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OMB APPROVAL
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OMB Number: 3235-0570
Expires: October 31, 2006
Estimated average burden
hours per response: 19.3
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
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
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(Address of principal executive offices) (Zip code)
Nicole M. Tremblay, Esq.
Weston Financial Group, Inc. 40 William Street Wellesley, Massachusetts 02481
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(Name and address of agent for service)
Registrant's telephone number, including area code: (781) 235-7055
----------------
Date of fiscal year end: October 31, 2004
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Date of reporting period: April 30, 2004
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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, 2004
(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:
Here is your Semi-Annual Report for the six-month period ended April 30, 2004.
This report outlines important financial information for each of the New Century
Portfolios. I invite you to visit our website at www.newcenturyportfolios.com
for additional information.
Although the U.S. equity markets slowed from their torrid pace in 2003, they
have generated reasonable gains. During the six-month period ended April 30,
2004, the S&P 500 Composite Index gained 6.27%, and the NASDAQ Composite Index
decreased by 0.62%. The Russell 3000 Growth Index, which reflects the
performance of stocks of smaller-capitalized domestic companies, gained 4.12%.
The international equity markets, as measured by the MSCI EAFE Index, gained
12.38%. The Lehman Brothers Government/Corporate Bond Index increased by 1.18%
during the period.
During this period, the New Century Capital Portfolio gained 5.6%, the New
Century Balanced Portfolio gained 5.3% and the New Century Aggressive Portfolio
gained 2.6%. The New Century International Portfolio gained 8.8% and the New
Century Alternative Strategies Portfolio gained 4.5%.
Although the markets have begun to move sideways after their meteoric increase
over the final three quarters of 2003, we retain a positive long-term economic
outlook. Inflation and interest rates are beginning to bottom; however, each
remains at a low historic level. The growth in corporate earnings has also
continued.
Nonetheless, 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
1
NEW CENTURY PORTFOLIOS
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2004 (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 ................ $ 89,118,591 $ 66,306,271 $ 4,686,414 $ 18,306,272 $ 41,754,048
============ ============ ============ ============ ============
At value (Note 1A) ................. $101,975,228 $ 73,849,494 $ 5,183,010 $ 21,007,974 $ 45,362,244
Dividends receivable .................... 158 18,068 6 68 8,334
Receivable for investment securities sold -- -- 313,460 -- --
Receivable for capital shares sold ...... 62,635 34,000 16,000 13,100 8,582
Other assets ............................ 11,052 8,460 567 2,136 5,429
------------ ------------ ------------ ------------ ------------
TOTAL ASSETS ....................... 102,049,073 73,910,022 5,513,043 21,023,278 45,384,589
------------ ------------ ------------ ------------ ------------
LIABILITIES
Payable to Advisor (Note 2) .......... 100,756 84,827 1,459 19,259 54,287
Payable for investment securities purchased -- -- 321,519 120,000 110,000
Payable for capital shares redeemed .. 5,000 -- -- -- 1,000
Other accrued expenses and liabilities 13,399 14,672 5,151 6,790 5,580
------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES .................. 119,155 99,499 328,129 146,049 170,867
------------ ------------ ------------ ------------ ------------
NET ASSETS .............................. $101,929,918 $ 73,810,523 $ 5,184,914 $ 20,877,229 $ 45,213,722
============ ============ ============ ============ ============
Net assets consist of:
Paid-in capital ...................... $105,010,724 $ 72,626,203 $ 6,255,026 $ 17,854,072 $ 41,352,796
Accumulated net investment income (loss) (381,162) 129,026 (21,889) 32,836 11,340
Accumulated net realized gains (losses)
on investments ..................... (15,556,281) (6,487,929) (1,544,819) 288,619 241,390
Unrealized appreciation of investments 12,856,637 7,543,223 496,596 2,701,702 3,608,196
------------ ------------ ------------ ------------ ------------
Net assets .............................. $101,929,918 $ 73,810,523 $ 5,184,914 $ 20,877,229 $ 45,213,722
============ ============ ============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ........................ 7,808,060 6,137,545 727,537 2,210,648 4,120,762
============ ============ ============ ============ ============
Net asset value, offering price and
redemption price per share ........... $ 13.05 $ 12.03 $ 7.13 $ 9.44 $ 10.97
============ ============ ============ ============ ============
See accompanying notes to financial statements.
