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UNITED STATES TRUST COMPANY OF BOSTON
WALDEN LOGO
WALDEN ASSET MANAGEMENT
A Division of United States Trust Company of Boston
PROSPECTUS FOR THE FOLLOWING BOSTON TRUST PORTFOLIOS:
WALDEN SOCIAL BALANCED FUND
WALDEN SOCIAL EQUITY FUND
June 30, 2000
INVESTMENT ADVISER
WALDEN ASSET MANAGEMENT, A DIVISION OF
UNITED STATES TRUST COMPANY OF BOSTON
40 COURT STREET
BOSTON, MASSACHUSETTS 02108
TELEPHONE: (617) 726-7250
Neither the Securities and Exchange Commission nor any other regulatory body has
approved the securities being offered by this prospectus or determined whether
this prospectus is accurate and complete. It is unlawful for anyone to make any
representation to the contrary.
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WALDEN MUTUAL FUNDS TABLE OF CONTENTS
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RISK/RETURN SUMMARY AND FUND EXPENSES
ICON
Carefully review this 3 Walden Social Balanced Fund
important section for a 5 Walden Social Equity Fund
summary of each Fund's
investments, risks and fees.
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
ICON
This section contains 7 Walden Social Balanced Fund
details on each Fund's 8 Walden Social Equity Fund
investment strategies and 9 Investment Risks
risks.
SHAREHOLDER INFORMATION
ICON
Consult this section to 10 Pricing of Fund Shares
obtain details on how shares 10 Purchasing and Adding to Your Shares
are valued, how to purchase, 12 Selling Your Shares
sell and exchange shares, 14 Exchanging Your Shares
related charges and payments 15 Dividends, Distributions and Taxes
of dividends.
FUND MANAGEMENT
ICON
Review this section for 16 The Investment Adviser
details on the people and 17 Portfolio Managers
organizations who oversee
the Funds and their
investments.
FINANCIAL HIGHLIGHTS
ICON
Review this section for 19 Walden Social Balanced Fund
details on the selected 19 Walden Social Equity Fund
financial statements of the
Funds.
</TABLE>
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RISK/RETURN SUMMARY AND FUND EXPENSES [ICON]
WALDEN SOCIAL BALANCED FUND
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INVESTMENT OBJECTIVE The Walden Social Balanced Fund seeks long-term capital
growth and income through an actively managed portfolio
of stocks, bonds and money market instruments.
PRINCIPAL INVESTMENT STRATEGIES The Fund invests in stocks, bonds and money market
instruments, with at least 20% of assets in fixed-income
securities.
PRINCIPAL INVESTMENT RISKS The Fund is subject to both stock market risk and
interest rate risk. Therefore, the value of the Fund's
investments will fluctuate with market conditions and
interest rates and the value of your investment in the
Fund will also vary. You could lose money on your
investment in the Fund, or the Fund could underperform
other investments.
WHO MAY WANT TO INVEST? Consider investing in the Fund if you are:
- interested in ensuring that your investments are
consistent with your social concerns and values
- investing for a period of time in excess of 3 to 5
years
- able to bear the risk of market value fluctuations in
the short-term
- looking for a combination of exposure to stock
investments for growth, and fixed-income investments
(bonds and money market instruments) for greater
stability of income and principal
This Fund will not be appropriate for someone:
- investing for a period of time less than 3 to 5 years
- not comfortable with market fluctuations in
the short-term
- looking primarily for a high level of current income
PERFORMANCE HISTORY Because the Fund commenced operations on June 20, 1999
and does not yet have investment returns for a full
calendar year, performance information for the Fund is
not presented.
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RISK/RETURN SUMMARY AND FUND EXPENSES [ICON]
ANNUAL FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Walden Social Balanced Fund.
