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)
Robert Kane
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
Date of reporting period: June 30, 2011
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, 2011
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:
The first half of 2011 was a difficult period for Northeast Investors Growth
Fund. The Fund was +0.28% during this period, underperforming the S&P 500 Index,
which was +6.02%. Although we are disappointed with this short-term performance
we believe, over the longer term, the investments we hold in well-run, industry
leading companies that exhibit strong growth characteristics will prove to be a
winning hand.
The first half of the year began with favorable market trends, the
continuation of a rally that began at the end of August 2010 with the
introduction of a second round of quantitative easing by the Federal Reserve,
the extension of lower capital gains tax rates, and additional payroll tax cuts
at the end of December. These actions helped propel the market upward until the
end of April 2011. During this eight-month plus period, from August through
April, most pro-cyclical sectors such as Technology, Energy and the Industrial
areas did better relative to defensive names. Tactically, we were well
represented in these areas, and this helped performance as we ended 2010.
Events since April brought into question whether the economy would be able to
continue its positive growth trends. Problems continued to challenge developed
nations: high levels of unemployment, high levels of debt both on the consumer
and the government level, a continued weak housing market, the expected end of
expansionary monetary policy in June and possibly tighter fiscal policy. There
were shocks to the world economy that cropped up: the earthquake and tsunami in
Japan and political unrest in a number of countries in Africa and the Middle
East. Additionally, as the U.S. and other developed nations attempted to
stimulate flagging economies, governments of emerging economies tried to dampen
their growth slightly as inflation was a primary concern.
Near-term these macroeconomic factors weighed on our holdings as our portfolio
was positioned for a continuation of the economic expansion.We maintained heavy
exposures to cyclical sectors such as Industrial, Financials, Information
Technology, and Consumer Discretionary and less exposure to traditionally
defensive sectors such as Health Care, Staples, and Utilities. Long-term we
believe this environment represents an investment opportunity for us and are
confident that the products and services provided by the high quality, well
managed companieswe own will prevail. Thus, we decided at present to hold the
course.
Technology is an area where we continue to see strong long-term growth
prospects, though in the short-term the sector has not performed as well as the
S&P 500 Index. For example, through June, Google was down about 15%, trading at
a very reasonable price of about 15x earnings, with cash of about $120 per share
on its balance sheet. Though their business was initially built through search
engines, they have diversified into growing markets such as smart phones, and
have quickly become market leaders. Google detracted from Fund performance this
half, but long-term we continue to be excited about its prospects. Near-term,
this market weakness could be used to add to a wellcapitalized company at a very
reasonable valuation.
The Financial sector also detracted from Fund performance this half. It was the
bottom performing sector in the S&P 500, down around 4%. We chose to concentrate
our investments in commercial banks such as Citigroup, Wells Fargo and JP
Morgan; Page 2 investment banks like Goldman Sachs; and asset managers T. Rowe
Price and Eaton Vance. As concerns about the state of the global economy
increased and economic conditions faltered, these investments experienced a
significant decline and underperformed the S&P 500 Index. Still, longer-term as
the economy recovers, these businesses will recover as well. If it appears that
the earnings prospects of these investments have changed dramatically relative
to other investment choices, we will change course.
Among areas that performed well for us was Energy.We maintained a heavy
weighting in this sector as compared to the S&P 500 Index, which was a good
decision as this was the best performing sector for the Index during the first
half. Companies that did exceptionally well were National Oilwell Varco (+17%),
an oil drilling and service company, and Chevron (+14%), an integrated oil and
gas company. Consumers at home and abroad are dependent on oil, and though
demand may decrease if growth slows, longer-term there are few substitutes, so
again we presently intend to hold the course.
Health care, the second best sector performer in the S&P 500 Index, and an area
we tactically added to this year, held many favorable performers. Pfizer (+20%),
an addition last year, was the second best performer in the Fund, and Allergan
(+16%) was a relatively new addition. Favorable characteristics of our
investments in this area are diversified product portfolios which include
pharmaceuticals, generic drugs, consumer health products, and exposure to
consumers in emerging markets.
