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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, 2004
------------------------------------
Date of reporting period: October 31, 2004
------------------------------------
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, 2004
40 William Street, Suite 100, Wellesley MA 02481 781-239-0445 888-639-0102 Fax 781-237-1635
CONTENTS
- --------------------------------------------------------------------------------
PRESIDENT'S LETTER 1
PERFORMANCE CHARTS 3-5
PORTFOLIO INFORMATION 6-10
New Century Portfolios
Statements of Assets and Liabilities 11
Statements of Operations 12
Statements of Changes in Net Assets 13-15
Financial Highlights 16-20
Portfolios of Investments 21-28
Notes to Financial Statements 29-35
Report of Independent Registered Public Accounting Firm 36
Board of Trustees and Officers 37-38
About Your Portfolio's Expenses 39
LETTER TO SHAREHOLDERS
================================================================================
Dear Fellow Shareholders:
I am pleased to present our Fifteenth Annual Report.
Political uncertainty (both domestic and foreign), economic data, corporate
earnings and energy prices have created a challenging investment environment in
2004.
The calendar year began with the momentum of 2003 continuing through the first
few months of 2004. The S&P 500(R) Composite Index posted a healthy gain of
approximately 4% by the end of February. During the next 8 months, uncertainty
gripped the markets. The threat of terrorist attacks, the U.S. presidential
race, higher interest rates, rising inflation, and the cooling of corporate
profits restrained the markets in a trading range below the February highs.
This dramatic shift in market momentum was reflected in the performance of the
various sectors. During the 12-month period ended October 31, 2004, the value
sector outperformed the growth sector in each of the large-cap, mid-cap and
small-cap sectors. During the period, for example, the large-cap value sector,
as measured by the iShares S&P 500/BARRA Value Index rose 14.25% while the
large-cap growth sector, as measured by the iShares S&P 500/BARRA Growth Index
gained 4.28%. Although the U.S. dollar continued to weaken against the Euro and
the Yen, the foreign markets remained strong.
During the past twelve months, New Century Capital Portfolio increased its
exposure to the value and international sectors, while reducing positions in the
growth sector. The New Century Capital Portfolio gained 8.25% as compared to the
S&P 500(R) Composite Index which gained 9.41%.
The New Century Balanced Portfolio also increased its allocation to the value
sector and reduced its allocation in the growth sector. Its overall allocation
between equities and fixed income remained constant. During the period, the New
Century Balanced Portfolio gained 7.75%, as compared to the S&P 500(R) Composite
Index which gained 9.41% and the Lehman Brothers Government/Corporate Bond Index
which gained 5.59%.
Although the technology and biotechnology sectors were somewhat disappointing,
the energy, natural resources, and emerging markets sectors generated strong
returns during the twelve month period. Positions in these sectors helped the
New Century Aggressive Portfolio post a gain of 5.04% during the period. The
NASDAQ Index increased by 2.21% - with October's 4.12% gain creating the
positive return for the period.
The New Century International Portfolio increased its positions in Europe and
the Americas (ex-US) while reducing positions in the Pacific Rim. During the
period, the New Century International Portfolio gained 16.01%. The international
equity markets, as measured by the MSCI EAFE Index, increased 18.84%.
International investments continue to perform well when compared to the domestic
market despite the continued weakening of the dollar.
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 had a total return of 9.12% for the period, as compared to the S&P
500(R) Composite Index which gained 9.41% and the Lehman Brothers
Government/Corporate Bond Index which gained 5.59%.
1
Looking forward, we believe that some of the uncertainty that characterized the
beginning of 2004 will be resolved and that the financial markets will resume
trading in a positive range. While future performance is always unpredictable,
we are confident that New Century's investment philosophy - diversification,
risk assessment and long-term focus - will maximize risk-adjusted returns.
New Century is committed to its shareholders and appreciates your selecting New
Century as part of your long-term investment strategy.
Sincerely,
/s/ Wayne
Wayne M. Grzecki
President
2
PERFORMANCE CHARTS
================================================================================
[GRAPHIC OMITTED]
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE NEW CENTURY CAPITAL PORTFOLIO AND THE S&P 500(R) COMPOSITE INDEX
S&P 500(R) Composite Index New Century Capital Portfolio
--------------------------- -----------------------------
ENDING ENDING
DATE BALANCE DATE BALANCE
---------- ------- ---------- -------
10/31/1994 $10,000 10/31/1994 $10,000
10/31/1995 $12,644 10/31/1995 $11,960
10/31/1996 $15,691 10/31/1996 $13,743
10/31/1997 $20,730 10/31/1997 $17,484
10/31/1998 $25,288 10/31/1998 $18,878
10/31/1999 $31,780 10/31/1999 $24,342
10/31/2000 $33,716 10/31/2000 $27,973
10/31/2001 $25,321 10/31/2001 $20,208
10/31/2002 $21,495 10/31/2002 $17,034
10/31/2003 $25,963 10/31/2003 $20,866
10/31/2004 $28,408 10/31/2004 $22,588
- ---------------------------------
NEW CENTURY CAPITAL PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS (a)
1 YEAR 5 YEARS 10 YEARS
8.25% (1.48%) 8.49%
- ---------------------------------
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, S&P 500(R) COMPOSITE INDEX AND
LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CREDIT INDEX
[GRAPHIC OMITTED]
New Century
S&P 500(R) Composite Index Balanced Portfolio Lehman Brothers Intermediate Government/Credit Index
- -------------------------- -------------------- ----------------------------------------------------
ENDING ENDING ENDING
DATE BALANCE DATE BALANCE DATE BALANCE
- ---------- ------- ---------- ------- ----------- -------
10/31/1994 $10,000 10/31/1994 $10,000 10/31/1994 $10,000
10/31/1995 $12,644 10/31/1995 $11,493 10/31/1995 $11,254
10/31/1996 $15,691 10/31/1996 $13,017 10/31/1996 $11,908
10/31/1997 $20,730 10/31/1997 $15,573 10/31/1997 $12,800
10/31/1998 $25,288 10/31/1998 $16,658 10/31/1998 $13,967
10/31/1999 $31,780 10/31/1999 $19,200 10/31/1999 $14,105
10/31/2000 $33,716 10/31/2000 $21,170 10/31/2000 $15,017
10/31/2001 $25,321 10/31/2001 $18,783 10/31/2001 $17,156
10/31/2002 $21,495 10/31/2002 $16,514 10/31/2002 $18,170
10/31/2003 $25,963 10/31/2003 $19,624 10/31/2003 $19,157
10/31/2004 $28,408 10/31/2004 $21,145 10/31/2004 $19,987
- ---------------------------------
NEW CENTURY BALANCED PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS (a)
1 YEAR 5 YEARS 10 YEARS
7.75% 1.95% 7.78%
- ---------------------------------
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.
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 $5,798 10/31/2003 $6,950
10/31/2004 $5,954 10/31/2004 $7,300
- ---------------------------------
NEW CENTURY AGGRESSIVE PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS (a)
1 YEAR SINCE INCEPTION*
5.04% (7.57%)
- ---------------------------------
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
[GRAPHIC OMITTED]
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
10/31/2004 $9,979 10/31/2004 $10,089
- -----------------------------------
NEW CENTURY INTERNATIONAL PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS (a)
1 YEAR SINCE INCEPTION*
16.01% 0.22%
- -----------------------------------
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.
4
PERFORMANCE CHARTS (CONTINUED)
===================================================================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO, S&P 500 (R) COMPOSITE INDEX
AND LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CREDIT INDEX
[GRAPHIC OMITTED]
New Century Alternative
S&P 500(R) Composite Index Strategies Portfolio Lehman Brothers Intermediate Government/Credit Index
- -------------------------- -------------------- ----------------------------------------------------
ENDING ENDING ENDING
DATE BALANCE DATE BALANCE DATE BALANCE
- ---------- ------- ---------- ------- ----------- -------
5/1/2002 $10,000 5/1/2002 $10,000 5/1/2002 $10,000
5/31/2002 $9,838 5/31/2002 $10,000 5/31/2002 $10,087
6/30/2002 $9,137 6/30/2002 $9,720 6/30/2002 $10,174
7/31/2002 $8,425 7/31/2002 $9,290 7/31/2002 $10,294
8/31/2002 $8,480 8/31/2002 $9,340 8/31/2002 $10,447
9/30/2002 $7,559 9/30/2002 $9,110 9/30/2002 $10,634
10/31/2002 $8,224 10/31/2002 $9,120 10/31/2002 $10,593
11/30/2002 $8,708 11/30/2002 $9,330 11/30/2002 $10,583
12/31/2002 $8,196 12/31/2002 $9,325 12/31/2002 $10,814
1/31/2003 $7,982 1/31/2003 $9,285 1/31/2003 $10,813
2/28/2003 $7,862 2/28/2003 $9,264 2/28/2003 $10,965
3/31/2003 $7,938 3/31/2003 $9,295 3/31/2003 $10,976
4/30/2003 $8,592 4/30/2003 $9,618 4/30/2003 $11,060
5/31/2003 $9,045 5/31/2003 $9,982 5/31/2003 $11,282
6/30/2003 $9,160 6/30/2003 $10,083 6/30/2003 $11,274
7/31/2003 $9,322 7/31/2003 $10,194 7/31/2003 $10,967
8/31/2003 $9,503 8/31/2003 $10,376 8/31/2003 $10,994
9/30/2003 $9,403 9/30/2003 $10,477 9/30/2003 $11,272
10/31/2003 $9,934 10/31/2003 $10,780 10/31/2003 $11,166
11/30/2003 $10,002 11/30/2003 $11,002 11/30/2003 $11,181
12/31/2003 $10,547 12/31/2003 $11,270 12/31/2003 $11,279
1/31/2004 $10,741 1/31/2004 $11,383 1/31/2004 $11,353
2/29/2004 $10,890 2/29/2004 $11,557 2/29/2004 $11,469
3/31/2004 $10,726 3/31/2004 $11,629 3/31/2004 $11,558
4/30/2004 $10,558 4/30/2004 $11,260 4/30/2004 $11,284
5/31/2004 $10,703 5/31/2004 $11,342 5/31/2004 $11,234
6/30/2004 $10,911 6/30/2004 $11,455 6/30/2004 $11,267
7/31/2004 $10,550 7/31/2004 $11,342 7/31/2004 $11,362
8/31/2004 $10,592 8/31/2004 $11,414 8/31/2004 $11,552
9/30/2004 $10,707 9/30/2004 $11,639 9/30/2004 $11,571
10/31/2004 $10,871 10/31/2004 $11,762 10/31/2004 $11,649
- ---------------------------------------------
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS (a)
1 YEAR SINCE INCEPTION*
9.12% 6.70%
- ---------------------------------------------
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.
