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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: October 31, 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
ANNUAL REPORT
YEAR ENDED OCTOBER 31, 2003
40 William Street, Suite 100, Wellesley MA 02481 781-239-0445 888-639-0102 Fax 781-237-1635
================================================================================
CONTENTS
- --------------------------------------------------------------------------------
PRESIDENT'S LETTER 1-2
PERFORMANCE CHARTS 3-5
NEW CENTURY PORTFOLIOS
Statements of Assets and Liabilities 6
Statements of Operations 7
Statements of Changes in Net Assets8-10
Financial Highlights 11-15
Portfolios of Investments 16-22
Notes to Financial Statements 23-28
Report of Independent Certified Public Accountants 29
Board of Trustees and Officers 30-31
Federal Tax Information 32
LETTER TO SHAREHOLDERS
================================================================================
Dear Fellow Shareholders:
I am pleased to present our fourteenth Annual Report.
The economy continues to benefit from recent monetary and fiscal policy. The
Federal Reserve Board is maintaining historically low interest rates; inflation
remains dormant; and the recent tax cuts and relief measures are beginning to
stimulate the economy.
Through the twelve-month period ended October 31, 2003, the equity markets
responded by rebounding. While each of the New Century Portfolios continues to
diversify its portfolio among multiple market sectors, each Portfolio assumed a
less-defensive stance over the year. During the period, the large-cap growth
sector, as measured by the iShares S&P 500/BARRA Growth Index increased more
than 17%, and the large-cap value sector, as measured by the iShares S&P
500/BARRA Value Index increased more than 25%. The Russell 2000 Index, which
reflects the performance of stocks of smaller-capitalized domestic companies,
gained more than 43%.
During the period, the New Century Capital Portfolio increased positions in the
growth sector. The New Century Capital Portfolio gained 22.50% as compared to
the S&P 500 Composite Index which gained 20.79%
The New Century Balanced Portfolio increased its positions in the growth sector
and its overall allocation to equities and decreased its overall allocation to
fixed income. The New Century Balanced Portfolio gained 18.84% during the
period, as compared to a blended index of 60% S&P 500 Composite Index/40% Lehman
Brothers Government/Corporate Bond Index which gained 14.75%.
The New Century Aggressive Portfolio took positions in the biotechnology,
technology and the small-cap sectors. The New Century Aggressive Portfolio
gained 27.06% during the period, as compared to the NASDAQ which surged more
than 45.97%.
The New Century International Portfolio increased its concentrations in the
Pacific Rim, the emerging markets sector and the international small-cap sector.
During the period, the New Century International Portfolio gained 33.13%. The
international equity markets, as measured by the MSCI EAFE Index, increased
27.56%.
The New Century Alternative Strategies Portfolio maintained diversified
positions in eleven investment strategies with minor adjustments to the
weighting of each investment style. The New Century Alternative Strategies
Portfolio gained 18.20% during the period, as compared to a blended index of 35%
S&P 500 Composite Index/65% 90-day T-bill, which gained 7.83%.
The Portfolios will maintain their diversification and risk management
strategies. We will continue to monitor economic and market conditions and
position the Portfolios to maximize risk-adjusted return. Although we cannot
predict future market conditions, we are confident that the disciplined
investment approach of the New Century Portfolios will provide a risk-adjusted
performance consistent with each portfolio's objectives.
Unfortunately, a number of mutual fund families have been charged with
misconduct because they permitted improper market timing and late trading. These
activities are not in the best interests of all shareholders.
New Century is committed to act in the best interests of all of its
shareholders. We do so not only in the way we invest your assets, but also in
the way that we conduct our business.
1
New Century does not permit market timing. We review the activity of each
portfolio to insure that each transaction complies with our policies and
procedures. If we determine that a shareholder is violating these rules, we will
restrict that shareholder's future trading privileges. New Century does not
permit late trading. Orders received prior to 4:00 PM Eastern Time are executed
at that day's closing price. Orders received after 4:00 PM Eastern Time are
executed at the following day's closing price. This rule also applies to orders
that are processed through agents, brokers and other intermediaries, such as
retirement plan platforms. New Century demands that its agents, brokers and
intermediaries comply with these rules.
We also monitor the activities of the mutual funds in which we invest. New
Century will sell a specific mutual fund that has engaged in illegal or
unethical trading activity. We will monitor the performance of funds that have
not engaged in illegal or unethical trading activity, but that are in fund
families that have been implicated. We will not immediately sell such funds
unless the performance of the specific fund fails to satisfy our investment
criteria - to maximize after-tax, risk-adjusted returns.
New Century's commitment to act in the best interests of all of its shareholders
is a fundamental element of our investment philosophy. We thank you for
selecting us to be part of your long-term investment strategy.
Sincerely,
/s/ Wayne M. Grzecki
Wayne M. Grzecki
President
2
PERFORMANCE CHARTS
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE NEW CENTURY CAPITAL PORTFOLIO AND THE S&P 500 COMPOSITE INDEX
[GRAPHIC OMITTED]
- ------------------------------------------- ---------------------------------
S&P 500 COMPOSITE INDEX NEW CENTURY CAPITAL PORTFOLIO
ENDING ENDING
DATE BALANCE DATE BALANCE
- ------------------------------------------- ---------------------------------
10/31/1993 10,000 10/31/1993 10,000
10/31/1994 10,387 10/31/1994 10,470
10/31/1995 13,134 10/31/1995 12,522
10/31/1996 16,298 10/31/1996 14,389
10/31/1997 21,532 10/31/1997 18,306
10/31/1998 26,267 10/31/1998 19,766
10/31/1999 33,010 10/31/1999 25,487
10/31/2000 35,021 10/31/2000 29,289
10/31/2001 26,301 10/31/2001 21,158
10/31/2002 22,327 10/31/2002 17,835
10/31/2003 26,968 10/31/2003 21,847
- ------------------------------------------- ---------------------------------
- ----------------------------------------
NEW CENTURY CAPITAL PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
1 YEAR 5 YEARS 10 YEARS
22.50% 2.02% 8.13%
- ----------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE NEW CENTURY BALANCED PORTFOLIO AND A BLENDED EQUITY/BOND INDEX
[GRAPHIC OMITTED]
- ----------------------------------------------------------------- -------------------------------
60% S&P 500 COMPOSITE INDEX/40% LEHMAN BROTHERS
GOVERNMENT/CORPORATE BOND INDEX NEW CENTURY BALANCED PORTFOLIO
ENDING ENDING
DATE BALANCE DATE BALANCE
- ----------------------------------------------------------------- -------------------------------
- ---------------------------------------------------------------- -------------------------------
10/31/1993 10,000 10/31/1993 10,000
10/31/1994 10,154 10/31/1994 10,126
10/31/1995 12,271 10/31/1995 11,638
10/31/1996 14,330 10/31/1996 13,181
10/31/1997 17,520 10/31/1997 15,770
10/31/1998 20,469 10/31/1998 16,869
10/31/1999 23,701 10/31/1999 19,442
10/31/2000 25,312 10/31/2000 21,437
10/31/2001 22,617 10/31/2001 19,020
10/31/2002 21,124 10/31/2002 16,722
10/31/2003 24,239 10/31/2003 19,872
- ---------------------------------------------------------------- --------------------------------
- ----------------------------------------
NEW CENTURY BALANCED PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
1 YEAR 5 YEARS 10 YEARS
18.84% 3.33% 7.11%
- ----------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
(a) The total returns shown do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
See accompanying notes to financial statements.
