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)
100 High Street
Boston, MA 02110
(Address of principal executive offices) (Zip code)
David Randall
100 High 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, 2009
Date of reporting period: December 31, 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
Annual Report
For the Year Ended
December 31, 2009
Table of Contents
Letter to Shareholders . . . . . . . . . . . . . . . . . . . 2
Fund Performance. . . . . . . . . . . . . . . . . . . . . . . 4
Schedule of Investments . . . . . . . . . . . . . . . . . . . 9
Financial Statements . . . . . . . . . . . . . . . . . . . . 14
Notes to the Financial Statements. . . . . . . . . . . . . . 15
Report of Independent Registered Public
Accounting Firm . . . . . . . . . . . . . . . . . . . .. . . 19
Trustees & Officers . . . . . . . . . . . . . . . . . .. . . 20
Dear Fellow Shareholders:
We are happy to report that 2009 ended firmly in positive territory with
Northeast Investors Growth Fund +29.05%, outperforming the S&P 500 Index, which
was +26.47%. Volatility peaked in the early part of the year, as market indices,
including the S&P 500 Index, bottomed in early March. From this point, however,
with the aid of substantial fiscal and monetary support from both the US and
world governments, markets across the globe rallied sharply, with a trough to
peak movement on the S&P 500 Index of more than 60% for the year.
By keeping the target on short-term interest rates low, and through substantial
quantitative easing, the Fed helped to stabilize domestic markets. As the credit
markets steadied, businesses were able to access credit more easily than was
possible under the conditions seen at the end of 2008. As the year progressed,
corporate profits stabilized, though much was due to aggressive cost-cutting
across the board. There were also nascent signs of recovery in the housing
market and employment.
In a reversal of 2008's market performance, where defensive sectors and holdings
did better relative to the market, the best performing sectors in 2009 were
those that would benefit from a recovering US and world economy, namely the more
cyclical Technology, Materials, and Consumer Discretionary sectors. The Fund's
performance was aided significantly by its overexposure to the first two of
these areas.
On an absolute level, the Fund's investments in the Materials sector, Freeport
McMoran (+232%), Vale SA (+145%), and BHP Billiton (+84%), ranked in the top 10
performers for the year. This contributed to the Fund outperforming the overall
return in the Materials sector for the S&P 500 Index. Near the latter part of
the year, we broadened our exposure in the Materials sector with the addition of
Kinross Gold, a gold mining company, and US Steel Corp. If one were to look at
the Fund's holdings over the past ten years, we have not held meaningful
weightings in this area. Over the past four years, we have initiated and
increased our holdings on the thesis that they will benefit from global growth
dynamics. Currently, we hold greater than a market weight in this sector.
Performance within the Technology sector was helped by both stock selection and
sector allocation in 2009. Long-term holdings in the sector- Apple, up over
140%, Corning, up more than 100%, Google, up close to 100%, and Akamai, putting
in a strong finish for the year at up more than 65% - all appeared in the top 10
performers for the year. We maintained a slightly greater than market exposure
to Technology during the year, and our stock selection, on average, outperformed
the market. We continue to like our Technology holdings, but have pared exposure
coming into year end.
Investments in Financials also contributed positively to performance this year.
During the year, we added back and added to names held at earlier times: Bank of
America, Fifth Third Bancorp, Goldman Sachs, JP Morgan and Wells Fargo & Co.
Within the Financials, our investments in Goldman Sachs Group (up over 100%),
and CME Group Inc., (up about 65%) did best. Still we have seen strong recovery
across the group and maintain an overweighting to this area.
Our underweighting to areas like Telecoms and Utilities helped performance
relative to the S&P 500 Index, as these defensive categories were the bottom
performing sectors in the Index. An area in which we did underperform relative
to the S&P 500 was the Consumer Discretionary sector. This area, despite the
still significant headwinds against the consumer, was a strong performer. We
were underweighted in this area, and our choices, McDonalds, Nike, and Amazon,
on average underperformed in a sector where companies like Ford Motors rose from
the ashes.
Looking ahead, we remain cautious but optimistic in our investment outlook. We
have seen better than expected earnings reports, GDP turn positive for the year,
and some recovery in the housing market in terms of prices and sales. There are
still challenges in the economy, particularly when one considers the high level
of unemployment in the US, the continued deleveraging of the consumer, and
concerns over the high level of debt our government has assumed to aid this
recovery. We expect the coming year to be more moderate in its returns and do
not expect the top performers to remain firmly in the cyclical sectors.
