ANNUAL REPORT
YEAR ENDED OCTOBER 31, 1999
<PAGE>
NEW CENTURY PORTFOLIOS
CONTENTS
- ------------------------------------------------------------------------------
PRESIDENT'S MESSAGE 1
PERFORMANCE CHARTS 2
NEW CENTURY CAPITAL PORTFOLIO
Portfolio of Investments
October 31, 1999 3
Statement of Assets and Liabilities
October 31, 1999 4
Statement of Operations
Year ended October 31, 1999 5
Statement of Changes in Net Assets
Years ended October 31, 1999 and 1998 6
Financial Highlights
Five years in the period ended October 31, 1999 7
NEW CENTURY BALANCED PORTFOLIO
Portfolio of Investments
October 31, 1999 8
Statement of Assets and Liabilities
October 31, 1999 10
Statement of Operations
Year ended October 31, 1999 11
Statement of Changes in Net Assets
Years ended October 31, 1999 and 1998 12
Financial Highlights
Five years in the period ended October 31, 1999 13
NEW CENTURY CAPITAL AND BALANCED PORTFOLIOS
Notes to Financial Statements 14
Report of Independent Certified Public Accountants 17
- ------------------------------------------------------------------------------
<PAGE>
PRESIDENT'S MESSAGE
Dear Fellow Shareholders:
I am pleased to present our Tenth Annual Report.
During the 12-month period ended October 31, 1999, the financial markets were
volatile.
The Standard & Poors 500 Composite Stock Price Index, which reflects the
performance of the stocks of the largest domestic companies, reached an
intermediate peak in mid-July (up 27% for the period) only to give up 44% of its
gain for the period by mid-October. The S&P then began an impressive rally which
is continuing through the beginning of December.
The Russell 2000 Index, which reflects the performance of stocks of
smaller-capitalized domestic companies, was not immune from volatility.
This Index posted an increase of 20% by mid-July. The Index then stumbled and
gave up 55% of its gain for the period by the end of October.
The international equity markets as measured by the Morgan Stanley Capital
International-Europe, Australasia, Far East Index, gained 22% by April and added
another 2% to its gain for the period by the end of October.
Volatility did not spare the fixed income sector. During the period interest
rates increased and the price of bonds, which moves in the opposite direction
of interest rates, declined. The Lehman Brothers Index of Long-Term Treasury
Bonds declined by more than 6% during the period.
During this 12-month period of financial volatility, a disciplined long-term
investment approach was crucial. Our investment discipline generated a 29%
return in New Century Capital and a 15% return in New Century Balanced. The
three-year Beta was .90 for the Capital Fund and .60 for the Balanced Fund.
(Beta measures the risk of a fund relative to the variability of an index,
in this case, the S&P 500. A fund with a Beta measure less than 1.0 would be
expected to increase less than the Index during a
rising market and to decrease less than the Index during a declining market.)
As we look forward to the next six months, our goal is to balance each fund's
investment allocation among the sectors that are exhibiting the best
risk-adjusted return. Within each sector, our goal is to continue to invest
in the mutual funds that are exhibiting superior risk-adjusted performance.
Although we can not predict future performance, we are confident that our
disciplined investment approach will provide a risk-adjusted performance
consistent with each fund's objectives. We thank you for
selecting us to be part of your long-term investment strategy.
Sincerely,
Wayne M. Grzecki
President
-1-
<PAGE>
PERFORMANCE CHARTS
[GRAPHIC OMITTED]
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
NEW CENTURY CAPITAL PORTFOLIO AND THE S&P 500 INDEX
Graph Data:
New Century Capital S&P 500 Index
10/31/89 $10,000 $10,000
10/31/90 $ 9,024 $ 9,251
10/31/91 $11,994 $12,351
10/31/92 $12,204 $13,582
10/31/93 $14,755 $15,608
10/31/94 $15,449 $16,210
10/31/95 $18,477 $20,491
10/31/96 $21,232 $25,425
10/31/97 $27,011 $33,587
10/31/98 $29,164 $40,973
10/31/99 $37,604 $51,486
Average Annual Total Return For The Period Ended
10/31/99
1 Year 5 Years 10 Years
------ ------- --------
New Century Capital 28.94% 19.47% 14.30%
Past performance does not predict future performance.
