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
Date of reporting period: June 30, 2009
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
Semi-Annual Report
For the Period Ended
June 30, 2009
Table of Contents
Letter to Shareholders . . . . . . . . . . . . . . . . .. . . 2
Fund Performance. . . . . . . . . . . . . . . . . . . . . . . 4
Investment Sectors . . . . . . . . . . . . . . . . . . .. . . 7
Schedule of Investments . . . . . . . . . . . . . . . . . . . 9
Financial Statements . . . . . . . . . . . . . . . . . . . . 11
Financial Highlights . . . . . . . . . . . . . . . . . . . . 14
Notes to the Financial Statements. . . . . . . . . . . . . . 15
Trustees & Officers . . . . . . . . . . . . . . . . . . . . 20
Dear Fellow Shareholders:
As you may remember, in our last letter we recounted the difficult environment
investors faced in 2008. For the six-month period ending June 30, 2009,
Northeast Investors Growth Fund (the Fund) ended in better territory, returning
5.45% vs. the S&P 500 Index which was up 3.16% for the same period. Though the
markets began and ended the first half of 2009 in positive territory, all was
not smooth sailing in between. Within a week of New Year's Day concerns weighed
on the market, and the S&P 500 Index began to slide rapidly downward, reaching
an intra-day low of 666 on March 6, 2009, which was territory the equity markets
had not experienced since 1996. At that point the S&P 500 Index was down close
to 25% for the year and down 50% from the October 2007 high.
As fears of systemic failure abated, unprecedented fiscal and monetary
intervention continued and began trickling through the system. It appeared that
disaster would be averted, and the market actually rebounded nearly 40% from its
March low as the month of June ended. Though many trials remain for the economy:
a near 10% unemployment rate, a weakening dollar, and concerns about the massive
amount of spending by the US government, signs of stabilization are appearing.
That has given us, and we hope you, our shareholders, some relief.
Investments that did well for the Fund and the broader Index were concentrated
in the Materials, Technology and Financial sectors. As fears of a worldwide
recession lessened, companies in these more cyclical areas rebounded sharply off
their dramatic lows. Freeport-McMoRan Copper & Gold, Inc. was up over 100%, Vale
SA up close to 50% and BHP Billiton Ltd. up nearly 30%. As mentioned last year,
Freeport-McMoRan Copper & Gold, Inc. and Vale SA were two of the worst
performers for 2008.
Technology, a sector that for most of the first half did much better than the
averages, has provided consistent positive support. Long-term holdings in the
sector, which include Corning, Inc., up close to 70%, Apple, Inc., up more than
60% and Google, Inc., up about 35%, helped propel the Fund forward. Technology
companies in general were buoyed by relatively strong balance sheets, low levels
of leverage, and large exposure to international sales, which benefit from a
declining dollar.
Though investments in the Financial sector overall provided mixed returns for
the first half of this year, it is safe to say that in general the best
performing companies in this sector were ones we held on to: Goldman Sachs
Group, Inc. (+76%) , CME Group Inc. (+52%), and Eaton Vance Corp. (+28%). The
worst performing names in the portfolio were Financials that we sold at a near
bottom, when fundamentals seemed to matter less and fears of nationalization and
systemic failure dominated: Bank of America Corp., Wells Fargo & Co., and JP
Morgan Chase & Co being three names we sold earlier in the year.
Other poor performers for the Fund can be characterized by their perceived
"safety": Procter & Gamble Co. (24%), Costco Wholesale Corp. (12%) , and Exxon
Mobil Corp. (11%) trailed the averages as investors moved out of "safe"
investments to more cyclical ones. We remain invested in these names at the
current time because they do provide some ballast to the overall portfolio.
We remain cautiously optimistic with our investment outlook.We believe the
economy is starting to show signs of recovery and the financial markets are now
on firmer ground than they were at any time last fall or winter.We believe we
are past the worst of the financial crisis and the fear that the world (at least
the financial world) might be coming to an end has abated. Investment markets
appear to have wrung out many of the excesses that had been building since the
beginning of the 21st century. Market valuation on a "normalized" basis is
more reasonable, not excessively expensive or cheap when compared to history.