<TABLE>
<S> <C>
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) on Purchases n/a
Maximum Deferred Sales Charge (load) n/a
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees 0.75%
Distribution and Service (12b-1) Fees n/a
Other Expenses 0.59%*
Total Fund Operating Expenses 1.34%*
Fee Waiver and/or Expense Reimbursement 0.34%*
Net Expenses 1.00%*
</TABLE>
* The Adviser has entered into an expense limitation agreement with the Walden
Social Balanced Fund to limit the Total Fund Operating Expenses of the Walden
Social Balanced Fund to 1.00% of its average daily net assets for its current
fiscal year. Without this expense limitation agreement, the Total Fund
Operating Expenses for the Balanced Fund would have been 1.34%. The Fund has
agreed to repay the Adviser for amounts waived or reimbursed by the Adviser
pursuant to the expense limitation agreement provided that such repayment does
not cause the Fund's Total Fund Operating Expenses to exceed 1.00% of its
average daily net assets and the repayment is made within three years after
the year in which the Adviser incurred the expense.
EXPENSE EXAMPLE
Use this table to compare fees and expenses with those of other funds. The table
illustrates the amount of fees and expenses you would pay, assuming the
following:
- $10,000 investment
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses
Because this example is hypothetical and for comparison purposes only, your
actual costs will be different.
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<S> <C> <C> <C> <C>
WALDEN SOCIAL 1 3 5 10
BALANCED FUND YEAR YEARS YEARS YEARS
$102 $391 $702 $1,583
</TABLE>
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RISK/RETURN SUMMARY AND FUND EXPENSES [ICON]
WALDEN SOCIAL EQUITY FUND
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INVESTMENT OBJECTIVE The Walden Social Equity Fund seeks long-term capital
growth through an actively managed portfolio of stocks.
PRINCIPAL INVESTMENT STRATEGIES The Fund invests primarily in equity securities.
PRINCIPAL INVESTMENT RISKS The Fund is subject to stock market risk. Therefore, the
value of the Fund's investments will fluctuate with
market conditions and the value of your investment in the
Fund will also vary. You could lose money on your
investment in the Fund, or the Fund could underperform
other investments.
WHO MAY WANT TO INVEST? Consider investing in the Fund if you are:
- interested in ensuring that your investments are
consistent with your social concerns and values
- investing for a period of time in excess of 3 to 5
years
- looking for a high-quality, well-diversified,
all-equity portfolio that provides the potential for
growth of your investment
- comfortable with market value fluctuations in the
short-term
This Fund will not be appropriate for someone:
- investing for a period of time less than 3 to 5 years
- not comfortable with market value fluctuations
- looking for current income
PERFORMANCE HISTORY Because the Fund commenced operations on June 20, 1999
and does not yet have investment returns for a full
calendar year, performance information for the Fund is
not presented.
</TABLE>
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RISK/RETURN SUMMARY AND FUND EXPENSES [ICON]
ANNUAL FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Walden Social Equity Fund.
<TABLE>
<S> <C>
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (load) on Purchases n/a
Maximum Deferred Sales Charge (load) n/a
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
Management Fees 0.75%
Distribution and Service (12b-1) Fees n/a
Other Expenses 0.43%*
Total Fund Operating Expenses 1.18%*
Fee Waiver and/or Expense Reimbursement 0.18%*
Net Expenses 1.00%*
</TABLE>
* The Adviser has entered into an expense limitation agreement with the Walden
Social Equity Fund to limit the Total Fund Operating Expenses of the Walden
Social Equity Fund to 1.00% of its average daily net assets for its current
fiscal year. Without this expense limitation agreement, the Total Fund
Operating Expenses for the Equity Fund would have been 1.18%. The Fund has
agreed to repay the Adviser for amounts waived or reimbursed by the Adviser
pursuant to the expense limitation agreement provided that such repayment does
not cause the Fund's Total Fund Operating Expenses to exceed 1.00% of its
average daily net assets and the repayment is made within three years after
the year in which the Adviser incurred the expense.
EXPENSE EXAMPLE
Use this table to compare fees and expenses with those of other Funds. It
illustrates the amount of fees and expenses you would pay, assuming the
following:
- $10,000 investment
- 5% annual return
- redemption at the end of each period
- no changes in the Fund's operating expenses
Because this example is hypothetical and for comparison purposes only, your
actual costs will be different.
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<S> <C> <C> <C> <C>
WALDEN SOCIAL 1 3 5 10
EQUITY FUND YEAR YEARS YEARS YEARS
$102 $357 $632 $1,416
</TABLE>
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INVESTMENT OBJECTIVES, STRATEGIES AND RISKS [ICON]
SOCIAL RESPONSIBILITY CRITERIA
Investments of the Funds will satisfy certain social responsibility criteria.