[GRAPHIC OMITTED]
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE
NEW CENTURY BALANCED PORTFOLIO AND A BLENDED
EQUITY/BOND INDEX
Graph Data:
S&P 500 Indx./
LB Interm Gov-
New Century Balanced Corp
10/31/89 $10,000 $10,000
10/31/90 $ 9,603 $ 9,864
10/31/91 $11,590 $12,371
10/31/92 $12,182 $13,606
10/31/93 $14,460 $15,363
10/31/94 $14,642 $15,601
10/31/95 $16,828 $18,854
10/31/96 $19,060 $22,017
10/31/97 $22,803 $25,723
10/31/98 $24,393 $29,786
10/31/99 $28,115 $29,786
Average Annual Total Return For The Period Ended
10/31/99
1 Year 5 Years 10 Years
------ ------- --------
New Century Balanced 15.26% 13.94% 10.91%
Past performance does not predict future performance.
-2-
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1999
- ------------------------------------------------------------------------------
Issuer Shares Value
INVESTMENT COMPANIES - 99.8%
Aggressive Funds - 11.4%
Janus Olympus Fund 113,405 $ 4,634,844
Oppenheimer Capital Appreciation 92,766 4,392,452
Rydex OTC 38,860 2,304,372
Transamerica Premier Aggressive Growth 89,827 2,356,155
-------------
13,687,823
Growth and Income Funds - 31.5%
Citizens Index Fund 121,470 3,070,770
Goldman Sachs Core U.S. Equity A 200,142 7,083,020
Janus Growth and Income 112,020 4,126,815
SEI Index S&P 500 Index E 93,522 3,977,470
Vanguard Index 500 156,698 19,751,808
-------------
38,009,883
Growth Funds - 32.2%
Janus 314,527 13,455,458
Legg Mason Value Prime 76,423 5,338,168
Marsico Growth and Income 466,481 8,158,749
Performance Large Cap Equity 145,013 4,256,132
Vanguard Index Growth 213,049 7,661,240
-------------
38,869,747
Foreign Stock Funds - 10.2%
Acorn International 123,394 3,369,902
American Century International
Discovery Institutional 130,602 1,646,889
Artisan International 194,361 4,066,035
Federated International 110,163 3,184,821
-------------
12,267,647
Small Company Funds - 14.5%
AIM Small Cap Growth 130,375 3,196,798
Berger New Generation 124,672 3,583,071
Berger Small Cap Value Institutional 188,700 3,909,858
Eclipse Small Cap Value 240,955 2,730,025
Mutual Discovery Z 1,358 26,136
State Street Research Aurora 212,887 4,044,853
-------------
17,490,741
Total investment companies (Cost $92,887,929) 99.8% 120,325,841
Liabilities in excess of assets 0.2% 256,871
--------- -------------
Net assets 100.0% $ 120,582,712
======= =============
Cost for federal income tax at October 31, 1999 was $92,887,929 and net
unrealized appreciation consisted of:
Gross unrealized appreciation $ 28,068,285
Gross unrealized depreciation (630,373)
Net unrealized appreciation $ 27,437,912
=============
- ------------------------------------------------------------------------------
See notes to financial statements
-3-
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
- ------------------------------------------------------------------------------
ASSETS
Investments, at value (Cost $92,887,929) (Note 1A) $ 120,325,841
Cash 449,462
Receivable for
Interest 1,471
Capital stock sold 10,000
Total assets 120,786,774
LIABILITIES
Payable for
Capital stock redeemed 23,227
Investment advisory fee 94,110
Administrative fee 6,000
Accrued expenses 80,725
Total liabilities 204,062
NET ASSETS
(applicable to 7,216,324 outstanding shares;
unlimited number of shares of beneficial interest
authorized, $.01 par value.) $ 120,582,712
==================
Net asset value, offering price and redemption
price per share ($120,582,712 / 7,216,324 shares
of beneficial interest outstanding) $16.71
======
Net assets consist of:
Undistributed net realized gain on investments $ 7,053,111
Unrealized appreciation of investments 27,437,912
Paid-in capital 86,091,689
-------------
Total net assets $ 120,582,712
=============
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See notes to financial statements
-4-
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
STATEMENT OF OPERATIONS
Year ended October 31, 1999
- -------------------------------------------------------------------------------
NET INVESTMENT LOSS
Income
Interest $ 19,589
Dividends 500,517
------------
Total investment income 520,106
Expenses
Distribution costs (Note 3) 190,308
Investment advisory fees (Note 2) 1,069,099
Transfer agent fees 31,164
Legal and audit fees 36,965
Custody and accounting fees 86,294
Registration and filing fees 12,428
Administration fee (Note 2) 71,863
Trustees' fees 7,965
Other 11,932
------------
Total expenses 1,518,018
Net investment loss (997,912)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 5,270,799
Capital gain distributions from
regulated investment companies 3,199,821
Net unrealized appreciation of
investments during the year 19,225,559
