<PAGE>
[GREEN CENTURY LOGO APPEARS HERE]
ANNUAL REPORT
Green Century Balanced Fund
Green Century Equity Fund
July 31, 1999
An Investment For Your Future. 29 Temple Place, Boston, Massachusetts 02111
For information on the Green Century Funds (R), call 1-800-93-GREEN. For
information on how to open an account and account services, call 1-800-221-
5519 9:00 am to 5:00 pm Eastern Time, Monday through Friday. For share price
and account information, call 1-800-221-5519, twenty-four hours a day.
- -------------------------------------------------------------------------------
Dear Green Century Funds Shareholder:
In 1991, a partnership of non-profit environmental advocacy
organizations founded the Green Century Funds. Since that time, our mission
has been to seek solid financial returns for environmentally conscious
investors while promoting greater corporate environmental accountability. We
are pleased to report to our shareholders our progress toward these goals.
Total assets under management in the two Green Century Funds
increased by over 40% in the past year while the number of Green Century Funds
investors grew by over 35%. Green Century welcomes our many new investors and
thanks our long-term shareholders for your continued commitment to
environmentally responsible investing.
The Green Century Equity Fund's performance was competitive during
its fiscal year ended July 31, 1999. While the Green Century Balanced Fund
underperformed other balanced funds for the one year period, its shorter term
performance in Calendar Year 1999 improved markedly. A fuller discussion of
the returns of each of the Funds follows.*
The Green Century Equity Fund's (the "Equity Fund") total return
for its fiscal year ended July 31, 1999 was 21.56%, exceeding the return of
the Standard & Poor's 500 Index (the "S&P 500(R) Index")/1/ of 20.20% and
well-above the 14.88% average total return of the growth and income funds
tracked by Morningstar for the same period./2/ In comparison to the S&P 500(R)
Index, the Equity Fund benefitted from its overexposure to the
telecommunications and electronics industries; conversely, the Equity Fund
suffered from its overexposure to the non-alcoholic beverages industry and its
lack of exposure to liquor stocks.
For the three-year period ended July 31, 1999, the average annual
total return for the Equity Fund was 31.20%, exceeding the 29.69% for the S&P
500(R) Index and surpassing the 23.17% average annual total return of growth
and income funds tracked by Morningstar for the same time period. The five-
year average annual total return of the Equity Fund as of July 31, 1999 was
26.22%, just slightly behind the S&P 500(R) Index's 26.24% but beating the
Morningstar average annual total return of growth and income funds of 20.96%
for the same period. Since inception on June 3, 1991, the average annual total
return for the Equity Fund was 18.44%./3/
*The performance data quoted represents past performance and is not a
guarantee of future results. Investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
<PAGE>
The Equity Fund invests primarily in a portfolio of the 400
companies that comprise the Domini 400 Social Index, a broadly diversified
portfolio which excludes companies with the worst environmental and social
records. As of July 31, 1999, 99.71% of the net assets of the Equity Fund were
invested in the stocks of the 400 companies.
The Green Century Balanced Fund's (the "Balanced Fund") total
return for the fiscal year ended July 31, 1999 was 4.93%; the average total
return of balanced funds tracked by Morningstar was 9.09% for the same
period./4/ The Balanced Fund's underperformance for the fiscal year ended July
31, 1999 is primarily attributable to the Balanced Fund's poor performance in
the first quarter of the fiscal year. The Balanced Fund's concentration in
small to mid capitalization stocks and high yield bonds led to its
underperformance in the quarter ended October 31, 1998, a period during which
the stocks of larger companies and investment grade bonds outperformed the
stocks of smaller and mid-sized companies and non-investment grade bonds.
Since October 1998, the Balanced Fund's performance has improved during a
period in which the market has broadened, high yield bonds are outperforming
long-term corporate and treasury bonds, and the value of several key
environmentally responsible stocks in which the Balanced Fund is invested is
being recognized.
For the period January 1, 1999 through July 31, 1999, the Balanced
Fund's total return was 9.47% compared to the 3.63% average total return of
balanced funds tracked by Morningstar for the same period.
As of July 31, 1999, the three- and five-year average annual total
returns of the Balanced Fund were 10.43% and 11.64%, respectively, as compared
to the three- and five-year Morningstar balanced fund average annual total
returns of 15.53% and 14.59% for the same time periods. Since inception on
March 18, 1992, the Balanced Fund's average annual total return was 7.75%.
The Balanced Fund invests primarily in the stocks and bonds of
select companies that have clean environmental records, many of which also
make positive environmental contributions; including companies that produce
renewable energy and those that offer effective remedies for existing
environmental problems. The Balanced Fund also invests in those companies that
have minimized their adverse impact on the environment and those companies
Green Century believes are "best in their class" companies that are setting
standards for environmental protection in their industries.
While the Balanced Fund's portfolio is not focused on any one
industry sector, as of July 31, 1999, the Balanced Fund held several stocks
and a bond of companies in the business of generating renewable energy.
Denmark's Vestas Wind Systems is the largest manufacturer of wind turbines
worldwide. York Research Corporation of New York develops, constructs, owns,
and operates electric power facilities fueled by solar energy and wind power.
AstroPower, Inc. of Newark, Delaware, the largest US manufacturer of
photovoltaic solar cells, sells its solar power to electricity providers.
Calpine Corporation, located in San Jose, California, generates geothermal
energy./5/
The Worldwatch Institute reports that between 1990 and 1998, wind
use expanded by 22 percent and photovoltaic energy by 16 percent, as opposed
to a 2 percent increase for oil use and no increase for nuclear power
generation--potentially positive news for both the environment and
environmentally concerned investors. The Balanced Fund is pleased to have a
stake in this market.
Shareholder advocacy is critical to the Green Century Funds'
mission of promoting greater corporate environmental responsibility. Using the
collective leverage of Green Century Funds' shareholders, the Funds seek to
hold companies accountable for the impact of their actions on the environment.
This year the Green Century Funds are coordinating their
shareholder advocacy with a national public education campaign launched by
Green Century's non-profit environmental advocacy
2
<PAGE>
founders, the Public Interest Research Groups (PIRGs). Our common goal is to
preserve the Coastal Plain of the Arctic National Wildlife Refuge from oil
drilling. The Coastal Plain is the only conservation area in the nation that
provides a complete range of Arctic ecosystems balanced with a wide variety of
wildlife including large populations of caribou, muskoxen, brown, black and
polar bears, wolves, Dall sheep, snow geese and thousands of other migratory
birds. The 125-mile long Coastal Plain is the only section of Alaska's 1,100-
mile long North Slope not open for oil drilling.
The Green Century Equity Fund, on behalf of the Domini Social
Index, the portfolio in which the Equity Fund invests substantially all of its
investable assets, filed a shareholder resolution with Atlantic Richfield
Company (ARCO)/6/ in November of 1998. The resolution pressed ARCO to
unconditionally cancel any future plans for oil drilling in the Arctic
National Wildlife Refuge and immediately stop the expenditure of any corporate
funds targeted to achieve this objective.
Following a meeting with senior ARCO management in January 1999,
the resolution was voted on at ARCO's annual meeting on May 3, 1999 in Los
Angeles, CA. The Green Century Equity Fund is pleased to report that 4.7% of
ARCO shareholders voted in support of our resolution--enough votes to allow
the Equity Fund to re-introduce the resolution at the company's annual meeting
next year and continue to press ARCO's management to refrain from drilling in
the Refuge.
Thank you for your commitment to environmentally responsible
investing and your investment in the Green Century Funds.
Respectfully,
The Green Century Funds
/1/ The S&P 500(R) Index is an unmanaged index of 500 selected common stocks,
most of which are listed on the New York Stock Exchange. The S&P 500(R) Index
is heavily weighted toward stocks with large market capitalizations and
represents approximately two-thirds of the total market value of all domestic
stocks.
/2/ The Morningstar growth and income fund category consists of funds where
growth of capital and current income are near-equal objectives. Investments
are typically selected for both appreciation potential and dividend-paying
ability.
/3/ The Green Century Equity Fund, which commenced investment operations in
September 1995, invests all its assets in an existing separate registered
investment company which has the same investment objective as the Fund (the
"Index Portfolio"). Consistent with regulatory guidance, the performance for
the period prior to the Fund's inception reflects the performance of the Index
Portfolio adjusted to reflect the deduction of the charges and expenses of the
Fund.
/4/ The Morningstar balanced fund category consists of funds that seek both
income and capital appreciation by investing in a generally fixed combination
of stocks and bonds. These funds generally hold a minimum of 25% of their
assets in fixed-income securities at all times.
/5/ As of July 31, 1999, the above named companies composed the following
percentages of the portfolio of the Balanced Fund: Vestas Wind Systems 2.81%;
York Research Corporation 1.74%; AstroPower, Inc. 1.41%; and Calpine
Corporation 1.68%. The holdings of the Balanced Fund may change due to ongoing
management of the Fund. References to specific investments should not be
construed as a recommendation of the securities by the Funds, the adviser or
their distributor.
/6/ As of July 31, 1999, ARCO comprised 0.49% of the portfolio in which the
Equity Fund invests. Holdings may change due to ongoing management. References
to specific investments should not be construed as a recommendation of the
security by the Funds or their distributor.
This material must be preceded or accompanied by a current prospectus.
Distributor: Sunstone Distribution Services, LLC 9/99
3
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MANAGEMENT'S DISCUSSION AND ANALYSIS
GREEN CENTURY BALANCED FUND
Investment Objective--The Green Century Balanced Fund seeks capital growth
and income from a diversified portfolio of equity and fixed-income securities.
The Fund invests in the securities of environmentally responsible and
environmentally proactive companies.
Portfolio Orientation--The Fund is invested in equity and fixed income
securities of performance driven, environmentally responsible companies.
Equity holdings focus on growth companies that have earnings growth greater
than that of the overall market, a rate of growth that the Fund's portfolio
manager believes will ultimately generate superior stock performance. The Fund
also invests in the stocks of small and micro-capitalization companies; the
Fund's portfolio manager believes that the environmentally distinguished
companies in which the Fund seeks to invest tend to have smaller market
capitalizations and that investments in such companies may offer greater
opportunities for growth as well as greater risks for price fluctuations than
larger, more established companies. The fixed-income portion of the portfolio
is comprised of debt of investment and non-investment grade environmentally
responsible companies.
Economic Environment--With a strong economy and tight labor conditions, the
Federal Reserve Bank is concerned about inflation and is raising interest
rates modestly. In a period of rising rates, stock selection rather than asset
allocation produces the best absolute and relative returns.
Investment Strategy and Performance--The Balanced Fund's investment advisers
believe that environmental responsibility and economic gain go hand in hand.