Our outlook for the balance of 2011 remains cautiously positive. We believe
equity market valuations are reasonable and offer a favorable risk/reward
opportunity. Corporate balance sheets are healthy and second quarter earnings
were very encouraging. Consumer balance sheets are being repaired. The U.S.
economy is exhibiting positive, though slow growth, and the U.S. government is
showing some signs that it is beginning to deal with its debt issues. Moreover,
our investments are in well-run, industry leading companies that exhibit strong
growth characteristics and have been purchased at what we believe to be
reasonable valuations. This is the reason for our judgment that over time, these
holdings will provide healthy returns to you, our shareholders.
We welcome and encourage you to contact us with any questions, concerns or
comments. Please call us directly or visit our website at
www.northeastinvest.com where you can view the Fund's closing price, portfolio
composition, and historical performance. If you follow your investments online,
the ticker symbol for the Fund is NTHFX. Our lines of communication are always
open to our most important partners, our fellow shareholders. We continue to
appreciate your support.
William A. Oates, Jr.
Nancy M. Mulligan
John F. Francini
Average Annual Total Return (unaudited)
One year ended June 30, 2011 . . . . . . . . . . . . . . 26.11%
Five years ended June 30, 2011 . . . . . . . . . . . . . 1.35%
Ten years ended June 30, 2011 . . . . . . . . . . . . . . 2.23%
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 return on the Standard & Poor's 500 Index, assuming an
investment of $10,000 in both at their closing prices on December 31, 2000 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 Fund's 2011 performance, including strategies and
market conditions which influenced such performance, see the portfolio managers'
letter to shareholders.
Table Omitted
<table>
<s> <c> <c> <c> <c>
Six Months
Ended
June 30,
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Northeast
Investors
Growth $8,285 $6,407 $8,226 $8,930 $9,946 $10,865 $12,375 $7,226 $9,325 $10,852 $10,883
Fund
Standard
& Poor's $8,812 $6,865 $8,833 $9,794 $10,275 $11,898 $12,550 $7,906 $9,999 $11,506 $12,199
500 Index
</table>
Returns and Per Share Data
<table>
<s> <c> <c> <c> <c>
Six Months
Ended
Year Ended December 31, June 30,
2011
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (unaudited)
Net Asset Value 15.43 11.91 15.26 16.52 18.40 20.10 20.19 11.74 15.15 17.60 17.65
Income Dividend 0.00 0.02 0.03 0.05 0.00 0.00 0.04 0.05 0.00 0.03 0.00
Capital Gains Dist. 1.44 0.00 0.00 0.00 0.00 0.00 2.60 0.00 0.00 0.00 0.00
NEIG Return (%) 17.15 22.67 28.39 8.56 11.38 9.24 13.90 41.61 29.05 16.38 0.28
S&P 500 Return (%) 11.88 22.10 28.68 10.88 4.91 15.79 5.48 37.00 26.47 15.07 6.02
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. NOTE:
Beginning August 29, 2011 the Fund's new website is www.northeastinvest.com
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
12/31/2010 6/30/2011 12/31/2010 - 6/30/2011
Actual Return
0.28% $1,000.00 $1,002.84 $6.89
Hypothetical
(5% return before expenses) $1,000.00 $1,018.03 $6.82
</table>
Example:
As a shareholder of the Fund, you incur ongoing costs, including management
fees, and other fund expenses. This example is intended to help you understand
these expenses of investing in the fund and to compare these costs with the
ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period, 12/31/2010 - 6/30/2011.
