UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-03074
Northeast Investors Growth Fund
(Exact name of registrant as specified in charter)
150 Federal Street
Boston, MA 02110
(Address of principal executive offices) (Zip code)
David Randall
150 Federal Street
Boston, MA 02110
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-523-3588
Date of fiscal year end: December 31, 2008
Date of reporting period: December 31, 2008
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its
regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of
the information collection burden estimate and any suggestions for reducing
the burden to Secretary, Securities and Exchange Commission, 450 Fifth
Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection
of information under the clearance requirements of 44 U.S.C. 3507.
Item 1. Reports to Stockholders.
NORTHEAST
INVESTORS
GROWTH FUND
A NO-LOAD FUND
Annual Report
For the Year Ended
December 31, 2008
Table of Contents
Letter to Shareholders . . . . . . . . . . . . . . . . .. . . 2
Fund Performance. . . . . . . . . . . . . . . . . . . . . . . 4
Schedule of Investments . . . . . . . . . . . . . . . . . . . 9
Financial Statements . . . . . . . . . . . . . . . . . . . . 11
Notes to the Financial Statements. . . . . . . . . . . . . . 15
Report of Independent Registered Public
Accounting Firm . . . . . . . . . . . . . . . . . . . . . . 20
Trustees & Officers . . . . . . . . . . . . . . . . . . . . 21
Dear Fellow Shareholders:
The past year was an extraordinarily difficult time for investors. Unfortunately
Northeast Investors Growth Fund shareholders, which include me and my team, were
not spared. In fact, 2008 was the worst performing year for U.S. large-cap
equities since the Great Depression. We, like many others, did not foresee the
magnitude of the dramatic events which unfolded in 2008. There was a string of
financial collapses previously thought inconceivable - AIG, Lehman Brothers,
Fannie Mac, Freddie Mac, Bear Stearns, Wachovia and Washington Mutual among
them. These failures contributed to an almost complete collapse of the credit
markets and the near evaporation of liquidity in the global financial system.
As the year progressed, we positioned the Fund's portfolio for a possible
shallow recession by increasing exposure to more traditionally defensive
sectors, namely Consumer Staples, Healthcare and Utilities, and reduced the
Fund's exposure to more cyclical economic sectors such as Energy, Industrials,
Materials and Technology. With hindsight, those defensive moves proved
inadequate in the face of the carnage that unfolded last fall. The Fund finished
the year returning -41.61%, underperforming its benchmark, the S&P 500 Index,
which returned -37.00%.
Unfortunately, in 2008, there were no sectors within the S&P 500 Index in which
'to hide' as all segments contributed negative results. The best performing
sector in the S&P 500 Index was Consumer Staples which was down -18% while the
worst performing sector was Financials which declined -57%. The Developed Equity
Markets as measured by the EAFE Index and fast growing developing economies as
measured by the Emerging Market Index were drastically down last year, declining
- -45% and -54%, respectively. The Fund's 'leastworst' performing sectors were
Consumer Discretionary, Consumer Stables, and Utilities down -16%, -25% & -28%,
respectively. The worst performing sectors in the Fund during the period were
Materials, Technology and Financials down -62%, -56% & -54% respectively. Again,
as evidenced by these return figures, there were no safe harbors for equity
investors.
In terms of individual stocks held by the Fund last year, the list of losers far
outweighs the list of winners as just five companies posted positive returns.
The winners included Wells Fargo (+16%), Gilead Sciences (+10%), McDonald's
(+8%), StreetTracks Gold (+5%) and Intuitive Surgical (+2%). McDonald's was,
in fact, the holding which was the Fund's best relative performer as the company
offered value, quality and convenience to consumers in a period of economic
weakening. Not surprisingly, the worst performing stocks were concentrated in
the Energy, Materials and Financial sectors. These names included Freeport
McMoran (-76%), Bank of America (-67%), Suncor (-67%) Weatherford International
(-65%) and Companhia Valer Rio Doce (-63%). Financials were the biggest
detractor from Fund performance. The problems affecting the Financial Sector
have been well documented, as have the historic declines in energy and material
prices.
Looking forward, we are cautiously optimistic about the opportunities ahead of
us. Without question, much uncertainty remains surrounding the eventual fix of
the banking industry and the overall outlook for the global economies as we
approach the longest recession since the 1930's. We believe, however, that the
government has done and will continue to do the things necessary to right our
ship despite some missteps along the way. Ultimately, the economy and the
financial system will recover, possibly sooner than most anticipate. The fear
that permeates the market has provided an opportunity for diligent, longterm
investors to purchase great companies at extraordinary prices. We believe the
Fund will be rewarded for purchases made in the face of this fear.
Our lines of communication are always open to our most important partners, our
fellow shareholders. Please call us directly or visit our website at
www.northeastinvestors.com where you can view the Fund's closing price,
month-end portfolio composition, and historical performance. If you follow your
investments on-line, the ticker symbol for the Fund is NTHFX. We continue to
appreciate your support.
William A. Oates, Jr.
January 2009
Average Annual Total Return
One year ended December 31, 2008 . . . . . . . . . . . . . . . . . . . .-41.61%
Five years ended December 31, 2008. . . . . . . . . . . . . . . . . . . - 2.56%
Ten years ended December 31, 2008 . . . . . . . . . . . . . . . . . . . - 2.29%
Performance Graph (Unaudited)
(Ten Years)
The following graph compares the cumulative total shareholder return on the
Northeast Investors Growth Fund shares over the ten preceding years to the
cumulative total share return on the Standard & Poor's 500 Index. Assuming an
investment of $10,000 in both at their closing prices on December 31, 1998 and
reinvestment of dividends and capital gains. The graph does not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the
redemption of Fund shares. Keep in mind that past performance does not guarantee
future returns, and an investment in the Fund is not guaranteed. For
management's discussion of the Growth Fund's 2008 performance, including
strategies and market conditions which influenced such performance, see the
President's letter to shareholders.