5
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2004 (UNAUDITED)
================================================================================
ASSET ALLOCATION (%of Net Assets)
- --------------------------------------------------------------------------------
Growth Funds - 35.7%
[GRAPHIC OMITTED] Growth and Income Funds - 28.5%
Small Company Funds - 18.2%
Foreign Stock Funds - 10.4%
Aggressive Funds - 6.4%
Cash Equivalents - 0.8%
TOP TEN HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
------------------------------------------------- -----------------
Hotchkis & Wiley Large Cap Value - Class A 7.4%
American Growth Fund of America - Class A 6.4%
Smith Barney Aggressive Growth - Class A 6.4%
iShares Dow Jones Select Dividend Index 6.3%
William Blair Small Cap Growth - Class I 6.3%
Calamos Growth - Class A 6.1%
Royce Opportunity - Investor Class 6.0%
Marsico 21st Century 5.4%
Fidelity Capital Appreciation 5.4%
Vanguard 500 Index - Investor Shares 4.6%
See accompanying notes to financial statements.
6
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2004 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% of Net Assets)
- --------------------------------------------------------------------------------
Growth and Income Funds - 29.4%
Growth Funds - 16.3%
[GRAPHIC OMITTED] High Yield Bond Funds - 12.2%
Small Company Funds - 11.4%
Foreign Stock Funds - 7.4%
Convertible Security Funds - 5.1%
Government Bond Funds - 4.9%
Corporate Bond Funds - 4.7%
Worldwide Bond Funds - 3.8%
High Quality Bond Funds - 3.6%
Cash Equivalents - 1.2%
TOP TEN HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
------------------------------------------------- -----------------
iShares S&P 500 Index 7.5%
Hotchkis & Wiley Large Cap Value - Class A 7.2%
iShares Dow Jones Select Dividend Index 7.1%
Pioneer High Yield - Class A 6.0%
American Century Target Maturities
Trust Series 2015 - Investor Class 4.9%
American Funds AMCAP - Class A 4.8%
Loomis Sayles Bond - Institutional Class 4.7%
Dodge & Cox Stock 4.2%
iShares MSCI EAFE Index 3.8%
Dodge & Cox Income 3.6%
See accompanying notes to financial statements.
7
NEW CENTURY AGGRESSIVE PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2004 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% of Net Assets)
- --------------------------------------------------------------------------------
Sector Funds - 61.8%
Mid-Cap Funds - 16.1%
[GRAPHIC OMITTED] Small-Cap Funds - 15.8%
Large-Cap Funds - 5.8%
Cash Equivalents - 0.5%
TOP TEN HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
------------------------------------------------- -----------------
iShares Dow Jones U.S. Energy Sector Index 15.1%
iShares Goldman Sachs Natural Resources Index 9.8%
Technology Select Sector SPDR 9.7%
iShares MSCI Emerging Markets Index 9.3%
S&P MidCap 400 Depositary Receipts 7.8%
Royce Opportunity - Investor Class 6.2%
Fidelity Capital Appreciation 5.8%
iShares Goldman Sachs Networking Index 5.7%
Calamos Growth - Class A 4.9%
Perritt Micro Cap Opportunities 4.9%
See accompanying notes to financial statements.
8
NEW CENTURY INTERNATIONAL PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2004 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% of Net Assets)
- --------------------------------------------------------------------------------
Europe Funds - 28.6%
Diversified Funds - 27.8%
[GRAPHIC OMITTED] Asia/Pacific Funds - 19.5%
Americas Funds - 14.5%
Emerging Markets Funds - 7.5%
Cash Equivalents - 2.1%
TOP TEN HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
------------------------------------------------- -----------------
Tocqueville International Value (The) 8.0%
Dodge & Cox Inernational Stock 7.2%
iShares MSCI Germany Index 6.6%
iShares MSCI Austria Index 6.5%
iShares MSCI EAFE Index 6.2%
Lazard International Small Cap - Investor Shares 5.1%
iShares S&P Latin American 40 Index 4.7%
iShares MSCI Canada Index 4.7%
Ivy European Opportunities - Class A 4.6%
Matthews Japan 4.3%
See accompanying notes to financial statements.
9
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2004 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% of Net Assets)
- --------------------------------------------------------------------------------
Merger Arbitrage Funds - 15.9%
Global Macro Funds - 12.3%
Asset Allocation Funds - 11.7%
Long/Short Equity Funds - 11.0%
Natural Resources Funds - 8.7%
Real Estate Investment Trust Funds - 8.3%
[GRAPHIC OMITTED] High Yield Funds - 8.3%
Convertible Arbitrage Funds - 6.4%
Options/Hedged Funds - 6.0%
Deep Value/Distressed Securities Funds - 5.0%
Market Neutral Funds - 3.7%
Cash Equivalents - 2.5%
Common Stocks - 0.2%
TOP TEN HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
------------------------------------------------- -----------------
First Eagle Global - Class A 7.5%
Merger Fund (The) 6.7%
Calamos Market Neutral - A Shares 6.4%
Gateway 6.0%
Hussman Strategic Growth 5.0%
Arbitrage Fund (The) - Class R 4.6%
PIMCO Commodity Real Return Strategy - Class A 3.7%
RS Global Natural Resources 3.1%
Enterprise Mergers and Acquisitions - Class A 3.0%
Third Avenue Real Estate Value 2.9%
See accompanying notes to financial statements.
10
NEW CENTURY PORTFOLIOS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 2004
==========================================================================================================================
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 ......................... $ 89,569,880 $ 66,055,567 $ 4,867,565 $ 20,620,914 $ 46,663,219
============ ============ ============ ============ ============
At value (Note 1A) .......................... $103,412,215 $ 74,419,058 $ 5,516,151 $ 24,479,965 $ 51,840,722
Dividends receivable .......................... 731 14,050 20 300 3,407
Receivable for capital shares sold ............ 635 -- 200 100 35,883
Receivable from Advisor (Note 2) .............. -- -- 734 -- --
Other assets .................................. 3,391 2,880 177 690 2,225
------------ ------------ ------------ ------------ ------------
TOTAL ASSETS ................................. 103,416,972 74,435,988 5,517,282 24,481,055 51,882,237
------------ ------------ ------------ ----------- ------------
LIABILITIES
Payable to Advisor (Note 2) ................... 127,005 90,801 -- 24,493 40,630
Payable for investment securities purchased ... -- -- -- -- 200,000
Payable for capital shares redeemed ........... 19,427 10,571 -- -- 1,000
Other accrued expenses and liabilities ........ 10,794 7,210 5,276 7,890 5,853
------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES ............................ 157,226 108,582 5,276 32,383 247,483
------------ ------------ ------------ ------------ ------------
NET ASSETS ..................................... $103,259,746 $ 74,327,406 $ 5,512,006 $ 24,448,672 $ 51,634,754
============ ============ ============ ============ ============
Net assets consist of:
Paid-in capital ............................... $103,006,533 $ 71,488,430 $ 6,397,661 $ 19,802,218 $ 45,655,496
Accumulated net investment income ............. -- 291,199 -- -- 172,051
Accumulated net realized gains (losses)
on investments ............................... (13,589,122) (5,815,714) (1,534,241) 787,403 629,704
Unrealized appreciation of investments ........ 13,842,335 8,363,491 648,586 3,859,051 5,177,503
------------ ------------ ------------ ------------ ------------
Net assets ..................................... $103,259,746 $ 74,327,406 $ 5,512,006 $ 24,448,672 $ 51,634,754
============ ============ ============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ................................ 7,718,217 6,041,840 755,287 2,428,116 4,505,270
============ ============ ============ ============ ============
Net asset value, offering price and
redemption price per share ................... $ 13.38 $ 12.30 $ 7.30 $ 10.07 $ 11.46
============ ============ ============ ============ ============
See accompanying notes to financial statements.