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 theexpenses 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 (unaudited)
June 30, 2011
Percent
Market of Net
Value Assets
-------------------------------------------------------------------------------
International Business Machines Corp. . . . . . $2,813,420 3.19%
Apple, Inc. . . . . . . . . . . . . . . .. . . . 2,668,577 3.03%
Schlumberger Ltd. . . . . . . . . . . . .. . . . 2,574,720 2.92%
Google, Inc., Class A. . . . . . . . . . . . . . 2,298,965 2.61%
United Technologies Corp. . . . . . . . .. . . . 2,292,409 2.60%
Danaher Corp. . . . . . . . . . . . . . .. . . . 2,246,776 2.55%
JPMorgan Chase & Co. . . . . . . . . . . . . . . 2,231,230 2.53%
National Oilwell Varco, Inc. . . . . . . . . . . 2,213,343 2.51%
American Tower Corp., Class A . . . . . .. . . . 2,168,084 2.46%
Emerson Electric Co. . . . . . . . . . . . . . . 2,160,000 2.45%
Summary of Sector Weightings as a Percentage of Net
Assets (unaudited)
June 30, 2011
Northeast
Market Investors S&P 500
Major Sectors Value Growth Fund Index
-------------------------------------------------------------------------------
Consumer Discretionary . . . . . . . . $11,210,238 12.71% 10.12%
Consumer Staples . . . . . . . . . . . $ 5,879,228 6.67% 11.53%
Energy . . . . . . . . . . . . . . . . $15,182,073 17.22% 10.68%
Financials . . . . . . . . . . . . .. . $11,416,789 12.95% 16.31%
Health Care. . . . . . . . . . . . .. . $ 9,323,980 10.58% 12.09%
Industrials . . . . . . . . . . . . . . $12,545,567 14.23% 10.38%
Information Technology . . . . . . .. . $16,441,825 18.65% 18.69%
Materials. . . . . . . . . . . . . .. . $ 3,515,885 3.99% 3.44%
Telecommunication Services . . . . . . $ 2,168,084 2.46% 3.00%
Utilities . . . . . . . . . . . . . . . $ -- 0.00% 3.76%
Cash, other assets and liabilities . . $ 484,791 0.54% 0.00%
------ ------
100.00% 100.00%
Summary of Net Assets by Industry (unaudited)
June 30, 2011
Market % of
Value Net Assets
-------------------------------------------------------------------------------
Common Stocks
Aerospace & Defense . . . . . . . . . . . . . . . . . . $2,292,409 2.60%
Asset Management & Custodian . . . . . . . . . . . . . . 3,684,016 4.18%
Automobile Manufacturers . . . . . . . . . . . . . . . . 1,689,275 1.91%
Communications Equipment . . . . . . . . . . . . . . . . 3,233,493 3.67%
Computer Hardware . . . . . . . . . . . . . . . . . . . 2,668,577 3.03%
Computer Storage & Peripherals . . . . . . . . . . . . . 1,556,575 1.76%
Construction & Farming. . . . . . . . . . . . . . . . . 2,081,862 2.36%
Dental Supplies . . . . . . . . . . . . . . . . . . . . 1,047,200 1.19%
Diversified Banks . . . . . . . . . . . . . . . . . . . 3,451,957 3.92%
Diversified Chemicals . . . . . . . . . . . . . . . . . 1,053,975 1.20%
Diversified Financial Services . . . . . . . . . . . . . 2,231,230 2.53%
Diversified Minerals . . . . . . . . . . . . . . . . . . 1,118,250 1.27%
Electrical Components & Equipment . . . . . . . . . . . 2,160,000 2.45%
Electronic Components . . . . . . . . . . . . . . . . . .1,962,015 2.23%
Food and Beeverage . . . . . . . . . . . . . . . . . . . 1,071,120 1.21%
Footwear . . . . . . . . . . . . . . . . . . . . . . . . 1,610,642 1.83%
Health Care Services . . . . . . . . . . . . . . . . . . 1,605,168 1.82%
Household Products . . . . . . . . . . . . . . . . . . . 1,354,041 1.54%
Industrial Conglomerate . . . . . . . . . . . . . . . . 1,697,400 1.93%
Industrial Machinery . . . . . . . . . . . . . . . . . . 2,246,776 2.55%
Integrated Oil & Gas. . . . . . . . . . . . . . . . . . .6,071,075 6.89%
Internet Retail . . . . . . . . . . . . . . . . . . . . 3,697,425 4.19%
Internet Software & Services . . . . . . . . . . . . . . 2,298,965 2.61%
Investment Banking & Brokerage. . . . . . . . . . . . . 2,049,586 2.32%
IT Consulting & Other Services . . . . . . . . . . . . . 2,813,420 3.19%
Metals & Mining . . . . . . . . . . . . . . . . . . . . 1,343,660 1.52%
Movies & Entertainment . . . . . . . . . . . . . . . . . 1,892,464 2.15%