Table Omitted
<table>
<s> <c> <c> <c> <c>
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Northeast
Investors
Growth $12,913 $10,981 $9,098 $7,035 $9,033 $9,806 $10,922 $11,931 $13,590 $7,935
Fund
Standard
& Poor's $12,104 $11,003 $9,695 $7,553 $9,719 $10,776 $11,305 $13,091 $13,808 $8,699
500 Index
</table>
Returns and Per Share Data
<table>
<s> <c> <c> <c> <c>
Year Ended December 31,
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Net Asset Value 26.08 20.23 15.43 11.91 15.26 16.52 18.40 20.10 20.19 11.74
Income Dividend 0.02 0.00 0.00 0.02 0.03 0.05 0.00 0.00 0.04 0.05
Capital Gains Dist 0.31 2.05 1.44 0.00 0.00 0.00 0.00 0.00 2.60 0.00
NEIG Return(%) 29.13 14.96 17.15 22.67 28.39 8.56 11.38 9.24 13.90 41.61
S&P 500 Return(%) 21.04 9.10 11.88 22.10 28.68 10.88 4.91 15.79 5.48 37.00
Table Omitted
</table>
Quarterly Portfolio Holdings: Each fiscal quarter-end the Fund is required to
file a complete schedule of investments with the Securities and Exchange
Commission. The schedules of portfolio holdings for the second and fourth
quarters appear in the semi-annual and annual reports to shareholders. For the
first and third quarters, the Fund files the schedules of portfolio holdings
with the SEC on Form N-Q. The Fund makes the information on Forms N-Q available
on its website at www.northeastinvestors.com or upon request.
Shareholders may also access and review information and reports of the Fund,
including Form N-Q, at the SEC's Public Reference Room in Washington, D.C. You
can call the SEC at 1-202-942-8090 for information about the operation of the
Public Reference Room. Reports and other information about the Fund are
available on the SEC's internet site at http://www.sec.gov. and copiesmay be
obtained for a duplicating fee by electronic request at the following e-mail
address: publicinfo@sec.gov or by writing the Public Reference Center of the
Securities and Exchange Commission, Washington, D.C. 20549-0102. The Fund's
reference number as a registrant under the Investment Company Act of 1940 is
811-3074
About Your Fund's Expenses (Unaudited)
<table>
<s> <c> <c> <c> <c>
Beginning Account Value Ending Account Value Expenses Paid During Period
6/30/2008 12/31/2008 6/30/2008 - 12/31/2008
Actual Return
- -35.19% $1,000.00 $ 648.12 $5.60
Hypothetical
(5% return per year before
expenses) $1,000.00 $1,018.12 $7.15
</table>
Example:
As a shareholder of the Fund, you incur ongoing costs, including management
fees, and other fund expenses. This example is intended to help you understand
these expenses of investing in the fund and to compare these costs with the
ongoing costs of investing in other mutual funds. The Example is based on an
investment of $1,000 invested at the beginning of the period and held for the
entire period, 6/30/2008 - 12/31/2008.
Actual Expenses:
The first line of the table above provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on you account during this period.
Hypothetical Example for Comparison Purposes:
The second line of the table above provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is
not the Fund's actual return. The hypothetical account values and expenses may
not be used to estimate the actual ending account balance or expenses you paid
for the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this5%hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Ten Largest Investment Holdings
December 31, 2008
Market Percent of
Value Net Assets
Procter & Gamble Co. . . . . . . . . . . .. $3,369,190 4.29%
Eaton Vance Corp. . . . . . . . . . . . . . 2,890,976 3.68%
Gilead Sciences, Inc. . . . . . . . . . . . 2,822,928 3.60%
CVS Caremark Corp. . . . . . . . . . . . . . 2,780,020 3.54%
T. Rowe Price Group, Inc. . . . . . . . . . 2,647,368 3.37%
PepsiCo, Inc. . . . . . . . . . . . . . . . 2,645,391 3.37%
Nestle SA . . . . . . . . . . . . . . . . . 2,501,100 3.19%
Burlington Northern Santa Fe Corp. . . . . . 2,324,297 2.96%
Emerson Electric Co. . . . . . . . . . . . . 2,174,634 2.77%
JPMorgan Chase & Co. . . . . . . . . . . . . 2,169,264 2.77%
Summary of Sector Weightings as a Percentage of Net Assets
December 31, 2008
<table>
<s> <c> <c> <c> <c>
Market Northeast Investors S&P 500
Major Sectors Value Growth Fund Index
Consumer Discretionary . . . . . . . $ 3,621,585 4.61% 8.40%
Consumer Staples . . . . . . . . . . $12,700,076 16.19% 12.88%
Energy . . . . . . . . . . . . . . . $ 9,038,155 11.52% 13.34%
Financials . . . . . . . . . . . . . $10,784,491 13.75% 13.29%
Health Care. . . . . . . . . . . . . $10,941,124 13.95% 14.79%
Industrials . . . . . . . . . . . . . $ 9,975,062 12.71% 11.08%
Information Technology . . . . . . . $12,239,862 15.60% 15.27%
Materials . . . . . . . . . . . . . . $ 1,836,630 2.34% 2.93%
Telecommunication Services . . . . . .$ 2,697,324 3.44% 3.83%
Utilities . . . . . . . . . . . . . . $ 2,808,093 3.58% 4.19%
Cash, other assets and liabilities . .$ 1,811,024 2.31% 0.00%
----- -----
100.00% 100.00%
</table>
Summary of Net Assets by Industry
December 31, 2008
% of
Value Net Assets
Common Stocks
Aerospace & Defense . . . . . . . . . . . . . . $ 2,085,040 2.66%
Asset Management & Custodian . . . . . . . . . 5,538,344 7.06%
Biotechnology . . . . . . . . . . . . . . . . . . 3,569,208 4.55%
Communications Equipment . . . . . . . . . . . . 5,871,554 7.49%
Computer Hardware . . . . . . . . . . . . . . . . 2,935,957 3.74%
Construction & Farming . . . . . . . . . . . . . 1,381,436 1.76%
Diversified Banks . . . . . . . . . . . . . . . . 589,600 0.75%
Diversified Financial Services . . . . . . . . . 2,662,064 3.39%
Diversified Minerals . . . . . . . . . . . . . . 1,360,050 1.73%
Drug Retail . . . . . . . . . . . . . . . . . . . 2,780,020 3.54%
Electric Utility . . . . . . . . . . . . . . . . 2,808,093 3.58%
Electrical Components & Equipment . . . . . . . . 2,174,634 2.77%
Footwear . . . . . . . . . . . . . . . . . . . . 1,662,600 2.12%
Health Care Distribution . . . . . . . . . . . . 1,943,470 2.48%
