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A REPORT CONCERNING
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Changes in
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Portfolio Management
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IN NORTH AMERICAN FUNDS
DISTRIBUTOR
NASL Financial Services, Inc.
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NASL FINANCIAL SERVICES -- OCTOBER 1, 1996
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NASL FINANCIAL SERVICES AND MANULIFE FINANCIAL HAVE ANNOUNCED SEVERAL CHANGES
TO THE PORTFOLIO SUBADVISERS IN NORTH AMERICAN FUNDS. NASL FINANCIAL
SERVICES IS THE DISTRIBUTOR OF NORTH AMERICAN FUNDS. EFFECTIVE OCTOBER 1, 1996
- -- PENDING SHAREHOLDER/CONTRACTHOLDER RATIFICATION -- THE CHANGES ARE AS
FOLLOWS:
MORGAN STANLEY ASSET MANAGEMENT INC. replaces Oechsle International
Advisors, L.P. as subadviser of the North American Funds Global Growth
portfolio, which has been renamed the GLOBAL EQUITY portfolio. The Global
Equity portfolio will be managed in a style similar to that of the Morgan
Stanley Institutional Fund Global Equity Portfolio.
T. ROWE PRICE ASSOCIATES, INC. replaces Goldman Sachs Asset Management as
subadviser of the North American Funds VALUE EQUITY portfolio. The portfolio
will be managed in a style similar to that of the T. Rowe Price Equity Income
Fund.
FOUNDERS ASSET MANAGEMENT, INC. replaces Goldman Sachs Asset Management as
subadviser of the North American Funds Asset Allocation portfolio. The new
portfolio is called the BALANCED portfolio and will be managed in a style
similar to that of the Founders Balanced Fund.
MANUFACTURERS ADVISER CORPORATION replaces Wellington Management Company as
subadviser of the North American Funds MONEY MARKET portfolio. (Wellington
Management Company will continue to manage the Growth and Income and
Investment Quality Bond portfolios.)
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Mutual funds are not deposits or obligations of, or guaranteed by, any bank
or financial institution. Mutual funds are not insured by the FDIC or any
other agency and are subject to investment risk, including the possible loss
of principal.
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THE NEW SUBADVISERS
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FOLLOWING IS A SUMMARY AND BRIEF DESCRIPTION OF THE NEW SUBADVISERS IN
NORTH AMERICAN FUNDS.
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MORGAN STANLEY ASSET MANAGEMENT INC.
[Chart]
Growth Value International/Global
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Global Equity Large Cap
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Mid Cap
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Small Cap
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[Headings are shaded with dotted lines separating boxes]
Founded in 1935, Morgan Stanley Group, Inc. is one of the world's leading
financial institutions with a network of over 9,700 employees in 27
principal offices worldwide. Morgan Stanley Asset Management Inc. (MSAM), a
wholly-owned subsidiary of Morgan Stanley Group, is recognized worldwide for
its expertise in managing assets of governments, corporations and high net
worth individuals. Between MSAM and Miller Anderson & Sherrerd, Morgan Stanley
employs 169 senior investment professionals (data current as of 6/30/96) and
has over $100 billion under management and fiduciary advice.
Morgan Stanley Asset Management Inc. employs a disciplined, quantitative and
fundamental value approach to investing in both U.S. and foreign companies. The
London-based team will manage the North American Funds GLOBAL EQUITY portfolio
in a style similar to that of the Morgan Stanley Institutional Fund Global
Equity Portfolio. Of course, foreign investments involve risks and
opportunities that are different from domestic investments, including
currency fluctuation and differences in tax reporting.
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T. ROWE PRICE ASSOCIATES, INC.
[Chart]
Growth Value International/Global
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Value Equity Large Cap
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Mid Cap
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Small Cap
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[Headings are shaded with dotted lines separating boxes]
Founded in 1937, T. Rowe Price Associates and its affiliates have over $85
billion in assets under management in more than four million individual and
institutional investor accounts including pension, profit sharing and other
employee benefit plans, endowments and foundations. The company employs a team
of 114 highly regarded investment professionals.
