Foreign securities may be denominated in foreign currencies. Therefore, the
value of an underlying fund's assets and income in U.S. dollars may be affected
by changes in exchange rates and regulations, since exchange rates for foreign
currencies change daily. The combination of currency risk and market risk tends
to make securities traded in foreign markets more volatile than securities
traded exclusively in the United States. Although underlying funds value their
assets daily in U.S. dollars, they generally do not convert their holding of
foreign currencies to U.S. dollars daily. Therefore, the underlying fund may be
exposed to currency risks over an extended period of time. (See "Underlying
Funds.")
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Performance History
Performance information is presented below for the New Century Capital and the
New Century Balanced Portfolios only, since the New Century Aggressive and New
Century International Portfolios will not commence investment operations until
November 1, 2000. The bar charts below show annual total return for the New
Century Capital Portfolio and the New Century Balanced Portfolio since their
inception, together with the best and worst quarters since inception. The
accompanying tables give some indication of the risks of an investment in these
Portfolios by comparing each Portfolio's performance to that of the S&P 500, a
widely recognized unmanaged index of stock performance. In addition, the New
Century Balanced table includes a comparison to the Lehman Bothers
Government/Corporate Index ("LB"), as well as a Blended Index comprised of 60%
S&P 500 / 40% LB. All presentations below assume reinvestment of dividends and
distributions. As with all mutual funds, past results are not an indication of
future performance.
Year-By-Year Total Returns As Of December 31, 1999
New Century Capital Portfolio (Inception: 1/31/1989)
Annual Total Returns
[BAR CHART OMITTED]
[DATA POINTS]
1990 -4.76%
1991 36.45%
1992 0.55%
1993 13.82%
1994 0.06%
1995 28.10%
1996 14.54%
1997 26.06%
1998 20.09%
1999 34.72%
Best Quarter Q 4 1999........ = 26.67%
Worst Quarter Q3 1990...... = -15.02%
Average Annual Total Return as of December 31, 1999
1 Year 3 Years 5 Years 10 Years
New Century Capital Portfolio 34.72% 26.82% 24.51% 16.11%
S&P 500 21.04% 27.56% 28.56% 18.21%
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<PAGE>
New Century Balanced Portfolio (Inception: 1/31/1989)
Annual Total Returns
[BAR CHART OMITTED]
[DATA POINTS]
1990 -0.74%
1991 22.93%
1992 2.82%
1993 15.52%
1994 -2.41%
1995 22.86%
1996 12.22%
1997 18.57%
1998 13.48%
1999 18.34%
Best Quarter Q4 1999.......... = 15.45%
Worst Quarter Q3 1990........ = -9.35%
Average Annual Total Return as of December 31, 1999
1 Year 3 Years 5 Years 10 Years
New Century Balanced Portfolio 18.34% 16.77% 17.03% 12.00%
Blended 60% S&P 500 / 40% 11.76% 14.68% 20.18% 13.99%
Lehman Bros. Government
Corporate Index
S&P 500 21.04% 27.56% 28.56% 18.21%
Lehman Bros. Government -2.14% 5.74% 7.60% 7.65%
Corporate Index
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<PAGE>
Expenses
As an investor, you pay certain fees and expenses in connection with the
Portfolios, which are described in the table below. There are no sales loads or
exchange fees associated with an investment in the Portfolios. Portfolio
operating expenses are paid out of the assets of each Portfolio, so their effect
is included in each Portfolio's share price.
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Capital Balanced Aggressive International
Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C>
Maximum Sales Charge (Load) Imposed on
Purchases None None None None
Maximum Deferred Sales Charge (Load)
None None None None
Redemption Fee None None None None
Wire Redemption Fee $9.00 $9.00 $9.00 $9.00
Exchange Fee None None None None
Annual Portfolio Operating Expenses (expenses that are deducted from Portfolio
assets)
Capital Balanced Aggressive International
Portfolio Portfolio Portfolio Portfolio
Management Fee (a) 0.98 % 1.00 % 1.00 % 1.00 %
Distribution 12b-1 Fees (b) 0.17 % 0.19 % 0.25 % 0.25 %
Other Expenses (c) 0.24 % 0.27 % 2.40 % 2.40 %
Total Portfolio Operating Expenses (d)
1.39 % 1.46 % 3.65 % 3.65 %
Fee Waivers (d) - - 2.15 % 2.15 %
Net Expenses(d) 1.39 % 1.46 % 1.50 % 1.50 %
------------------------------------------- ============== ============== ================ ==================
<FN>
(a) For its services, the Advisor receives a Management 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 0.75% of
the assets exceeding that amount.
(b) Each Portfolio has adopted a Rule 12b-1 plan, which allows a Portfolio to
pay distribution fees for the sale and distribution of its shares. The
maximum level of distribution expenses is 0.25% per year of a Portfolio's
average net assets. As these fees are paid out of a Portfolio's assets on
an on-going basis, over time these fees will
15
<PAGE>
increase the cost of your investment and may cost you more than paying
other types of sales charges.
(c) These expenses include custodian, transfer agency and administration fees
and other customary Portfolio expenses.
(d) The Advisor has agreed to limit the total expenses (excluding interest,
taxes, brokerage and extraordinary expenses) to an annual rate of 1.50% of
the Aggressive Portfolio's average net assets and to an annual rate of
1.50% of the International Portfolio's average net assets, in each case
until October 31, 2001. This fee waiver may be terminated at any time
after October 31, 2001. The Advisor is entitled to reimbursement from a
Portfolio of any fees waived pursuant to this arrangement if such
reimbursement does not cause the Portfolio to exceed existing expense
limitations and the reimbursement is made within three years after the
year in which the Advisor incurred the expense.
</FN>
</TABLE>
Example. This example is intended to help you compare the cost of investing in
the Portfolios with the cost of investing in other mutual funds. The example
should not be considered indicative of future investment returns and operating
expenses, which may be more or less than those shown. This example is based on
the Annual Portfolio Operating Expenses described in the table.
This example assumes that you invest $10,000 in a Portfolio for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that
each Portfolio's operating expenses remain the same. Although your actual costs
may be higher or lower, based on these assumptions your costs would be:
One Year Three Years Five Years Ten Years
Capital Portfolio $139 $432 $747 $1,639
Balanced Portfolio $146 $454 $784 $1,715
Aggressive Portfolio $150 $466 $804 $1,760
International Portfolio $150 $466 $804 $1,760
Please note that the above example is an estimate of the expenses to be incurred
by shareholders of the Portfolios. Actual expenses may be higher or lower than
those reflected above.
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<PAGE>
WHO MANAGES THE PORTFOLIOS
The Investment Advisor
Weston Financial Group, Inc. ("Weston"), located at 20 William Street, Suite
330, Wellesley, MA 02481-4102, serves as the investment advisor to each
Portfolio under separate investment advisory agreements (the "Advisory
Agreements"). The Advisory Agreements provide that the Advisor will furnish
continuous investment advisory and management services to the Portfolios. Weston
was organized in 1981 as a registered investment advisor. In addition to the
Portfolios, Weston provides investment management services to individuals and as
of July 31, 2000, had approximately $1.0 billion under management.
The Advisor manages the investments of the Portfolios, subject to policies
adopted by the Portfolio's Board of Trustees. Weston pays the salaries and fees
of all officers and trustees of the Trust who are also officers, directors or
employees of Weston Financial Group. The Trust pays the salaries and fees of all
other trustees of the Trust. For its services, 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
0.75% of the assets exceeding that amount.
The Advisor also serves as the Portfolios' administrator under an agreement with
each Portfolio (the "Administration Agreements"). The Administration Agreements
provide that the Advisor will furnish the New Century Portfolios with office
space, and with any ordinary clerical and bookkeeping services not furnished by
the custodian, transfer agent or Distributor. The Board of Trustees approved the
Administration Agreements. 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.
The Portfolio Manager
The Advisor analyzes investment trends and strategies for the Portfolios and
continuously reviews and administers each Portfolio's investment program,
subject to the objectives specified in the Prospectus and supplemental
guidelines approved by the New Century Portfolios' Board of Trustees.
Wayne M. Grzecki, who has 21 years of investment experience, is President and
Manager of the New Century Portfolios. Mr. Grzecki is a Principal and has been a
Senior Financial Counselor with the Weston Financial Group since 1986 and has
managed the Portfolios since 1995. Mr. Grzecki meets periodically with the
Investment Committee of the Advisor and discusses the investment management of
the Portfolios. The members of the Investment Committee include Douglas A.
Biggar and Ronald A. Sugameli. Mr. Biggar, a Principal of the Advisor and
Trustee of the Portfolios, served as the New
17
<PAGE>
Century Portfolios' portfolio manager from inception to 1994. Mr. Sugameli, a
Vice President of the Portfolios, has served in various management positions
with the Advisor since 1984, advising individuals concerning financial planning
and investment advice.
HOW TO BUY AND SELL SHARES
Pricing of Portfolio Shares
The price you pay for a share of a Portfolio, and the price you receive upon
selling or redeeming a share of a Portfolio, is called the Portfolio's net asset
value ("NAV"). The NAV is calculated by taking the total value of a Portfolio's
assets, subtracting its liabilities, and then dividing by the number of shares
that have already been issued. This is a standard calculation, and forms the
basis for all transactions involving buying, selling, exchanging or reinvesting
shares. The NAV is generally calculated as of the close of trading on the New
York Stock Exchange (usually 4:00 p.m. Eastern Time) every day the Exchange is
open. Your order will be priced at the next NAV calculated after the Portfolio's
transfer agent, PFPC Global Fund Services, Inc., (the "Transfer Agent") accepts
your order. The Portfolio's investments are valued based on market value, or
where market quotations are not readily available, based on fair value as
determined in good faith by the Portfolios' Board of Trustees. The Portfolios
may use pricing services to determine market value.
Instructions For Opening and Adding to an Account
To Open An Account To Add To An Account
By Mail: By Mail:
Complete and sign the Account Complete the investment slip that is
Application or an IRA Application. included on your account statement,
and write your account number on your
check. If you no longer have your
investment slip, please reference your
name, account number and address on
your check.
Make your check payable to the New Century Portfolios.
For IRA accounts, please specify the year for which the contribution is
made.
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<PAGE>
To Open An Account To Add To An Account
Mail Your Application And Check To: Mail The Slip And The Check To:
New Century Portfolios New Century Portfolios
20 William Street, Suite 330 20 William Street, Suite 330
Wellesley, MA 02481-4102 Wellesley, MA 02481-4102
By Overnight Courier, Send To: By Overnight Courier, Send To:
New Century Portfolios New Century Portfolios
20 William Street, Suite 330 20 William Street, Suite 330
Wellesley, MA 02481-4102 Wellesley, MA 02481-4102
-------------------------------------------------------------------------------
By Telephone: By Telephone:
Telephone transactions may not You automatically are granted
be used for initial purchases. telephone transaction privileges
unless you decline them on your
Account Application or by calling
(888) 639-0102. You may call (888)
639-0102 to purchase shares in an
existing account. Shares purchased by
telephone will be purchased at the NAV
next determined after the Transfer
Agent receives your funds and all
required information, including a
completed application, is provided.