The premise of the Fund is that environmental responsibility enhances
corporate profitability, which in turn may produce competitive shareholder
returns.
The performance objective of the Fund is to be in the top quartile of all
balanced funds. In order to reach this goal, the Fund is positioned in
financially driven companies that are selling ecologically sustainable
solutions and other companies with clean environmental records.
Environmentally sound companies frequently enjoy higher profitability through
lower costs and participation in growth markets. In addition, this investment
strategy helps to avoid companies at risk due to exposure to environmental
liability.
The Fund's total return for the year ended July 31, 1999 was 4.93%, compared
to 9.54% for the average of the balanced funds tracked by Lipper Analytical
Services, Inc. during the same period. For the five years ended July 31, 1999,
the Balanced Fund's average annual total return was 11.64%, compared to 16.11%
for the average balanced fund tracked by Lipper. The Fund's average annual
total return since inception on March 18, 1992 was 7.75%.
The S&P 500(R) Index is an unmanaged index of 500 stocks. The Lipper Balanced
Fund Index includes the 30 largest funds whose primary objective is to conserve
principal by maintaining at all times a balanced portfolio of both stocks and
bonds. Typically the stock/bond ratio ranges around 60%/40%.
The benchmark to which the Balanced Fund is compared in the accompanying chart
was changed from the Micropal Balanced Fund Index and the Micropal Environmental
Sector Index to the Lipper Balanced Fund Index. The Lipper Balanced Fund Index
is a better known and more widely published benchmark than the Micropal indices.
A hypothetical $10,000 investment in the Micropal Balanced Fund Index and the
Micropal Environmental Sector Index on March 31, 1992 would have values of
$20,099 and $7,195, respectively, as of July 31, 1999. A hypothetical investment
at July 31, 1998 of $10,000 in the Fund, the S&P 500(R) Index, the Lipper
Balanced Fund Index, the Micropal Balanced Fund Index, and the Micropal
Environmental Sector Index would have values of $10,493, $12,020, $11,074,
$10,946, and $9,590, respectively, as of July 31, 1999.
[LINE GRAPH APPEARS HERE]
Balanced Fund S&P 500 Lipper Balanced Index
------------- ------- ---------------------
3/31/92 10,000 10,000 10,000
6/30/92 10,015 10,190 10,160
6/30/93 10,385 11,580 11,619
6/30/94 9,987 11,742 11,713
6/30/95 11,486 14,804 13,529
6/30/96 14,010 18,653 15,534
6/30/97 16,142 25,125 18,737
6/30/98 18,262 32,703 22,187
7/31/98 16,792 32,355 21,927
7/31/99 17,620 38,892 24,283
AVERAGE ANNUAL TOTAL RETURN
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<TABLE>
<S> <C>
One year ended July 31, 1999.................................... 4.93%
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Five years ended July 31, 1999.................................. 11.64%
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Inception (March 18, 1992) to July 31, 1999..................... 7.75%
</TABLE>
4
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MANAGEMENT'S DISCUSSION AND ANALYSIS
GREEN CENTURY EQUITY FUND
Investment Objective--The Green Century Equity Fund seeks long-term total
return from a diversified portfolio of stocks which corresponds to the
performance of an index consisting of approximately 400 companies which
conform to basic standards for environmental and social corporate
responsibility.
Portfolio Orientation--The Fund seeks to achieve its investment objective by
investing all its investable assets in the Domini Social Index Portfolio (the
"Index Portfolio") which has the same investment objective as the Fund. Like
other index funds, the Equity Fund is not actively managed in the traditional
investment sense, but rather seeks to track the performance of a broad based
index. The Equity Fund thus provides an investor with the opportunity to be
nearly fully invested at all times in a broad and diverse portfolio of stocks
which meet certain environmental and social criteria.
In evaluating stocks for inclusion in the Index Portfolio, a company's
environmental performance, employee relations, corporate citizenship, and the
quality of the company's products and its attitudes with regard to consumer
issues are considered. Companies are excluded which, based on data available,
derive more than 2% of their gross revenues from the sale of military weapons;
derive any revenues from the manufacture of tobacco products or alcoholic
beverages; derive any revenues from gambling enterprises; own directly or
operate nuclear power plants or participate in businesses related to the
nuclear fuel cycle.
Investment Strategy and Performance--The Equity Fund's managers believe that
enterprises which exhibit a social awareness should be better prepared to meet
future societal needs for goods and services and may be less likely to incur
certain legal liabilities that may be charged when a product or service is
determined to be harmful. The Fund's managers also believe that such
enterprises should over the long term be able to provide investors with a
return that is competitive with enterprises that do not exhibit such social
and environmental awareness.
The Fund's total return for its fiscal year was 21.56%, compared to 20.20%
for the Standard & Poor's 500(R) Index (the "S&P 500(R) Index"). For the five
years ended July 31, 1999, the Equity Fund's average annual total return was
26.22%, compared to 26.24% for the S&P 500(R) Index. The Fund's average annual
total return since inception on June 3, 1991 was 18.44%.*
The S&P 500(R) Index is an unmanaged index of 500 stocks. Its performance
reflects reinvestment of dividends and distributions but not management and
other operating expenses, as does the Fund's performance. Performance on the
accompanying graph for the S&P 500(R) Index commences on May 31, 1991.
[LINE GRAPH APPEARS HERE]
Equity Fund S&P 500
----------- -------
6/3/91 10,000 10,000
7/31/91 9,987 9,987
7/31/92 11,137 11,264
7/31/93 12,162 12,249
7/31/94 12,425 12,880
7/31/95 15,442 16,243
7/31/96 17,628 18,934
7/31/97 26,996 28,807
7/31/98 32,752 34,362
7/31/99 39,813 41,304
AVERAGE ANNUAL TOTAL RETURN
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<TABLE>
<S> <C>
One year ended July 31, 1999.................................... 21.56%
---------------------------------------------------------------------
Five years ended July 31, 1999*................................. 26.22%
---------------------------------------------------------------------
Inception (June 3, 1991) to July 31, 1999*...................... 18.44%
</TABLE>
* The Green Century Equity Fund, which commenced investment operations in
September, 1995, invests all of its investable assets in an existing separate
registered investment company which has the same investment objective as the
Fund (the "Index Portfolio"). Consistent with regulatory guidance, performance
for the period prior to the Fund's inception reflects the performance of the
Index Portfolio adjusted to reflect the deduction of the charges and expenses
of the Fund.
5
<PAGE>
GREEN CENTURY BALANCED FUND
PORTFOLIO OF INVESTMENTS
July 31, 1999
COMMON STOCKS--73.2%
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Technology--15.5%
ADE Corp. (b)............................................. 32,500 $ 394,062
American Power Conversion Corp. (b)....................... 20,000 415,000
Dionex Corp. (b).......................................... 1,000 43,187
Gartner Group, Inc.--Class B (b).......................... 1,302 28,156
Intel Corp................................................ 400 27,600
Internet Capital Group, Inc. (b)(g)....................... 600 --
Macromedia, Inc. (b)...................................... 4,000 140,000
Project Software & Development, Inc. (b).................. 12,000 510,000
Safeguard Scientifics, Inc. (b)........................... 6,000 384,000
Texas Instruments......................................... 3,000 432,000
U.S. Interactive, Inc. (b)(h)............................. 300 --
-----------
2,374,005
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Environmental Products & Services--15.5%
Galileo Corp. (b)......................................... 110,000 1,409,375
Hi-Rise Recycling Systems, Inc. (b)....................... 122,000 366,000
Ionics, Inc. (b).......................................... 10,000 338,750
KTI, Inc. (b)............................................. 10,000 149,375
Thermo Trilogy Corp. (b)(d)(e)............................ 12,000 99,000
-----------
2,362,500
-----------
Health Services & Hospital Supplies--12.6%
ChromaVision Medical Systems, Inc. (b).................... 15,000 224,062
IMS Health Incorporated................................... 10,000 278,750
MedImmune, Inc. (b)....................................... 5,000 399,375
QLT PhotoTherapeutics Inc. (b)............................ 5,000 318,906
QuadraMed Corp. (b)....................................... 35,000 364,221
Thermo BioAnalysis Corp. (b).............................. 18,500 337,625
-----------
1,922,939
-----------
Natural Foods & Nutraceuticals--8.9%
Balance Bar Company (b)................................... 50,000 318,750
Horizon Organic Holding Corp. (b)......................... 10,000 123,750
Rexall Sundown, Inc. (b).................................. 20,000 248,750
United Natural Foods, Inc. (b)............................ 12,000 223,126
Whole Foods Market, Inc. (b).............................. 10,000 440,000
-----------
1,354,376
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Renewable Energy--5.9%
AstroPower, Inc. (b)..................................... 15,000 $ 214,687
Vestas Wind Systems A/S (b)(c)........................... 4,000 428,112
York Research Corp. (b).................................. 50,000 265,625
-----------
908,424
-----------
Financial Services--5.8%
21st Century Holding Co. (b)............................. 15,000 97,500
American International Group, Inc........................ 150 17,419
Banco Latinoamericano de Exportaciones, S.A.--
E shares (c)............................................ 12,000 319,500
Eaton Vance Corp......................................... 13,000 452,563
-----------
886,982
-----------
Communications--4.4%
Medialink Worldwide, Inc. (b)............................ 10,000 151,250
MCI Worldcom, Inc. (b)................................... 2,000 165,000
Time Warner, Inc......................................... 200 14,400
Valassis Communications, Inc. (b)........................ 9,000 335,250
-----------
665,900
-----------
Pharmaceuticals--4.0%
Alkermes, Inc. (b)....................................... 18,000 470,250
MGI Pharma, Inc. (b)..................................... 12,000 135,000
-----------
605,250
-----------
Commercial Products & Services--0.6%
Perficient, Inc. (b)..................................... 10,000 97,500
-----------
Paper & Forest Products--0.0%
Champion International Corp.............................. 100 5,175
-----------
Total Common Stocks
(Cost $9,471,601)....................................... 11,183,051
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CORPORATE BONDS & NOTES--25.3%
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
Communications--15.4%
EchoStar DBS Corp.
9.375%, due 2/01/09 (d)................................. $250,000 $ 251,875
Level 3 Communications
9.125%, due 5/01/08..................................... 300,000 285,750
</TABLE>
6
<PAGE>
GREEN CENTURY BALANCED FUND
PORTFOLIO OF INVESTMENTS--(concluded)
July 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <C> <C>
Nextel Communications
9.75%, due 8/15/04 (f)................................... $300,000 $ 306,000
Nextel Communications
0%, due 2/15/08 (f)...................................... 400,000 282,000
PSINet Inc.
