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OMB APPROVAL
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OMB Number: 3235-0570
Expires: September 30, 2007
Estimated average burden
hours per response: 19.4
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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, Suite 100 Wellesley, MA 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, 2006
-------------------------------------
Date of reporting period: October 31, 2006
------------------------------------
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.
================================================================================
[LOGO OMITTED]
NEW CENTURY
P O R T F O L I O S
NEW CENTURY CAPITAL
NEW CENTURY BALANCED
NEW CENTURY OPPORTUNISTIC
NEW CENTURY INTERNATIONAL
NEW CENTURY ALTERNATIVE STRATEGIES
ANNUAL REPORT
YEAR ENDED OCTOBER 31, 2006
40 William Street, Suite 100, Wellesley MA 02481 781-239-0445 888-639-0102 Fax 781-237-1635
================================================================================
CONTENTS
- --------------------------------------------------------------------------------
PRESIDENT'S LETTER 1-2
PERFORMANCE CHARTS 3-5
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 21-29
Notes to Financial Statements 30-38
Report of Independent Registered Public Accounting Firm 39
Board of Trustees and Officers 40-41
About Your Portfolio's Expenses 42-44
Federal Tax Information 44
Trustees Approval of Investment Advisory Agreements 45-47
LETTER TO SHAREHOLDERS DECEMBER 2006
================================================================================
Dear Fellow Shareholders:
I am pleased to present our 17th Annual Report.
Economic concerns including inflation and a slowing real estate market coupled
with continued geopolitical uncertainties have not been enough to derail the
U.S. equity markets during the twelve-month period ended October 31, 2006.
Bolstered by strong corporate profits and resilient consumer spending, U.S.
equity markets, as measured by the S&P 500(R) Composite Index, posted a gain of
16.34% during the twelve-month period ended October 31, 2006. International
equity markets continued their advance as well, outperforming the domestic
marketplace over the twelve-month period. As of October 31, 2006, the
international equity markets, as measured by the MSCI EAFE Index, gained 27.52%
over the past twelve months. The fixed income markets, as measured by the Lehman
Brothers Intermediate Government/Credit Index, gained 4.67% during the
twelve-month period ended October 31, 2006.
During the twelve-month period ended October 31, 2006, the New Century Capital
Portfolio maintained its allocation in each sector. Recently, more emphasis has
been placed on increasing exposure to large-cap positions with a potential
reduction in small-cap holdings. The New Century Capital Portfolio gained 14.56%
as compared to the S&P 500(R) Composite Index which gained 16.34%.
The New Century Balanced Portfolio increased its allocation to the growth and
income sector, while slightly reducing positions in the growth and small-cap
sectors. With respect to fixed income, the New Century Balanced Portfolio has
reduced its exposure to high yield bonds. The New Century Balanced Portfolio's
equity-to-fixed income allocation has increased slightly to 66%/34%. This is a
direct result of the relative strength of equities during this period of time.
During the twelve-month period ended October 31, 2006, the New Century Balanced
Portfolio posted a gain of 12.37%, as compared to the S&P 500(R) Composite Index
which gained 16.34% and the Lehman Brothers Intermediate Government/Credit Index
which gained 4.67%.
The New Century Opportunistic Portfolio, during the past twelve months, reduced
its holdings in the sector specific category while increasing its positions in
the large-cap and mid-cap sectors. The New Century Opportunistic Portfolio
primarily decreased its allocation to the biotech, energy and emerging markets
sectors while increasing its position to global real estate. The New Century
Opportunistic Portfolio also maintained its allocation in the technology sector
during the period. During the twelve-month period ended October 31, 2006, the
New Century Opportunistic Portfolio gained 8.37% while the NASDAQ Index posted
an 11.62% increase during the period.
The New Century International Portfolio increased its positions in the
diversified and European sectors over the last twelve months while reducing
positions in Emerging Markets, Japan and the Americas (ex-US). The New Century
International Portfolio continues to maintain holdings in non-traditional EAFE
regions such as India, China and Latin America. The New Century International
Portfolio also continues to maintain an allocation to global energy. During the
twelve-month period ended October 31,
1
2006, the New Century International Portfolio gained 25.35%. The international
equity markets, as measured by the MSCI EAFE Index, increased 27.52% during the
same time period.
The New Century Alternative Strategies Portfolio maintained diversified
positions in ten investment strategies, reducing its exposure to the asset
allocation and high yield categories, while increasing exposure to long/short
equity strategies. The New Century Alternative Strategies Portfolio had a total
return of 12.32% for the twelve-month period ended October 31, 2006, as compared
to the S&P 500(R) Composite Index which gained 16.34% and the Lehman Brothers
Intermediate Government/Credit Index which gained 4.67% during the same time
period.
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 (UNAUDITED)
================================================================================
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
[GRAPHIC OMITTED]
S&P 500(R) Composite Index New Century Capital Portfolio
-------------------------- -----------------------------
Ending Ending
Date Balance Date Balance
------ --------- ------ ---------
10/31/1996 $ 10,000 10/31/1996 $ 10,000
10/31/1997 13,211 10/31/1997 12,722
10/31/1998 16,117 10/31/1998 13,736
10/31/1999 20,254 10/31/1999 17,712
10/31/2000 21,488 10/31/2000 20,355
10/31/2001 16,137 10/31/2001 14,704
10/31/2002 13,699 10/31/2002 12,395
10/31/2003 16,546 10/31/2003 15,183
10/31/2004 18,105 10/31/2004 16,436
10/31/2005 19,683 10/31/2005 18,475
10/31/2006 22,903 10/31/2006 21,166
- ----------------------------------
NEW CENTURY CAPITAL PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
1 YEAR 5 YEARS 10 YEARS
14.56% 7.56% 7.79%
- ----------------------------------
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
- -------------------------- ------------------------ -------------------------
10/31/1996 $ 10,000 10/31/1996 $ 10,000 10/31/1996 $ 10,000
10/31/1997 13,211 10/31/1997 11,964 10/31/1997 10,749
10/31/1998 16,117 10/31/1998 12,797 10/31/1998 11,729
10/31/1999 20,254 10/31/1999 14,750 10/31/1999 11,845
10/31/2000 21,488 10/31/2000 16,263 10/31/2000 12,611
10/31/2001 16,137 10/31/2001 14,429 10/31/2001 14,408
10/31/2002 13,699 10/31/2002 12,686 10/31/2002 15,259
10/31/2003 16,546 10/31/2003 15,076 10/31/2003 16,088
10/31/2004 18,105 10/31/2004 16,244 10/31/2004 16,784
10/31/2005 19,683 10/31/2005 17,627 10/31/2005 16,826
10/31/2006 22,903 10/31/2006 19,807 10/31/2006 17,610
- ----------------------------------
NEW CENTURY BALANCED PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
1 YEAR 5 YEARS 10 YEARS
12.37% 6.54% 7.07%
- ----------------------------------
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 Portfolio distributions or the redemption of
Portfolio shares.