-------------------------------------------------------------------------------
To Open An Account To Add To An Account
By Wire: By Wire:
Call (888) 639-0102 for instructions Send your investment to Boston Safe
and to obtain an account number Deposit & Trust by following the
prior to wiring the Portfolios. instructions listed in the column to
the left.
Send your investment to Boston Safe Deposit & Trust with these instructions:
Boston Safe Deposit & Trust
ABA#: 011001234
For Credit to the New Century Portfolios
A/C#: 002984
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<PAGE>
For further credit to: investor account number; name(s) of investor(s);
SSN or TIN; name of Portfolio to be purchased.
Telephone And Wire Transactions
Only bank accounts held at domestic financial institutions that are Automated
Clearing House (ACH) members can be used for telephone transactions. It takes 15
calendar days after receipt by the Portfolios of your bank account information
to establish this feature. Purchases by ACH transfer may not be made during this
time. You automatically are granted telephone transaction privileges unless you
decline them on your Account Application or by calling (888) 639-0102. With
respect to purchases made by telephone, the Portfolios and their agents will
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine. Such procedures may include, among others, requiring some
form of personal identification prior to acting upon telephone instructions,
providing written confirmation of all such transactions, and/or tape recording
all telephone instructions. If reasonable procedures are followed, the
Portfolios or their agents will not be liable for any loss, cost or expense for
acting upon an investor's telephone instructions or for any unauthorized
telephone transactions.
If you purchase your initial shares by wire, the Transfer Agent first must have
received a completed Account Application and issued an account number to you.
The account number must be included in the wiring instructions set forth above.
The Transfer Agent must receive your Account Application to establish
shareholder privileges and to verify your account information. Payment of
redemption proceeds may be delayed and taxes may be withheld unless the
Portfolios receive a properly completed and executed Account Application.
Shares purchased by wire will be purchased at the NAV next determined after the
Transfer Agent receives your wired funds and all required information is
provided in the wire instructions.
Exchange Privilege. As a convenience, the Portfolios' shareholders may exchange
all or part of their investment in the Portfolios for the New Century Money
Market Portfolio, a money market fund advised by Scudder Kemper Investments,
Inc. (And not by the Advisor) that invests in a diversified portfolio of high
quality money market instruments. THIS PROSPECTUS DOES NOT OFFER THE SHARES OF
THE NEW CENTURY MONEY MARKET PORTFOLIO. For important information on this
exchange feature, please see page 24 of this Prospectus.
Additional Purchase Information
The Portfolios may hold redemption proceeds until the proceeds used to purchase
shares have been collected (e.g. your check has cleared, or your ACH payments
have been received), but in no event for more than 10 calendar days.
20
<PAGE>
If you fail to provide and certify to the accuracy of your Social Security
Number or Taxpayer Identification Number, the Portfolios will be required to
withhold 31% of all dividends, distributions and payments, including redemption
proceeds.
Please note that the Portfolios are offered and sold only to persons residing in
the United States or Puerto Rico. Applications will only be accepted if they
contain a U.S. or Puerto Rico address. This Prospectus should not be considered
a solicitation to buy or an offer to sell shares of the Portfolios in any
jurisdiction where it would be unlawful under the securities laws of that
jurisdiction.
All purchases must be made in U.S. Dollars and checks must be drawn on U.S.
banks. No cash, credit cards or third party checks will be accepted. A fee may
be charged against your account for any payment check returned to the Transfer
Agent or for any incomplete ACH or other electronic funds transfer, or for
insufficient funds, stop payment, closed account or other reasons. You will also
be responsible for any losses suffered by the Portfolios as a result. The
Portfolios reserve the right to reject any purchase order for Portfolio shares.
Automatic Investment Program. Call us to set up an automatic investment program.
Under the program you can have money transferred automatically from your
checking account to a Portfolio each month to buy additional shares. The market
value of the Portfolio's shares may fluctuate and a systematic investment
program such as this will not assure a profit or protect against a loss. You may
discontinue the program at any time by notifying the Transfer Agent or
Distributor by mail or phone.
Purchase Restrictions. Each Portfolio reserves the right in its sole discretion
(i) to waive or lower investment minimums, (ii) to accept initial purchases by
telephone or mailgram, and (iii) to refuse any purchase or exchange order,
including purchase orders from any investor who engages in excessive purchases
and redemptions in their account.
These actions will be taken when, in the sole discretion of management, they are
deemed to be in the best interest of a Portfolio.
Instructions For Selling Portfolio Shares
To Sell Shares
By Mail. Write a letter of instruction that includes:
the name(s) and signature(s) of all account owners
your account number
the Portfolio name
the dollar or share amount you want to sell
how and where to send the proceeds
21
<PAGE>
if redeeming from your IRA, please note applicable withholding requirements
Obtain a medallion signature guarantee or other documentation, if required.
Mail Your Request To: By Overnight Courier, Send To:
New Century Portfolios New Century Portfolios
20 William Street, Suite 330 20 William Street, Suite 330
Wellesley, MA 02481-4102 Wellesley, MA 02481-4102
By Telephone. You automatically are granted telephone transaction privileges
unless you decline them on your Account Application or by calling (888)
639-0102. You may redeem Portfolio shares by calling (888) 639-0102. Redemption
proceeds will be mailed directly to you or electronically transferred to your
predesignated bank account.
Unless you decline telephone privileges on your Account Application, as long as
the Portfolios take reasonable measures to verify the order, you may be
responsible for any fraudulent telephone order.
Systematic Withdrawal Plan. Call us to request a Systematic Withdrawal Plan. It
may be set up over the phone or by letter of instruction. Our systematic
withdrawal program allows you to sell your shares and receive regular payments
from your account on a monthly, quarterly or annual basis. We may refuse to
establish a systematic withdrawal program for an account under $10,000 or a
withdrawal payment under $50. When you sell your shares under a systematic
withdrawal program, it is a taxable transaction.
For specific information on how to redeem your account, and to determine if a
signature guarantee or other documentation is required, please call toll free in
the U.S.: (888) 639-0102.
As explained under "How to Exchange Shares," (page 24) shareholders in the
Portfolios may exchange all or part of their investment for shares of the New
Century Money Market Portfolio. To redeem shares from the New Century Money
Market Portfolio, follow the same procedures that apply to redeeming shares of
the Portfolios. If you have any questions about redeeming shares of the New
Century Money Market Portfolio, please call (888) 639-0102. Please note that
when redeeming less than all your shares of the New Century Money Market
Portfolio, your proceeds will exclude accrued and unpaid income form the New
Century Money Market Portfolio through the date of the redemption. When
redeeming your entire balance from the New Century Money Market Portfolio,
accrued income will automatically be paid to you when the income is collected
and paid from the New Century Money Market Portfolio, at the end of the month.
Additional Redemption Information
22
<PAGE>
Payment Of Redemption Proceeds. You may sell shares at any time. Your shares
will be sold at the next NAV per share calculated after the Transfer Agent
accepts your order. Your order will be processed promptly and you will generally
receive the proceeds within seven days after receiving your properly completed
request. Payment of the redemption proceeds for shares of the Portfolios where
you request wire payment will normally be made in federal funds on the next
business day.
Before selling recently purchased shares, please note that if the Transfer Agent
has not yet collected payment for the shares you are selling, it may delay
sending the proceeds for up to 10 calendar days. This procedure is intended to
protect the Portfolios and their shareholders from loss.
The Transfer Agent will wire redemption proceeds only to the bank and account
designated on the Account Application or in written instructions (with
signatures guaranteed) subsequently received by the Transfer Agent, and only if
the bank is a member of the Federal Reserve System. Your instructions should
include:
o the name, address, and telephone number of the bank where you want the
proceeds sent
o the Federal Reserve ABA Routing number.
o your bank account number
The Transfer Agent currently charges a $ 9.00 fee for each payment by wire of
redemption proceeds, which will be deducted from your redemption proceeds.
If the dollar or share amount requested to be redeemed is greater than the
current value of your account, your entire account balance will be redeemed. If
you choose to redeem your account in full, any automatic service currently in
effect for the account will be terminated unless you indicate otherwise in
writing.
Medallion Signature Guarantees. A medallion signature guarantee of each owner is
required to redeem shares in the following situations: (i) if you change
ownership on your account; (ii) when you want the redemption proceeds sent to a
different address than that registered on the account; (iii) if the proceeds are
to be made payable to someone other than the account's owner(s); (iv) any
redemption transmitted by federal wire transfer to a bank other than your bank
of record; and (v) if a change of address request has been received by the
Transfer Agent within the last 15 days. In addition, signature guarantees are
required for all redemptions of $50,000 or more from any shareholder account.
Signature guarantees are designed to protect both you and the Portfolios from
fraud. When the fund requires a signature guarantee, a medallion signature
guarantee must be provided. A medallion signature guarantee may be obtained from
a domestic bank or trust company, broker, dealer, clearing agency, savings
association, or other financial institution which is participating in a
medallion program recognized by the Securities
23
<PAGE>
Transfer Association. The three recognized medallion programs are Securities
Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program
(SEMP) and New York Stock Exchange, Inc. Medallion Guarantee (NYSE MSP).
Signature guarantees from financial institutions which are not participating in
one of these programs will not be accepted. Notaries Public cannot provide
signature guarantees.
Corporate, Trust And Other Accounts. Redemption requests from corporate, trust
and institutional accounts, and executors, administrators and guardians, require
documents in addition to those described above, evidencing the authority of the
officers, trustees or others. In order to avoid delays in processing redemption
requests for these accounts, you should call the Portfolios at (888) 639-0102
before making the redemption request to determine what additional documents are
required.
Transfer Of Ownership. In order to change the account registration or transfer
ownership of an account, additional documents will be required. In order to
avoid delays in processing these requests, you should call the Portfolios at
(888) 639-0102 before making your request to determine what additional documents
are required.
Redemption Initiated By The Portfolios. If your account balance falls below
$500, your Portfolio may ask you to increase your balance. If your account
balance is still below $500 after 30 days, the Portfolio may close your account
and send you the proceeds. This minimum balance requirement does not apply to
IRAs and other tax-sheltered investment accounts. The right of redemption by the
Portfolios will not apply if the value of your account drops below $500 because
of market performance.