2
NEW CENTURY PORTFOLIOS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2004 (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 ............................ $ 281,538 $ 957,264 $ 15,081 $ 172,112 $ 531,281
------------ ------------ ------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 2) .... 503,787 369,475 26,266 93,280 149,423
Distribution costs (Note 3) .......... 105,940 57,555 5,667 20,551 26,318
Accounting fees ...................... 20,115 18,669 15,259 15,982 17,010
Administration fees (Note 2) ......... 26,043 19,836 4,295 7,355 12,090
Transfer agent fees .................. 10,500 10,500 10,500 10,500 10,500
Legal and audit fees ................. 20,536 14,558 1,110 4,328 9,264
Custody fees ......................... 10,135 8,630 1,705 3,686 6,433
Trustees' fees and expenses (Note 2) . 5,078 3,646 267 970 2,038
Insurance expense .................... 2,711 2,083 131 332 823
Other expenses ....................... 12,613 22,551 5,222 7,252 2,140
------------ ------------ ------------ ------------ ------------
Total expenses ..................... 717,458 527,503 70,422 164,236 236,039
Less fees waived and/or expenses
reimbursed by the Advisor (Note 2) . -- -- (31,023) (24,316) --
Plus previously waived investment advisory
fees and expense reimbursements
recouped by the Advisor (Note 2) ... -- 1,967 -- -- --
------------ ------------ ------------ ------------ ------------
Net expenses ....................... 717,458 529,470 39,399 139,920 236,039
------------ ------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) ............ (435,920) 427,794 (24,318) 32,192 295,242
------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains on investments .... 3,380,335 934,089 293,610 637,391 371,462
Capital gain distributions from regulated
investment companies ............... 388,246 272,087 20,496 12,092 299,500
Net change in unrealized appreciation/
(depreciation) on investments ...... 2,031,011 2,096,119 (170,628) 627,744 454,307
------------ ------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAINS ON INVESTMENTS ................. 5,799,592 3,302,295 143,478 1,277,227 1,125,269
------------ ------------ ------------ ------------ ------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS ............... $ 5,363,672 $ 3,730,089 $ 119,160 $ 1,309,419 $ 1,420,511
============ ============ ============ ============ ============
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 SIX MONTHS
ENDED YEAR ENDED YEAR
APRIL 30, ENDED APRIL 30, ENDED
2004 OCTOBER 31, 2004 OCTOBER 31,
(UNAUDITED) 2003 (UNAUDITED) 2003
- -------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) ............ $ (435,920) $ ( 494,695) $ 427,794 $ 1,001,436
Net realized gains (losses) from
security transactions ................. 3,380,335 (3,278,273) 934,089 (211,178)
Capital gain distributions from regulated
investment companies .................. 388,246 239,189 272,087 289,977
Net change in unrealized appreciation/
(depreciation) on investments ......... 2,031,011 21,012,989 2,096,119 10,080,063
------------ ----------- ------------ ------------
Net increase in net assets from operations 5,363,672 17,479,210 3,730,089 11,160,298
------------ ----------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) -- -- ( 607,544) ( 1,269,163)
------------ ----------- ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............... 4,552,311 5,343,302 3,139,392 4,706,871
Net asset value of shares issued in
reinvestment of distributions
to shareholders ....................... -- -- 566,472 1,182,279
Payments for shares redeemed ............ (3,381,831) (9,736,354) (3,458,612) (8,094,571)
------------ ----------- ------------ ------------
Net increase (decrease) in net assets from
capital share transactions .............. 1,170,480 (4,393,052) 247,252 (2,205,421)
------------ ----------- ------------ ------------
TOTAL INCREASE IN NET ASSETS ............... 6,534,152 13,086,158 3,369,797 7,685,714
NET ASSETS
Beginning of period ..................... 95,395,766 82,309,608 70,440,726 62,755,012
------------ ----------- ------------ ------------
End of period ........................... $101,929,918 $ 95,395,766 $ 73,810,523 $ 70,440,726
============ ============ ============ ============
ACCUMULATED NET INVESTMENT
INCOME (LOSS) ........................... $ (381,162) $ -- $ 129,026 $ 266,822
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold .................................... 345,311 497,945 259,060 449,059
Reinvested .............................. -- -- 47,245 117,415
Redeemed ................................ (257,363) (937,285) (284,740) (793,113)
------------ ----------- ------------ ------------
Net increase (decrease) in shares outstanding 87,948 (439,340) 21,565 (226,639)
Shares outstanding, beginning of period . 7,720,112 8,159,452 6,115,980 6,342,619
------------ ----------- ------------ ------------
Shares outstanding, end of period ....... 7,808,060 7,720,112 6,137,545 6,115,980
============ ============ ============ ============
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 SIX MONTHS
ENDED YEAR ENDED YEAR
APRIL 30, ENDED APRIL 30, ENDED
2004 OCTOBER 31, 2004 OCTOBER 31,
(UNAUDITED) 2003 (UNAUDITED) 2003
- -------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) ............ $ (24,318) $ (41,560) $ 32,192 $ (57,062)
Net realized gains (losses) from
security transactions ................. 293,610 (117,066) 637,391 (132,110)
Capital gain distributions from regulated
investment companies .................. 20,496 9,338 12,092 10,659
Net change in unrealized appreciation/
(depreciation) on investments ......... (170,628) 1,155,927 627,744 3,373,431
------------ ----------- ------------ ------------
Net increase in net assets from operations . 119,160 1,006,639 1,309,419 3,194,918
------------ ----------- ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ............... 256,409 424,354 4,419,736 4,989,446
Payments for shares redeemed ............ (56,169) (175,881) (139,967) (551,685)
------------ ----------- ------------ ------------
Net increase in net assets from capital
share transactions ...................... 200,240 248,473 4,279,769 4,437,761
------------ ----------- ------------ ------------
TOTAL INCREASE IN NET ASSETS ............... 319,400 1,255,112 5,589,188 7,632,679
NET ASSETS
Beginning of period ..................... 4,865,514 3,610,402 15,288,041 7,655,362
------------ ----------- ------------ ------------
End of period ........................... $ 5,184,914 $ 4,865,514 $20,877,229 $15,288,041
============ ============ ============ ============
ACCUMULATED NET INVESTMENT
INCOME (LOSS) ........................... $ (21,889) $ -- $ 32,836 $ --
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold .................................... 34,611 71,447 463,349 667,427
Redeemed ................................ (7,397) (31,155) (14,334) (79,110)
------------ ----------- ------------ ------------
Net increase in shares outstanding ...... 27,214 40,292 449,015 588,317
Shares outstanding, beginning of period . 700,323 660,031 1,761,633 1,173,316
------------ ----------- ------------ ------------
Shares outstanding, end of period ....... 727,537 700,323 2,210,648 1,761,633
============ ============ ============ ============
See accompanying notes to financial statements.