Oil & Gas Equipment . . . . . . . . . . . . . . . . . .. 4,788,063 5.43%
Oil & Gas Exploration & Production . . . . . . . . . . . 4,322,935 4.90%
Packaged Foods . . . . . . . . . . . . . . . . . . . . . 1,559,500 1.77%
Pharmaceuticals . . . . . . . . . . . . . . . . . . . . .7,718,812 8.75%
Railroads . . . . . . . . . . . . . . . . . . . . . . . .2,067,120 2.34%
Restaurants . . . . . . . . . . . . . . . . . . . . . . 1,273,232 1.44%
Soft Drinks . . . . . . . . . . . . . . . . . . . . . . 1,894,567 2.15%
Systems Software . . . . . . . . . . . . . . . . . . . . 1,908,780 2.16%
Wireless Services . . . . . . . . . . . . . . . . . . . 2,168,084 2.46%
---------- -----
Total Common Stocks . . . . . . . . . . . . . . . . . . 87,683,669 99.45%
Total Cash Equivalents and Repurchase Agreement . . . . .6,353,189 7.21%
---------- -----
Total Investment Portfolio . . . . . . . . . . . .. . . 94,036,858 106.66%
Net Other Assets and Liabilities. . . . . . . . . . . . (5,868,398) 6.66%
---------- -----
Total Net Assets . . . . . . . . . . . . . . . . . . . $88,168,460 100.00%
Schedule of Investments June 30, 2011 (unaudited)
Number Market Percent
Common Stock Sector of Value of Net
Name of Issuer Shares (Note B) Assets
-------------------------------------------------------------------------------
Consumer Discretionary
-------------------------------------------------------------------------------
Amazon.com, Inc.^ . . . . . . . . . . . 8,600 $1,758,614
Dentsply International, Inc. # . . . . 27,500 1,047,200
Ford Motor Co. ^# . . . . . . . . . . 122,500 1,689,275
McDonald's Corp.* . . . . . . . . . . 15,100 1,273,232
Netflix, Inc. ^# . . . . . . . . . . . 3,900 1,024,491
Nike, Inc. . . . . . . . . . . . . . . 17,900 1,610,642
Opentable, Inc. ^# . . . . . . . . . . 11,000 914,320
Walt Disney Co. . . . . . . . . . . .. 48,475 1,892,464
----------
11,210,238 12.71%
Consumer Staples
-------------------------------------------------------------------------------
Green Mountain Coffee Roasters ^#. . . 12,000 1,071,120
Nestle SA * . . . . . . . . . . . . . 25,000 1,559,500
PepsiCo, Inc. * . . . . . . . . . . . 26,900 1,894,567
Procter & Gamble Co. * . . . . . . . . 21,300 1,354,041
----------
5,879,228 6.67%
Energy
-------------------------------------------------------------------------------
Apache Corp. . . . . . . . . . . . . . 16,400 2,023,596
Cenovus Energy, Inc. . . . . . . . . . 25,000 941,500
Chevron Corp. * . . . . . . . . . . . 18,500 1,902,540
EnCana Corp. . . . . . . . . . . . . . 44,100 1,357,839
Exxon Mobil Corp. * . . . . . . . . .. 25,782 2,098,139
National Oilwell Varco, Inc. . . . . . 28,300 2,213,343
Occidental Petroleum Corp. . . . . . . 19,900 2,070,396
Schlumberger Ltd. . . . . . . . . . .. 29,800 2,574,720
----------
15,182,073 17.22%
Financials
-------------------------------------------------------------------------------
Citigroup, Inc. . . . . . . . . . . .. 41,120 1,712,237
Eaton Vance Corp. * . . . . . . . . .. 54,600 1,650,558
Goldman Sachs Group . . . . . . . . .. 15,400 2,049,586
JPMorgan Chase & Co. . . . . . . . . . 54,500 2,231,230
T. Rowe Price Group, Inc. * . . . . .. 33,700 2,033,458
Wells Fargo & Co. . . . . . . . . . .. 62,000 1,739,720
----------
11,416,789 12.95%
Health Care
-------------------------------------------------------------------------------
Allergan, Inc. . . . . . . . . . . . . 23,400 1,948,050
Medco Health Solutions, Inc. ^ . . . . 28,400 1,605,168
Novartis AG, ADR . . . . . . . . . . . 32,000 1,955,520
Pfizer, Inc. . . . . . . . . . . . . . 89,000 1,833,400
Teva Pharmaceutical Industries Ltd. . 41,100 $1,981,842
----------
9,323,980 10.58%
Industrials
-------------------------------------------------------------------------------
Danaher Corp. * . . . . . . . . . .. . 42,400 2,246,776
Deere & Co. * . . . . . . . . . . .. . 25,250 2,081,862
Emerson Electric Co. * . . . . . . . . 38,400 2,160,000
General Electric Co. . . . . . . . . . 90,000 1,697,400
Union Pacific Corp. . . . . . . . .. . 19,800 2,067,120