With 2009 being buoyed by the extraordinary fiscal and monetary policy measures,
it is likely that 2010 will be colored by the expectation that the government
will need to begin to withdraw from this supportive position at some point. This
withdrawal may necessarily have a dampening effect upon the markets as rates are
raised or monetary or fiscal policy becomes less accommodative. We would argue
that these moves are, at some point, necessary. The level of debt we see now
represents a significant burden upon our tax-paying citizens and the question is
not if, but when these moves will be made.
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.
December 2009
Average Annual Total Return
One year ended December 31, 2009 . . . . . . . . . . . . . . . . . . . 29.05%
Five years ended December 31, 2009. . . . . . . . . . .. . . . . . . . . 0.87%
Ten years ended December 31, 2009 . . . . . . . . . . .. . . . . . . . . 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, 1999 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>
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Northeast
Investors
Growth $8,504 $7,046 $5,448 $6,995 $7,594 $8,458 $9,240 $10,524 $6,145 $7,930
Fund
Standard
& Poor's $9,090 $8,010 $6,240 $8,029 $8,903 $9,340 $10,815 $11,408 $7,187 $9,089
500 Index
</table>
Returns and Per Share Data
<table>
<s> <c> <c> <c> <c>
Year Ended December 31,
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Net Asset Value 20.23 15.43 11.91 15.26 16.52 18.40 20.10 20.19 11.74 15.15
Income Dividend 0.00 0.00 0.02 0.03 0.05 0.00 0.00 0.04 0.05 0.00
Capital Gains Dist. 2.05 1.44 0.00 0.00 0.00 0.00 0.00 2.60 0.00 0.00
NEIG Return(%) 14.96 17.15 22.67 28.39 8.56 11.38 9.24 13.90 41.61 29.05
S&P 500 Return(%) 9.10 11.88 22.10 28.68 10.88 4.91 15.79 5.48 37.00 26.47
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
<table>
<s> <c> <c> <c> <c>
Beginning Account Value Ending Account Value Expenses Paid During Period
6/30/2009 12/31/2009 6/30/2009 - 12/31/2009
Actual Return
22.37% $1,000.00 $1,223.75 $9.13
Hypothetical
(5% return per year before
expenses) $1,000.00 $1,017.12 $8.15
</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 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, 6/30/2009 - 12/31/2009.
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 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, 2009
Market Percent of
Value Net Assets
Apple, Inc. . . . . . . . . . . . . . . $3,508,688 3.80%
Google, Inc., Class A . . . . . . . . . 3,347,892 3.62%
Corning, Inc. . . . . . . . . . . . . . 2,975,671 3.22%
Goldman Sachs Group . . . . . . . . . . 2,600,136 2.82%
Emerson Electric Co. . . . . . . . . . . 2,530,440 2.74%
United Technologies Corp. . . . . . . . 2,422,409 2.62%
American Tower Corp., Class A. . . . . . 2,399,495 2.60%
International Business Machines Corp. . 2,356,200 2.55%
Akamai Technologies, Inc. . . . . . . . 2,354,086 2.55%
Deere & Co. . . . . . . . . . . . . . . 2,301,530 2.49%
Summary of Sector Weightings as a Percentage of Net Assets
December 31, 2009
Market Northeast Investors S&P 500
Major Sectors Value Growth Fund Index
Consumer Discretionary . . . . . . $ 5,095,742 5.52% 9.58%
Consumer Staples . . . . . . . . . $ 8,656,338 9.37% 11.36%
Energy . . . . . . . . . . . . . . .$14,958,653 16.20% 11.48%
Financials . . . . . . . . . . . . .$16,043,976 17.37% 14.38%
Health Care. . . . . . . . . . . . $ 4,899,457 5.30% 12.63%
Industrials . . . . . . . . . . . . $11,363,849 12.30% 10.24%
Information Technology . . . . . . $19,986,297 21.64% 19.86%
Materials . . . . . . . . . . . . . $ 6,565,125 7.11% 3.60%
Telecommunication Services . . . . .$ 4,255,205 4.61% 3.16%
Utilities . . . . . . . . . . . . . $ - 0.00% 3.71%
Cash, other assets and liabilities $ 539,136 0.58% 0.00%
------------- ------
100.00% 100.00%
Summary of Net Assets by Industry
December 31, 2009