5
NEW CENTURY PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================
NEW CENTURY ALTERNATIVE
STRATEGIES PORTFOLIO
-------------------------------
SIX MONTHS
ENDED YEAR
APRIL 30, ENDED
2004 OCTOBER 31,
(UNAUDITED) 2003
- ----------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ............................................. $ 295,242 $ 274,065
Net realized gains (losses) from security transactions ............ 371,462 (142,839)
Capital gain distributions from regulated investment companies .... 299,500 90,480
Net change in unrealized appreciation/
(depreciation) on investments ................................... 454,307 4,231,042
----------- -----------
Net increase in net assets from operations ........................... 1,420,511 4,452,748
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) .............................. (581,288) (224,495)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ......................................... 10,592,889 11,337,961
Net asset value of shares issued in reinvestment of
distributions to shareholders ................................... 573,254 220,766
Payments for shares redeemed ...................................... (525,766) (1,581,670)
----------- -----------
Net increase in net assets from capital share transactions ........... 10,640,377 9,977,057
----------- -----------
TOTAL INCREASE IN NET ASSETS ......................................... 11,479,600 14,205,310
NET ASSETS
Beginning of period ............................................... 33,734,122 19,528,812
----------- -----------
End of period ..................................................... $45,213,722 $33,734,122
=========== ===========
ACCUMULATED NET INVESTMENT INCOME .................................... $ 11,340 $ 103,110
=========== ===========
CAPITAL SHARE ACTIVITY
Sold .............................................................. 953,155 1,156,113
Reinvested ........................................................ 52,209 23,918
Redeemed .......................................................... (47,209) (159,173)
----------- -----------
Net increase in shares outstanding ................................ 958,155 1,020,858
Shares outstanding, beginning of period ........................... 3,162,607 2,141,749
----------- -----------
Shares outstanding, end of period ................................. 4,120,762 3,162,607
=========== ===========
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,
2004 --------------------------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
----------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ....... $ 12.36 $ 10.09 $ 11.97 $ 18.07 $ 16.71 $ 14.30
--------- --------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment loss ........................ (0.06) (0.06) (0.08) (0.10) (0.14) (0.14)
Net realized and unrealized gains
(losses) on investments .................. 0.75 2.33 (1.80) (4.62) 2.67 4.08
--------- --------- --------- --------- --------- ---------
Total from investment operations .............. 0.69 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 period ................ $ 13.05 $ 12.36 $ 10.09 $ 11.97 $ 18.07 $ 16.71
========= ========= ========= ========= ========= =========
TOTAL RETURN .................................. 5.58%(a) 22.50% ( 15.71%) ( 27.77%) 14.92% 28.94%
========= ========= ========= ========= ========= =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .......... $ 101,930 $ 95,396 $ 82,310 $ 109,873 $ 156,668 $ 120,583
========= ========= ========= ========= ========= =========
Ratio of expenses to average net assets .... 1.41%(b) 1.45% 1.40% 1.29% 1.27% 1.39%
Ratio of net investment loss to
average net assets (0.86%)(b) ( 0.59%) ( 0.62%) ( 0.72%) ( 0.80%) ( 0.91%)
Portfolio turnover 48%(b) 71% 59% 70% 51% 64%
(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,
2004 --------------------------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
----------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ....... $ 11.52 $ 9.89 $ 11.35 $ 3.64 $ 13.42 $ 12.83
--------- --------- --------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income ...................... 0.07 0.16 0.13 0.23 0.22 0.20
Net realized and unrealized gains
(losses) on investments .................. 0.54 1.67 ( 1.49) ( 1.71) 1.17 1.68
--------- --------- --------- --------- --------- ---------
Total from investment operations ........... 0.61 1.83 ( 1.36) ( 1.48) 1.39 1.88
--------- --------- --------- --------- --------- ---------
Less distributions:
Distributions from net investment income . ( 0.10) ( 0.20) (0.10) ( 0.23) ( 0.22) ( 0.20)
Distributions from net realized gains .... -- -- -- ( 0.58) ( 0.95) ( 1.09)
--------- --------- --------- --------- --------- ---------
Total distributions ........................ ( 0.10) ( 0.20) ( 0.10) ( 0.81) ( 1.17) ( 1.29)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period ............. $ 12.03 $ 11.52 $ 9.89 $ 11.35 $ 13.64 $ 13.42
========= ========= ========= ========= ========= =========
TOTAL RETURN .................................. 5.30%(a) 18.84% ( 12.08%) ( 11.21%) 10.26% 15.26%
========= ========= ========= ========= ========= =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .......... $ 73,811 $ 70,441 $ 62,755 $ 71,251 $ 79,553 $ 65,721
========= ========= ========= ========= ========= =========
Ratio of expenses to average net assets .... 1.43%(b) 1.45%(c) 1.48% 1.49% 1.40% 1.46%
Ratio of net investment income to
average net assets ....................... 1.16%(b) 1.56%(c) 1.19% 1.87% 1.51% 1.45%
Portfolio turnover ......................... 29%(b) 80% 93% 69% 43% 60%
(a) Not annualized.
(b) Annualized.
(c) 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.
