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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 811-05646
-----------------------------------------
New Century Portfolios
-----------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
40 William Street, Suite 100 Wellesley, Massachusetts 02481
-----------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Nicole M. Tremblay, Esq.
Weston Financial Group, Inc. 40 William Street Wellesley, Massachusetts 02481
-------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (781) 235-7055
----------------
Date of fiscal year end: October 31, 2003
---------------------------
Date of reporting period: April 30, 2003
---------------------------
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. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
================================================================================
[GRAPHIC OMITTED]
NEW CENTURY
PORTFOLIOS
NEW CENTURY CAPITAL
NEW CENTURY BALANCED
NEW CENTURY AGGRESSIVE
NEW CENTURY INTERNATIONAL
NEW CENTURY ALTERNATIVE STRATEGIES
SEMI-ANNUAL REPORT
SIX MONTHS ENDED APRIL 30, 2003
(UNAUDITED)
40 William Street, Suite 100, Wellesley MA 02481 781-239-0445 888-639-0102 Fax 781-237-1635
================================================================================
CONTENTS
- --------------------------------------------------------------------------------
PRESIDENT'S LETTER 1
NEW CENTURY PORTFOLIOS
Statements of Assets and Liabilities 2
Statements of Operations 3
Statements of Changes in Net Assets 4-6
Financial Highlights 7-11
Portfolio of Investments 12-18
Notes to Financial Statements 19-24
LETTER TO SHAREHOLDERS
================================================================================
Dear Fellow Shareholders:
During the six-month period ended April 30, 2003, a series of external events
influenced the financial markets. Continued terrorist threats, the war with
Iraq, geopolitical risks in Korea and the Middle East, and the outbreak of SARS
soured market psychology. The market recovery which appeared to be materializing
during the final quarter of 2002 was derailed. Once again, investors were
rewarded for sticking with prudent investment tools - diversification, risk
assessment, long-term focus, and patience. Each of the New Century Portfolios
provides these tools for its shareholders.
During the six-month period ended April 2003, the US equity markets generated
gains of approximately 4%. During the period, the NASDAQ led the increase,
gaining approximately 10%; the S&P 500 Index gained slightly more than 4%; the
large-cap growth index gained 3.75%; the large-cap value index gained 5.3%. The
Russell 3000 Index, which reflects the performance of stocks of
smaller-capitalized domestic companies, gained more than 7.5%. The international
equity markets, as measured by the EAFE Index, gained approximately 1.8%. The
Lehman Aggregate Bond Index increased by 4% during the period.
During this period, the New Century Capital Portfolio gained 2.87%, the New
Century Balanced Portfolio gained 5.04% and the New Century Aggressive Portfolio
gained 4.39%. While maintaining a broad diversification across market sectors,
each Portfolio increased its allocation in the large-cap sector over the last
six months.
The New Century International Portfolio gained 5.98% and the New Century
Alternative Strategies gained 5.46%. The International Portfolio increased its
positions in Europe and decreased its positions in the Pacific Rim. The
Alternative Strategies Portfolio increased its positions in the option hedged
and asset allocation categories, while decreasing exposure to the equity market
neutral and merger arbitrage categories.
We will continue to monitor economic and market conditions and position the
Portfolios to maximize risk-adjusted return.
We thank you for selecting us to be part of your long-term investment strategy.
Sincerely,
/s/ Wayne M. Grzecki
Wayne M. Grzecki
President
NEW CENTURY PORTFOLIOS
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2003 (UNAUDITED)
===============================================================================================================================
NEW CENTURY
NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY ALTERNATIVE
CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost ..................... $ 86,355,300 $ 64,454,986 $ 3,934,062 $ 9,783,940 $ 23,991,208
============= ============= ============ ============ =============
At value (Note 1A) ...................... $ 81,214,088 $ 63,504,965 $ 3,846,983 $ 9,311,600 $ 24,059,389
Dividends receivable ...................... 171 2,982 14 22 406
Receivable for capital shares sold ........ 2,393 -- 2,083 -- 15,400
Receivable from Advisor (Note 2) .......... -- -- 2,035 -- --
Other assets .............................. 13,277 22,665 1,409 1,488 2,597
------------- ------------- ------------ ------------ -------------
TOTAL ASSETS ............................ 81,229,929 63,530,612 3,852,524 9,313,110 24,077,792
------------- ------------- ------------ ------------ -------------
LIABILITIES
Payable to Advisor (Note 2) ............... 70,422 84,005 -- 3,115 26,721
Payable for capital shares redeemed ....... 127,570 50,000 -- -- --
Other accrued expenses and liabilities .... -- -- 5,110 6,357 7,400
------------- ------------- ------------ ------------ -------------
TOTAL LIABILITIES ....................... 197,992 134,005 5,110 9,472 34,121
------------- ------------- ------------ ------------ -------------
NET ASSETS ................................. $ 81,031,937 $ 63,396,607 $ 3,847,414 $ 9,303,638 $ 24,043,671
============= ============= ============ ============ =============
Net assets consist of:
Paid-in capital ........................... $ 105,167,338 $ 73,176,351 $ 5,917,199 $ 10,349,230 $ 24,273,361
Accumulated net investment income (loss) .. (40,462) 76,194 (6,264) 33,592 11,869
Accumulated net realized losses
on investments .......................... (18,953,727) (8,905,917) (1,976,442) (606,844) (309,740)
Unrealized appreciation/(depreciation)
of investments .......................... (5,141,212) (950,021) (87,079) (472,340) 68,181
------------- ------------- ------------ ------------ -------------
Net assets ................................. $ 81,031,937 $ 63,396,607 $ 3,847,414 $ 9,303,638 $ 24,043,671
============= ============= ============ ============ =============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ............................ 7,805,180 6,195,389 674,148 1,347,358 2,525,652
============= ============= ============ ============ =============
Net asset value, offering price and
redemption price per share ................ $ 10.38 $ 10.23 $ 5.71 $ 6.91 $ 9.52
============= ============= ============ ============ =============
See accompanying notes to financial statements.