11
NEW CENTURY PORTFOLIOS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2004
==========================================================================================================================
NEW CENTURY
NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY ALTERNATIVE
CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends ..................................... $ 514,527 $ 1,692,670 $ 23,138 $ 172,987 $ 946,254
------------ ------------ ------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 2) ............. 1,008,218 736,199 53,046 202,046 328,945
Distribution costs (Note 3) ................... 185,782 118,312 12,122 44,207 27,640
Accounting fees ............................... 40,197 37,346 30,526 32,051 34,354
Administration fees (Note 2) .................. 51,052 38,837 8,556 15,104 25,591
Legal and audit fees .......................... 47,661 34,951 4,430 11,870 23,213
Transfer agent fees ........................... 21,000 21,000 21,000 21,000 21,000
Custody fees .................................. 21,324 17,294 3,341 7,690 13,270
Postage and supplies .......................... 10,935 7,372 4,106 4,082 5,060
Trustees' fees and expenses (Note 2) .......... 9,951 7,173 525 2,009 4,342
Insurance expense ............................. 5,358 3,977 269 871 1,972
Other expenses ................................ 30,341 17,065 5,664 10,168 4,914
------------ ------------ ------------ ------------ ------------
Total expenses .............................. 1,431,819 1,039,526 143,585 351,098 490,301
Less fees waived and/or expenses
reimbursed by the Advisor (Note 2) ........... -- -- (64,016) (48,030) --
Plus previously waived investment advisory
fees and expense reimbursements
recouped by the Advisor (Note 2) ............. -- 1,967 -- -- --
------------ ------------ ------------ ------------ ------------
Net expenses .................................. 1,431,819 1,041,493 79,569 303,068 490,301
------------ ------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) ................... (917,292) 651,177 (56,431) (130,081) 455,953
------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains on investments .............. 5,347,494 1,597,601 304,188 1,136,175 739,129
Capital gain distributions from regulated
investment companies ......................... 388,246 280,790 20,496 12,092 320,147
Net change in unrealized appreciation/
(depreciation) on investments ................ 3,016,709 2,916,387 (18,638) 1,785,093 2,023,614
------------ ------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAINS ON INVESTMENTS .......................... 8,752,449 4,794,778 306,046 2,933,360 3,082,890
------------ ------------ ------------ ------------ ------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS ........................ $ 7,835,157 $ 5,445,955 $ 249,615 $ 2,803,279 $ 3,538,843
============ ============ ============ ============ ============
See accompanying notes to financial statements.
12
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,
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) .................. $ (917,292) $ (494,695) $ 651,177 $ 1,001,436
Net realized gains (losses) from
security transactions ........................ 5,347,494 (3,278,273) 1,597,601 (211,178)
Capital gain distributions from regulated
investment companies ......................... 388,246 239,189 280,790 289,977
Net change in unrealized appreciation/
(depreciation) on investments ................. 3,016,709 21,012,989 2,916,387 10,080,063
------------ ------------ ------------ ------------
Net increase in net assets from operations ..... 7,835,157 17,479,210 5,445,955 11,160,298
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) .......... -- -- (668,754) (1,269,163)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ..................... 6,977,635 5,343,302 5,125,191 4,706,871
Net asset value of shares issued in reinvestment
of distributions to shareholders ............. -- -- 623,494 1,182,279
Payments for shares redeemed .................. (6,948,812) (9,736,354) (6,639,206) (8,094,571)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from
capital share transactions .................... 28,823 (4,393,052) (890,521) (2,205,421)
------------ ------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS ................... 7,863,980 13,086,158 3,886,680 7,685,714
NET ASSETS
Beginning of year ............................. 95,395,766 82,309,608 70,440,726 62,755,012
------------ ------------ ------------ ------------
End of year ................................... $103,259,746 $ 95,395,766 $ 74,327,406 $ 70,440,726
============ ============ ============ ============
UNDISTRIBUTED NET INVESTMENT
INCOME ........................................ $ -- $ -- $ 291,199 $ 266,822
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold .......................................... 532,195 497,945 423,870 449,059
Reinvested .................................... -- -- 51,911 117,415
Redeemed ...................................... (534,090) (937,285) (549,921) (793,113)
------------ ------------ ------------ ------------
Net decrease in shares outstanding ............ (1,895) (439,340) (74,140) (226,639)
Shares outstanding, beginning of year ......... 7,720,112 8,159,452 6,115,980 6,342,619
------------ ------------ ------------ ------------
Shares outstanding, end of year ............... 7,718,217 7,720,112 6,041,840 6,115,980
============ ============ ============ ============
See accompanying notes to financial statements.
13
NEW CENTURY PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
============================================================================================================
NEW CENTURY NEW CENTURY
AGGRESIVE PORTFOLIO INTERNATIONAL PORTFOLIO
-----------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment loss ........................... $ (56,431) $ (41,560) $ (130,081) $ (57,062)
Net realized gains (losses) from
security transactions ........................ 304,188 (117,066) 1,136,175 (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 ................. (18,638) 1,155,927 1,785,093 3,373,431
------------ ------------ ------------ ------------
Net increase in net assets from operations ..... 249,615 1,006,639 2,803,279 3,194,918
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) .......... -- -- -- --
------------ ------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ..................... 530,663 424,354 7,138,355 4,989,446
Payments for shares redeemed .................. (133,786) (175,881) (781,003) (551,685)
------------ ------------ ------------ ------------
Net increase in net assets from capital
share transactions ............................ 396,877 248,473 6,357,352 4,437,761
------------ ------------ ------------ ------------
TOTAL INCREASE IN NET ASSETS ................... 646,492 1,255,112 9,160,631 7,632,679
NET ASSETS
Beginning of year ............................. 4,865,514 3,610,402 15,288,041 7,655,362
------------ ------------ ------------ ------------
End of year ................................... $ 5,512,006 $ 4,865,514 $ 24,448,672 $ 15,288,041
============ ============ ============ ============
CAPITAL SHARE ACTIVITY
Sold .......................................... 73,300 71,447 747,210 667,427
Redeemed ...................................... (18,336) (31,155) (80,727) (79,110)
------------ ------------ ------------ ------------
Net increase in shares outstanding ............ 54,964 40,292 666,483 588,317
Shares outstanding, beginning of year ......... 700,323 660,031 1,761,633 1,173,316
------------ ------------ ------------ ------------
Shares outstanding, end of year ............... 755,287 700,323 2,428,116 1,761,633
============ ============ ============ ============
See accompanying notes to financial statements.
14
NEW CENTURY PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
=================================================================================================
NEW CENTURY ALTERNATIVE
STRATEGIES PORTFOLIO
-------------------------------
YEAR YEAR
ENDED ENDED
OCTOBER 31, OCTOBER 31,
2004 2003
- -------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ............................................. $ 455,953 $ 274,065
Net realized gains (losses) from security transactions ............ 739,129 (142,839)
Capital gain distributions from regulated investment companies .... 320,147 90,480
Net change in unrealized appreciation/(depreciation) on investments 2,023,614 4,231,042
------------ ------------
Net increase in net assets from operations ......................... 3,538,843 4,452,748
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) .............................. (581,288) (224,495)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ......................................... 16,825,271 11,337,961
Net asset value of shares issued in reinvestment of
distributions to shareholders .................................... 573,254 220,766
Payments for shares redeemed ...................................... (2,455,448) (1,581,670)
------------ ------------
Net increase in net assets from capital share transactions ......... 14,943,077 9,977,057
------------ ------------
TOTAL INCREASE IN NET ASSETS ....................................... 17,900,632 14,205,310
NET ASSETS
Beginning of year .................................................. 33,734,122 19,528,812
------------ ------------
End of year ........................................................ $ 51,634,754 $ 33,734,122
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME ................................ $ 172,051 $ 103,110
============ ============
CAPITAL SHARE ACTIVITY
Sold .............................................................. 1,509,894 1,156,113
Reinvested ........................................................ 52,209 23,918
Redeemed .......................................................... (219,440) (159,173)
------------ ------------
Net increase in shares outstanding ................................ 1,342,663 1,020,858
Shares outstanding, beginning of year ............................. 3,162,607 2,141,749
------------ ------------
Shares outstanding, end of year ................................... 4,505,270 3,162,607
============ ============
See accompanying notes to financial statements.
15
NEW CENTURY CAPITAL PORTFOLIO
FINANCIAL HIGHLIGHTS
===========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
===========================================================================================================================
YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------------
2004 2003 2002 2001 2000
--------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year ............ $ 12.36 $ 10.09 $ 11.97 $ 18.07 $ 16.71
------------ ------------ ------------ ------------ ------------
Income (loss) from investment operations:
Net investment loss ............................ (0.12) (0.06) (0.08) (0.10) (0.14)
Net realized and unrealized gains
(losses) on investments ....................... 1.14 2.33 (1.80) (4.62) 2.67
------------ ------------ ------------ ------------ ------------
Total from investment operations ............... 1.02 2.27 (1.88) (4.72) 2.53
------------ ------------ ------------ ------------ ------------
Less distributions:
Distributions from net investment income ..... -- -- -- -- --
Distributions from net realized gains ........ -- -- -- (1.38) (1.17)
------------ ------------ ------------ ------------ ------------
Total distributions ............................ -- -- -- (1.38) (1.17)
------------ ------------ ------------ ------------ ------------
Net asset value, end of year ................... $ 13.38 $ 12.36 $ 10.09 $ 11.97 $ 18.07
============ ============ ============ ============ ============
TOTAL RETURN (a) ............................... 8.25% 22.50% (15.71%) (27.77%) 14.92%
============ ============ ============ ============ ============
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ............... $ 103,260 $ 95,396 $ 82,310 $ 109,873 $ 156,668
============ ============ ============ ============ ============
Ratio of expenses to average net assets(b) .... 1.41% 1.45% 1.40% 1.29% 1.27%
Ratio of net investment loss to
average net assets(c) ........................ (0.91%) (0.59%) (0.62%) (0.72%) (0.80%)
Portfolio turnover ............................ 48% 71% 59% 70% 51%
(a) Total return is a measure of the change in the value of an investment in
the Portfolio over the periods covered, which asssumes any dividends or
capital gains distributions are reinvested in shares of the Portfolio.