Net realized and unrealized gain on investments 27,696,179
------------
Net increase in net assets resulting
from operations $ 26,698,267
=================
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See notes to financial statements
-5-
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
Years ended October 31,
- ------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
1999 1998
---- ----
OPERATIONS
Net investment loss $ (997,912) $ (581,423)
Net realized gain on investments 5,270,799 5,919,837
Capital gain distributions from regulated
investment companies 3,199,821 5,157,916
Net unrealized appreciation (depreciation)
of investments 19,225,559 (4,543,009)
------------- ------------
Net increase in net assets
resulting from operations 26,698,267 5,953,321
DISTRIBUTIONS TO SHAREHOLDERS
Realized gains on investments
($1.53 and $1.46 per share, respectively) (9,820,727) (7,850,147)
CAPITAL SHARE TRANSACTIONS
Increase in net assets from
capital share transactions (a) 13,540,820 13,669,847
---------------- ---------------
TOTAL INCREASE IN NET ASSETS 30,418,360 11,773,021
NET ASSETS
Beginning of period 90,164,352 78,391,331
------------- ------------
End of period $ 120,582,712 $ 90,164,352
============= ============
(a) Summary of capital share transactions is as follows:
<TABLE>
<S> <C> <C>
1999 1998
---------------------------- -----------------------------
Shares Value Shares Value
Shares sold 1,120,772 $17,427,343 943,259 $ 13,807,429
Shares issued on
reinvestment of distributions 631,817 9,357,214 541,907 7,364,519
------------ --------------- ----------- ----------------
1,752,589 26,784,557 1,485,166 21,171,948
Shares redeemed (843,278) (13,243,737) (523,418) (7,502,101)
---------- ------------- ---------- ------------
Net increase 909,311 $ 13,540,820 961,748 $ 13,669,847
============ ================= ============= ===================
</TABLE>
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See notes to financial statements
-6-
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
(For a Share Outstanding Throughout each Period)
Years ended October 31,
<TABLE>
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $14.30 $ 14.67 $13.51 $ 13.12 $ 12.31
------ ------- ------ -------- --------
Income (loss) from investment operations
Net investment loss (0.14) (0.09) (0.10) (0.09) (0.06)
Net gain on securities
(both realized and unrealized) 4.08 1.18 3.29 1.90 2.16
---- ------ ------- --------- --------
Total from investment operations 3.94 1.09 3.19 1.81 2.10
---- ------ ------- --------- --------
Less distributions
Distributions from capital gains (1.53) (1.46) (2.03) (1.42) (1.29)
----- ------- ----- --------- --------
Net asset value, end of period $16.71 $ 14.30 $14.67 $ 13.51 $13.12
====== ======= ====== ========== =========
TOTAL RETURN 28.94 % 7.97 % 27.22 % 14.91 % 19.60 %
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $120,583 $ 90,164 $ 78,391 $ 62,741 $ 50,889
Ratio of expenses to
average net assets 1.39 % 1.44 % 1.43 % 1.47 % 1.61 %
Ratio of net investment loss to
average net assets -0.91 % -0.67 % -0.76 % -0.69 % -0.52 %
Portfolio turnover 64 % 102 % 93 % 214 % 206 %
</TABLE>
- -------------------------------------------------------------------------------
See notes to financial statements
-7-
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1999
- ------------------------------------------------------------------------------
Issuer Shares Value
INVESTMENT COMPANIES - 99.5%
Growth and Income Funds - 29.2%
Citizens Index Fund 70,059 $ 1,771,080
Franklin Mutual Shares 715 15,172
Goldman Sachs Core U.S. Equity A 51,326 1,816,424
Janus Growth and Income 53,245 1,961,546
Lexington Corporate Leaders 113,357 1,976,947
SEI Index S&P 500 Index E 52,176 2,219,064
Strong Growth & Income 63,922 1,614,679
Vanguard Index 500 62,101 7,827,861
------------
19,202,773
Growth Funds - 15.6%
Janus 88,802 3,798,961
Legg Mason Value Prime 24,039 1,679,119
Marsico Growth and Income 163,245 2,855,146
Vanguard Index Growth 52,401 1,884,342
------------
10,217,568
Small Company Funds - 10.5%
AIM Small Cap Growth 63,553 1,558,322
Berger New Generation 55,556 1,596,667
Berger Small Cap Value Institutional 142,856 2,959,967
Eclipse Small Cap Value 68,530 776,442
------------
6,891,398
Convertible Security Funds - 4.0%
MainStay Convertible A 98,133 1,397,408
Nations Capital Income A 65,651 1,243,428
------------
2,640,836
Foreign Stock Funds - 7.0%
Acorn International 61,950 1,691,842
American Century International
Discovery Institutional 57,708 727,700
Artisan International 104,126 2,178,316
------------
4,597,858
General Corporate Bond Funds - 2.7%