3
PERFORMANCE CHARTS (CONTINUED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE NEW CENTURY AGGRESSIVE PORTFOLIO AND THE NASDAQ COMPOSITE INDEX
[GRAPHIC OMITTED]
- ----------------------------------------------- ----------------------------------
NASDAQ COMPOSITE INDEX NEW CENTURY AGGRESSIVE PORTFOLIO
ENDING ENDING
DATE BALANCE DATE BALANCE
- ----------------------------------------------- ----------------------------------
10/31/2000 10,000 10/31/2000 10,000
10/31/2001 5,030 10/31/2001 7,370
10/31/2002 3,972 10/31/2002 5,470
10/31/2003 5,799 10/31/2003 6,950
- ----------------------------------------------- ----------------------------------
- ----------------------------------------
NEW CENTURY AGGRESSIVE PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
1 YEAR SINCE INCEPTION*
27.06% (11.43%)
- ----------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE NEW CENTURY INTERNATIONAL PORTFOLIO AND THE MSCI EAFE INDEX
- ----------------------------------------------- -----------------------------------
MSCI EAFE INDEX NEW CENTURY INTERNATIONAL PORTFOLIO
ENDING ENDING
DATE BALANCE DATE BALANCE
- ----------------------------------------------- -----------------------------------
10/31/2000 10,000 10/31/2000 10,000
10/31/2001 7,532 10/31/2001 7,410
10/31/2002 6,559 10/31/2002 6,533
10/31/2003 8,367 10/31/2003 8,697
- ----------------------------------------------- -----------------------------------
- ----------------------------------------
NEW CENTURY INTERNATIONAL PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
1 YEAR SINCE INCEPTION*
33.13% (4.55%)
- ----------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
* Initial public offering of shares was November 1, 2000.
(a) The total returns shown do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
See accompanying notes to financial statements.
4
PERFORMANCE CHARTS (CONTINUED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO AND A BLENDED EQUITY/BOND INDEX
[GRAPHIC OMITTED]
- ----------------------------------------------- ------------------------------
BLENDED EQUITY/BOND INDEX NEW CENTURY ALTERNATIVE
35% S&P 500 COMPOSITE INDEX/65% 90-DAY T-BILL STRATEGIES PORTFOLIO
ENDING ENDING
DATE BALANCE DATE BALANCE
- ----------------------------------------------- ------------------------------
5/1/2002 10,000 5/1/2002 10,000
5/31/2002 9,988 5/31/2002 10,000
6/30/2002 9,784 6/30/2002 9,720
7/31/2002 9,565 7/31/2002 9,290
8/31/2002 9,593 8/31/2002 9,340
9/30/2002 9,289 9/30/2002 9,110
10/31/2002 9,542 10/31/2002 9,120
11/30/2002 9,745 11/30/2002 9,330
12/31/2002 9,551 12/31/2002 9,325
1/31/2003 9,469 1/31/2003 9,285
2/28/2003 9,426 2/28/2003 9,264
3/31/2003 9,463 3/31/2003 9,295
4/30/2003 9,742 4/30/2003 9,618
5/31/2003 9,927 5/31/2003 9,982
6/30/2003 9,976 6/30/2003 10,083
7/31/2003 10,043 7/31/2003 10,194
8/31/2003 10,116 8/31/2003 10,376
9/30/2003 10,084 9/30/2003 10,477
10/31/2003 10,289 10/31/2003 10,780
- ----------------------------------------------- ------------------------------
- -----------------------------------------------
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS (a)
1 YEAR SINCE INCEPTION*
18.20% 5.13%
- -----------------------------------------------
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
* Initial public offering of shares was May 1, 2002.
(a) The total returns shown do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund
shares.
See accompanying notes to financial statements.
5
NEW CENTURY PORTFOLIOS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 2003
========================================================================================================================
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 ................... $84,871,084 $65,039,593 $ 4,332,734 $13,189,782 $30,584,014
=========== =========== =========== =========== ===========
At value (Note 1A) .................... $95,696,710 $70,486,697 $ 4,999,958 $15,263,740 $33,737,903
Dividends receivable .................... 140 27,327 4 56 5,691
Receivable for investment securities sold -- 1,530,392 153,483 -- --
Receivable for capital shares sold ...... 13,364 -- 50 41,632 50,475
Receivable from Advisor (Note 2) ........ -- -- 1,188 -- --
Other assets ............................ 2,456 1,898 118 285 722
----------- ---------- ----------- ---------- -----------
TOTAL ASSETS ........... 95,712,670 72,046,314 5,154,801 15,305,713 33,794,791
----------- ---------- ----------- ---------- -----------
LIABILITIES
Payable to Advisor (Note 2) .............. 98,713 83,939 -- 10,992 29,488
Payable for investment securities purchased -- 1,508,650 283,987 -- --
Payable for capital shares redeemed ...... 201,731 -- -- -- 20,787
Other accrued expenses and liabilities ... 16,460 12,999 5,300 6,680 10,394
----------- ---------- ----------- ---------- -----------
TOTAL LIABILITIES ....... 316,904 1,605,588 289,287 17,672 60,669
----------- ---------- ----------- ---------- -----------
NET ASSETS ................................ $95,395,766 $70,440,726 $ 4,865,514 $15,288,041 $33,734,122
=========== =========== =========== =========== ===========
Net assets consist of:
Paid-in capital ......................... $103,840,244 $72,378,951 $ 6,054,786 $13,574,303 $30,712,419
Accumulated net investment income ....... -- 266,822 -- -- 103,110
Accumulated net realized losses
on investments ........................ (19,270,104) (7,652,151) (1,856,496) (360,220) (235,296)
Unrealized appreciation of investments .. 10,825,626 5,447,104 667,224 2,073,958 3,153,889
----------- ---------- ----------- ---------- -----------
Net assets ............................... $95,395,766 $70,440,726 $ 4,865,514 $15,288,041 $33,734,122
=========== =========== =========== =========== ===========
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) .......................... 7,720,112 6,115,980 700,323 1,761,633 3,162,607
=========== =========== =========== =========== ===========
Net asset value, offering price and
redemption price per share .............. $ 12.36 $ 11.52 $ 6.95 $ 8.68 $ 10.67
=========== =========== =========== =========== ===========
See accompanying notes to financial statements.
6
NEW CENTURY PORTFOLIOS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2003
========================================================================================================================
NEW CENTURY
NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY ALTERNATIVE
CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends ................................ $ 727,425 $ 1,936,770 $ 19,023 $ 97,232 $ 634,700
----------- ---------- ----------- ---------- -----------
EXPENSES
Investment advisory fees (Note 2) ....... 841,721 643,732 40,388 102,862 193,369
Distribution costs (Note 3) ............. 162,810 110,567 9,813 24,744 39,934
Accounting fees ......................... 38,399 36,475 30,395 30,970 32,556
Administration fees (Note 2) ............ 54,624 43,309 8,503 12,023 20,879
Legal and audit fees .................... 51,024 42,948 7,219 9,747 16,368
Transfer agent fees ..................... 21,000 21,000 21,000 21,000 21,000
Custody fees ............................ 21,543 16,112 3,460 4,782 9,703
Trustees' fees and expenses (Note 2) .... 10,657 8,154 614 1,316 3,260
Insurance expense ....................... 6,957 5,150 353 659 1,396
Other expenses .......................... 13,385 9,854 7,674 8,924 6,449
----------- ---------- ----------- ---------- -----------
Total expenses ......................... 1,222,120 937,301 129,419 217,027 344,914
Less fees waived and/or expenses
reimbursed by the Advisor (Note 2)...... -- (1,967) (68,836) (62,733) --
Plus previously waived investment advisory
fees and expense reimbursements
recouped by the Advisor (Note 2)........ -- -- -- -- 15,721
----------- ---------- ----------- ---------- -----------
Net expenses ........................... 1,222,120 935,334 60,583 154,294 360,635
----------- ---------- ----------- ---------- -----------
NET INVESTMENT INCOME (LOSS) .............. (494,695) 1,001,436 (41,560) (57,062) 274,065
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized losses on investments ....... (3,278,273) (211,178) (117,066) (132,110) (142,839)
Capital gain distributions from regulated
investment companies ................... 239,189 289,977 9,338 10,659 90,480
Net change in unrealized appreciation/
(depreciation) on investments ........... 21,012,989 10,080,063 1,155,927 3,373,431 4,231,042
----------- ---------- ----------- ---------- -----------
NET REALIZED AND UNREALIZED
GAINS ON INVESTMENTS ..................... 17,973,905 10,158,862 1,048,199 3,251,980 4,178,683
----------- ---------- ----------- ---------- -----------
NET INCREASE IN NET
ASSETS FROM OPERATIONS ................... $17,479,210 $11,160,298 $ 1,006,639 $ 3,194,918 $ 4,452,748
=========== =========== =========== =========== ===========
See accompanying notes to financial statements.