Returns shown do not reflect the deduction of taxes a shareholder would pay
on Portfolio distributions or the redemption of Portfolio shares.
(b) The ratios of expenses to average net assets do not reflect the Portfolio's
proportionate share of expenses of the underlying investment companies in
which the Portfolio invests.
(c) Recognization of net investment income by the Porfolio is affected by the
timing of the declaration of dividends by the underlying investment
companies in which the Portfolio invests.
See accompanying notes to financial statements.
16
NEW CENTURY BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
===========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
===========================================================================================================================
YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------------
2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year $ 11.52 $ 9.89 $ 11.35 $ 13.64 $ 13.42
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income 0.11 0.16 0.13 0.23 0.22
Net realized and unrealized gains
(losses) on investments 0.78 1.67 (1.49) (1.71) 1.17
----------- ----------- ----------- ----------- -----------
Total from investment operations 0.89 1.83 (1.36) (1.48) 1.39
----------- ----------- ----------- ----------- -----------
Less distributions:
Distributions from net investment income (0.11) (0.20) (0.10) (0.23) (0.22)
Distributions from net realized gains -- -- -- (0.58) (0.95)
----------- ----------- ----------- ----------- -----------
Total distributions (0.11) (0.20) (0.10) (0.81) (1.17)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 12.30 $ 11.52 $ 9.89 $ 11.35 $ 13.64
=========== =========== =========== =========== ===========
TOTAL RETURN (a) 7.75% 18.84% (12.08%) (11.21%) 10.26%
=========== =========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) $ 74,327 $ 70,441 $ 62,755 $ 71,251 $ 79,553
=========== =========== =========== =========== ===========
Ratio of expenses to average net assets(d) 1.42%(c) 1.45%(b) 1.48% 1.49% 1.40%
Ratio of net investment income to
average net assets(e) 0.88%(c) 1.56%(b) 1.19% 1.87% 1.51%
Portfolio turnover 44% 80% 93% 69% 43%
(a) Total return is a measure of the change in the value of an investment in
the Portfolio over the periods covered, which asssumes any dividends or
capital gains distributions are reinvested in shares of the Portfolio.
Returns shown do not reflect the deduction of taxes a shareholder would pay
on Portfolio distributions or the redemption of Portfolio shares.
(b) 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).
(c) Absent the recoupment of fees previously waived and reimbursed by the
Advisor, the ratio of expenses to average net assets would have been 1.41%
and the ratio of net investment income to average net assets would have
been 0.89% for the year ended October 31, 2004 (Note 2).
(d) The ratios of expenses to average net assets do not reflect the Portfolio's
proportionate share of expenses of the underlying investment companies in
which the Portfolio invests.
(e) Recognization of net investment income by the Porfolio is affected by the
timing of the declaration of dividends by the underlying investment
companies in which the Portfolio invests.
See accompanying notes to financial statements.
17
NEW CENTURY AGGRESSIVE PORTFOLIO
FINANCIAL HIGHLIGHTS
======================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
======================================================================================================================
YEARS ENDED OCTOBER 31,
-------------------------------------------------------------
2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year ................... $ 6.95 $ 5.47 $ 7.37 $ 10.00
-------- -------- -------- ---------
Income (loss) from investment operations:
Net investment loss .................................. (0.07) (0.06) (0.07) (0.07)
Net realized and unrealized gains (losses)
on investments ...................................... 0.42 1.54 (1.83) (2.56)
-------- -------- -------- ---------
Total from investment operations ..................... 0.35 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 ......................... $ 7.30 $ 6.95 $ 5.47 $ 7.37
======== ======== ======== =========
TOTAL RETURN (a) ...................................... 5.04% 27.06% (25.78%) (26.30%)
======== ======== ======== =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ...................... $ 5,512 $ 4,866 $ 3,610 $ 1,846
======== ======== ======== =========
Ratios of expenses to average net assets:
Before expense reimbursement
and waived fees(b) ................................. 2.71% 3.20% 2.95% 5.90%
After expense reimbursement
and waived fees(b) ................................. 1.50% 1.50% 1.50% 1.50%
Ratios of net investment loss to average net assets:
Before expense reimbursement
and waived fees(c) ................................. (2.27%) (2.73%) (2.50%) (5.35%)
After expense reimbursement
and waived fees(c) ................................. (1.06%) (1.03%) (1.05%) (0.95%)
Portfolio turnover .................................. 68% 78% 120% 86%
(a) Total return is a measure of the change in the value of an investment in
the Portfolio over the periods covered, which asssumes any dividends or
capital gains distributions are reinvested in shares of the Portfolio.
Returns shown do not reflect the deduction of taxes a shareholder would pay
on Portfolio distributions or the redemption of Portfolio shares.
(b) The ratios of expenses to average net assets do not reflect the Portfolio's
proportionate share of expenses of the underlying investment companies in
which the Portfolio invests.
(c) Recognization of net investment income by the Porfolio is affected by the
timing of the declaration of dividends by the underlying investment
companies in which the Portfolio invests.
See accompanying notes to financial statements.
18
NEW CENTURY INTERNATIONAL PORTFOLIO
FINANCIAL HIGHLIGHTS
=======================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
=======================================================================================================================
YEARS ENDED OCTOBER 31,
-------------------------------------------------------------
2004 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year ................... $ 8.68 $ 6.52 $ 7.41 $ 10.00
---------- ---------- ---------- ----------
Income (loss) from investment operations
Net investment loss ................................. (0.05) (0.03) (0.06) (0.04)
Net realized and unrealized gains (losses)
on investments ..................................... 1.44 2.19 (0.81) (2.55)
---------- ---------- ---------- ----------
Total from investment operations .................... 1.39 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 ......................... $ 10.07 $ 8.68 $ 6.52 $ 7.41
========== ========== ========= =========
TOTAL RETURN(a) ....................................... 16.01% 33.13% (11.84%) (25.90%)
========== ========== ========= =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ...................... $ 24,449 $ 15,288 $ 7,655 $ 731
========== ========== ========= =========
Ratios of expenses to average net assets:
Before expense reimbursement
and waived fees(b) ................................. 1.74% 2.11% 2.54% 10.81%
After expense reimbursement
and waived fees(b) ................................. 1.50% 1.50% 1.50% 1.50%
Ratios of net investment loss to average net assets:
Before expense reimbursement
and waived fees(c) ................................. (0.88%) (1.16%) (2.34%) (9.81%)
After expense reimbursement
and waived fees(c) ................................. (0.64%) (0.55%) (1.30%) (0.50%)
Portfolio turnover ................................... 45% 56% 27% 83%
(a) Total return is a measure of the change in the value of an investment in
the Portfolio over the periods covered, which asssumes any dividends or
capital gains distributions are reinvested in shares of the Portfolio.
Returns shown do not reflect the deduction of taxes a shareholder would pay
on Portfolio distributions or the redemption of Portfolio shares.
(b) The ratios of expenses to average net assets do not reflect the Portfolio's
proportionate share of expenses of the underlying investment companies in
which the Portfolio invests.
(c) Recognization of net investment income by the Porfolio is affected by the
timing of the declaration of dividends by the underlying investment
companies in which the Portfolio invests.
See accompanying notes to financial statements.
19
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
FINANCIAL HIGHLIGHTS
=====================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
=====================================================================================
YEARS ENDED OCTOBER 31,
--------------------------------------
2004 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 ...................... 0.14 0.11 0.01
Net realized and unrealized gains (losses)
on investments ............................ 0.83 1.54 (0.89)
--------- --------- ---------
Total from investment operations ............ 0.97 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 .............. $ 11.46 $ 10.67 $ 9.12
========= ========= ==========
TOTAL RETURN (c) ............................. 9.12% 18.20% (8.80%)(b)
========= ========= ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's) .......... $ 51,635 $ 33,734 $ 19,529
========= ========= ==========
Ratios of expenses to average net assets(f) . 1.12% 1.40% 1.49%(d)(e)
Ratios of net investment income to
average net assets(g) ...................... 1.04% 1.06% 0.32%(d)(e)
Portfolio turnover .......................... 11% 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) Total return is a measure of the change in the value of an investment in
the Portfolio over the periods covered, which asssumes any dividends or
capital gains distributions are reinvested in shares of the Portfolio.
Returns shown do not reflect the deduction of taxes a shareholder would pay
on Portfolio distributions or the redemption of Portfolio shares.
(d) Annualized.
(e) 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).
