ANNUAL REPORT
YEAR ENDED OCTOBER 31, 2000
<PAGE>
NEW CENTURY PORTFOLIOS
CONTENTS
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PRESIDENT'S MESSAGE 1
PERFORMANCE CHARTS 2
NEW CENTURY CAPITAL PORTFOLIO
Portfolio of Investments 3
Statement of Assets and Liabilities 4
Statement of Operations 5
Statement of Changes in Net Assets 6
Financial Highlights 7
NEW CENTURY BALANCED PORTFOLIO
Portfolio of Investments 8
Statement of Assets and Liabilities 10
Statement of Operations 11
Statement of Changes in Net Assets 12
Financial Highlights 13
NEW CENTURY CAPITAL AND BALANCED PORTFOLIOS
Notes to Financial Statements 14
Report of Independent Certified Public Accountants 16
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PRESIDENT'S LETTER
Dear Fellow Shareholders:
I am pleased to present our Eleventh Annual Report.
During the 12-month period ended October 31, 2000, the financial markets
rewarded investors who adhered to a disciplined long-term investment strategy.
This period, however, reflected two distinct market cycles.
Through the end of March 2000, the equity markets, fueled by what in retrospect
truly was "irrational exuberance" staged a spectacular rally. During the period,
the NASDAQ gained more than 65%; the Russell 2000 Index, which reflects the
performance of stocks of smaller-capitalized domestic companies, rose by 40%;
and the Standard & Poors 500 Composite Stock Price Index, which reflects the
performance of the stocks of the largest domestic companies, gained 13%. During
the period the growth index, which increased by more than 20%, continued to
outperform the value index, which increased by more than 7%. Even the
international equity markets, as measured by the EAFE Index, posted a 13% gain.
The New Century Capital Portfolio (up 35%) and the New Century Balanced
Portfolio (up 20%) also participated in this strong equity rally.
The period, however, was not as kind to fixed income investments. The 10-year
Treasury Note maintained its value while the 30-year Treasury Bond lost
approximately 5%.
As the cruel fates would have it, just about the time we were filing our
income tax returns, the markets staged a dramatic reversal. By the end of the
year ended October 31, 2000, the Russell 2000's gain dwindled to 11% and the
NASDAQ's gain evaporated to 8%. The S & P 500 clung on to a 7% gain and the
EAFE was sporting a loss of 4%. By the end of the period the value index was
outperforming the growth index by 11% to 3%. The 10-year Treasury Note was
down 5% and the 30-year Treasury Bond was down 7%.
During this 12-month period of financial volatility, disciplined long-term
investment approach of the New Century Portfolios was successful. The New
Century Capital Portfolio generated a 15% return and the New Century Balanced
Portfolio produced a 10% return.
As we look forward, I am excited to introduce two new funds to the New Century
Family of Portfolios - the New Century Aggressive Portfolio and the New Century
International Portfolio. These new Portfolios will be managed with New
Century's investment philosophy - to balance each fund's investment allocation
among the sectors that are producing the most favorable risk-adjusted return.
(The investment sectors in these new Portfolios, however, will be more
concentrated.) Within each sector, our goal is to continue to invest in the
mutual funds that are generating superior risk-adjusted performance.
Although we cannot predict future market conditions, we are confident that the
disciplined investment approach of the New Century Portfolios 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
10/31/90 $10,000 $10,000
10/31/91 13,291 13,351
10/31/92 13,524 14,682
10/31/93 16,351 16,871
10/31/94 17,120 17,522
10/31/95 20,475 22,150
10/31/96 23,528 27,484
10/31/97 29,933 36,306
10/31/98 32,318 44,290
10/31/99 41,671 55,655
10/31/00 47,889 59,044
Average Annual Total Return For The Period Ended 10/31/00
1 Year 5 Years 10 Years
------ ------- --------
New Century Capital 14.92% 18.52% 16.96%
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:
New Century Balanced S&P 500 Index
10/31/90 $10,000 $10,000
10/31/91 12,069 12,564
10/31/92 12,686 13,818
10/31/93 15,058 15,603
10/31/94 15,248 15,844
10/31/95 17,524 19,149
10/31/96 19,848 22,361
10/31/97 23,746 27,337
10/31/98 25,401 31,939
10/31/99 29,277 36,983
10/31/00 32,281 39,498
Average Annual Total Return For The Period Ended 10/31/00
1 Year 5 Years 10 Years
------ ------- --------
New Century Balanced 10.26% 13.00% 12.43%
Past performance does not predict future performance.