Health Care Equipment . . . . . . . . . . . . . . 4,124,152 5.26%
Household Products . . . . . . . . . . . . . . . 3,369,190 4.29%
Hypermarkets & Super Centers . . . . . . . . . . 1,404,375 1.79%
Industrial Machinery . . . . . . . . . . . . . . 2,009,655 2.56%
Integrated Oil & Gas . . . . . . . . . . . . . . 5,102,350 6.50%
Integrated Telecommunication Services . . . . . . 1,069,155 1.36%
Internet Software & Services . . . . . . . . . . 3,432,351 4.38%
Investment Bank & Brokerage . . . . . . . . . . . 1,130,826 1.44%
Metals & Mining . . . . . . . . . . . . . . . . 476,580 0.61%
Oil & Gas Equipment . . . . . . . . . . . . . . . 1,481,550 1.89%
Oil & Gas Exploration . . . . . . . . . . . . . . 2,454,255 3.13%
Packaged Foods. . . . . . . . . . . . . . . . . . 2,501,100 3.19%
Pharmaceuticals . . . . . . . . . . . . . . . . . 1,304,294 1.66%
Railroads . . . . . . . . . . . . . . . . . . . . 2,324,297 2.96%
Restaurants . . . . . . . . . . . . . . . . . . . 1,958,985 2.50%
Soft Drinks . . . . . . . . . . . . . . . . . . . 2,645,391 3.37%
Specialized Finance . . . . . . . . . . . . . . . . 863,657 1.10%
Wireless Services . . . . . . . . . . . . . . . . 1,628,169 2.08%
----------- -----
Total Common Stocks . . . . . . . . . . . . . . 76,642,402 97.69%
Total Cash Equivalents. . . . . . . . . . . . . 1,844,164 2.35%
----------- -----
Total Investment Portfolio . . . . . . . . . . 78,486,566 100.04%
Net Other Assets and Liabilities. . . . . . . . (33,140) -0.04%
----------- -----
Total Net Assets . . . . . . . . . . . . . . . . 78,453,426 100.00%
Schedule of Investments December 31, 2008
Number Market Percent
Common Stock Sector of Value of Net
Name of Issuer Shares (Note B) Assets
- -------------------------------------------------------------------------------
Consumer Discretionary
- -------------------------------------------------------------------------------
McDonald's Corp.* . . . . . . . . . . . 31,500 $ 1,958,985
Nike, Inc. . . . . . . . . . . . . . .. 32,600 1,662,600
-----------
3,621,585 4.61%
Consumer Staples
- -------------------------------------------------------------------------------
Costco Wholesale Corp. . . . . . . . . 26,750 $ 1,404,375
CVS Caremark Corp.* . . . . . . . . . . 96,730 2,780,020
Nestle SA* . . . . . . . . . . . . . . 63,000 2,501,100
PepsiCo, Inc.* . . . . . . . . . . . . 48,300 2,645,391
Procter & Gamble Co.* . . . . . . . . . 54,500 3,369,190
-----------
12,700,076 16.19%
Energy
- -------------------------------------------------------------------------------
Apache Corp. . . . . . . . . . . . . . 17,900 1,334,087
Chevron Corp.* . . . . . . . . . . . . 25,700 1,901,029
ConocoPhillips . . . . . . . . . . . . 27,000 1,398,600
EnCana Corp. . . . . . . . . . . . . . 24,100 1,120,168
Exxon Mobil Corp.* . . . . . . . . . . 22,582 1,802,721
Schlumberger Ltd. . . . . . . . . . . . 35,000 1,481,550
-----------
9,038,155 11.52%
Financials
- -------------------------------------------------------------------------------
Bank of America Corp. . . . . . . . . . 35,000 492,800
CME Group, Inc. . . . . . . . . . . . . 4,150 863,657
Eaton Vance Corp.* . . . . . . . . . . 137,600 2,890,976
Goldman Sachs Group . . . . . . . . . . 13,400 1,130,826
JPMorgan Chase & Co.* . . . . . . . . . 68,800 2,169,264
T. Rowe Price Group, Inc.*. . . . . . . 74,700 2,647,368
Wells Fargo & Co. . . . . . . . . . . . 20,000 589,600
-----------
10,784,491 13.75%
Health Care
- -------------------------------------------------------------------------------
AmericourceBergen Corp.* . . . . . . . 54,500 1,943,470
Celgene Corp.^ . . . . . . . . . . . . 13,500 746,280
Gilead Sciences, Inc.*^ . . . . . . . . 55,200 2,822,928
Hologic, Inc.^ . . . . . . . . . . . . 106,780 1,395,615
Johnson & Johnson . . . . . . . . . . . 21,800 1,304,294
Medtronic, Inc. . . . . . . . . . . . . 35,600 1,118,552
Stryker Corp. . . . . . . . . . . . . . 40,300 1,609,985
-----------
10,941,124 13.95%
Industrials
- -------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp.* . . 30,700 2,324,297
Danaher Corp.* . . . . . . . . . . . . 35,500 2,009,655
Deere & Co. . . . . . . . . . . . . . . 36,050 1,381,436
Emerson Electric Co.* . . . . . . . . . 59,400 2,174,634
United Technologies Corp.* . . . . . . 38,900 2,085,040
-----------
9,975,062 12.71%
Information Technology
- -------------------------------------------------------------------------------
Akamai Technologies, Inc.^ . . . . . . .92,900 1,401,861
Apple, Inc.^ . . . . . . .. . . . . . . 16,650 1,421,077
Cisco Systems, Inc.^ . . . . . . . . . 82,500 1,344,750
Corning, Inc. . . . . .. . . . . . . . 154,100 1,468,573
Google, Inc., Class A*^ . .. . . . . . . 6,600 2,030,490
International Business Machines Corp. . 18,000 1,514,880
Itron, Inc.^ . . . . . . . . . . . . . 26,900 1,714,606
Qualcomm, Inc. . . . . . . . . . . . . 37,500 1,343,625
-----------
12,239,862 15.60%
Materials
- -------------------------------------------------------------------------------
BHP Billiton Ltd. . . . . . . . . . . . 19,000 815,100
Companhia Vale Rio Doce . . . . . . . . 45,000 544,950
Freeport-McMoran Copper & Gold, Inc. . 19,500 476,580
-----------
1,836,630 2.34%
Telecommunication Services
- -------------------------------------------------------------------------------
America Movil, ADR . . . . . . . . . . 34,500 1,069,155
American Tower Corp., Class A^ . . . . 55,531 1,628,169
-----------
2,697,324 3.44%
Utilities
- -------------------------------------------------------------------------------
Entergy Corp. . . . . . . . . . . . . . 10,500 872,865
Exelon Corp.* . . . . . . . . . . . . . 34,800 1,935,228
-----------
2,808,093 3.58%
Total Common Stocks (Cost-$86,546,686) . . . . . . . . $76,642,402 97.69%
Repurchase Agreement
- -------------------------------------------------------------------------------
State Street Bank & Trust Co. Repurchase Agreement,
0.01% due 1/2/09 @ . . . . . . . . . . . . . . . . . . . 1,844,164