(f) The ratios of expenses to average net assets do not reflect the Portfolio's
proportionate share of expenses of the underlying investment companies in
which the Portfolio invests.
(g) Recognization of net investment income by the Porfolio is affected by the
timing of the declaration of dividends by the underlying investment
companies in which the Portfolio invests.
See accompanying notes to financial statements.
20
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2004
================================================================================
INVESTMENT COMPANIES -- 99.2% SHARES VALUE
- --------------------------------------------------------------------------------
GROWTH FUNDS -- 35.7%
American Funds AMCAP - Class A (a) .................. 212,681 $ 3,694,271
American Growth Fund of America - Class A ........... 259,371 6,629,524
Calamos Growth - Class A (a) ........................ 130,992 6,285,019
Fidelity Capital Appreciation ....................... 223,114 5,589,008
Fidelity Select Utilities Growth .................... 40,096 1,536,488
Goldman Sachs Growth Opportunities - Class A (a) .... 213,092 4,236,259
iShares Russell 1000 Growth Index ................... 43,935 2,017,495
Marsico 21st Century (a) ............................ 525,508 5,607,174
Strong Advisor Select - Class A (a) ................. 138,478 1,247,685
------------
36,842,923
------------
GROWTH AND INCOME FUNDS -- 28.5%
Hotchkis & Wiley Large Cap Value - Class A .......... 375,233 7,669,759
iShares Dow Jones Select Dividend Index ............. 112,500 6,556,500
iShares Dow Jones U.S. Energy Sector Index .......... 23,000 1,429,220
iShares Russell 1000 Value Index .................... 14,800 910,940
iShares S&P 500 Index ............................... 34,150 3,869,878
iShares S&P MidCap 400/BARRA Value Index ............ 36,500 4,239,475
Vanguard 500 Index - Investor Shares ................ 45,347 4,741,028
------------
29,416,800
------------
SMALL COMPANY FUNDS -- 18.2%
Buffalo Small Cap ................................... 50,783 1,323,416
FBR Small Cap (a) ................................... 29,308 1,104,338
iShares S&P SmallCap 600/BARRA Growth Index ......... 21,700 2,103,815
iShares S&P SmallCap 600/BARRA Value Index .......... 13,700 1,512,617
Royce Opportunity - Investor Class (a) .............. 496,798 6,229,850
William Blair Small Cap Growth - Class I (a) ........ 261,862 6,488,944
------------
18,762,980
------------
FOREIGN STOCK FUNDS -- 10.4%
Dodge & Cox International Stock ..................... 39,017 1,077,253
Fidelity Japan Small Companies ...................... 76,488 885,731
Franklin Mutual Discovery - Class Z ................. 948 21,324
iShares MSCI EAFE Index ............................. 13,400 1,963,502
iShares MSCI Emerging Markets Index ................. 17,100 3,033,711
Lazard International Small Cap - Investor Shares .... 114,371 2,091,847
Tocqueville International Value (The) ............... 132,171 1,731,439
------------
10,804,807
------------
AGGRESSIVE FUNDS -- 6.4%
Smith Barney Aggressive Growth - Class A (a) ........ 76,148 6,620,264
------------
TOTAL INVESTMENT COMPANIES (Cost $88,605,439) $ 102,447,774
--------------
21
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2004
================================================================================
MONEY MARKET SECURITIES -- 0.9% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class A
(Cost $964,441) ..................................... 964,441 $ 964,441
------------
TOTAL INVESTMENTS AT VALUE --100.1% (Cost $89,569,880) $103,412,215
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%) ....... (152,469)
------------
NET ASSETS -- 100.0% .................................. $103,259,746
============
(a) Non-income producing security.
See accompanying notes to financial statements.
22
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2004
================================================================================
INVESTMENT COMPANIES -- 98.8% SHARES VALUE
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUNDS -- 29.4%
Dodge & Cox Stock ................................... 25,909 $ 3,153,381
Hotchkis & Wiley Large Cap Value - Class A .......... 261,641 5,347,941
iShares Dow Jones Select Dividend Index ............. 90,600 5,280,168
iShares Dow Jones U.S. Energy Sector Index .......... 10,000 621,400
iShares Russell 1000 Value Index .................... 200 12,310
iShares S&P 500 Index ............................... 49,300 5,586,676
iShares S&P MidCap 400/BARRA Value Index ............ 4,500 522,675
Vanguard 500 Index - Investor Shares ................ 12,792 1,337,382
------------
21,861,933
------------
GROWTH FUNDS -- 16.3%
American Funds AMCAP - Class A (a) .................. 204,538 3,552,832
Calamos Growth - Class A (a) ........................ 28,965 1,389,756
Fidelity Capital Appreciation ....................... 67,398 1,688,327
Fidelity Select Utilities Growth .................... 44,691 1,712,550
iShares Russell 1000 Growth Index ................... 16,300 748,496
Strong Advisor Select - Class A (a) ................. 116,292 1,047,792
S&P MidCap 400 Depositary Receipts .................. 17,580 1,937,316
------------
12,077,069
------------
HIGH YIELD BOND FUNDS -- 12.2%
Fidelity Advisor High Income Advantage - Class I .... 246,122 2,301,245
MainStay High Yield Corporate Bond - Class A ........ 366,762 2,317,937
Pioneer High Yield - Class A ........................ 381,536 4,475,421
------------
9,094,603
------------
SMALL COMPANY FUNDS -- 11.4%
FBR Small Cap (a) ................................... 20,516 773,036
iShares S&P SmallCap 600/BARRA Growth Index ......... 15,400 1,493,030
iShares S&P SmallCap 600/BARRA Value Index .......... 13,900 1,534,699
Royce Opportunity - Investor Class (a) .............. 180,982 2,269,510
William Blair Small Cap Growth - Class I (a) ........ 96,877 2,400,606
------------
8,470,881
------------
FOREIGN STOCK FUNDS -- 7.4%
iShares MSCI EAFE Index ............................. 19,100 2,798,723
Lazard International Small Cap - Investor Shares .... 45,524 832,639
Tocqueville International Value (The) ............... 142,684 1,869,154
------------
5,500,516
------------
CONVERTIBLE SECURITY FUNDS -- 5.1%
Davis Appreciation & Income ......................... 79,099 2,077,149
Smith Barney Convertible - Class A .................. 99,255 1,687,338
------------
3,764,487
------------
GOVERNMENT BOND FUNDS -- 4.9%
American Century Target Maturities Trust
Series 2015 - Investor Class ........................ 49,593 3,628,730
------------
CORPORATE BOND FUNDS -- 4.7%
Loomis Sayles Bond - Institutional Class ............ 255,440 3,512,306
------------
23
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2004
================================================================================
INVESTMENT COMPANIES -- 98.8% (Continued) SHARES VALUE
- --------------------------------------------------------------------------------
WORLDWIDE BOND FUNDS -- 3.8%
Loomis Sayles Global Bond - Institutional Class ..... 69,576 $ 1,111,828
PIMCO Foreign Bond - Institutional Class ............ 164,080 1,737,605
------------
2,849,433
------------
HIGH QUALITY BOND FUNDS -- 3.6%
Dodge & Cox Income .................................. 209,740 2,701,453
------------
TOTAL INVESTMENT COMPANIES (Cost $65,097,920) ........ $ 73,461,411
------------
================================================================================
MONEY MARKET SECURITIES -- 1.3% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class A
(Cost $957,647) .................................... 957,647 $ 957,647
------------
TOTAL INVESTMENTS AT VALUE -- 100.1% (Cost $66,055,567) $ 74,419,058
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%) ...... (91,652)
------------
NET ASSETS -- 100.0% ................................. $ 74,327,406
============
(a) Non-income producing security.
See accompanying notes to financial statements.
24
NEW CENTURY AGGRESSIVE PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2004
================================================================================
INVESTMENT COMPANIES -- 99.5% SHARES VALUE
- --------------------------------------------------------------------------------
SECTOR FUNDS -- 61.8%
FBR Small Cap Financial ............................. 2,597 $ 94,571
Fidelity Select Medical Delivery (a) ................ 5,777 202,080
Fidelity Select Wireless (a) ........................ 33,403 181,712
iShares Dow Jones U.S. Energy Sector Index .......... 13,400 832,676
iShares Goldman Sachs Natural Resources Index ....... 4,300 542,187
iShares Goldman Sachs Networking Index (a) .......... 11,100 311,910
iShares MSCI Emerging Markets Index ................. 2,900 514,489
iShares Nasdaq Biotechnology Index (a) .............. 2,800 190,792
Technology Select Sector SPDR ....................... 26,800 534,928
------------
3,405,345
------------
MID-CAP FUNDS -- 16.1%
Calamos Growth - Class A (a) ........................ 5,654 271,259
iShares S&P MidCap 400/BARRA Growth Index ........... 1,500 184,725
S&P MidCap 400 Depositary Receipts .................. 3,902 430,000
------------
885,984
------------
SMALL-CAP FUNDS -- 15.8%
Buffalo Small Cap ................................... 9,879 257,440
Perritt Micro Cap Opportunities ..................... 10,996 268,955
Royce Opportunity - Investor Class (a) .............. 27,412 343,747
------------
870,142
------------
LARGE-CAP FUNDS -- 5.8%
Fidelity Capital Appreciation ....................... 12,798 320,595
------------
TOTAL INVESTMENT COMPANIES (Cost $4,833,480) $ 5,482,066
------------
================================================================================
MONEY MARKET SECURITIES -- 0.6% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class A
(Cost $34,085) ...................................... 34,085 $ 34,085
------------
TOTAL INVESTMENTS AT VALUE -- 100.1% (Cost $4,867,565) $ 5,516,151
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%) ....... (4,145)
------------
NET ASSETS -- 100.0% .................................. $ 5,512,006
============
(a) Non-income producing security.