11.50%, due 11/01/08..................................... 300,000 309,750
RCN Corp.
0%, due 10/15/07 (f)..................................... 300,000 200,250
RCN Corp.
0%, due 2/15/08 (f)...................................... 300,000 189,000
Verio Inc.
11.25%, due 12/01/08 (d)................................. 300,000 307,500
Winstar Communications, Inc.
0%, due 10/15/05 (f)..................................... 250,000 213,750
-----------
2,345,875
-----------
Consumer Goods & Services--4.8%
Frank's Nursery & Crafts
10.25%, due 3/01/08...................................... 200,000 199,250
Kindercare Learning Centers
9.50%, due 2/15/09....................................... 250,000 242,500
Nebraska Book Company
8.75%, due 2/15/08....................................... 200,000 165,500
Nebraska Book Company
0%, due 2/15/09.......................................... 300,000 133,500
-----------
740,750
-----------
Food & Beverage--2.7%
Homeland Stores, Inc.
10.00%, due 8/01/03...................................... 250,000 213,438
Sparkling Spring Water
11.50%, due 11/15/07..................................... 250,000 201,250
-----------
414,688
-----------
Energy--1.7%
Calpine Corp.
8.75%, due 07/15/07...................................... 250,000 255,625
-----------
Environmental Services--0.7%
ICF Kaiser International
13.00%, due 12/31/03..................................... 200,000 100,750
-----------
Total Corporate Bonds and Notes (Cost $4,111,796)......... 3,857,688
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
<S> <C>
SHORT-TERM OBLIGATIONS--1.0%
Repurchase Agreements
Salomon Brothers, 4.33%, dated 7/30/99, due 8/02/99, proceeds
$159,364 (collateralized by U.S. Treasury securities with maturity
at 8/15/2025, value $162,492) (cost $159,306)..................... $ 159,306
-----------
TOTAL INVESTMENTS (a)--99.5%
(Cost $13,742,703)................................................ 15,200,045
</TABLE>
<TABLE>
<S> <C>
Other Assets Less
Liabilities--0.5%.................................................. 69,203
-----------
NET ASSETS--100%.................................................... $15,269,248
===========
</TABLE>
- -------
(a) The cost of investments for federal income tax purposes is $13,742,703,
resulting in gross unrealized appreciation and depreciation of $2,257,633
and $800,291 respectively, or net unrealized appreciation of $1,457,342.
(b) Non-income producing security.
(c) Securities whose values are determined or significantly influenced by
trading on exchanges not in the United States or Canada. ADR after the
name of a foreign holding stands for American Depository Receipt
representing foreign securities on deposit with a domestic custodian bank.
(d) Securities that may be resold to "qualified institutional buyers" under
Rule 144a or securities offered pursuant to Section 4(2) of the Securities
Act of 1933, as amended. These securities have been determined to be
liquid under guidelines established by the Board of Trustees.
(e) Restricted Security. Purchased in a private placement transaction; resale
to the public may require registration or sale only to qualified
institutional buyers. Management has determined that its fair value at
July 31, 1999 is equal to cost.
(f) Step bond. Rate shown is currently in effect at July 31, 1999.
(g) Represent rights to purchase shares in an Initial Public Offering; shares
were subsequently purchased on 8/5/99 at a cost of $12.00 each.
(h) Represent rights to purchase shares in an Initial Public Offering; shares
were subsequently purchased on 8/10/99 at a cost of $10.00 each.
See Notes to Financial Statements
7
<PAGE>
GREEN CENTURY BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $13,742,703)........................... $15,200,045
Receivables for:
Securities sold................................................... 205,737
Interest and dividends............................................ 110,797
Capital stock sold................................................ 57,288
-----------
Total assets...................................................... 15,573,867
-----------
LIABILITIES:
Payable for securities purchased................................... 269,750
Accrued expenses................................................... 31,174
Payable for capital stock redeemed................................. 3,695
-----------
Total liabilities................................................. 304,619
-----------
NET ASSETS......................................................... $15,269,248
===========
NET ASSETS CONSIST OF:
Paid-in capital.................................................... $15,239,760
Accumulated net realized loss on investments and options written... (1,433,166)
Net unrealized appreciation on investments......................... 1,457,342
Accumulated undistributed net investment income.................... 5,312
-----------
NET ASSETS......................................................... $15,269,248
===========
SHARES OUTSTANDING................................................. 1,250,985
===========
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE..... $ 12.21
===========
GREEN CENTURY BALANCED FUND
STATEMENT OF OPERATIONS
For the year ended July 31, 1999
INVESTMENT INCOME:
Interest income.................................................... $ 464,992
Dividend income.................................................... 18,928
Miscellaneous income............................................... 6,044
-----------
Total investment income........................................... 489,964
-----------
EXPENSES (Note 2):
Administrative services fee........................................ 209,905
Investment advisory fee............................................ 104,953
Distribution fee................................................... 34,984
-----------
Total expenses.................................................... 349,842
-----------
NET INVESTMENT INCOME.............................................. 140,122
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND OPTIONS
WRITTEN (Note 1):
Net realized gain (loss) on:
Investments....................................................... (1,456,834)
Options written................................................... 56,637
-----------
(1,400,197)
-----------
Net increase (decrease) in net unrealized appreciation/depreciation
of:
Investments....................................................... 1,942,123
Options written................................................... (2,201)
-----------
1,939,922
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND OPTIONS
WRITTEN........................................................... 539,725
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.... $ 679,847
===========
</TABLE>
See Notes to Financial Statements
8
<PAGE>
GREEN CENTURY BALANCED FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE
YEAR ENDED ONE MONTH ENDED YEAR ENDED
JULY 31, 1999 JULY 31, 1998 JUNE 30, 1998
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income............. $ 140,122 $ 3,077 $ 17,371
Net realized gain (loss) on in-
vestments and options written.... (1,400,197) (32,969) 1,701,718
Net increase (decrease) in
unrealized net
appreciation/depreciation of
investments and options written.. 1,939,922 (1,300,712) (457,501)
----------- ----------- -----------
Net increase (decrease) in net as-
sets resulting from operations... 679,847 (1,330,604) 1,261,588
----------- ----------- -----------
Dividends and distributions to
shareholders (Note 1):
From net investment income........ (137,787) -- (78,490)
From net realized gains........... (1,046,950) -- (1,204,821)
----------- ----------- -----------
Total dividends and distributions.. (1,184,737) -- (1,283,311)
----------- ----------- -----------
Capital share transactions (Note
4):
Proceeds from sales of shares..... 3,191,755 567,446 5,329,586
Reinvestment of dividends and dis-
tributions....................... 859,904 -- 1,022,174
Payments for shares redeemed...... (3,489,320) (310,809) (1,066,413)
----------- ----------- -----------
Net increase in net assets result-
ing from capital stock transac-
tions............................ 562,339 256,637 5,285,347
----------- ----------- -----------
Total Increase (Decrease) in Net
Assets............................ 57,449 (1,073,967) 5,263,624
NET ASSETS:
Beginning of Period............... 15,211,799 16,285,766 11,022,142
----------- ----------- -----------
End of Period (including undis-
tributed net investment income of
$5,312 and $3,077 for the year
ended July 31, 1999, and the one
month ended July 31, 1998, re-
spectively)...................... $15,269,248 $15,211,799 $16,285,766
=========== =========== ===========
</TABLE>
GREEN CENTURY BALANCED FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE
FOR THE ONE MONTH
YEAR ENDED ENDED FOR THE YEARS ENDED JUNE 30,
--------------------------------
JULY 31, 1999 JULY 31, 1998 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, begin-
ning of period......... $ 12.68 $ 13.79 $ 13.53 $ 13.34 $11.03 $ 9.68
------- ------- ------- ------- ------ ------
Income from investment
operations:
Net investment income.. 0.11 -- 0.02 0.12 0.10 0.10
Net realized and
unrealized gain (loss)
on investments........ 0.40 (1.11) 1.68 1.77 2.31 1.35
------- ------- ------- ------- ------ ------
Total increase (de-
crease) from investment
operations............. 0.51 (1.11) 1.70 1.89 2.41 1.45
------- ------- ------- ------- ------ ------
Less dividends and dis-
tributions (Note 1):
Dividends from net in-
vestment income....... (0.11) -- (0.09) (0.10) (0.10) (0.10)
Distributions from net
realized gains........ (0.87) -- (1.35) (1.60) -- --
------- ------- ------- ------- ------ ------
Total decrease from div-
idends and distribu-
tions.................. (0.98) -- (1.44) (1.70) (0.10) (0.10)
------- ------- ------- ------- ------ ------
Net Asset Value, end of
period................. $ 12.21 $ 12.68 $ 13.79 $ 13.53 $13.34 $11.03
======= ======= ======= ======= ====== ======
Total return............ 4.93% (8.05)%(a) 13.13% 15.22% 21.98% 15.00%
Ratios\Supplemental da-
ta:
Net assets, end of pe-
riod (in 000's)....... $15,269 $15,212 $16,286 $11,022 $8,215 $3,291
Ratio of expenses to
average net assets.... 2.50% 2.50%(b) 2.50% 2.50% 2.50% 2.50%
Ratio of net investment
income to average net
assets................ 1.00% 0.22%(b) 0.12% 0.94% 0.85% 0.97%
Portfolio turnover..... 91% 4%(a) 96% 109% 136% 16%
</TABLE>
(a) Not annualized
(b) Annualized
See Notes to Financial Statements
9
<PAGE>
GREEN CENTURY EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment in Domini Social Index Portfolio, at value (Note 1)...... $29,717,191
Receivable for capital stock sold................................... 78,996
-----------
Total assets..................................................... 29,796,187
-----------
LIABILITIES:
Accrued expenses (Note 2)........................................... 32,347
-----------
NET ASSETS.......................................................... $29,763,840
===========
NET ASSETS CONSIST OF:
Paid-in capital..................................................... $23,001,463
Accumulated net realized gain on investment......................... 174,365
Net unrealized appreciation on investment........................... 6,588,012
-----------
NET ASSETS.......................................................... $29,763,840
===========
SHARES OUTSTANDING.................................................. 1,208,833
===========
NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE...... $ 24.62
===========
</TABLE>
GREEN CENTURY EQUITY FUND
STATEMENT OF OPERATIONS
For the year ended July 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME FROM INDEX PORTFOLIO:
Investment income from Index Portfolio............................. $ 225,879
Expenses from Index Portfolio...................................... (43,340)
----------
Net income from Index Portfolio................................. 182,539
----------
EXPENSES:
Administrative services fee (Note 2)............................... 281,718
----------
NET INVESTMENT LOSS................................................ (99,179)
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENT:
Net realized gain on investment allocated from Index Portfolio..... 369,045
Net increase in net unrealized appreciation of investment allocated
from Index Portfolio.............................................. 3,767,345