Strong Corporate Bond 168,986 1,791,249
------------
- ------------------------------------------------------------------------------
See notes to financial statements
-8-
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
October 31, 1999
- ------------------------------------------------------------------------------
Issuer Shares Value
Government Treasury Bond Funds - 4.6%
American Century - Benham Target Maturities 2005 29,370 2,129,027
American Century - Benham Target Maturities 2010 13,629 761,010
Vanguard Fixed Income Intermediate Term U.S. 11,978 123,853
------------
3,013,890
High Quality Bond Funds - 3.3%
Dodge & Cox Income 116,556 1,354,378
Scudder Income 66,567 830,087
------------
2,184,465
High Yield Bond Funds - 14.7%
John Hancock High Yield 155,367 969,493
Mainstay High Yield Corporate Bond 607,333 4,524,632
Northeast Investors 420,685 4,177,398
------------
9,671,523
Worldwide Bond Funds - 7.9%
PIMCO Foreign Institutional 339,610 3,440,244
PIMCO Global Institutional 187,375 1,757,573
------------
5,197,817
Total investment companies (Cost $58,845,343) 99.5% 65,409,377
Cash and other assets in excess of liabilities 0.5% 311,903
-------- -------------
Net assets 100.0% $ 65,721,280
====== ============
Cost for federal income tax at
October 31, 1999 was $58,845,343 and net
unrealized appreciation consisted of:
Gross unrealized appreciation $ 8,127,406
Gross unrealized depreciation (1,563,372)
------------
Net unrealized appreciation $ 6,564,034
============
- ------------------------------------------------------------------------------
See notes to financial statements
-9-
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
- ------------------------------------------------------------------------------
ASSETS
Investments, at value (Cost $58,845,343) (Note 1A) $ 65,409,377
Cash 315,852
Receivables for
Capital stock sold 200
Dividends and interest 69,431
------------
Total assets 65,794,860
LIABILITIES
Payable for
Investment advisory fee 54,172
Administrative fee 3,200
Accrued expenses 16,208
------------
Total liabilities 73,580
NET ASSETS
(applicable to 4,896,539 outstanding shares;
unlimited number of shares of beneficial
interest authorized, $.01 par value.) $ 65,721,280
=================
Net asset value, offering price and redemption
price per share ($65,721,280 / 4,896,539 shares
of beneficial interest outstanding) $13.42
======
Net assets consist of:
Undistributed net realized gain on investments $ 4,062,010
Unrealized appreciation of investments 6,564,034
Paid-in capital 55,095,236
------------
Total net assets $ 65,721,280
============
- ------------------------------------------------------------------------------
See notes to financial statements
-10-
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
STATEMENT OF OPERATIONS
Year ended October 31, 1999
- ------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest $ 12,685
Dividends 1,801,027
-----------
Total investment income 1,813,712
Expenses
Distribution costs (Note 3) 117,985
Investment advisory fees (Note 2) 624,526
Transfer agent fees 28,315
Legal and audit fees 20,248
Custody and accounting fees 59,349
Registration and filing fees 10,671
Administration fee (Note 2) 39,254
Trustees' fees 4,343
Other 5,720
-----------
Total expenses 910,411
Net investment income 903,301
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 2,938,374
Capital gain distributions from
regulated investment companies 1,577,632
Net unrealized appreciation of
investments during the year 3,133,807
-----------
Net realized and unrealized gain on investments 7,649,813
-----------
Net increase in net assets resulting from operations $ 8,553,114
================
- -------------------------------------------------------------------------------
See notes to financial statements
-11-
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
Years ended October 31,
- -------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
1999 1998
---- ----
OPERATIONS
Net investment income $ 903,301 $ 804,861
Net realized gain on investments 2,938,374 2,740,780
Capital gain distributions from regulated
investment companies 1,577,632 2,252,579
Net unrealized appreciation
(depreciation) of investments 3,133,807 (2,511,268)
------------- ------------
Net increase in net assets resulting
from operations 8,553,114 3,286,952
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income
($0.20 and $0.21 per share, respectively) (903,301) (804,861)
Realized gains on investments
($1.09 and $1.06 per share, respectively) (4,811,756) (3,906,114)
CAPITAL SHARE TRANSACTIONS
Increase in net assets from capital
share transactions (a) 6,692,789 8,721,229