Suspension of Redemption Rights. The Board of Trustees may suspend the right of
redemption or postpone the date of payment during any period when:
o trading on the New York Stock Exchange is restricted as determined by
the Securities and Exchange Commission,
o such Exchange is closed for other than weekends and holidays,
o the Securities and Exchange Commission has by order permitted such
suspension, or
o 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.
24
<PAGE>
Redemptions In-Kind. The Portfolios have reserved the right to pay redemption
proceeds by a distribution in-kind of portfolio securities (rather than cash).
In the event that the Portfolio makes an in-kind distribution, you could incur
brokerage and transaction charges when converting the securities to cash. You
could be required to comply with normal procedures to redeem shares of an
underlying fund and could experience normal processing delays. In-kind
redemptions will be made when the Board determines that it would be detrimental
to a Portfolio to make payment in cash.
How To Exchange Shares
You may exchange all or a portion of your investment from one New Century
Portfolio to another. You may exchange shares by mail or by telephone. You
automatically are granted telephone transaction privileges unless you decline
them on your Account Application or by calling (888) 639-0102.
Any new account established through an exchange will have the same privileges as
your original account and will also be subject to the minimum investment
requirements described above. There is currently no fee for an exchange.
Exchanges will be executed on the basis of the relative NAV of the shares
exchanged. An exchange is considered to be a sale of shares for federal income
tax purposes on which you may realize a taxable gain or loss.
In addition to your ability to exchange all or a portion of your investment
between the New Century Portfolios, you may also exchange Portfolio shares for
shares of the New Century Money Market Portfolio. Once you have opened a New
Century Money Market Portfolio account, you may send a written exchange request
to New Century Portfolios or, if you have established telephone exchange
privileges, call (888) 639-0102. Please read that Prospectus before making an
exchange into the New Century Money Market Portfolio. This exchange privilege is
offered as a convenience to the Portfolios' shareholders. Please note that when
exchanging from a Portfolio to the New Century Money Market Portfolio, you will
begin accruing income from the New Century Money Market Portfolio the day
following the exchange. When exchanging less than all of the balance from the
New Century Money Market Portfolio to your Portfolio, your exchange proceeds
will exclude accrued and unpaid income from the New Century Money Market
Portfolio through the date of the exchange. When exchanging your entire balance
from the New Century Money Market Portfolio, accrued income will automatically
be exchanged into the Fund when the income is collected and paid from the New
Century Money Market Portfolio, at the end of the month.
More Information About The Exchange Privilege. The Portfolios are intended as
long-term investment vehicles and not to provide a means of speculating on
short-term market movements. In addition, excessive trading can hurt the
Portfolios' performance and shareholders. Therefore, the Portfolios may
terminate, without notice, the exchange privilege of any investor who uses the
exchange privilege excessively (more than six
25
<PAGE>
times each year). This policy does not apply to investors who have elected to
participate in the Automatic Exchange Program, described on page 26.
The Portfolios may change or temporarily suspend the exchange privilege during
unusual market conditions.
About The New Century Money Market Portfolio. Please be sure to read the New
Century Money Market Portfolio Prospectus before investing in that portfolio.
The New Century Money Market Portfolio seeks maximum current income consistent
with stability of capital by investing in U. S. dollar-denominated money market
instruments that mature in 12 months or less.
The New Century Money Market Portfolio is managed by Scudder Kemper Investments,
Inc. and not by the Advisor. Kemper Distributors Inc. is the distributor of the
New Century Money Market Portfolio's shares.
Retirement Plan Services
The Portfolios offer a wide variety of retirement plans for individuals and
institutions, including large and small businesses. For information on
establishing retirement accounts and for a complete list of retirement accounts
offered, please call (888) 639-0102. Complete instructions about how to
establish and maintain your plan and how to open accounts for you and your
employees will be included in the retirement plan kit you receive in the mail.
The retirement plans currently available to shareholders of the Portfolios
include:
Traditional IRA And IRA Rollovers: an individual retirement account. Your
contribution may or may not be deductible depending on your circumstances.
Rollovers are not deductible. Assets can grow tax-free and distributions are
taxable as income.
Spousal IRA: an IRA funded by a working spouse in the name of a non-earning
spouse.
SEP-IRA: an individual retirement account funded by employer contributions. Your
assets grow tax-free and distributions are taxable as income.
Roth IRA: an IRA with non-deductible contributions, tax-free growth of asset and
tax-free distributions for qualified distributions.
403(b): an arrangement that allows employers of charitable or educational
organizations to make voluntary salary reduction contributions to a tax deferred
account.
Automatic Services for Portfolio Investors
26
<PAGE>
Buying or selling shares automatically is easy with the services described
below. With each service, you select a schedule and an amount, subject to
certain restrictions. You can set up most of these services with your Account
Application or by calling (888) 639-0102.
For Investing:
Automatic Investment Program. For making automatic investments from a designated
bank account.
Dividend Reinvestment
If the investor does not specify an election, all income dividends and capital
gains distributions automatically will be reinvested in shares of the
Portfolios.
For Investing And For Selling Shares:
Automatic Exchange Program. For making regular exchanges from your Portfolio
into another New Century Portfolio or between a New Century Portfolio and the
New Century Money Market Portfolio.
27
<PAGE>
Shareholder Communications
Account Statements. Every quarter, New Century investors automatically receive
regular account statements. You will also be sent a yearly statement detailing
the tax characteristics of any dividends and distributions you have received.
Confirmation. Confirmation Statements will be sent after each transaction that
affects your account balance or account registration.
Regulatory Mailings. Financial reports will be sent at least semiannually.
Annual reports will include audited financial statements.
Dividends and Distributions
Frequency. The New Century Capital, Aggressive and International Portfolios
intend to declare and pay annual dividends to its shareholders. The New Century
Balanced Portfolio intends to 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. Each Portfolio will distribute net
realized capital gains, if any, at least once each year. You may elect to
reinvest income dividends and capital gain distributions in shares of the
Portfolios or receive these distributions in cash. Dividends and any
distributions from the Portfolios are automatically reinvested in the Portfolios
at NAV, unless you elect to have dividends paid in cash. Reinvested dividends
and distributions receive the same tax treatment as those paid in cash.
If you are interested in changing your election, you may call the Distributor at
(888) 639-0102 or send written notification to New Century Portfolios, 20
William Street, Suite 330, Wellesley, MA 02481-4102.
Dividend payments are not guaranteed, are subject to the Board's discretion and
may vary with each payment. The Portfolios do not pay "interest" or guarantee
any fixed rate of return on an investment in its shares.
Taxes
Portfolio dividends and distributions are taxable to most investors (unless your
investment is in an IRA or other tax-advantaged account). Dividends paid by a
Portfolio out of net ordinary income and distributions of net short-term capital
gains are taxable to the Portfolio's shareholders as ordinary income. Dividends
from net ordinary income may be eligible for the corporate dividends-received
deduction.
Distributions by a Portfolio of net capital gains (the excess of net long-term
capital gains over net short-term capital losses) to shareholders are generally
taxable to the shareholders at the applicable long-term capital gains rate,
regardless of how long the shareholder has held shares of the Portfolio.
28
<PAGE>
Shareholders that sell, exchange or redeem shares generally will have a capital
gain or loss from the sale, redemption or exchange. The amount of the gain or
loss and the rate of tax will depend mainly upon the amount paid for the shares,
the amount, if any, of reinvested distributions, the amount received from the
sale, exchange or redemption, and how long the shares were held.
A dividend or capital gains distribution declared by a Portfolio in October,
November or December, but paid during January of the following year will be
considered to be paid on December 31 of the year it was declared.
If the value of shares is reduced below a shareholder's cost as a result of a
distribution by a Portfolio, the distribution will be taxable even though it, in
effect, represents a return of invested capital. Investors considering buying
shares just prior to a dividend or capital gain distribution payment date should
be aware that, although the price of shares purchased at that time may reflect
the amount of the forthcoming distribution, those who purchase just prior to the
record date for a distribution may receive a distribution which will be taxable
to them.
Shareholders will be advised annually as to the federal tax status of dividends
and capital gain distributions made by each Portfolio for the preceding year.
Distributions by the Portfolios generally will be subject to state and local
taxes.
Additional tax information may be found in the Statement of Additional
Information. Because everyone's tax situation is unique, always consult your tax
professional about federal, state and local tax consequences of an investment in
the Portfolios
29
<PAGE>
FINANCIAL HIGHLIGHTS
Financial highlights are presented below for the Capital Portfolio and the
Balanced Portfolio only, since the Aggressive and the International Portfolios
did not commence investment operations until November 1, 2000. The financial
highlights table is intended to help you understand each Portfolio's financial
performance and other financial information since its inception. Certain
information reflects financial results for a single Portfolio share. "Total
Return" shows how much an investor in each Portfolio would have earned on an
investment in a Portfolio assuming reinvestment of all dividends and
distributions. The information for the years ended October 31, 1997 through 1999
has been audited by Briggs Bunting & Dougherty LLP, the Trust's independent
accountants, whose report, along with each Portfolio's financial statements, are
incorporated by reference in the Statement of Additional Information, which is
available upon request. The information for the years ended October 31, 1995 and
1996 has been audited by other auditors. The information for the six-month
period ended April 30, 2000 is unaudited and may be found, along with the Funds'
financial statements, in the Funds' latest semi-annual report.
30
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout each Period)
<TABLE>
<CAPTION>
Six Months
Ended
April 30, Years ended October 31,
2000 1999 1998 1997 1996 1995
--------- ------ ------ ------ ------ ------
(Unaudited)
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.71 $14.30 $14.67 $13.51 $13.12 $12.31
--------- ------ ------ ------ ------ ------
Income (loss) from investment operations
Net investment loss (0.06) (0.14) (0.09) (0.10) (0.09) (0.06)
Net gain on securities
(both realized and unrealized) 3.35 4.08 1.18 3.29 1.90 2.16
--------- ------ ------ ------ ------ ------
Total from investment operations 3.29 3.94 1.09 3.19 1.81 2.10
--------- ------ ------ ------ ------ ------
Less distributions
Distributions from capital gains (1.17) (1.53) (1.46) (2.03) (1.42) (1.29)
--------- ------ ------ ------ ------ ------
Net asset value, end of period $ 18.83 $16.71 $14.30 $14.67 $13.51 $13.12
========= ====== ====== ====== ====== ======
TOTAL RETURN** 19.40% 28.94% 7.97% 27.22% 14.91% 19.60%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) $155,759 $120,583 $90,164 $78,391 $62,741 $50,889
Ratio of expenses to
average net assets 1.29%* 1.39% 1.44% 1.43% 1.47% 1.61%
Ratio of net investment loss to
average net assets -0.73%* -0.91% -0.67% -0.76% -0.69% -0.52%
Portfolio turnover 23% 64% 102% 93% 214% 206%
</TABLE>
* Annualized.