3
PERFORMANCE CHARTS (UNAUDITED)(CONTINUED)
================================================================================
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE NEW CENTURY OPPORTUNISTIC PORTFOLIO AND THE NASDAQ COMPOSITE INDEX
[GRAPHIC OMITTED]
NASDAQ COMPOSITE INDEX NEW CENTURY OPPORTUNISTIC 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
10/31/2005 6,436 10/31/2005 8,720
10/31/2006 7,239 10/31/2006 9,450
- ----------------------------------------
NEW CENTURY OPPORTUNISTIC PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
1 YEAR 5 YEARS SINCE INCEPTION*
8.37% 5.10% (0.94%)
- ----------------------------------------
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]
NEW CENTURY
MSCI EAFE INDEX 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
10/31/2005 11,787 10/31/2005 12,481
10/31/2006 15,031 10/31/2006 15,645
- -------------------------------------
NEW CENTURY INTERNATIONAL PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
1 YEAR 5 YEARS SINCE INCEPTION*
25.35% 16.12% 7.75%
- -------------------------------------
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 Portfolio distributions or the redemption of
Portfolio shares.
4
PERFORMANCE CHARTS (UNAUDITED)(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 LEHMAN BROTHERS INTERMEDIATE
S&P 500(R) COMPOSITE INDEX STRATEGIES PORTFOLIO 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 10,022 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
11/30/2004 11,310 11/30/2004 12,111 11/30/2004 11,543
12/31/2004 11,695 12/31/2004 12,290 12/31/2004 11,621
1/31/2005 11,410 1/31/2005 12,119 1/31/2005 11,644
2/28/2005 11,650 2/28/2005 12,429 2/28/2005 11,579
3/31/2005 11,444 3/31/2005 12,322 3/31/2005 11,519
4/30/2005 11,227 4/30/2005 12,130 4/30/2005 11,651
5/31/2005 11,584 5/31/2005 12,290 5/31/2005 11,755
6/30/2005 11,601 6/30/2005 12,482 6/30/2005 11,805
7/31/2005 12,032 7/31/2005 12,793 7/31/2005 11,707
8/31/2005 11,922 8/31/2005 12,889 8/31/2005 11,844
9/30/2005 12,019 9/30/2005 13,114 9/30/2005 11,743
10/31/2005 11,818 10/31/2005 12,836 10/31/2005 11,679
11/30/2005 12,265 11/30/2005 12,996 11/30/2005 11,730
12/31/2005 12,270 12/31/2005 13,189 12/31/2005 11,804
1/31/2006 12,594 1/31/2006 13,632 1/31/2006 11,801
2/28/2006 12,629 2/28/2006 13,587 2/28/2006 11,810
3/31/2006 12,786 3/31/2006 13,798 3/31/2006 11,758
4/30/2006 12,957 4/30/2006 14,030 4/30/2006 11,764
5/31/2006 12,585 5/31/2006 13,831 5/31/2006 11,765
6/30/2006 12,602 6/30/2006 13,875 6/30/2006 11,782
7/31/2006 12,679 7/31/2006 13,986 7/31/2006 11,914
8/31/2006 12,981 8/31/2006 14,107 8/31/2006 12,063
9/30/2006 13,316 9/30/2006 14,096 9/30/2006 12,159
10/31/2006 13,750 10/31/2006 14,417 10/31/2006 11,740
- -----------------------------------------------
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
1 YEAR SINCE INCEPTION*
12.32% 8.47%
- -----------------------------------------------
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 Portfolio distributions or the redemption of
Portfolio shares.
5
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% of Net Assets)
- --------------------------------------------------------------------------------
Growth Funds - 34.3%
Growth and Income Funds - 33.5%
[GRAPHIC OMITTED] Small Company Funds - 17.5%
Foreign Stock Funds - 13.9%
Cash Equivalents - 0.8%
TOP TEN HOLDINGS
================================================================================
SECURITY DESCRIPTION % OF NET ASSETS
------------------------------------------------ ---------------
American Growth Fund of America - Class A 7.1%
William Blair Small Cap Growth - Class I 6.8%
Marsico 21st Century 6.7%
Hotchkis & Wiley Large Cap Value - Class A 6.1%
Calamos Growth - Class A 5.9%
Fidelity Capital Appreciation 4.8%
Powershares Dynamic Market 4.6%
iShares S&P MidCap 400/BARRA Value Index 4.6%
Royce Opportunity - Investor Class 4.0%
Goldman Sachs Growth Opportunities - Class A 4.0%
6
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% of Net Assets)
- --------------------------------------------------------------------------------
Growth and Income Funds - 35.7%
Growth Funds - 10.6%
Foreign Stock Funds - 10.4%
Small Company Funds - 9.6%
[GRAPHIC OMITTED] High Yield Bond Funds - 8.4%
Convertible Security Funds - 5.3%
Worldwide Bond Funds - 5.0%
Corporate Bond Funds - 5.0%
Government Bond Funds - 3.3%
High Quality Bond Funds - 2.9%
Cash Equivalents - 3.8%
TOP TEN HOLDINGS
================================================================================
SECURITY DESCRIPTION % OF NET ASSETS
------------------------------------------------ ---------------
Hotchkis & Wiley Large Cap Value - Class A 6.9%
Dodge & Cox Stock 5.7%
Loomis Sayles Bond - Institutional Class 5.0%
iShares S&P 500 Index 4.8%
iShares MSCI EAFE Index 4.7%
MainStay High Yield Corporate Bond - Class A 4.7%
Powershares Dynamic Market 4.6%
Loomis Sayles Institutional High Income 3.7%
American Funds AMCAP - Class A 3.5%
iShares Dow Jones Select Dividend Index 3.4%
7
NEW CENTURY OPPORTUNISTIC PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% of Net Assets)
- --------------------------------------------------------------------------------
Sector Funds - 49.6%
Mid-Cap Funds - 25.8%
[GRAPHIC OMITTED] Large-Cap Funds - 14.9%
Small-Cap Funds - 7.3%
Cash Equivalents - 2.4%
TOP TEN HOLDINGS
================================================================================
SECURITY DESCRIPTION % OF NET ASSETS
----------------------------------------------- ---------------
Marsico 21st Century 11.2%