Market % of
Value Net Assets
Common Stocks
Aerospace & Defense . . . . . . . . . . . . $ 2,422,409 2.62%
Asset Management & Custodian . . . . . . . . . 4,502,911 4.88%
Automobile Manufacturers . . . . . . . . . . . 975,000 1.06%
Communications Equipment . . . . . . . . . . . 6,996,691 7.58%
Computer Hardware . . . . . . . . . . . . . . 5,864,888 6.35%
Construction & Farming . . . . . . . . . . . . 2,301,530 2.49%
Diversified Banks . . . . . . . . . . . . . . 1,268,530 1.37%
Diversified Financial Services . . . . . . . . 4,138,455 4.48%
Diversified Minerals . . . . . . . . . . . . . 2,761,370 2.99%
Drug Retail . . . . . . . . . . . . . . . . . 1,534,162 1.66%
Electrical Components & Equipment . . . . . .. 2,530,440 2.74%
Footwear . . . . . . . . . . . . . . . . . . . 2,153,882 2.33%
Health Care Services . . . . . . . . . . . . . 2,203,179 2.39%
Household Products . . . . . . . . . . . . . . 1,776,459 1.92%
Hypermarkets & Super Centers . . . . . . . . . 1,582,797 1.71%
Industrial Conglomerate . . . . . . . . . . . 1,860,990 2.02%
Industrial Machinery . . . . . . . . . . . . . 2,248,480 2.44%
Integrated Oil & Gas . . . . . . . . . . . . . 5,633,610 6.10%
Integrated Telecommunication Services . . . . 1,855,710 2.01%
Internet Software & Services . . . . . . . . . 5,701,978 6.17%
Investment Bank & Brokerage . . . . . . . . . 2,600,136 2.82%
Metals & Mining . . . . . . . . . . . . . . . 2,646,235 2.87%
Oil & Gas Equipment . . . . . . . . . . . . . 3,512,669 3.80%
Oil & Gas Exploration . . . . . . . . . . . . 5,812,374 6.29%
Packaged Foods. . . . . . . . . . . . . . . . 2,127,400 2.30%
Pharmaceuticals . . . . . . . . . . . . . . . 2,696,278 2.92%
Regional Banks . . . . . . . . . . . . . . . . 1,803,750 1.95%
Restaurants . . . . . . . . . . . . . . . . . 1,966,860 2.13%
Soft Drinks . . . . . . . . . . . . . . . . . 1,635,520 1.77%
Specialized Finance . . . . . . . . . . . . . 1,730,194 1.87%
Steel . . . . . . . . . . . . . . . . . . . . 1,157,520 1.25%
Systems Software . . . . . . . . . . . . . . . 1,422,740 1.54%
Wireless Services . . . . . . . . . . . . . . 2,399,495 2.60%
---------- -------
Total Common Stocks . . . . . . . . . . . . .$91,824,642 99.42%
Total Cash Equivalents. . . . . . . .. . . . . 7,088,709 7.67%
---------- -------
Total Investment Portfolio . . . . .. . . . . 98,913,351 107.09%
Net Other Assets and Liabilities. . . . . . . (6,549,573) 7.09%
---------- -------
Total Net Assets . . . . . . . . . . . . . . $92,363,778 100.00%
Schedule of Investments December 31, 2009
Number Market Percent
Common Stock Sector of Value of Net
Name of Issuer Shares (Note B) Assets
Consumer Discretionary
- -------------------------------------------------------------------------------
Ford Motor Co. . . . . . . . . . . . . .97,500 $ 975,000
McDonald's Corp.* . . . . . . . . . . . 31,500 1,966,860
Nike, Inc. . . . . . . . . . . . .. . . 32,600 2,153,882
----------
5,095,742 5.52%
Consumer Staples
- -------------------------------------------------------------------------------
Costco Wholesale Corp. . . . . . . . . 26,750 $ 1,582,797
CVS Caremark Corp.* . . . . . . . . . . 47,630 1,534,162
Nestle SA* . . . . . . . . . . . . . . 44,000 2,127,400
PepsiCo, Inc.* . . . . . . . . . . . . 26,900 1,635,520
Procter & Gamble Co.* . . . . . . . . . 29,300 1,776,459
----------
8,656,338 9.37%
Energy
- -------------------------------------------------------------------------------
Apache Corp. . . . . . . . . . . . . . .22,000 2,269,740
Cenovus Energy, Inc. . . . . . . . . . 30,600 771,120
Chevron Corp.* . . . . . . . . . . . . 25,700 1,978,643
EnCana Corp. . . . . . . . . . . . . . 30,600 991,134
Exxon Mobil Corp.* . . . . . . . . . . 22,582 1,539,866
National Oilwell Varco, Inc. . .. . . . 28,000 1,234,520
Occidental Petroleum Corp. . . . . . . 26,000 2,115,100
Petroleo Brasileiro, ADR . . . . . . . 42,000 1,780,380