Over the longer-term, we are somewhat concerned with the level of debt the US
government is taking on and how it might impact the broader economy two or three
years from now. We are concerned with the prospect of rising real interest rates
and the possibility of sharply rising inflation. Rising real interest rates and/
or inflation are not a foregone conclusion, but the prospect requires vigilance
as we move forward. For the immediate term, however, we believe the economic
recovery will continue, bringing us out of the longest recession since the Great
Depression.
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.
Average Annual Total Return (unaudited)
One year ended June 30, 2009. . . . . . . . . . . . . . . . . . . . . . .-31.65%
Five years ended June 30, 2009 . . . . . . . . . . . . . . . . . . . . . -2.29%
Ten years ended June 30, 2009 . . . . . . . . . . . . . . . . . . . . . -2.84%
Performance Graph
(Ten Years) (unaudited)
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 2009 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>
Six Months
Ended
June 30,
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Northeast
Investors
Growth $12,913 $10,981 $9,098 $7,035 $9,033 $9,806 $10,922 $11,931 $13,590 $7,935 $8,367
Fund
Standard
& Poor's $12,104 $11,003 $9,695 $7,553 $9,719 $10,776 $11,305 $13,091 $13,808 $8,699 $8,974
500 Index
</table>
Returns and Per Share Data
<table>
<s> <c> <c> <c> <c>
Six Months
Ended
Year Ended December 31, June 30,
2009
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 (unaudited)
Net Asset Value 26.08 20.23 15.43 11.91 15.26 16.52 18.40 20.10 20.19 11.74 12.38
Income Dividend 0.02 0.00 0.00 0.02 0.03 0.05 0.00 0.00 0.04 0.05 0.00
Capital Gains Dist. 0.31 2.05 1.44 0.00 0.00 0.00 0.00 0.00 2.60 0.00 0.00
NEIG Return (%) 29.13 -14.96 -17.15 -22.67 28.39 8.56 11.38 9.24 13.90 -41.61 5.45
S&P 500 Return (%) 21.04 -9.10 -11.88 -22.10 28.68 10.88 4.91 15.79 5.48 -37.00 3.16
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 Form 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 copies may 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
12/31/2008 6/30/2009 12/31/2008 - 6/30/2009
Actual Return
5.45% $1,000.00 $1,054.50 $8.46
Hypothetical
(5% return before expenses) $1,000.00 $1,016.14 $8.72
</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 wth 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, 12/31/2008 - 6/30/2009.
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 your 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 this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Ten Largest Investment Holdings (unaudited)
June 30, 2009
Percent
Market of Net
Value Assets
Eaton Vance Corp. . . . . . . . . . . . . . . . . . . . $2,798,050 3.48%
T. Rowe Price Group, Inc. . . . . . . . . . . .. . . . . 2,654,379 3.30%
Corning, Inc. . . . . . . . . . . . . . . . . .. . . . . 2,474,846 3.08%
Apple, Inc. . . . . . . . . . . . . . . . . . .. . . . . 2,371,460 2.95%
Google, Inc., Class A . . . . . . . . . . . . .. . . . . 2,276,586 2.83%
Goldman Sachs Group . . . . . . . . . . . . . .. . . . . 2,270,576 2.83%
Burlington Northern Santa Fe Corp. . . . . . . . . . . . 2,257,678 2.81%
United Technologies Corp. . . . . . . . . . . .. . . . . 2,021,244 2.52%
Emerson Electric Co. . . . . . . . . . . . . . . . . . . 1,924,560 2.39%
Schlumberger Ltd. . . . . . . . . . . . . . . . . . . . 1,893,850 2.36%
Summary of Sector Weightings as a Percentage of Net
Assets (unaudited)
June 30, 2009
Northeast
Market Investors S&P 500
Major Sectors Value Growth Fund Index
Consumer Discretionary . . . . . . . .$ 4,857,663 6.04% 8.96%
Consumer Staples . . . . . . . . . . .$ 7,373,517 9.18% 11.97%
Energy . . . . . . . . . . . . . . . .$11,039,110 13.74% 12.43%