7
NEW CENTURY PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
==============================================================================================================
NEW CENTURY NEW CENTURY
CAPITAL PORTFOLIO BALANCED PORTFOLIO
--------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2003 2002 2003 2002
- --------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) ................. $ (494,695) $ (632,422) $ 1,001,436 $ 845,406
Net realized losses from security transactions (3,278,273) (9,742,217) (211,178) (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 ................ 21,012,989 (5,522,352) 10,080,063 (4,988,725)
------------ ---------- ----------- ----------
Net increase (decrease) in net assets
from operations.............................. 17,479,210 ( 15,563,243) 11,160,298 ( 8,958,502)
------------ ---------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E)......... -- -- (1,269,163) (653,622)
------------ ---------- ----------- ----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold .................... 5,343,302 5,394,055 4,706,871 11,061,815
Net asset value of shares issued in reinvestment
of distributions to shareholders ........... -- -- 1,182,279 605,958
Payments for shares redeemed ................. (9,736,354) (17,394,554) (8,094,571) (10,551,254)
------------ ---------- ----------- ----------
Net increase (decrease) in net assets from
capital share transactions.................... ( 4,393,052) ( 12,000,499) ( 2,205,421) 1,116,519
------------ ---------- ----------- ----------
TOTAL INCREASE (DECREASE)
IN NET ASSETS ................................ 13,086,158 (27,563,742) 7,685,714 (8,495,605)
NET ASSETS
Beginning of year ............................ 82,309,608 109,873,350 62,755,012 71,250,617
------------ ---------- ----------- ----------
End of year .................................. $ 95,395,766 $ 82,309,608 $ 70,440,726 $ 62,755,012
============ ============ ============ ============
ACCUMULATED NET INVESTMENT
INCOME ....................................... $ -- $ -- $ 266,822 $ 256,811
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ......................................... 497,945 458,911 449,059 980,851
Reinvested ................................... -- -- 117,415 52,871
Redeemed ..................................... (937,285) (1,475,796) (793,113) (970,657)
------------ ---------- ----------- ----------
Net increase (decrease) in shares outstanding (439,340) (1,016,885) (226,639) 63,065
Shares outstanding, beginning of year ........ 8,159,452 9,176,337 6,342,619 6,279,554
------------ ---------- ----------- ----------
Shares outstanding, end of year .............. 7,720,112 8,159,452 6,115,980 6,342,619
============ ============ ============ ============
See accompanying notes to financial statements.
8
NEW CENTURY PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
==============================================================================================================
NEW CENTURY NEW CENTURY
AGGRESSIVE PORTFOLIO INTERNATIONAL PORTFOLIO
--------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2003 2002 2003 2002
- --------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment loss.......................... $ ( 41,560) $ ( 46,487) $ ( 57,062) $ (78,168)
Net realized losses from security transactions (117,066) (1,483,724) (132,110) (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 .............. 1,155,927 (322,656) 3,373,431 (1,211,023)
------------ ---------- ----------- ----------
Net increase (decrease) in net assets
from operations ............................. 1,006,639 (1,845,301) 3,194,918 (1,415,727)
------------ ---------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) ........ -- -- -- (6,775)
------------ ---------- ----------- ----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ................... 424,354 4,685,222 4,989,446 8,540,301
Net asset value of shares issued in reinvestment
of distributions to shareholders .......... -- -- -- 6,775
Payments for shares redeemed ................ (175,881) (1,075,840) (551,685) (200,343)
------------ ---------- ----------- ----------
Net increase in net assets from capital
share transactions........................... 248,473 3,609,382 4,437,761 8,346,733
------------ ---------- ----------- ----------
TOTAL INCREASE IN NET ASSETS ................. 1,255,112 1,764,081 7,632,679 6,924,231
NET ASSETS
Beginning of year ............................ 3,610,402 1,846,321 7,655,362 731,131
------------ ---------- ----------- ----------
End of year .................................. $ 4,865,514 $ 3,610,402 $15,288,041 $ 7,655,362
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold ......................................... 71,447 620,678 667,427 1,101,714
Reinvested ................................... -- -- -- 871
Redeemed ..................................... (31,155) (211,085) (79,110) (27,920)
------------ ---------- ----------- ----------
Net increase in shares outstanding ........... 40,292 409,593 588,317 1,074,665
Shares outstanding, beginning of year ........ 660,031 250,438 1,173,316 98,651
------------ ---------- ----------- ----------
Shares outstanding, end of year .............. 700,323 660,031 1,761,633 1,173,316
============ ============ ============ ============
See accompanying notes to financial statements.
9
NEW CENTURY PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
NEW CENTURY ALTERNATIVE
STRATEGIES PORTFOLIO
--------------------------------
YEAR PERIOD
ENDED ENDED
OCTOBER 31, OCTOBER 31,
2003 2002(a)
- --------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ........................... $ 274,065 $ 21,728
Net realized losses from security transactions .. (142,839) (157,514)
Capital gain distributions from regulated
investment companies .......................... 90,480 6,389
Net change in unrealized appreciation/
(depreciation) on investments .................. 4,231,042 (1,077,153)
------------ ------------
Net increase (decrease) in net assets
from operations ................................. 4,452,748 (1,206,550)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) ............ (224,495) --
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ....................... 11,337,961 21,028,982
Net asset value of shares issued in reinvestment
of distributions to shareholders .............. 220,766 --
Payments for shares redeemed .................... (1,581,670) (293,620)
------------ ------------
Net increase in net assets from capital
share transactions ............................ 9,977,057 20,735,362
------------ ------------
TOTAL INCREASE IN NET ASSETS .................... 14,205,310 19,528,812
NET ASSETS
Beginning of period ............................. 19,528,812 --
------------ ------------
End of period ...................................$ 33,734,122 $ 19,528,812
============ ============
ACCUMULATED NET INVESTMENT INCOME ............... $ 103,110 $ 24,462
============ ============
CAPITAL SHARE ACTIVITY
Sold ............................................ 1,156,113 2,173,841
Reinvested ...................................... 23,918 --
Redeemed ........................................ (159,173) (32,092)
------------ ------------
Net increase in shares outstanding .............. 1,020,858 2,141,749
Shares outstanding, beginning of period ......... 2,141,749 --
------------ ------------
Shares outstanding, end of period ............... 3,162,607 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.