** Total return for a period of less than 1 year has not been annualized.
31
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout each Period)
<TABLE>
<CAPTION>
Six Months
Ended
April 30, Years ended October 31,
2000 1999 1998 1997 1996 1995
-------- ------ ------ ------ ------ ------
(Unaudited)
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.42 $12.83 $13.23 $12.21 $11.82 $11.22
-------- ------ ------ ------ ------ ------
Income from investment operations
Net investment income (loss) 0.15 0.20 0.21 0.21 0.18 0.24
Net gain (loss) on securities
(both realized and unrealized) 1.44 1.68 0.66 2.01 1.30 1.28
-------- ------ ------ ------ ------ ------
Total from investment operations 1.59 1.88 0.87 2.22 1.48 1.52
-------- ------ ------ ------ ------ ------
Less distributions
Dividends from net investment income (0.13) (0.20) (0.21) (0.21) (0.18) (0.24)
Distributions from capital gains (0.95) (1.09) (1.06) (0.99) (0.91) (0.68)
-------- ------ ------ ------ ------ ------
Total distributions (1.08) (1.29) (1.27) (1.20) (1.09) (0.92)
-------- ------ ------ ------ ------ ------
Net asset value, end of period $ 13.93 $13.42 $12.83 $13.23 $12.21 $11.82
======== ====== ====== ====== ====== ======
TOTAL RETURN** 11.88% 15.26% 6.97% 19.64% 13.24% 14.93%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in thousands) $76,446 $65,721 $56,190 $48,893 $40,423 $30,124
Ratio of expenses to
average net assets 1.41%* 1.46% 1.46% 1.41% 1.61% 1.72%
Ratio of net investment income to
average net assets 2.07%* 1.45% 1.51% 1.58% 1.45% 2.14%
Portfolio turnover 22% 60% 59% 80% 172% 191%
</TABLE>
* Annualized.
** Total return for a period of less than 1 year has not been annualized.
32
<PAGE>
NEW CENTURY PORTFOLIOS
New Century Balanced Portfolio
New Century Capital Portfolio
New Century Aggressive Portfolio
New Century International Portfolio
INVESTMENT ADVISOR AND ADMINISTRATOR Weston Financial Group, Inc.
Wellesley, MA
DISTRIBUTOR
Weston Securities Corporation
Wellesley, MA
COUNSEL
Greenberg Traurig, LLP
Philadelphia, PA
INDEPENDENT ACCOUNTANTS
Briggs Bunting and Dougherty, LLP
Philadelphia, PA
TRANSFER AND DIVIDEND DISBURSING AGENT
PFPC Global Fund Services, Inc.
King of Prussia, PA
CUSTODIAN
Bank of New York
New York, NY
33
<PAGE>
WHERE TO GO FOR MORE INFORMATION
You will find more information about the Portfolios in the following Documents:
Annual And Semiannual Reports
Our annual and semiannual reports list the holdings in each Portfolio, describe
Portfolio performance, include financial statements for the Portfolios, and
discuss the market conditions and strategies that significantly affected each
Portfolio's performance.
Statement of Additional Information
The Statement of Additional Information contains additional and more detailed
information about each Portfolio and the risks of investing in each Portfolio,
and is considered to be a part of this Prospectus.
There Are Three Ways To Get A Copy Of These Documents
1. Call or write for one, and a copy will be sent without charge.
New Century Portfolios
20 William Street, Suite 330
Wellesley, MA 02481-4102
(888) 639-0102
www.newcenturyportfolios.com
2. Call, write or submit an E-mail request to the Public Reference Section of
the Securities and Exchange Commission ("SEC") and ask them to mail you a
copy. The SEC charges a fee for this service. You can also drop by the
Public Reference Section and copy the documents while you are there.
Information about the Public Reference Section may be obtained by calling
the number below.
Public Reference Section of the SEC Washington, D.C. 20549-0102
(202) 942-8090
E-mail address: [email protected]
3. Go to the SEC's Website (www.sec.gov) and download a free text-only
version from the EDGAR Database on the Website. SEC file number 811-5646
34
<PAGE>
NEW CENTURY PORTFOLIOS
STATEMENT OF ADDITIONAL INFORMATION
Dated November ___, 2000
--------------------------------------------------------------------------------
20 William Street, Suite 330, Wellesley, Massachusetts 02481-4102
The Distributor may be telephoned at (888) 639-0102
--------------------------------------------------------------------------------
New Century Portfolios (the "Trust") is an open-end diversified investment
company currently offering four series of shares (each a "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 investment objective of each Portfolio is as follows:
New Century Capital Portfolio Provide capital growth, with a
secondary objective to provide
income, while managing risk.
New Century Balanced Portfolio Provide income, with a
secondary objective to provide
capital growth, while managing risk.
New Century Aggressive Portfolio Provide capital growth without
regard to current income, while
managing risk.
New Century International Portfolio Provide capital growth with a
secondary objective to provide
income, while managing risk.
The Portfolios seek to achieve their objectives by investing primarily in shares
of other registered investment companies that emphasize investments in equities
(domestic and foreign) and, for New Century Balanced portfolio, fixed income
securities (domestic and foreign). There can be no assurance that the objectives
of the Portfolios will be achieved.
Free copies of the Prospectus and most recent Annual Report of the Trust are
available by calling the above number collect or by writing to the above
address.
-------------------------------------------------------------------------------
This statement of additional information is not a prospectus and should be read
in connection with the Trust's prospectus dated August 29, 2000. Retain this
statement of additional information for future reference. Certain information
from the Trust's Annual Report to Shareholders for the year ended October 31,
1999 is incorporated by reference into this statement
B-1
<PAGE>
of additional information.
-------------------------------------------------------------------------------
B-2
<PAGE>
NEW CENTURY PORTFOLIOS
STATEMENT OF ADDITIONAL INFORMATION
AUGUST 29, 2000
TABLE OF CONTENTS
Page
Investments by the Portfolios 4
Rising Trend Strategy 4
Declining Trend Strategy 4
Other Factors 4
Investment Company Securities 5
Money Market Securities 5
Individual Securities 6
Portfolio Turnover 7
Investment Restrictions 7
Underlying Funds 8
Illiquid And Restricted Securities 8
Foreign Securities 9
Foreign Currency Transactions 9
Industry Concentration 9
Master Demand Notes 9
Repurchase Agreements 10
Loans Of Portfolio Securities 10
Short Sales 10
Options Activities 11
Futures Contracts 11
Options On Futures Contracts 12
Risk Factors Regarding Options,
Futures And Options On Futures 13
Leverage Through Borrowing 13
Warrants 14
Description Of Bond Ratings 14
Investment Advisor 15
Distributor 16
Allocation Of Portfolio Brokerage 18
Transfer Agent 19
Purchase Of Shares 19
Tax-Sheltered Retirement Plans 19
Individual Retirement Accounts (IRA) 19
Tax-Sheltered Custodial Accounts 20
How to Establish Retirement Accounts 20
Systematic Withdrawal Plan 20
Officers And Trustees Of New Century Portfolios 21
Ownership of the Portfolio 23
General Information 23
Beneficial Shares 23
B-3
<PAGE>
Audits and Reports 24
Taxes 24
Expenses 24
Custodian 25
Code of Ethics 25
Performance 25
Average Annual Total Returns 26
Comparisons and Advertisements 26
Financial Statements 27
B-4
<PAGE>
Investments by the Portfolios
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 each Portfolio's
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, the Portfolios may make such investments, if necessary, to
qualify as a "regulated investment company" under the Internal Revenue Code (the
"IRC"). (See "General Information - Taxes" in this SAI 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 Balanced
Portfolio is on income over growth. The primary emphasis of the New Century
Aggressive Portfolio is on capital growth and for the New Century International
Portfolio is on capital growth over income. 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 New Century Capital Portfolio will remain that of capital
growth over income; of the New Century Balanced Portfolio, income over growth;
of the New Century Aggressive Portfolio, capital growth and of the New Century
International Portfolio, capital growth over income. 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 its assets 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
B-5
<PAGE>
or other money market securities (see "Money Market Securities"), the use of
very short portfolio maturities of 60 days or less, other investments which
protect the value of the series, and similar techniques such as holding cash.
Investment Company Securities. The other investment companies in which each
Portfolio invests will be diversified investment companies managed by a number
of investment advisors and portfolio managers. This will offer each Portfolio an
opportunity to benefit from a variety of diversified portfolios.
Each such company will be a registered investment company, and will operate
subject to a variety of regulatory constraints. While such regulation does not
guarantee the investment success of an investment company, or assure that it
will not suffer investment losses, the Advisor believes that such investment
companies provide a sound foundation upon which to base an investment portfolio.
By investing in a broad spectrum of such companies each Portfolio hopes to
benefit from the collective research and analysis of many experienced investment
personnel.
There are many types of investment companies. All maintain portfolios which are
generally liquid, but can be composed of different kinds of securities and
involve different objectives. Such companies may seek only income, only
appreciation, or various combinations of these. They may invest in money market
securities, short or long term bonds, dividend producing stocks, tax-exempt
municipal securities, or a variety of other instruments. They may seek
speculative or conservative investments ranging from securities issued by new
companies to securities issued by "blue-chip" companies. An investment company
which has a policy of holding 80% of its assets in debt securities maturing in
thirteen months or less, or which holds itself out as a "money market fund" will
be treated as a money market fund by the Portfolios.
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.
B-6
<PAGE>
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 100% of the dollar amount
to be paid to the Portfolio under each agreement at its maturity, and the
Portfolio will make payment for such securities only upon physical delivery or
evidence of book entry transfer to the account of the Custodian. If the seller
defaults, the Portfolio might incur a loss if the value of the collateral
securing the repurchase agreement declines, and might incur disposition costs in
connection with liquidation of the collateral. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the security, collection
of the collateral by the Portfolio may be delayed or limited. The Portfolio may
not enter into a repurchase agreement with more than seven days to maturity if,
as a result, more than 10% of the market value of the Portfolio's net assets
would be invested in such repurchase agreements together with any other illiquid
assets.
Individual Securities. 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. The Advisor will not invest in
individual securities without prior approval by the Board of Trustees. 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. 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 also
retains the right, when the Advisor deems appropriate, to invest in investment
grade fixed income securities. The Portfolios may invest only in investment
grade fixed income securities. There are four categories which are referred to
as investment grade. These are the four highest ratings or categories as defined
by Moody's Investors Service, Inc. ("Moody's) and Standard and Poor's
Corporation ("Standard & Poor's"). Categories below this have lower ratings and
are considered more speculative in nature. The following are bond ratings
classified as investment grade by Moody's and Standard and Poor's. Baa and BBB
rated securities are considered to have speculative characteristics.