-2-
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 2000
------------------------------------------------------------------------------
<TABLE>
<S> <C>
Issuer Shares Value
INVESTMENT COMPANIES - 90.5%
Aggressive Funds - 8.5%
Janus Olympus 86,108 $ 4,348,467
Oppenheimer Capital Appreciation 98,866 5,648,241
ProFunds Ultra Short OTC 2,567 143,766
Transamerica Premier Aggressive Growth 92,619 3,259,246
-------------
13,399,720
Growth and Income Funds - 31.3%
Citizens Index Institutional 204,910 5,212,905
Janus Growth and Income 174,207 7,119,855
SEI Index S&P 500 E 127,462 5,642,725
SSGA Growth & Income 332,025 7,985,203
Vanguard 500 Index 158,891 20,976,823
Whitehall Growth and Income 133,567 2,035,563
-------------
48,973,074
Growth Funds - 32.6%
Davis New York Venture 162,385 5,094,008
Janus 353,505 15,554,229
Marsico Growth & Income 456,213 8,827,729
MFS Capital Opportunities 289,167 6,416,620
Vanguard Growth Index 243,781 8,739,535
Whitehall Growth 183,778 4,158,886
White Oak Growth 30,462 2,347,066
-------------
51,138,073
Foreign Stock Funds - 4.0%
American Century International Discovery 99,864 1,612,808
Artisan International 91,540 2,358,985
Liberty Acorn International 77,568 2,258,015
-------------
6,229,808
Small Company Funds - 14.1%
AIM Small Cap Growth 174,250 6,480,341
Berger New Generation 104,252 3,322,506
Franklin Mutual Discovery Z 2,236 49,020
State Street Research Aurora 424,134 12,219,290
-------------
22,071,157
Total investment companies (Cost $108,698,714) 90.5% 141,811,832
Cash and other assets in excess of liabilities 9.5 14,856,393
------- ----------
Net assets 100.0% $156,668,225
===== ============
Cost for federal income tax at October 31, 2000 was $108,698,714 and net
unrealized appreciation consisted of:
Gross unrealized appreciation $ 33,525,468
Gross unrealized depreciation (412,350)
-----------
Net unrealized appreciation $ 33,113,118
============
</TABLE>
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See notes to financial statements
-3-
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
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<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost $108,698,714) (Note 1A) $ 141,811,832
Cash 2,560,940
Receivable for
Securities sold 12,474,859
Interest 2,854
Capital stock sold 30,391
-------------
Total assets 156,880,876
LIABILITIES
Accrued expenses 212,651
NET ASSETS
(applicable to 8,668,519 outstanding shares; unlimited number
of shares of beneficial interest authorized, $.01 par value.) $ 156,668,225
==================
Net asset value, offering price and redemption price per share
($156,668,225/8,668,519 shares of beneficial interest outstanding) $18.07
NET ASSETS CONSIST OF:
Paid-in capital $ 113,902,126
Unrealized appreciation of investments 33,113,118
Undistributed net realized gain on investments 9,652,981
-------------
Total net assets $ 156,668,225
=============
</TABLE>
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See notes to financial statements
-4-
<PAGE>
NEW CENTURY CAPITAL PORTFOLIO
STATEMENT OF OPERATIONS
Year ended October 31, 2000
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<TABLE>
<S> <C>
NET INVESTMENT LOSS
Income
Interest $ 36,400
Dividends 683,727
------------
Total investment income 720,127
Expenses
Distribution costs (Note 3) 247,921
Investment advisory fees (Note 2) 1,398,874
Transfer agent fees 61,151
Legal and audit fees 45,878
Custody and accounting fees 90,477
Administration fee (Note 2) 71,976
Trustees' fees 10,042
Other 12,461
------------
Total expenses 1,938,780
Net investment loss (1,218,653)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 6,732,238
Capital gain distributions from regulated investment companies 5,531,039
Net unrealized appreciation of investments during the year 5,675,206
Net realized and unrealized gain on investments 17,938,483
------------
Net increase in net assets resulting from operations $ 16,719,830
=================
</TABLE>
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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,
------------------------------------------------------------------------------
<TABLE>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
2000 1999
---- ----
OPERATIONS
Net investment loss $ (1,218,653) $ (997,912)
Net realized gain on investments 6,732,238 5,270,799