Total Repurchase Agreement (Cost-$1,844,164) . . . . . $ 1,844,164 2.35%
-----------
Total Investment Portfolio (Cost-$88,390,850). . . . . . 78,486,566 100.04%
-----------
Net Other Assets and Liabilities . . . . . . . . . . . . (33,140) -0.04%
-----------
Total Net Assets . . . . . . . . . . . . . . . . . . . $78,453,426 100.00%
* All or a portion of this security is pledged to collateralize short-term
borrowings, when utilized
^ Non-income producing security
@ Acquired on December 31, 2008. Collateralized by $1,901,283 of market value
of U.S.
Government mortgage-backed securities due through 01/01/37. The maturity value
is $1,844,165.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities
December 31, 2008
Assets
- ------------------------------------------------------------------------------
Investments-at market value (cost $88,390,850) . . . . . . . . . . $78,486,566
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,194
Dividends receivable . . . . . . . . . . . . . . . . . . . . . . . . . . 88,264
Receivable for shares sold . . . . . . . . . . . . . . . . . . . . . . . 7,250
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,707
-----------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . 78,611,981
Liabilities
- -------------------------------------------------------------------------------
Accrued investment advisory fee . . . . . . . . . . . . . . . . . . . . 40,691
Accrued audit expense . . . . . . . . . . . . . . . . . . . . . . . . . 41,892
Accrued other expenses. . . . . . . . . . . . . . . . . . . . . . . . . 12,079
Payable for shares repurchased . . . . . . . . . . . . . . . . . . . . . 63,893
-----------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . 158,555
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $78,453,426
Net Assets Consist of:
Capital paid-in . . . . . . . . . . . . . . . . . . . . . . . . . . $91,756,078
Accumulated net realized gain/(loss) . . . . . . . . . . . . . . . (3,398,368)
Net unrealized appreciation/(depreciation) of investments . .. . . . (9,904,284)
-----------
Net Assets . . .. . . . . . . . . . . . . . . . . . . . . . . . . . $78,453,426
-----------
-----------
Net Asset Value, offering price and redemption price per share
($78,453,426/6,684,865 shares) . . . . . . . . . . . . . . . . . . . . . $11.74
The accompanying notes are an integral part of the financial statements.
Statement of Operations
Year Ended December 31, 2008
- -------------------------------------------------------------------------------
Investment Income
Dividend Income . . . . . . . . . . . . . . . . . . . . . . . . . . $1,733,614
Security Lending Income . . . . . . . . . . . . . . . . . . . . . . . . 52,263
Interest Income. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 9,672
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,861
-----------
Total Income 1,806,410
Expenses
- -------------------------------------------------------------------------------
Investment advisory fee . . . . . . . . . . . . . . . . . . . . . . . $681,888
Administrative expenses and salaries . . . . . . . . . . .. . . . . . . 345,046
Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,900
Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,030
Printing, postage, and stationery . . . . . . . . . . . . .. . . . . . . 61,128
Computer and related expenses . . . . . . . . . . . . . . .. . . . . . . 42,525
Insurance . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 42,090
Registration and Filing fees . . . . . . . . . . . . . . . . . . . . . . 33,600
Trustee fees. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 30,000
Commitment fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,118
Telephone expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,300
Custodian fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,444
Interest fee . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 2,731
Miscellaneous fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,150
----------
Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,477,950
----------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . $328,460
----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from investment transactions . . . . . . . $(3,398,368)
Change in unrealized appreciation (depreciation) of investments . . (55,730,920)
----------
Net gain (loss) on investments . . . . . . . . . . . . . . . . . .. (59,129,288)
----------
Net increase (decrease) in net assets resulting from operations . $(58,800,828)
----------
----------
The accompanying notes are an integral part of the financial statements.
<table>
<s> <c> <c> <c> <c>
Statement of Changes in Net Assets
Year Ended Year Ended
December 31, December 31,
2008 2007
Increase (Decrease) in Net Assets
From Operations:
Net investment income (loss) . . . . . . . . . . . . . . . . $328,460 $152,107
Net realized gain (loss) from investment transactions . . . . (3,398,368) 7,592,914
Change in unrealized appreciation (depreciation) of investments(55,730,920) 10,742,593
---------- ----------
Net Increase (Decrease) in Net Assets
Resulting from Operations . . . . . . . . . . . . . . . . . . (58,800,828) 18,487,614
---------- ----------
Distributions to Shareholders
From net investment income . . . . . . . . . . . . . . . . . . . (328,460) (254,770)
From net realized gains from investment transactions . . . . . . - (16,714,448)
---------- ----------
Total Distributions to Shareholders . . . . . . . . . . . . . . . (328,460) (16,969,218)
From Net Fund Share Transactions . . . . . . . . . . . . . .. . (7,856,946) 3,994,441
---------- ----------
Total Increase (Decrease) in Net Assets . . . . . . . . . . . .(66,986,234) 5,512,837
Net Assets:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . .145,439,660 139,926,823
----------- -----------
End of Period. . . . . . . . . . . . . . . . . . . . . . . . . $78,453,426 $145,439,660
The accompanying notes are an integral part of the financial statements.