iShares Dow Jones U.S. Energy Sector Index 8.2%
iShares Goldman Sachs Natural Resources Index 8.1%
Leuthold Select Industries 7.1%
S&P MidCap 400 Depositary Receipts 7.1%
iShares Goldman Sachs Networking Index 6.1%
Technology Select Sector SPDR 5.9%
Janus Orion 5.0%
iShares MSCI Emerging Markets Index 4.6%
Perritt Micro Cap Opportunities 4.1%
8
NEW CENTURY INTERNATIONAL PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% of Net Assets)
- --------------------------------------------------------------------------------
Europe Funds - 31.6%
Diversified Funds - 27.2%
[GRAPHIC OMITTED] Asia/Pacific Funds - 20.5%
Americas Funds - 12.1%
Emerging Markets Funds - 7.1%
Cash Equivalents - 1.5%
TOP TEN HOLDINGS
================================================================================
SECURITY DESCRIPTION % OF NET ASSETS
------------------------------------------------ ---------------
Janus Overseas 5.7%
iShares MSCI Austria Index 5.4%
Ivy European Opportunities - Class A 4.6%
iShares MSCI EAFE Index 4.6%
AIM European Growth - Class A 4.4%
iShares MSCI Canada Index 3.6%
Oppenheimer International Small Company - Class A 3.6%
Eaton Vance Greater India - Class A 3.4%
iShares FTSE/Xinhua China 25 Index 3.4%
iShares MSCI Australia Index 3.4%
9
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2006 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% of Net Assets)
- --------------------------------------------------------------------------------
Long/Short Equity Funds - 19.0%
Merger Arbitrage Funds - 15.0%
Global Macro Funds - 12.6%
Natural Resources Funds - 9.6%
Asset Allocation Funds - 9.4%
Real Estate Funds - 7.1%
[GRAPHIC OMITTED] Option Hedged Funds - 7.1%
Deep Value/Distressed Securities Funds - 6.4%
Convertible Arbitrage Funds - 5.0%
High Yield Funds - 5.0%
Structured Notes - 1.8%
Cash Equivalents - 2.0%
TOP TEN HOLDINGS
================================================================================
SECURITY DESCRIPTION % OF NET ASSETS
------------------------------------------------ ---------------
First Eagle Global - Class A 7.0%
Merger Fund (The) 5.2%
Calamos Market Neutral - A Shares 5.0%
Hussman Strategic Growth 4.6%
Enterprise Mergers and Acquisitions - Class A 4.5%
Gateway 4.3%
Schwab Hedged Equity 4.0%
Third Avenue Real Estate Value 3.5%
PIMCO Commodity Real Return Strategy - Class A 3.5%
Franklin Mutual Discovery - Class Z 3.1%
10
NEW CENTURY PORTFOLIOS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 2006
=================================================================================================================================
NEW CENTURY
NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY ALTERNATIVE
CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in securities:
At acquisition cost...................... $ 90,575,984 $ 69,400,671 $ 10,890,233 $ 77,866,266 $ 84,137,549
============ ============ ============ ============ ============
At value (Note 1A)....................... $124,047,278 $ 85,889,550 $ 11,961,467 $103,091,631 $ 98,242,454
Dividends receivable......................... 4,685 12,682 817 6,829 8,806
Receivable for capital shares sold........... 6,550 375 -- 37,034 44,131
Other assets................................. 7,733 5,623 798 5,930 5,979
------------ ------------ ------------ ------------ ------------
TOTAL ASSETS............................. 124,066,246 85,908,230 11,963,082 103,141,424 98,301,370
------------ ------------ ------------ ------------ ------------
LIABILITIES
Payable to Advisor (Note 2).................. 101,595 73,709 5,565 103,989 63,470
Payable to Distributor (Note 3).............. 15,301 13,493 2,527 17,104 11,062
Payable for investment securities purchased.. -- -- -- -- 400,000
Payable for capital shares redeemed.......... 50,739 13,897 -- 61,531 5,000
Other accrued expenses and liabilities....... 10,702 8,061 6,130 13,523 10,652
------------ ------------ ------------ ------------ ------------
TOTAL LIABILITIES........................ 178,337 109,160 14,222 196,147 490,184
------------ ------------ ------------ ------------ ------------
NET ASSETS.................................... $123,887,909 $ 85,799,070 $ 11,948,860 $102,945,277 $ 97,811,186
============ ============ ============ ============ ============
Net assets consist of:
Paid-in capital.............................. $ 94,350,190 $ 69,508,054 $ 11,230,610 $ 74,298,128 $ 81,326,477
Accumulated undistributed net
investment income........................ -- 227,009 -- -- 136,487
Accumulated net realized gains (losses)
on investments........................... (3,933,575) (424,872) (352,984) 3,421,784 2,243,317
Net unrealized appreciation of investments... 33,471,294 16,488,879 1,071,234 25,225,365 14,104,905
------------ ------------ ------------ ------------ ------------
Net assets.................................... $123,887,909 $ 85,799,070 $ 11,948,860 $102,945,277 $ 97,811,186
============ ============ ============ ============ ============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value)................................ 7,188,979 5,887,622 1,264,444 6,837,813 7,507,530
============ ============ ============ ============ ============
Net asset value, offering price and
redemption price per share(a)................ $ 17.23 $ 14.57 $ 9.45 $ 15.06 $ 13.03
============ ============ ============ ============ ============
(a) Redemption price may differ from the net asset value per share depending upon the length of time held (Note 1B).
See accompanying notes to financial statements.