10
NEW CENTURY CAPITAL PORTFOLIO
FINANCIAL HIGHLIGHTS
========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ------------------------------------------------------------------------------------------------------------------------
YEARS ENDED OCTOBER 31,
-----------------------------------------------------------------------
2003 2002 2001 2000 1999
-----------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year ....... $ 10.09 $ 11.97 $ 18.07 $ 16.71 $ 14.30
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment loss .................... (0.06) (0.08) (0.10) (0.14) (0.14)
Net realized and unrealized gains
(losses) on investments ................ 2.33 (1.80) (4.62) 2.67 4.08
----------- ----------- ----------- ----------- -----------
Total from investment operations ......... 2.27 (1.88) (4.72) 2.53 3.94
----------- ----------- ----------- ----------- -----------
Less distributions:
Distributions from net investment income -- -- -- -- --
Distributions from net realized gains ... -- -- (1.38) (1.17) (1.53)
----------- ----------- ----------- ----------- -----------
Total distributions ...................... -- -- (1.38) (1.17) (1.53)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year ............. $ 12.36 $ 10.09 $ 11.97 $ 18.07 $ 16.71
=========== ============ ============ ============ ============
TOTAL RETURN ............................. 22.50% (15.71%) (27.77%) 14.92% 28.94%
=========== ============ ============ ============ ============
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) .......... $ 95,396 $ 82,310 $ 109,873 $ 156,668 $ 120,583
=========== ============ ============ ============ ============
Ratio of expenses to average net assets .. 1.45% 1.40% 1.29% 1.27% 1.39%
Ratio of net investment loss to
average net assets ..................... (0.59%) (0.62%) (0.72%) (0.80%) (0.91%)
Portfolio turnover ....................... 71% 59% 70% 51% 64%
11
NEW CENTURY BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ------------------------------------------------------------------------------------------------------------------------
YEARS ENDED OCTOBER 31,
-----------------------------------------------------------------------
2003 2002 2001 2000 1999
-----------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year ....... $ 9.89 $ 11.35 $ 13.64 $ 13.42 $ 12.83
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income .................. 0.16 0.13 0.23 0.22 0.20
Net realized and unrealized gains
(losses) on investments .................. 1.67 (1.49) (1.71) 1.17 1.68
----------- ----------- ----------- ----------- -----------
Total from investment operations ......... 1.83 (1.36) (1.48) 1.39 1.88
----------- ----------- ----------- ----------- -----------
Less distributions:
Distributions from net investment income (0.20) (0.10) (0.23) (0.22) (0.20)
Distributions from net realized gains .. -- -- (0.58) (0.95) (1.09)
----------- ----------- ----------- ----------- -----------
Total distributions ...................... (0.20) (0.10) (0.81) (1.17) (1.29)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year ............. $ 11.52 $ 9.89 $ 11.35 $ 13.64 $ 13.42
=========== ============ ============ ============ ============
TOTAL RETURN .............................. 18.84% (12.08%) (11.21%) 10.26% 15.26%
=========== ============ ============ ============ ============
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's)........... $ 70,441 $ 62,755 $ 71,251 $ 79,553 $ 65,721
=========== ============ ============ ============ ============
Ratio of expenses to average net assets .. 1.45%(a) 1.48% 1.49% 1.40% 1.46%
Ratio of net investment income to
average net assets ..................... 1.56%(a) 1.19% 1.87% 1.51% 1.45%
Portfolio turnover ....................... 80% 93% 69% 43% 60%
(a) Absent fee waivers and expense reimbursements by the Advisor, the ratio of
expenses to average net assets would have been 1.46% and the ratio of net
investment income to average net assets would have been 1.55% for the year
ended October 31, 2003 (Note 2).
See accompanying notes to financial statements.
12
NEW CENTURY AGGRESSIVE PORTFOLIO
FINANCIAL HIGHLIGHTS
====================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ----------------------------------------------------------------------------------------------------
YEARS ENDED OCTOBER 31,
-----------------------------------------------------
2003 2002 2001
- ----------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year .......... $ 5.47 $ 7.37 $ 10.00
------- ------- --------
Income (loss) from investment operations:
Net investment loss ....................... (0.06) (0.07) (0.07)
Net realized and unrealized gains (losses)
on investments ........................... 1.54 (1.83) (2.56)
------- ------- --------
Total from investment operations ............ 1.48 (1.90) (2.63)
------- ------- --------
Less distributions:
Distributions from net investment income .. -- -- --
Distributions from net realized gains ..... -- --
------- ------- --------
Total distributions.......................... -- -- --
------- ------- --------
Net asset value, end of year ................ $ 6.95 $ 5.47 $ 7.37
======= ======== ========
TOTAL RETURN ................................ 27.06% (25.78%) (26.30%)
======= ======== ========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) .......... $ 4,866 $ 3,610 $ 1,846
======= ======== ========
Ratios of expenses to average net assets:
Before expense reimbursement and waived fees 3.20% 2.95% 5.90%
After expense reimbursement and waived fees 1.50% 1.50% 1.50%
Ratios of net investment loss to average net assets:
Before expense reimbursement and waived fees 2.73%) ( 2.50%) ( 5.35%)
After expense reimbursement and waived fees ( 1.03%) ( 1.05%) (0.95%)
Portfolio turnover 78% 120% 86%
See accompanying notes to financial statements.
13
NEW CENTURY INTERNATIONAL PORTFOLIO
FINANCIAL HIGHLIGHTS
====================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- ----------------------------------------------------------------------------------------------------
YEARS ENDED OCTOBER 31,
-----------------------------------------------------
2003 2002 2001
- ----------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year .......... $ 6.52 $ 7.41 $ 10.00
------- ------- --------
Income (loss) from investment operations:
Net investment loss ....................... (0.03) (0.06) (0.04)
Net realized and unrealized gains (losses)
on investments ........................... 2.19 (0.81) (2.55)
------- ------- --------
Total from investment operations ............ 2.16 (0.87) (2.59)
------- ------- --------
Less distributions:
Distributions from net investment income .. -- (0.02) --
Distributions from net realized gains ..... -- --
------- ------- --------
Total distributions ......................... -- (0.02) --
------- ------- --------
Net asset value, end of year ................ $ 8.68 $ 6.52 $ 7.41
======= ======= ========
TOTAL RETURN ................................ 33.13% (11.84%) (25.90%)
======= ======= ========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ............. $15,288 $ 7,655 $ 731
======= ======= ========
Ratios of expenses to average net assets:
Before expense reimbursement and waived fees 2.11% 2.54% 10.81%
After expense reimbursement and waived fees 1.50% 1.50% 1.50%
Ratios of net investment loss to average net assets:
Before expense reimbursement and waived fees (1.16%) (2.34%) (9.81%)
After expense reimbursement and waived fees (0.55%) (1.30%) (0.50%)
Portfolio turnover........................... 56% 27% 83%
See accompanying notes to financial statements.
14
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
FINANCIAL HIGHLIGHTS
=================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
-----------------------------------
YEAR PERIOD
ENDED ENDED
OCTOBER 31, OCTOBER 31,
2003 2002(a)
- ---------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ............ $ 9.12 $ 10.00
--------- ---------
Income (loss) from investment operations:
Net investment income ......................... 0.11 0.01
Net realized and unrealized gains (losses)
on investments ............................... 1.54 (0.89)
--------- ---------
Total from investment operations ................ 1.65 (0.88)
--------- ---------
Less distributions:
Distributions from net investment income ........ (0.10) --
Distributions from net realized gains ........... -- --
--------- ---------
Total distributions ............................. (0.10) --
--------- ---------
Net asset value, end of period .................. $ 10.67 $ 9.12
========= =========
TOTAL RETURN .................................... 18.20% ( 8.80%)(b)
========= =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............... $ 33,734 $ 19,529
========= =========
Ratios of expenses to average net assets ........ 1.40% 1.49%(c)(d)
Ratios of net investment income to average
net assets ..................................... 1.06% 0.32%(c)(d)
Portfolio turnover .............................. 21% 7%(d)
(a) Represents the period from the initial public offering of shares (May 1,
2002) through October 31, 2002.
(b) Not annualized.