Financials . . . . . . . . . . . . . .$14,336,378 17.84% 13.60%
Health Care. . . . . . . . . . . . . .$ 7,177,753 8.93% 13.98%
Industrials . . . . . . . . . . . . . $12,707,476 15.81% 9.86%
Information Technology . . . . . . . $16,728,920 20.82% 18.34%
Materials. . . . . . . . . . . . . . .$ 2,810,365 3.50% 3.23%
Telecommunication Services . . . . . .$ 3,280,332 4.08% 3.54%
Utilities . . . . . . . . . . . . . . $ - 0.00% 4.09%
Cash, other assets and liabilities . $ 49,973 0.06% 0.00%
----------- -------
100.00% 100.00%
Summary of Net Assets by Industry (unaudited)
June 30, 2009
Market % of
Value Net Assets
Common Stocks
Aerospace & Defense . . . . . . . . . . . . . . $ 2,021,244 2.52%
Asset Management & Custody . . . . . . . . . .. . 5,452,429 6.78%
Biotechnology . . . . . . . . . . . . . . . . . . 1,681,556 2.09%
Communications Equipment . . . . . . . . . . .. . 7,432,304 9.25%
Computer Hardware . . . . . . . . . . . . . . . . 4,251,020 5.29%
Construction & Farming. . . . . . . . . . . . . . 1,699,872 2.12%
Diversified Banks . . . . . . . . . . . . . . . . 1,140,220 1.42%
Diversified Financial Services . . . . . . . .. . 1,483,785 1.85%
Diversified Minerals . . . . . . . . . . . . .. . 1,833,220 2.28%
Drug Retail. . . . . . . . . . . . . . . . . .. . 1,517,968 1.89%
Electrical Components & Equipment . . . . . . . . 1,924,560 2.39%
Fertilizers & Agricultural Chemicals . . . . .. . 1,516,536 1.89%
Financial Services . . . . . . . . . . . . . .. . 1,073,600 1.34%
Footwear . . . . . . . . . . . . . . . . . . .. . 1,688,028 2.10%
Health Care Equipment . . . . . . . . . . . . . . 3,123,137 3.89%
Home Improvement Retail . . . . . . . . . . . . . 1,358,700 1.69%
Household Products . . . . . . . . . . . . . .. . 1,497,230 1.86%
Hypermarkets & Supercenters . . . . . . . . . . . 1,224,615 1.52%
Industrial Conglomerate . . . . . . . . . . . . . 1,441,560 1.79%
Industrial Machinery . . . . . . . . . . . . .. . 1,846,026 2.30%
Integrated Oil & Gas. . . . . . . . . . . . . . . 4,711,373 5.86%
Integrated Telecommunication Services . . . . . . 1,529,440 1.90%
Internet Software & Services . . . . . . . . .. . 4,058,408 5.05%
Investment Banking & Brokerage. . . . . . . . . . 2,270,576 2.83%
Metals & Mining . . . . . . . . . . . . . . . . . . 977,145 1.22%
Natural Gas . . . . . . . . . . . . . . . . . . . 1,711,060 2.13%
Oil & Gas Equipment . . . . . . . . . . . . . . . 1,893,850 2.36%
Oil & Gas Exploration & Production . . . . . .. . 2,722,827 3.39%
Packaged Foods . . . . . . . . . . . . . . . .. . 1,655,280 2.06%
Pharmaceuticals . . . . . . . . . . . . . . . . . 2,373,060 2.95%
Railroads . . . . . . . . . . . . . . . . . . . . 2,257,678 2.81%
Regional Banks . . . . . . . . . . . . . . . .. . 1,313,500 1.63%
Restaurants . . . . . . . . . . . . . . . . . . . 1,810,935 2.25%
Retail - General. . . . . . . . . . . . . . . . . . 987,188 1.23%
Soft Drinks . . . . . . . . . . . . . . . . . . . 1,478,424 1.84%
Specialized Finance . . . . . . . . . . . . . . . 1,602,268 1.99%
Wireless Services . . . . . . . . . . . . . . . . 1,750,892 2.18%
----------- ------
Total Common Stocks . . . . . . . . . . . . . . .80,311,514 99.94%
Total Cash Equivalents . . . . . . . . . . . . . 4,230,127 5.26%
----------- ------
Total Investment Portfolio . . . . . . . . . . . 84,541,641 105.20%
Net Other Assets and Liabilities. . .. . . . . . (4,180,154) 5.20%
----------- ------
Total Net Assets . . . . . . . . . . . . . . . $80,361,487 100.00%
Schedule of Investments June 30, 2009 (unaudited)
Number Market Percent
Common Stock Sector of Value of Net
Name of Issuer Shares (Note B) Assets
Consumer Discretionary
- -------------------------------------------------------------------------------
Lowe's Companies, Inc. . . . .. 70,000 $ 1,358,700