The North American Funds VALUE EQUITY portfolio, which will be managed in a
style similar to that of the T. Rowe Price Equity Income Fund, will be managed
to follow T. Rowe Price's large cap value strategy: value-oriented investments
in companies selling below historical valuation levels as determined by
dividend yield analysis.
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FOUNDERS ASSET MANAGEMENT, INC.
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[Chart] [Chart]
Equity Fixed Income
Growth Value International/Global Short Maturity Intermediate Maturity Long Maturity
- ------ ----- -------------------- -------------- --------------------- -------------
Large Cap Balanced High Quality
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Balanced Mid Cap Medium Quality
[Under both ------- --------------
Growth and Value]
Small Cap Low Quality
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[Headings are shaded with dotted lines separating boxes] [Headings are shaded with dotted lines separating boxes]
Founded in 1938, Founders Asset Management, Inc. manages over $4 billion in
client assets. Founders has developed a reputation as a growth style manager
based on its belief that growth companies consistently earning above average
returns and producing high growth rates in sales and earnings are the most
rewarding to own over time. The firm's bottom-up stock selection process and
investment style has historically excelled in periods of moderate economic
growth.
The North American Funds BALANCED portfolio, whch will be managed in a style
similar to that of the Founders Balanced Fund, invests for stability, seeking
to participate in the upside potential of the markets while minimizing the
downside, thus limiting volatility through stock selection and diversification.
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MANUFACTURERS ADVISER CORPORATION
Manufacturers Adviser Corporation is the investment adviser subsidiary of The
Manufacturers Life Insurance Company (Manulife Financial). Manulife Financial,
with its related companies, manages over $55 billion of assets worldwide.
Founded in 1887, Manulife Financial and its subsidiaries represent one of the
largest insurance companies in North America and among the 60 largest life
insurers in the world (as measured by assets).
The North American Funds MONEY MARKET portfolio will continue to be invested
in high quality money market instruments with maturities of 13 months or less.
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WHY WE HAVE MADE THESE CHANGES
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The subadviser selection process employed by NASL Financial Services is a
combination of quantitative and qualitative criteria focused solely on finding
managers that can potentially deliver real value on a highly consistent basis.
This analysis led to changes in subadvisers that reflect NASL Financial
Services' commitment to provide investors with:
- publicly recognized names in portfolio management with distinct
expertise and leadership in a particular asset and style class,
- portfolios that can be stand-alone investments, and of great importance,
- portfolios that have been selected to work in combination with other
portfolios to pursue superior, risk-adjusted returns and broad
diversification achieved through asset allocation.
NASL Financial Services continuously monitors each portfolio subadviser and
measures performance by reviewing a variety of factors, including the degree
to which:
- risk-adjusted returns are consistently superior to its peer group and
relevant index,
- investment philosophy and discipline are applied consistently,
- there exists a continuity of professional talent and ongoing business
operations, and
- performance excels in good markets and provides downside protection
in difficult markets.
NASL Financial Services takes its responsibility to shareholders and
contractholders very seriously. As always, you can expect due diligence and
ongoing evaluation of each portfolio subadviser to ensure that your assets are
benefitting from among the best professional investment management expertise
in the business.
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WORLD-CLASS INVESTMENT
MANAGEMENT
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- - J.P. MORGAN INVESTMENT MANAGEMENT INC.
- - MANUFACTURER'S ADVISER CORPORATION
- - SALOMON BROTHERS ASSET MANAGEMENT INC.
- - WELLINGTON MANAGEMENT COMPANY, LLP
- - MORGAN STANLEY ASSET MANAGEMENT INC.
- - T. ROWE PRICE ASSOCIATES INC.
- - FOUNDERS ASSET MANAGEMENT, INC.
- - FRED ALGER MANAGEMENT, INC.
For more information, call your financial adviser.
DISTRIBUTOR OF NORTH AMERICAN FUNDS
NASL Financial Services, Inc.
116 Huntington Avenue
Boston, MA 02116-5743
North American Funds 800-872-8037
Sales and Marketing Support
Wood Logan Associates, Inc.
This material is authorized for use with prospective investors only when
preceded or accompanied by a current North American Funds prospectus containing
more complete information, including all charges, expenses, risk factors and
limitations. Investors should read the prospectuses carefully before investing.
Past performance is not a guarantee of future results.