Schlumberger Ltd. . . . . . . . . . . . 35,000 2,278,150
----------
14,958,653 16.20%
Financials
- -------------------------------------------------------------------------------
Bank of America Corp. . . . . . . . . .124,000 1,867,440
CME Group, Inc. . . . . . . . . . . . . 5,150 1,730,194
Eaton Vance Corp.* . . . . . . . . . . 54,600 1,660,386
Fifth Third Bancorp . . . .. . . . . . 185,000 1,803,750
Goldman Sachs Group . . . . . . . . . . 15,400 2,600,136
JPMorgan Chase & Co. . . . . . . . . . 54,500 2,271,015
Northern Trust Corp. . . . . . . . . . 20,000 1,048,000
T. Rowe Price Group, Inc.* . . . . . . 33,700 1,794,525
Wells Fargo & Co. . . . . . . . . . . . 47,000 1,268,530
----------
16,043,976 17.37%
Health Care
- -------------------------------------------------------------------------------
Athenaheatlh, Inc. . . . . . . . . . . .22,000 995,280
Johnson & Johnson . . . . . . . . . . . 21,800 1,404,138
Medco Health Solutions, Inc. . . . . . 18,900 1,207,899
Teva Pharmaceutical . . . . . . . . . . 23,000 1,292,140
----------
4,899,457 5.30%
Industrials
- -------------------------------------------------------------------------------
Danaher Corp.* . . . . . . . . . . . . .29,900 2,248,480
Deere & Co.*# . . . . . . . . . . . . . 42,550 2,301,530
Emerson Electric Co.*. . . . . . . . . 59,400 2,530,440
General Electric Co. . . . . . . . . . 123,000 1,860,990
United Technologies Corp.* . . . . . . 34,900 2,422,409
----------
11,363,849 12.30%
Information Technology
- -------------------------------------------------------------------------------
Akamai Technologies, Inc.^# . . . . . . 92,900 $ 2,354,086
Apple, Inc.^ . . . . .. . . . . . . . . 16,650 3,508,688
Cisco Systems, Inc.^ . . . . .. . . . . 95,500 2,286,270
Corning, Inc.* . . . . . . . . . . . . 154,100 2,975,671
Google, Inc., Class A*^ . . . . . . . . 5,400 3,347,892
International Business Machines Corp. . 18,000 2,356,200
Oracle Corp. . . . . . . . . . . . . . 58,000 1,422,740
Qualcomm, Inc. . . . . . . . . . . .. . 37,500 1,734,750
----------
19,986,297 21.64%
Materials
- -------------------------------------------------------------------------------
BHP Billiton Ltd.#. . . . . . . . .. . 19,000 1,455,020
Freeport-McMoran Copper & Gold, Inc. . 21,500 1,726,235
Kinross Gold Corp. . . . . . . . . . . 50,000 920,000
United States Steel Corp.# . . . . . . 21,000 1,157,520
Vale SA# . . . . . . . . . . . . . . . 45,000 1,306,350
----------
6,565,125 7.11%
Telecommunication Services
- -------------------------------------------------------------------------------
America Movil, ADR . . . . . . . . . . .39,500 1,855,710
American Tower Corp., Class A^ . .. . . 55,531 2,399,495
----------
4,255,205 4.61%
Total Common Stocks (Cost-$75,891,797). . . . . . . $91,824,642 99.42%
Repurchase Agreement
- -------------------------------------------------------------------------------
State Street Bank & Trust Co. Repurchase
Agreement, 0.01% due 1/4/10 @. . . . . . . . . . . . . 611,334
--------
Total Repurchase Agreement (Cost-$611,334). . . . $ 611,334 0.66%
Cash Equivalents
- -------------------------------------------------------------------------------
State Street Bank & Trust Navigator Prime~ . . . . . 6,477,375
----------
Total Cash Equivalents (Cost-$6,477,375) . . . . . .$ 6,477,375 7.01%
Total Investment Portfolio (Cost-$82,980,506) . . . .98,913,351 107.09%
----------
Net Other Assets and Liabilities . . . . . . . . . . (6,549,573) 7.09%
Total Net Assets. . . . . . . . . . . . . . . . . . $92,363,778 100.00%
* 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 December 31, 2009. Collateralized by $633,336 of market value of
U.S. Government mortgage-backed securities due through 12/25/2038. The
maturity value is $611,335
~ Security held as collateral for securities on loan
The accompanying notes are an integral part of the financial statements.