McDonald's Corp.* . . . . . . . 31,500 1,810,935
Nike, Inc. . . . . . . . . . . 32,600 1,688,028
-----------
4,857,663 6.04%
Consumer Staples
- -------------------------------------------------------------------------------
Costco Wholesale Corp. . . . . 26,750 1,224,615
CVS Caremark Corp.* . . . . . . 47,630 1,517,968
Nestle SA* . . . . . . . . . . 44,000 1,655,280
PepsiCo, Inc.* . . . . . . . . 26,900 1,478,424
Procter & Gamble Co.* . . . . . 29,300 1,497,230
-----------
7,373,517 9.18%
Energy
- -------------------------------------------------------------------------------
Apache Corp. . . . . . . . . . 19,500 1,406,925
Chevron Corp.* . . . . . . . . 25,700 1,702,625
ConocoPhillips . . . . . . . .. 34,000 1,430,040
EnCana Corp. . . . . . . . . . 26,600 1,315,902
Exxon Mobil Corp.* . . . . . . 22,582 1,578,708
Occidental Petroleum Corp. . . 26,000 1,711,060
Schlumberger Ltd. . . . . . . . 35,000 1,893,850
-----------
11,039,110 13.74%
Financials
- -------------------------------------------------------------------------------
CME Group, Inc. . . . . . . . . 5,150 1,602,268
Eaton Vance Corp.* . . . . . . 104,600 2,798,050
Fifth Third Bancorp . . . . . 185,000 1,313,500
Goldman Sachs Group, Inc. . . . 15,400 2,270,576
JPMorgan Chase & Co. . . . . . 43,500 1,483,785
Northern Trust Corp. . . . . . 20,000 1,073,600
T. Rowe Price Group, Inc.* . . 63,700 2,654,379
Wells Fargo & Co. . . . . . . . 47,000 1,140,220
-----------
14,336,378 17.84%
Health Care
- -------------------------------------------------------------------------------
Gilead Sciences, Inc.*^ . . . . 35,900 1,681,556
Hologic, Inc.^# . . . . . . . . 106,780 1,521,615
Johnson & Johnson . . . . . . . 21,800 1,238,240
Stryker Corp.* . . . . . . .. . 40,300 1,601,522
Teva Pharmaceutical Industries Ltd. . . 23,000 1,134,820
-----------
7,177,753 8.93%
Industrials
- -------------------------------------------------------------------------------
Burlington Northern Santa Fe Corp.*.. . 30,700 2,257,678
Danaher Corp.* . . . . . . . . . . . . 29,900 1,846,026
Deere & Co.* . . . . . . . . . . . . . 42,550 1,699,872
Emerson Electric Co.* . . . . . . . . . 59,400 1,924,560
General Electric Co. . . . . . . . . . 123,000 1,441,560
Monsanto Co. . . . . . . . . . . . . .. 20,400 1,516,536
United Technologies Corp.* . . . . . . 38,900 2,021,244
-----------
12,707,476 15.81%
Information Technology
- -------------------------------------------------------------------------------
Akamai Technologies, Inc.^ . . . . . .. 92,900 $ 1,781,822
Amazon.com, Inc.^ . . . . . . . . . . . 11,800 987,188
Apple, Inc.^ . . . . . . . . . . . . . 16,650 2,371,460
Cisco Systems, Inc.^ . . . . . . . . . 95,500 1,781,075
Corning, Inc.*. . . . . . . . . . . . 154,100 2,474,846
Google, Inc., Class A*^ . . . . . . . . 5,400 2,276,586
International Business Machines Corp. . 18,000 1,879,560
Itron, Inc.^# . . . . . . . . . . . . . 26,900 1,481,383
Qualcomm, Inc. . . . . . . . . . . . .. 37,500 1,695,000
-----------
16,728,920 20.82%
Materials
- -------------------------------------------------------------------------------
BHP Billiton Ltd.# . . . . . . . . . . 19,000 1,039,870
Freeport-McMoRan Copper & Gold, Inc. . 19,500 977,145
Vale SA. . . . . . . . . . . . . . . . 45,000 793,350
-----------
2,810,365 3.50%
Telecommunication Services
- -------------------------------------------------------------------------------
America Movil, ADR . . . . . . . . . .. 39,500 1,529,440
American Tower Corp., Class A^ . . . .. 55,531 1,750,892
-----------
3,280,332 4.08%
Total Common Stocks (Cost- $81,857,363) . . . . . . . . $80,311,514 99.94%
-----------
Repurchase Agreement
- -------------------------------------------------------------------------------
State Street Bank & Trust Co.