Among the criteria on which the Adviser evaluates companies are:
- PRODUCT SAFETY AND DESIRABILITY: Do companies produce tobacco or alcohol?
Are they honest and comprehensive in promoting products and services?
- WORKPLACE ISSUES: Do companies engage in equal employment and fair labor
practices? Do they provide safe working conditions?
- ENVIRONMENTAL IMPACT: Are companies curbing emissions and waste? Are they
complying with environmental regulations? Do they own or operate nuclear
power plants?
- INTERNATIONAL OPERATIONS: Are companies upholding human rights and
environmental standards abroad?
- WEAPONS CONTRACTING: Are companies directly involved in the production of
weapons systems?
WALDEN SOCIAL BALANCED FUND
TICKER SYMBOL: WSBFX
INVESTMENT OBJECTIVE
The investment objective of the Walden Social Balanced Fund is to seek
long-term capital growth and income through an actively managed portfolio of
stocks, bonds and money market instruments.
POLICIES AND STRATEGIES
Consistent with the Walden Social Balanced Fund's investment objective, the
Fund:
- maintains an actively managed portfolio of stocks, bonds and money market
instruments
- will generally invest at least 20% of its total assets in fixed-income
securities
- will invest in the following types of equity securities: common stocks,
preferred stocks, securities convertible or exchangeable into common
stocks, warrants and any rights to purchase common stocks
- will purchase primarily investment grade bonds
- may invest up to 20% of its total assets in fixed-income securities that
are considered non-investment grade
- may invest in obligations issued or guaranteed by agencies or
instrumentalities of the U.S. Government (excluding U.S. Treasury
instruments)
- may invest in the securities of foreign issuers and may acquire sponsored
and unsponsored American Depositary Receipts and European Depositary
Receipts
- may engage in repurchase transactions pursuant to which the Fund
purchases a security and simultaneously commits to resell that security
to the seller (either a bank or a securities dealer) at an agreed upon
price on an agreed upon date (usually within seven days of purchase)
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INVESTMENT OBJECTIVES, STRATEGIES AND RISKS [ICON]
- may lend securities to qualified brokers, dealers, banks and other
financial institutions for the purpose of realizing additional income
- may invest in other investment companies
PORTFOLIO TURNOVER. The annual rate of portfolio turnover is not expected to
exceed 100%. In general, the Adviser will not consider the rate of portfolio
turnover to be a limiting factor in determining when or whether to purchase
or sell securities in order to achieve the Fund's objective.
In the event that the Adviser determines that market conditions are not
suitable for the Fund's typical investments, the Adviser may, for temporary
defensive purposes during such unusual market conditions, invest all or any
portion of the Fund's assets in money market instruments.
WALDEN SOCIAL EQUITY FUND
TICKER SYMBOL: WSEFX
INVESTMENT OBJECTIVE
The investment objective of the Walden Social Equity Fund is to seek
long-term growth of capital.
POLICIES AND STRATEGIES
Consistent with the Walden Social Equity Fund's investment objective, the
Fund:
- will invest substantially all, but in no event less than 65%, of the
value of its total assets in equity securities
- will invest in the following types of equity securities: common stocks,
preferred stocks, securities convertible or exchangeable into common
stocks, warrants and any rights to purchase common stocks
- may invest in fixed income securities consisting of corporate notes,
bonds and debentures that are rated investment grade at the time of
purchase
- may invest in obligations issued or guaranteed by agencies or
instrumentalities of the U.S. Government (excluding U.S. Treasury
instruments)
- may invest in the securities of foreign issuers and may acquire sponsored
and unsponsored American Depositary Receipts and European Depositary
Receipts
- may engage in repurchase transactions pursuant to which the Fund
purchases a security and simultaneously commits to resell that security
to the seller (either a bank or a securities dealer) at an agreed upon
price on an agreed upon date (usually within seven days of purchase)
- may lend securities to qualified brokers, dealers, banks and other
financial institutions for the purpose of realizing additional income
- may invest in other investment companies
In the event that the Adviser determines that current market conditions are
not suitable for the Fund's typical investments, the Adviser may, for
temporary defensive purposes, invest all or any portion of the Fund's assets
in money market instruments and U.S. Government securities.