Statement of Assets and Liabilities
December 31, 2009
Assets
- -------------------------------------------------------------------------------
Investments - at market value (including securities loaned of $6,300,021)
(cost $82,980,506) . . . . . . . . . . . . . . .. . . . . . . . . . $98,913,351
Dividends receivable . . . . . . . . . . . . . . . . . . . . . . . . . . 77,893
Receivable for shares sold. . . . . . . . . . . . . . . . . . . . . . . . 50
Other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,102
-----------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,010,396
Liabilities
- -------------------------------------------------------------------------------
Collateral on securities loaned, at value . . . . . . . . . . . . . . 6,477,375
Payable for shares repurchased . . . . . . . . . . . . . . . . . . . . . 49,434
Accrued investment advisory fee . . . . . . . . . . . . . . . . . . . . 47,507
Accrued audit expense . . . . . . . . . . . . . . . . . . . . . . . . . 44,477
Accrued other expenses . . . . . . . . . . . . . . . . . . . . . . . . . 27,825
----------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 6,646,618
Net Assets . . . . . . . . . . . . . . . . . .. . . . . . . . . . . $92,363,778
Net Assets Consist of:
Capital paid-in . . . . . . . . . . . . . . . . . . . . . . . . . . $84,069,680
Undistributed net investment income . . . . . . . . . . . . . . . . . . 134,876
Accumulated net realized gain (loss) . . . . . . . . . . . . . . . . (7,773,623)
Net unrealized appreciation (depreciation) of investments .. . . . . 15,932,845
-----------
Net Assets . . . . . . . . . . . . . . . . . .. . . . . . . . . . . $92,363,778
Net Asset Value, offering price and redemption price per share
($92,363,778/6,097,435 shares) . . . . . . . . . . . . . . . . . . . . . $15.15
The accompanying notes are an integral part of the financial statements.
Statement of Operations
Year Ended December 31, 2009
Investment Income
Dividend Income . . . . . . . . . . . . . . . . . . . . . . . . . . $1,401,976
Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,913
Security Lending Income . . . . . . . . . . . . . . . . . . . . . . . . . 2,958
Other Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,428
----------
Total Income . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 1,446,275
Expenses
Investment advisory fee . . . . . . . . . . . . . . . . . . . . . . . $509,131
Administrative expenses and salaries . . . . . . . . . . . . . .. . . . 326,064
Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 113,975
Audit fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,840
Printing, postage, and stationery . . . . . . . . . . . . . . . . . . . 60,625
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,975
Computer and related expenses . . . . . . . . . . . . . . . . . . . . . 39,750
Registration and Filing fees . . . . . . . . . . . . . . . . . . . . . . 36,275
Trustee fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Commitment fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,836
Telephone expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,250
Custodian fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,510
Interest fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,543
Miscellaneous fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,625
----------
Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,311,399
----------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . $134,876
----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from investment transactions . . . . . . . $(4,375,255)
Change in unrealized appreciation (depreciation) of investments . . 25,837,129
----------
Net gain (loss) on investments . . . . . . . . . . . . . . . . . . . 21,461,874
----------
Net increase (decrease) in net assets resulting from operations . . $21,596,750
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,
2009 2008
Increase (Decrease) in Net Assets
From Operations:
Net investment income (loss) . . . . . .. . . . . . . . . . . . . . . . $134,876 $328,460
Net realized gain (loss) from investment transactions . . . . . . . . (4,375,255) (3,398,368)
Change in unrealized appreciation (depreciation) of investments . . . 25,837,129 (55,730,920)
---------- ----------
Net Increase (Decrease) in Net Assets
Resulting from Operations . . . . . . . . . . . . . . . . . . . . . . 21,596,750 (58,800,828)
---------- ----------
Distributions to Shareholders
From net investment income . . . . . . . . . . . . . . . . . . . . . . . . . - (328,460)
---------- ----------
Total Distributions to Shareholders . . . . . . . . . . . . . . . . . . . - (328,460)
From Net Fund Share Transactions . . . . . . . . . . . . . . . . . . .(7,686,398) (7,856,946)
---------- ---------
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . 13,910,352 (66,986,234)
Net Assets:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . 78,453,426 145,439,660
---------- -----------
End of Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . $92,363,778 $78,453,426
---------- -----------
---------- -----------
Undistributed Net Investment Income . . . . . . . . . . . . . . . . . . $134,876 -
The accompanying notes are an integral part of the financial statements.