11
NEW CENTURY PORTFOLIOS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2006
=================================================================================================================================
NEW CENTURY
NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY ALTERNATIVE
CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends.................................... $ 941,166 $ 2,105,414 $ 67,300 $ 921,174 $ 2,209,047
------------ ------------ ------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 2)............ 1,136,399 818,452 110,397 882,692 659,869
Distribution costs (Note 3).................. 164,176 143,879 25,105 186,489 99,217
Accounting fees.............................. 41,822 38,120 31,060 38,871 38,833
Legal and audit fees......................... 46,990 33,712 7,771 35,971 35,765
Administration fees (Note 2)................. 39,313 29,084 9,298 30,768 30,777
Transfer agent fees.......................... 21,000 21,000 21,000 21,000 21,000
Custody fees................................. 20,745 15,839 5,219 20,692 19,919
Trustees' fees and expenses (Note 2)......... 13,706 9,471 1,328 10,627 10,274
Insurance expense............................ 7,140 5,083 590 4,257 5,151
Other expenses............................... 6,480 11,616 9,842 17,609 27,338
------------ ------------ ------------ ------------ ------------
Total expenses........................... 1,497,771 1,126,256 221,610 1,248,976 948,143
Less fees waived and/or expenses
reimbursed by the Advisor (Note 2)....... -- -- (56,057) -- --
Plus previously waived investment
advisory fees and expense
reimbursements recouped
by the Advisor (Note 2).................. -- -- -- 75,667 --
------------ ------------ ------------ ------------ ------------
Net expenses............................. 1,497,771 1,126,256 165,553 1,324,643 948,143
------------ ------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS).................. (556,605) 979,158 (98,253) (403,469) 1,260,904
------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized gains on investments............ 1,704,300 1,241,744 817,940 3,043,416 973,092
Capital gain distributions from regulated
investment companies..................... 3,556,360 1,607,334 159,314 875,977 2,145,864
Net change in unrealized appreciation/
(depreciation) on investments............ 11,233,452 5,632,860 (391,329) 14,609,225 5,623,409
------------ ------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAINS ON INVESTMENTS......................... 16,494,112 8,481,938 585,925 18,528,618 8,742,365
------------ ------------ ------------ ------------ ------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS....................... $ 15,937,507 $ 9,461,096 $ 487,672 $ 18,125,149 $ 10,003,269
============ ============ ============ ============ ============
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,
2006 2005 2006 2005
- ----------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss)....................... $ (556,605) $ (628,007) $ 979,158 $ 855,815
Net realized gains from
security transactions.......................... 1,704,300 2,892,881 1,241,744 1,751,541
Capital gain distributions from regulated
investment companies........................... 3,556,360 1,955,220 1,607,334 1,128,719
Net change in unrealized appreciation/
(depreciation) on investments.................. 11,233,452 8,395,507 5,632,860 2,492,528
------------- ------------- ------------- -------------
Net increase in net assets from operations.......... 15,937,507 12,615,601 9,461,096 6,228,603
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E)............... -- -- (1,111,490) (1,126,169)
From net realized gains on security
transactions (Note 1E)......................... -- -- -- --
------------- ------------- ------------- -------------
Net decrease in net assets from
distributions to shareholders...................... -- -- (1,111,490) (1,126,169)
------------- ------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold.......................... 11,070,170 6,701,234 5,087,519 4,765,588
Net asset value of shares issued in reinvestment
of distributions to shareholders............... -- -- 1,066,079 1,081,941
Payments for shares redeemed....................... (13,697,406) (11,998,943) (5,831,703) (8,149,800)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets from
capital share transactions......................... (2,627,236) (5,297,709) 321,895 (2,302,271)
------------- ------------- ------------- -------------
TOTAL INCREASE IN NET ASSETS........................ 13,310,271 7,317,892 8,671,501 2,800,163
NET ASSETS
Beginning of year.................................. 110,577,638 103,259,746 77,127,569 74,327,406
------------- ------------- ------------- -------------
End of year........................................ $ 123,887,909 $ 110,577,638 $ 85,799,070 $ 77,127,569
============= ============= ============= =============
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME.............................. $ -- $ -- $ 227,009 $ 188,771
============= ============= ============= =============
CAPITAL SHARE ACTIVITY
Sold .............................................. 681,814 461,564 367,445 368,469
Reinvested......................................... -- -- 79,499 83,382
Redeemed........................................... (846,878) (825,738) (422,404) (630,609)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding...... (165,064) (364,174) 24,540 (178,758)
Shares outstanding, beginning of year.............. 7,354,043 7,718,217 5,863,082 6,041,840
------------- ------------- ------------- -------------
Shares outstanding, end of year.................... 7,188,979 7,354,043 5,887,622 5,863,082
============= ============= ============= =============
See accompanying notes to financial statements.
13
NEW CENTURY PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
======================================================================================================================
NEW CENTURY NEW CENTURY
OPPORTUNISTIC PORTFOLIO INTERNATIONAL PORTFOLIO
----------------------------------------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
2006 2005 2006 2005
- ----------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment loss................................ $ (98,253) $ (43,755) $ (403,469) $ (237,896)
Net realized gains from
security transactions.......................... 817,940 154,869 3,043,416 84,860
Capital gain distributions from regulated
investment companies........................... 159,314 76,023 875,977 320,739
Net change in unrealized appreciation/
(depreciation) on investments.................. (391,329) 813,977 14,609,225 6,757,089
------------- ------------- ------------- -------------
Net increase in net assets from operations.......... 487,672 1,001,114 18,125,149 6,924,792
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E)............... -- -- -- --
From net realized gains on security
transactions (Note 1E)......................... -- -- (684,174) (789,174)
------------- ------------- ------------- -------------
Net decrease in net assets from
distributions to shareholders...................... -- -- (684,174) (789,174)
------------- ------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold.......................... 7,157,035 1,174,899 44,931,737 14,451,797
Proceeds from redemption
fees collected (Note 1B)....................... -- -- 575 73
Net asset value of shares issued in reinvestment
of distributions to shareholders............... -- -- 576,069 788,064
Payments for shares redeemed....................... (2,587,039) (796,827) (5,017,738) (810,565)
------------- ------------- ------------- -------------
Net increase in net assets from capital
share transactions................................. 4,569,996 378,072 40,490,643 14,429,369
------------- ------------- ------------- -------------
TOTAL INCREASE IN NET ASSETS........................ 5,057,668 1,379,186 57,931,618 20,564,987
NET ASSETS
Beginning of year.................................. 6,891,192 5,512,006 45,013,659 24,448,672
------------- ------------- ------------- -------------
End of year........................................ $ 11,948,860 $ 6,891,192 $ 102,945,277 $ 45,013,659
============= ============= ============= =============
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME.............................. $ -- $ -- $ -- $ --
============= ============= ============= =============
CAPITAL SHARE ACTIVITY
Sold............................................... 755,146 138,297 3,448,917 1,285,214
Reinvested......................................... -- -- 44,076 71,773
Redeemed........................................... (281,228) (103,058) (368,210) (72,073)
------------- ------------- ------------- -------------
Net increase in shares outstanding................. 473,918 35,239 3,124,783 1,284,914
Shares outstanding, beginning of year.............. 790,526 755,287 3,713,030 2,428,116