B-7
<PAGE>
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.
Portfolio Turnover. It is not the policy of the Portfolios to purchase or sell
securities for short-term trading purposes, but each Portfolio 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 and Distributions" in the prospectus.)
Investment Restrictions
The investment restrictions set forth below have been adopted 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. 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:
(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 New Century Portfolios and its affiliates owning more than 3% of the
total outstanding voting stock of such investment company.
(c) purchase more than 10% of the voting securities, or more than 10%
of any class of securities of any issuer. For purposes of this restriction, all
outstanding fixed income securities of an issuer are considered as one class.
(d) purchase or sell commodities or commodity futures contracts.
(e) make loans of money or securities, except (i) by the purchase of
fixed income
B-8
<PAGE>
obligations in which the Portfolio may invest consistent with its investment
objective and policies; or (ii) by investment in repurchase agreements.
(f) 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.
(g) 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.
(h) purchase the securities of any issuer, if, as a result, more than
10% of the value of New Century Portfolios' 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.
(i) issue senior securities.
(j) 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.
(k) 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.
(l) invest for the purpose of exercising control or management of
another company.
(m) concentrate its investments in any industry other than registered
investment companies.
(n) make purchases of securities on "margin." With respect to
investment restriction (m) above, although New Century Portfolios 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, New Century Portfolios 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.
B-9
<PAGE>
Underlying Funds
The underlying funds in which the New Century Portfolios invest may invest in
various obligations and employ various investment techniques. Some of these
securities and techniques are described below.
Illiquid And Restricted Securities. An underlying fund may invest up to 15% of
its net assets in illiquid securities. Illiquid Securities are securities that
can not be disposed of within seven days and in the ordinary course of business
at approximately the amount at which the fund has valued it. Illiquid Securities
may 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 such 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 such
information may be less reliable. Foreign securities are subject to heightened
political, social and economic risks, including the possibility of
expropriation, nationalization, confiscation, confiscatory taxation, exchange
controls or other foreign governmental restrictions. An underlying fund may
maintain its foreign securities in custody of non U.S. banks and securities
depositories. All of these risks are heightened for investments in emerging
markets .
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 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 investments within a single industry would all be
affected by developments within that industry, a fund which concentrates in an
industry is subject to greater risk than a fund which invests in a broader range
of securities. Also, the value of the shares of such an
B-10
<PAGE>
underlying fund may be subject to greater market fluctuation than an investment
in a more diversified fund.
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 that the seller will repurchase
the securities at an agreed upon time and price. The Portfolios also may enter
into repurchase agreements. These agreements are considered under the 1940 Act
to be loans by the fund. If the seller should default on its obligation to
repurchase the securities, the underlying fund may experience delays 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.
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
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<PAGE>
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 replaces 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) call options
("calls") and put options ("puts") only if the positions are "covered"
throughout the life of the option. Generally, a position is "covered" if the
fund establishes a segregated account containing the cash or securities
necessary to cover the option when exercised or if the fund owns an offsetting
position.
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. 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). 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.
A fund also may purchase puts and calls. When a fund purchases an option, it
pays a premium in return for the right to sell (put) or buy (call) the
underlying security at the exercise price at any time during the option period.
An underlying fund also may purchase stock index options which differ from
options 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. 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.
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
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<PAGE>
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. If a fund enters
into a futures contract or an option on a futures contract (see below) for other
than bona fide hedging purposes, only up to 5% of its net assets may then
consist of initial margin deposits and premiums required to establish such
positions.
Generally, if market interest rates increase, the value of outstanding debt
securities declines (and vice versa). Entering into a futures contract for the
sale of securities has an effect similar to the actual sale of securities,
although sale of the futures contract might be accomplished more easily and
quickly. For example, if a fund holds long-term U.S. Government securities and
it anticipates a rise in long-term interest rates, it could, in lieu of
disposing of its portfolio securities, enter into futures contracts for the sale
of similar long term securities. If rates increased and the value of the fund's
portfolio securities declined, the value of the fund's futures contracts would
increase, thereby protecting the fund by preventing net asset value from
declining as much as it otherwise would have. Similarly, entering into futures
contracts for the purchase of securities has an effect similar to the actual
purchase of the underlying securities, but permits the continued holding of
securities other than the underlying securities. For example, if the fund
expects long-term interest rates to decline, it might enter into futures
contracts for the purchase of long-term securities so that it could gain rapid
market exposure that may offset anticipated increases in the cost of securities
it intends to purchase while continuing to hold higher-yield short-term
securities or waiting for the long-term market to stabilize. A stock index
futures contract may be used to hedge an underlying fund's portfolio with regard
to market risk as distinguished from risk relating to a specific security. A
stock index futures contract does not require the physical delivery of
securities, but merely provides for profits and losses resulting from changes in
the market value of the contract to be credited or debited at the close of each
trading day to the respective accounts of the parties to the contract. On the
contract's expiration date, a final cash settlement occurs. Changes in the
market value of a particular stock index futures contract reflect changes in the
specified index of equity securities on which the future is based.
There are several risks in connection with the use of futures contracts. In the
event of an imperfect correlation between the futures contract and the portfolio
position which is intended to be protected, the desired protection may not be
obtained and the fund may be exposed to risk of loss. Further, unanticipated
changes in interest rates or stock price movements may result in a poorer
overall performance for the fund than if it had not entered into any futures on
debt securities or stock index.
In addition, the market prices of futures contracts may be effected by certain
factors. First, all participants in the futures market are subject to margin
deposit and maintenance requirements. Rather than meeting additional margin
deposit requirements, investors 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
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<PAGE>
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. An underlying 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.
Risk Factors Regarding Options, Futures And Options On Futures. Perfect
correlation between an underlying fund's derivative positions and portfolio
positions will be impossible to achieve. Accordingly, successful use by a fund
of options on stock or bond indices, financial and currency futures contracts
and related options, and currency options will be subject to the investment
manager's ability to predict correctly movements in the direction of the
securities and currency markets generally or of a particular segment. If a
fund's investment manager is not successful in employing such instruments in
managing a fund's investments, the fund's performance will be worse than if it
did not employ such strategies. In addition, a fund will pay commissions and
other costs in connection with such investments, which may increase the fund's
expenses and reduce the return. In writing options on futures, a fund's loss is
potentially unlimited and may exceed the amount of the premium received.
Positions in stock index options, stock and bond index futures contracts,
financial futures contracts, foreign currency futures contracts, related options
on futures and options on currencies
B-14
<PAGE>
may be closed out only on an exchange which provides a secondary market. There
can be no assurance that a liquid secondary market will exist for any particular
option, futures contract or option thereon at any specific time. Thus, it may
not be possible to close such an option or futures position. This is
particularly true when trading options on foreign exchanges or the OTC market.
The inability to close options or futures positions could have an adverse impact
on a fund.
When trading options on foreign exchanges or in the OTC market many of the
protections afforded to exchange participants will not be available. For
example, there are no daily price fluctuation limits, and adverse market
movements could therefore continue to an unlimited extent over a period of time.
Leverage Through Borrowing. An underlying fund may borrow to increase its
holdings of portfolio securities. Under the 1940 Act, the fund is required to
maintain continuous asset coverage of 300% with respect to such borrowings and
to sell (within three days) sufficient portfolio holdings to restore such
coverage if it should decline to less than 300% due to market fluctuations or
otherwise, even if disadvantageous from an investment standpoint. Leveraging
will exaggerate the effect of any increase or decrease in the value of portfolio
securities on the fund's net asset value, and money borrowed will be subject to
interest costs (which may include commitment fees and/or the cost of maintaining
minimum average balances) which may or may not exceed the interest and option
premiums received from the securities purchased with borrowed funds.
Warrants. An underlying fund may invest in warrants, which are options to
purchase equity securities at specific prices valid for a specific period of
time. The prices do not necessarily move parallel to the prices of the
underlying securities.
Warrants have no voting rights, receive no dividends and have no rights with
respect to the assets of the issuer. If a warrant is not exercised within the
specified time period, it will become worthless and the fund will lose the
purchase price and the right to purchase the underlying security.
Description Of Bond Ratings. Excerpts from Moody's Investors Service, Inc.
("Moody's") description of its four highest bond ratings:
Aaa--judged to be the best quality. They carry the smallest
degree of investment risk; Aa--judged to be of high quality by
all standards. Together with the Aaa group they comprise what
are generally known as high grade bonds; A--possess many
favorable investment attributes and are to be considered as
"upper medium grade obligations"; Baa--considered as medium
grade obligations, i.e., they are neither highly protected nor
poorly secured. Interest payments and principal security
appear adequate for the present but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time; Ba--judged to have
speculative elements, their future cannot be considered as
well assured; B--generally lack characteristics of the
desirable investment; Caa--are of poor standing. Such issues
may be in default or there may be present elements of danger
with respect to principal or interest; Ca--speculative in a
high degree; often
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<PAGE>
in default; C--lowest rated class of bonds; regarded as having
extremely poor prospects.
Moody's also supplies numerical indicators 1, 2 and 3 to rating categories. The
modifier 1 indicates that the security is in the higher end of its rating
category; the modifier 2 indicates a mid-range ranking; and 3 indicates a
ranking toward the lower end of the category.
Excerpts from Standard & Poor's Corporation ("S&P") description of its five
highest bond ratings:
AAA--highest grade obligations. Capacity to pay interest and
repay principal is extremely strong; AA--also qualify as high
grade obligations. A very strong capacity to pay interest and
repay principal and differs from AAA issues only in a small
degree; A--regarded as upper medium grade. They have a strong
capacity to pay interest and repay principal although it is
somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher
rated categories; BBB--regarded as having an adequate capacity
to pay interest and repay principal. Whereas it normally
exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead
to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories. This
group is the lowest which qualifies for commercial bank
investment. BB, B, CCC, CC--predominantly speculative with
respect to capacity to pay interest and repay principal in
accordance with terms of the obligations; BB indicates the
lowest degree of speculation and CC the highest.
S&P applies indicators "+", no character, and "-" to its rating categories. The
indicators show relative standing within the major rating categories.
Investment Advisor
A separate Investment Advisory Agreement between New Century Portfolios and the
Advisor on behalf of the Capital and the Balanced Portfolios of the Trust was
initially approved (on February 28, 1990) for a term of two years. On October
16, 1998, the Fund's shareholders approved new investment advisory agreements
with the Advisor to replace the prior Advisory Agreements. The new agreements
contain the same terms and conditions as the prior Advisory Agreements, except
for effective dates and termination dates. Shareholders were asked to approve
the new agreements because the Advisor merged with Weston Advisors, Inc., an
affiliated company, which resulted in a change of control of the Advisor. On
June 22, 2000, the initial shareholder of the Aggressive and International
Portfolios approved comparable Investment Advisory Agreements with the Advisor
for those two series.