2
NEW CENTURY PORTFOLIOS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED)
======================================================================================================================
NEW CENTURY
NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY ALTERNATIVE
CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends ................................. $ 451,424 $ 1,056,811 $ 11,865 $ 96,983 $ 352,729
------------- ------------- ------------ ------------ -------------
EXPENSES
Investment advisory fees (Note 2) ......... 395,657 308,970 18,040 42,261 82,942
Distribution costs (Note 3) ............... 48,659 47,828 4,226 10,565 22,336
Accounting fees ........................... 18,887 18,107 15,182 15,412 16,071
Legal and audit fees ...................... 31,067 26,192 3,654 5,167 9,689
Administration fees (Note 2) .............. 27,522 22,194 4,223 5,749 9,930
Transfer agent fees ....................... 10,500 10,500 10,500 10,500 10,500
Custody fees .............................. 9,415 7,952 1,870 1,894 4,508
Trustees' fees and expenses (Note 2) ...... 5,368 4,180 347 595 1,510
Insurance expense ......................... 3,870 2,756 206 305 500
Other expenses ............................ 8,968 6,514 4,131 4,103 4,155
------------- ------------- ------------ ------------ -------------
Total expenses .......................... 559,913 455,193 62,379 96,551 162,141
Less fees waived and/or expenses
reimbursed by the Advisor (Note 2) ........ -- (2,000) (35,320) ( 33,160) --
Plus previously waived investment advisory
fees and expense reimbursements
recouped by the Advisor (Note 2) ........ -- -- -- -- 3,743
------------- ------------- ------------ ------------ -------------
Net expenses ............................... 559,913 453,193 27,059 63,391 165,884
------------- ------------- ------------ ------------ -------------
NET INVESTMENT INCOME (LOSS)................ ( 108,489) 603,618 ( 15,194) 33,592 186,845
------------- ------------- ------------ ------------ -------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized losses on investments ........ (2,961,896) (1,559,022) (237,012) (378,734) (217,283)
Capital gain distributions from regulated
investment companies .................... 239,189 289,977 9,338 10,659 86,459
Net change in unrealized appreciation/
(depreciation) on investments ............. 5,046,151 3,682,938 401,624 827,133 1,145,334
------------- ------------- ------------ ------------ -------------
NET REALIZED AND UNREALIZED
GAINS ON INVESTMENTS ...................... 2,323,444 2,413,893 173,950 459,058 1,014,510
------------- ------------- ------------ ------------ -------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS .................... $ 2,214,955 $ 3,017,511 $ 158,756 $ 492,650 $ 1,201,355
============= ============= ============ ============ =============
See accompanying notes to financial statements.
3
NEW CENTURY PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
==============================================================================================================
NEW CENTURY NEW CENTURY
CAPITAL PORTFOLIO BALANCED PORTFOLIO
--------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, 2003 OCTOBER, 31 APRIL 30, 2003 OCTOBER, 31
(UNAUDITED) 2002 (UNAUDITED) 2002
- --------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) .................. $ (108,489) $ (632,422) $ 603,618 $ 845,406
Net realized losses from security transactions (2,961,896) (9,742,217) (1,559,022) (5,048,282)
Capital gain distributions from regulated
investment companies ......................... 239,189 333,748 289,977 233,099
Net change in unrealized appreciation/
(depreciation) on investments ................ 5,046,151 (5,522,352) 3,682,938 (4,988,725)
------------ ----------- ----------- -----------
Net increase (decrease) in net assets
from operations .............................. 2,214,955 (15,563,243) 3,017,511 (8,958,502)
------------ ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) .......... -- -- (967,895) (653,622)
------------ ----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ..................... 2,553,110 5,394,055 2,388,649 11,061,815
Net asset value of shares issued in
reinvestment of distributions to
shareholders ................................. -- -- 901,806 605,958
Payments for shares redeemed .................. (6,045,736) (17,394,554) (4,698,476) (10,551,254)
------------ ----------- ----------- -----------
Net increase (decrease) in net assets from
capital share transactions .................... (3,492,626) (12,000,499) (1,408,021) 1,116,519
------------ ----------- ----------- -----------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ................................. (1,277,671) (27,563,742) 641,595 (8,495,605)
NET ASSETS
Beginning of period ........................... 82,309,608 109,873,350 62,755,012 71,250,617
------------ ----------- ----------- -----------
End of period ................................. $ 81,031,937 $ 82,309,608 $ 63,396,607 $ 62,755,012
============ =========== =========== ===========
ACCUMULATED NET
INVESTMENT INCOME (LOSS) ...................... $ ( 40,462) $ -- $ 76,194 $ --
============ =========== =========== ===========
CAPITAL SHARE ACTIVITY
Sold .......................................... 253,727 458,911 239,061 980,851
Reinvested .................................... -- -- 91,276 52,871
Redeemed ...................................... (607,999) (1,475,796) (477,567) (970,657)
------------ ----------- ----------- -----------
Net increase (decrease) in shares outstanding . (354,272) (1,016,885) (147,230) 63,065
Shares outstanding, beginning of period ....... 8,159,452 9,176,337 6,342,619 6,279,554
------------ ----------- ----------- -----------
Shares outstanding, end of period ............. 7,805,180 8,159,452 6,195,389 6,342,619
============ =========== =========== ===========
See accompanying notes to financial statements.
4
NEW CENTURY PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
==============================================================================================================
NEW CENTURY NEW CENTURY
AGGRESSIVE PORTFOLIO INTERNATIONAL PORTFOLIO
--------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, 2003 OCTOBER, 31 APRIL 30, 2003 OCTOBER, 31
(UNAUDITED) 2002 (UNAUDITED) 2002
- --------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) .................. $ ( 15,194) $ ( 46,487) $ 33,592 $ ( 78,168)
Net realized losses from security transactions (237,012) (1,483,724) (378,734) (133,654)
Capital gain distributions from regulated
investment companies ......................... 9,338 7,566 10,659 7,118
Net change in unrealized appreciation/
(depreciation) on investments ................ 401,624 (322,656) 827,133 (1,211,023)
------------ ----------- ----------- -----------
Net increase (decrease) in net assets
from operations ............................... 158,756 (1,845,301) 492,650 (1,415,727)
------------ ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) -- -- -- ( 6,775)
------------ ----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ..................... 229,306 4,685,222 1,567,950 8,540,301
Net asset value of shares issued in reinvestment
of distributions to shareholders ............. -- -- -- 6,775
Payments for shares redeemed .................. (151,050) (1,075,840) (412,324) (200,343)
------------ ----------- ----------- -----------
Net increase in net assets from capital
share transactions ............................ 78,256 3,609,382 1,155,626 8,346,733
------------ ----------- ----------- -----------
TOTAL INCREASE IN NET ASSETS ................... 237,012 1,764,081 1,648,276 6,924,231
NET ASSETS
Beginning of period ........................... 3,610,402 1,846,321 7,655,362 731,131
------------ ----------- ----------- -----------
End of period ................................. $ 3,847,414 $ 3,610,402 $ 9,303,638 $ 7,655,362
============ =========== =========== ===========
ACCUMULATED NET
INVESTMENT INCOME (LOSS) ...................... $ (6,264) $ -- $ 33,592 $ --
============ =========== =========== ===========
CAPITAL SHARE ACTIVITY
Sold .......................................... 41,459 620,678 234,820 1,101,714
Reinvested .................................... -- -- -- 871
Redeemed ...................................... (27,342) (211,085) (60,778) (27,920)
------------ ----------- ----------- -----------
Net increase in shares outstanding ............. 14,117 409,593 174,042 1,074,665
Shares outstanding, beginning of period ........ 660,031 250,438 1,173,316 98,651
------------ ----------- ----------- -----------
Shares outstanding, end of period .............. 674,148 660,031 1,347,358 1,173,316
============ =========== =========== ===========
See accompanying notes to financial statements.