</table>
Financial Highlights
<table>
<s> <c> <c> <c> <c>
Year Ended December 31,
2008 2007 2006 2005 2004
Per Share Data ^
Net Asset Value:
Beginning of Period . . . . . . . . . . . . $20.19 $20.10 $18.40 $16.52 $15.26
------ ------ ------ ------ ------
Income From Investment Operations:
Net investment income (loss) . . . . . . . . 0.05 0.02 0.01 (0.02) 0.04
Net realized and unrealized gain (loss) on
investment . . . . . . . . . . . . . . . . . . (8.45) 2.71 1.69 1.90 1.27
------ ------ ------ ------ ------
Total from investment operations . . . . . . (8.40) 2.73 1.70 1.88 1.31
------ ------ ------ ------ ------
Less Distributions:
Net investment income . . . . . . . . . . . (0.05) (0.04) 0.00 0.00 (0.05)
Capital Gain . . . . . . . . . . . . . . . . . 0.00 (2.60) 0.00 0.00 0.00
------ ------ ------ ------ ------
Total Distributions . . . . . . . . . . . . . (0.05) (2.64) 0.00 0.00 (0.05)
Net Asset Value:
End of Period . . . . . . . . . . . . . . . . $11.74 $20.19 $20.10 $18.40 $16.52
------ ------ ------ ------ -------
Total Return . . . . . . . . . . . . . . . . -41.61% 13.90% 9.24% 11.38% 8.56%
Ratios & Supplemental Data
Net assets end of period (in thousands) . . $78,453 $145,440 $139,927 $134,412 $136,238
Ratio of operating expenses to average
net assets (includes interest
expense) . . . . . . . . . . . . . . . . . . . 1.27% 1.10% 1.15% 1.18% 1.32%
Ratio of interest expense to average net
assets . . . . . . . . . . . . . . . . . . . . 0.00%* 0.01% 0.00%* 0.00%* 0.07%
Ratio of net investment income to
average net assets . . . . . . . . . . . . . 0.29% 0.11% 0.08% -0.15% 0.29%
Portfolio turnover rate . . . . . . . . . . . 45% 40% 52% 57% 19%
^ Average share method used to calculate per share data
* Amount is less than .01%
</table>
Notes to Financial Statements
Note A-Organization
Northeast Investors Growth Fund (the "Fund") is a diversified, no-load,
open-end, series-type management investment company registered under the
Investment Company Act of 1940, as amended. The Fund presently consists of one
portfolio and is organized as a Massachusetts business trust.
The Fund's objective is to produce long term growth for its shareholders.
Note B-Significant Accounting Policies
Significant accounting policies of the Fund are as follows:
Valuation of Investments: Investments in securities traded on national
securities exchanges are valued based upon closing prices on the exchanges.
Securities traded in the over-the-counter market and listed securities with no
sales on the date of valuation are valued at closing bid prices. Repurchase
agreements are valued at cost with earned interest included in interest
receivable. Other short-term investments, when held by the Fund, are valued at
cost plus earned discount or interest which approximates fair value.
Securities and other assets for which market quotations are not readily
available (including restricted securities, if any) are valued at their fair
value as determined in good faith under consistently applied procedures approved
by the Board of Trustees. The Fund may use fair value pricing for foreign
securities if a material event occurs that may effect the price of a security
after the close of the foreign market or exchange (or on days the foreign market
is closed) but before the Fund prices it's portfolio, generally at 4:00 p.m. ET.
Fair value pricing may also be used for securities acquired as a result of
corporate restructurings or reorganizations as reliable market quotations for
such issues may not be readily available. At December 31, 2008 there were no
securities priced at fair value as determined in good faith.
Security Transactions: Security transactions are accounted for as of trade date.
Gains and losses on securities sold are determined on the basis of identified
cost.
Federal Income Taxes: No provision for federal income taxes is necessary since
the Fund has elected to qualify under subchapter M of the Internal Revenue Code
and its policy is to distribute all of its taxable income, including net
realized capital gains, within the prescribed time periods.
State Income Taxes: Because the Fund has been organized by an Agreement and
Declaration of Trust executed under the laws of the Commonwealth of
Massachusetts, it is not subject to state income or excise taxes.
Distributions and Income: Income and capital gain distributions are determined
in accordance with income tax regulations which may differ from U.S. generally
accepted accounting principles. These differences are primarily due to differing
treatments for capital loss carryovers and losses deferred due to wash sales.
Permanent book and tax differences relating to shareholder distributions will
result in reclassifications to paid-in-capital. The Fund's distributions and
dividend income are recorded on the ex-dividend date. Interest income, which
consists of interest from repurchase agreements, is accrued as earned.
Net Asset Value: In determining the net asset value per share, rounding
adjustments are made for fractions of a cent to the next higher cent.
Use of Estimates: The preparation of financial statements in conformity with
U.S. 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.
Note C-Investment Advisory and Service Contract
The Fund has its investment advisory and service contract with Northeast
Management & Research Company, Inc. (the "Advisor"). Under the contract, the
Fund pays the Advisor an annual fee at a maximum rate of 1% of the first
$10,000,000 of the Fund's average daily net assets, 3.4 of 1% of the next
$20,000,000 and 1.2 of 1% of the average daily net assets in excess of
$30,000,000, in monthly installments on the basis of the average daily net
assets during the month preceding payment. Messrs. John C. Emery, Michael
Baldwin, and F. Washington Jarvis are not officers or directors of the Advisor.
The compensation of all disinterested trustees of the Fund is borne by the Fund.