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,
2004 -------------------------------------------
(UNAUDITED) 2003 2002 2001
----------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ......... $ 6.95 $ 5.47 $ 7.37 $ 10.00
----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment loss ........................ (0.03) (0.06) (0.07) (0.07)
Net realized and unrealized gains (losses)
on investments ............................ 0.21 1.54 (1.83) (2.56)
----------- ----------- ----------- -----------
Total from investment operations ............. 0.18 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 period ............... $ 7.13 $ 6.95 $ 5.47 $ 7.37
=========== =========== =========== ===========
TOTAL RETURN .................................... 2.59%(a) 27.06% (25.78%) (26.30%)
=========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............ $ 5,185 $ 4,866 $ 3,610 $ 1,846
=========== =========== =========== ===========
Ratios of expenses to average net assets:
Before expense reimbursement and waived fees .. 2.68%(b) 3.20% 2.95% 5.90%
After expense reimbursement and waived fees ... 1.50%(b) 1.50% 1.50% 1.50%
Ratios of net investment loss to average net assets:
Before expense reimbursement and waived fees .. (2.11%)(b) (2.73%) (2.50%) (5.35%)
After expense reimbursement and waived fees ... (0.93%)(b) (1.03%) (1.05%) (0.95%)
Portfolio turnover .............................. 80%(b) 78% 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,
2004 -------------------------------------------
(UNAUDITED) 2003 2002 2001
----------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ......... $ 8.68 $ 6.52 $ 7.41 $ 10.00
----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income (loss) ............... 0.01 (0.03) (0.06) (0.04)
Net realized and unrealized gains (losses)
on investments ............................ 0.75 2.19 (0.81) (2.55)
----------- ----------- ----------- -----------
Total from investment operations ............. 0.76 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 period .................. $ 9.44 $ 8.68 $ 6.52 $ 7.41
=========== =========== =========== ===========
TOTAL RETURN .................................... 8.76%(a) 33.13% (11.84%) (25.90%)
=========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............ $ 20,877 $ 15,288 $ 7,655 $ 731
=========== =========== =========== ===========
Ratios of expenses to average net assets:
Before expense reimbursement and waived fees .. 1.76%(b) 2.11% 2.54% 10.81%
After expense reimbursement and waived fees ... 1.50%(b) 1.50% 1.50% 1.50%
Ratios of net investment income (loss)
to average net assets:
Before expense reimbursement and waived fees .. 0.08%(b) (1.16%) (2.34%) (9.81%)
After expense reimbursement and waived fees ... 0.34%(b) (0.55%) (1.30%) (0.50%)
Portfolio turnover .............................. 35%(b) 56% 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
ENDED
APRIL 30, YEARS ENDED OCTOBER 31,
2004 -----------------------------
(UNAUDITED) 2003 2002(a)
--------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period .......... $ 10.67 $ 9.12 $ 10.00
--------- -------- ---------
Income (loss) from investment operations:
Net investment income ....................... 0.10 0.11 0.01
Net realized and unrealized gains (losses)
on investments ............................. 0.38 1.54 (0.89)
--------- -------- ---------
Total from investment operations .............. 0.48 1.65 (0.88)
--------- -------- ---------
Less distributions:
Distributions from net investment income ....... (0.18) (0.10) --
Distributions from net realized gains .......... -- -- --
--------- -------- ---------
Total distributions .............................. (0.18) (0.10) --
--------- -------- ---------
Net asset value, end of period ................... $ 10.97 $ 10.67 $ 9.12
========= ======== =========
TOTAL RETURN ..................................... 4.45%(b) 18.20% ( 8.80%)(b)
========= ======== =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) ............. $ 45,214 $ 33,734 $ 19,529
========= ======== =========
Ratios of expenses to average net assets ......... 1.18%(c) 1.40% 1.49%(c)(d)
Ratios of net investment income to average net assets 1.48%(c) 1.06% 0.32%(c)(d)
Portfolio turnover ............................... 11%(c) 21% 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) Absent fee waivers and expense reimbursements by the Advisor, the ratio of
expenses to average net assets would have been 1.72%(c) and the ratio of
net investment income to average net assets would have been 0.09%(c) for
the period ended October 31, 2002 (Note 2).
See accompanying notes to financial statements.
11
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 2004 (UNAUDITED)
=======================================================================================
INVESTMENT COMPANIES -- 99.5% SHARES VALUE
- ---------------------------------------------------------------------------------------
GROWTH FUNDS -- 39.5%
American Funds AMCAP - Class A (a) ................... 212,681 $ 3,643,227
American Growth Fund of America - Class A ............ 259,371 6,486,870
Calamos Growth - Class A (a) ......................... 117,564 5,284,486
Fidelity Capital Appreciation ........................ 168,209 4,190,101
Goldman Sachs Growth Opportunities - Class A (a) ..... 213,091 4,076,441
iShares Russell 1000 Growth Index .................... 78,535 3,658,160
Marsico 21st Century (a) ............................. 463,653 4,641,163
Smith Barney Large Capitalization Growth - Class A (a) 385,991 8,314,239
-----------
40,294,687
-----------
GROWTH AND INCOME FUNDS -- 24.4%
Hotchkis & Wiley Large Cap Value - Class A ........... 140,710 2,703,037
iShares Dow Jones Select Dividend Index Fund ......... 21,900 1,175,154
iShares Russell 1000 Value Index ..................... 14,800 861,360
iShares S&P 500 Index ................................ 61,150 6,787,650
iShares S&P MidCap 400/BARRA Value Index ............. 27,500 3,059,375
SEI S&P 500 Index - Class E .......................... 126,050 4,312,172
Vanguard 500 Index - Investor Shares ................. 58,140 5,951,808
-----------
24,850,556
-----------
SMALL COMPANY FUNDS -- 18.7%
Buffalo Small Cap (a) ................................ 50,748 1,249,920
iShares S&P SmallCap 600/BARRA Growth Index .......... 21,700 1,967,756
iShares S&P SmallCap 600/BARRA Value Index ........... 13,700 1,408,086
Royce Opportunity - Investor Class (a) ............... 585,059 7,184,531
William Blair Small Cap Growth - Class I (a) ......... 309,278 7,249,476
-----------
19,059,769
-----------
FOREIGN STOCK FUNDS -- 10.4%
Driehaus International Discovery (a) ................. 106,612 3,231,407
Franklin Mutual Discovery - Class Z .................. 942 20,051
iShares MSCI EAFE Index .............................. 23,900 3,271,910
iShares MSCI Emerging Markets Index .................. 17,100 2,706,930
iShares MSCI Japan Index ............................. 47,000 476,580
Tocqueville International Value (The) ................ 72,849 886,571
-----------
10,593,449
-----------
AGGRESSIVE FUNDS -- 6.5%
Smith Barney Aggressive Growth - Class A (a) ......... 76,148 6,649,962
-----------
TOTAL INVESTMENT COMPANIES (Cost $88,591,786) ........... $ 101,448,423
-----------
=======================================================================================
MONEY MARKET SECURITIES -- 0.5% SHARES VALUE
- ---------------------------------------------------------------------------------------
First American Treasury Obligation - Class A
(Cost $526,805) ..................................... 526,805 $ 526,805
-----------
TOTAL INVESTMENTS AT VALUE--100.0% (Cost $89,118,591) $ 101,975,228
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.0%) ....... (45,310)
-----------
NET ASSETS-- 100.0% .................................. $ 101,929,918
=============
(a) Non-income producing security.