Capital gain distributions from regulated
investment companies 5,531,039 3,199,821
Net unrealized appreciation of investments 5,675,206 19,225,559
---------------- ---------------
Net increase in net assets resulting from operations 16,719,830 26,698,267
DISTRIBUTIONS TO SHAREHOLDERS
Realized gains on investments
($1.17 and $1.53 per share, respectively) (8,444,754) (9,820,727)
CAPITAL SHARE TRANSACTIONS
Increase in net assets from capital share transactions (a) 27,810,437 13,540,820
---------------- ---------------
TOTAL INCREASE IN NET ASSETS 36,085,513 30,418,360
NET ASSETS
Beginning of period 120,582,712 90,164,352
------------- --------------
End of period $ 156,668,225 $ 120,582,712
============= ==============
</TABLE>
(a) Summary of capital share transactions is as follows:
<TABLE>
<S> <C> <C>
2000 1999
----------------------------- -----------------------------
Shares Value Shares Value
Shares sold 1,331,336 $25,549,506 1,120,772 $ 17,427,343
Shares issued on
reinvestment of distributions 430,764 8,020,828 631,817 9,357,214
------------ ------------ --------- ------------
1,762,100 33,570,334 1,752,589 26,784,557
Shares redeemed (309,905) (5,759,897) (843,278) (13,243,737)
---------- ------------ ----------- -------------
Net increase 1,452,195 $27,810,437 909,311 $ 13,540,820
============ =========== =========== =============
</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>
2000 1999 1998 1997 1996
-------- --------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 16.71 $14.30 $ 14.67 $ 13.51 $13.12
------- ------ ------- ------- --------
Income (loss) from investment operations
Net investment loss (0.14) (0.14) (0.09) (0.10) (0.09)
Net gain on securities
(both realized and unrealized) 2.67 4.08 1.18 3.29 1.90
------ ----- ------- ------- -------
Total from investment operations 2.53 3.94 1.09 3.19 1.81
------ ------ ------- ------- -------
Less distributions
Distributions from capital gains (1.17) (1.53) (1.46) (2.03) (1.42)
----- ----- ----- ----- ------
Net asset value, end of period $18.07 $ 16.71 $ 14.30 $ 14.67 $13.51
======== ====== ======== ======= ========
TOTAL RETURN 14.92 % 28.94% 7.97 % 27.22 % 14.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $156,668 $ 120,583 $ 90,164 $ 78,391 $ 62,741
Ratio of expenses to
average net assets 1.27 % 1.39% 1.44 % 1.43 % 1.47 %
Ratio of net investment loss to
average net assets -0.80 % -0.91% -0.67 % -0.76 % -0.69 %
Portfolio turnover 51 % 64% 102 % 93 % 214 %
</TABLE>
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See notes to financial statements
-7-
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 2000
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
Issuer Shares Value
INVESTMENT COMPANIES - 80.1%
Growth and Income Funds - 27.3%
Citizens Index Institutional 74,933 $ 1,906,303
Franklin Mutual Shares Z 835 17,558
Janus Growth and Income 74,621 3,049,752
SEI Index S&P 500 E 75,132 3,326,112
SSGA Growth & Income 73,222 1,760,985
Strong Growth & Income 80,340 2,276,822
Vanguard 500 Index 62,970 8,313,349
Whitehall Growth and Income 67,809 1,033,413
------------
21,684,294
Growth Funds - 16.6%
Davis New York Venture Fund 70,205 2,202,339
Janus 99,807 4,391,525
Marsico Growth & Income 110,377 2,135,801
Vanguard Growth Index 96,390 3,455,569
Whitehall Growth 29,167 660,042
White Oak Growth 4,778 368,132
------------
13,213,408
Small Company Funds - 8.1%
AIM Small Cap Growth 79,448 2,954,663
State Street Research Aurora 120,968 3,485,080
------------
6,439,743
Convertible Security Funds - 4.8%
MainStay Convertible 145,454 2,257,440
Nations Convertible Securities 82,521 1,571,205
------------
3,828,645
Foreign Stock Funds - 2.6%
Artisan International 51,649 1,330,995
Liberty Acorn International 25,502 742,369
------------
2,073,364
General Corporate Bond Funds - 2.4%
Strong Corporate Bond 181,540 1,893,467
------------
Government Treasury Bond Funds - 10.6%
American Century - Target Maturities 2005 46,939 3,652,764
American Century - Target Maturities 2010 75,927 4,633,845
Vanguard Fixed Income Intermediate Term U.S. 12,754 133,658
------------
8,420,267
High Quality Bond Funds - 1.8%
Dodge & Cox Income 124,623 1,445,623
------------
</TABLE>
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See notes to financial statements
-8-
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 2000