Under the Fund's Investment Advisory Agreement (the "Agreement"), personnel of
the Advisor provide the Fund with advice and assistance in the choice of
investments and the execution of securities transactions, and otherwise maintain
the Fund's organization. The Advisor also provides the Fund with necessary
office space and portfolio accounting and bookkeeping services. The salaries of
all officers of the Fund or of the Advisor performing services relating to
research, statistical and investment activities are paid by the Advisor.
The Fund pays expenses, including the salaries of employees engaged in the
following activities, related to its role as transfer agent.
Note D-Purchases and Sales of Investments
The cost of purchases and proceeds from sales of investments, other than
short-term securities, aggregated $51,755,166 and $63,064,703, respectively,
for the year ended December 31, 2008.
Note E-Shares of Beneficial Interest
<table>
<s> <c> <c> <c> <c>
At December 31, 2008, there was an unlimited number of shares of beneficial
interest authorized with no par value. Transactions in shares of beneficial
interest were as follows:
December 31, 2008 December 31, 2007
----------------- -----------------
Shares Amount Shares Amount
Shares sold . . . . . . . . . . . . . 384,741 $ 6,358,765 292,188 $ 6,243,717
Shares issued to shareholders in
reinvestment of distributions from
net investment income and
realized gains from security
transactions . . . . . . . . . . . . . 24,885 289,801 790,393 15,570,737
-------- ----------- ------- -----------
409,626 $ 6,648,566 1,082,581 $ 21,814,454
Shares repurchased . . . . . . . . . (929,233) $(14,505,512) (840,605) $(17,820,013)
-------- ----------- ------- ------------
Net Increase . . . . . .. . . . . . . (519,607) $ (7,856,946) 241,976 $ 3,994,441
</table>
Note F-Repurchase Agreement
On a daily basis, the Fund generally invests any cash balances into repurchase
agreements hypothecated by U.S. Government obligations. Securities pledged as
collateral for repurchase agreements are held by the Fund's custodian bank until
maturity of the repurchase agreement. Provisions of the agreement ensure that
the market value of the collateral is sufficient in the event of default.
However, in the event of default or bankruptcy by the other party to the
agreement, realization and/ or retention of the collateral may be subject to
legal proceedings.
Note G-Committed Line of Credit
Short-term bank borrowings, which do not require maintenance of compensating
balances, are generally on a demand basis and are at rates equal to adjusted
money market interest rates in effect during the period in which such loans are
outstanding. At December 31, 2008, the Fund had an unused line of credit
amounting to $20,000,000. In addition the Fund pays a commitment fee of 0.125%
per annum, payable at the end of each quarter based on the unused portion of the
line of credit. The committed line of credit may be terminated at the bank's
option at the annual renewal date.
The following information relates to aggregate short-term borrowings during the
year ended December 31, 2008:
Average amount outstanding (total of daily outstanding principal balances
divided by number of days with debt outstanding during the period) . . $419,768
Weighted average interest rate . . . . . . . . . . . . . . . . . . .. . . 3.24%
Note H-Additional Tax Information
Dividends paid during the fiscal year ended December 31, 2007 and 2008 were
$254,770 and $328,460 respectively, and such dividends were classified for tax
purposes as ordinary income.
Capital gain distributions paid during the fiscal year ended December 31, 2007
and 2008 were $16,714,448 and $0 respectively, and such capital gain
distributions were classified for tax purposes as long term capital gains.
As of December 31, the components of accumulated earnings (losses) on a tax
basis were as follows:
2008
----
Capital loss carryforward*. . . . . . . . . . . . . . . . . . . . . $ (864,347)
Timing Differences . . . . . . . . . . . . . . . . . . . .. . . . . (2,534,021)
Unrealized gains (losses) - net . . . . . . . . . . . . . . . . . . (9,904,284)
-----------
Total accumulated earnings (losses) - net . . . . . . . . . . . . $(13,302,652)
* The capital loss carryforward will expire as follows:
Expiration
Year Amount
- ---- ----------
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(864,347)
At December 31, 2008 the Fund's Post October loss deferral was $(2,534,021).
At December 31, 2008 the Fund's aggregate security unrealized gains and losses
based on cost for U.S. federal income tax purposes was as follows:
2008
----
Tax cost . . . . . . . . . . . . . . . . . . . . .. . . . . . . . $ 88,390,850
Gross unrealized gain . . . . . . . . . . . . . . . . . . . . . . . 7,590,562
Gross unrealized loss . . . . . . . . . . . . . . . . . . . . . . (17,494,846)
---------------
Net unrealized security gain (loss) . . . . . . . . . . . . . . . $ (9,904,284)
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Fund's tax returns to determine whether the tax positions will
'more-likely-than-not' be sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the Fund's current fiscal year. FIN 48
did not result in any unrecognized tax benefits and management has concluded
that no provision is required in the Fund's accompanying financial statements,
however each of the open tax years (2005-2007) remains subject to examination by
the Internal Revenue Service.
Note I-Securities Lending
The Fund may seek additional income by lending portfolio securities to qualified
institutions. The Fund will receive cash as collateral in an amount equal to at
least 102% of the current market value of any loaned securities plus accrued
interest. By reinvesting any cash collateral it receives in these transactions,
the Fund could realize additional gains and losses. If the borrower fails to
return the securities and the value of the collateral has declined during the
term of the loan, the Fund will bear the loss. At December 31, 2008, there were
no securities loaned. During the year ended December 31, 2008, income from
securities lending amounted to $52,263.
Note J-Financial Accounting Standards No. 157 ("FAS 157")
In September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157 ("FAS 157"), "Fair Value Measurements".
FAS 157 establishes a framework for measuring fair value and expands disclosures
about fair value measurements in financial statements, effective for the Fund's
current fiscal period. The various inputs that may be used to determine the
value of the Fund's investments are summarized in three broad levels. The inputs
or methodologies used for valuing securities are not necessarily an indication
of the risk associated with investing in those securities.
Level 1 - Quoted prices in active markets for identical securities.
Level 2 - Other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 - Significant unobservable inputs (including the Fund's own assumptions
used to determine the fair value of investments).
The following table summarized the Fund's investment as of December 31, 2008,
based on the inputs used to value them.
