------------------------- |OMB APPROVAL |OMB Number: 3235-0570 | |Expires: Nov. 30, 2005 | |Estimated average burden |hours per response: 5.0 ------------------------- 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 This page intentionally left blank. ================================================================================ 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.