5
NEW CENTURY PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
NEW CENTURY ALTERNATIVE
STRATEGIES PORTFOLIO
---------------------------
SIX MONTHS PERIOD
ENDED ENDED
APRIL 30, 2003 OCTOBER 31,
(UNAUDITED) 2002(a)
- --------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income .......................... $ 186,845 $ 21,728
Net realized losses from security transactions .. (217,283) (157,514)
Capital gain distributions from regulated
investment companies .......................... 86,459 6,389
Net change in unrealized appreciation/
(depreciation) on investments ................. 1,145,334 (1,077,153)
---------- -----------
Net increase (decrease) in net assets
from operations ................................ 1,201,355 (1,206,550)
---------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) ........... (224,495) --
---------- -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ...................... 3,977,399 21,028,982
Net asset value of shares issued in reinvestment
of distributions to shareholders .............. 220,766 --
Payments for shares redeemed ................... (660,166) (293,620)
---------- -----------
Net increase in net assets from capital
share transactions ............................. 3,537,999 20,735,362
---------- -----------
TOTAL INCREASE IN NET ASSETS .................... 4,514,859 19,528,812
NET ASSETS
Beginning of period ............................ 19,528,812 --
---------- -----------
End of period .................................. $24,043,671 $ 19,528,812
========== ===========
ACCUMULATED NET INVESTMENT INCOME .............. $ 11,869 $ --
========== ===========
CAPITAL SHARE ACTIVITY
Sold ........................................... 430,908 2,173,841
Reinvested ..................................... 23,918 --
Redeemed ....................................... (70,923) ( 32,092)
---------- -----------
Net increase in shares outstanding ............. 383,903 2,141,749
Shares outstanding, beginning of period ........ 2,141,749 --
---------- -----------
Shares outstanding, end of period .............. 2,525,652 2,141,749
========== ===========
(a) Represents the period from the initial public offering of shares (May 1,
2002) through October 31, 2002.
See accompanying notes to financial statements.
6
NEW CENTURY CAPITAL PORTFOLIO
FINANCIAL HIGHLIGHTS
====================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, YEARS ENDED OCTOBER 31,
2003 --------------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ......... $ 10.09 $ 11.97 $ 18.07 $ 16.71 $ 14.30 $ 14.67
-------- -------- -------- -------- -------- -------
Income (loss) from investment operations:
Net investment loss ........................ (0.01) (0.08) (0.10) (0.14) (0.14) (0.09)
Net realized and unrealized gains
(losses) on investments ................... 0.30 (1.80) (4.62) 2.67 4.08 1.18
-------- -------- -------- -------- -------- -------
Total from investment operations .............. 0.29 (1.88) (4.72) 2.53 3.94 1.09
-------- -------- -------- -------- -------- -------
Less distributions:
Distributions from net realized gains ...... -- -- (1.38) (1.17) (1.53) (1.46)
-------- -------- -------- -------- -------- -------
Net asset value, end of period ................ $ 10.38 $ 10.09 $ 11.97 $ 18.07 $ 16.71 $ 14.30
======== ======== ======== ======== ======== =======
TOTAL RETURN .................................. 2.87%(a) (15.71%) (27.77%) 14.92% 28.94% 7.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............ $ 81,032 $ 82,310 $109,873 $156,668 $120,583 $90,164
Ratio of expenses to average net assets ...... 1.42%(b) 1.40% 1.29% 1.27% 1.39% 1.44%
Ratio of net investment loss to
average net assets ......................... (0.27%)(b) (0.62%) (0.72%) (0.80%) (0.91%) (0.67%)
Portfolio turnover ........................... 64%(b) 59% 70% 51% 64% 102%
(a) Not annualized.
(b) Annualized.
See accompanying notes to financial statements.
7
NEW CENTURY BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
====================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- --------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, YEARS ENDED OCTOBER 31,
2003 --------------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
- --------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ......... $ 9.89 $ 11.35 $ 13.64 $ 13.42 $ 12.83 $ 13.23
-------- -------- -------- -------- -------- --------
Income (loss) from investment operations:
Net investment income ...................... 0.10 0.13 0.23 0.22 0.20 0.21
Net realized and unrealized gains
(losses) on investments ................... 0.39 (1.49) (1.71) 1.17 1.68 0.66
-------- -------- -------- -------- -------- --------
Total from investment operations ............. 0.49 (1.36) (1.48) 1.39 1.88 0.87
-------- -------- -------- -------- -------- --------
Less distributions:
Distributions from net investment income ... (0.15) (0.10) (0.23) (0.22) (0.20) (0.21)
Distributions from net realized gains ...... -- -- (0.58) (0.95) (1.09) (1.06)
-------- -------- -------- -------- -------- -------
Total distributions .......................... (0.15) (0.10) (0.81) (1.17) (1.29) (1.27)
-------- -------- -------- -------- -------- -------
Net asset value, end of period ............... $ 10.23 $ 9.89 $ 11.35 $ 13.64 $ 13.42 $ 12.83
======== ======== ======== ======== ======== ========
TOTAL RETURN .................................. 5.04%(a) (12.08%) (11.21%) 10.26% 15.26% 6.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............ $ 63,397 $ 62,755 $ 71,251 $ 79,553 $ 65,721 $ 56,190
Ratio of expenses to average net assets ...... 1.47%(b)(c) 1.48% 1.49% 1.40% 1.46% 1.46%
Ratio of net investment income to
average net assets ......................... 1.95%(b) 1.19% 1.87% 1.51% 1.45% 1.51%
Portfolio turnover ........................... 61%(b) 93% 69% 43% 60% 59%
(a) Not annualized.
(b) Annualized.
(c) Fee waivers by the Advisor did not have a material impact on the ratio of
expenses to average net assets during the period (See Note 2).
See accompanying notes to financial statements.
8
NEW CENTURY AGGRESSIVE PORTFOLIO
FINANCIAL HIGHLIGHTS
==========================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, YEARS ENDED OCTOBER 31,
2003 ---------------------------
(UNAUDITED) 2002 2001
- ----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period .......... $ 5.47 $ 7.37 $ 10.00
-------- --------- ---------
Income (loss) from investment operations:
Net investment loss ......................... (0.02) (0.07) (0.07)
Net realized and unrealized gains (losses)
on investments ............................. 0.26 (1.83) (2.56)
-------- --------- ---------
Total from investment operations .............. 0.24 (1.90) (2.63)
-------- --------- ---------
Net asset value, end of period ................ $ 5.71 $ 5.47 $ 7.37
======== ========= =========
TOTAL RETURN ................................... 4.39%(a) (25.78%) (26.30%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............. $ 3,847 $ 3,610 $ 1,846
Ratios of expenses to average net assets:
Before expense reimbursement and waived fees . 3.46%(b) 2.95% 5.90%
After expense reimbursement and waived fees .. 1.50%(b) 1.50% 1.50%
Ratios of net investment loss to
average net assets:
Before expense reimbursement and
waived fees ................................. ( 2.80%)(b) (2.50%) (5.35%)
After expense reimbursement and waived fees .. ( 0.84)(b) (1.05%) (0.95%)
Portfolio turnover ............................. 58%(b) 120% 86%
(a) Not annualized.