Investments in
Valuation Inputs Securities
- ---------------- --------------
Level 1 - Quoted prices . . . . . . . . . . . . . .. . . . . . . . $76,642,402
Level 2 - Other significant observable inputs . . .. . . . . . . . . 1,844,164*
Level 3 - Significant unobservable inputs . . . . .. . . . . . . . . . . . . 0
--------------
Total . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . $78,486,566
* Repurchase Agreement
Report of Independent Registered Public
Accounting Firm
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders
Northeast Investors Growth Fund.
We have audited the accompanying statement of assets and liabilities of
Northeast Investors Growth Fund (the "Fund"), including the schedule of
investments, as of December 31, 2008, and the related statement of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
five years in the period then ended. 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 the standards of the Public Company
Accounting Oversight Board (United States). 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. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2008, by correspondence with custodian.
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
Northeast Investors Growth Fund at December 31, 2008, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with U.S. generally
accepted accounting principles.
Ernst & Young LLP
Boston, Massachusetts
February 18, 2009
Trustees and Officers
TRUSTEES & OFFICERS
The Trustees of Northeast Investors Growth Fund are William A. Oates, Jr.,
John C. Emery, Michael Baldwin, and F. Washington Jarvis. Under Massachusetts
Law, the Trustees are generally responsible for overseeing the operation and
management of the Fund. The table below provides certain information about the
Fund's Trustees and Officers. The mailing address for the Trustees and Officers
of the Fund is 150 Federal Street, Boston, MA 02110-1745.
The Fund's Statement of Additional Information (SAI) contains additional
information about the Trustees. To request a free copy, call the Fund at
800-225-6704 or visit our website at www.northeastinvestors.com.
<table>
<s> <c> <c> <c> <c>
Principal
Occupation(s)
During the Past
Five Years/and
Name/Age/Service * Position Other Directorships
- ------------------ -------- -------------------
Affiliated Trustees and Fund Officers
Williams A. Oates, Jr. Trustee and President Trustee and President of
Age: 66 Northeast Investors Growth
Years of Service: 28 Fund; President and Director of
Northeast Investment
Management, Inc.
Gordon C. Barrett Senior Vice President, Chief Chief Financial Officer of
Age: 52 Financial Officer, and Chief Northeast Investors Growth
Years of Service: 15 Compliance Officer Fund, Chief Financial Officer of
Northeast Investors Trust, and
Officer of Northeast Investment
Management, Inc.
Robert B. Minturn Clerk, Vice President, And Officer of Northeast Investors
Age: 69 Chief Legal Officer Trust; Officer of Northeast
Years of Service: 28 Investors Growth Fund (Trustee
until November 2008); Officer
of Northeast Investment
Management, Inc.
Independent Trustees
John C. Emery Trustee Partner, Law Firm of Sullivan &
Age: 78 Worcester
Years of Service: 28
Michael Baldwin Trustee Partner, Baldwin Brothers,
Age: 68 Registered Investment Advisor
Years of Service: 9
F. Washington Jarvis Trustee Headmaster Emeritus at
Age: 69 Roxbury Latin School
Years of Service: 5
* The Trustees serve until their resignation or the appointment of a successor
and the officers serve at the pleasure of the Trustees.
</table>
Trustees
- -------------------------------------------------------------------------------
William A. Oates, Jr. Michael Baldwin
John C. Emery F. Washington Jarvis
Officers
- -------------------------------------------------------------------------------
William A. Oates, Jr., President
Gordon C. Barrett, Senior Vice President, Chief Financial Officer & Chief
Compliance Officer
Robert B. Minturn, Vice President, Clerk & Chief Legal Officer
Bruce H. Monrad, Vice President
David A. Randall, Vice President
John F. Francini, Vice President
Nancy M. Mulligan, Vice President
Investment Advisor
- -------------------------------------------------------------------------------
Northeast Management & Research Company, Inc.
150 Federal Street
Boston, Massachusetts 02110
Custodian
- -------------------------------------------------------------------------------
State Street Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02111
Legal Counsel
- -------------------------------------------------------------------------------
Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Transfer Agent
- -------------------------------------------------------------------------------
Northeast Investors Growth Fund
150 Federal Street
Boston, Massachusetts 02110
Independent Registered Public Accounting Firm
- -------------------------------------------------------------------------------
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116-5072
This report is prepared for the information of the shareholders of Northeast
Investors Growth Fund and must not be given to others unless preceded or
accompanied by a copy of the current Prospectus by which all offerings of the
Fund shares are made. It should be noted in reading this report and the letter
to shareholders that the record of past performance is not a representation as
to the Fund's future performance, and that the Fund's investments are subject to
market risks.
For a free copy of the Fund's proxy voting guidelines and proxy voting record
visit www.northeastinvestors.com/growth/proxypolicy.stm, call 1-800-225-6704 or
visit the Securities and Exchange Commission (SEC)'s website at www.sec.gov.
Shares of the Fund are sold to investors at net asset value by
Northeast Investors Growth Fund
150 Federal Street
Boston, Massachusetts 02110
800-225-6704 - 617-523-3588
www.northeastinvestors.com
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer and principal financial officer. A copy of the
code of ethics has been filed as Exhibit to registrant's Report on Form N-CSR
for its fiscal year ended December 31, 2003. The registrant has not made any
amendment to its code of ethics during the covered period. The registrant has
not granted any waivers from any provisions of the code of ethics during the
covered period.
Item 3. Audit Committee Financial Expert.
The registrant does not have an Audit Committee Financial Expert. Although the
members of the registrant's Audit Committee have a variety of business and
investment experience, none of them has been determined to meet the technical
qualifications required in order to meet the definition of an Audit Committee
Financial Expert under this Item. The registrant's trustee who is
considered to be an "interested person" as defined in Section 2(a)(19) under the
Investment Company of 1940, as amended, does possess such qualifications, but it
has been determined that the Audit Committee should consist entirely of
independent trustees. The Audit Committee, under its charter, has the ability
to retain independent advisers if it deems it necessary or appropriate without
the need to seek approval from the management of the Fund.
Item 4. Principal Accountant Fees and Services.