See accompanying notes to financial statements.
12
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 2004 (UNAUDITED)
=======================================================================================
INVESTMENT COMPANIES -- 99.3% SHARES VALUE
- ---------------------------------------------------------------------------------------
GROWTH AND INCOME FUNDS -- 26.6%
Dodge & Cox Stock .................................... 25,748 $ 2,989,606
Franklin Mutual Shares - Class Z ..................... 2,358 50,248
Hotchkis & Wiley Large Cap Value - Class A ........... 200,257 3,846,936
iShares Russell 1000 Value Index ..................... 200 11,640
iShares S&P 500 Index ................................ 76,400 8,480,400
SEI S&P 500 Index - Class E ......................... 86,293 2,952,095
Vanguard 500 Index - Investor Shares ................. 12,698 1,299,940
-----------
19,630,865
-----------
GROWTH FUNDS -- 18.0%
American Funds AMCAP - Class A (a) ................... 204,538 3,503,743
Calamos Growth - Class A(a) ......................... 28,965 1,301,991
Fidelity Capital Appreciation ........................ 67,398 1,678,891
iShares Russell 1000 Growth Index .................... 16,300 759,254
S&P MidCap 400 Depositary Receipts ................... 17,580 1,873,149
Smith Barney Large Capitalization Growth - Class A(a) 194,593 4,191,538
-----------
13,308,566
-----------
HIGH YIELD BOND FUNDS -- 12.5%
Fidelity Advisor High Income Advantage - Class I ..... 238,323 2,199,716
MainStay High Yield Corporate Bond - Class A ......... 351,138 2,191,101
Pioneer High Yield - Class A ......................... 412,261 4,835,815
-----------
9,226,632
-----------
SMALL COMPANY FUNDS -- 12.0%
iShares S&P SmallCap 600/BARRA Growth Index .......... 15,400 1,396,472
iShares S&P SmallCap 600/BARRA Value Index ........... 13,900 1,428,642
Royce Opportunity - Investor Class (a) ............... 242,765 2,981,148
William Blair Small Cap Growth - Class I (a) ......... 130,068 3,048,790
-----------
8,855,052
-----------
GOVERNMENT CORPORATE BOND FUNDS -- 9.2%
Loomis Sayles Bond - Institutional Class ............. 367,650 4,764,745
Rydex Series - Juno - Investor Class (a) ............. 94,476 2,001,944
-----------
6,766,689
-----------
FOREIGN STOCK FUNDS -- 8.1%
Driehaus International Discovery (a) ................. 29,565 896,118
iShares MSCI EAFE Index .............................. 24,700 3,381,430
Tocqueville International Value (The) ................ 142,684 1,736,459
-----------
6,014,007
-----------
CONVERTIBLE SECURITY FUNDS -- 5.1%
Calamos Growth and Income - Class A .................. 73,664 2,021,349
Smith Barney Convertible - Class A ................... 97,935 1,705,043
-----------
3,726,392
-----------
13
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2004 (UNAUDITED)
=======================================================================================
INVESTMENT COMPANIES -- 99.3% (Continued) SHARES VALUE
- ---------------------------------------------------------------------------------------
WORLDWIDE BOND FUNDS -- 4.2%
Payden Global Fixed Income ........................... 141,536 $ 1,406,872
PIMCO Foreign Bond - Institutional Class ............. 161,994 1,697,694
-----------
3,104,566
-----------
HIGH QUALITY BOND FUNDS -- 3.6%
Dodge & Cox Income ................................... 205,031 2,618,245
-----------
TOTAL INVESTMENT COMPANIES (Cost $65,707,791) ........... $ 73,251,014
-----------
=======================================================================================
MONEY MARKET SECURITIES -- 0.8% SHARES VALUE
- ---------------------------------------------------------------------------------------
First American Treasury Obligation - Class A
(Cost $598,480) ..................................... 598,480 $ 598,480
-----------
TOTAL INVESTMENTS AT VALUE-- 100.1% (Cost $66,306,271) .. $ 73,849,494
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.1%) .......... ( 38,971)
-----------
NET ASSETS-- 100.0% $ 73,810,523
============
(a) Non-income producing security.
See accompanying notes to financial statements.