(b) Annualized.
See accompanying notes to financial statements.
9
NEW CENTURY INTERNATIONAL PORTFOLIO
FINANCIAL HIGHLIGHTS
========================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, YEARS ENDED OCTOBER 31,
2003 ---------------------------
(UNAUDITED) 2002 2001
- ----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period .......... $ 6.52 $ 7.41 $ 10.00
-------- --------- ---------
Income (loss) from investment operations:
Net investment income (loss) ................ 0.02 (0.06) (0.04)
Net realized and unrealized gains (losses)
on investments ............................. 0.37 (0.81) (2.55)
-------- --------- ---------
Total from investment operations .............. 0.39 (0.87) (2.59)
-------- --------- ---------
Less distributions:
Distributions from net investment income .... -- (0.02) --
-------- --------- ---------
Net asset value, end of period ................ $ 6.91 $ 6.52 $ 7.41
======== ========= =========
TOTAL RETURN ................................... 5.98%(a) (11.84%) (25.90%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............. $ 9,304 $ 7,655 $ 731
Ratios of expenses to average net assets:
Before expense reimbursement and waived fees 2.28%(b) 2.54% 10.81%
After expense reimbursement and waived fees . 1.50%(b) 1.50% 1.50%
Ratios of net investment income (loss)
to average net assets:
Before expense reimbursement and waived fees 0.01%(b) (2.34%) (9.81%)
After expense reimbursement and waived fees . 0.79%(b) (1.30%) (0.50%)
Portfolio turnover ............................. 37%(b) 27% 83%
(a) Not annualized.
(b) Annualized.
See accompanying notes to financial statements.
10
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
FINANCIAL HIGHLIGHTS
==================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ----------------------------------------------------------------------------------
SIX MONTHS PERIOD
ENDED ENDED
APRIL 30, 2003 OCTOBER 31,
(UNAUDITED) 2002(a)
- ----------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ........... $ 9.12 $ 10.00
----------- -----------
Income (loss) from investment operations:
Net investment income ........................ 0.08 0.01
Net realized and unrealized gains (losses)
on investments .............................. 0.42 (0.89)
----------- -----------
Total from investment operations ............... 0.50 (0.88)
----------- -----------
Less distributions:
Distributions from net investment income ...... (0.10) --
----------- -----------
Net asset value, end of period .................. $ 9.52 $ 9.12
=========== ===========
TOTAL RETURN .................................... 5.46%(b) ( 8.80%)(b)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .............. $ 24,044 $ 19,529
Ratios of expenses to average net assets
Before expense reimbursement and waived fees . 1.50%(c)(d) 1.72%(c)
After expense reimbursement and waived fees .. 1.50%(c)(d) 1.49%(c)
Ratios of net investment income to
average net assets
Before expense reimbursement and waived fees.. 1.69%(c)(d) 0.09%(c)
After expense reimbursement and waived fees .. 1.69%(c)(d) 0.32%(c)
Portfolio turnover .............................. 23%(c) 7%(c)
(a) Represents the period from the initial public offering of shares (May 1,
2002) through October 31, 2002.
(b) Not annualized.
(c) Annualized.
(d) There were no expense reimbursements or waived fees for the six months
ended April 30, 2003 (See Note 2).
See accompanying notes to financial statements.
11
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 2003 (UNAUDITED)
================================================================================
INVESTMENT COMPANIES -- 99.8% SHARES VALUE
- --------------------------------------------------------------------------------
GROWTH FUNDS -- 40.2%
American AMCAP - Class A ......................... 212,636 $ 2,962,020
American Growth Fund of America - Class A ........ 259,304 5,053,844
Goldman Sachs Growth Opportunities - Class A (a) . 254,628 3,776,139
iShares Russell 1000 Growth Index ................ 223,135 8,624,168
iShares S&P 500/BARRA Growth Index ............... 214,350 10,158,047
iShares S&P MidCap 400/BARRA Growth Index ........ 100 9,395
S&P MidCap 400 Depository Receipts ............... 11,580 928,716
Strong MidCap Disciplined - Investor Class (a) ... 69,273 1,050,174
-----------
32,562,503
-----------
GROWTH AND INCOME FUNDS -- 37.4%
Dodge and Cox Stock .............................. 17,752 1,578,184
iShares Russell 1000 Value Index ................. 135,900 6,422,634
iShares S&P 400 MidCap/BARRA Value Index ......... 27,500 2,223,925
iShares S&P 500 Index ............................ 61,150 5,616,628
SEI S&P 500 Index - Class E ...................... 124,230 3,515,716
T. Rowe Price Capital Appreciation ............... 214,778 3,122,874
Vanguard 500 Index - Investor Shares ............. 92,594 7,845,461
-----------
30,325,422
-----------
SMALL COMPANY FUNDS -- 16.4%
Buffalo Small Cap ................................ 87,472 1,355,809
Hennessy Cornerstone Growth (a) .................. 229,872 3,211,306
iShares S&P SmallCap 600/BARRA Growth Index ...... 72,400 4,863,108
iShares S&P SmallCap 600/BARRA Value Index ....... 13,700 994,620
Royce Total Return ............................... 329,211 2,827,923
-----------
13,252,766
-----------
AGGRESSIVE FUNDS -- 4.6%
Oppenheimer Capital Appreciation - Class A ....... 118,656 3,725,808
-----------
FOREIGN STOCK FUNDS -- 1.2%
Franklin Mutual Discovery - Class Z .............. 922 15,415
iShares MSCI EAFE Index .......................... 9,700 968,060
-----------
983,475
-----------
TOTAL INVESTMENT COMPANIES (Cost $85,991,186) ..... $80,849,974
-----------
================================================================================
MONEY MARKET SECURITIES -- 0.4% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class S
(Cost $364,114) .................................. 364,114 $ 364,114
-----------
TOTAL INVESTMENTS AT VALUE-- 100.2%
(Cost $86,355,300)................................ $81,214,088
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.2)%..... ( 182,151)
-----------
NET ASSETS-- 100.0% $81,031,937
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
12
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 2003 (UNAUDITED)
================================================================================
INVESTMENT COMPANIES -- 99.3% SHARES VALUE
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUNDS -- 32.8%
Dodge & Cox Stock ................................ 21,860 $ 1,943,392
Franklin Mutual Shares Corp. - Class Z ........... 51,587 899,685
iShares Russell 1000 Value Index ................. 57,200 2,703,272
iShares S&P 500 Index ............................ 76,400 7,017,340
SEI S&P 500 Index - Class E ...................... 85,048 2,406,845
T. Rowe Price Capital Appreciation ............... 118,988 1,730,085
Vanguard 500 Index - Investor Shares ............. 36,551 3,096,960
Van Kampen Equity Income - Class A ............... 147,662 998,193
-----------
20,795,772
-----------
HIGH YIELD BOND FUNDS -- 19.0%
Columbia High Yield - Class Z .................... 401,655 3,482,346