United Technologies Corp. * . . . .. . 25,900 2,292,409
----------
12,545,567 14.23%
Information Technology
-------------------------------------------------------------------------------
Apple, Inc. ^ . . . . . . . . . . . . . 7,950 2,668,577
Corning, Inc. *. . . . . . . . . . .. 108,100 1,962,015
EMC Corp. ^# . . . . . . . . . . . . . 56,500 1,556,575
Google, Inc., Class A*^ . . . . . . . 4,540 2,298,965
International Business Machines Corp. 16,400 2,813,420
Juniper Networks, Inc. ^ . . . . . . . 45,500 1,433,250
Oracle Corp. . . . . . . . . . . . . . 58,000 1,908,780
Qualcomm, Inc. . . . . . . . . . . . . 31,700 1,800,243
----------
16,441,825 18.65%
Materials
-------------------------------------------------------------------------------
Dupont . . . . . . . . . . . . . . . . 19,500 1,053,975
Freeport-McMoRan Copper & Gold, Inc. . 25,400 1,343,660
Vale SA. . . . . . . . . . . . . . . . 35,000 1,118,250
----------
3,515,885 3.99%
Telecommunication Services
-------------------------------------------------------------------------------
American Tower Corp., Class A^ . . . . 41,431 2,168,084 2.46%
----------
Total Common Stocks (Cost--$65,055,624) . . . . . . . .$87,683,669 99.46%
Repurchase Agreement
-------------------------------------------------------------------------------
State Street Bank & Trust Co.
Repurchase Agreement, 0.01% due 7/1/10@. . . . . . . . 496,264
Total Repurchase Agreement (Cost--$496,264). . . . . . .$ 496,264 0.56%
Cash Equivalents
-------------------------------------------------------------------------------
State Street Bank & Trust Navigator Prime . . . . . . . 5,856,925
Total Cash Equivalents (Cost--$5,856,925). . . . . . $ 5,856,925 6.64%
Total Investment Portfolio (Cost--$71,408,813) . . . . 94,036,858 106.66%
Net Other Assets and Liabilities . . . . . . . . . . . (5,868,398) -6.66%
Total Net Assets . . . . . . . . . . . . . . . . . . $88,168,460 100.00%
-----------
-----------
* 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, 2011. Collateralized by $511,593, of market value of U.S.
Government Treasury Bills due through 11/25/40. The maturity value is $496,265
~ 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, 2011
Assets
-------------------------------------------------------------------------------
Investments--at market value (including securities loaned of $5,764,811)
(cost $71,408,813). . . . . . . . . . . . . . . . . . . . . . . . . $94,036,858
Dividends receivable . . . . . . . . . . . . . . . . . . . . . . . . . 116,625
Receivable for shares sold . . . . . . . . . . . . . . . . . . . . . . . . 925
-----------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,154,408
Liabilities
-------------------------------------------------------------------------------
Collateral on securities loaned, at value . . . . . . . . . . . . . . 5,856,925
Accrued audit expense . . . . . . . . . . . . . . . . . . . . . . . . . 48,702
Accrued investment advisory fee . . . . . . . . . . . . . . . . . . . . 43,581
Accrued other expenses. . . . . . . . . . . . . . . . . . . . . . . . . 26,111
Payable for shares repurchased . . . . . . . . . . . . . . . . . . . . . 10,629
-----------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 5,985,948
-----------
Net Assets . . . . . . . . . . . . . . . . . . . . .. . . . . . . . $88,168,460
-----------
-----------
Net Assets Consist of:
Capital paid-in . . . . . . . . . . . . . . . . . . . . . . . . . . $66,434,442
Undistributed net investment income . . . . .. . . . . . . . . . . . . . 87,863
Accumulated net realized gain/(loss) . . . . . . . . . . . . . . . . . (981,890)
Net unrealized appreciation/(depreciation) of investments . . . . . 22,628,045
-----------
Net Assets . . . . . . . . . . . . . . . . . . . . .. . . . . . . . $88,168,460
-----------
-----------
Net Asset Value, offering price and redemption price per share
($88,168,460/4,997,532 shares) . . . . . . . . . . . . . . . . . . . . . $17.65
The accompanying notes are an integral part of the financial statements.