8
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INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
INVESTMENT RISKS
Any investment in the Funds is subject to investment risks, including the
possible loss of the principal amount invested.
Generally, the Funds will be subject to the following risks:
- MARKET RISK: Market risk refers to the risk related to investments in
securities in general and the daily fluctuations in the securities
markets. The Funds' performance per share will change daily based on many
factors, including fluctuation in interest rates, the quality of the
instruments in each Fund's investment portfolio, national and
international economic conditions and general market conditions.
- INTEREST RATE RISK: Interest rate risk refers to the risk that the value
of either Fund's fixed income securities can change in response to
changes in prevailing interest rates causing volatility and possible loss
of value as rates increase.
- CREDIT RISK: Credit risk refers to the risk related to the credit quality
of the issuer of a security held in either Fund's portfolio. The Funds
could lose money if the issuer of a security is unable to meet its
financial obligations.
Investments in the Funds are not deposits of United States Trust Company of
Boston or any of its affiliates and are not insured or guaranteed by the
Federal Deposit Insurance Corporation (the "FDIC") or any other government
agency.
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SHAREHOLDER INFORMATION
PRICING OF FUND SHARES
-------------------------------------
HOW NAV IS CALCULATED
The NAV is calculated by adding the total value of the Fund's investments and
other assets, subtracting its liabilities and then dividing that figure by the
number of outstanding shares of the Fund:
NAV =
Total Assets - Liabilities
-------------------------
Number of Shares
Outstanding
You can find the Fund's NAV daily in The Wall Street Journal and other financial
newspapers.
-------------------------------------
The net asset value per share of each Fund is determined at the time trading
closes on the New York Stock Exchange ("NYSE") (currently 4:00 p.m., Eastern
Standard Time, Monday through Friday), except on business holidays when the NYSE
is closed. The NYSE recognizes the following holidays: New Year's Day,
President's Day, Martin Luther King, Jr. Day, Good Friday, Memorial Day, Fourth
of July, Labor Day, Thanksgiving Day, and Christmas Day. Any other holiday
recognized by the NYSE will be considered a business holiday on which the net
asset value of each Fund will not be calculated.
Your order for purchase, sale or exchange of shares is priced at the next NAV
calculated after your order is accepted by the Funds. This is known as the
offering price.
Each Fund's securities are generally valued at current market prices. If market
quotations are not available, prices will be based on fair value as determined
by the Funds' Trustees.
PURCHASING AND ADDING TO YOUR SHARES
You may purchase the Funds through the Distributor or through investment
representatives, who may charge additional fees and may require higher
minimum investments or impose other limitations on buying and selling shares.
If you purchase shares through an investment representative, that party is
responsible for transmitting orders by close of business and may have an
earlier cut-off time for purchase and sale requests. Consult your investment
representative for specific information.
The minimum initial investment in the Funds is $2,000. Subsequent investments
must be at least $500. BISYS Fund Services (the "Distributor") acts as
Distributor of each Fund's shares. Shares of the Funds are offered
continuously for purchase at the net asset value per share of the Fund next
determined after a purchase order is received. Investors may purchase shares
of the Funds by check, money order or wire, as described below.
All purchases must be in U.S. dollars. A fee will be charged for any checks
that do not clear. Third-party checks are not accepted.
A Fund or the Adviser may waive its minimum purchase requirement, or the
Distributor may reject a purchase order, if it is deemed to be in the best
interest of either Fund and its shareholders.
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SHAREHOLDER INFORMATION
PURCHASING AND ADDING TO YOUR SHARES
CONTINUED
INSTRUCTIONS FOR OPENING OR ADDING TO AN ACCOUNT
BY REGULAR MAIL OR OVERNIGHT SERVICE
INITIAL INVESTMENT:
1. Carefully read and complete the application. Establishing your account
privileges now saves you the inconvenience of having to add them later.
2. Make check, certified check or money order payable to either "Walden
Social Balanced Fund" or "Walden Social Equity Fund", as applicable.
3. Mail to: Walden Mutual Funds, c/o United States Trust Company of Boston,
40 Court Street, Boston, MA 02108.
SUBSEQUENT INVESTMENTS:
1. Subsequent investments should be made by check or money order payable to
the applicable fund and mailed to the address indicated above. Your
account number should be written on the check.