Fidelity Capital & Income ........................ 68,776 506,878
PIMCO High Yield - Class A ....................... 427,825 3,974,491
Pioneer High Yield - Class A ..................... 387,188 4,104,196
-----------
12,067,911
-----------
GROWTH FUNDS -- 16.4%
American AMCAP - Class A ......................... 147,276 2,051,556
iShares Russell 1000 Growth Index ................ 26,600 1,028,090
iShares S&P 500/BARRA Growth Index ............... 105,500 4,999,645
S&P MidCap 400 Depository Receipts ............... 14,380 1,153,276
Strong MidCap Disciplined - Investor Class (a) ... 78,661 1,192,496
-----------
10,425,063
-----------
WORLDWIDE BOND FUNDS -- 12.1%
Payden Global Fixed Income ....................... 174,110 1,795,077
PIMCO Foreign Bond - Institutional Class ......... 373,235 3,997,349
T. Rowe Price Emerging Markets Bond .............. 164,453 1,910,948
-----------
7,703,374
-----------
SMALL COMPANY FUNDS -- 7.4%
Hennessy Cornerstone Growth (a) .................. 58,930 823,249
iShares S&P SmallCap 600/BARRA Growth Index ...... 17,000 1,141,890
iShares S&P SmallCap 600/BARRA Value Index ....... 19,900 1,444,740
Royce Total Return ............................... 144,811 1,243,925
-----------
4,653,804
-----------
CONVERTIBLE SECURITY FUNDS -- 4.8%
Calamos Convertible Growth and Income - Class A .. 72,538 1,695,215
MainStay Convertible - Class A ................... 127,947 1,372,867
-----------
3,068,082
-----------
HIGH QUALITY BOND FUNDS -- 4.1%
Dodge & Cox Income ............................... 158,340 2,053,667
PIMCO Real Return - Institutional Shares ......... 47,906 541,343
-----------
2,595,010
-----------
13
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2003 (UNAUDITED)
================================================================================
INVESTMENT COMPANIES -- 99.3% (Continued) SHARES VALUE
- --------------------------------------------------------------------------------
FOREIGN STOCK FUNDS -- 2.2%
First Eagle Global - Class A ..................... 24,252 $ 645,837
iShares MSCI EAFE Index .......................... 7,500 748,500
-----------
1,394,337
-----------
GOVERNMENT TREASURY BOND FUNDS -- 0.5%
American Century Target Maturities Trust
Series 2005 - Investor Shares .................... 3,267 320,098
-----------
TOTAL INVESTMENT COMPANIES (Cost $63,973,472) $ 63,023,451
-----------
================================================================================
MONEY MARKET SECURITIES -- 0.8% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class S
(Cost $481,514) .................................. 481,514 $ 481,514
-----------
TOTAL INVESTMENTS AT VALUE-- 100.1%
(Cost $64,454,986) ............................... $ 63,504,965
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.1)% ... (108,358)
-----------
NET ASSETS-- 100.0% .............................. $ 63,396,607
=============
(a) Non-income producing security.
See accompanying notes to financial statements.
14
NEW CENTURY AGGRESSIVE PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 2003 (UNAUDITED)
================================================================================
INVESTMENT COMPANIES -- 99.5% SHARES VALUE
- --------------------------------------------------------------------------------
SECTOR FUNDS -- 44.1%
AMEX Financial Select Sector SPDR ................ 9,778 $ 228,512
AMEX Technology Select Sector SPDR ............... 39,800 621,278
Biotech HOLDRs ................................... 5,200 528,840
iShares Dow Jones U.S. Technology
Sector Index (a) ................................ 4,600 162,196
iShares Dow Jones U.S. Telecommunications
Sector Index .................................... 4,400 81,268
iShares Nasdaq Biotechnology Index (a) ........... 1,300 74,490
-----------
1,696,584
-----------
LARGE-CAP FUNDS -- 29.0%
iShares Russell 1000 Growth Index ................ 13,400 517,910
iShares S&P 500/BARRA Growth Index ............... 12,600 597,114
-----------
1,115,024
-----------
MID-CAP FUNDS -- 15.2%
Goldman Sachs Growth Opportunities - Class A (a) . 6,667 98,867
iShares S&P MidCap 400/BARRA Growth Index ........ 2,200 206,690
S&P MidCap 400 Depository Receipts ............... 3,002 240,760
Strong MidCap Disciplined - Investor Class (a) ... 2,706 41,027
-----------
587,344
-----------
SMALL-CAP FUNDS -- 11.2%
Buffalo Small Cap ................................ 3,890 60,288
iShares S&P SmallCap 600/BARRA Growth Index ...... 5,500 369,435
-----------
429,723
-----------
TOTAL INVESTMENT COMPANIES (Cost $3,915,754)....... $ 3,828,675
-----------
================================================================================
MONEY MARKET SECURITIES -- 0.5% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class S
(Cost $18,308) ................................... 18,308 $ 18,308
-----------
TOTAL INVESTMENTS AT VALUE-- 100.0% (Cost $3,934,062) $ 3,846,983
OTHER ASSETS IN EXCESS OF LIABILITIES--0.0%........ 431
-----------
NET ASSETS-- 100.0% $ 3,847,414
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
15
NEW CENTURY INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 2003 (UNAUDITED)
================================================================================
INVESTMENT COMPANIES -- 99.3% SHARES VALUE
- --------------------------------------------------------------------------------
EUROPE FUNDS -- 32.8%
iShares MSCI EMU Index ........................... 22,536 $ 1,023,585
iShares MSCI France Index ........................ 13,800 210,726
iShares MSCI Germany Index ....................... 52,000 561,600
iShares MSCI Italy Index ......................... 25,600 404,224
iShares MSCI Switzerland Index ................... 25,485 287,980
iShares MSCI United Kingdom Index ................ 45,646 562,359
-----------
3,050,474
-----------
DIVERSIFIED FUNDS -- 29.3%
Driehaus International Discovery (a) ............. 14,042 269,321
Eclipse International Equity ..................... 14,924 129,090
First Eagle Global - Class A ..................... 28,833 767,826
iShares MSCI EAFE Index .......................... 9,200 918,160
Oakmark International - Class I .................. 48,906 643,118
-----------
2,727,515
-----------
ASIA/PACIFIC FUNDS -- 17.4%
iShares MSCI Australia Index ..................... 71,800 734,514
iShares MSCI Japan Index (a) ..................... 58,105 372,453
iShares MSCI Pacific ex-Japan Index .............. 8,000 429,040
iShares MSCI South Korea Index (a) ............... 4,600 79,442
-----------
1,615,449
-----------
AMERICAS FUNDS -- 10.0%
iShares MSCI Canada Index ........................ 76,700 805,350
iShares S&P Latin American 40 Index .............. 2,900 121,800
-----------
927,150
-----------
EMERGING MARKETS -- 9.8%
Dreyfus Premier Emerging Markets - Class A ....... 42,445 483,875
ING Russia - Class A ............................. 18,030 271,718
T. Rowe Price Emerging Europe & Mediterranean (a) 19,929 159,830
-----------
915,423
-----------
TOTAL INVESTMENT COMPANIES (Cost $9,708,351)....... $ 9,236,011
-----------
================================================================================