14
NEW CENTURY AGGRESSIVE PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 2004 (UNAUDITED)
=======================================================================================
INVESTMENT COMPANIES -- 99.3% SHARES VALUE
- ---------------------------------------------------------------------------------------
SECTOR FUNDS -- 53.8%
Biotech HOLDRs Trust ................................. 2,400 $ 359,832
iShares Dow Jones U.S. Energy Sector Index ........... 5,600 299,488
iShares Goldman Sachs Natural Resources Index ........ 2,000 216,760
iShares Goldman Sachs Networking Index (a) ........... 11,100 301,587
iShares Goldman Sachs Semiconductor Index (a) ........ 5,800 320,740
iShares MSCI Emerging Markets Index .................. 2,900 459,070
iShares Nasdaq Biotechnology Index (a) ............... 4,000 311,040
S&P Technology Select Sector Depositary Receipt ...... 26,800 519,652
-----------
2,788,169
-----------
SMALL-CAP FUNDS -- 15.8%
Buffalo Small Cap (a) ................................ 9,872 243,143
Perritt Micro Cap Opportunities ...................... 9,865 240,424
Royce Opportunity - Investor Class (a) ............... 27,412 336,620
-----------
820,187
-----------
LARGE-CAP FUNDS -- 15.8%
Fidelity Capital Appreciation ........................ 9,621 239,673
Smith Barney Aggressive Growth - Class A (a) ......... 3,943 344,325
Smith Barney Large Capitalization Growth - Class A (a) 10,817 232,991
-----------
816,989
-----------
MID-CAP FUNDS -- 13.9%
Calamos Growth - Class A (a) ......................... 2,724 122,439
iShares S&P MidCap 400/BARRA Growth Index ............ 1,500 181,020
S&P MidCap 400 Depositary Receipts ................... 3,902 415,758
-----------
719,217
-----------
TOTAL INVESTMENT COMPANIES (Cost $4,647,966) ............ $ 5,144,562
-----------
=======================================================================================
MONEY MARKET SECURITIES -- 0.7% SHARES VALUE
- ---------------------------------------------------------------------------------------
First American Treasury Obligation - Class A
(Cost $38,448) ....................................... 38,448 $ 38,448
-----------
TOTAL INVESTMENTS AT VALUE-- 100.0% (Cost $4,686,414) ... $ 5,183,010
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.0% ............ 1,904
-----------
NET ASSETS-- 100.0% ..................................... $ 5,184,914
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
15
NEW CENTURY INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 2004 (UNAUDITED)
=======================================================================================
INVESTMENT COMPANIES -- 99.4% SHARES VALUE
- ---------------------------------------------------------------------------------------
ASIA/PACIFIC FUNDS -- 28.9%
Fidelity Japan Smaller Companies ..................... 65,953 $ 817,821
iShares MSCI Australia Index ......................... 47,100 612,771
iShares MSCI Japan Index ............................. 157,605 1,598,115
iShares MSCI Pacific Ex-Japan Index .................. 8,100 583,200
iShares MSCI South Korea Index ....................... 13,000 336,050
Matthews China ....................................... 59,929 789,870
Matthews Japan (a) ................................... 59,673 906,431
Matthews Pacific Tiger - Class I ..................... 28,845 384,496
-----------
6,028,754
-----------
EUROPE FUNDS -- 27.7%
iShares MSCI Austria Index ........................... 55,900 894,959
iShares MSCI Belgium Index ........................... 21,300 286,059
iShares MSCI Germany Index ........................... 97,200 1,511,460
iShares MSCI Sweden Index ............................ 79,500 1,318,110
iShares MSCI United Kingdom Index .................... 45,646 711,621
Ivy European Opportunities - Class A ................. 48,059 1,073,642
-----------
5,795,851
-----------
DIVERSIFIED FUNDS -- 24.0%
Driehaus International Discovery (a) ................. 49,355 1,495,941
iShares MSCI EAFE Index .............................. 10,300 1,410,070
Oakmark International - Class I ...................... 15,921 291,680
Tocqueville International Value (The) ................ 148,469 1,806,871
-----------
5,004,562
-----------
AMERICAS FUNDS -- 9.7%
iShares MSCI Canada Index ............................ 76,700 1,025,479
iShares MSCI Mexico Index ............................ 21,000 395,010
iShares S&P Latin American 40 Index .................. 11,000 615,780
-----------
2,036,269
-----------
EMERGING MARKETS FUNDS -- 9.1%
Dreyfus Premier Emerging Markets - Class A ........... 23,001 394,003
Driehaus Emerging Markets Growth (a) ................. 14,444 289,745
iShares MSCI Emerging Markets Index .................. 3,100 490,730
T. Rowe Price Emerging Europe & Mediterranean ........ 55,266 724,539
-----------
1,899,017
-----------
TOTAL INVESTMENT COMPANIES (Cost $18,062,751)............ $ 20,764,453
-----------
=======================================================================================
MONEY MARKET SECURITIES -- 1.2% SHARES VALUE
- ---------------------------------------------------------------------------------------
First American Treasury Obligation - Class A
(Cost $243,521) ..................................... 243,521 $ 243,521
-----------
TOTAL INVESTMENTS AT VALUE-- 100.6% (Cost $18,306,272)... $ 21,007,974
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.6%) .......... ( 130,745)
-----------
NET ASSETS-- 100.0% ..................................... $ 20,877,229
===========
(a) Non-income producing security.
See accompanying notes to financial statements.