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
Issuer Shares Value
High Yield Bonds - 1.2%
John Hancock High Yield Bond 69,627 378,076
Northeast Investors 68,761 603,031
------------
981,107
Worldwide Bond Funds - 4.7%
PIMCO Foreign Bond Institutional 368,934 3,718,850
------------
Total investment companies (Cost $54,576,833) 80.1% 63,698,768
Cash and other assets in excess of liabilities 19.9 15,854,621
------ --------------
Net assets 100.0% $ 79,553,389
===== ============
Cost for federal income tax at October 31, 2000 was
$54,576,833 and net unrealized appreciation consisted of:
Gross unrealized appreciation $ 9,724,137
Gross unrealized depreciation (602,202)
-------------
Net unrealized appreciation $ 9,121,935
=============
</TABLE>
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See notes to financial statements
-9-
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost $54,576,833) (Note 1A) $ 63,698,768
Cash 3,480,379
Receivables for
Securities sold 12,382,645
Dividends and interest 63,403
Prepaid expenses 10,513
Total assets 79,635,708
LIABILITIES
Accrued expenses 82,319
NET ASSETS
(applicable to 5,832,176 outstanding shares; unlimited number
of shares of beneficial interest authorized, $.01 par value.) $ 79,553,389
===============
Net asset value, offering price and redemption price per share
($79,553,389/5,832,176 shares of beneficial interest outstanding) $13.64
NET ASSETS CONSIST OF:
Paid-in capital $ 68,112,799
Unrealized appreciation of investments 9,121,935
Undistributed net realized gain on investments 2,318,655
------------
Total net assets $ 79,553,389
============
</TABLE>
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See notes to financial statements
-10-
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
STATEMENT OF OPERATIONS
Year ended October 31, 2000
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Dividends $ 2,193,531
Interest 29,098
------------
Total investment income 2,222,629
Expenses
Distribution costs (Note 3) 128,036
Investment advisory fees (Note 2) 767,040
Transfer agent fees 36,421
Legal and audit fees 25,506
Custody and accounting fees 64,314
Administration fee (Note 2) 36,078
Trustees' fees 4,958
Other 6,216
-----------
Total expenses 1,068,569
Net investment income 1,154,060
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 758,174
Capital gain distributions from regulated investment companies 2,163,980
Net unrealized appreciation of investments during the year 2,557,901
Net realized and unrealized gain on investments 5,480,055
-----------
Net increase in net assets resulting from operations $ 6,634,115
============
</TABLE>
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See notes to financial statements
-11-
<PAGE>
NEW CENTURY BALANCED PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
Years ended October 31,
-------------------------------------------------------------------------------
<TABLE>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
2000 1999
---- ----
OPERATIONS
Net investment income $ 1,154,060 $ 903,301
Net realized gain on investments 758,174 2,938,374
Capital gain distributions from regulated
investment companies 2,163,980 1,577,632
Net unrealized appreciation of investments 2,557,901 3,133,807
----------- ----------
Net increase in net assets resulting from operations 6,634,115 8,553,114
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income
($0.22 and $0.20 per share, respectively) (1,154,060) (903,301)
Realized gains on investments
($0.95 and $1.09 per share, respectively) (4,665,509) (4,811,756)
CAPITAL SHARE TRANSACTIONS
Increase in net assets from capital share transactions (a) 13,017,563 6,692,789
---------- ---------
TOTAL INCREASE IN NET ASSETS 13,832,109 9,530,846
NET ASSETS
Beginning of period 65,721,280 56,190,434
------------ ------------
End of period $ 79,553,389 $ 65,721,280
============ ============
</TABLE>
(a) Summary of capital share transactions is as follows:
<TABLE>
<S> <C>
2000 1999
--------------------------- ---------------------------
Shares Value Shares Value
Shares sold 1,021,162 $12,659,852 531,039 $ 7,001,002
Shares issued on
reinvestment of distributions 412,023 5,252,025 411,727 5,260,712
--------- ------------- -------- ----------
1,433,185 17,911,877 942,766 12,261,714