All of the Agreements continue in effect from year to year after an initial term
of two years 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
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<PAGE>
party to the Agreement, voting in person at a meeting called for the purpose of
voting on such approval. Each 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 its services as investment advisor, the Advisor receives a monthly fee from
each Portfolio, 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. For the fiscal years ended October 31, 1999, 1998 and 1997, the
Advisor received fees related to its management of the Portfolios as follows:
---------------------------------------------------------------------
1999 1998 1997
---------------------------------------------------------------------
New Century Capital $1,069,099 $624,526 $875,355
---------------------------------------------------------------------
New Century Balanced $533,425 $703,591 $455,053
---------------------------------------------------------------------
New Century Aggressive N/A N/A N/A
---------------------------------------------------------------------
New Century International N/A N/A N/A
---------------------------------------------------------------------
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<PAGE>
For the fiscal years ended October 31, 1999, 1998 and 1997, the Advisor received
fees related to administrative services provided to Portfolios the as follows:
------------------------------------------------------------------------------
1999 1998 1997
------------------------------------------------------------------------------
------------------------------------------------------------------------------
New Century Capital $71,863 $39,254; $68,180
------------------------------------------------------------------------------
------------------------------------------------------------------------------
New Century Balanced $41,385 $58,965 $27,593
------------------------------------------------------------------------------
------------------------------------------------------------------------------
New Century Aggressive N/A N/A N/A
------------------------------------------------------------------------------
------------------------------------------------------------------------------
New Century International N/A N/A N/A
------------------------------------------------------------------------------
The officers and trustees of the Advisor (and their positions held with New
Century Portfolios) are as follows: I. Richard Horowitz, President; Douglas A.
Biggar, Executive Vice President and Clerk (Chairman and a Trustee of the
Trust); Joseph Robbat, Jr., Chief Executive Officer and Treasurer (a Trustee of
the Trust); Wayne M. Grzecki (President of the Trust); Ronald A. Sugameli (Vice
President of the Trust); and Robert I. Stock. Together, these individuals may be
deemed to control the Advisor.
Distributor
Pursuant to separate Distribution Agreements between New Century Portfolios and
Weston Securities Corp. (the "Distributor") on behalf of each Portfolio, the
Distributor is the exclusive agent for the Portfolios' shares, and has the right
to select selling dealers to offer the shares to investors. The Portfolios each
have a Distribution Plan ("Plan") adopted pursuant to Rule 12b-1 under the 1940
Act, which allows each Portfolio to pay up to 0.25% of its average daily net
assets to the Distributor for activities primarily intended to sell shares of
the Portfolio. In addition, the Distributor receives sales commissions and other
compensation in connection with the purchase of investment company shares by
each Portfolio. The Distributor is obligated to waive payments made by each
Portfolio pursuant to the Plan in amounts equal to the sales commissions and
other compensation that it receives in connection with the purchase of
investment company shares by each Portfolio. The following table sets forth the
corresponding dollar amounts for the last three fiscal years.
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Year Ended Fiscal Year Ended Fiscal Year Ended
October 31, 1997 October 31, 1998 October 31, 1999
--------------------- ---------------------- ---------------------
New Century Capital
Gross amount payable by Portfolio under
Plan........................................ $171,713 $208,476 $273,707
Amount waived by Distributor (equals sales $(77,284) $(56,576) $(83,399)
commissions and compensation it received in --------- --------- ---------
connection with the transactions by the
Portfolios).................................
Net amount paid by Portfolio to Distributor under $94,429 $151,900 $190,308
Plan........................................ ======= ======== ========
New Century Balanced
Gross amount payable by Portfolio under
Plan........................................ $113,764 125,861 156,161
Amount waived by Distributor (equals sales $(31,283) $(38,766) $(38,176)
commissions and compensation it received in --------- --------- ---------
connection with the transactions by the
Portfolios).................................
Net amount paid by Portfolio to Distributor under $82,481 $87,095 $117,985
Plan........................................ ======= ======= ========
New Century Aggressive
Gross amount payable by Portfolio under
Plan........................................ N/A N/A N/A
Amount waived by Distributor (equals sales N/A N/A N/A
commissions and compensation it received in
connection with the transactions by the
Portfolios).................................
Net amount paid by Portfolio to Distributor under N/A N/A N/A
Plan........................................
New Century Aggressive
Gross amount payable by Portfolio under
Plan........................................ N/A N/A N/A
Amount waived by Distributor (equals sales N/A N/A N/A
commissions and compensation it received in
connection with the transactions by the
Portfolios).................................
Net amount paid by Portfolio to Distributor under N/A N/A N/A
Plan........................................
</TABLE>
The principal expenses incurred during the stated period were for administration
staff and advertising. Under the Distribution Agreements, the expenses of
printing all sales literature, including prospectuses, are to be borne by the
Distributor. I. Richard Horowitz, Douglas A.
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<PAGE>
Biggar and Joseph Robbat, Jr., officers of the Advisor, are also registered
representatives of the Distributor. Therefore, the Distributor is an affiliated
person of New Century Portfolios.
On February 28, 1990, the Distribution Agreement and the Distribution (12b-1)
Plan for the Capital and the Balanced Portfolio were approved by the Board of
Trustees, including a majority of the Trustees who are not "interested persons"
of New Century Portfolios 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 "12b-1 Trustees"). The comparable
Distribution Agreements and 12b-1 Plans for the Aggressive and the International
Portfolios were approved by the Board of Trustees on June 22, 2000. The Plans
may be terminated at any time by the vote of the Board or the 12b-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 12b-1 Trustees is
committed to the discretion of such persons then in office.
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 limit
specified in the Plan, and the amounts and purposes of expenditures under the
Plans must be reported to the 12b-1 Trustees quarterly.
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, 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.
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
sales of Portfolio shares but only when execution and price are comparable to
that offered by other brokers. For the three fiscal years ending on October 31,
1999, 1998 and 1997, the aggregate amounts of brokerage commissions (including
markups on principal transactions) paid by the Trust were $0, $0 and
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<PAGE>
$108,567, respectively.
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.
New Century Portfolios 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 New Century Portfolios 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
PFPC Global Fund Services 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
B-21
<PAGE>
plan into the Trust or set up a new plan in the manner described below.
Individual Retirement Accounts (IRA). Individuals, who are not active
participants (and, when a joint return is filed, who do not have a spouse who is
an active participant) in an employer maintained retirement plan are eligible to
contribute on a deductible basis to an IRA account. The IRA deduction is also
retained for individual taxpayers and married couples with adjusted gross
incomes not in excess of certain specified limits. All individuals may make non
deductible IRA contributions to a separate account to the extent that they are
not eligible for a deductible contribution. Income earned by an IRA account will
continue to be tax deferred. A special IRA program is available for corporate
employers under which the employers may establish IRA accounts for their
employees in lieu of establishing corporate retirement plans. Known as SEP-IRA's
(Simplified Employee Pension-IRA), they free the corporate employer of many of
the record keeping requirements of establishing and maintaining a corporate
retirement plan trust.
If you have received a lump sum distribution from another qualified retirement
plan, you may roll over all or part of that distribution into a New Century
Portfolios 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.
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, 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 Program. You can arrange to make systematic cash
withdrawals from your account monthly, quarterly or annually. 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.
New Century Portfolios bears the cost of providing this plan at the present
time. Please contact the Distributor to obtain information or an application. We
may refuse to establish a systematic withdrawal program for an account under
$10,000 or a withdrawal payment under $50.
B-22
<PAGE>
Officers And Trustees Of New Century Portfolios
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.
<TABLE>
<CAPTION>
Position and Principal Occupation
Name and Address Age Office with Trust During the past Five Years
---------------- --- ----------------- --------------------------
<S> <C> <C> <C>
*Douglas A. Biggar 53 Chairman and Executive Vice President and Clerk,
20 William Street, Trustee Weston Financial Group, Inc.;
Suite 330 Clerk and Treasurer of Weston
Wellesley, MA 02481 Securities Corporation.
*Joseph Robbat, Jr. 49 Trustee Chief Executive Officer and
20 William St., Treasurer,
Suite 330 Weston Financial Group, Inc.
Wellesley, MA 02481
Stanley H. Cooper, Esq. 52 Trustee Attorney in private practice
One Ashford Lane
Andover, MA 01810
Roger Eastman, CPA 69 Trustee Executive Vice President and Chief
32 Meetinghouse Square Operating Officer, Danvers Savings
Middleton, MA 01949 Bank; Formerly Partner, Arthur
Andersen & Co.
Michael A. Diorio, CPA 54 Trustee Consultant in private practice,
11 Calvin Drive Formerly Partner, Diorio, Hudson &
Milford, MA 01757 Pavento, P.C.
Wayne M. Grzecki 49 President Vice President and Senior
20 William St., Counselor, Weston Financial
Suite 330 Group, Inc.
Wellesley, MA 02481
Ronald A. Sugameli 49 Vice President Vice President and Senior
20 William St., Counselor, Weston Financial
Suite 330 Group, Inc.
Wellesley, MA 02481
Ellen M. Bruno 34 Treasurer Vice President, Weston Financial
20 William St. and Secretary Group, Inc.;
Suite 330 Consultant, United Asset
Wellesley, MA 02481 Management Corporation
B-23
<PAGE>
Susan K. Arnold 42 Assistant Treasurer Financial Counselor,
20 William St., Weston Financial Group, Inc.
Suite 330
Wellesley, MA 02481
Clara Prokup 52 Assistant Secretary Director of Investment
20 William St., Operations and Comptroller,
Suite 330 Weston Financial Group, Inc.
Wellesley, MA 02481
</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 New Century Portfolios who are
affiliated with the Administrator, the Advisor or the Distributor is paid by the
Administrator, the Investment Advisor or the Distributor, respectively, and not
by the Trust. The Trust pays each Trustee who is not affiliated with the
Administrator, Advisor or Distributor quarterly fees.
The following table shows aggregate compensation paid to each non-affiliated
Trustee by the Trust in the fiscal year ended October 31, 1999.
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Name of Person, Aggregate Pension or Estimated Annual Total
Position Compensation Retirement Benefits Upon Compensation
From Benefits Accrued Retirement
Registrant as Part of Trust
Expenses
<S> <C> <C> <C> <C>
Stanley H. Cooper, $4,000 $-0- $-0- $4,000
Esquire -Trustee
Roger Eastman, $4,000 $-0- $-0- $4,000
CPA - Trustee
Michael A. Diorio, $4,000 $-0- $-0- $4,000
CPA - Trustee
</TABLE>
B-24
<PAGE>
Ownership of the Portfolios
As of August 1, 2000, the following persons were control persons or principal
holders of each Portfolio's shares. Control persons are persons deemed to
control a Portfolio because they own beneficially over 25% of the outstanding
shares of the Portfolio. Principal holders are persons that own beneficially 5%
or more of a Portfolio's outstanding shares. As of that date, the Trust's
officers and Trustees as a group owned less than 1% of the outstanding shares of
the Portfolios.