(c) Absent fee waivers and expense reimbursements by the Advisor, the ratio of
expenses to average net assets would have been 1.72%(d) and the ratio of
net investment income to average net assets would have been 0.09%(d) for
the period ended October 31, 2002 (Note 2).
(d) Annualized.
See accompanying notes to financial statements.
15
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2003
================================================================================
INVESTMENT COMPANIES -- 99.7% SHARES VALUE
- --------------------------------------------------------------------------------
GROWTH FUNDS -- 39.9%
American Funds AMCAP - Class A ....................... 212,681 $ 3,434,800
American Growth Fund of America - Class A ............ 259,304 6,028,828
Goldman Sachs Growth Opportunities - Class A (a) ..... 254,628 4,588,403
iShares Russell 1000 Growth Index .................... 124,835 5,605,091
iShares S&P 500/BARRA Growth Index ................... 67,750 3,596,848
iShares S&P MidCap 400/BARRA Growth Index ............ 100 11,600
Marsico 21st Century (a) ............................. 356,958 3,483,915
Smith Barney Large Capitalization Growth - Class A (a) 385,991 8,067,205
Strong MidCap Disciplined - Investor Class (a) ....... 169,870 3,259,807
-----------
38,076,497
-----------
GROWTH AND INCOME FUNDS -- 24.3%
iShares Russell 1000 Value Index ..................... 77,600 4,241,616
iShares S&P 500 Index Trust .......................... 61,150 6,447,045
iShares S&P MidCap 400/BARRA Value Index ............. 27,500 2,827,550
SEI S&P 500 Index - Class E .......................... 125,162 4,062,763
Vanguard 500 Index - Investor Shares ................. 57,668 5,604,783
-----------
23,183,757
-----------
SMALL COMPANY FUNDS -- 20.9%
Buffalo Small Cap (a) ................................ 227,086 4,927,774
iShares S&P SmallCap 600/BARRA Growth Index .......... 62,200 5,314,990
iShares S&P SmallCap 600/BARRA Value Index ........... 13,700 1,290,677
Royce Opportunity - Investor Class (a) ............... 470,014 5,574,368
William Blair Small Cap Growth - Class I (a) ......... 137,658 2,881,173
-----------
19,988,982
-----------
AGGRESSIVE FUNDS -- 7.5%
Smith Barney Aggressive Growth - Class A (a) ......... 88,635 7,141,310
-----------
FOREIGN STOCK FUNDS -- 7.1%
Driehaus International Discovery (a) ................. 90,383 2,520,793
Franklin Mutual Discovery - Class Z .................. 928 18,099
iShares MSCI EAFE Index .............................. 31,500 3,924,900
iShares MSCI Emerging Markets Index(a) ............... 2,000 296,820
-----------
6,760,612
-----------
TOTAL INVESTMENT COMPANIES (Cost $84,325,532).......... $95,151,158
-----------
================================================================================
MONEY MARKET SECURITIES -- 0.6% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class S
(Cost $545,552) ..................................... 545,552 $ 545,552
-----------
TOTAL INVESTMENTS AT VALUE-- 100.3%
(Cost $84,871,084).................................... $95,696,710
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.3%) ....... (300,944)
-----------
NET ASSETS-- 100.0% .................................. $95,395,766
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
16
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2003
================================================================================
INVESTMENT COMPANIES -- 99.2% SHARES VALUE
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUNDS -- 25.4%
Dodge & Cox Stock .................................... 25,325 $2,700,358
Franklin Mutual Shares - Class Z ..................... 2,337 45,904
Hotchkis & Wiley Large Cap Value - Class A ........... 86,306 1,500,863
iShares Russell 1000 Value Index ..................... 28,900 1,579,674
iShares S&P 500 Index ................................ 76,400 8,054,852
SEI S&P 500 Index - Class E .......................... 85,686 2,781,351
Vanguard 500 Index - Investor Shares ................. 12,595 1,224,146
-----------
17,887,148
-----------
GROWTH FUNDS -- 22.3%
American Funds AMCAP - Class A ....................... 204,538 3,303,295
Calamos Growth - Class A(a) .......................... 35,754 1,586,056
Fidelity Capital Appreciation (a) .................... 67,312 1,583,845
iShares Russell 1000 Growth Index .................... 26,600 1,194,340
iShares S&P 500/BARRA Growth Index ................... 41,600 2,208,544
S&P MidCap 400 Depositary Receipts ................... 17,580 1,768,196
Smith Barney Large Capitalization Growth (a) ......... 194,593 4,066,998
-----------
15,711,274
-----------
HIGH YIELD BOND FUNDS -- 12.6%
Fidelity Advisor High Income Advantage - Class I ..... 162,514 1,500,000
MainStay High Yield Corporate Bond - Class A ......... 246,711 1,492,599
PIMCO High Yield - Class A ........................... 128,160 1,221,360
Pioneer High Yield - Class A ......................... 399,772 4,633,361
-----------
8,847,320
-----------
WORLDWIDE BOND FUNDS -- 8.6%
AllianceBernstein Emerging Market Debt - Class A ..... 339,899 2,715,795
Payden Global Fixed Income - Class R ................. 138,479 1,391,710
PIMCO Foreign Bond - Institutional Class ............. 184,365 1,943,209
-----------
6,050,714
-----------
SMALL COMPANY FUNDS -- 8.1%
iShares S&P SmallCap 600/BARRA Growth Index .......... 11,900 1,016,855
iShares S&P SmallCap 600/BARRA Value Index ........... 17,000 1,601,570
Royce Opportunity - Investor Class (a) ............... 133,206 1,579,829
William Blair Small Cap Growth - Class I (a) ......... 71,327 1,492,867
-----------
5,691,121
-----------
FOREIGN STOCK FUNDS -- 8.1%
First Eagle SoGen Global - Class A ................... 18,808 608,823
iShares MSCI EAFE Index .............................. 28,700 3,576,020
Tocqueville International Value (The) ................ 137,758 1,501,563
-----------
5,686,406
-----------
GOVERNMENT CORPORATE BOND FUNDS -- 6.2%
Loomis Sayles Bond - Institutional Class ............. 342,381 4,389,325
-----------
17
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2003
================================================================================
INVESTMENT COMPANIES -- 99.2% (Continued) SHARES VALUE
- --------------------------------------------------------------------------------
CONVERTIBLE SECURITY FUNDS -- 5.0%
Calamos Convertible Growth & Income - Class A ........ 73,002 $ 1,959,382
Smith Barney Convertible - Class A ................... 96,228 1,579,096
-----------
3,538,478
-----------
HIGH QUALITY BOND FUNDS -- 2.9%
Dodge & Cox Income ................................... 162,032 2,082,112
-----------
TOTAL INVESTMENT COMPANIES (Cost $64,436,794).......... $69,883,898
-----------
================================================================================
MONEY MARKET SECURITIES -- 0.9% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class S
(Cost $602,799) ..................................... 602,799 $ 602,799
TOTAL INVESTMENTS AT VALUE-- 100.1% (Cost $65,039,593). $70,486,697
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.1%)......... ( 45,971)
-----------
NET ASSETS-- 100.0%.................................... $70,440,726
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
18
NEW CENTURY AGGRESSIVE PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2003
================================================================================
INVESTMENT COMPANIES -- 99.3% SHARES VALUE
- --------------------------------------------------------------------------------
SECTOR FUNDS -- 44.3%
Biotech HOLDRs Trust ................................. 1,400 $ 180,250
iShares Dow Jones U.S. Technology Sector Index (a) ... 4,600 217,580
iShares Goldman Sachs Networking Index (a) ........... 9,200 248,768
iShares Goldman Sachs Semiconductor Index ............ 3,900 242,970
iShares MSCI Emerging Markets Index (a) .............. 2,500 371,025
iShares Nasdaq Biotechnology Index (a) ............... 1,600 113,584
S&P Technology Select Sector Depositary Receipt ...... 39,800 780,876
-----------
2,155,053
-----------
SMALL-CAP FUNDS -- 20.0%
Buffalo Small Cap (a) ................................ 9,782 212,278
iShares S&P SmallCap 600/BARRA Growth Index .......... 4,100 350,345
Perritt Micro Cap Opportunities Fund ................. 4,382 100,000