BY WIRE TRANSFER
Note: Your bank may charge a wire transfer fee.
For initial investment: Before wiring funds, you should call 1-800-282-8782,
ext. 4050, or 1-617-695-4050 to advise that an initial investment will be
made by wire and to receive an account number. Follow the instructions below
after receiving your account number.
For initial and subsequent investments: Instruct your bank to wire transfer
your investment to:
United States Trust Company of Boston
Routing Number: ABA #011500120
DDA# 113195811
Include:
Your name
Your account number
Fund name
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SHAREHOLDER INFORMATION
SELLING YOUR SHARES
INSTRUCTIONS FOR SELLING SHARES
You may sell your shares at any time. Your sales price will be the next NAV
after your sell order is received by the Fund, its transfer agent, or your
investment representative. Normally you will receive your proceeds within a
week after your request is received. See section on "General Policies on
Selling Shares" below.
WITHDRAWING MONEY FROM YOUR FUND
INVESTMENT
A request for a withdrawal in cash from
either Fund
constitutes a redemption or sale of
shares
for a mutual fund shareholder.
BY TELEPHONE
(unless you have declined telephone sales privileges)
1. Call 1-800-282-8782, ext. 4050 with instructions as to how you wish to
receive your funds (mail, wire, electronic transfer).
BY MAIL
2(a). Call 1-800-282-8782, ext. 4050 to request redemption forms or write a
letter of instruction indicating:
- your Fund and account number
- amount you wish to redeem
- address to which your check should be sent
- account owner signature
2(b). Mail to: Walden Mutual Funds, c/o United States Trust Company of
Boston, 40 Court Street, Boston, MA 02108
BY OVERNIGHT SERVICE
SEE INSTRUCTION 2 ABOVE.
Send to: Walden Mutual Funds, c/o United States Trust Company of Boston, 40
Court Street, Boston, MA 02108
BY WIRE TRANSFER
You must indicate this option on your application.
If you call by 4 p.m. Eastern Standard Time, your payment will normally be
wired to your bank on the next business day.
The Fund may charge a wire transfer fee.
Note: Your financial institution may also charge a separate fee.
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SHAREHOLDER INFORMATION
GENERAL POLICIES ON SELLING SHARES
REDEMPTIONS IN WRITING REQUIRED
You must request redemption in writing in the following situations:
1. Redemptions from Individual Retirement Accounts ("IRAs").
2. Circumstances under which redemption requests require a signature
guarantee include, but may not be limited to, each of the following:
- Redemptions over $10,000
- Your account registration or the name(s) on your account has changed
within the last 15 days
- The check is not being mailed to the address on your account
- The check is not being made payable to the owner of the account
- The redemption proceeds are being transferred to another Fund account
with a different registration
A signature guarantee can be obtained from a financial institution, such as a
bank, broker-dealer, credit union, clearing agency, or savings association.
VERIFYING TELEPHONE REDEMPTIONS
The Funds make every effort to ensure that telephone redemptions are only
made by authorized shareholders. All telephone calls are recorded for your
protection and you will be asked for information to verify your identity.
Given these precautions, unless you have specifically indicated on your
application that you do not want the telephone redemption feature, you may be
responsible for any fraudulent telephone orders.
REDEMPTIONS WITHIN 15 DAYS OF INITIAL INVESTMENT
When you have made your initial investment by check, you cannot redeem any
portion of it until the Transfer Agent is satisfied that the check has
cleared (which may require up to 15 business days). You can avoid this delay
by purchasing shares with a certified check.
REFUSAL OF REDEMPTION REQUEST
Payment for shares may be delayed under extraordinary circumstances or as
permitted by the Securities and Exchange Commission in order to protect
remaining shareholders.
REDEMPTION IN KIND
The Funds reserve the right to make payment in securities rather than cash,
known as "redemption in kind." This could occur under extraordinary
circumstances, such as a very large redemption that could affect Fund
operations (a redemption of more than 1% of the Fund's net assets). If either
Fund deems it advisable for the benefit of all shareholders, redemption in
kind will consist of securities equal in market value to your shares. When
you convert these securities to cash, you will pay brokerage charges.