New Century Capital
None
New Century Balanced
FTC & Co. 6.19%
Datalynx 093
P.O. Box 173736
Denver, CO 80217-3736
New Century Aggressive
N/A
New Century International
N/A
General Information
Beneficial Shares. New Century Portfolios was organized as a Maryland
corporation on July 20, 1988. It was reorganized as a Massachusetts business
trust on March 20, 1990. Prior to November 2, 1998, New Century Portfolios was
named Weston Portfolios and New Century Balanced Portfolio was designated as New
Century I Portfolio.
It offers an unlimited number of transferable beneficial shares all at $.01 par
value. At the present time, there are four series of shares designated as the
"New Century Capital Portfolio", the "New Century Balanced Portfolio", the "New
Century Aggressive Portfolio", and the "New Century International 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 Portfolios.
B-25
<PAGE>
Audits and Reports. The accounts of the Trust are audited each year by Briggs
Bunting & Dougherty, LLP, Two Logan Square, Suite 2121, Philadelphia, PA 19103,
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.
Taxes. 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 in accordance with certain
timing requirements 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, among other things, 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 the sum of (i) 98% of its calendar year ordinary income, plus
(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, plus (iii) 100% of any undistributed ordinary or capital
gain net income from the prior year. New Century Portfolios 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 entity 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.
B-26
<PAGE>
Expenses. Except as indicated above, New Century Portfolios 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 New Century Portfolios' Custodian and Transfer Agent; (d) the
charges and expenses of New Century Portfolios' 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 New Century Portfolios to governmental agencies; (g)
the fees of any trade association of which New Century Portfolios is a member;
(h) the cost of stock certificates, if any, representing shares of the
Portfolio; (i) reimbursements of the organization expenses of New Century
Portfolios and the fees and expenses involved in registering and maintaining
registration of New Century Portfolios and its shares with the Securities and
Exchange Commission and registering to distribute its shares in and qualifying
its shares for sale under state securities laws, and the preparation and
printing of New Century Portfolios' 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 New Century Portfolios' business; and (l) compensation
for employees of New Century Portfolios.
Custodian. The Trust has retained The Bank of New York, 90 Washington Street,
22nd Floor, New York, NY 10286, to act as Custodian of the securities and cash
of the Trust and its Portfolios.
Code of Ethics. The Trust has adopted a Code of Ethics for certain access
persons of the Portfolios, which includes its Trustees and certain officers and
employees of the Trust, the Advisor and the Distributor. The Code of Ethics is
designed to ensure that insiders act in the interest of the Portfolios and their
shareholders with respect to any personal trading of securities. Under the Code
of Ethics, access persons are prohibited from directly or indirectly buying or
selling securities (except for mutual funds, U.S. government securities and
money market instruments) which to his or her actual knowledge are being
purchased, sold or considered for purchase or sale by the Portfolios. The Code
of Ethics contains even more stringent investment restrictions and prohibitions
for insiders who participate in the Portfolios' investment decisions. The Code
of Ethics also contains certain reporting requirements and securities trading
clearance procedures.
Performance
From time to time a Portfolio may advertise its total return and yield. "Total
return" is the total of all income and capital gains paid to shareholders,
assuming reinvestment of all distributions, plus (or minus) the change in the
value of the original investment, expressed as a percentage of purchase price.
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
B-27
<PAGE>
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. A portfolio may also include its distribution rate in its
advertisements. The distribution rate is the amount of distributions per share
made over a 12-month period divided by the current net asset value.
Total return quotations used by the Portfolios are based on standardized methods
of computing performance mandated by Securities and Exchange Commission rules.
The "average annual 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 average annual total returns for each
Portfolio for one-year, five-years and ten-years periods ending on December 31,
1999 are set forth in the Prospectus.
B-28
<PAGE>
Average Annual Returns for the Periods Ended October 31, 1999.
1 Year 5 Years 10 Years
------ -------- --------
New Century Capital Portfolio 28.94% 19.47% 14.30%
New Century Balanced Portfolio 15.26% 13.94% 10.91%
New Century Aggressive Portfolio N/A N/A N/A
New Century International Portfolio N/A N/A N/A
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:
P(1 + T)n = 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.
B-29
<PAGE>
Financial Statements
The Trust's audited financial statements, related notes and the report of Briggs
Bunting & Dougherty, LLP for the fiscal year ended October 31, 1999, as set
forth in the Trust's Annual Report to Shareholders dated October 31, 1999, are
incorporated herein by reference. You may obtain a free copy of the Annual
Report to Shareholders by contacting the Trust at the address or telephone
number appearing on the cover of this Statement of Additional Information.
INVESTMENT ADVISOR
Weston Financial, Inc.
20 William Street, Suite 330
Wellesley, MA 02481-4102
DISTRIBUTOR
Weston Securities Corporation
20 William Street, Suite 330
Wellesley, MA 02481-4102
CUSTODIAN
The Bank of New York
90 Washington Street, 22nd Floor
New York, NY 10286-0001
TRANSFER AGENT
PFPC Global Fund Services
211 South Gulph Road
P.O. Box 61767
King of Prussia, PA 19406-3101
LEGAL COUNSEL
Greenberg Traurig, LLP
One Commerce Square
2005 Market Street, Suite 2050
Philadelphia, PA 19103-7065
AUDITORS
Briggs Bunting & Dougherty, LLP
Two Logan Square, Suite 2121
Philadelphia, PA 19103-4901
B-30
<PAGE>
NEW CENTURY PORTFOLIOS
PART C: OTHER INFORMATION
Item 23. FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits need to be re-filed, except as otherwise noted:
(a) (1) Declaration of Trust of Weston Portfolios dated February 1, 1990 (the
"Declaration") as filed with the Secretary of the Commonwealth of the
Commonwealth of Massachusetts on February 26, 1990 is filed herewith
as Exhibit EX-99.a.1.
a. Consent to Use of Name of Weston Portfolios dated
February 22, 1990 as filed with the Secretary of the
Commonwealth of the Commonwealth of Massachusetts on
February 26, 1990 is filed herewith as Exhibit EX-99.a.1.a.
b. Amended Certificate to Declaration of Trust dated
August 30, 2000 as filed with the Secretary of the
Commonwealth of the Commonwealth of Massachusetts on
August 30, 2000 is filed herewith as Exhibit
EX-99.a.1.b.
(2) Amendments to the Declaration.
(a) Amendment dated October 30, 1998 to the Declaration
re: a change of name from Weston Portfolios to New
Century Portfolios as filed with the Secretary of the
Commonwealth of the Commonwealth of Massachusetts on
October 20, 1998 is filed herewith as Exhibit
EX-99.a.2.a.
(b) Amendment dated August 30, 2000 to the Declaration
re: the re-designation of the New Century I Portfolio
as the New Century Balanced Portfolio as filed with
the Secretary of the Commonwealth of the Commonwealth
of Massachusetts on August 30, 2000 is filed herewith
as Exhibit EX-99.a.2.b.
(c) Amendment dated August 30, 2000 to the Declaration
re: the addition of the New Century Aggressive
Portfolio and the New Century Balanced Portfolio as
filed with the Secretary of the Commonwealth of the
Commonwealth of Massachusetts on August 30, 2000 is
filed herewith as Exhibit EX-99.a.2.c.
(b) By-Laws.
By-Laws of the Registrant are filed herewith as Exhibit EX-99.b.
<PAGE>
(c) Instruments Defining Rights of Security Holders.
(1) Specimens.
a. Specimen security of New Century Capital Portfolio re: shares
of beneficial interest, $0.01 par value, of the Registrant, a
business trust organized under the laws of the
Commonwealth of Massachusetts will be filed by Amendment.
b. Specimen of the New Century Balanced Portfolio (f/k/a New
Century I Portfolio) re: shares of beneficial interest, $0.01 par
value, of the Registrant, a business trust organized under the
laws of the Commonwealth of Massachusetts will be filed by
Amendment.
(2) Instruments Defining Rights of Security Holders.
a. Declaration of Trust.
Article IV. OWNERSHIP OF ASSETS IN THE TRUST.
Article V. SHAREHOLDERS: BENEFICIAL INTEREST IN THE
TRUST; PURCHASE AND REDEMPTION OF SHARES
OF BENEFICIAL INTEREST.
Section 5.1 Shares of Beneficial Interest.
Section 5.2 Establishment and Designation
of Series.
Section 5.3 Purchase of Beneficial Shares
in the Trust.
Section 5.5 Ownership of Beneficial
Shares.
Section 5.6 Pre-Emptive Rights.
Section 5.7 Redemption of Beneficial Shares.
Section 5.8 Option to Redeem Small
Accounts.
Section 5.9 Suspension of Right of
Redemption.
Section 5.10 Redemption in Kind.
Section 5.11 Exchange Privilege.
Article VI. LIMITATION OF SHAREHOLDER LIABILITY.
Article VII. Section 7.3. Subsections (M) and (O)
Article IX. BENEFICIAL SHAREHOLDERS' VOTING POWERS
AND MEETINGS.
Article X. DISTRIBUTIONS AND DETERMINATIONS OF NET
INCOME.
<PAGE>
Article XI. LIMITATION OF LIABILITY AND INDEMNIFICATION.
Section 11.3.
Article XII. MISCELLANEOUS.
Section 12.3., 12.4, and 12.5.
b. By-Laws.
Article II. SHAREHOLDERS AND CERTIFICATES OF
BENEFICIAL INTEREST.
Article III. MEETINGS OF SHAREHOLDERS.
Article X. DIVIDENDS.
Article XV. NOTICES.
(d) (1) Executed Investment Advisory Agreement dated November 30, 1998 between
the Registrant and Weston Financial Group, Inc. on behalf of the New
Century Capitol Portfolio is filed herewith as Exhibit EX-99.d.1.
(2) Executed Investment Advisory Agreement dated November 30, 1998 between
the Registrant and Weston Financial Group, Inc. on behalf of the New
Century Balanced Portfolio is filed herewith as Exhibit EX-99.d.2.
(3) FORM OF Investment Advisory Agreement dated November __, 2000 between
the Registrant and Weston Financial Group, Inc. on behalf of the New
Century Aggressive Portfolio is filed herewith as Exhibit EX-99.d.3.
(4) FORM OF Investment Advisory Agreement dated November __, 2000 between
the Registrant and Weston Financial Group, Inc. on behalf of the New
Century International Portfolio is filed herewith as Exhibit
EX-99.d.4.