------------- ------------- ------------- -------------
Shares outstanding, end of year.................... 1,264,444 790,526 6,837,813 3,713,030
============= ============= ============= =============
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,
2006 2005
- ----------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income................................................ $ 1,260,904 $ 704,047
Net realized gains from security transactions........................ 973,092 389,570
Capital gain distributions from regulated investment companies....... 2,145,864 1,135,285
Net change in unrealized appreciation/(depreciation) on investments.. 5,623,409 3,303,993
------------- -------------
Net increase in net assets from operations............................ 10,003,269 5,532,895
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E)................................. (2,149,410) (1,190,792)
From net realized gains on security transactions (Note 1E)........... (455,936) (1,234,575)
------------- -------------
Net decrease in net assets from distributions to shareholders......... (2,605,346) (2,425,367)
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold............................................ 16,213,431 22,175,175
Proceeds from redemption fees collected (Note 1B).................... -- 76
Net asset value of shares issued in reinvestment of
distributions to shareholders.................................... 2,588,651 2,403,567
Payments for shares redeemed......................................... (4,949,196) (2,760,723)
------------- -------------
Net increase in net assets from capital share transactions............ 13,852,886 21,818,095
------------- -------------
TOTAL INCREASE IN NET ASSETS.......................................... 21,250,809 24,925,623
NET ASSETS
Beginning of year.................................................... 76,560,377 51,634,754
------------- -------------
End of year.......................................................... $ 97,811,186 $ 76,560,377
============= =============
ACCUMULATED UNDISTRIBUTED
NET INVESTMENT INCOME................................................ $ 136,487 $ 181,141
============= =============
CAPITAL SHARE ACTIVITY
Sold................................................................. 1,304,516 1,906,069
Reinvested........................................................... 217,168 208,871
Redeemed............................................................. (398,656) (235,708)
------------- -------------
Net increase in shares outstanding................................... 1,123,028 1,879,232
Shares outstanding, beginning of year................................ 6,384,502 4,505,270
------------- -------------
Shares outstanding, end of year...................................... 7,507,530 6,384,502
============= =============
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,
---------------------------------------------------------------------------------
2006 2005 2004 2003 2002
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year.......... $ 15.04 $ 13.38 $ 12.36 $ 10.09 $ 11.97
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment loss..................... (0.08) (0.09) (0.12) (0.06) (0.08)
Net realized and unrealized gains
(losses) on investments............... 2.27 1.75 1.14 2.33 (1.80)
----------- ----------- ----------- ----------- -----------
Total from investment operations............ 2.19 1.66 1.02 2.27 (1.88)
----------- ----------- ----------- ----------- -----------
Less distributions:
Distributions from net
investment income..................... -- -- -- -- --
Distributions from net realized gains... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions......................... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value, end of year................ $ 17.23 $ 15.04 $ 13.38 $ 12.36 $ 10.09
=========== =========== =========== =========== ===========
TOTAL RETURN(a).............................. 14.56% 12.41% 8.25% 22.50% (15.71%)
=========== =========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's)............. $ 123,888 $ 110,578 $ 103,260 $ 95,396 $ 82,310
=========== =========== =========== =========== ===========
Ratio of expenses to average net assets(b).. 1.27% 1.35% 1.41% 1.45% 1.40%
Ratio of net investment loss to
average net assets(c)................... (0.47%) (0.57%) (0.91%) (0.59%) (0.62%)
Portfolio turnover.......................... 12% 13% 48% 71% 59%
(a) Total return is a measure of the change in the value of an investment in
the Portfolio over the periods covered, which assumes 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) Recognition of net investment income by the Portfolio 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,
---------------------------------------------------------------------------------
2006 2005 2004 2003 2002
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year.......... $ 13.15 $ 12.30 $ 11.52 $ 9.89 $ 11.35
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income................... 0.17 0.15 0.11 0.16 0.13
Net realized and unrealized gains
(losses) on investments............... 1.44 0.89 0.78 1.67 (1.49)
----------- ----------- ----------- ----------- -----------
Total from investment operations............ 1.61 1.04 0.89 1.83 (1.36)
----------- ----------- ----------- ----------- -----------
Less distributions:
Distributions from net
investment income..................... (0.19) (0.19) (0.11) (0.20) (0.10)
Distributions from net realized gains... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions......................... (0.19) (0.19) (0.11) (0.20) (0.10)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year................ $ 14.57 $ 13.15 $ 12.30 $ 11.52 $ 9.89
=========== =========== =========== =========== ===========
TOTAL RETURN(a).............................. 12.37% 8.51% 7.75% 18.84% (12.08%)
=========== =========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's)............. $ 85,799 $ 77,128 $ 74,327 $ 70,441 $ 62,755
=========== =========== =========== =========== ===========
Ratio of expenses to average net assets(d).. 1.38% 1.38% 1.42%(c) 1.45%(b) 1.48%
Ratio of net investment income to
average net assets(e)................... 1.20% 1.12% 0.88%(c) 1.56%(b) 1.19%
Portfolio turnover.......................... 22% 21% 44% 80% 93%
(a) Total return is a measure of the change in the value of an investment in
the Portfolio over the periods covered, which assumes 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) Recognition of net investment income by the Portfolio 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 OPPORTUNISTIC PORTFOLIO*
FINANCIAL HIGHLIGHTS
================================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
================================================================================================================================
YEARS ENDED OCTOBER 31,
---------------------------------------------------------------------------------
2006 2005 2004 2003 2002
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year.......... $ 8.72 $ 7.30 $ 6.95 $ 5.47 $ 7.37
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment loss..................... (0.08) (0.06) (0.07) (0.06) (0.07)
Net realized and unrealized gains
(losses) on investments............... 0.81 1.48 0.42 1.54 (1.83)
----------- ----------- ----------- ----------- -----------
Total from investment operations............ 0.73 1.42 0.35 1.48 (1.90)
----------- ----------- ----------- ----------- -----------
Less distributions:
Distributions from net
investment income..................... -- -- -- -- --
Distributions from net realized gains... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions......................... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value, end of year................ $ 9.45 $ 8.72 $ 7.30 $ 6.95 $ 5.47
=========== =========== =========== =========== ===========
TOTAL RETURN(a).............................. 8.37% 19.45% 5.04% 27.06% (25.78%)
=========== =========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's)............. $ 11,949 $ 6,891 $ 5,512 $ 4,866 $ 3,610
=========== =========== =========== =========== ===========
Ratios of expenses to average net assets:
Before expense reimbursement
and waived fees(b).................... 2.00% 2.56% 2.71% 3.20% 2.95%
After expense reimbursement
and waived fees(b).................... 1.50% 1.50% 1.50% 1.50% 1.50%
Ratios of net investment loss
to average net assets:
Before expense reimbursement
and waived fees(c).................... (1.39%) (1.80%) (2.27%) (2.73%) (2.50%)
After expense reimbursement
and waived fees(c).................... (0.89%) (0.74%) (1.06%) (1.03%) (1.05%)
Portfolio turnover.......................... 49% 19% 68% 78% 120%
* Until March 1, 2006, the New Century Opportunistic Portfolio was known as
the "New Century Aggressive Portfolio."