See accompanying notes to financial statements.
25
NEW CENTURY INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2004
================================================================================
INVESTMENT COMPANIES -- 97.9% SHARES VALUE
- --------------------------------------------------------------------------------
EUROPE FUNDS -- 28.6%
iShares MSCI Austria Index .......................... 83,800 $ 1,588,848
iShares MSCI Belgium Index .......................... 53,300 906,633
iShares MSCI Germany Index .......................... 97,200 1,601,856
iShares MSCI Sweden Index ........................... 53,100 986,067
iShares MSCI United Kingdom Index ................... 45,646 766,853
Ivy European Opportunities - Class A ................ 48,059 1,133,235
------------
6,983,492
------------
DIVERSIFIED FUNDS -- 27.8%
Dodge & Cox International Stock ..................... 64,185 1,772,148
iShares MSCI EAFE Index ............................. 10,300 1,509,259
Lazard International Small Cap - Investor Shares .... 68,284 1,248,916
Oakmark International - Class I ..................... 15,921 311,741
Tocqueville International Value (The) ............... 148,469 1,944,947
------------
6,787,011
------------
ASIA/PACIFIC FUNDS -- 19.5%
Fidelity Japan Small Companies ...................... 83,543 967,431
iShares MSCI Australia Index ........................ 54,600 844,662
iShares MSCI Pacific Ex-Japan Index ................. 8,100 675,297
Matthews China ...................................... 59,929 834,817
Matthews Japan (a) .................................. 72,946 1,046,775
Matthews Pacific Tiger - Class I .................... 28,844 409,302
------------
4,778,284
------------
AMERICAS FUNDS -- 14.5%
Fidelity Canada ..................................... 25,825 823,029
iShares MSCI Canada Index ........................... 69,300 1,139,292
iShares MSCI Mexico Index ........................... 21,000 450,660
iShares S&P Latin American 40 Index ................. 16,600 1,142,080
------------
3,555,061
------------
EMERGING MARKETS FUNDS -- 7.5%
Dreyfus Premier Emerging Markets - Class A .......... 23,001 426,434
iShares MSCI Emerging Markets Index ................. 4,700 833,827
T. Rowe Price Emerging Europe & Mediterranean ....... 39,518 562,741
------------
1,823,002
------------
TOTAL INVESTMENT COMPANIES (Cost $20,067,799) ......... $ 23,926,850
------------
================================================================================
MONEY MARKET SECURITIES -- 2.2% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class A
(Cost $553,115) ..................................... 553,115 $ 553,115
------------
TOTAL INVESTMENTS AT VALUE -- 100.1% (Cost $20,620,914) $ 24,479,965
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%) ....... (31,293)
------------
NET ASSETS -- 100.0% .................................. $ 24,448,672
============
(a) Non-income producing security.
See accompanying notes to financial statements.
26
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2004
================================================================================
INVESTMENT COMPANIES -- 97.3% SHARES VALUE
- --------------------------------------------------------------------------------
MERGER ARBITRAGE FUNDS -- 15.9%
Arbitrage Fund (The) - Class R (a) .................. 191,643 $ 2,349,540
Enterprise Mergers and Acquisitions - Class A (a) ... 138,130 1,555,349
Gabelli ABC ......................................... 88,846 881,353
Merger Fund (The) ................................... 227,566 3,447,627
------------
8,233,869
------------
GLOBAL MACRO FUNDS -- 12.3%
First Eagle Global - Class A ........................ 105,998 3,872,105
Franklin Mutual Discovery - Class Z ................. 60,433 1,359,733
Prudent Global Income ............................... 89,000 1,128,520
------------
6,360,358
------------
ASSET ALLOCATION FUNDS -- 11.7%
Berwyn Income ....................................... 60,612 727,343
FPA Crescent - Class I .............................. 49,340 1,120,522
Greenspring ......................................... 61,943 1,248,770
Leuthold Core Investment ............................ 96,054 1,479,238
Oakmark Equity and Income - Class I ................. 19,639 457,987
Rydex Series - Juno - Investor Class (a) ............ 51,957 996,538
------------
6,030,398
------------
LONG/SHORT EQUITY FUNDS -- 11.0%
CGM Focus (a) ....................................... 16,819 527,111
Franklin Templeton Global Long-Short - Class A (a) .. 46,556 521,893
Hussman Strategic Growth (a) ........................ 164,685 2,562,493
Needham Growth (a) .................................. 32,454 910,991
Needham Small Cap Growth (a) ........................ 15,601 258,668
Prudent Bear ........................................ 116,022 647,405
Schwab Hedged Equity (a) ............................ 19,440 252,916
------------
5,681,477
------------
NATURAL RESOURCES FUNDS -- 8.7%
Permanent Portfolio ................................. 24,343 651,174
PIMCO Commodity Real Return Strategy - Class A ...... 117,495 1,897,542
RS Global Natural Resources (a) ..................... 67,453 1,602,695
T. Rowe Price New Era ............................... 7,544 247,362
Vanguard Precious Metals & Minerals ................. 7,143 116,357
------------
4,515,130
------------
REAL ESTATE INVESTMENT TRUST FUNDS -- 8.3%
AIM Select Real Estate Income (b) .................. 40,170 680,078
Alpine Realty Income and Growth - Class Y ........... 44,016 879,008
Scudder RREEF Real Estate (b) ....................... 16,100 336,329
Security Capital U.S. Real Estate Shares ............ 51,045 892,270
Third Avenue Real Estate Value ...................... 59,559 1,516,956
------------
4,304,641
------------
27
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2004
================================================================================
INVESTMENT COMPANIES -- 97.3% (Continued) SHARES VALUE
- --------------------------------------------------------------------------------
HIGH YIELD FUNDS -- 8.3%
Calamos High Yield - Class A ......................... 78,160 $ 856,633
Columbia High Yield - Class Z ....................... 1,276 11,307
Fidelity Capital & Income ........................... 61,436 505,617
MainStay High Yield Corporate Bond - Class A ....... 212,343 1,342,011
Neuberger Berman Income Opportunity (b) ............. 24,700 372,229
Pioneer High Yield - Class A ........................ 100,311 1,176,647
------------
4,264,444
------------
CONVERTIBLE ARBITRAGE FUNDS -- 6.4%
Calamos Market Neutral - A Shares ................... 236,372 3,299,750
------------
OPTIONS/HEDGED FUNDS -- 6.0%
Gateway ............................................. 128,689 3,079,530
------------
DEEP VALUE/DISTRESSED SECURITIES FUNDS -- 5.0%
Franklin Mutual Beacon - Class Z .................... 85,654 1,296,808
Third Avenue Value .................................. 26,229 1,263,172
------------
2,559,980
------------
MARKET NEUTRAL FUNDS -- 3.7%
J.P. Morgan Market Neutral - Institutional Shares (a) 13,045 186,549
Laudus Rosenberg Value Long/Short Equity (a) ........ 41,347 409,332
One Group Market Neutral (a) ........................ 42,596 447,262
Phoenix Capital Market Neutral - Class A (a) ........ 73,071 841,041
------------
1,884,184
------------
TOTAL INVESTMENT COMPANIES (Cost $45,055,361) ......... $ 50,213,761
============
================================================================================
COMMON STOCKS -- 0.2% SHARES VALUE
- --------------------------------------------------------------------------------
Plum Creek Timber Company, Inc.
(Cost $87,952) ...................................... 2,950 $ 107,055
------------
================================================================================
MONEY MARKET SECURITIES -- 2.9% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation - Class A
(Cost $1,519,906) .................................. 1,519,906 $ 1,519,906
------------
TOTAL INVESTMENTS AT VALUE --100.4% (Cost $46,663,219) $ 51,840,722
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.4%) ....... (205,968)
------------
NET ASSETS -- 100.0% .................................. $ 51,634,754
============
(a) Non-income producing security.
(b) Closed-end fund.
See accompanying notes to financial statements.
28
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2004
================================================================================
(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.
29
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2004
================================================================================
A. INVESTMENT VALUATION
--------------------
Investments, representing primarily capital stock of other 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. Other assets and securities
for which no quotations are readily available or for which quotations Weston
Financial Group, Inc. (the "Advisor") believes do not reflect market value are
valued at fair value as determined in good faith by the Advisor under the
supervision of 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 years ended October 31, 2004 and
2003.
30
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2004
================================================================================
F. COST OF OPERATIONS
------------------
The Portfolios bear all costs of their operations other than expenses
specifically assumed by the Advisor. Expenses directly attributable to a
Portfolio are charged to that Portfolio; other expenses are allocated
proportionately among the Portfolios in relation to the net assets of each
Portfolio.
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 average
daily 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, 2004, the Advisor waived its entire advisory fee
of $53,046 and reimbursed $10,970 of other operating expenses for the New
Century Aggressive Portfolio and waived investment advisory fees of $48,030 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 year ended October 31, 2004, the Advisor received
$1,967 in recouped fees from the New Century Balanced Portfolio. During the
year, 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 October 31, 2004.