Royce Opportunity - Investor Class (a) ............... 26,119 309,776
-----------
972,399
-----------
LARGE-CAP FUNDS -- 19.2%
iShares Russell 1000 Growth Index .................... 5,200 233,480
iShares S&P 500/BARRA Growth Index ................... 3,000 159,270
Smith Barney Aggressive Growth - Class A (a) ......... 3,943 317,671
Smith Barney Large Capitalization Growth - Class A (a) 10,817 226,068
-----------
936,489
-----------
MID-CAP FUNDS -- 15.8%
iShares S&P MidCap 400/BARRA Growth Index ............ 2,200 255,200
Goldman Sachs Growth Opportunities - Class A (a) ..... 6,667 120,134
S&P MidCap 400 Depositary Receipts ................... 3,902 392,463
-----------
767,797
-----------
TOTAL INVESTMENT COMPANIES (Cost $4,164,514)........... $ 4,831,738
-----------
================================================================================
MONEY MARKET SECURITIES -- 3.5% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class S
(Cost $168,220) ...................................... 168,220 $ 168,220
-----------
TOTAL INVESTMENTS AT VALUE-- 102.8% (Cost $4,332,734).. $4,999,958
LIABILITIES IN EXCESS OF OTHER ASSETS-- (2.8%)......... ( 134,444)
-----------
NET ASSETS-- 100.0%.................................... $4,865,514
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
19
NEW CENTURY INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2003
================================================================================
INVESTMENT COMPANIES -- 99.2% SHARES VALUE
- --------------------------------------------------------------------------------
DIVERSIFIED FUNDS -- 31.9%
Driehaus International Discovery (a) ................. 41,911 $1,168,904
First Eagle SoGen Global - Class A ................... 14,310 463,223
iShares MSCI EAFE Index .............................. 13,300 1,657,180
Oakmark International - Class I ...................... 15,818 262,730
Tocqueville International Value (The) ................ 121,392 1,323,172
-----------
4,875,209
-----------
ASIA/PACIFIC FUNDS -- 29.9%
Fidelity Japan Smaller Companies (a) ................. 40,285 416,952
iShares MSCI Australia Index ......................... 47,100 598,170
iShares MSCI Japan Index (a) ......................... 137,005 1,265,926
iShares MSCI Pacific Ex-Japan Index .................. 10,800 753,516
iShares MSCI South Korea Index(a) .................... 13,000 314,470
Matthews China ....................................... 52,203 695,343
Matthews Japan (a) ................................... 40,950 524,161
-----------
4,568,538
-----------
EUROPE FUNDS -- 17.1%
iShares MSCI EMU Index ............................... 12,736 688,763
iShares MSCI Germany Index ........................... 68,400 950,076
iShares MSCI Sweden Index ............................ 22,600 317,756
iShares MSCI United Kingdom Index .................... 45,646 660,498
-----------
2,617,093
-----------
AMERICAS FUNDS -- 11.1%
iShares MSCI Brazil Index ............................ 26,600 371,602
iShares MSCI Canada Index ............................ 76,700 1,013,974
iShares S&P Latin American 40 Index .................. 6,000 314,400
-----------
1,699,976
-----------
EMERGING MARKETS FUNDS -- 9.2%
Dreyfus Premier Emerging Markets - Class A ........... 45,713 709,010
iShares MSCI Emerging Markets Index (a) .............. 2,700 400,707
T. Rowe Price Emerging Europe & Mediterranean (a) .... 28,032 303,021
-----------
1,412,738
-----------
TOTAL INVESTMENT COMPANIES (Cost $13,099,596).......... $15,173,554
-----------
================================================================================
MONEY MARKET SECURITIES -- 0.6% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class S
(Cost $90,186) ....................................... 90,186 $ 90,186
-----------
TOTAL INVESTMENTS AT VALUE-- 99.8% (Cost $13,189,782).. $15,263,740
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.2%........... 24,301
-----------
NET ASSETS-- 100.0% $15,288,041
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
20
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2003
================================================================================
INVESTMENT COMPANIES -- 97.8% SHARES VALUE
- --------------------------------------------------------------------------------
MERGER ARBITRAGE FUNDS -- 13.9%
Arbitrage Fund (The) (a) ............................. 135,059 $1,740,913
Gabelli ABC .......................................... 83,739 839,906
Merger Fund (The) .................................... 140,629 2,105,219
-----------
4,686,038
-----------
GLOBAL MACRO FUNDS -- 13.1%
First Eagle SoGen Global - Class A ................... 87,655 2,837,376
Franklin Mutual Discovery - Class Z .................. 40,149 783,313
Prudent Global Income ................................ 64,278 803,473
-----------
4,424,162
-----------
LONG/SHORT EQUITY FUNDS -- 11.9%
AXA Rosenberg U.S. Large/Mid Capitalization Long/
Short Equity - Institutional Shares ................. 17,961 190,563
AXA Rosenberg Value Long/Short Equity -
Institutional Shares (a) ............................ 31,396 303,603
CGM Focus (a) ........................................ 10,320 283,279
Franklin Templeton Global Long-Short - Class A(a) .... 46,556 498,150
Hussman Strategic Growth (a) ......................... 91,356 1,349,321
Needham Growth(a) .................................... 37,629 1,084,463
Needham Small Cap Growth (a) ......................... 19,327 311,751
-----------
4,021,130
-----------
ASSET ALLOCATION FUNDS -- 10.9%
Berwyn Income ........................................ 57,965 663,694
FPA Crescent - Class I ............................... 33,075 694,239
Greenspring .......................................... 49,347 936,598
Leuthold Core Investment ............................. 96,539 1,383,405
-----------
3,677,936
-----------
CONVERTIBLE ARBITRAGE FUNDS -- 9.4%
Calamos Market Neutral - A Shares .................... 217,904 3,166,144
-----------
HIGH YIELD FUNDS -- 9.0%
Calamos High Yield - Class A ......................... 66,704 707,064
Columbia High Yield .................................. 1,198 10,402
Fidelity Capital & Income ............................ 47,315 376,630
MainStay High Yield Corporate Bond - Class A ......... 138,117 835,610
Pioneer High Yield - Class A ......................... 93,966 1,089,071
-----------
3,018,777
-----------
REAL ESTATE INVESTMENT TRUST FUNDS -- 8.7%
Alpine Realty Income and Growth - Class Y ............ 59,544 992,594
First American Real Estate Securities - Class Y ...... 58,734 963,233
iShares Dow Jones U.S. Real Estate Index ............. 3,790 352,470
Security Capital U.S. Real Estate Shares ............. 46,763 639,255
-----------
2,947,552
-----------
OPTIONS/HEDGED FUNDS -- 6.5%
Gateway .............................................. 95,610 2,179,908
-----------
21
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2003
================================================================================
INVESTMENT COMPANIES -- 97.8% (Continued) SHARES VALUE
- --------------------------------------------------------------------------------
DEEP VALUE/DISTRESSED SECURITIES FUNDS -- 5.6%
Fidelity Leveraged Company Stock (a) ................. 40,454 $ 707,548
Franklin Mutual Beacon - Class Z ..................... 61,376 824,893
Third Avenue Value ................................... 8,844 359,235
-----------
1,891,676
-----------
NATURAL RESOURCES FUNDS -- 5.3%
Permanent Portfolio .................................. 21,449 500,182
RS Global Natural Resources (a) ...................... 57,439 937,986
T. Rowe Price New Era ................................ 14,377 348,076
-----------
1,786,244
-----------
MARKET NEUTRAL FUNDS -- 3.5%
J.P. Morgan Market Neutral - Institutional Shares .... 13,045 183,549
Phoenix Capital Market Neutral - Class A (a) ......... 86,523 985,502
-----------
1,169,051
-----------
TOTAL INVESTMENT COMPANIES (Cost $29,804,510).......... $32,968,618
-----------
================================================================================
COMMON STOCK -- 0.2% SHARES VALUE
- --------------------------------------------------------------------------------
Plum Creek Timber Company, Inc. ......................