(a) Total return is a measure of the change in the value of an investment in
the Portfolio over the periods covered, which assumes 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) Recognition of net investment income by the Portfolio 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,
---------------------------------------------------------------------------------
2006 2005 2004 2003 2002
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year.......... $ 12.12 $ 10.07 $ 8.68 $ 6.52 $ 7.41
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment loss..................... (0.06) (0.06) (0.05) (0.03) (0.06)
Net realized and unrealized gains
(losses) on investments............... 3.12 2.42 1.44 2.19 (0.81)
----------- ----------- ----------- ----------- -----------
Total from investment operations............ 3.06 2.36 1.39 2.16 (0.87)
----------- ----------- ----------- ----------- -----------
Less distributions:
Distributions from net
investment income..................... -- -- -- -- (0.02)
Distributions from net realized gains... (0.12) (0.31) -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions......................... (0.12) (0.31) -- -- (0.02)
----------- ----------- ----------- ----------- -----------
Proceeds from redemption fees collected..... 0.00(a) 0.00(a) -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value, end of year................ $ 15.06 $ 12.12 $ 10.07 $ 8.68 $ 6.52
=========== =========== =========== =========== ===========
TOTAL RETURN(b).............................. 25.35% 23.70% 16.01% 33.13% (11.84%)
=========== =========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's)............. $ 102,945 $ 45,014 $ 24,449 $ 15,288 $ 7,655
=========== =========== =========== =========== ===========
Ratios of expenses to average net assets:
Before expense reimbursement
and waived fees(c).................... 1.50% 1.55% 1.74% 2.11% 2.54%
After expense reimbursement
and waived fees(c).................... 1.50%(e) 1.50% 1.50% 1.50% 1.50%
Ratios of net investment loss
to average net assets:
Before expense reimbursement
and waived fees(d).................... (0.46%) (0.72%) (0.88%) (1.16%) (2.34%)
After expense reimbursement
and waived fees(d).................... (0.46%)(e) (0.67%) (0.64%) (0.55%) (1.30%)
Portfolio turnover.......................... 22% 3% 45% 56% 27%
(a) Amount rounds to less than $0.01 per share.
(b) Total return is a measure of the change in the value of an investment in
the Portfolio over the periods covered, which assumes 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.
(c) 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.
(d) Recognition of net investment income by the Portfolio is affected by the
timing of the declaration of dividends by the underlying investment
companies in which the Portfolio invests.
(e) 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 loss to average net assets would have been
(0.37%) for the year ended October 31, 2006 (Note 2).
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
================================================================================================================================
PERIODS ENDED OCTOBER 31,
---------------------------------------------------------------------------------
2006 2005 2004 2003 2002(a)
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year.......... $ 11.99 $ 11.46 $ 10.67 $ 9.12 $ 10.00
----------- ----------- ----------- ----------- -----------
Income (loss) from investment operations:
Net investment income................... 0.21 0.15 0.14 0.11 0.01
Net realized and unrealized gains
(losses) on investments............... 1.23 0.87 0.83 1.54 (0.89)
----------- ----------- ----------- ----------- -----------
Total from investment operations............ 1.44 1.02 0.97 1.65 (0.88)
----------- ----------- ----------- ----------- -----------
Less distributions:
Distributions from net
investment income..................... (0.33) (0.24) (0.18) (0.10) --
Distributions from net realized gains... (0.07) (0.25) -- -- --
----------- ----------- ----------- ----------- -----------
Total distributions......................... (0.40) (0.49) (0.18) (0.10) --
----------- ----------- ----------- ----------- -----------
Proceeds from redemption fees collected..... -- 0.00(b) -- -- --
----------- ----------- ----------- ----------- -----------
Net asset value, end of period.............. $ 13.03 $ 11.99 $ 11.46 $ 10.67 $ 9.12
=========== =========== =========== =========== ===========
TOTAL RETURN(d).............................. 12.32% 9.12% 9.12% 18.20% (8.80%)(c)
=========== =========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........... $ 97,811 $ 76,560 $ 51,635 $ 33,734 $ 19,529
=========== =========== =========== =========== ===========
Ratios of expenses to average net assets(h). 1.08% 1.06% 1.12% 1.40%(g) 1.49%(e)(f)
Ratios of net investment income to
average net assets(i)................... 1.43% 1.06% 1.04% 1.06%(g) 0.32%(e)(f)
Portfolio turnover......................... 12% 11% 11% 21% 7%(e)
(a) Represents the period from the initial public offering of shares (May 1,
2002) through October 31, 2002.
(b) Amount rounds to less than $0.01 per share.
(c) Not annualized.
(d) Total return is a measure of the change in the value of an investment in
the Portfolio over the periods covered, which assumes 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.
(e) Annualized.
(f) Absent fee waivers and expense reimbursements by the Advisor, the ratio of
expenses to average net assets would have been 1.72%(e) and the ratio of
net investment income to average net assets would have been 0.09%(e) for
the period ended October 31, 2002 (Note 2).
(g) Absent the recoupment of fees previously waived and reimbursed by the
Advisor, the ratio of expenses to average net assets would have been 1.34%
and the ratio of net investment income to average net assets would have
been 1.12% for the year ended October 31, 2003 (Note 2).
(h) 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.