Statement of Operations (unaudited)
Six Months Ended June 30, 2011
Investment Income
-------------------------------------------------------------------------------
Dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . $705,227
Security lending income. . . . . . . . . . . . . . . .. . . . . . . . . . 3,567
Other income . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 728
-------
Total Income . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 709,522
Expenses
-------------------------------------------------------------------------------
Investment advisory fee . . . . . . . . . . . . . . . . . . . . . . .. $277,680
Administrative expenses and salaries . . . . . . . . . . . . . . . . . 132,809
Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,075
Audit fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,725
Computer and related expenses . . . . . . . . . . . . . . . . . . . .. . 22,625
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 20,815
Printing, postage, and stationery . . . . . . . . . . . . . . . . . .. . 18,825
Registration and Filing fees . . . . . . . . . . . . . . . . . . . . . . 18,100
Trustee fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Custodian fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,705
Telephone expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,050
Commitment fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,996
Interest fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,729
Miscellaneous fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,525
-------
Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 621,659
-------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . . . . . 87,863
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from investment transactions. . . . . . . . $4,303,502
Change in unrealized appreciation (depreciation) of investments . . (4,082,600)
----------
Net gain (loss) on investments . . . . . . . . . . . . . . . . . . .. . 220,902
Net increase (decrease) in net assets resulting from operations . . . $308,765
----------
The accompanying notes are an integral part of the financial statements.
<table>
<s> <c> <c> <c> <c>
Statement of Changes in Net Assets
Six Months
Ended
June 30, Year Ended
2011 December 31,
(unaudited) 2010
Increase (Decrease) in Net Assets
From Operations:
Net investment income (loss) . . . . . . . . . . . . . . . . . . . .. . $87,863 $29,402
Net realized gain (loss) from investment transactions . . . . . . . . 4,303,502 2,488,231
Change in unrealized appreciation (depreciation) of investments . . .(4,082,600) 10,777,800
----------- ----------
Net Increase (Decrease) in Net Assets
Resulting from Operations . . . . . . . . . . . . . . . . . . . . . . . 308,765 13,295,433
----------- ----------
Distributions to Shareholders
From net investment income . . . . . . . . . . . . . . . . . . . . . . . . . -- (164,278)
----------- ----------
Total Distributions to Shareholders . . . . . . . . . . . . . . . . . . . -- (164,278)
From Net Fund Share Transactions . . . . . . . . . . . . . . . . . . (5,404,086) (12,231,152)
----------- -----------
Total Increase (Decrease) in Net Assets . . . .. . . . . . . . . . . (5,095,321) 900,003
Net Assets:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . 93,263,781 92,363,778
----------- -----------
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . $88,168,460 $93,263,781
----------- -----------
----------- -----------
Undistributed Net Investment Income . . . . . . . . . . . . . . . . . . $87,863 $0
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,
2011 Year Ended December 31,
Per Share Data ^ (unaudited) 2010 2009 2008 2007 2006
Net Asset Value:
Beginning of Period . . . . . . . . . . $17.60 $15.15 $11.74 $20.19 $20.10 $18.40
Income From Investment
Operations:
Net investment income (loss) . . . . . . . 0.02 0.01 0.02 0.05 0.02 0.01
Net realized and unrealized gain (loss)
on investment . . . . . . . . . . . . . . . 0.03 2.47 3.39 (8.45) 2.71 1.69