MONEY MARKET SECURITIES -- 0.8% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class S
(Cost $75,589) ................................... 75,589 $ 75,589
-----------
TOTAL INVESTMENTS AT VALUE-- 100.1% (Cost $9,783,940) $ 9,311,600
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.1)%..... ( 7,962)
-----------
NET ASSETS-- 100.0% $ 9,303,638
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
16
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 2003 (UNAUDITED)
================================================================================
INVESTMENT COMPANIES -- 99.0% SHARES VALUE
- --------------------------------------------------------------------------------
CONVERTIBLE ARBITRAGE FUNDS -- 12.7%
Calamos Market Neutral - A Shares ................ 212,425 $ 3,048,302
-----------
MERGER ARBITRAGE FUNDS -- 11.7%
Arbitrage (The) (a) .............................. 62,105 738,432
Gabelli ABC ...................................... 101,124 983,933
Merger (The) ..................................... 78,317 1,095,661
-----------
2,818,026
-----------
GLOBAL MACRO FUNDS -- 11.4%
First Eagle SoGen Global - Class A ............... 74,866 1,993,671
Franklin Mutual Discovery - Class Z .............. 28,811 481,725
Prudent Safe Harbor .............................. 21,775 256,295
-----------
2,731,691
-----------
LONG/SHORT EQUITY FUNDS -- 10.6%
AXA Rosenberg U.S. Large/Mid Capitalization Long/
Short Equity - Institutional Shares ............. 17,961 201,340
AXA Rosenberg Value Long/Short Equity -
Institutional Shares (a) ......................... 43,007 440,820
CGM Focus (a) .................................... 10,320 193,084
Hussman Strategic Growth (a) ..................... 39,871 503,572
Needham Growth (a) ............................... 41,119 852,804
Templeton Global Long-Short - Class A (a) ........ 37,160 354,138
-----------
2,545,758
-----------
ASSET ALLOCATION FUNDS -- 10.4%
Berwyn Income .................................... 44,758 492,336
Greenspring ...................................... 52,134 881,581
Leuthold Core Investment ......................... 73,112 810,816
Oakmark Equity and Income - Class I .............. 17,357 318,846
-----------
2,503,579
-----------
REAL ESTATE INVESTMENT TRUST FUNDS -- 8.6%
Alpine Realty Income and Growth .................. 12,197 174,411
First American Real Estate Securities - Class Y .. 76,383 1,067,838
iShares Dow Jones U.S. Real Estate Index ......... 3,790 302,063
Security Capital U.S. Real Estate Shares ......... 45,750 535,731
-----------
2,080,043
-----------
HIGH YIELD FUNDS -- 8.5%
Calamos High Yield - Class A ..................... 68,124 689,416
Columbia High Yield .............................. 55,614 482,172
Pioneer High Yield - Class A ..................... 82,929 879,046
-----------
2,050,634
-----------
OPTIONS/HEDGED FUNDS -- 8.1%
Gateway .......................................... 90,373 1,954,779
-----------
17
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2003 (UNAUDITED)
================================================================================
INVESTMENT COMPANIES -- 99.0% (Continued) SHARES VALUE
- --------------------------------------------------------------------------------
DEEP VALUE/DISTRESSED SECURITIES FUNDS -- 6.5%
Fidelity Leveraged Company Stock (a) ............. 40,263 $ 494,427
Franklin Mutual Beacon - Class Z ................. 60,912 711,451
Third Avenue Value ............................... 11,219 348,903
-----------
1,554,781
-----------
MARKET NEUTRAL FUNDS -- 5.6%
JP Morgan Market Neutral - Institutional Shares .. 16,658 232,548
Phoenix-Capital West Market Neutral - Class A (a) 95,272 1,102,301
-----------
1,334,849
-----------
NATURAL RESOURCE FUNDS -- 4.9%
Permanent Portfolio .............................. 21,449 451,708
Pictet Global Water - Unit I (a) ................. 9,131 73,318
Plum Creek Timber Company, Inc. .................. 2,950 68,617
RS Global Natural Resources (a) .................. 16,559 232,484
T. Rowe Price New Era ............................ 16,834 343,423
-----------
1,169,550
-----------
TOTAL INVESTMENT COMPANIES (Cost $23,723,811)...... $23,791,992
-----------
================================================================================
MONEY MARKET SECURITIES-- 1.1%
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class S
(Cost $267,397) .................................. 267,397 $ 267,397
-----------
TOTAL INVESTMENTS AT VALUE-- 100.1%
(Cost $23,991,208)................................ $ 24,059,389
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.01%).... ( 15,718)
-----------
NET ASSETS-- 100.0%................................ $ 24,043,671
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
18
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2003 (UNAUDITED)
================================================================================
(1) SIGNIFICANT ACCOUNTING POLICIES
New Century Portfolios ("New Century") is organized as a Massachusetts business
trust which is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company and currently offers shares of five
series: New Century Capital Portfolio, New Century Balanced Portfolio, New
Century Aggressive Portfolio, New Century International Portfolio and New
Century Alternative Strategies Portfolio (together, the "Portfolios"). New
Century Aggressive Portfolio and New Century International Portfolio commenced
operations on November 1, 2000, and New Century Alternative Strategies Portfolio
commenced operations on May 1, 2002.
The investment objective of New Century Capital Portfolio is to provide capital
growth, with a secondary objective to provide income while managing risk. This
Portfolio seeks to achieve its objectives by investing primarily in shares of
other registered investment companies that emphasize investments in equities
(domestic and foreign). The investment objective of New Century Balanced
Portfolio is to provide income, with a secondary objective to provide capital
growth while managing risk. This Portfolio seeks to achieve its objectives by
investing primarily in shares of other registered investment companies that
emphasize investments in equities (domestic and foreign), and fixed income
securities (domestic and foreign). The investment objective of New Century
Aggressive Portfolio is to provide capital growth, without regard to current
income, while managing risk. This Portfolio seeks to achieve its objective by
investing primarily in shares of registered investment companies that emphasize
investments in equities (domestic and foreign). The investment objective of New
Century International Portfolio is to provide capital growth, with a secondary
objective to provide income, while managing risk. This Portfolio seeks to
achieve its objectives by investing primarily in shares of registered investment
companies that emphasize investments in equities and fixed income securities
(foreign, worldwide, emerging markets and domestic). The investment objective of
New Century Alternative Strategies Portfolio is to provide long-term capital
appreciation, with a secondary objective to earn income, while managing risk.