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SHAREHOLDER INFORMATION
CLOSING OF SMALL ACCOUNTS
If your account falls below $500, the Fund may ask you to increase your
balance. If it is still below $500 after 60 days, the Fund may close your
account and send you the proceeds at the then current NAV.
UNDELIVERABLE REDEMPTION CHECKS
For any shareholder who chooses to receive distributions in cash: If
distribution checks (1) are returned and marked as "undeliverable" or (2)
remain uncashed for six months, your account will be changed automatically so
that all future distributions are reinvested in your account. Checks that
remain uncashed for six months will be canceled and the money reinvested in
the Fund.
EXCHANGING YOUR SHARES
You can exchange your shares in one Fund for shares of another Boston Trust
or Walden Mutual Fund. No transaction fees are charged for exchanges.
You must meet the minimum investment requirements for the Fund into which you
are exchanging.
INSTRUCTIONS FOR EXCHANGING SHARES
Exchanges may be made by sending a written request to Walden Mutual Funds,
c/o United States Trust Company of Boston, 40 Court Street, Boston, MA 02108,
or by calling 1-800-282-8782, ext. 4050. Please provide the following
information:
- Your name and telephone number
- The exact name on your account and account number
- Taxpayer identification number (usually your Social Security number)
- Dollar value or number of shares to be exchanged
- The name of the Fund from which the exchange is to be made
- The name of the Fund into which the exchange is being made
Please refer to "Selling your Shares" for important information about
telephone transactions.
NOTES ON EXCHANGES
- To prevent disruption in the management of the Funds, exchange activity
may be limited to 4 exchanges within a calendar year.
- The registration and tax identification numbers of the two accounts must
be identical.
- The Exchange Privilege (including automatic exchanges) may be changed or
eliminated at any time upon a 60-day notice to shareholders.
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SHAREHOLDER INFORMATION
DIVIDENDS, DISTRIBUTIONS AND TAXES
Any income a Fund receives in the form of dividends is paid out, less
expenses, to its shareholders. Income dividends and capital gains
distributions on the Funds usually are paid annually.
Dividends and distributions are treated in the same manner for federal income
tax purposes whether you receive them in cash or in additional shares.
An exchange of shares is considered a sale, and gains from any sale or
exchange may be subject to applicable taxes.
Dividends are taxable as ordinary income. Distributions designated by a Fund
as long-term capital gain distributions will be taxable to you at your
long-term capital gains rate, regardless of how long you have held your
shares.
Dividends are taxable in the year in which they are paid, even if they appear
on your account statement in the following year.
You will be notified in January of each year about the federal tax status of
distributions made by the Funds. Depending on your state of residence,
distributions also may be subject to state and local taxes, including
withholding taxes. There is a penalty on certain pre-retirement distributions
from retirement accounts. Consult your tax adviser about the federal, state
and local tax consequences in your particular circumstances.
Foreign shareholders may be subject to special withholding requirements.
The Funds are required to withhold 31% of taxable dividends, capital gains
distributions and redemptions paid to shareholders who have not provided the
Funds with their certified taxpayer identification number in compliance with
IRS rules. To avoid this, make sure you provide your correct Tax
Identification Number (Social Security Number for most investors) on your
account application.
This tax discussion is meant only as a general summary. Because each
investor's tax situation is unique, you should consult your tax adviser about
the particular consequences to you of investing in the Funds.
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FUND MANAGEMENT
WALDEN ASSET MANAGEMENT, A DIVISION OF THE INVESTMENT
ADVISER
United States Trust Company of Boston, (the "Adviser"), 40 Court Street,
Boston, Massachusetts 02108, is the investment adviser for the Funds and has
designated its Walden division to fulfill its obligations with respect to the
Funds. The Adviser is a Massachusetts-chartered banking and trust company
established in 1895 and is a wholly-owned subsidiary of Citizens Financial
Group, Inc., Providence, Rhode Island ("CFG"), a Delaware corporation, which
in turn is a wholly-owned subsidiary of The Royal Bank of Scotland plc, a
banking company organized under the laws of Scotland. The Trust Department of
the Adviser has managed assets as a fiduciary for over 50 years. The Adviser
began offering professional investment management services in 1974 with the
establishment of its Asset Management Division. The Adviser is not affiliated
with United States Trust Company of New York.