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENT..................... 4,136,390
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $4,037,211
==========
</TABLE>
See Notes to Financial Statements
10
<PAGE>
GREEN CENTURY EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
JULY 31, 1999 JULY 31, 1998
<S> <C> <C>
INCREASE IN NET ASSETS:
From Operations:
Net investment loss............................... $ (99,179) $ (24,397)
Net realized gain on investment allocated from In-
dex Portfolio.................................... 369,045 101,835
Net increase in net unrealized appreciation of in-
vestment allocated from Index Portfolio.......... 3,767,345 1,755,126
----------- -----------
Net increase in net assets resulting from opera-
tions............................................ 4,037,211 1,832,564
----------- -----------
Dividends and distributions to shareholders:
From net realized gains........................... (179,708) (5,456)
----------- -----------
Total dividends and distributions................. (179,708) (5,456)
----------- -----------
Capital Share Transactions (Note 4):
Proceeds from sales of shares..................... 13,046,220 10,106,426
Reinvestment of dividends and distributions....... 174,395 5,171
Payments for shares redeemed...................... (2,789,855) (1,738,306)
----------- -----------
Net increase in net assets resulting from capital
share transactions............................... 10,430,760 8,373,291
----------- -----------
Total Increase in Net Assets....................... 14,288,263 10,200,399
NET ASSETS:
Beginning of period............................... 15,475,577 5,275,178
----------- -----------
End of period (including accumulated net
investment loss of $0 and $0 respectively)....... $29,763,840 $15,475,577
=========== ===========
</TABLE>
GREEN CENTURY EQUITY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 13, 1995
FOR THE YEARS (COMMENCEMENT OF
ENDED JULY 31, OPERATIONS) TO
-------------------------- JULY 31, 1996
1999 1998 1997
<S> <C> <C> <C> <C>
Net Asset Value, beginning of
period......................... $ 20.44 $ 16.86 $11.04 $10.00
------- ------- ------ ------
Income from investment opera-
tions:
Net investment income (loss)... (0.08) (0.03) 0.02 0.02
Net realized and unrealized
gain on investment............ 4.47 3.62 5.84 1.04
------- ------- ------ ------
Total increase from investment
operations.................... 4.39 3.59 5.86 1.06
------- ------- ------ ------
Less dividends and distribu-
tions:
Dividends from net investment
income........................ -- -- (0.03) (0.02)
Distributions from net realized
gains......................... (0.21) (0.01) (0.01) --
------- ------- ------ ------
Total decrease from dividends
and distributions.............. (0.21) (0.01) (0.04) (0.02)
------- ------- ------ ------
Net Asset Value, end of period.. $ 24.62 $ 20.44 $16.86 $11.04
======= ======= ====== ======
Total return.................... 21.56% 21.32% 53.14% 10.64%(a)
Ratios/supplemental data
Net Assets, end of period (in
000's)........................ $29,764 $15,476 $5,275 $ 880
Ratio of expenses to average
net assets.................... 1.50% 1.50% 1.50% 1.50%(b)
Ratio of net investment income
(loss) to average net assets.. (0.46)% (0.26)% 0.07% 0.49%(b)
Portfolio turnover (c)......... 8% 5% 1% n/a
</TABLE>
(a) Not annualized.
(b) Annualized.
(c) Represents portfolio turnover for the Index Portfolio.
See Notes to Financial Statements
11
<PAGE>
GREEN CENTURY BALANCED FUND
GREEN CENTURY EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Organization and Significant Accounting Policies
Green Century Funds (the "Trust") is a Massachusetts business trust which
offers two separate series, the Green Century Balanced Fund (the "Balanced
Fund") and the Green Century Equity Fund (the "Equity Fund"). The Trust is
registered under the Investment Company Act of 1940, as amended (the "Act"),
as an open-end management investment company. The Trust accounts separately
for the assets, liabilities and operations of each series. The Balanced Fund
commenced operations on March 18, 1992 and the Equity Fund commenced
operations on September 13, 1995.
The Equity Fund invests substantially all of its assets in the Domini Social
Index Portfolio (the "Index Portfolio"), an open-end, diversified management
investment company having the same investment objective as the Fund. The
Equity Fund accounts for its investment in the Index Portfolio as a
partnership investment and records its share of the Index Portfolio's income,
expenses and realized and unrealized gains and losses daily. The value of such
investment reflects the Fund's proportionate interest in the net assets of the
Index Portfolio (2.21% at July 31, 1999). The financial statements of the
Index Portfolio are included elsewhere in this report and should be read in
conjunction with the Equity Fund's financial statements.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The
following is a summary of the Trust's significant accounting policies:
(A) Balanced Fund Investment Valuation: Equity securities listed on
national securities exchanges or reported through the NASDAQ system are
valued at last sale price. Unlisted securities or listed securities for
which last sale prices are not available are valued at the mean between
the closing bid and asked prices if such securities are listed on a
national exchange, and at the last quoted bid price in the case of
securities not listed on a national exchange. Debt securities (other
than short-term obligations maturing in sixty days or less) are valued
on the basis of valuation furnished by a pricing service which takes
into account appropriate factors such as institution-size trading in
similar groups of securities, yield, quality, coupon rate, maturity,
type of issue, and other market data, without exclusive reliance on
quoted prices or exchange or over-the-counter prices, since such
valuations are believed to reflect more accurately the fair value of
the securities. Securities, if any, for which there are no such
valuations or quotations available are valued at fair value as
determined in good faith under guidelines established by the Trustees.
Short-term obligations maturing in sixty days or less are valued at
amortized cost, which approximates market value.
Equity Fund Investment Valuation: Valuation of securities by the Index
Portfolio is discussed in Note 1 of the Index Portfolio's Notes to
Financial Statements which are included elsewhere in this report.
(B) Balanced Fund Securities Transactions and Investment Income: Securities
transactions are recorded on a trade date basis. Realized gains and
losses from securities transactions are determined using the identified
cost basis. Interest income is recognized on the accrual basis and
dividend income is recorded on ex-dividend date.
Equity Fund Securities Transactions and Investment Income: The Fund earns
income, net of Index Portfolio expenses, daily based on its investment
in the Index Portfolio.
12
<PAGE>
GREEN CENTURY BALANCED FUND
GREEN CENTURY EQUITY FUND
NOTES TO FINANCIAL STATEMENTS--(continued)
(C) Distributions: Distributions to shareholders are recorded on the ex-
dividend date. The Funds declare and pay dividends of net investment
income, if any, semi-annually and distribute net realized capital
gains, if any, annually. The amount and character of income and net
realized gains to be distributed are determined in accordance with
Federal income tax rules and regulations, which may differ from
generally accepted accounting principles. These differences are
attributable to permanent book and tax accounting differences.
Accordingly, at July 31, 1999 for the Balanced Fund, a reclassification
was recorded to decrease undistributed net investment income and to
decrease undistributed net realized loss by $102. At July 31, 1999 for
the Equity Fund, a reclassification was recorded to increase
undistributed net investment income and decrease undistributed net
realized gain by $99,179.
(D) Balanced Fund Options Written: When the Balanced Fund writes a call
option or a put option, an amount equal to the premium received by the
Fund is recorded as a liability, the value of which is marked-to-market
daily. When a written option expires, the Balanced Fund realizes a gain
equal to the amount of the premium originally received. When the
Balanced Fund enters into a closing purchase transaction, the Fund
realizes a gain (or loss if the cost of the closing purchase
transaction exceeds the premium originally received when the option was
written) without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is
eliminated. When a call option is exercised, the Fund realizes a gain
or loss from the sale of the underlying security and the proceeds from
such sale are increased by the premium originally received. When a put
option is exercised, the amount of the premium originally received will
reduce the cost of the security which the Fund purchased upon exercise.
The risk in writing a call option is that the Balanced Fund may forego
the opportunity for profit if the market price of the underlying
security increases and the option is exercised. The risk in writing a
put option is that the Fund may incur a loss if the market price of the
underlying security decreases and the option is exercised. There is also
the risk the Fund may not be able to enter into a closing transaction
because of an illiquid secondary market. In addition, the Fund could be
exposed to risks if the counterparties to the transaction are unable to
meet the terms of the contracts.
(E) Federal Taxes: Each series of the Trust is treated as a separate entity
for Federal income tax purposes. Each Fund's policy is to comply with
the provisions of the Internal Revenue Code applicable to regulated
investment companies. Accordingly, no provisions for Federal income or
excise tax are necessary.
NOTE 2--Transactions With Affiliates
(A) Investment Adviser: Green Century Capital Management, Inc. ("Green
Century") is the adviser ("the Adviser") for the Balanced Fund and
oversees the portfolio management of the Balanced Fund on a day-to-day
basis. For these services, Green Century receives a fee, accrued daily
and paid monthly, at an annual rate equal to 0.75% of the Balanced
Fund's average daily net assets.
(B) Subadviser: Winslow Management Company ("Winslow"), a separate
operating division of Adams, Harkness & Hill, Inc., is the subadviser
for the Balanced Fund. Prior to March 31, 1999, Winslow was a division
of Eaton Vance Management. For its services, Winslow is paid a fee by
the Adviser at an annual rate equal to 0.40% of the average daily net
assets of the Balanced Fund, subject to an adjustment up or down of
0.20% annually. For the year ended July 31, 1999 Green Century accrued
fees of $26,938 to Winslow.
13
<PAGE>
GREEN CENTURY BALANCED FUND
GREEN CENTURY EQUITY FUND
NOTES TO FINANCIAL STATEMENTS--(continued)
(C) Administrator: Green Century is the administrator ("the Administrator")
of the Green Century Funds. Pursuant to the Administrative Services
Agreement, Green Century pays all the expenses of each Fund other than
the investment advisory fees, fees under the Distribution Plan,
interest, taxes, brokerage costs and other capital expenses, expenses
of non-interested trustees (including counsel fees) and any
extraordinary expenses. For these services, Green Century receives a
fee from the Balanced Fund at an annual rate equal to 1.50% of the
Fund's average daily net assets, and receives a fee from the Equity
Fund at a rate such that immediately following any payment to the
Administrator, the combined total operating expenses of the Fund and
the Index Portfolio (including investment advisory and distribution
fees and any amortization of organization expenses), on an annual
basis, do not exceed 1.50% of the Fund's average daily net assets.
(D) Subadministrator: Pursuant to a Subadministrative Services Agreement
with the Administrator, Sunstone Financial Group, Inc. ("Sunstone"), as
Subadministrator, is responsible for conducting certain day-to-day
administration of the Trust subject to the supervision and direction of
the Administrator. For the year ended July 31, 1999, Green Century
accrued fees of $40,685 and $40,685 to Sunstone related to services
performed on behalf of the Balanced Fund and the Equity Fund,
respectively.