(i) Recognition of net investment income by the Portfolio 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, 2006
================================================================================
INVESTMENT COMPANIES -- 99.2% SHARES VALUE
- --------------------------------------------------------------------------------
GROWTH FUNDS -- 34.3%
American Funds AMCAP - Class A ................... 222,133 $ 4,495,973
American Funds Growth Fund of America - Class A .. 263,753 8,801,436
Calamos Growth - Class A(a) ...................... 133,080 7,335,344
Fidelity Capital Appreciation(a) ................. 216,755 5,941,239
Goldman Sachs Growth Opportunities - Class A(a)... 224,103 4,945,950
iShares Russell 1000 Growth Index(b).............. 235 12,688
Janus Orion ...................................... 116,009 1,100,928
Marsico 21st Century ............................. 574,651 8,320,953
Wells Fargo Advantage Endeavor Select - Class A(a) 152,697 1,520,861
-------------
42,475,372
-------------
GROWTH AND INCOME FUNDS -- 33.5%
Fidelity Select Utilities Growth ................. 67,387 3,613,303
Hotchkis & Wiley Large Cap Value - Class A ....... 295,932 7,498,923
iShares Dow Jones Select Dividend Index(b)........ 65,100 4,469,115
iShares Dow Jones U.S. Energy Sector Index(b)..... 49,400 4,761,666
iShares Goldman Sachs Natural Resources Index(b).. 10,600 1,026,504
iShares Russell 1000 Value Index(b)............... 28,800 2,288,160
iShares S&P 500 Index(b).......................... 17,350 2,391,871
iShares S&P MidCap 400/BARRA Value Index(b)....... 73,000 5,637,060
Powershares Dynamic Market(b)..................... 116,200 5,671,722
Vanguard 500 Index - Investor Shares ............. 32,429 4,119,831
-------------
41,478,155
-------------
SMALL COMPANY FUNDS -- 17.5%
Buffalo Small Cap(a) ............................. 47,040 1,332,636
FBR Small Cap(a) ................................. 44,461 2,194,591
iShares S&P SmallCap 600/BARRA Growth Index(b) ... 21,700 2,709,462
iShares S&P SmallCap 600/BARRA Value Index(b) .... 27,400 2,015,270
Royce Opportunity - Investor Class(a) ............ 352,055 4,971,017
William Blair Small Cap Growth - Class I(a) ...... 309,031 8,430,368
-------------
21,653,344
-------------
FOREIGN STOCK FUNDS -- 13.9%
Dodge & Cox International Stock .................. 104,190 4,347,827
iShares MSCI EAFE Index(b) ....................... 67,200 4,718,112
iShares MSCI EAFE Value Index(b) ................. 13,000 892,450
iShares MSCI Emerging Markets Index(b) ........... 41,400 4,289,040
Lazard International Small Cap - Investor Shares . 59,385 1,135,440
Tocqueville International Value (The) ............ 111,435 1,863,199
-------------
17,246,068
-------------
TOTAL INVESTMENT COMPANIES (Cost $89,381,645)....... $ 122,852,939
-------------
21
NEW CENTURY CAPITAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
MONEY MARKET SECURITIES -- 0.9% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligations - Class A
(Cost $1,194,339)................................ 1,194,339 $ 1,194,339
-------------
TOTAL INVESTMENTS AT VALUE -- 100.1%
(Cost $90,575,984)................................. $ 124,047,278
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%)..... (159,369)
-------------
NET ASSETS -- 100.0%................................ $ 123,887,909
=============
(a) Non-income producing security.
(b) Exchange-traded fund.
See accompanying notes to financial statements.
22
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2006
================================================================================
INVESTMENT COMPANIES -- 96.2% SHARES VALUE
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUNDS -- 35.7%
Dodge & Cox Stock ................................ 31,574 $ 4,899,940
Fidelity Select Utilities Growth ................. 52,302 2,804,409
Hotchkis & Wiley Large Cap Value - Class A ....... 232,123 5,881,999
iShares Dow Jones Select Dividend Index(b) ....... 42,600 2,924,490
iShares Dow Jones U.S. Energy Sector Index(b) .... 28,300 2,727,837
iShares Goldman Sachs Natural Resources Index(b) . 10,600 1,026,504
iShares Russell 1000 Value Index(b) .............. 20,300 1,612,835
iShares S&P 500 Index(b) ......................... 29,600 4,080,656
iShares S&P MidCap 400/BARRA Value Index(b) ...... 9,000 694,980
Powershares Dynamic Market(b) .................... 81,000 3,953,610
-------------
30,607,260
-------------
GROWTH FUNDS -- 10.6%
American Funds AMCAP - Class A ................... 148,337 3,002,338
Calamos Growth - Class A(a) ...................... 15,607 860,282
Fidelity Capital Appreciation(a) ................. 28,673 785,919
iShares Russell 1000 Growth Index(b) ............. 300 16,197
Marsico 21st Century ............................. 36,417 527,312
S&P MidCap 400 Depositary Receipts(b) ............ 17,580 2,519,390
Wells Fargo Advantage Endeavor Select - Class A(a) 136,092 1,355,477
-------------
9,066,915
-------------
FOREIGN STOCK FUNDS -- 10.4%
Dodge & Cox International Stock .................. 41,511 1,732,237
iShares MSCI EAFE Index(b) ....................... 57,300 4,023,033
iShares MSCI EAFE Value Index(b) ................. 21,000 1,441,650
Tocqueville International Value (The) ............ 101,453 1,696,294
-------------
8,893,214
-------------
SMALL COMPANY FUNDS -- 9.6%
FBR Small Cap(a) ................................. 23,082 1,139,321
iShares S&P SmallCap 600/BARRA Growth Index(b) ... 15,400 1,922,844
iShares S&P SmallCap 600/BARRA Value Index(b) .... 27,800 2,044,690
Royce Opportunity - Investor Class(a) ............ 116,030 1,638,351
William Blair Small Cap Growth - Class I(a) ...... 55,085 1,502,728
-------------
8,247,934
-------------
HIGH YIELD BOND FUNDS -- 8.4%
Loomis Sayles Institutional High Income........... 382,166 3,175,796
MainStay High Yield Corporate Bond - Class A...... 635,130 4,020,375
-------------
7,196,171
-------------
CONVERTIBLE SECURITY FUNDS -- 5.3%
Davis Appreciation & Income ...................... 84,484 2,607,178
Franklin Convertible Securities - Class A ........ 115,977 1,994,802
-------------
4,601,980
-------------
23
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
INVESTMENT COMPANIES -- 96.2% (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
WORLDWIDE BOND FUNDS -- 5.0%
Alliance World Dollar Government II (c) .......... 135,800 $ 1,840,090
Loomis Sayles Global Bond - Institutional Class .. 55,028 858,982
Templeton Global Bond - Class A .................. 99,026 1,081,363
T. Rowe Price Emerging Markets Bond .............. 38,485 535,330
-------------
4,315,765
-------------
CORPORATE BOND FUNDS -- 5.0%
Loomis Sayles Bond - Institutional Class ......... 297,723 4,281,263
-------------
GOVERNMENT BOND FUNDS -- 3.3%
American Century Target Maturities Trust
Series 2015 - Investor Class .................... 36,259 2,836,886
-------------
HIGH QUALITY BOND FUNDS -- 2.9%
Dodge & Cox Income ............................... 195,271 2,458,462
-------------
TOTAL INVESTMENT COMPANIES (Cost $66,016,971)....... $ 82,505,850
-------------
================================================================================
MONEY MARKET SECURITIES -- 3.9% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligations - Class A
(Cost $3,383,700) ............................... 3,383,700 $ 3,383,700
-------------
TOTAL INVESTMENTS AT VALUE -- 100.1%
(Cost $69,400,671)................................. $ 85,889,550
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%)..... (90,480)
-------------
NET ASSETS -- 100.0%................................ $ 85,799,070
=============
(a) Non-income producing security.