31
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2004
================================================================================
As of October 31, 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 ............................ $197,324
New Century International Portfolio ......................... $173,842
- --------------------------------------------------------------------------------
As of October 31, 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,
2005 2006 2007
- --------------------------------------------------------------------------------
New Century Aggressive Portfolio ...... $64,472 $68,836 $64,016
New Century International Portfolio ... $63,079 $62,733 $48,030
- --------------------------------------------------------------------------------
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. Trustees who are affiliated with the Advisor do not receive
compensation.
(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, 2004, the Distributor received $185,782,
$118,312, $12,122, $44,207 and $27,640 from the New Century Capital, Balanced,
Aggressive, International and Alternative Strategies Portfolios, respectively,
pursuant to the Plan. Also during this time, the Distributor received sales
commissions and other compensation of $67,584, $65,682, $1,138, $6,349 and
$82,091 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 Plan in amounts equal to the
sales commissions and other compensation.
Certain officers and trustees of New Century are also officers and/or directors
of the Advisor and the Distributor.
32
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2004
================================================================================
(4) INVESTMENT TRANSACTIONS
For the year ended October 31, 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 ............ $48,069,006 $32,098,946 $ 3,965,659 $14,724,598 $19,125,565
=========== =========== =========== =========== ===========
Proceeds from sales of investment securities .. $49,134,067 $33,034,392 $ 3,600,880 $ 8,892,570 $ 4,613,843
=========== =========== =========== =========== ===========
- ----------------------------------------------------------------------------------------------------------------------
(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 each 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, 2004, 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) ..................... $ 917,292 $ 41,954 $ 56,431 $ 130,081 $ 194,276
----------- ----------- ----------- ----------- -----------
Decrease Accumulated Net Realized Gains
(Losses) on Investments ...................... $ (54,758) $ (41,954) $ (2,429) $ (644) $ (194,276)
----------- ----------- ----------- ----------- -----------
Decrease in Paid in Capital ................... $ (862,534) $ -- $ (54,002) $ (129,437) $ --
----------- ----------- ----------- ----------- -----------
- ----------------------------------------------------------------------------------------------------------------------
These reclassifications did not change the net assets of the Portfolios.
33
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2004
================================================================================
The tax character of distributable earnings (deficit) at October 31, 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
- ----------------------------------------------------------------------------------------------------------------------
Undistributed ordinary income ................. $ -- $ 291,199 $ -- $ -- $ 172,051
Unrealized appreciation ....................... 13,842,335 8,258,563 625,148 3,859,051 5,149,391
Capital loss carryforwards .................... (13,589,122) (5,710,786) (1,510,803) -- --
Undistributed long-term gains ................. -- -- -- 787,403 657,816
----------- ----------- ----------- ----------- -----------
Total distributable earnings (deficit) ........ $ 253,213 $ 2,838,976 $ (885,655) $ 4,646,454 $ 5,979,258
=========== =========== =========== =========== ===========
- ----------------------------------------------------------------------------------------------------------------------
The following information is based upon the federal income tax cost of
investment securities as of October 31, 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 ................. $13,931,568 $ 8,293,196 $ 654,886 $ 3,913,389 $ 5,453,174
Gross unrealized depreciation ................. (89,233) (34,633) (29,738) (54,338) (303,783)
----------- ----------- ----------- ----------- -----------
Net unrealized appreciation ................... $13,842,335 $ 8,258,563 $ 625,148 $ 3,859,051 5,149,391
=========== =========== =========== =========== ===========
Federal income tax cost ....................... $89,569,880 $66,160,495 $ 4,891,003 $20,620,914 $46,691,331
=========== =========== =========== =========== ===========
- ----------------------------------------------------------------------------------------------------------------------
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, 2004, 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
CENTURY CENTURY CENTURY
CAPITAL BALANCED AGGRESSIVE
EXPIRES OCTOBER 31, PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------
2009 ......................... $ 1,052,258 $ 829,745 $ --
2010 ......................... 9,405,834 4,737,511 1,394,145
2011 ......................... 3,131,030 143,530 116,658
------------ ------------ ------------
$ 13,589,122 $ 5,710,786 $ 1,510,803
============ ============ ============
- --------------------------------------------------------------------------------
34
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2004
================================================================================
During the year ended October 31, 2004, the following amounts of capital loss
carryforwards were utilized to offset current year realized gains:
New Century Capital Portfolio $5,661,480
New Century Balanced Portfolio $1,837,335
New Century Aggressive Portfolio $ 322,255
New Century International Portfolio $ 345,097
New Century Alternative Strategies Portfolio $ 210,041
(6) CONTINGENCIES AND COMMITMENTS
New Century indemnifies its officers and trustees for certain liabilities that
might arise from their performance of their duties to the Portfolios.
Additionally, in the normal course of business, New Century, on behalf of its
Portfolios, enters into contracts that contain a variety of representations and
warranties and which provide general indemnifications. The Portfolios' maximum
exposure under these arrangements is unknown, as this would involve future
claims that may be made against the Portfolios that have not yet occurred.
However, based on experience, New Century expects the risk of loss to be remote.
35
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
================================================================================
To the Shareholders and Board of Trustees
New Century Portfolios
Wellesley, Massachusetts
We have audited the statements of assets and liabilities of New Century Capital
Portfolio, New Century Balanced Portfolio, New Century Aggressive Portfolio, New
Century International Portfolio and New Century Alternative Strategies
Portfolio, each a series of shares of beneficial interest of New Century
Portfolios, including the portfolios of investments, as of October 31, 2004, and
the related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years then ended and the financial
highlights for the periods indicated therein. 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 the standards of the Public Company
Accounting Oversight Board (United States). 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, 2004 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 New
Century Capital Portfolio, New Century Balanced Portfolio, New Century
Aggressive Portfolio, New Century International Portfolio and New Century
Alternative Strategies Portfolio as of October 31, 2004, the results of their
operations for the year then ended, the changes in their net assets for each of
the two years then ended, and the financial highlights for the periods indicated
therein 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 18, 2004
36
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 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 TRUSTEE
- -------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES:
- -------------------------------------------------------------------------------------------------------------------------
*Douglas A. Biggar Since 1988 Chairman/ Vice President and Clerk, 5 None
40 William Street, Trustee WestonFinancial Group, Inc.;
Suite 100 Clerk and Treasurer of Weston
Wellesley, MA 02481 Securities Corporation.
(age 57)
- -------------------------------------------------------------------------------------------------------------------------
*Joseph Robbat, Jr. Since 1988 Trustee Vice President and 5 None
40 William Street, Treasurer, WestonFinancial
Suite 100 Group, Inc.
Wellesley, MA 02481
(age 54)
- -------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES:
- -------------------------------------------------------------------------------------------------------------------------
Stanley H. Cooper, Esq. Since 1988 Trustee Attorney in private practice. 5 None
One Ashford Lane
Andover, MA 01810
(age 57)
- -------------------------------------------------------------------------------------------------------------------------
Roger Eastman, CPA Since 1989 Trustee Executive Vice President and 5 None
32 Meetinghouse Square Chief Operating Officer, Danvers
Middleton, MA 01949 Savings Bank; Formerly Partner,
(age 74) Arthur Andersen & Co.
- -------------------------------------------------------------------------------------------------------------------------
Michael A. Diorio, CPA Since 1988 Trustee Consultant in private practice, 5 Director of
11 Calvin Drive Formerly Partner, Diorio, Milford
Milford, MA 01757 Hudson & Pavento, P.C. National
(age 59) Bank & Trust
Company
- -------------------------------------------------------------------------------------------------------------------------
OFFICERS:
- -------------------------------------------------------------------------------------------------------------------------
Wayne M. Grzecki Since 1996 President Vice President and Senior
40 William Street, Counselor, WestonFinancial
Suite 100 Group, Inc.
Wellesley, MA 02481
(age 53)
- -------------------------------------------------------------------------------------------------------------------------
Ronald A. Sugameli Since 1997 Vice Vice President and Senior
40 William Street, President Counselor, WestonFinancial
Suite 100 Group, Inc.
Wellesley, MA 02481
(age 52)
- -------------------------------------------------------------------------------------------------------------------------
37
BOARD OF TRUSTEES AND OFFICERS (UNAUDITED)
(CONTINUED)
=========================================================================================================================
PRINCIPAL OCCUPATION(S)
NAME, POSITION(S) DURING PAST 5 YEARS
ADDRESS LENGTH OF HELD WITH AND DIRECTORSHIPS OF
AND AGE TIME SERVED NEW CENTURY PUBLIC COMPANIES
- -------------------------------------------------------------------------------------------------------------------------
Nicole M. Tremblay, Esq. Since 2002 CFO, Treasurer, Chief Compliance Officer,
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 30) Secretary Sun Life Financial (1/96-2/02)
- -------------------------------------------------------------------------------------------------------------------------
Susan K. Arnold Since 1998 Assistant Senior Financial Counselor,
40 William Street, Treasurer WestonFinancial Group, Inc.
Suite 100
Wellesley, MA 02481
(age 45)
- -------------------------------------------------------------------------------------------------------------------------
Clara Prokup Since 1998 Assistant Director of Investment
40 William Street, Secretary Operations, WestonFinancial
Suite 100 Group, Inc.