(E) Distribution Plan: The Trust has adopted a Distribution Plan (the
"Plan") with respect to the Balanced Fund in accordance with Rule 12b-1
under the Act. The Plan provides that the Balanced Fund pay a fee to
Sunstone Distribution Services, LLC, as distributor of shares of the
Balanced Fund, at an annual rate not to exceed 0.25% of the Balanced
Fund's average daily net assets. The fee is reimbursement for, or in
anticipation of, expenses incurred for distribution-related activities.
For the year ended July 31, 1999, the Balanced Fund accrued and paid
$35,090 to Sunstone Distribution Services, LLC for services provided
pursuant to the plan.
NOTE 3--Investment Transactions
The Balanced Fund's purchases and sales of securities, other than short-term
securities, aggregated $12,675,977 and $12,195,865, respectively, for the year
ended July 31, 1999.
The Balanced Fund's activity in written options for the year ended July 31,
1999 was as follows:
<TABLE>
<CAPTION>
PREMIUM CONTRACTS
<S> <C> <C>
Options outstanding at July 31, 1998........................ $ 6,664 34
Options written............................................. 69,629 554
Options expired............................................. (46,502) (354)
Options closed.............................................. (29,791) (234)
-------- ----
Options outstanding at July 31, 1999........................ $ 0 0
======== ====
</TABLE>
Additions and reductions in the Equity Fund's investment in the Index
Portfolio aggregated $13,100,902 and $2,779,346 for the year ended July 31,
1999.
14
<PAGE>
GREEN CENTURY BALANCED FUND
GREEN CENTURY EQUITY FUND
NOTES TO FINANCIAL STATEMENTS--(concluded)
NOTE 4--Capital Share Transactions
Capital share transactions for the Balanced Fund and the Equity Fund were as
follows:
<TABLE>
<CAPTION>
BALANCED FUND EQUITY FUND
----------------------------------------- ------------------------
FOR THE
FOR THE FOR THE ONE FOR THE FOR THE YEAR ENDED
YEAR ENDED MONTH ENDED YEAR ENDED YEAR ENDED JULY
JULY 31, 1999 JULY 31, 1998 JUNE 30, 1998 JULY 31, 1999 31, 1998
<S> <C> <C> <C> <C> <C>
Shares sold............. 284,115 41,766 360,830 572,365 535,842
Reinvestment of divi-
dends.................. 77,885 0 78,147 7,585 307
Shares redeemed......... (310,445) (22,956) (72,916) (128,076) (92,049)
-------- ------- ------- -------- -------
51,555 18,810 366,061 451,874 444,100
======== ======= ======= ======== =======
</TABLE>
NOTE 5--Results of the Shareholder Meeting (Unaudited)
The special meeting of the shareholders of the Balanced Fund was held on
June 18, 1999. The matter voted on by the shareholders of record as of May 3,
1999 and the results of the vote at the shareholder meeting was as follows:
1. To approve a new investment subadvisory agreement between Winslow
Management Company, Green Century Capital Management, Inc. and the Trust
on behalf of the Fund,
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
790,107 11,861 27,396
</TABLE>
- -------------------------------------------------------------------------------
TAX INFORMATION--UNAUDITED
The federal tax status of distributions per share made to shareholders on
December 29, 1998 was as follows:
<TABLE>
<CAPTION>
NET 20%
INVESTMENT SHORT-TERM LONG-TERM
INCOME CAPITAL GAINS CAPITAL GAINS
---------- ------------- -------------
<S> <C> <C> <C>
Balanced Fund............................ $0.0026 $0.1878 $0.6777
Equity Fund.............................. NONE NONE $0.2098
</TABLE>
For the Balanced Fund for the year ended July 31, 1999, 5.2% of dividends
paid from net investment income and short-term capital gains qualified for the
70% dividends received deduction available to corporate shareholders.
For the year ended July 31, 1999, the Equity Fund did not pay any dividends
from net investment income or short-term capital gains that would qualify for
the 70% dividends received deduction available to corporate shareholders.
As of July 31, 1999, the Balanced Fund had a capital loss carryover for
federal income tax purposes of $631,500, of which $32,969 expires in 2006 and
$598,531 expires in 2007.
15
<PAGE>
[LOGO OF KPMG APPEARS HERE]
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
Green Century Funds
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of the Green Century Balanced Fund
(the "Fund") as of July 31, 1999, the related statement of operations for the
year then ended, the statements of changes in net assets for the year then
ended and for one-month period ended July 31, 1998 and the year ended June 30,
1998, and financial highlights for each of the five fiscal periods ended July
31, 1999. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
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 July 31, 1999 by correspondence with the custodian and brokers. 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
the Green Century Balanced Fund as of July 31, 1999, the results of its
operations, changes in its net assets and financial highlights for the years
or periods described above, in conformity with generally accepted accounting
principles.
[LOGO OF KPMG LLP APPEARS HERE]
Boston, Massachusetts
September 16, 1999
16
<PAGE>
[LOGO OF KPMG APPEARS HERE]
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
Green Century Funds
We have audited the accompanying statement of assets and liabilities of the
Green Century Equity Fund (the "Fund") as of July 31, 1999, and the related
statement of operations for the year then ended, and statements of changes in
net assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the three-year period then
ended, and for the period from September 13, 1995 (commencement of operations)
to July 31, 1996. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
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. 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
the Green Century Equity Fund as of July 31, 1999, the results of its
operations, changes in its net assets and financial highlights for each of the
years or periods referred to above in conformity with generally accepted
accounting principles.
[LOGO OF KPMG LLP APPEARS HERE]
Boston, Massachusetts
September 16, 1999
17
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS
July 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Basic Materials--1.3%
Air Products & Chemicals, Inc. ........................... 52,300 $ 1,748,781
Alcoa, Inc. .............................................. 84,600 5,065,425
Battle Mountain Gold Company (b).......................... 48,100 93,194
Bemis Company, Inc. ...................................... 12,000 444,000
Cabot Corporation......................................... 14,600 350,400
Calgon Carbon Corporation................................. 8,100 54,675
Caraustar Industries, Inc. ............................... 5,200 129,350
Catalytica, Incorporated (b).............................. 5,800 72,500
Consolidated Papers, Inc. ................................ 20,700 589,950
Cyprus Amax Minerals Company.............................. 19,700 258,563
Echo Bay Mines Ltd. (b)................................... 25,000 32,811
Ecolab Inc. .............................................. 29,700 1,265,963
Fuller (H.B.) Company..................................... 3,100 215,450
IMCO Recycling Inc. ...................................... 3,100 54,056
Mead Corporation.......................................... 22,900 938,900
Minerals Technologies Inc. ............................... 4,800 257,400
Nalco Chemical Company.................................... 15,100 776,706
Nucor Corporation......................................... 19,950 967,575
Praxair, Inc. ............................................ 35,800 1,651,275
Ryerson Tull, Inc. ....................................... 6,400 136,800
Sigma-Aldrich Corporation................................. 23,100 776,738
Sonoco Products Company................................... 23,345 625,938
Westvaco Corporation...................................... 22,900 674,119
Worthington Industries, Inc. ............................. 20,400 298,350
------------
17,478,919
------------
Business & Professional Services--0.1%
Avery Dennison Corporation................................ 26,000 1,595,750
Dionex Corporation (b).................................... 4,900 211,619
Isco, Inc. (b)............................................ 800 4,750
Wellman, Inc. ............................................ 7,000 113,312
------------
1,925,431
------------
Capital Goods--2.0%
Baldor Electric Company................................... 7,500 136,406
Case Corporation.......................................... 17,000 809,625
Cooper Industries, Inc. .................................. 21,300 1,168,836
Cross (A.T.) Company (b).................................. 2,300 11,500
Crown Cork & Seal Company, Inc. .......................... 28,000 820,750
Cummins Engine Company, Inc. ............................. 9,700 627,469
Deere & Company........................................... 53,000 2,027,250
Emerson Electric Co. ..................................... 99,600 5,944,875
Graco Inc. ............................................... 4,675 144,341
Granite Construction Incorporated......................... 6,050 153,141
HON Industries, Inc. ..................................... 13,600 316,200
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Capital Goods--(continued)
Hubbell Incorporated...................................... 14,460 $ 596,475
Hunt Corporation.......................................... 1,600 14,200
Illinois Tool Works Inc. ................................. 57,100 4,243,244
Ionics, Inc. (b).......................................... 3,400 115,175
Lawson Products, Inc. .................................... 2,300 54,625
Leggett & Platt, Inc. .................................... 45,000 1,153,125
Milacron Inc. ............................................ 7,800 133,575
Herman Miller, Inc. ...................................... 17,800 467,250
Molex Incorporated........................................ 35,137 1,227,599
Moore Corporation......................................... 19,400 161,263
National Service Industries, Inc. ........................ 9,000 317,810
New England Business Service, Inc. ....................... 2,900 83,194
Pitney Bowes Inc. ........................................ 61,500 3,912,938
Raychem Corporation....................................... 17,700 674,813
Smith (A.O.) Corporation.................................. 4,900 142,713
Standard Register Company................................. 6,200 180,188
Thomas & Betts Corporation................................ 12,600 570,150
Thomas Industries Inc. ................................... 3,300 69,094
------------
26,277,824
------------
Consumer Cyclicals--12.0%
American Greetings Corporation............................ 15,000 440,625
Angelica Corporation...................................... 1,300 16,656
Apogee Enterprises, Inc. ................................. 5,600 55,300
AutoZone, Inc. (b)........................................ 34,200 844,312
Bandag, Incorporated...................................... 4,900 164,456
Banta Corporation......................................... 6,050 148,981
Bassett Furniture Industries.............................. 2,400 59,400
Black & Decker Corporation................................ 19,900 1,149,225
Block (H&R), Inc. ........................................ 22,100 1,207,212
Brown Shoe Company, Inc. ................................. 3,800 75,762
Centex Corporation........................................ 13,600 458,150
Champion Enterprises, Inc. (b)............................ 10,600 145,087
Charming Shoppes, Inc. (b)................................ 20,500 137,094
Circuit City Stores, Inc. ................................ 45,800 2,164,050
Cintas Corporation........................................ 25,200 1,615,950
Claire's Stores, Inc. .................................... 11,100 263,625
Cooper Tire and Rubber Company............................ 16,600 373,500
Costco Companies Inc. (b)................................. 50,115 3,746,096
Dana Corporation.......................................... 37,600 1,569,800
Dayton Hudson Corporation................................. 101,300 6,552,844
Delphi Automotive Systems Corporation..................... 128,700 2,316,600
DeVry Inc. (b)............................................ 15,200 315,400
Dillard, Inc. ............................................ 24,500 754,906
Dollar General Corporation................................ 50,201 1,327,189
</TABLE>
18
<PAGE>
PORTFOLIO OF INVESTMENTS--(continued)
July 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Consumer Cyclicals--(continued)