Shares redeemed (497,548) (4,894,314) (425,308) (5,568,925)
---------- ------------ ---------- -------------
Net increase 935,637 $13,017,563 517,458 $ 6,692,789
=========== ============ ========== ============
</TABLE>
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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>
2000 1999 1998 1997 1996
--------- --------- --------- --------- ----------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 13.42 $12.83 $13.23 $12.21 $ 11.82
------- ------ ------ ------ ---------
Income from investment operations
Net investment income 0.22 0.20 0.21 0.21 0.18
Net gain on securities
(both realized and unrealized) 1.17 1.68 0.66 2.01 1.30
------ ----- ----- ----- ---------
Total from investment operations 1.39 1.88 0.87 2.22 1.48
------ ----- ----- ----- ---------
Less distributions
Dividends from net investment income (0.22) (0.20) (0.21) (0.21) (0.18)
Distributions from capital gains (0.95) (1.09) (1.06) (0.99) (0.91)
----- ----- ----- ----- --------
Total distributions (1.17) (1.29) (1.27) (1.20) (1.09)
----- ----- ----- ----- -------
Net asset value, end of period $ 13.64 $ 13.42 $ 12.83 $ 13.23 $12.21
======== ======= ======= ======= =======
TOTAL RETURN 10.26 % 15.26% 6.97 % 19.64 % 13.24 %
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $79,553 $ 65,721 $ 56,190 $ 48,893 $ 40,423
Ratio of expenses to
average net assets 1.40 % 1.46% 1.46 % 1.41 % 1.61 %
Ratio of net investment income to
average net assets 1.51 % 1.45% 1.51 % 1.58 % 1.45 %
Portfolio turnover 43 % 60% 59 % 80 % 172 %
</TABLE>
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See notes to financial statements
-13-
<PAGE>
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
-------------------------------------------------------------------------------
(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 four series: New Century Capital Portfolio
and New Century Balanced Portfolio (together, "the Portfolios"), and New
Century Aggressive Portfolio and New Century International Portfolio which
commenced operations on November 1, 2000. 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 its 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 its
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 specific identification 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 West Financial Group, Inc.
(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.
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-14-
<PAGE>
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
-------------------------------------------------------------------------------
(2) INVESTMENT ADVISORY FEE, ADMINISTRATIVE AGREEMENT AND TRUSTEES' FEE
Fees paid by the Portfolios pursuant to an Investment Advisory Agreement
with 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. Effective September 28, 2000, the annual trustee's fee was
increased to $8,000 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, 2000, the Distributor received sales
commissions and other compensation of $134,898 and $43,542 in connection with
the purchase of investment company shares by New Century Capital Portfolio and
New Century Balanced Portfolio, respectively. The Distributor has voluntarily
agreed to waive payments made by each Portfolio pursuant to the distribution
plans in amounts equal to the sales commissions and other compensation.
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, 2000, 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 $76,165,100 $67,086,555
New Century Balanced Portfolio $31,689,356 $36,716,039
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-15-
<PAGE>
BRIGGS
BUNTING &
DOUGHERTY, LLP
Certified Public Accountants and Business Advisors
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, 2000, 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
four 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 the
year 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, 2000 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, 2000, 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 four years in
the period then ended, in conformity with generally accepted accounting
principles.
BRIGGS, BUNTING & DOUGHERTY, LLP
Philadelphia, Pennsylvania
November 22, 2000
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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.