The Adviser makes the day-to-day investment decisions for the Funds. In
addition, the Adviser continuously reviews, supervises and administers each
Fund's investment program. For these advisory services, each of the Funds
paid the Adviser investment advisory fees equaling 0.75% of its average daily
net assets during the fiscal year ended March 31, 2000. In accordance with an
expense limitation agreement in effect with respect to each of the Funds, the
Adviser reimbursed the Balanced Fund 0.28% resulting in a net investment
advisory fee, after reimbursement, of 0.47% for the Fund, and it reimbursed
the Equity Fund 0.13% resulting in a net investment advisory fee, after
reimbursement, of 0.62% for the Fund.
SOCIAL INVESTING
For many, the primary goal of socially responsive investing is moral
consistency: not owning and profiting from investments in companies which
violate personal ethical standards. This goal is achieved best by using
specific social criteria to screen potential investments.
For others, the goal of socially responsive investing is social change.
Recognizing corporations as key participants in effecting social and economic
justice, this strategy uses the power of ownership to influence corporate
behavior. Walden Asset Management utilizes both social screening and social
change strategies to achieve its financial and social objectives.
Walden is engaged actively in promoting positive corporate change through
company dialogue and shareholder resolutions, social screening, public policy
testimony and technical assistance to nonprofits.
Walden is committed to making socially responsive investing an effective
instrument of social change at home and abroad. Walden has an in-house social
research process that fully harnesses the power of shareholder activism.
Through dialogue with management and in partnership with other agents of
change, Walden uses its leverage as a shareholder to foster progressive
corporate practices.
Walden is working to focus companies on the sustainability of their profits
by urging corporate management to treat their workers, customers, communities
and the environment as valuable, long-term assets. Our research and advocacy
work is dedicated to finding the practical linkages between these
constituencies, and helping use shareholder power productively.
For a quarter century, Walden Asset Management has been at the forefront of
building relationships and developing tools to effect social change. Walden
strives to be responsive to evolving social concerns and to stay at the
forefront of research and activism on emerging social issues.
Consistent with these social investing principles, each Fund seeks to invest
in companies that:
- Are above average in their industry for environmental performance and
management, have innovative programs for pollution prevention and
resource conservation, comply with environmental regulations, conduct
comprehensive environmental auditing, and develop products that help the
environment.
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FUND MANAGEMENT
- Are above average in their industry for labor relations, worker safety
programs, employee benefits, equal employment opportunity and affirmative
action, encourage employee ownership and participation, and support
families and communities.
- Adhere to policies and practices that respect fundamental human rights.
- Strive to be responsible corporate citizens, and respond openly to social
concerns through public disclosure of information.
The Funds avoid investing in companies that, to the Adviser's knowledge:
- Have below average performance in the area of pollution control and poor
compliance records for environmental regulations; have equity ownership
in nuclear power plants, or significant involvement in the nuclear power
fuel cycle.
- Have substandard performance in the hiring and promotion of women and
minorities, or have a pattern of violating fair labor standards or health
and safety regulations.
- Derive significant revenues from the manufacture of weapons systems or
hand guns, tobacco products and alcoholic beverages, or from gaming
activities.
- Significantly support human rights abuses.
Each Fund's social guidelines are subject to change without shareholder
approval.
PORTFOLIO MANAGERS
The following individuals serve as portfolio managers for the Funds and are
primarily responsible for the day-to-day management of the Funds' portfolios:
<TABLE>
<S> <C>
Balanced Fund: Mr. Stephen Moody, Senior Vice President and Chairman of the
Adviser's Social Investment Policy Committee, is the
portfolio manager of the Balanced Fund. Prior to joining the
Adviser in 1980, Mr. Moody served as research director of
the Council on Economic Priorities, and economic consultant
to the Shalan Foundation and Natural Resources Defense
Council. Mr. Moody earned his B.A. from the University of
California at Berkeley and an MA in Economics from the
Graduate Faculty of the New School for Social Research. He
is a member of the American Economic Association and the
Boston Security Analysts Society.
Equity Fund: Mr. Robert Lincoln, Senior Vice President and Chief Economic
Strategist of the Adviser, is the portfolio manager of the
Equity Fund. Mr. Lincoln joined the Adviser in 1984 after
serving as a Group Vice President at Charles River
Associates, a Boston-based economic and financial consulting
firm. Mr. Lincoln earned his B.A. degree (magna cum laude)
in Economics and his M.A. in Economics from Harvard
University.