</table>
Financial Highlights
<table>
<s> <c> <c> <c> <c>
Year Ended December 31,
Per Share Data^ 2009 2008 2007 2006 2005
Net Asset Value:
Beginning of Period . . . . . . . . . . . . $11.74 $20.19 $20.10 $18.40 $16.52
Income From Investment Operations:
Net investment income (loss) . . . . . . . . . 0.02 0.05 0.02 0.01 (0.02)
Net realized and unrealized gain (loss) on
investment . . . . . . . . . . . . . . . . . . .3.39 (8.45) 2.71 1.69 1.90
----- ----- ----- ----- -----
Total from investment operations . . . . . . . 3.41 (8.40) 2.73 1.70 1.88
Less Distributions:
Net investment income. . . . . . . . . . . . 0.00 (0.05) (0.04) 0.00 0.00
Capital Gain . . . . . . . . . . . . . . . . . .0.00 0.00 (2.60) 0.00 0.00
----- ----- ----- ----- -----
Total Distributions . . . . . . . . . . . . . . 0.00 (0.05) (2.64) 0.00 0.00
Net Asset Value:
End of Period . . . . . . . . . . . . . . . . $15.15 $11.74 $20.19 $20.10 $18.40
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total Return . . . . . . . . . . . . . . . . 29.05% -41.61% 13.90% 9.24% 11.38%
Ratios & Supplemental Data
Net assets end of period (in thousands) . . $92,364 $78,453 $145,440 $139,927 $134,412
Ratio of operating expenses to average net
assets (includes interest expense). . . . . 1.60% 1.27% 1.10% 1.15% 1.18%
Ratio of interest expense to average net
assets . . . . . . . . . . . . . . . . . . . . 0.00%* 0.00%* 0.01% 0.00%* 0.00%*
Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . . 0.16% 0.29% 0.11% 0.08% -0.15%
Portfolio turnover rate . . . . . . . . . . . . .36% 45% 40% 52% 57%
^ 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, 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. 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, 2009 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.
The Fund has reviewed the tax positions for the open tax years as of December
31, 2009 and has determined that no provision for income tax is required in the
Fund's financial statements. The Fund's federal tax returns for the prior three
fiscal years remain subject to examination by the Internal Revenue Service.
\
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.
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.
Messrs. John C. Emery, Michael Baldwin, and F. Washington Jarvis, the Fund's
disinterested trustees, are not officers or directors of the Advisor. The
compensation of all disinterested trustees of the Fund is borne by the Fund.
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 $29,325,898 and $35,124,072, respectively,
for the year ended December 31, 2009.