(a) Audit Fees. The aggregate fees billed for the registrant's
fiscal years ended December 31, 2008 and December 31, 2007 for professional
services rendered by the registrant's principal accountant for audit of its
annual financial statements or services that are normally provided by such
accountant in connection with statutory and regulatory filings were $50,880,
and $48,000 respectively.
(b) Audit-Related Fees The aggregate fees billed for the
registrant's fiscal year ended December 31, 2008 and December 31, 2007 for
assurance and related services by the registrant's principal accountant
reasonably related to the performance of audit of the registrant's financial
statements and not reported under Paragraph (a) of this Item were $20,650 and
$19,500 respectively. Such services consisted of a report of the Fund's transfer
agent internal controls pursuant to rule 17AD-13, semi-annual report review and
a report on the Fund's anti-money laundering controls and policies.
(c) Tax Fees. The aggregate fees billed in the registrant's
fiscal years ended December 31, 2008 and December 31, 2007 for professional
services rendered by the registrant's principal accountant for tax matters were
$8,500 and $8,000 respectively. Such services consisted of the preparation of
the registrant's federal income and excise tax returns.
(d) Other Fees. During the fiscal years ended December 31, 2008
and 2007 the aggregate fees billed for other services rendered by the
registrant's principal accountant were $0 and $16,731 respectively. Such
services consisted of a review and testing of registrant's compliance policies
and procedures pursuant to Rule 38a-1 under the Investment Company Act of
1940, as amended.
(e) It is the registrant's policy that all audit and non-audit
services provided by the registrant's principal accountant be approved in
advance by the Audit Committee, and all of the services described in Paragraphs
(a) - (d) of this item were so approved.
(f) The registrant has been advised by its independent accountants
that less than 50% of the hours expended on the principal accountant's
engagement to audit the registrant's financial statements were attributed to
work by persons other than the principal accountants' full-time, permanent
employees.
(g) No non-audit services were provided by the registrant's
principal accountant to the registrant's investment adviser. There is no entity
affiliated with registrant's investment adviser that provides ongoing services
to the registrant.
(h) Not applicable to the registrant.
Item 5. Audit Committee of Listed Registrants.
Not applicable to the registrant.
Item 6. Schedule of Investments
Included as part of Item 1 above.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable to the registrant.
Item 8. Portfolio Manager of Closed-End Management Investment Companies
Not applicable to the registrant.
Item 9. Purchase of Equity Securities by Closed-End Management Company and
Affiliated Purchasers
Not applicable to the registrant.
Item 10. Submission of Matters to a Vote of Security Holders.
No material changes have been made with respect to procedures by which
shareholders may recommend nominees for trustee during the covered period.
Item 11. Controls and Procedures.
(a) The registrant's principal executive and financial officers,
after evaluating the effectiveness of the registrant's
disclosure controls and procedures (as defined in Rule 30a-2(c) under
the Investment Company Act of 1940, as amended), have concluded that,
based on such evaluation, the registrant's disclosure controls and
procedures were effective as of a date within 90 days of the filing of
this report.
(b) The registrant's principal executive officer and principal
financial officer are aware of no changes in the registrant's
internal control over financial reporting that occurred during the
registrant's most recent fiscal half-year that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits.
(a) 99.CERT Separate certifications by the registrant's principal
executive officer and principal financial officer, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule
30a-2(a) under the Investment Company Act of 1940, are attached.
(b) 99.906CERT A certification by the registrant's principal executive
officer and principal financial officer, pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under
the Investment Company Act of 1940, is attached.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Northeast Investors Growth Fund
By (Signature and Title)
William A. Oates, Jr.
President
(principal executive officer)
Date: March 11, 2009
By (Signature and Title)
Gordon C. Barrett
Chief Financial Officer
(principal financial officer)
Date: March 11, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)
William A. Oates, Jr.
President
(principal executive officer)
Date: March 11, 2009
By (Signature and Title)
Gordon C. Barrett
Chief Financial Officer
(principal financial officer)
Date: March 11, 2009
Exhibit 99.CERT
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
I, William A. Oates, Jr., certify that:
1. I have reviewed this report on Form N-CSR of Northeast Investors Growth Fund;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations, changes in net assets, and
cash flows (if the financial statements are required to include a statement of
cash flows) of the registrant as of, and for, the periods presented in this
report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of a date
within 90 days prior to the filing date of this report based on such evaluation;
and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal half-year (the registrant's second fiscal half-year in the
case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses
in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's ability to
record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: March 11, 2009
William A. Oates, Jr.
President
(principal executive officer)
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
I, Gordon C. Barrett, certify that:
1. I have reviewed this report on Form N-CSR of Northeast Investors Growth
Fund;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations, changes in net assets, and
cash flows (if the financial statements are required to include a statement of
cash flows) of the registrant as of, and for, the periods presented in this
report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of a date
within 90 days prior to the filing date of this report based on such evaluation;
and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal half-year (the registrant's second fiscal half-year in the
case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses
in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's ability to
record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: March 11, 2009
Gordon C. Barrett
Chief Financial Officer
(principal financial officer)
Exhibit 99.906CERT
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a)
and (b) of section 1350, chapter 63 of title 18, United States Code), each of
the undersigned officers of Northeast Investors Growth Fund, a Massachusetts
business trust (the "Registrant"), does hereby certify, to such officer's
knowledge, that:
The report on Form N-CSR for the period ended December 31, 2008 of the
Registrant (the "Form N-CSR") fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the
information contained in the N-CSR fairly presents, in all material respects,
the financial condition and results of operations of the Registrant.
Dated: March 11, 2009
William A. Oates, Jr.
President
(Principal Executive Officer)
Dated: March 11, 2009
Gordon C. Barrett
Chief Financial Officer
(Principal Financial Officer)
The foregoing certification is being furnished solely pursuant to section
906 of the Sarbanes-Oxley Act of 2002 and is not being filed as a separate
disclosure document.
A signed original of this written statement required by Section 906 has been
provided to the Registrant and will be retained by the Registrant and
furnished to the Securities and Exchange Commission or its staff upon request.