------------ ------------
TOTAL INCREASE IN NET ASSETS 9,530,846 7,297,206
NET ASSETS
Beginning of period 56,190,434 48,893,228
------------ -----------
End of period $ 65,721,280 $ 56,190,434
============ ============
(a) Summary of capital share transactions is as follows:
<TABLE>
<S> <C> <C>
1999 1998
---------------------------- -----------------------------
Shares Value Shares Value
Shares sold 531,039 $7,001,002 689,907 $ 8,996,626
Shares issued on
reinvestment of distributions 411,727 5,260,712 342,996 4,273,243
------------ ---------- ------------ -----------------
942,766 12,261,714 1,032,903 13,269,869
Shares redeemed (425,308) (5,568,925) (348,325) (4,548,640)
------------ ------------ ------------ -----------------
Net increase 517,458 $6,692,789 684,578 $ 8,721,229
============ ============ ============ =================
</TABLE>
- -------------------------------------------------------------------------------
See notes to financial statements
-12-
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
(For a Share Outstanding Throughout each Period)
Years ended October 31,
<TABLE>
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.83 $ 13.23 $12.21 $ 11.82 $ 11.22
------ ------- ------ -------- --------
Income from investment operations
Net investment income 0.20 0.21 0.21 0.18 0.24
Net gain on securities
(both realized and unrealized) 1.68 0.66 2.01 1.30 1.28
---- ------ ------- ------- ------
Total from investment operations 1.88 0.87 2.22 1.48 1.52
---- ------ ------- ------- ------
Less distributions
Dividends from net investment income (0.20) (0.21) (0.21) (0.18) (0.24)
Distributions from capital gains (1.09) (1.06) (0.99) (0.91) (0.68)
----- ------- ----- ------ ------
Total distributions (1.29) (1.27) (1.20) (1.09) (0.92)
------ ------- ------- ------- -------
Net asset value, end of period $13.42 $ 12.83 $13.23 $ 12.21 $ 11.82
====== ======= ====== ========= ==========
TOTAL RETURN 15.26 % 6.97 % 19.64 % 13.24 % 14.93 %
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $65,721 $56,190 $48,893 $40,423 $30,124
Ratio of expenses to
average net assets 1.46 % 1.46 % 1.41 % 1.61 % 1.72 %
Ratio of net investment income to
average net assets 1.45 % 1.51 % 1.58 % 1.45 % 2.14 %
Portfolio turnover 60 % 59 % 80 % 172 % 191 %
</TABLE>
- -------------------------------------------------------------------------------
See notes to financial statements
-13-
<PAGE>
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
- -------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
New Century Portfolios ("New Century") is organized as a Massachusetts
business trust which is registered under the Investment Company Act of
1940, as amended, as an open-end diversified management investment company
and currently offers shares of two series: New Century Capital Portfolio
and New Century Balanced Portfolio (together, "the Portfolios"). The
investment objective of the New Century Capital Portfolio is to provide
capital growth, with a secondary objective to provide income, while
managing risk. This Portfolio seeks to achieve these objectives by
investing primarily in shares of other registered investment companies
that emphasize investments in equities (domestic and foreign). The
investment objective of New Century Balanced Portfolio is to provide
income, with a secondary objective to provide capital growth, while
managing risk. This Portfolio seeks to achieve these objectives by
investing primarily in shares of other registered investment companies
that emphasize investments in equities (domestic and foreign), and fixed
income securities (domestic and foreign). The price of shares of these
Portfolios fluctuates daily and there are no assurances that the
Portfolios will be successful in achieving their stated investment
objectives. The following is a summary of significant accounting policies
consistently followed by the Portfolios in the preparation of their
financial statements.
A. INVESTMENT VALUATION
Investments, representing primarily capital stock of other open-end
investment companies, are valued at their net asset value as reported
by such companies. In the absence of readily available market
quotations, investments are valued at fair value as determined by the
Board of Trustees. Short-term investments are valued at amortized
cost which approximates market value.
B. FEDERAL INCOME TAXES
It is the policy of each Portfolio to comply with the requirements of
the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of their taxable income
to their shareholders in a manner which results in no tax to the
Portfolios. Therefore, no federal income or excise tax provision
is required.