Repurchase Agreement, 0.01% due 7/1/09@. . . . . . . . 76,992
-----------
Total Repurchase Agreement (Cost-$76,992) . . . . . . $ 76,992 0.09%
Cash Equivalents
- -------------------------------------------------------------------------------
State Street Bank & Trust Navigator Prime~ . . . . . . .. 4,153,135
-----------
Total Cash Equivalents (Cost-$4,153,135). . . . . . . . $ 4,153,135 5.17%
-----------
Total Investment Portfolio (Cost-$86,087,490) . . . . . 84,541,641 105.20%
-----------
Net Other Assets and Liabilities . . . . . . . . . . . . (4,180,154) -5.20%
Total Net Assets . . . . . . . . . . . . . . . . . .. . $80,361,487 100.00%
-----------
-----------
* All or a portion of this security is pledged to collateralize short-term
borrowings, when utilized
^ Non-income producing security
# All or a portion of this security is currently out on loan (See Note I)
@ Acquired on June 30, 2009. Collateralized by $79,984 of market value of U.S.
Government Treasury Bills due through 08/20/09. The maturity value is $76,992.
~ Security held as collateral for securities on loan.
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities (unaudited)
June 30, 2009
Assets
Investments-at market value (including securities loaned of $4,042,868)
(cost $86,087,490). . . . . . . . . . . . . . . . . . . . . . . . . $84,541,641
Dividends receivable . . . . . . . . . . . . . . . . . . . . . . . . . . 74,329
Receivable for shares sold . . . . . . . . . . . . . . . . .. . . . . . . . 342
Other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,854
------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,645,166
Liabilities
Collateral on securities loaned, at value . . . . . . . . . . . . . . 4,153,135
Accrued audit expense . . . . . . . . . . . . . . . . . . . . . . . . . 45,092
Accrued investment advisory fee . . . . . . . . . . . . . . . . . . . . 42,030
Accrued other expenses. . . . . . . . . . . . . . . . . . . . . . . . . 29,088
Payable for shares repurchased . . . . . . . . . . . . . . . . . . . . . 14,334
------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 4,283,679
------------
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $80,361,487
Net Assets Consist of:
Capital paid-in . . . . . . . . . . . . . . . . . . . . . . . . . . $89,677,740
Undistributed net investment income . . . . . . . . . . . .. . . . . . . 65,426
Accumulated net realized gain/(loss) . . . . . . . . . . . . . . . . (7,835,830)
Net unrealized appreciation/(depreciation) of investments .. . . . . (1,545,849)
------------
Net Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $80,361,487
------------
------------
Net Asset Value, offering price and redemption price per share
($80,361,487/6,493,063 shares) . . . . . . . . . . . . . . . . . . . . . $12.38
The accompanying notes are an integral part of the financial statements.