This Portfolio seeks to achieve its objectives by investing primarily in shares
of other registered investment companies that emphasize investments in
alternative strategies.
The price of shares of each Portfolio fluctuates daily and there is no assurance
that the Portfolios will be successful in achieving their stated investment
objectives. The following is a summary of significant accounting policies
consistently followed by the Portfolios in the preparation of their financial
statements.
19
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Continued)
APRIL 30, 2003 (UNAUDITED)
================================================================================
A. INVESTMENT VALUATION
Investments, representing primarily capital stock of other open-end investment
companies, are valued at their net asset value as reported by such companies. In
the absence of readily available market quotations, investments are valued at
fair value as determined by the Board of Trustees. Short-term investments are
valued at amortized cost which approximates market value.
B. SHARE VALUATION
The net asset value per share of each Portfolio is calculated daily by dividing
the total value of each Portfolio's assets, less liabilities, by the number of
shares outstanding. The offering price and redemption price per share of each
Portfolio is equal to the net asset value per share.
C. INVESTMENT TRANSACTIONS INVESTMENT
Investment transactions are recorded on a trade date basis. Realized gains and
losses from investment transactions are determined using the specific
identification method.
D. INCOME RECOGNITION
Interest, if any, is accrued on portfolio investments daily. Dividend income is
recorded on the ex-dividend date.
E. DISTRIBUTIONS TO SHAREHOLDERS
Dividends arising from net investment income, if any, are declared and paid
semi-annually to shareholders of the New Century Balanced and New Century
Alternative Strategies Portfolios. Dividends from net investment income, if any,
are declared and paid annually for the New Century Capital, New Century
Aggressive, and New Century International Portfolios. Net realized short-term
capital gains, if any, may be distributed throughout the year and net realized
long-term capital gains, if any, are distributed at least once each year. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations, which may differ from accounting principles generally
accepted in the United States of America. There were no differences between the
book and tax basis of distributions for the periods ended April 30, 2003 and
October 31, 2002.
F. COST OF OPERATIONS
The Portfolios bear all costs of their operations other than expenses
specifically assumed by Weston Financial Group, Inc. (the "Advisor"). Expenses
directly attributable to a Portfolio are charged to that Portfolio; other
expenses are allocated proportionately among the Portfolios in relation to the
net assets of each Portfolio.
20
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Continued)
APRIL 30, 2003 (UNAUDITED)
================================================================================
G. USE OF ESTIMATES
In preparing financial statements in accordance with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that affect the reported amount of assets and
liabilities, the disclosure of contingent assets and liabilities, and revenues
and expenses during the reporting period. Actual results could differ from those
estimates.
(2) INVESTMENT ADVISORY FEE, ADMINISTRATIVE
AGREEMENT AND TRUSTEES' FEE
Fees paid by the Portfolios pursuant to an Investment Advisory Agreement with
the Advisor are computed daily and paid monthly at an annualized rate of 1% on
the first $100 million of average daily assets and .75% of net assets exceeding
that amount, except the fees for the New Century Alternative Strategies
Portfolio which are computed at an annualized rate of .75% of net assets. The
advisory fees are based on the net assets of each of the Portfolios separately,
and not on the total net assets of New Century.
The Advisor has agreed to limit the total expenses (excluding interest, taxes,
brokerage and extraordinary expenses) to an annual rate of 1.50% of average net
assets for each of the New Century Balanced, New Century Aggressive, New Century
International, and New Century Alternative Strategies Portfolios. Accordingly,
for the six months ended April 30, 2003, the Adviser waived investment advisory
fees of $2,000 for the Balanced Portfolio, waived its entire advisory fee of
$18,040 and reimbursed $17,280 of other operating expenses for the Aggressive
Portfolio and waived investment advisory fees of $33,160 for the International
Portfolio. No waiver was necessary for the Alternative Strategies Portfolio.
Any advisory fees waived and/or any other operating expenses absorbed by the
Advisor pursuant to an agreed upon expense cap shall be reimbursed by the
Portfolio to the Advisor, if so requested by the Advisor, provided the aggregate
amount of the Portfolio's current total operating expenses for such fiscal year
does not exceed the applicable existing limitation on Portfolio expenses, and
the reimbursement is made within three years after the year in which the Advisor
incurred the expense. For the six months ended April 30, 2003, the Advisor
received $3,743 in recouped fees from the Alternative Strategies Portfolio.
During these six months, the Advisor did not recoup any other fees waived or
other operating expenses absorbed from the Balanced Portfolio, Aggressive
Portfolio, or the International Portfolio.
21
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Continued)
APRIL 30, 2003 (UNAUDITED)
================================================================================
As of April 30, 2003, the amounts available for reimbursement that have been
paid and/or waived by the Advisor on behalf of the Funds are as follows:
- --------------------------------------------------------------------------------
New Century Balanced Portfolio ................................ $ 2,000
New Century Aggressive Portfolio .............................. $161,800
New Century International Portfolio ........................... $158,858
New Century Alternative Strategies Portfolio .................. $ 11,978
- --------------------------------------------------------------------------------
As of April 30, 2003, the Advisor may recapture a portion of the above amounts
no later than the dates as stated below:
- -------------------------------------------------------------------------------------
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2004 2005 2006
- -------------------------------------------------------------------------------------
New Century Balanced Portfolio ................. $ -- $ -- $ 2,000
New Century Aggressive Portfolio ............... $62,008 $64,472 $35,320
New Century International Portfolio ............ $62,619 $63,079 $33,160
New Century Alternative Strategies Portfolio ... -- $11,978 $ --
- -------------------------------------------------------------------------------------
Fees paid by the Portfolios pursuant to an Administration Agreement with the
Advisor to administer the ordinary course of the Portfolios' business are paid
monthly from a detail of actual expenses incurred in the overseeing of the
Portfolios' affairs. All expenses incurred overseeing the Portfolios' affairs
are reimbursed monthly.
The Portfolios pay each Trustee who is not affiliated with the Advisor $8,000
annually.
(3) DISTRIBUTION PLAN AND OTHER TRANSACTIONS WITH AFFILIATES
The Portfolios have adopted a Distribution Plan (the "Plan") under Section 12(b)
of the Investment Company Act of 1940 and Rule 12b-1 thereunder. Under the Plan,
each Portfolio may pay up to .25% of its average daily net assets to Weston
Securities Corporation (the "Distributor") for activities primarily intended to
result in the sale of shares. Under its terms, the Plan shall remain in effect
from year to year, provided such continuance is approved annually by a vote of a
majority of the Trustees and a majority of those Trustees who are not
"interested persons" of the Portfolios and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related to
the Plan.
During the six months ended April 30, 2003, the Distributor received sales
commissions and other compensation of $21,027, $15,680, $47, $82 and $9,901 in
connection with the purchase of investment company shares by New Century Capital
Portfolio, New Century Balanced Portfolio, New Century Aggressive Portfolio, New
Century International Portfolio and New Century Alternative Strategies
Portfolio, respectively. The Distributor has voluntarily agreed to waive
payments made by each Portfolio pursuant to the distribution plans in amounts
equal to the sales commissions and other compensation.