16
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 2004 (UNAUDITED)
=======================================================================================
INVESTMENT COMPANIES -- 98.3% SHARES VALUE
- ---------------------------------------------------------------------------------------
MERGER ARBITRAGE FUNDS -- 17.3%
Arbitrage Fund (The) - Class R (a) ................... 191,643 $ 2,382,119
Enterprise Mergers and Acquisitions - Class A (a) .... 97,715 1,087,564
Gabelli ABC .......................................... 88,846 876,022
Merger Fund (The) .................................... 225,661 3,472,924
-----------
7,818,629
-----------
GLOBAL MACRO FUNDS -- 12.5%
First Eagle SoGen Global - Class A ................... 105,998 3,611,350
Franklin Mutual Discovery - Class Z .................. 51,075 1,086,881
Prudent Global Income ................................ 79,775 964,485
-----------
5,662,716
-----------
LONG/SHORT EQUITY FUNDS -- 11.5%
CGM Focus (a) ........................................ 15,422 434,283
Hussman Strategic Growth (a) ......................... 142,106 2,246,700
Needham Growth (a) ................................... 32,454 931,437
Needham Small Cap Growth (a) ......................... 27,901 462,883
Prudent Bear ......................................... 103,567 614,152
Franklin Templeton Global Long-Short - Class A (a) ... 46,556 520,497
-----------
5,209,952
-----------
ASSET ALLOCATION FUNDS -- 11.3%
Berwyn Income ........................................ 59,283 688,277
FPA Crescent - Class I ............................... 48,654 1,094,228
Greenspring .......................................... 60,713 1,233,071
Leuthold Core Investment ............................. 100,017 1,477,245
Oakmark Equity and Income - Class I .................. 433 10,000
Rydex Series - Juno - Investor Class (a) ............. 27,907 591,342
-----------
5,094,163
-----------
HIGH YIELD FUNDS -- 8.5%
Calamos High Yield - Class A ......................... 87,589 943,333
Columbia High Yield - Class Z ........................ 1,236 10,725
Fidelity Capital & Income ............................ 59,511 472,519
MainStay High Yield Corporate Bond - Class A ........ 203,316 1,268,695
Pioneer High Yield - Class A ......................... 96,902 1,136,658
-----------
3,831,930
-----------
REAL ESTATE INVESTMENT TRUST FUNDS -- 7.8%
AIM Select Real Estate Income (b) .................... 19,670 290,723
Alpine Realty Income and Growth - Class Y ............ 61,048 1,029,260
iShares Dow Jones U.S. Real Estate Index ............. 3,790 352,849
Security Capital U.S. Real Estate Shares ............. 64,769 899,644
Third Avenue Real Estate Value ....................... 43,396 934,752
-----------
3,507,228
-----------
NATURAL RESOURCES FUNDS -- 7.7%
Permanent Portfolio .................................. 24,343 587,152
PIMCO Commodity Real Return Strategy - Class A ....... 95,032 1,395,070
RS Global Natural Resources (a) ...................... 67,453 1,299,154
T. Rowe Price New Era ................................ 7,544 207,153
-----------
3,488,529
-----------
17
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
APRIL 30, 2004 (UNAUDITED)
=======================================================================================
INVESTMENT COMPANIES -- 98.3% (Continued) SHARES VALUE
- ---------------------------------------------------------------------------------------
CONVERTIBLE ARBITRAGE FUNDS -- 7.2%
Calamos Market Neutral - A Shares .................... 228,886 $ 3,273,071
-----------
OPTIONS/HEDGED FUNDS -- 6.0%
Gateway .............................................. 117,059 2,713,434
-----------
DEEP VALUE/DISTRESSED SECURITIES FUNDS -- 5.1%
Fidelity Leveraged Company Stock (a) ................. 23,037 448,985
Franklin Mutual Beacon - Class Z ..................... 80,425 1,167,764
Third Avenue Value ................................... 16,134 697,815
-----------
2,314,564
-----------
MARKET NEUTRAL FUNDS -- 3.4%
J.P. Morgan Market Neutral - Institutional Shares (a) 13,045 187,984
Laudus Rosenberg U.S. Large/Mid Capitalization
Long/Short Equity (a) ............................... 22,590 238,102
Laudus Rosenberg Value Long/Short Equity (a) ......... 31,396 302,975
Phoenix Capital Market Neutral - Class A (a) ......... 73,071 814,005
-----------
1,543,066
-----------
TOTAL INVESTMENT COMPANIES (Cost $40,848,336) ........... $44,457,282
-----------
=======================================================================================
COMMON STOCKS -- 0.2% SHARES VALUE
- ---------------------------------------------------------------------------------------
Plum Creek Timber Company, Inc.
(Cost $87,952) ...................................... 2,950 $ 87,202
-----------
=======================================================================================
MONEY MARKET SECURITIES -- 1.8% SHARES VALUE
- ---------------------------------------------------------------------------------------
First American Treasury Obligation - Class A
(Cost $817,760) ..................................... 817,760 $ 817,760
-----------
TOTAL INVESTMENTS AT VALUE--100.3% (Cost $41,754,048) ... $45,362,244
LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.3%) .......... ( 148,522)
-----------
NET ASSETS-- 100.0% ..................................... $45,213,722
===========
(a) Non-income producing security.
(b) Closed-end fund.
See accompanying notes to financial statements.
18
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2004 (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 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.
19
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2004 (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.
Investments in securities traded on a national securities exchange are valued at
the last reported sales price; securities included in the NASDAQ National Market
System are valued at the NASDAQ Official Closing 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 April 30, 2004 and
October 31, 2003.
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
20
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2004 (UNAUDITED)
================================================================================
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 net assets and .75% of average daily 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 average daily 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, 2004, the Advisor waived its entire advisory
fee of $26,266 and reimbursed $4,757 of other operating expenses for the New
Century Aggressive Portfolio and waived investment advisory fees of $24,316 for
the New Century International Portfolio. No waiver was necessary for the New
Century Balanced or New Century Alternative Strategies Portfolios.