C. INVESTMENT TRANSACTIONS
Investment transactions are recorded on a trade date basis. Realized
gains and losses from investment transactions are determined using the
first-in, first-out method.
D. INCOME RECOGNITION
Interest is accrued on portfolio investments daily. Dividend income is
recorded on the ex-dividend date.
E. COST OF OPERATIONS
The Portfolios bear all costs of their operations other than expenses
specifically assumed by the Advisor. Expenses directly attributable
to a Portfolio are charged to that Portfolio; other expenses are
allocated proportionately among each Portfolio in relation to the net
assets of each Portfolio.
F. USE OF ESTIMATES
In preparing financial statements in accordance with generally
accepted accounting principles, management is required to make
estimates and assumptions that affect the reported amount of
assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements, and
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
- -------------------------------------------------------------------------------
-14-
<PAGE>
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS - (Continued)
October 31, 1999
- -------------------------------------------------------------------------------
(2) INVESTMENT ADVISORY FEE, ADMINISTRATIVE AGREEMENT AND TRUSTEES' FEE
Fees paid by the Portfolios pursuant to an Investment Advisory Agreement
with Weston Financial Group, Inc. (the "Advisor") are computed daily and paid
monthly at an annualized rate of 1% on the first $100 million of average daily
assets and .75% of net assets exceeding that amount. The advisory fees are based
on the net assets of each of the Portfolios separately, and not on the total net
assets of the two series.
Fees paid by the Portfolio pursuant to an Administration Agreement with
the Advisor to administer the ordinary course of the Portfolios' business are
paid monthly from a detail of actual expenses incurred in the overseeing of the
Portfolios' affairs. All expenses incurred overseeing the Portfolios' affairs
are reimbursed monthly.
The Portfolios pay each Trustee who is not affiliated with the Advisor
$4,000 annually.
(3) DISTRIBUTION PLAN AND OTHER TRANSACTIONS WITH AFFILIATES
The Portfolios have adopted a Distribution Plan (the "Plan") under
Section 12(b) of the Investment Company Act of 1940 and Rule 12(b)-1
thereunder. Under the Plan, each Portfolio may pay up to .25% of its average
daily net assets to Weston Securities Corporation (the "Distributor") for
activities primarily intended to result in the sale of shares. Under its
terms, the Plan shall remain in effect from year to year, provided such
continuance is approved annually by a vote of a majority of the
Trustees and a majority of those Trustees who are not "interested persons" of
the Portfolios and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan.
During the year ended October 31, 1999, the Distributor received sales
commissions and other compensation of $83,399 and $38,176 in connection with the
purchase of investment company shares by New Century Capital Portfolio and New
Century Balanced Portfolio, respectively. Weston Securities Corp. has
voluntarily agreed to waive payments made by each Portfolio pursuant to the
distribution plans in amounts equal to the sales commissions and other
compensation.
Certain officers and trustees are also officers and/or directors of the
Advisor and the Distributor.
(4) INVESTMENT TRANSACTIONS
For the year ended October 31, 1999, the cost of purchases and the
proceeds from sales of securities other than short-term notes were as follows:
Purchases Sales
New Century Capital Portfolio $74,663,217 $69,428,142
New Century Balanced Portfolio $40,280,704 $37,058,935
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees
New Century Portfolios
Wellesley, Massachusetts
We have audited the statements of assets and liabilities of New Century
Portfolios (comprising, respectively, the New Century Capital Portfolio and the
New Century Balanced Portfolio), including the portfolios of investments, as of
October 31, 1999, and the related statement of operations for the year then
ended, and the statements of changes in net assets for each of the two years in
the period then ended and the financial highlights for each of the three years
in the period then ended. These financial statements and financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits. The financial highlights for each of the two years in the period
ended October 31, 1996 were audited by other auditors whose report dated
November 22, 1996, expressed an unqualified opinion on the financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of October 31, 1999 by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of New
Century Portfolios as of October 31, 1999, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the three years in
the period then ended, in conformity with generally accepted accounting
principles.
BRIGGS, BUNTING & DOUGHERTY, LLP
Philadelphia, Pennsylvania
November 24, 1999
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This report and the financial statements contained herein are submitted for
the general information of the shareholders of the Portfolios. This report is
authorized for distribution to prospective investors in the Portfolios only if
preceded or accompanied by an effective Prospectus which contains details
concerning the management fee expense and other pertinent information.