------ ----- ----- ----- ----- -----
Total from investment operations . . . . 0.05 2.48 3.41 (8.40) 2.73 1.70
Less Distributions:
Net investment income . . . . . . . . . 0.00 (0.03) 0.00 (0.05) (0.04) 0.00
Capital Gain . . . . . . . . . . . . . . . . 0.00 0.00 0.00 0.00 (2.60) 0.00
------ ----- ----- ----- ----- -----
Total Distributions . . . . . . . . . . . . 0.00 -0.03 0.00 (0.05) (2.64) 0.00
Net Asset Value:
End of Period . . . . . . . . . . . . . . $17.65 $17.60 $15.15 $11.74 $20.19 $20.10
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Total Return. . . . . . . . . . . . . . . . . 0.28%# 16.38% 29.05% -41.61% 13.90% 9.24%
Ratios & Supplemental Data
Net assets end of period (in
thousands) . . . . . . . . . . . . . . . . $88,168 $93,264 $92,364 $78,453 $145,440 $139,927
Ratio of operating expenses to average
net assets (includes interest
expense) . . . . . . . . . . . . . . . . . . 1.36%~ 1.39% 1.60% 1.27% 1.10% 1.15%
Ratio of interest expense to average
net assets . . . . . . . . . . . . . . . . . 0.00%*~ 0.01% 0.00%* 0.00%* 0.01% 0.00%*
Ratio of net investment income to
average net assets . . . . . . . . . . . 0.21%~ 0.03% 0.16% 0.29% 0.11% 0.08%
Portfolio turnover rate . . . . . . . . . . . 14%# 15% 36% 45% 40% 52%
^ 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
and factors used to fair value securities may include, but are not limited to,
information of any recent sales, the analysis of the company's financial
statements, quotations or evaluated prices from broker-dealers and/or pricing
services and information obtained from analysts. 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 June 30, 2011
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, 2010 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 Page 15 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 $12,951,756 and $18,692,314, respectively,
for the six months ended June 30, 2011.
Note E-Shares of Beneficial Interest
At June 30, 2011, 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, 2011 December 31, 2010
------------- -----------------
Shares Amount Shares Amount
Shares sold . . . . . . . . . . . . . . 48,354 $867,064 94,619 $1,505,210
Shares issued to shareholders in
reinvestment of distributions
from net investment income
and realized gains from
security transactions. . . . . . . . -- -- 8,317 144,718
------ ------- ------ ---------
48,354 $867,064 102,936 $1,649,928
Shares repurchased . . . . . . . . . (350,019) $(6,271,150) (901,174) $(13,881,080)
-------- ----------- -------- ------------
Net Increase. . . . . . . . . . . . . (301,665) $(5,404,086) (798,238) $(12,231,152)
</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, 2011, the Fund had an unused line of credit amounting
to $10,000,000. 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, 2011:
Average amount outstanding (total of daily outstanding principal balances
divided by number of days with debt outstanding during the period) . . $370,849
Weighted average interest rate . . . . . . . . . . . . . . . . . . . . . 1.44%
Note H-Additional Tax Information
Dividends paid during the fiscal year ended December 31, 2010 were $164,278, and
such dividends were classified for tax purposes as ordinary income. There were
no dividends paid during the six months ended June 30, 2011
As of December 31, 2010 the components of accumulated earnings (losses) on a tax
basis were as follows:
2010
----
Capital loss carryforward* . . . . . . . . . . . . . . . . . . . . $ (4,274,091)
Timing Differences . . . . . . . . . . . . . . . . . . . . . . . . . . (592,955)
Unrealized gains (losses)--net . . . . . . . . . . . . . . . . . . . 26,292,299
-------------
Total accumulated earnings (losses)--net . . . . . . . . . . . . .. $21,425,253
*The capital loss carryforward will expire as follows:
Expiration
Year Amount
---- -----------
2017 . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . $(4,274,091)
At December 31, 2010 the Fund's Post October loss deferral was $(592,955).