Dow Jones & Company....................................... 20,700 $ 1,032,412
Egghead.com, Inc. (b)..................................... 6,800 59,075
Enesco Group, Inc. ....................................... 3,400 72,675
Fedders Corporation....................................... 6,400 42,000
Federal-Mogul Corporation................................. 16,100 780,850
Fleetwood Enterprises, Inc. .............................. 7,700 177,581
Gap, Inc. (The)........................................... 196,687 9,195,117
Genuine Parts Company..................................... 40,600 1,261,137
Gibson Greetings, Inc. (b)................................ 2,300 11,500
Handleman Company (b)..................................... 6,600 73,837
Harcourt General.......................................... 16,300 756,931
Harland (John H.) Company................................. 6,500 130,812
Harman International Industries, Inc. .................... 3,930 172,920
Hartmarx Corporation (b).................................. 5,500 24,063
Hasbro, Inc. ............................................. 44,725 1,162,850
Hillenbrand Industries, Inc. ............................. 14,800 665,075
Home Depot, Inc. ......................................... 339,098 21,638,691
Huffy Corporation......................................... 2,500 28,125
IMS Health Incorporated................................... 72,300 2,015,363
Interface, Inc. .......................................... 11,000 98,313
Jostens, Inc. ............................................ 7,400 149,850
Kmart Corporation (b)..................................... 112,900 1,637,050
Kaufman & Broad Home Corporation.......................... 10,500 218,531
Kelly Services, Inc. ..................................... 7,975 245,730
Lands' End, Inc. (b)...................................... 6,700 303,594
Lee Enterprises, Inc. .................................... 9,700 295,244
Lillian Vernon Corporation................................ 1,500 21,375
Limited, Inc. (The)....................................... 49,600 2,266,100
Liz Claiborne, Inc. ...................................... 14,000 543,375
Lowe's Companies, Inc. ................................... 84,700 4,467,925
Marriott International, Inc. ............................. 56,900 1,995,056
Mattel, Inc. ............................................. 95,085 2,234,498
May Department Stores Company............................. 77,300 2,990,544
Maytag Corporation........................................ 20,200 1,406,425
McGraw-Hill Companies, Inc. .............................. 45,100 2,294,463
Media General, Inc. ...................................... 5,900 300,163
Men's Wearhouse, Inc. (b)................................. 8,800 218,900
Meredith Corporation...................................... 11,900 427,656
Modine Manufacturing Company.............................. 6,500 208,203
New York Times Company.................................... 40,100 1,576,431
Nordstrom, Inc. .......................................... 32,000 1,006,000
Omnicom Group Inc. ....................................... 40,800 2,891,700
Oshkosh B'Gosh, Inc. ..................................... 3,800 64,600
Penney (J.C.) Company, Inc. .............................. 60,100 2,629,375
Pep Boys--Manny, Moe & Jack............................... 11,700 194,513
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Consumer Cyclicals--(continued)
Phillips-Van Heusen Corporation......................... 5,700 $ 48,450
Reebok International Ltd. (b)........................... 12,300 149,138
Rouse Company (The)..................................... 15,800 384,138
Russell Corporation..................................... 7,300 140,069
SPX Corporation (b)..................................... 6,915 587,775
Scholastic Corporation (b).............................. 3,600 160,650
Sears, Roebuck and Co. ................................. 86,800 3,515,400
Service Corporation International....................... 62,300 989,013
Shaw Industries, Inc. (b)............................... 32,300 680,319
Sherwin-Williams Company (The).......................... 38,300 1,034,100
Skyline Corporation..................................... 1,900 57,594
Snap-on Incorporated.................................... 15,050 526,750
Springs Industries, Inc. ............................... 4,000 159,000
Stanley Works (The)..................................... 20,300 567,131
Staples, Inc. (b)....................................... 106,100 3,063,638
Stride Rite Corporation................................. 9,700 88,513
TJ International, Inc. ................................. 3,300 102,300
TJX Companies, Inc. .................................... 73,300 2,423,481
Tandy Corporation....................................... 44,100 2,262,881
Tennant Company......................................... 1,700 58,225
Timberland Company (The) (b)............................ 2,400 195,150
Times Mirror Company.................................... 16,500 994,125
Toro Company............................................ 2,700 95,850
Toys 'R' Us, Inc. (b)................................... 55,920 908,700
VF Corporation.......................................... 27,000 1,066,500
Venator Group, Inc. (b)................................. 30,100 316,050
Wal-Mart Stores, Inc. .................................. 1,018,600 43,035,850
Washington Post Company................................. 2,300 1,299,500
Whirlpool Corporation................................... 17,200 1,233,025
------------
162,032,163
------------
Consumer Staples--15.8%
Alberto-Culver Company.................................. 12,500 319,531
Albertson's, Inc. ...................................... 95,900 4,765,031
Avon Products, Inc. .................................... 59,600 2,711,800
Ben & Jerry's Homemade, Inc. (b)........................ 1,200 25,200
Bergen Brunswig Corporation............................. 30,736 491,776
Bestfoods............................................... 63,800 3,110,250
Bob Evans Farms, Inc. .................................. 9,000 190,407
CVS Corporation......................................... 89,500 4,452,625
Campbell Soup Company................................... 99,500 4,378,000
Church & Dwight Co., Inc. .............................. 4,300 188,931
Clorox Company.......................................... 26,900 3,012,800
Coca-Cola Company....................................... 564,800 34,064,500
Colgate-Palmolive Company............................... 133,800 6,606,375
Comcast Corporation..................................... 169,500 6,525,750
</TABLE>
19
<PAGE>
PORTFOLIO OF INVESTMENTS--(continued)
July 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Consumer Staples--(continued)
Darden Restaurants, Inc. ................................. 29,800 $ 650,012
Deluxe Corporation........................................ 17,900 671,250
Disney, Walt Company (The) (b)............................ 471,300 13,019,662
Donnelley (R.R.) & Sons Company........................... 29,500 1,032,500
Fleming Companies, Inc. .................................. 8,000 96,500
Fort James Corporation.................................... 50,400 1,839,600
General Mills Incorporated................................ 34,800 2,881,875
Gillette Company.......................................... 253,900 11,123,994
Great Atlantic & Pacific Tea Company, Inc. ............... 8,500 293,781
Hannaford Bros. Co. ...................................... 9,700 554,719
Heinz (H.J.) Company...................................... 82,000 3,864,250
Hershey Foods Corporation................................. 31,900 1,850,200
Kellogg Company........................................... 92,400 3,216,675
Kimberly-Clark Corporation................................ 121,864 7,433,704
King World Productions, Inc. (b).......................... 16,200 564,975
Kroger Co. (b)............................................ 189,100 4,975,694
Longs Drug Stores Corporation............................. 8,600 296,162
Luby's, Inc. ............................................. 4,600 68,137
McDonald's Corporation.................................... 310,800 12,956,475
MediaOne Group, Inc. (b).................................. 138,600 10,031,175
Nature's Sunshine Products, Inc. ......................... 3,800 35,625
Newell Rubbermaid Inc. ................................... 64,378 2,784,348
Odwalla, Inc. (b)......................................... 500 3,500
Oneida Ltd. .............................................. 3,500 91,000
PepsiCo, Inc. ............................................ 338,100 13,228,162
Procter & Gamble Company.................................. 304,100 27,521,050
Quaker Oats Company....................................... 30,800 2,096,325
Ralston Purina Company.................................... 74,200 2,221,362
Ruby Tuesday, Inc. ....................................... 6,600 138,600
Ryan's Family Steakhouse, Inc. (b)........................ 8,400 89,775
Smucker (J.M.) Company.................................... 6,500 157,219
Starbucks Corporation (b)................................. 40,900 950,925
SUPERVALU Inc. ........................................... 27,300 621,075
SYSCO Corporation......................................... 75,400 2,464,638
TCBY Enterprises, Inc. ................................... 4,100 23,063
Tootsie Roll Industries, Inc. ............................ 7,420 256,918
Tupperware Corporation.................................... 12,600 297,675
Viacom, Inc. (b).......................................... 32,100 1,346,194
Walgreen Company.......................................... 229,200 6,489,225
Wendy's International, Inc. .............................. 28,200 819,563
Whitman Corporation....................................... 20,400 388,875
Whole Foods Market, Inc. (b).............................. 5,700 250,800
Wild Oats Markets, Inc. (b)............................... 2,700 98,213
Wrigley (Wm.) Jr. Company................................. 26,500 2,111,719
------------
212,750,165
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Financial Services--15.8%
Aetna, Inc. .............................................. 32,170 $ 2,637,940
American Express Company.................................. 103,100 13,583,425
American General Corporation.............................. 57,462 4,446,122
American International Group, Inc. ....................... 283,550 32,927,244
Bank One Corporation...................................... 270,285 14,747,425
BankBoston Corporation.................................... 67,700 3,177,669
CIGNA Corporation......................................... 46,600 4,109,537
Capital One Financial Corporation......................... 45,000 2,086,875
Chittenden Corporation.................................... 6,061 168,950
Chubb Corporation......................................... 40,300 2,410,444
Cincinnati Financial Corporation.......................... 37,385 1,406,611
Dime Bancorp, Inc. ....................................... 24,800 499,100
Edwards (A.G.), Inc. ..................................... 20,987 579,765
Freddie Mac............................................... 159,100 9,128,362
Fannie Mae................................................ 234,600 16,187,400
Fifth Third Bancorp....................................... 61,525 4,002,970
First Tennessee National Corporation...................... 29,400 1,076,775
Firstar Corporation....................................... 152,000 3,961,500
FirstFed Financial Corp. (b).............................. 4,000 64,000
Golden West Financial..................................... 12,700 1,218,406
HSB Group, Inc. .......................................... 6,350 258,365
Household International, Inc. ............................ 109,346 4,695,044
Jefferson-Pilot Corporation............................... 24,050 1,757,153
Lincoln National Corporation.............................. 45,700 2,285,000
MBIA Inc. ................................................ 22,700 1,299,575
MBNA Corporation.......................................... 182,950 5,214,075
MGIC Investment Corporation............................... 24,800 1,222,950
Marsh & McLennan Companies, Inc. ......................... 60,050 4,563,800
Mellon Bank Corporation................................... 118,900 4,012,875
Merrill Lynch & Co., Inc. ................................ 84,200 5,730,863
Morgan (J.P.) & Co. Incorporated.......................... 40,600 5,191,725
PNC Bank Corp. ........................................... 69,300 3,664,238
Providian Financial Corporation........................... 32,600 2,966,600
ReliaStar Financial Corp. ................................ 20,300 921,113