Statement of Operations (unaudited)
Six Months Ended June 30, 2009
Investment Income
Dividend income . . . .. . . . . . . . . . . . . . . . . . . . . . . . $710,438
Interest income . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Security lending income . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Other income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 810
------------
Total Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 711,298
Expenses
Investment advisory fee . . . . . . . . . . . . . . .. . . . . . . . . $235,947
Administrative expenses and salaries . . . . . . . . . . . . . . . . . 161,410
Legal fees. . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 63,375
Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,440
Printing, postage, and stationery . . . . . . . . . .. . . . . . . . . . 33,025
Computer and related expenses . . . . . . . . . . . .. . . . . . . . . . 24,250
Insurance . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 20,815
Registration and Filing fees . . . . . . . . . . . . . . . . . . . . . . 17,875
Trustee fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Commitment fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,085
Telephone expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,050
Custodian fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,154
Interest fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Miscellaneous fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,425
------------
Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 645,872
------------
Net Investment Income. . . . . . . . . . . . . . . . . . . . . . . . . . 65,426
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from investment transactions . . . . . . . $(4,437,463)
Change in unrealized appreciation/(depreciation) of investments . . . 8,358,435
------------
Net gain (loss) on investments . . . . . . . . . . . . . . . . . . . 3,920,972
Net increase (decrease) in net assets resulting from operations. . . $3,986,398
------------
------------
The accompanying notes are an integral part of the financial statements.
Statements of Changes in Net Assets
<table>
<s> <c> <c> <c> <c>
Six Months
Ended
June 30, Year Ended
2009 December 31,
(unaudited) 2008
Increase (Decrease) in Net Assets
From Operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . . . . $65,426 $328,460
Net realized gain (loss) from investment transactions . . . . . . . . . (4,437,463) (3,398,368)
Change in unrealized appreciation (depreciation) of investments . . . . .8,358,435 (55,730,920)
---------- -----------
Net Increase (Decrease) in Net Assets
Resulting from Operations . . . . . . . . . . . . . . . . . . . . . . . .3,986,398 (58,800,828)
---------- -----------
Distributions to Shareholders
From net investment income . . . . . . . . . . . . . . . . . . . . . . . - (328,460)
From net realized gains from investment transactions . . . . . . . . . . . . - -
---------- -----------
Total Distributions to Shareholders . . . . . . . . . . . . . . . . . . . - (328,460)
From Net Fund Share Transactions . . . . . . . . . . . . . . . . . . . (2,078,337) (7,856,946)
---------- -----------
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . 1,908,061 (66,986,234)
Net Assets:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . 78,453,426 145,439,660
---------- -----------
End of Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $80,361,487 $78,453,426
---------- -----------
---------- -----------
Undistributed Net Investment Income . . . . . . . . . . . . . . . . . .. . $65,426 -
The accompanying notes are an integral part of the financial statements.
</table>
Financial Highlights
<table>
<s> <c> <c> <c> <c>
Six Months
Ended
June 30,
2009 Year Ended December 31,
Per Share Data^ (unaudited) 2008 2007 2006 2005 2004
Net Asset Value:
Beginning of Period . . . . . . . . $11.74 $20.19 $20.10 $18.40 $16.52 $15.26
------ ------ ------ ------ ------ ------
Income From Investment
Operations:
Net investment income (loss) . . . . . 0.01 0.05 0.02 0.01 (0.02) 0.04
Net realized and unrealized gain
(loss) on investment . . . . . . . . . 0.63 (8.45) 2.71 1.69 1.90 1.27
------ ------ ------ ------ ------ ------
Total from investment operations . . . 0.64 (8.40) 2.73 1.70 1.88 1.31
------ ------ ------ ------ ------ ------
Less Distributions:
Net investment income . . . . . . . 0.00 (0.05) (0.04) 0.00 0.00 (0.05)
Capital Gain . . . . . . . . . . . . . . 0.00 0.00 (2.60) 0.00 0.00 0.00
------ ------ ------ ------ ------ ------
Total Distributions . . . . . . . . . . . 0.00 (0.05) (2.64) 0.00 0.00 (0.05)
Net Asset Value:
End of Period . . . . . . . . . . . . . $12.38 $11.74 $20.19 $20.10 $18.40 $16.52
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Total Return . . . . . . . . . . . . . . 5.45%# 41.61% 13.90% 9.24% 11.38% 8.56%
Ratios & Supplemental Data
Net assets end of period (in
thousands) . . . . . . . . . . . . . . $80,361 $78,453 $145,440 $139,927 $134,412 $136,238
Ratio of operating expenses to
average net assets (includes
interest expense) . . . . . . . . . . . 1.73% 1.27% 1.10% 1.15% 1.18% 1.32%
Ratio of interest expense to average
net assets . . . . . . . . . . . . . . . 0.00%* 0.00%* 0.01% 0.00%* 0.00%* 0.07%
Ratio of net investment income to
average net assets . . . . . . . . . . 0.18% 0.29% 0.11% 0.08% 0.15% 0.29%
Portfolio turnover rate . . . . . . . . . . 22%# 45% 40% 52% 57% 19%
^ Average share method used to calculate per share data
* Amount is less than 0.01%
Annualized
# Not annualized
</table>
Notes to Financial Statements
Note A-Organization
Northeast Investors Growth Fund (the "Fund") is a diversified, no-load,
open-end, seriestype 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 market 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. Methodologies used to fair value securities may
include, but are not limited to, the analysis of current debt to cash flow,
information of any recent sales, and the nature of the existing market for
securities with characteristics similar to such obligations. 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 the
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
June 30, 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, dividend paying and
shareholder servicing agent.