Certain officers and trustees are also officers and/or directors of the Advisor
and the Distributor.
22
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Continued)
APRIL 30, 2003 (UNAUDITED)
================================================================================
(4) INVESTMENT TRANSACTIONS
For the six months ended April 30, 2003, the cost of purchases and the proceeds
from sales of securities other than short-term notes were as follows:
=============================================================================================================
NEW
NEW NEW NEW NEW CENTURY
CENTURY CENTURY CENTURY CENTURY ALTERNATIVE
CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------------------------------------
Purchases of investment securities $ 25,122,148 $ 18,637,853 $ 1,116,957 $ 2,673,140 $ 6,429,124
============ ============ =========== =========== ===========
Proceeds from sales of
investment securities ........... $28,101,095 $20,091,399 $ 1,048,536 $ 1,533,772 $ 2,458,214
============ ============ =========== =========== ===========
- -------------------------------------------------------------------------------------------------------------
(5) TAX MATTERS
It is each Portfolio's policy to comply with the special provisions of the
Internal Revenue Code applicable to regulated investment companies. As provided
therein, in any fiscal year in which a Portfolio so qualifies and distributes at
least 90% of its taxable net income, the Portfolio (but not the shareholders)
will be relieved of federal income tax on the income distributed. Accordingly,
no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also the Portfolio's intention to declare as
dividends in each calendar year at least 98% of its net investment income
(earned during the calendar year) and 98% of its net realized capital gains
(earned during the twelve months ended October 31) plus undistributed amounts
from prior years.
For the period ended October 31, 2002, New Century Capital Portfolio, New
Century Aggressive Portfolio, and New Century International Portfolio
reclassified net investment losses of $591,636, $40,914, and $81,060,
respectively, against paid-in-capital on the Statement of Assets and
Liabilities. Such reclassifications, the result of permanent differences between
the financial statement and income tax reporting requirements, have no effect on
the Portfolios' net assets or net asset value per share.
The tax character of distributable earnings at April 30, 2003 was as follows:
========================================================================================================================
NEW
NEW NEW NEW NEW CENTURY
CENTURY CENTURY CENTURY CENTURY ALTERNATIVE
CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------
Accumulated ordinary income (loss) ..... $ (40,462) $ 170,272 $ (6,264) $ 33,592 $ 11,869
Unrealized appreciation / (depreciation) (5,196,752) (1,054,050) (110,517) (487,463) 42,926
Capital loss carryforwards ............. (16,119,572) (7,404,591) (1,716,400) (223,646) (128,604)
Other losses ........................... (2,778,615) (1,491,375) (236,604) (368,075) (155,881)
------------ ------------ ------------ ------------ ------------
Total distributable earnings ........... $( 24,135,401) $ (9,779,744) $ (2,069,785) $ (1,045,592) $ (229,690)
============ ============ ============ ============ ============
- ------------------------------------------------------------------------------------------------------------------------
23
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Continued)
APRIL 30, 2003
================================================================================
The following information is based upon the federal income tax cost of
investment securities as of April 30, 2003:
- ------------------------------------------------------------------------------------------------------------------------
NEW
NEW NEW NEW NEW CENTURY
CENTURY CENTURY CENTURY CENTURY ALTERNATIVE
CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------
Gross unrealized appreciation .......... $ 2,155,905 $ 1,927,267 $ 129,374 $ 272,691 $ 616,354
Gross unrealized depreciation .......... (7,352,657) (2,981,317) (239,891) (760,154) (573,428)
------------ ------------ ------------ ------------ ------------
Net unrealized appreciation
/ (depreciation) ...................... $ (5,196,752) $ (1,054,050) $ ( 110,517) $ ( 487,463) $ 42,926
============ ============ ============ ============ ============
Federal income tax cost ................ $ 86,410,840 $ 64,559,015 $ 3,957,500 $ 9,799,063 $ 24,016,463
============ ============ ============ ============ ============
- -----------------------------------------------------------------------------------------------------------------------
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for the Portfolios is due to certain timing
differences in the recognition of capital losses under income tax regulations
and accounting principles generally accepted in the United States of America.
As of October 31, 2002, the Portfolios had the following capital loss
carryforwards for federal income tax purposes. These capital loss carryforwards
may be utilized in the current and future years to offset net realized capital
gains, if any, prior to distributing such gains to shareholders.
- ------------------------------------------------------------------------------------------------------------------------
NEW
NEW NEW NEW NEW CENTURY
CENTURY CENTURY CENTURY CENTURY ALTERNATIVE
CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES
EXPIRES OCTOBER 31, PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------
2009 ................................... $ 6,713,738 $ 2,667,080 $ 258,107 $ 108,350 $ --
2010.................................... 9,405,834 4,737,511 1,458,293 115,296 128,604
------------ ------------ ------------ ------------ ------------
$ 16,119,572 $ 7,404,591 $ 1,716,400 $ 223,646 $ 128,604
============ ============ ============ ============ ============
- ------------------------------------------------------------------------------------------------------------------------
24
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================================================================================
INVESTMENT ADVISOR AND ADMINISTRATOR
Weston Financial Group, Inc.
Wellesley, MA
DISTRIBUTOR
Weston Securities Corporation
Wellesley, MA
COUNSEL
Greenburg Traurig, LLP
Philadelphia, PA
INDEPENDENT ACCOUNTANTS
Briggs, Bunting and Dougherty, LLP
Philadelphia, PA
TRANSFER AGENT
Ultimus Fund Solutions, LLC
Cincinnati, OH
CUSTODIAN
U.S. Bank, N.A.
Cincinnati, OH
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Portfolios. This report is
authorized for distribution to prospective investors in the Portfolios only if
preceded or accompanied by any effective Prospectus which contains details
concerning the management fee expense and other pertinent information.
================================================================================
ITEM 2. CODE OF ETHICS.
Not required
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required
ITEMS 4. PRINCIPAL ACOUNTANT FEES AND SERVICES.
Not required
ITEMS 5-6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not required
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 301-2(c) under the Investment Company Act of
1940) are effective based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this report.
(b) There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent
to the date of their evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act (17
CFR 270.30a-2): Attached hereto
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) New Century Portfolios
-------------------------------------------
By (Signature and Title)* /s/ Wayne M. Grzecki
----------------------------
Wayne M. Grzecki, President
Date June 20, 2003
--------------------------------------------------
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)* /s/ Wayne M. Grzecki
----------------------------
Wayne M. Grzecki, President
Date June 20, 2003
--------------------------------------------------
By (Signature and Title)* /s/ Nicole M. Tremblay
----------------------------
Nicole M. Tremblay, Treasurer
Date June 20, 2003
--------------------------------------------------
* Print the name and title of each signing officer under his or her signature.