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, 2004, the Advisor
received $1,967 in recouped fees from the New Century Balanced Portfolio. During
the period, the Advisor did not recoup any other fees waived or other operating
expenses absorbed from the New Century Aggressive Portfolio and New Century
International Portfolio. The Advisor has recouped all fees waived and expenses
reimbursed for the New Century Balanced Portfolio and New Century Alternative
Strategies Portfolio as of April 30, 2004.
21
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2004 (UNAUDITED)
================================================================================
As of April 30, 2004, 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 Aggressive Portfolio ............................... $ 226,339
New Century International Portfolio ............................ $ 212,747
- --------------------------------------------------------------------------------
The Advisor has recouped all fees waived and expenses reimbursed for the
Balanced Portfolio and Alternative Strategies Portfolio as of April 30, 2004.
As of April 30, 2004, the Advisor may recapture a portion of the above amounts
no later than the dates as stated below:
- -------------------------------------------------------------------------------------------------------
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2004 2005 2006 2007
- -------------------------------------------------------------------------------------------------------
New Century Aggressive Portfolio ......... $ 62,008 $ 64,472 $ 68,836 $ 31,023
New Century International Portfolio ...... $ 62,619 $ 63,079 $ 62,733 $ 24,316
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, 2004, the Distributor received $105,940,
$57,555, $5,667, $20,551 and $26,318 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 $18,511, $34,795, $908, $2,799 and
$54,486 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
22
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2004 (UNAUDITED)
================================================================================
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.
(4) INVESTMENT TRANSACTIONS
For the six months ended April 30, 2004, 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 ............ $ 25,037,117 $ 11,053,377 $ 2,254,633 $ 7,505,427 $ 12,842,462
============ ============ =========== ============ =============
Proceeds from sales of investment securities .. $ 24,148,673 $ 10,715,439 $ 2,064,790 $ 3,179,664 $ 2,170,098
============ ============ =========== ============ =============
- ---------------------------------------------------------------------------------------------------------------------------------
(5) TAX MATTERS
It is each Portfolio's policy to comply with the special provisions of
Subchapter M 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.
23
NEW CENTURY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2004 (UNAUDITED)
=============================================================================================================================
The tax character of distributable earnings (deficit) at April 30, 2004 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 ............. $ 1,105,788 $ 607,702 $ 19,378 $ 315,437 $ 57,797
Unrealized appreciation ................. 12,856,637 7,439,193 473,158 2,686,579 3,582,941
Capital loss carryforwards .............. (19,250,602) (7,548,121) (1,833,058) (345,097) (210,041)
Other gains ............................. 2,207,371 685,546 270,410 366,238 430,229
------------ ------------ ------------ ------------ ------------
Total distributable earnings (deficit) .. $ (3,080,806) $ 1,184,320 $ (1,070,112) $ 3,023,157 $ 3,860,926
============ ============ ============ ============ ============
- -----------------------------------------------------------------------------------------------------------------------------
The following information is based upon the federal income tax cost of investment securities
as of April 30, 2004:
- -----------------------------------------------------------------------------------------------------------------------------
NEW
NEW NEW NEW NEW CENTURY
CENTURY CENTURY CENTURY CENTURY ALTERNATIVE
CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------
Gross unrealized appreciation ........... $ 13,785,257 $ 7,867,944 $ 535,411 $ 2,897,272 $ 3,919,574
Gross unrealized depreciation ........... (928,620) (428,751) (62,253) (210,693) (336,633)
------------ ------------ ------------ ------------ ------------
Net unrealized appreciation ............. $ 12,856,637 $ 7,439,193 $ 473,158 $ 2,686,579 $ 3,582,941
============ ============ ============ ============ ============
Federal income tax cost ................. $ 89,118,591 $ 66,410,301 $ 4,709,852 $ 18,321,395 $ 41,779,303
============ ============ ============ ============ ============
- ----------------------------------------------------------------------------------------------------------------------------
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 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
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
============ ============ ============ ============ ============
- ----------------------------------------------------------------------------------------------------------------------------
24
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INVESTMENT ADVISOR AND ADMINISTRATOR
Weston Financial Group, Inc.
Wellesley, MA
DISTRIBUTOR
Weston Securities Corporation
Wellesley, MA
COUNSEL
Greenburg Traurig, LLP
Philadelphia, PA
INDEPENDENT ACCOUNTANTS
Briggs, Bunting and Dougherty, LLP
Philadelphia, PA
TRANSFER AGENT
Ultimus Fund Solutions, LLC
Cincinnati, OH
CUSTODIAN
U.S. Bank, N.A.
Cincinnati, OH
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Portfolios. This report is
authorized for distribution to prospective investors in the Portfolios only if
preceded or accompanied by 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.
Not required
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not required
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant has no procedures by which shareholders may recommend nominees to
the registrant's board of trustees.
ITEM 10. CONTROLS AND PROCEDURES.
(a) Based on their evaluation (as of a date within 90 days of the 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 11. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) 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 required
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2(a)): Attached hereto
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the Act (17 CFR 270.23c-1) sent or given during the period covered by the report
by or on behalf of the registrant to 10 or more persons: Not applicable
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)): 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
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 July 8, 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 July 8, 2004
--------------------------------------------------
By (Signature and Title)* /s/ Nicole M. Tremblay
----------------------------
Nicole M. Tremblay, Treasurer
Date July 8, 2004
--------------------------------------------------
* Print the name and title of each signing officer under his or her signature.