SLM Holding Corporation................................... 37,300 1,697,150
SAFECO Corporation........................................ 31,200 1,187,550
St. Paul Companies, Inc. (The)............................ 51,564 1,604,930
Schwab (Charles) Corporation.............................. 186,900 8,235,281
SunTrust Banks, Inc. ..................................... 73,600 4,747,200
Synovus Financial Corp. .................................. 62,050 1,136,291
Torchmark Corporation..................................... 30,100 989,538
U.S. Bancorp.............................................. 165,900 5,163,638
UnumProvident Corp. ...................................... 54,500 2,820,375
Value Line, Inc. ......................................... 2,100 83,738
</TABLE>
20
<PAGE>
PORTFOLIO OF INVESTMENTS--(continued)
July 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Financial Services--(continued)
Wachovia Corporation...................................... 46,200 $ 3,606,488
Washington Mutual, Inc. .................................. 135,702 4,656,275
Wells Fargo & Company..................................... 378,300 14,753,700
Wesco Financial Corporation............................... 1,600 491,200
------------
213,377,250
------------
Healthcare--8.2%
Acuson Corporation........................................ 5,800 101,137
ADAC Laboratories (b)..................................... 3,600 25,425
Allergan, Inc. ........................................... 15,100 1,426,950
ALZA Corporation (b)...................................... 23,100 1,123,237
Becton Dickinson and Company.............................. 56,600 1,552,962
Biomet, Inc. ............................................. 25,700 934,838
Boston Scientific Corporation (b)......................... 90,200 3,658,738
Forest Laboratories, Inc. (b)............................. 18,900 968,625
Guidant Corporation (b)................................... 69,200 4,052,525
Humana Inc. (b)........................................... 38,400 417,600
Johnson & Johnson......................................... 307,900 28,365,288
Mallinckrodt Inc.......................................... 16,300 552,163
McKesson HBOC, Inc. ...................................... 63,220 1,963,771
Medtronic, Inc. .......................................... 133,700 9,634,756
Merck & Co., Inc. ........................................ 540,300 36,571,556
Mylan Laboratories, Inc. ................................. 28,700 652,925
Oxford Health Plans, Inc. (b)............................. 17,800 318,175
St. Jude Medical, Inc. (b)................................ 19,300 717,719
Schering-Plough Corporation............................... 336,900 16,508,100
Stryker Corporation (b)................................... 22,000 1,342,000
Sunrise Medical Inc. (b).................................. 3,500 23,188
United American Healthcare Corporation (b)................ 800 1,000
------------
110,912,678
------------
Industrial, Construction & Housing--0.6%
American Power Conversion (b)............................. 43,200 896,400
Ault Incorporated (b)..................................... 500 2,750
Brady Corporation......................................... 4,700 164,500
CLARCOR Inc. ............................................. 5,250 103,358
Fastenal Company.......................................... 8,700 514,388
Hutchinson Technology Incorporated (b).................... 5,100 134,194
Merix Corporation (b)..................................... 600 4,725
Millipore Corporation..................................... 10,100 411,575
Nordson Corporation....................................... 3,700 212,750
Osmonics, Inc. (b)........................................ 2,100 21,263
Sealed Air Corporation (b)................................ 19,100 1,227,175
Solectron Corporation (b)................................. 57,500 3,705,156
Spartan Motors, Inc. ..................................... 1,700 10,625
Watts Industries, Inc. ................................... 5,600 100,100
------------
7,508,959
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Natural Resources--0.8%
Anadarko Petroleum Corporation.......................... 27,200 $ 1,038,700
Apache Corporation...................................... 25,200 1,069,425
Atlantic Richfield Company.............................. 73,700 6,637,606
Helmerich & Payne, Inc. ................................ 11,000 281,188
PennzEnergy Company..................................... 10,700 175,881
Rowan Companies, Inc. (b)............................... 18,500 348,031
Santa Fe Snyder Corporation (b)......................... 37,100 343,175
Sunoco, Inc. ........................................... 20,700 631,350
------------
10,525,356
------------
Printing, Publishing & Telecommunications--3.8%
AT&T Corp. ............................................. 728,377 37,830,081
Citizens Utilities Company (b).......................... 59,467 706,171
Frontier Corporation.................................... 39,500 2,189,781
Sprint Corporation...................................... 198,000 10,234,125
------------
50,960,158
------------
Technology--29.6%
Adaptec, Inc. (b)....................................... 23,600 917,450
Advanced Micro Devices, Inc. (b)........................ 32,600 560,313
Analog Devices, Inc. (b)................................ 36,600 1,578,375
Apple Computer, Inc. (b)................................ 36,300 2,021,456
Applied Materials, Inc. (b)............................. 85,400 6,143,462
Arrow Electronics, Inc. (b)............................. 21,000 447,562
Autodesk, Inc. ......................................... 13,100 347,150
Automatic Data Processing, Inc. ........................ 141,574 5,671,808
Avnet, Inc. ............................................ 7,700 377,300
BMC Software, Inc. (b).................................. 53,700 2,893,087
CPI Corp. .............................................. 2,000 67,375
Ceridian Corporation (b)................................ 32,500 910,000
Cisco Systems, Inc. (b)................................. 731,100 45,419,587
Compaq Computer Corporation............................. 389,088 9,338,112
Computer Associates International, Inc. ................ 122,800 5,633,450
Compuware Corporation (b)............................... 83,800 2,325,450
Dell Computer Corporation (b)........................... 580,500 23,727,937
EMC Corporation (b)..................................... 231,700 14,032,331
Gerber Scientific Inc. ................................. 4,700 113,094
Grainger (W.W.), Inc. .................................. 21,300 1,006,425
Hewlett-Packard Company................................. 232,300 24,318,906
Ikon Office Solutions, Inc. ............................ 33,100 436,506
Inprise Corporation (b)................................. 10,400 45,826
Intel Corporation....................................... 759,400 52,398,600
LSI Logic Corporation (b)............................... 32,700 1,645,218
Lucent Technologies, Inc. .............................. 695,800 45,270,487
Microsoft Corporation................................... 1,168,200 100,246,163
</TABLE>
21
<PAGE>
PORTFOLIO OF INVESTMENTS--(concluded)
July 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Technology--(continued)
Micron Technology, Inc. (b)............................... 57,100 $ 3,547,338
National Semiconductor Corporation (b).................... 37,900 938,025
Novell, Inc. (b).......................................... 76,600 1,972,450
PE Corp-PE Biosystems Group (b)........................... 5,650 149,725
PeopleSoft, Inc. (b)...................................... 55,100 750,738
Polaroid Corporation...................................... 9,600 220,800
QRS Corporation (b)....................................... 2,700 146,138
Scientific-Atlanta, Inc. ................................. 17,100 624,150
Shared Medical Systems Corporation........................ 5,900 353,263
Sun Microsystems, Inc. (b)................................ 177,100 12,020,663
Symantec Corporation (b).................................. 12,100 366,025
Tektronix, Inc. .......................................... 10,200 323,213
Tellabs, Inc. (b)......................................... 89,600 5,516,000
Texas Instruments Incorporated............................ 89,700 12,916,800
3Com Corporation (b)...................................... 82,600 1,992,725
Xilinx, Inc. (b).......................................... 33,000 2,058,375
Xerox Corporation......................................... 151,400 7,380,750
------------
399,170,608
------------
Transportation--1.1%
AMR Corporation........................................... 40,200 2,607,975
Airborne Freight Corporation.............................. 10,700 266,831
Alaska Air Group, Inc. (b)................................ 5,800 257,375
Consolidated Freightways Corporation (b).................. 4,700 49,644
Delta Air Lines, Inc. .................................... 32,000 1,908,000
FDX Holding Corporation (b)............................... 67,800 3,038,288
GATX Corporation.......................................... 11,300 450,587
Norfolk Southern Corporation.............................. 86,600 2,533,050
Roadway Express, Inc. .................................... 4,300 93,794
Ryder System, Inc. ....................................... 15,700 369,931
Southwest Airlines Co. ................................... 114,775 2,123,338
UAL Corporation (b)....................................... 11,900 754,906
Yellow Corporation (b).................................... 5,400 92,475
------------
14,546,194
------------
Utilities--8.8%
AGL Resources Inc. ....................................... 12,600 237,825
American Water Works, Inc. ............................... 21,400 640,662
Ameritech Corporation..................................... 251,500 18,422,375
Aquarion Company.......................................... 2,250 78,750
Bell Atlantic Corporation................................. 355,322 22,651,777
BellSouth Corporation..................................... 433,500 20,808,000
Cleco Corporation......................................... 4,700 150,988
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Utilities--(continued)
Cascade Natural Gas Corporation....................... 2,000 $ 35,875
Connecticut Energy Corporation........................ 2,200 84,150
Consolidated Natural Gas Company...................... 21,800 1,365,225
Eastern Enterprises................................... 5,000 194,687
El Paso Energy Corporation............................ 27,800 995,587
Energen Corporation................................... 6,200 116,250
Enron Corp. .......................................... 80,700 6,874,631
Equitable Resources, Inc. ............................ 7,600 281,675
IDACORP Inc........................................... 8,200 253,687
KeySpan Corporation................................... 32,700 907,425
LG&E Energy Corp. .................................... 29,700 642,263
MCN Energy Group, Inc. ............................... 18,300 390,019
New Century Energies, Inc. ........................... 25,900 898,406
NICOR Inc. ........................................... 10,400 401,700
Northwest Natural Gas Company......................... 5,200 137,150
Northwestern Corporation.............................. 4,800 120,000
OGE Energy Corp. ..................................... 17,800 421,638
Peoples Energy Corporation............................ 7,900 290,819
Potomac Electric Power Company........................ 27,100 777,431
Questar Corporation................................... 18,100 340,506
SBC Communications Inc. .............................. 449,458 25,703,380
Sonat Inc. ........................................... 25,200 886,725
Telephone and Data Systems, Inc. ..................... 13,700 1,018,938
Union Pacific Resources Group, Inc. .................. 56,800 1,011,750
U S West, Inc. ....................................... 114,941 6,587,556
Washington Gas Light Company.......................... 10,100 281,538
Williams Companies, Inc. ............................. 98,700 4,151,641
--------------
118,161,029
--------------
TOTAL INVESTMENTS (a)--99.9%.................................. $1,345,626,734
Other Assets, less liabilities--0.1%.......................... 1,778,047
--------------
NET ASSETS--100.0%............................................ $1,347,404,781
==============
</TABLE>
- -------
(a) The aggregate cost for book and federal income tax purposes is
$1,006,703,336, the aggregate gross unrealized appreciation is
$357,620,142, and the aggregate gross unrealized depreciation is
$18,696,744, resulting in net unrealized appreciation of $338,923,398.
