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GREEN CENTURY FUNDS
SUPPLEMENT DATED OCTOBER 22, 1997
TO PROSPECTUS DATED SEPTEMBER 11, 1995
(AS SUPPLEMENTED OCTOBER 3, 1997)
1. RESTRUCTURING OF THE MANAGEMENT AGREEMENTS OF THE DOMINI SOCIAL INDEX
PORTFOLIO
The Green Century Equity Fund (the "Equity Fund") invests substantially all of
the Fund's investable assets in the Domini Social Index Portfolio (the "Index
Portfolio"). The Board of Trustees and investors of the Index Portfolio
approved a restructuring of the management of the Index Portfolio effective
October 22, 1997 (the "Restructuring"). The changes effect management
arrangements of the Equity Fund. There are no changes in the management of the
Green Century Balanced Fund or in the management fees paid by either Fund.
INVESTMENT MANAGER. Pursuant to the Restructuring, the Index Portfolio has
entered into a management agreement (the "Management Agreement") with Domini
Social Investments LLC ("DSI"), 11 West 25th Street, New York, NY 10010,
pursuant to which effective October 22, 1997 DSI provides to the Index Portfolio
investment supervisory services, overall operational support and administrative
services. The services include the provision of general office facilities and
supervising the overall administration of the Index Portfolio. For its
services under the Management Agreement, DSI receives a fee equal on an annual
basis to 0.20% of the Index Portfolio's average daily net assets, except that
for the first year of the Agreement, the fee payable to DSI will be reduced by
the amount, if any, by which the total ordinary operating expenses of the Index
Portfolio (excluding brokerage fees and commissions, interest, taxes, and any
other extraordinary expenses) exceed, on an annual basis, 0.20% of the average
daily net assets of the Index Portfolio.
DSI was organized as a Massachusetts limited liability company in April 1997
and registered as an investment adviser under the Investment Advisers Act of
1940, as amended, in June 1997. It was formed by principals of Kinder,
Lydenberg, Domini & Co., Inc. ("KLD"), the former investment adviser for the
Index Portfolio, and other investment company and marketing professionals.
DSI has no prior experience in managing or advising a mutual fund.
The entering into of the Management Agreement and the Submanagement Agreement
(discussed below), and the termination of certain agreements, were part of a
restructuring by the Index Portfolio which was designed to provide a more
centralized management structure for the Index Portfolio. Because of the
expense payment arrangements between the Equity Fund and Green Century Capital
Management, Inc. ("Green Century Capital Management"), the administrator (the
"Administrator") of the Equity Fund, the changes in the management of the Index
Portfolio and the potential increase in the expenses to be incurred by the
Index Portfolio(includiing the Equity Fund's pro rata portion of the expenses
of the Index Portfolio) will not have any impact on the total expenses of the
Equity Fund to be borne by Equity Fund shareholders. The following replaces
the Expense Table as it relates to the Equity Fund in the section "FEE
INFORMATION" of the Prospectus, as supplemented and should be read in
conjunction with the other information in that section:
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GREEN CENTURY EQUITY FUND
Annual Operating Expenses*
Advisory and Management Fees**...................0.20%
Rule 12b-1 (Distribution) Fees...................0.00%
Other Expenses
Administrative Services Fees.................1.30%
Expense Payment and Sponsorship Fees.........0.00%
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Total Operating Expenses.........................1.50%
*The Annual Operating Expenses for the Equity Fund, which summarize the charges
of the Equity Fund and the Index Portfolio, have been restated to reflect fees
currently in effect. Green Century Capital Management, Inc.("Green Century
Capital Management"), the administrator (the "Administrator") of the Equity
Fund, has agreed to pay the total operating expenses of the Equity Fund,
excluding interest, taxes, brokerage costs and other capital expenses and any
extraordinary expenses, which exceed 1.50% of the Equity Fund's average net
assets.
**Under the Management Agreement between the Index Portfolio and DSI, DSI's
fee for advisory and administrative services to the Index Portfolio is 0.20%
of the average daily net assets of the Index Portfolio but will be reduced to
the extent necessary to keep the aggregate annual operating expenses of the
Index Portfolio (excluding brokerage fees and commissions, interest, taxes and
other extraordinary expenses) at no greater than 0.20% of the average daily net
assets of the Portfolio, through October 22, 1998. If this fee reduction were
not in effect, advisory and management fees for the Index Portfolio would be
0.20% of the average daily net assets of the Index Portfolio.
SUBMANAGEMENT AGREEMENT. Also pursuant to the Restructuring, DSI has entered
into a submanagement agreement (the "Submanagement Agreement") with Mellon
Equity Associates ("Mellon Equity") effective October 22, 1997. Pursuant to
the Submanagement Agreement, Mellon Equity will continue to manage the
investments of the Index Portfolio on a day-to-day basis. Mellon Equity does
not determine the composition of the Domini Social Index, DSI pays Mellon
Equity an investment submanagement fee equal on an annual basis to 0.10% of
the average daily net assets of the Index Portfolio.
GENERAL. The Index Portfolio's Investment Advisory Agreement and Sponsorship
Agreement with KLD, its Investment Managment Agreement with Mellon Equity, and
KLD's Administrative Services Agreement and Letter Agreement regarding expense
payments with Signature Broker-Dealer Services, Inc. have been terminated in
connection with the Restructuring. See "ORGANIZATION AND MANAGEMENT" in the
Prospectus and "INVESTMENT ADVISERS" in the Statement of Additional
Information for a description of these agreements. KLD continues to determine
and monitor the composition of the Domini 400 Social Index (which determines
the composition of the Index Portfolio's securities), and provides other
services relating to socially responsible investments. DSI is licensed to
use the Index. See "INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS-The
Green Century Equity Fund Investment Objectives" in the Prospectus. Except as
noted above the other service providers for the Equity Fund as discussed in the
Prospectus, as supplemented, remain the same.
2. CHANGES IN THE GREEN CENTURY BOARD OF TRUSTEES
Effective October 10, 1997, Ms. Mindy S. Lubber resigned as the President and
as a Trustee of the Green Century Funds. The Board of Trustees appointed
Douglas M. Husid, a trustee of the Green Century Funds since inception, to
serve as President of Green Century Funds effective October 10, 1997. The
Board determined not to fill the vacancy in the Board which was created by the
resignation of Ms. Lubber.