(Cost $87,952) ...................................... 2,950 $ 77,733
-----------
================================================================================
MONEY MARKET SECURITIES -- 2.0% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class S
(Cost $691,552) 691,552 $ 691,552
-----------
TOTAL INVESTMENTS AT VALUE-- 100.0% (Cost $30,584,014,) $ 33,737,903
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.00%)........ ( 3,781)
-----------
NET ASSETS-- 100.0% $ 33,734,122
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
22
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2003
================================================================================
(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. These policies are in conformity with accounting principles
generally accepted in the United States of America.
23
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2003
================================================================================
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.
Investments in securities traded on a national securities exchange or included
in the NASDAQ National Market System are valued at the last reported sales
price; other securities traded in the over-the-counter market and listed
securities for which no sale is reported on that date are valued at the last
reported bid price. 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 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 October 31, 2003 and
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
24
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2003
================================================================================
Portfolio are charged to that Portfolio; other expenses are allocated
proportionately among the Portfolios in relation to the net assets of each
Portfolio.
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 year ended October 31, 2003, the Adviser waived investment advisory fees
of $1,967 for the Balanced Portfolio, waived its entire advisory fee of $40,388
and reimbursed $28,448 of other operating expenses for the Aggressive Portfolio
and waived investment advisory fees of $62,733 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 year ended October 31, 2003, the Advisor received
$15,721 in recouped fees from the Alternative Strategies Portfolio. During the
year, the Advisor did not recoup any other fees waived or other operating
expenses absorbed from the Balanced Portfolio, Aggressive Portfolio, or
International Portfolio.
25
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Continued)
OCTOBER 31, 2003
================================================================================
As of October 31, 2003, the amounts available for reimbursement that have been
paid and/or waived by the Advisor on behalf of the following Portfolios are as
follows:
- --------------------------------------------------------------------------------
New Century Balanced Portfolio............................. $ 1,967
New Century Aggressive Portfolio........................... $ 195,316
New Century International Portfolio........................ $ 188,431
- --------------------------------------------------------------------------------
The Advisor has recouped all fees waived and expenses reimbursed for the New
Century Alternative Strategies Portfolio as of October 31, 2003.
As of October 31, 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 $ -- $ -- $ 1,967
New Century Aggressive Portfolio $ 62,008 $ 64,472 $ 68,836
New Century International Portfolio $ 62,619 $ 63,079 $ 62,733
- --------------------------------------------------------------------------------
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 year ended October 31, 2003, the Distributor received $162,810,
$110,567, $9,813, $24,744 and $39,934 from the New Century Capital, Balanced,
Aggressive, International, and Alternative Strategies Portfolios, respectively,
pursuant to the 12b-1 plans. Also during this time, the Distributor received
sales commissions and other compensation of $32,665, $29,687, $169, $1,023 and
$24,728 in connection with the purchase of investment company shares by the New
Century Capital, Balanced, Aggressive, International and Alternative Strategies
Portfolios, 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.
26
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2003
(4) INVESTMENT TRANSACTIONS
For the year ended October 31, 2003, the cost of purchases and the proceeds from
sales of securities other than short-term investments and U.S. government
securities 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...... $ 59,364,379 $ 50,839,953 $ 3,317,401 $ 10,053,028 $ 15,324,944
============ ============ ============ ============= =============
Proceeds from sales of
investment securities.................. $ 63,692,602 $ 53,103,055 $ 3,120,166 $ 5,769,039 $ 5,252,351
============ ============ ============ ============= =============
- -----------------------------------------------------------------------------------------------------------------------------
(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 year ended October 31, 2003, the following reclassifications were made
as a result of permanent differences between the financial statement and income
tax reporting requirements:
- -----------------------------------------------------------------------------------------------------------------------------
NEW
NEW NEW NEW NEW CENTURY
CENTURY CENTURY CENTURY CENTURY ALTERNATIVE
CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------
Increase in Accumulated Net Investment
Income (Loss).......................... $ 494,695 $ 277,738 $ 41,560 $ 57,062 $ 29,078
Decrease Accumulated Net Realized Gains
(Losses) on Investments................ ( 68,027) ( 277,738) ( 8,930) -- ( 29,078)
------------ ------------ ------------ ------------- ------------
Decrease in Paid in Capital $ ( 426,668) $ -- $ ( 32,630) $ (57,062) $ --
============ ============ ============ ============= ============
- -----------------------------------------------------------------------------------------------------------------------------
These reclassifications did not change the net assets of the funds.
27
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2003
================================================================================
The tax character of distributable earnings (deficit) at October 31, 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
- ------------------------------------------------------------------------------------------------------------------------
Undistributed ordinary income ........ $ -- $ 266,822 $ -- $ -- $ 103,110
Unrealized appreciation .............. 10,806,124 5,343,074 643,786 2,058,835 3,128,634
Capital loss carryforwards ........... (19,250,602) (7,548,121) (1,833,058) (345,097) (210,041)
------------ ------------ ------------ ------------ ------------
Total distributable earnings (deficit) $ (8,444,478) $ (1,938,225) $ (1,189,272) $ 1,713,738 $ 3,021,703
============ ============ ============ ============ ============
- ------------------------------------------------------------------------------------------------------------------------
The following information is based upon the federal income tax cost of investment
securities as of October 31, 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......... $ 11,678,640 $ 5,904,038 $ 646,058 $ 2,128,146 $ 3,202,655
Gross unrealized depreciation......... (872,516) (560,964) (2,272) ( 69,311 ) ( 74,021 )
------------ ------------ ------------ ------------ ------------
Net unrealized appreciation .......... $ 10,806,124 $ 5,343,074 $ 643,786 $ 2,058,835 $ 3,128,634
============ ============ ============ ============ ============
Federal income tax cost .............. $ 84,890,586 $ 65,143,623 $ 4,356,172 $ 13,204,905 $ 30,609,269
============ ============ ============ ============ ============
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, 2003, the Portfolios had the following capital loss
carryforwards for federal income tax purposes. These capital loss carryforwards
may be utilized in 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
2011 ............................. 3,131,030 143,530 116,658 121,451 81,437
------------ ------------ ------------ ------------ ------------
$ 19,250,602 $ 7,548,121 $ 1,833,058 $ 345,097 $ 210,041
============ ============ ============ ============ ============
- ------------------------------------------------------------------------------------------------------------------------
28
REPORT OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS
===============================================================================
To the Shareholders and Board of Trustees
New Century Portfolios
Wellesley, Massachusetts
We have audited the statements of assets and liabilities of New Century
Portfolios (comprising, respectively, the New Century Capital Portfolio, the New
Century Balanced Portfolio, the New Century Aggressive Portfolio, the New
Century International Portfolio and the New Century Alternative Strategies
Portfolio), including the portfolios of investments, as of October 31, 2003, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended or the
period from commencement of operations to October 31, 2003, and the financial
highlights for each of the five years in the period then ended or the period
from commencement of operations to October 31, 2003. These financial statements
and financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2003 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the portfolios constituting the New Century Portfolios as of October 31,
2003, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended or the
period from commencement of operations to October 31, 2003, and the financial
highlights for each of the five years in the period then ended or the period
from commencement of operations to October 31, 2003, in conformity with
accounting principles generally accepted in the United States of America.