(b) Non-income producing security.
22
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments at value (Cost $1,006,703,336)...................... $1,345,626,734
Cash............................................................ 7,020,013
Receivable for securities sold.................................. 1,738,780
Dividends receivable............................................ 1,282,406
--------------
Total assets................................................. 1,355,667,933
--------------
LIABILITIES:
Payable for securities purchased................................ 8,037,683
Accrued expenses (Note 2)....................................... 225,469
--------------
Total liabilities............................................ 8,263,152
--------------
NET ASSETS APPLICABLE TO INVESTORS' BENEFICIAL INTERESTS........ $1,347,404,781
==============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended July 31, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding tax of $440).. $ 9,845,270
------------
EXPENSES:
Management fee (Note 2)............................. 1,901,529
Professional fees................................... 65,407
Custody fees (Note 3)............................... 367,440
Trustee fees........................................ 5,000
Miscellaneous....................................... 2,356
------------
Total expenses...................................... 2,341,732
Fees paid indirectly............................... (345,517)
Expenses paid and fee waived by manager............ (109,912)
------------
Net expenses..................................... 1,886,303
------------
NET INVESTMENT INCOME............................... 7,958,967
NET REALIZED GAIN ON INVESTMENTS
Proceeds from sales................................. $ 86,482,202
Cost of securities sold............................. 70,606,930
------------
Net realized gain on investments................. 15,875,272
NET CHANGES IN UNREALIZED APPRECIATION OF INVEST-
MENTS
Beginning of year.................................. $175,720,768
End of year........................................ 338,923,398
------------
Net change in unrealized appreciation............ 163,202,630
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERA-
TIONS.............................................. $187,036,869
============
</TABLE>
See Notes to Financial Statements
23
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE
FOR THE YEAR ENDED
YEAR ENDED JULY 31,
JULY 31, 1999 1998
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From Operations:
Net investment income........................... $ 7,958,967 $ 4,628,319
Net realized gain on investments................ 15,875,272 4,836,426
Net change in unrealized appreciation of invest-
ments.......................................... 163,202,630 84,559,360
-------------- ------------
Net Increase in Net Assets Resulting from Opera-
tions.......................................... 187,036,869 94,024,105
-------------- ------------
Transactions in Investors' Beneficial Interest:
Additions....................................... 531,746,685 267,044,708
Reductions...................................... (13,614,408) (11,192,148)
-------------- ------------
Net Increase in Net Assets from Transactions in
Investors' Beneficial Interests................ 518,132,277 255,852,560
-------------- ------------
Total Increase in Net Assets..................... 705,169,146 349,876,665
NET ASSETS:
Beginning of year............................... 642,235,635 292,358,970
-------------- ------------
End of year..................................... $1,347,404,781 $642,235,635
============== ============
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JULY 31,
----------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Net Assets (000's)...... $1,347,405 $642,236 $292,359 $100,401 $54,003
Ratio of net investment
income to average net
assets................. 0.84%(1) 1.05%(2) 1.34% 1.48%(4) 1.85%(5)
Ratio of expenses to av-
erage net assets....... 0.24%(1)(3) 0.24%(2)(3) 0.29%(3) 0.59%(3)(4) 0.43%(5)
Portfolio turnover
rate................... 8% 5% 1% 5% 6%
</TABLE>
(1) Reflects a voluntary expense reimbursement and fee waiver of 0.01% by the
Manager. Had the manager not waived their fee and reimbursed expenses, the
annualized ratios of net investment income and expense to average net
assets for the year ended July 31, 1999 would have been 0.83% and 0.25%,
respectively.
(2) Reflects a waiver of 0.01% of fees by the Manager due to limitations set
forth in the Management Agreement. Had the Manager not waived their fees,
the ratios of net investment income and expenses to average net assets for
the year ended July 31, 1998 would have been 1.04% and 0.25%,
respectively.
(3) Ratio of expenses to average net assets for the years ended July 31, 1999,
1998, 1997 and 1996 include indirectly paid expenses. Excluding indirectly
paid expenses, the expense ratios would have been 0.20%, 0.20%, 0.25% and
0.50% for the years ended July 31, 1999, 1998, 1997 and 1996,
respectively.
(4) Had the Expense Payment Agreement and Sponsor Arrangement not been in
place, the ratios of net investment income and expense for the years ended
July 31, 1996 would have been 1.14% and 0.85% respectively.
(5) Reflects a voluntary waiver of fees by the Administrator and Adviser due
to the limitations set forth in the Expense Reimbursement Agreement. Had
the Administrator and Adviser not waived their fees, the ratios of net
investment income and expenses to average net assets for the year ended
July 31, 1995 would have been 1.75% and 0.53% respectively.
See Notes to Financial Statements
24
<PAGE>
DOMINI SOCIAL INDEX PORTFOLIO/July 31, 1999
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Organization and Significant Accounting Policies
Domini Social Index Portfolio (the "Index Portfolio") is registered under
the Investment Company Act of 1940 (the "Act") as a no-load, diversified,
open-end management investment company which was organized as a trust under
the laws of the State of New York on June 7, 1989. The Index Portfolio intends
to correlate its investment portfolio as closely as is practicable with the
Domini 400 Social Index (the "Index"), which is a common stock index developed
and maintained by Kinder, Lydenberg, Domini & Co., Inc. ("KLD"). The
Declaration of Trust permits the Trustees to issue an unlimited number of
beneficial interests in the Index Portfolio. The Index Portfolio commenced
operations upon effectiveness on August 10, 1990 and began investment
operations on June 3, 1991.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The
following is a summary of the Index Portfolio's significant accounting
policies.
(A) Valuation of Investments: The Index Portfolio values securities at the
last reported sale price, or at the last reported bid price if no sales
are reported.
(B) Dividend Income: Dividend income is reported on the ex-dividend date.
(C) Federal Taxes: The Index Portfolio will be treated as a partnership for
U.S. federal income tax purposes and is therefore not subject to U.S.
federal income tax. As such, each investor in the Index Portfolio will
be taxed on its share of the Index Portfolio's ordinary income and
capital gains. It is intended that the Portfolio will be managed in
such a way that an investor will be able to satisfy the requirements of
the Internal Revenue Code applicable to regulated investment companies.
(D) Other: Investment transactions are accounted for on the trade date.
Gains and losses are determined on the basis of identified cost.
NOTE 2--Transactions With Affiliates
(A) Manager. Domini Social Investments LLC ("DSIL" or the "Manager") is
registered as an investment adviser under the Investment Advisers Act
of 1940. The services provided by the Manager consist of investment
supervisory services, overall operational support and administrative
services. The administrative services include the provision of general
office facilities and supervising the overall administration of the
Index Portfolio. For its services under the Management Agreement, the
Manager receives from the Index Portfolio a fee accrued daily and paid
monthly at an annual rate equal to 0.20%. Currently, DSIL is waiving
its fee to the extent necessary to keep 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 Index
Portfolio. This fee waiver is voluntary and may be reduced or
terminated at any time.
(B) Submanager. Mellon Equity provides investment submanagement services to
the Index Portfolio on a day-to-day basis pursuant to a Submanagement
Agreement with DSIL. Mellon Equity does not determine the composition
of the Domini Social Index. Under the Submanagement Agreement, DSIL
pays Mellon Equity an investment submanagement fee equal, on an annual
basis, to 0.10% of the average daily net assets of the Portfolio.
NOTE 3--Investment Transactions
Cost of purchases and sales of investments, other than U.S. Government
securities and short-term obligations, for the year ended July 31, 1999
aggregated $609,803,880 and $86,482,202, respectively. Custody fees of the
Portfolio were reduced by $345,517 which was compensation for uninvested cash
left on deposit with the custodian.
25
<PAGE>
[LOGO OF KPMG APPEARS HERE]
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Investors
Domini Social Index Portfolio:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Domini Social Index Portfolio as of
July 31, 1999, the related statement of operations for the year then ended, and
the statements of changes in net assets for each of the years in the two-year
period then ended, and the financial highlights for each of the years in the
five-year period then ended. These financial statements and financial
highlights are the responsibility of the Portfolio's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
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 July
31, 1999 by correspondence with the custodian and brokers. 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
Domini Social Index Portfolio as of July 31, 1999, the results of its
operations for the year then ended, changes in its net assets for each of the
years in the two-year period then ended, and financial highlights for each of
the years in the five-year period then ended, in conformity with generally
accepted accounting principles.
[LOGO OF KPMG LLP
APPEARS HERE]
Boston, Massachusetts
August 25, 1999
26
<PAGE>
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YOUR NOTES
27
<PAGE>
Annual Report
- --------------------------------------------------------------------------------
[LOGO OF GREEN CENTURY FUNDS APPEARS HERE]
July 31, 1999
INVESTMENT ADVISER (Balanced Fund) AND ADMINISTRATOR
Green Century Capital Management, Inc.
29 Temple Place
Boston, MA 02111
1-800-93-GREEN
INVESTMENT SUBADVISER (Balanced Fund)
Winslow Management Company
60 State Street
Boston, MA 02109
INVESTMENT MANAGER (Index Portfolio)
Domini Social Investments LLC
11 West 25th Street
New York, NY 10010
INVESTMENT SUBMANAGER (Index Portfolio)
Mellon Equity Associates
500 Grant Street, Suite 3700
Pittsburgh, PA 15258-0001
COUNSEL TO INDEPENDENT TRUSTEES OF THE FUNDS
Debevoise & Plimpton
555 13th Street, N.W.
Washington, DC 20004
SUBADMINISTRATOR and DISTRIBUTOR
Sunstone Financial Group, Inc. (Subadministrator)
Sunstone Distribution Services, LLC (Distributor)
207 East Buffalo Street, Suite 400
Milwaukee, WI 53202
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
Unified Fund Services, Inc.
431 North Pennsylvania Street
Indianapolis, IN 46204-1806
COUNSEL TO GREEN CENTURY CAPITAL MANAGEMENT, INC.
Goulston & Storrs
400 Atlantic Avenue
Boston, MA 02110
INDEPENDENT AUDITORS
KPMG LLP
99 High Street
Boston, MA 02110
Balanced Fund
- --------------------------------------------------------------------------------
Equity Fund
[LOGO OF GREEN CENTURY FUNDS APPEARS HERE]
An investment for your future.
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