</TABLE>
The Statement of Additional Information has more detailed information about
the Adviser.
17
<PAGE> 18
FUND MANAGEMENT
THE DISTRIBUTOR AND ADMINISTRATOR
BISYS Fund Services is the Funds' distributor and administrator and is
located at 3435 Stelzer Road, Columbus, OH 43219.
CAPITAL STRUCTURE
The Coventry Group was organized as a Massachusetts business trust on January
8, 1992. Overall responsibility for the management of the Funds is vested in
its Board of Trustees. Shareholders are entitled to one vote for each full
share held and a proportionate fractional vote for any fractional shares
held, and will vote in the aggregate and not by series except as otherwise
expressly required by law. An annual or special meeting of shareholders to
conduct necessary business is not required by the Coventry Group's
Declaration of Trust, the Investment Company Act of 1940 or other authority,
except under certain circumstances. Absent such circumstances, the Coventry
Group does not intend to hold annual or special meetings.
18
<PAGE> 19
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand each Fund's
performance since its inception. Certain information reflects financial
results for a single Fund share. The total returns in the table represent the
rate that an investor would have earned on an investment in each Fund
(assuming the reinvestment of all dividends and distributions). This
information has been audited by Arthur Andersen LLP, whose report, along with
each Fund's financial statements, are included in the annual report to
shareholders of each Fund, which is available upon request.
<TABLE>
<CAPTION>
WALDEN SOCIAL WALDEN SOCIAL
BALANCED FUND EQUITY FUND
FOR THE FOR THE
PERIOD ENDING PERIOD ENDING
MARCH 31, 2000(a) MARCH 31, 2000(a)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.00 $10.00
----------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES:
Net investment income 0.13 0.02
Net realized and unrealized gains from investment
transactions 0.65 0.67
----------------------------------------------------------------------------------------------------
Total from investment activities 0.78 0.69
----------------------------------------------------------------------------------------------------
DIVIDENDS:
Net investment income (0.09) (0.01)
In excess of net realized gains from investment
transactions -- (0.08)
----------------------------------------------------------------------------------------------------
Total dividends (0.09) (0.09)
----------------------------------------------------------------------------------------------------
Net asset value, end of period $10.69 $10.60
----------------------------------------------------------------------------------------------------
Total return 7.83%(c) 6.94%(c)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (millions) $ 13.1 $ 25.1
Ratio of expenses to average net assets 1.01%(d) 1.00%(d)
Ratio of net investment income to average net assets 1.70%(d) 0.28%(d)
Ratio of expenses to average net assets(b) 1.34%(d) 1.18%(d)
Portfolio turnover 28.80% 28.57%
</TABLE>
(a) Commenced operations on June 20, 1999.
(b) During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratio would have been as indicated.
(c) Not annualized.
(d) Annualized.
19
<PAGE> 20
For more information about the Funds, the following documents are available free
upon request:
ANNUAL/SEMI-ANNUAL REPORTS:
Each Fund's annual and semi-annual reports to shareholders contain additional
investment information. In the annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected each
Fund's performance during its most recent fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI):
The SAI provides more detailed information about the Funds, including their
operations and investment policies. It is incorporated by reference and is
legally considered a part of this prospectus.
YOU CAN GET FREE COPIES OF REPORTS AND THE SAI, OR REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING THE FUNDS AT:
WALDEN MUTUAL FUNDS
C/O UNITED STATES TRUST COMPANY OF BOSTON
40 COURT STREET
BOSTON, MASSACHUSETTS 02108
TELEPHONE: 1-800-282-8782 X 4050
You can also review each Fund's reports and the SAI at the Public Reference Room
of the Securities and Exchange Commission. You can get text-only copies:
- For a duplicating fee, by writing the Public Reference Section of the
Commission, Washington, D.C.
20549-6009 or calling 1-202-942-8090, or by electronic request, by e-mailing
the SEC at the following address: [email protected].
- Free on the EDGAR Database from the Commission's Website at
http://www.sec.gov.
Investment Company Act file no. 811-6526.