(e) (1) Distribution Agreement dated February 28, 1990 between Weston
Securities Corporation and the Registrant on behalf of the New Century
Capital Portfolio is filed herewith as Exhibit EX-99.e.1.
(a) Amendments to Distribution Agreement
1. Amendment dated February 16, 2000, between Weston Securities
Corporation and the Registrant on behalf of the New Century
Capital Portfolio is filed herewith as Exhibit
EX-99.e.1.a.1
(2) Distribution Agreement dated February 28, 1990 between Weston
Securities Corporation and the Registrant on behalf of the New Century
<PAGE>
Balanced Portfolio (f/k/a New Century I Portfolio) is filed herewith
as Exhibit EX-99.e.2.
(a) Amendments to Distribution Agreement
1. Amendment dated February 16, 2000, between Weston
Securities Corporation and the Registrant on behalf of
the New Century Balanced Portfolio is filed herewith as
Exhibit EX-99.e.2.a.1.
(3) FORM OF Distribution Agreement dated November __, 2000 between
Weston Securities Corporation and the Registrant on behalf of
the New Century Aggressive Portfolio is filed herewith as
Exhibit EX-99.e.3.
(4) FORM OF Distribution Agreement dated November __, 2000 between
Weston Securities Corporation and the Registrant on behalf of
the New Century International Portfolio is filed herewith as
Exhibit EX-99.e.4.
(f) Not applicable, because there are no pension, bonus or other
agreements for the benefit of trustees and officers
(g) (1) Custody Agreement dated December 21, 1994 between Registrant and The
Bank of New York is incorporated herein by reference to Exhibit No.
23(g)(1) to Item No. 23 (Exhibit EX-99.b8) of Post-Effective Amendment
No. 13/17 1A (File Nos. 33-24041 and 811-05646) to the Registrant's
Registration Statement on Form N-1A, as filed with the Commission on
February 26, 1999.
(2) Custody Administration and Agency Agreement dated December 21, 1994
between Fund/Plan Services, Inc. and the Registrant will be filed by
Amendment.
a. Letter Agreement dated March 3, 1998
between FPS Services, Inc. (formerly known as Fund/
Plan Services, Inc.) and Weston Portfolios, Inc. on
behalf of the New Century Capital Portfolio (formerly
known as the Weston Growth Portfolio) and the
New Century Balanced Portfolio (formerly known as
the New Century I Portfolio and the Weston Income
Portfolio) re: assignment of all obligations under the
Custody Administration and Agency Agreement to First Data
Corporation is filed herewith as Exhibit EX-99.g.2.a.
<PAGE>
(h) (1) Administration Agreements.
a. Administration Agreement dated February ___, 1990 between
Weston Financial Group, Inc. and the Registrant on behalf of
the New Century Capital Portfolio is filed herewith as
Exhibit EX-99.h.1.a.
b. Administration Agreement dated February ___, 1990 between
Weston Financial Group, Inc. and the Registrant on behalf of
the New Century Balanced Portfolio (f/k/a New Century I
Portfolio) is filed herewith as Exhibit EX-99.h.1.b.
c. FORM OF Administration Agreement dated November __, 2000
between Weston Financial Group, Inc. and the Registrant on
behalf of the New Century Aggressive Portfolio is filed
herewith as Exhibit EX-99.h.1.c.
d. FORM OF Administration Agreement dated November __, 2000
between Weston Financial Group, Inc. and the Registrant on
behalf of the New Century International Portfolio is filed
herewith as Exhibit EX-99.h.1.c.
(2) Shareholder Services.
a. Shareholder Services Agreement dated November 8, 1988 between
Fund/Plan Services, Inc. and Weston Portfolios, Inc. on
behalf of the New Century Capital Portfolio (formerly known
as the Weston Growth Portfolio) and the New Century Balanced
Portfolio (formerly known as the New Century I Portfolio and
the Weston Income Portfolio) is filed herewith as Exhibit
EX-99.h.2.a.
1. Letter Agreement dated March 3, 1998 between FPS
Services, Inc. (formerly known as Fund/ Plan
Services, Inc.) and Weston Portfolios, Inc. on
behalf of the New Century Capital Portfolio
(formerly known as the Weston Growth Portfolio) and
the New Century Balanced Portfolio (formerly known
as the New Century I Portfolio and the Weston Income
Portfolio) re: assignment of all obligations under
the Shareholder Services Agreement to First Data
Corporation is filed herewith as Exhibit
EX-99.h.2.a.1.
(3) Accounting Services.
a. Accounting Services Agreement dated November 8, 1988
between Fund/Plan Services, Inc. and Weston
Portfolios, Inc. on behalf of the New Century
Capital Portfolio (formerly known as the Weston
<PAGE>
Growth Portfolio) and the New Century Balanced
Portfolio (formerly known as the New Century I
Portfolio and the Weston Income Portfolio) is filed
herewith as Exhibit EX-99.h.3.a.
1. Amendment dated February 1, 1990 to Accounting
Services Agreement dated November 8, 1998 will
be filed by Amendment.
2. Letter Agreement dated March 3, 1998 between FPS
Services, Inc. (formerly known as Fund/ Plan
Services, Inc.) and Weston Portfolios, Inc. on
behalf of the New Century Capital Portfolio
(formerly known as the Weston Growth Portfolio)
and the New Century Balanced Portfolio (formerly
known as the New Century I Portfolio and the
Weston Income Portfolio) re: assignment of all
obligations under the Accounting Services
Agreement to First Data Corporation is filed
herewith as Exhibit EX-99.h.3.a.2.
(i) Opinion and consent of Greenberg, Traurig, LLP dated August 30, 2000 as
to the legality of the Registrant's securities being registered is
filed herewith as Exhibit EX-99.i.
(j) Consent of Briggs Bunting & Dougherty, LLP Independent Certified Public
Accountants dated August 28, 2000 is filed herewith as Exhibit EX-99.j.
(k) Not applicable.
(l) (a) Letter dated November 30, 1988 from Messrs. Douglas A. Biggar, Joseph
Robbat, Jr., and I. Richard Horowitz, Trustees of The Weston Financial
Group Profit Sharing Plan and Trust re: $100,000 investment in the
Registrant is incorporated herein by reference to Post-Effective
Amendment Nos. 3/3 to the Registrant's Registration Statement on Form
N-1A (File Nos. 33-24041 and 811-05646), as filed with the Commission
on March 16, 1990.
(b) Letter dated November 30, 1988 from Joseph Robbat, Jr., Chairman and
CEO of Weston Financial Group, to Messrs. Douglas A. Biggar, Joseph
Robbat, Jr. And I. Richard Horowitz, Trustees of The Weston Financial
Group Profit Sharing Plan and Trust is incorporated herein by
reference to Post-Effective Amendment Nos. 3/3 to the Registrant's
Registration Statement on Form N-1A (File Nos. 33-24041 and
811-05646), as filed with the Commission on March 16, 1990.
(m) (1) Distribution Plan dated _____________for the New Century Capital
Portfolio (f/k/a The Weston Growth Portfolio) is filed herewith as
<PAGE>
Exhibit EX-99.m.1.
(2) Distribution Plan dated ____________ for the New Century Balanced
Portfolio (f/k/a The New Century I Portfolio and The Weston Income
Portfolio) is filed herewith as Exhibit EX-99.m.2.
(3) Form of Distribution Plan dated November __, 2000 for the New Century
Aggressive Portfolio is filed herewith as Exhibit EX-99.m.3.
(4) Form of Distribution Plan dated November __, 2000 for the New Century
International Portfolio is filed herewith as Exhibit EX-99.m.4.
(n) Rule 18f-3 Plan.
Not applicable.
(o) Not applicable. [Reserved]
(p) Code of Ethics of the Registrant dated October 1, 1998 is incorporated
herein by reference to Exhibit (j) to Item No. 23 (EX-99.p.) of
Post-Effective Amendment Nos. 13/17 to Registrant's Registration
Statement on Form N-1A (File Nos. 33-24041 and 811-05646 ) as filed
with the Commission on February 28, 2000.
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL OF THE
REGISTRANT.
None.
Item 25. INDEMNIFICATION.
The company shall indemnify any person who was or is a
trustee, officer or employee of the Trust; provided however,
that any such indemnification (unless ordered by a court)
shall be made by the company only as authorized in the
specific case upon a determination that indemnification of
such persons is proper in the circumstances. Such
determination shall be made:
(i) by the Board of Trustees by a majority vote of a
quorum which consists of the trustees who are neither
"interested persons" of the company as defined in
Section 2(a)(19) of the 1940 Act, nor parties to the
proceedings, or,
(ii) if the required quorum is not obtainable or if a
quorum of such trustees so directs, by independent
legal counsel in a written opinion. No
indemnification will be provided by the company to
any trustee or officer of the company for any
liability to the company or shareholders to which he
would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless
disregard of duty.
As permitted by Article 11.2 (a)(v) of the
Declaration of Trust, reasonable expenses incurred by
<PAGE>
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 26. 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 27. 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 Weston
Securities Corp., the only underwriter named in answer to
Item 20 of Part B:
<PAGE>
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 02481
Douglas A. Biggar Clerk and Chairman
20 William St., Suite 330 Treasurer and Trustee
Wellesley, MA 02481
(c) Not applicable.
Item 28. 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, MA 02481, PFPC Global Fund Services, 211
South Gulph Road, King of Prussia, PA 19406 or The Bank of New
York, 90 Washington Street, 22nd Floor, New York, NY 10286.
Item 29. MANAGEMENT SERVICES.
All management services are covered in the investment advisory
and administration agreements between the Registrant and
Weston Financial Group, Inc. as discussed in Parts A and B.
Item 30. 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 Fund has duly caused of this Amendment to
its Registration Statement to be signed on its behalf by the undersigned, duly
authorized, in the city of Wellesley, and Commonwealth of Massachusetts on the
25 day of August, 2000.
NEW CENTURY PORTFOLIOS
Fund
By: /S/ WAYNE M. GRZECKI
(Signature and Title)
Wayne M. Grzecki, President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the date(s) indicated.
(Signature) (Title) (Date)
/S/ DOUGLAS A. BIGGAR Trustee August 25, 2000
Douglas A. Biggar
/S/ JOSEPH ROBBAT, JR. Trustee August 25, 2000
Joseph Robbat, Jr.
/S/ STANLEY H. COOPER Trustee August 25, 2000
Stanley H. Cooper
/S/ WAYNE M. GRZECKI President August 25, 2000
Wayne M. Grzecki
/S/ MICHAEL A. DIORIO Trustee August 25, 2000
Michael A. Diorio
/S/ ROGER EASTMAN Trustee August 25, 2000
Roger Eastman