At December 31, 2010 the Fund's aggregate security unrealized gains and losses
based on cost for U.S. federal income tax purposes was as follows:
2010
----
Tax cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $72,176,741
Gross unrealized gain. . . . . . . . . . . . . . . . . . . . . . . . 26,930,842
Gross unrealized loss . . . . . . . . . . . . . . .. . . . . . . . . . (638,543)
------------
Net unrealized security gain (loss) . . . . . . . . . . . . . . . . $26,292,299
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, 2011, the value of
securities loaned and the value of collateral was $5,764,811 and $5,856,925,
respectively. During the six months ended June 30, 2011, income from securities
lending amounted to $3,567.
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 June 30, 2011, based
on the inputs used to value them.
Level 1 Level 2 Level 3 Total
------- ------- ------- ------
Common Stock . . . .$87,683,669 -- -- $87,683,669
Cash Equivalents . . .5,856,925 -- -- 5,856,925
Repurchase Agreement . . . -- $496,264 -- 496,264
---------- -------- ------- ------------
$93,540,594 $496,264 -- $94,036,858
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 02110-1745.
The Fund's Statement of Additional Information (SAI) contains additional
information about the Trustees. To request a free copy prior to August 29, 2011,
call the Fund at 800-225-6704 or visit our website at
www.northeastinvestors.com. NOTE: Beginning August 29, 2011 the Fund's new
phone number is 855-755-NEIG (6344); the new website is www.northeastinvest.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: 69 President Investors Growth Fund; President and
Years of Service: 30 Director of Northeast Investment
Management, Inc.
Gordon C. Barrett Senior Vice Chief Financial Officer of Northeast
Age: 54 President, Chief Investors Growth Fund, Chief Financial
Years of Service: 17 Financial Officer Officer of Northeast Investors Trust, and
Officer of Northeast Investment
Management, Inc.
Robert B. Minturn Clerk, Vice Officer of Northeast Investors Trust;
Age: 72 President, And Officer of Northeast Investors Growth
Years of Service: 30 Chief Legal Officer Fund (Trustee until November 2008);
Officer of Northeast Investment
Management, Inc.
David A. Randall Chief Compliance Vice President of Northeast Investors
Age: 44 Officer Growth Fund and Vice President of
Years of Service: 10 Northeast Investors Trust
Independent Trustees
--------------------------------------------------------------------------------------------------------------------------
John C. Emery Trustee Partner, Law Firm of Sullivan &
Age: 80 Worcester
Years of Service: 30
Michael Baldwin Trustee Partner, Baldwin Brothers, Registered
Age: 70 Investment Advisor
Years of Service: 11
F. Washington Jarvis Trustee Headmaster Emeritus at Roxbury Latin
Age: 72 School
Years of Service: 7
* 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 June 3, 2011, 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 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. Michael Baldwin
John C. Emery F. Washington Jarvis
Officers
-------------------------------------------------------------------------------
William A. Oates, Jr., President
Gordon C. Barrett, Senior Vice President & Chief Financial Officer
Robert B. Minturn, Vice President, Clerk & Chief Legal Officer
David A. Randall, Vice President & Chief Compliance Officer
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 02116
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
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/growth/proxypolicy.stm, call 1-800-225-6704 or
visit the Securities and Exchange Commission (SEC)'s website at www.sec.gov.
Beginning August 29, 2011 the Fund's new phone number is 855-755-NEIG (6344);
the new website is www.northeastinvest.com
Shares of the Fund are sold to investors at net asset value by
Northeast Investors Growth Fund
100 High Street
Boston, Massachusetts 02110
855-755-NEIG (6344)
www.northeastinvest.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 7, 2011
By (Signature and Title)
John F. Francini
Chief Financial Officer
(principal financial officer)
Date: September 7, 2011
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 7, 2011
By (Signature and Title)
John F. Francini
Chief Financial Officer
(principal financial officer)
Date: September 7, 2011
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 7, 2011
William A. Oates, Jr.
President
(principal executive officer)
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
I, John F. Francini, 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 7, 2011
John F. Francini
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, 2011 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 7, 2011
William A. Oates, Jr.
President
(Principal Executive Officer)
Dated: September 7, 2011
John F. Francini
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.