/s/ BRIGGS, BUNTING & DOUGHERTY, LLP
BRIGGS, BUNTING & DOUGHERTY, LLP
Philadelphia, Pennsylvania
November 21, 2003
29
BOARD OF TRUSTEES AND OFFICERS (Unaudited)
================================================================================
Overall responsibility for management of New Century rests with the Board of
Trustees. The Trustees serve during the lifetime of New Century and until its
termination, or until death, resignation, retirement or removal. The Trustees,
in turn, elect the officers of New Century to actively supervise its day-to-day
operations. The officers have been elected for an annual term. The following
table provides information regarding each Trustee and executive officer of New
Century:
NUMBER OF
PRINCIPAL OCCUPATION(S) PORTFOLIOS IN OTHER
NAME, POSITION(S) DURING PAST 5 YEARS FUND COMPLEX DIRECTORSHIPS
ADDRESS LENGTH OF HELD WITH AND DIRECTORSHIPS OF OVERSEEN HELD BY
AND AGE TIME SERVED NEW CENTURY PUBLIC COMPANIES BY TRUSTEE BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES:
- ------------------------------------------------------------------------------------------------------------------------
*Douglas A. Biggar Since 1988 Chairman/ Vice President and Clerk, 5 0
40 William Street, Trustee WestonFinancial Group, Inc.;
Suite 100 Clerk and Treasurer of Weston
Wellesley, MA 02481 Securities Corporation.
(age 56)
- ------------------------------------------------------------------------------------------------------------------------
*Joseph Robbat, Jr. Since 1988 Trustee Vice President and 5 0
40 William Street, Treasurer, WestonFinancial
Suite 100 Group, Inc
Wellesley, MA 02481
(age 53)
- ------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES:
- ------------------------------------------------------------------------------------------------------------------------
Stanley H. Cooper, Esq. Since 1988 Trustee Attorney in private practice. 5 0
One Ashford Lane
Andover, MA 01810
(age 56)
- ------------------------------------------------------------------------------------------------------------------------
Roger Eastman, CPA Since 1989 Trustee Executive Vice President and 5 0
32 Meetinghouse Square Chief Operating Officer, Danvers
Middleton, MA 01949 Savings Bank; Formerly Partner,
(age 73) Arthur Andersen & Co.
- ------------------------------------------------------------------------------------------------------------------------
Michael A. Diorio, CPA Since 1988 Trustee Consultant in private practice, 5 1
11 Calvin Drive Formerly Partner, Diorio,
Milford, MA 01757 Hudson &Pavento, P.C.
(age 58)
- ------------------------------------------------------------------------------------------------------------------------
OFFICERS:
- ------------------------------------------------------------------------------------------------------------------------
Wayne M. Grzecki Since 1996 President Vice President and Senior 5 0
40 William Street, Counselor,WestonFinancial
Suite 100 Group, Inc.
Wellesley, MA 02481
(age 52)
- ------------------------------------------------------------------------------------------------------------------------
Ronald A. Sugameli Since 1997 Vice Vice President and Senior 5 0
40 William Street, President Counselor, WestonFinancial
Suite 100 Group, Inc.
Wellesley, MA 02481
(age 51)
- ------------------------------------------------------------------------------------------------------------------------
30
BOARD OF TRUSTEES AND OFFICERS (Unaudited)
(Continued)
========================================================================================================================
NUMBER OF
PRINCIPAL OCCUPATION(S) PORTFOLIOS IN OTHER
NAME, POSITION(S) DURING PAST 5 YEARS FUND COMPLEX DIRECTORSHIPS
ADDRESS LENGTH OF HELD WITH AND DIRECTORSHIPS OF OVERSEEN HELD BY
AND AGE TIME SERVED COMPANY PUBLIC COMPANIES BY TRUSTEE BY TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------
Nicole M. Tremblay, Esq. Since 2002 CFO, Treasurer, Chief Compliance Officer, 5 0
40 William Street, Chief WestonFinancial Group, Inc.;
Suite 100 Compliance GoldK, Inc. (5/02-10/02);
Wellesley, MA 02481 Officer and Allmerica Financial (2/02-5/02);
(age 29) Secretary Sun Life Financial (1/96-2/02)
- ------------------------------------------------------------------------------------------------------------------------
Susan K. Arnold Since 1998 Assistant Senior Financial Counselor, 5 0
40 William Street, Treasurer WestonFinancial Group, Inc.
Suite 100
Wellesley, MA 02481
(age 44)
- ------------------------------------------------------------------------------------------------------------------------
Clara Prokup Since 1998 Assistant Director of Investment 5 0
40 William Street, Secretary Operations, WestonFinancial
Suite 100 Group, Inc.
Wellesley, MA 02481
(age 56)
- ------------------------------------------------------------------------------------------------------------------------
* Douglas A. Biggar and Joseph Robbat, Jr., as officers and control persons
of the Advisor and Distributor, are "interested persons" of New Century
within the meaning of Section 2(a)(19) of the Investment Company Act.
Additional information about members of the Board of Trustees and executive
officers is available in the Statement of Additional Information (SAI). To
obtain a free copy of the SAI, please call 1-888-639-0102.
31
FEDERAL TAX INFORMATION (UNAUDITED)
===============================================================================
For the fiscal year ended October 31, 2003 certain dividends paid by the Funds
may be subject to a maximum tax rate of 15%, as provided for by the Jobs and
Growth Tax Relief Reconciliation Act of 2003. The Funds intend to designate up
to a maximum amount of $1,269,163 and $224,495 for the New Century Balanced and
Alternative Strategies Portfolios, respectively, as taxed at a maximum rate of
15%. Complete information will be computed and reported in conjunction with your
2003 Form 1099-DIV.
32
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 an effective Prospectus which contains details
concerning the management fee expense and other pertinent information.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available without charge
upon request by calling toll-free 1-888-639-0102.
===============================================================================
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. Pursuant to Item 10(a), a copy of its code
of ethics is filed as an exhibit to this Form N-CSR. During the period covered
by this report, the code of ethics has not been amended, and the registrant has
not granted an express or implied waiver from the provisions of the code of
ethics.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's board of trustees has determined that the registrant has at
least one audit committee financial expert serving on its audit committee. The
name of the audit committee financial expert is Roger Eastman. Mr. Eastman is
"independent" for purposes of this Item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required
ITEM 5. AUDIT COMMITTEE OF LISTED COMPANIES
Not required
ITEM 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) Based on their evaluation (as of a date within 90 days of filing of this
report) of the registrant's disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940), the registrant's
principal executive officer and principal financial officer have concluded that
such disclosure controls and procedures are reasonably designed and are
operating effectively to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to them by
others within those entities, particularly during the period in which this
report is being prepared, and that the information required in filings on Form
N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no significant changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment Company
Act of 1940) that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
have materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
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: Attached hereto
(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
Exhibit 99.CERT Certifications pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002
Exhibit 99.906CERT Certifications pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
Exhibit 99.CODE ETH Code of Ethics
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 January 6, 2004
--------------------------------------------------
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 January 6, 2004
--------------------------------------------------
By (Signature and Title)* /s/ Nicole M. Tremblay
----------------------------
Nicole M. Tremblay, Treasurer
Date January 6, 2004
--------------------------------------------------
* Print the name and title of each signing officer under his or her signature.