Wellesley, MA 02481
(age 57)
- -------------------------------------------------------------------------------------------------------------------------
* 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 of
1940, as amended.
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.
38
NEW CENTURY PORTFOLIOS
ABOUT YOUR PORTFOLIO'S EXPENSES (UNAUDITED)
================================================================================
We believe it is important for you to understand the impact of costs on your
investment. All mutual funds have operating expenses. As a shareholder of the
Portfolios, you incur ongoing costs, including management fees, distribution
(i.e. 12b-1) fees and other fund expenses. Operating expenses, which are
deducted from each Portfolio's gross income, directly reduce the investment
return of the Portfolios.
A fund's expenses are expressed as a percentage of its average net assets. This
figure is known as the expense ratio. The following examples are intended to
help you understand the ongoing costs (in dollars) of investing in the
Portfolios and to compare these costs with the ongoing costs of investing in
other mutual funds. The examples below are based on an investment of $1,000 made
at the beginning of the period shown and held for the entire period.
The table below illustrates each Portfolio's costs in two ways:
Actual fund return - This section helps you to estimate the actual expenses that
you paid over the period. The "Ending Account Value" shown is derived from each
Portfolio's actual return, and the third column shows the dollar amount of
operating expenses that would have been paid by an investor who started with
$1,000 in the Portfolios. You may use the information here, together with the
amount you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for the Portfolios under the heading "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN - This section is intended to help you compare the
Portfolios' costs with those of other mutual funds. It assumes that each
Portfolio had an annual return of 5% before expenses during the period shown,
but that the expense ratio is unchanged. In this case, because the return used
is not the Portfolios' actual returns, the results do not apply to your
investment. The example is useful in making comparisons because the Securities
and Exchange Commission requires all mutual funds to calculate expenses based on
a 5% return. You can assess each Portfolio's costs by comparing this
hypothetical example with the hypothetical examples that appear in shareholder
reports of other funds.
Note that expenses shown in the table are meant to highlight and help you
compare ongoing costs only. The Portfolios do not charge transaction fees, such
as purchase or redemption fees, nor do they carry a "sales load."
The calculations assume no shares were bought or sold during the period. Your
actual costs may have been higher or lower, depending on the amount of your
investment and the timing of any purchases or redemptions.
39
NEW CENTURY PORTFOLIOS
ABOUT YOUR PORTFOLIO'S EXPENSES (UNAUDITED)
================================================================================
More information about the Portfolios' expenses, including recent annual expense
ratios, can be found in this report. For additional information on operating
expenses and other shareholder costs, please refer to the Portfolios'
prospectus.
NEW CENTURY CAPITAL PORTFOLIO
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
April 30, 2004 Oct. 31, 2004 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $ 1,000.00 $ 1,025.30 $ 7.19
Based on Hypothetical 5% Return
(before expenses) $ 1,000.00 $ 1,018.04 $ 7.16
- --------------------------------------------------------------------------------
* Expenses are equal to the New Century Capital Portfolio's annualized
expense ratio of 1.41% for the period, multiplied by the average account
value over the period, multiplied by 184/366 (to reflect the one-half year
period).
NEW CENTURY BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
April 30, 2004 Oct. 31, 2004 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $ 1,000.00 $ 1,023.30 $ 7.10
Based on Hypothetical 5% Return
(before expenses) $ 1,000.00 $ 1,018.12 $ 7.08
- --------------------------------------------------------------------------------
* Expenses are equal to the New Century Balanced Portfolio's annualized
expense ratio of 1.40% for the period, multiplied by the average account
value over the period, multiplied by 184/366 (to reflect the one-half year
period).
NEW CENTURY AGGRESSIVE PORTFOLIO
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
April 30, 2004 Oct. 31, 2004 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $ 1,000.00 $ 1,023.80 $ 7.63
Based on Hypothetical 5% Return
(before expenses) $ 1,000.00 $ 1,017.60 $ 7.60
- --------------------------------------------------------------------------------
* Expenses are equal to the New Century Aggressive Portfolio's annualized
expense ratio of 1.50% for the period, multiplied by the average account
value over the period, multiplied by 184/366 (to reflect the one-half year
period).
40
NEW CENTURY PORTFOLIOS
ABOUT YOUR PORTFOLIO'S EXPENSES (UNAUDITED)
================================================================================
NEW CENTURY INTERNATIONAL PORTFOLIO
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
April 30, 2004 Oct. 31, 2004 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $ 1,000.00 $ 1,066.70 $ 7.79
Based on Hypothetical 5% Return
(before expenses) $ 1,000.00 $ 1,017.60 $ 7.60
- --------------------------------------------------------------------------------
* Expenses are equal to the New Century International Portfolio's annualized
expense ratio of 1.50% for the period, multiplied by the average account
value over the period, multiplied by 184/366 (to reflect the one-half year
period).
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
April 30, 2004 Oct. 31, 2004 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $ 1,000.00 $ 1,044.70 $ 5.46
Based on Hypothetical 5% Return
(before expenses) $ 1,000.00 $ 1,019.80 $ 5.39
- --------------------------------------------------------------------------------
* Expenses are equal to the New Century Alternative Strategies Portfolio's
annualized expense ratio of 1.06% for the period, multiplied by the average
account value over the period, multiplied by 184/366 (to reflect the
one-half year period).
41
================================================================================
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.
The Portfolios files its complete schedule of portfolio holdings with the
Commission for the first and third quarters of each fiscal year on Form N-Q. The
Portfolios' Form N-Q is available on the Commission's website at
http://www.sec.gov. The Portfolios' Form N-Q may be reviewed and copied at the
Commission's Public Reference Room in Washington, DC, or by calling
1-800-SEC-0330.
A description of the policies and procedures that the Portfolios use to
determine how to vote proxies relating to portfolio securities is available
without charge upon request by calling toll-free 1-888-639-0102, or on the
Securities and Exchange Commission's (SEC) website at http://www.sec.gov.
Information regarding how the Portfolios voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available
without charge upon request by calling toll-free 1-888-639-0102, or on the SEC's
website at http://www.sec.gov.
================================================================================
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, regardless of whether these individuals
are employed by the registrant or a third party. Pursuant to Item 11(a)(1), a
copy of the registrant's 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 any waivers, including implicit
waivers, 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.
(a) AUDIT FEES. The aggregate fees billed for professional services
rendered by the principal accountant for the audit of the registrant's
annual financial statements or for services that are normally provided
by the accountant in connection with statutory and regulatory filings
or engagements were $42,000 with respect to the registrant's fiscal
year ended October 31, 2004. The aggregate fees billed for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or for services
that are normally provided by the accountant in connection with the
statutory and regulatory filings or engagements were $40,500 with
respect to the registrant's fiscal year ended October 31, 2003.
(b) AUDIT-RELATED FEES. No fees were billed in either of the last two
fiscal years for assurance and related services by the principal
accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item.
(c) TAX FEES. The aggregate fees billed for professional services rendered
by the principal accountant for tax compliance, tax advice, and tax
planning were $4,500 and $4,000 with respect to the registrant's
fiscal years ended October 31, 2004 and 2003, respectively. The
services comprising these fees are the preparation of the registrant's
federal income and excise tax returns.
(d) ALL OTHER FEES. No fees were billed in either of the last two fiscal
years for products and services provided by the principal accountant,
other than the services reported in paragraphs (a) through (c) of this
Item.
(e)(1) The audit committee has adopted pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(e)(2) The services described in paragraph (b) through (d) of this Item
were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) No hours were expended on the principal accountant's engagement to
audit the registrant's financial statements for the most recent fiscal
year were attributed to work performed by persons other than the
principal accountant's full-time, permanent employees.
(g) During the fiscal years ended October 31, 2004 and 2003, aggregate
non-audit fees of $4,500 and $4,000, respectively, were billed by the
registrant's accountant for services rendered to the registrant.
During the fiscal years ended October 31, 2004 and 2003, aggregate
non-audit fees of $3,300 and $3,000 respectively, were billed by the
registrant's accountant for services rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled
by, or under common control with the adviser that provides ongoing
services to the registrant.
(h) The principal accountant has not provided any non-audit services to
the registrant's investment adviser that were not previously approved
(not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to
the registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable [schedule filed with Item 1]
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 a standing nominating committee responsible for the selection
and nomination of candidates to serve as trustees of the registrant. Although
the nominating committee expects to be able to find an adequate number of
qualified candidates to serve as trustees, the nominating committee is willing
to consider nominations received from shareholders. Shareholders wishing to
submit a nomination should do so by notifying the Secretary of the registrant,
in writing, at the following address: 40 William Street, Suite 100, Wellesley,
Massachusetts 02481-3902.
ITEM 10.CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
1940) as of a date within 90 days of the filing date of this report, 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 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: Attached hereto
(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.CODE ETH Code of Ethics
Exhibit 99.CERT Certifications required by Rule 30a-2(a) under the Act
Exhibit 99.906CERT Certifications required by Rule 30a-2(b) under the Act
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 5, 2005
----------------------------------
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 5, 2005
----------------------------------
By (Signature and Title)* /s/ Nicole M. Tremblay
-------------------------------------
Nicole M. Tremblay, Treasurer
Date January 5, 2005
----------------------------------
* Print the name and title of each signing officer under his or her signature.