Note D-Purchases and Sales of Investments
The cost of purchases and proceeds from sales of investments, other than
short-term securities, aggregated $16,371,588 and $16,192,114, respectively, for
the six months ended June 30, 2009.
Note E-Shares of Beneficial Interest
At June 30, 2009, there was an unlimited number of shares of beneficial interest
authorized with no par value. Transactions in shares of beneficial interest were
as follows:
<table>
<s> <c> <c> <c> <c>
June 30, 2009 December 31, 2008
------------- -----------------
Shares Amount Shares Amount
Shares sold . . . . . . . . . . . . . . 199,858 $2,331,424 384,741 $6,358,765
Shares issued to shareholders in
reinvestment of distributions
from net investment income
and realized gains from
security transactions. . . . . . . . 0 $0 24,885 $289,801
------- ---------- ------- ----------
199,858 $2,331,424 409,626 $6,648,566
Shares repurchased . . . . . . . . . (391,660) $(4,409,761) (929,233) $(14,505,512)
------- ---------- ------- ----------
Net Increase. . .. . . . . . . . . . . (191,802) $(2,078,337) (519,607) $(7,856,946)
</table>
Note F-Repurchase Agreement
On a daily basis, the Fund 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 June 30, 2009, 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
six months ended June 30, 2009:
Average amount outstanding (total of daily outstanding principal balances
divided by number of days with debt outstanding during the period) . . $112,008
Weighted average interest rate . . . . . . . . . . . . . . . . . . . . . 0.86%
Note H-Additional Tax Information
Dividends paid during the fiscal year ended December 31, 2008 and the six months
ended June 30, 2009 were $328,460 and $0 respectively, and such dividends were
classified for tax purposes as ordinary income.
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. The
implementation of 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 the Fund's federal tax returns for
the prior three fiscal years remain 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 June 30, 2009, the value of
securities loaned and the value of collateral was $4,042,868 and $4,153,135,
respectively. During the six months ended June 30, 2009, income from securities
lending amounted to $15.
Note J-Fair Value Measurements
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements", as amended, establishes a three-tier
hierarchy for measuring fair value and requires additional disclosure about the
classification of fair value measurements.
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 summarizes the Fund's investments as of June 30, 2009, based
on the inputs used to value them. For information on the Fund's policy regarding
the valuation of investments, please refer to the Valuation of Investments
section of Note B in the accompanying Notes to Financial Statements.
Investments
Valuation Inputs in Securities
- ---------------- -------------
Level 1 -
Common Stock . .. . . . . . . . . . . . . . . . . . . . . $80,311,514
Cash Equivalents . . . . . . . . . . . . . . . . . . . . . 4,153,135
Level 2 -
Repurchase Agreement . . . . . . . . . . . . . . . . . . . . . 76,992
Level 3 - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
-------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . $84,541,641
Note K-Review for Subsequent Events
In accordance with the provisions set forth in Financial Accounting Standards
Board Statement of Financial Accounting Standards No. 165 "Subsequent Events",
adopted by the Fund as of June 30, 2009, events and transactions from July 1,
2009 through August 25, 2009, the date the financial statements were available
to be issued, have been evaluated by management for subsequent events.
Management has determined that there were no material events that would require
disclosure in the Fund's financial statements through this date.
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 Trustee and President of Northeast
Age: 67 President Investors Growth Fund; President and
Years of Service: 28 Director of Northeast Investment
Management, Inc.