Note E-Shares of Beneficial Interest
At December 31, 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>
December 31, 2009 December 31, 2008
Shares Amount Shares Amount
Shares sold . . . . . . . . . . . . . . 261,500 $3,181,058 384,741 $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
-------- ---------- ------- ----------
261,500 $3,181,026 409,626 $6,648,566
Shares repurchased . . . . . . . . . . (848,930) $(10,867,456) (929,233) $(14,505,512)
-------- ---------- ------- -----------
Net Increase. . .. . . . . . . . . . . (587,430) $ (7,686,398) (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 December 31, 2009, the Fund had an unused line of credit
amounting to $10,000,000. In addition the Fund pays a commitment fee of 0.15%
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, 2009:
Average amount outstanding (total of daily outstanding principal balances
divided by number of days with debt outstanding during the period) . $1,112,943
Weighted average interest rate . . . . . . . .. . . . . . . . . . . . . . 0.80%
Note H-Additional Tax Information
Dividends paid during the fiscal year ended December 31, 2008 and the year ended
December 31, 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:
2009
----
Undistributed ordinary income . . . . . . . . . . . . . . . . .. . . $ 134,876
Capital loss carryforward* . . . . . . . . . . . . . . . . . . . . (7,658,091)
Unrealized gains (losses) - net . . . . . . . . . . . . . . . . . . 15,817,313
-----------
Total accumulated earnings (losses) - net . . . . . . . . . . .. . $ 8,294,098
* The capital loss carryforward will expire as follows:
Expiration
Year Amount
- ---- ----------
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (864,347)
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,793,744)
At December 31, 2009 the Fund's aggregate security unrealized gains and losses
based on cost for U.S. federal income tax purposes was as follows:
2009
----
Tax cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $83,096,038
Gross unrealized gain. . . . . . . . . . . . . . .. . . . . . . . . 17,662,167
Gross unrealized loss . . . . . . . . . . . . . . . . . . . . . . . (1,844,854)
------------
Net unrealized security gain (loss) . . . . . . . . . . . . . . . $15,817,313
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, 2009, the value
of securities loaned and the value of collateral was $6,300,021 and $6,477,375,
respectively. During the year ended December 31, 2009, income from securities
lending amounted to $2,958.
Note J-Fair Value Measurements
Accounting Standards Codification ASC 820, "Fair Value Measurements and
Disclosures" (ASC 820) established a fair value hierarchy that distinguishes
between market data obtained from independent sources (observable inputs) and
the Fund's own market assumptions (unobservable inputs). The inputs or
methodologies used for valuing securities are not necessarily an indication of
the risk associated with investing in those securities. The various inputs that
may be used to determine the value of the Fund's investments are summarized in
the following fair value hierarchy:
Level 1 - Unadjusted 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, 2009,
based on the inputs used to value them.
Level 1 Level 2 Level 3 Total
Common Stock . . . .. $91,824,642 - - $91,824,642
Cash Equivalents . . .$ 6,477,375 - - $ 6,477,375
Repurchase Agreement . . . .- $611,334 - $ 611,334
--------- ------- -------- -----------
$98,302,017 $611,334 - $98,913,351
Note K-Review for Subsequent Events
In accordance with the provisions set forth in Accounting Standards Codification
ASC 855 "Subsequent Events", adopted by the Fund as of December 31, 2009, events
and transactions from January 1, 2010 through February 18, 2010, 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.
Report of Independent Registered Public
Accounting Firm
The Board of Trustees and Shareholders of
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, 2009, 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, 2009, 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, 2009, 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, 2010
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 100 High Street, Boston, MA 02110-2301.
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: 67 Northeast Investors Growth
Years of Service: 29 Fund; President and Director of
Northeast Investment
Management, Inc.
Gordon C. Barrett Senior Vice President, Chief Chief Financial Officer of
Age: 53 Financial Officer, and Chief Northeast Investors Growth
Years of Service: 16 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: 70 Chief Legal Officer Trust; Officer of Northeast
Years of Service: 29 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: 79 Worcester
Years of Service: 29
Michael Baldwin Trustee Partner, Baldwin Brothers,
Age: 69 Registered Investment Advisor
Years of Service: 10
F. Washington Jarvis Trustee Headmaster Emeritus at
Age: 70 Roxbury Latin School
Years of Service: 6
* 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.
100 High 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
100 High 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
100 High 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, 2009 and December 31, 2008 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 $52,410,
and $50,880 respectively.
(b) Audit-Related Fees The aggregate fees billed for the
registrant's fiscal year ended December 31, 2009 and December 31, 2008 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 $21,270 and
$20,650 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, 2009 and December 31, 2008 for professional
services rendered by the registrant's principal accountant for tax matters were
$8,760 and $8,500 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, 2009
and 2008 the aggregate fees billed for other services rendered by the
registrant's principal accountant were $0.
(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 for its fiscal year
ended December 31, 2009 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 10, 2010
By (Signature and Title)
Gordon C. Barrett
Chief Financial Officer
(principal financial officer)
Date: March 10, 2010
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 10, 2010
By (Signature and Title)
Gordon C. Barrett
Chief Financial Officer
(principal financial officer)
Date: March 10, 2010
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 10, 2010
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 10, 2010
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, 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: March 10, 2010
William A. Oates, Jr.
President
(Principal Executive Officer)
Dated: March 10, 2010
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.