Gordon C. Barrett Senior Vice Chief Financial Officer of Northeast
Age: 52 President, Chief Investors Growth Fund, Chief Financial
Years of Service: 15 Financial Officer, Officer of Northeast Investors Trust, and
and Chief Compliance Officer Officer of Northeast Investment
Management, Inc.
Robert B. Minturn Clerk, Vice Officer of Northeast Investors Trust;
Age: 70 President, and Officer of Northeast Investors Growth
Years of Service: 28 Chief Legal Officer 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, Registered
Age: 68 Investment Advisor
Years of Service: 9
F. Washington Jarvis Trustee Headmaster Emeritus at Roxbury Latin
Age: 70 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>
Board Approval of Investment Advisory Contract
At its meeting held on May 27, 2009, the Board of Trustees of the Fund,
including the Independent Trustees voting separately, voted to extend the Fund's
investment management agreement with Northeast Management & Research Company,
Inc. (the "Investment Adviser").
The Investment Adviser presented detailed information to the Board requested by
the Independent Trustees. Such information included (i) information confirming
the financial condition of the Investment Adviser and the Investment Adviser's
profitability derived from its relationship with the Fund; (ii) a description of
the personnel and services provided by the Investment Adviser; (iii) comparative
information on investment performance; and (iv) information regarding brokerage
and portfolio transactions.
The Board reviewed and discussed financial information provided by the
Investment Adviser, including fees, income and expenses, and the Investment
Adviser's profitability derived from its relationship with the Fund. The Board
determined that the Investment Adviser is solvent and is in a position to
perform the ongoing responsibilities to the Fund and to satisfy its obligations
under the Act and the advisory agreement.
The Board reviewed the advisory fee and the effective investment advisory fee
rate paid by the Fund and the appropriateness of such advisory fee. The Board
reviewed and considered any economies of scale which might be realized by the
Fund and how the current advisory fee for the Fund reflects the economies of
scale for the benefit of the shareholders of the Fund.
The Board also reviewed and considered the fees or other payments received by
the Investment Adviser. The Board reviewed and considered comparison of fees
charged by investment advisers to fund peers of the Fund. The Board also
considered and reviewed information regarding brokerage.
The Board reviewed and considered the qualifications of the current and
anticipated portfolio managers to manage the portfolio of the Fund, including
their history managing investments generally and growth oriented investments in
particular, as well as the background and expertise of the key personnel and
amount of time they would be able to devote to the affairs of the Fund. The
Board concluded, in light of the particular requirements of the Fund, that it
was satisfied with the professional qualifications and overall commitment to
the Fund of the anticipated portfolio management team.
The Board considered the nature, extent and quality of services rendered to the
Fund by the Investment Adviser and the investment performance of the Fund based
on the data provided which included comparisons with index data and data
concerning performance relative to other funds with generally similar objectives
and management policies. The Board determined that in light of the data taken as
a whole and the nature of the investment program of the Fund, the investment
performance was reasonable and acceptable. The Board discussed the Investment
Adviser's profitability, and it was determined to be reasonable, given the
services rendered and the Fund's performance and services provided. The Board
concluded that the Fund's fees paid to the Investment Adviser were reasonable
in light of comparative performance and advisory fee information, costs of the
services provided and profits to be realized and benefits derived by the
Investment Adviser from the relationship with the Fund.
Trustees
- -------------------------------------------------------------------------------
William A. Oates, Jr. John C. Emery
Michael Baldwin
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
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.
Not applicable for semi-annual report.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual report.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual report.
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 Managers 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.
The registrant has not adopted procedures for the submission of nominees for
Trustee.
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: September 10, 2009
By (Signature and Title)
Gordon C. Barrett
Chief Financial Officer
(principal financial officer)
Date: September 10, 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: September 10, 2009
By (Signature and Title)
Gordon C. Barrett
Chief Financial Officer
(principal financial officer)
Date: September 10, 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 second fiscal quarter
of the period covered by this 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: September 10, 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 second fiscal quarter
of the perio covered by this 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: September 10, 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 June 30, 2009 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: September 10, 2009
William A. Oates, Jr.
President
(Principal Executive Officer)
Dated: September 10, 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.