(b) Exchange-traded fund.
(c) Closed-end fund.
See accompanying notes to financial statements.
24
NEW CENTURY OPPORTUNISTIC PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2006
================================================================================
INVESTMENT COMPANIES -- 97.6% SHARES VALUE
- --------------------------------------------------------------------------------
SECTOR FUNDS -- 49.6%
Alpine International Real Estate Equity - Class Y. 4,519 $ 169,750
FBR Gas Utility Index ............................ 13,711 267,088
Fidelity Select Utilities Growth ................. 3,137 168,229
Fidelity Select Wireless(a) ...................... 50,328 337,201
iShares Dow Jones U.S. Energy Sector Index(b) .... 10,200 983,178
iShares Goldman Sachs Natural Resources Index(b) . 10,000 968,400
iShares Goldman Sachs Networking Index(a)(b) ..... 23,900 732,774
iShares Goldman Sachs Semiconductor Index(b) ..... 4,050 246,564
iShares MSCI Emerging Markets Index(b) ........... 5,300 549,080
iShares Nasdaq Biotechnology Index(a)(b) ......... 5,700 453,435
PowerShares Dynamic Biotechnology & Genome(a)(b) . 9,700 179,935
Technology Select Sector SPDR(b) ................. 30,800 705,012
T Rowe Price Emerging Europe & Mediterranean .... 5,548 170,725
-------------
5,931,371
-------------
MID-CAP FUNDS -- 25.8%
Calamos Growth - Class A(a) ...................... 6,353 350,202
iShares S&P MidCap 400/BARRA Growth Index(b) ..... 5,800 453,038
Janus Orion ...................................... 62,533 593,440
Leuthold Select Industries ....................... 46,072 845,878
S&P MidCap 400 Depositary Receipts(b) ............ 5,902 845,816
-------------
3,088,374
-------------
LARGE-CAP FUNDS -- 14.9%
iShares Russell 1000 Value Index(b) .............. 5,500 436,975
Marsico 21st Century ............................. 92,799 1,343,729
-------------
1,780,704
-------------
SMALL-CAP FUNDS -- 7.3%
iShares S&P SmallCap 600/BARRA Growth Index(b) ... 1,200 149,832
iShares S&P SmallCap 600/BARRA Value Index(b) .... 3,100 228,005
Perritt Micro Cap Opportunities(a) ............... 15,172 490,365
-------------
868,202
-------------
TOTAL INVESTMENT COMPANIES (Cost $10,597,417)....... $ 11,668,651
-------------
================================================================================
MONEY MARKET SECURITIES -- 2.5% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligations - Class A
(Cost $292,816) ................................ 292,816 $ 292,816
-------------
TOTAL INVESTMENTS AT VALUE -- 100.1%
(Cost $10,890,233)................................. $ 11,961,467
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%)..... (12,607)
-------------
NET ASSETS -- 100.0%................................ $ 11,948,860
=============
(a) Non-income producing security.
(b) Exchange-traded fund.
See accompanying notes to financial statements.
25
NEW CENTURY INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2006
================================================================================
INVESTMENT COMPANIES -- 98.5% SHARES VALUE
- --------------------------------------------------------------------------------
EUROPE FUNDS -- 31.6%
AIM European Growth - Class A .................... 114,625 $ 4,564,367
Fidelity Nordic .................................. 11,765 430,471
iShares MSCI Austria Index(b) .................... 166,200 5,554,404
iShares MSCI Belgium Index(b) .................... 110,600 2,682,050
iShares MSCI EMU Index(b) ........................ 25,800 2,512,662
iShares MSCI France Index(b) ..................... 10,000 321,900
iShares MSCI Germany Index(b) .................... 128,200 3,225,512
iShares MSCI Italy Index(b) ...................... 10,000 315,300
iShares MSCI Spain Index(b) ...................... 37,200 1,879,716
iShares MSCI Sweden Index(b) ..................... 76,000 2,192,600
iShares MSCI Switzerland Index(b) ................ 47,500 1,120,050
iShares MSCI United Kingdom Index(b) ............. 129,746 2,971,183
Ivy European Opportunities - Class A ............. 132,700 4,762,616
-------------
32,532,831
-------------
DIVERSIFIED FUNDS -- 27.2%
AllianceBernstein International Growth - Class A . 96,381 1,754,124
Dodge & Cox International Stock .................. 71,690 2,991,643
iShares MSCI EAFE Index(b) ....................... 67,800 4,760,238
iShares S&P Global Energy Sector Index(b) ........ 23,900 2,559,690
Janus Overseas ................................... 137,922 5,853,420
Lazard International Small Cap - Investor Shares . 41,686 797,039
Oakmark International - Class I .................. 102,360 2,829,235
Oppenheimer International Small Company - Class A(a) 146,562 3,688,967
Tocqueville International Value (The) ............ 168,364 2,815,046
-------------
28,049,402
-------------
ASIA/PACIFIC FUNDS -- 20.5%
Eaton Vance Greater India - Class A(a) ........... 143,481 3,529,637
Fidelity Japan ................................... 131,022 2,209,031
iShares FTSE/Xinhua China 25 Index(b) ............ 41,100 3,511,995
iShares MSCI Australia Index(b) .................. 151,100 3,475,300
iShares MSCI Japan Index(b) ...................... 143,800 1,981,564
iShares MSCI Pacific Ex-Japan Index(b) ........... 21,600 2,577,096
Matthews Pacific Tiger - Class I ................. 88,129 1,974,976
ProFunds UltraJapan - Investor Class(a) .......... 27,505 1,811,476
-------------
21,071,075
-------------
AMERICAS FUNDS -- 12.1%
Fidelity Canada .................................. 56,310 2,786,212
iShares MSCI Canada Index(b) ..................... 151,000 3,720,640
iShares MSCI Mexico Index(b) ..................... 54,800 2,549,296
iShares S&P Latin America 40 Index(b) ............ 22,200 3,405,480
-------------
12,461,628
-------------
See accompanying notes to financial statements.
26
NEW CENTURY INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
INVESTMENT COMPANIES -- 98.5% (Continued) SHARES VALUE
- --------------------------------------------------------------------------------
EMERGING MARKETS FUNDS -- 7.1%
iShares MSCI Emerging Markets Index(b) ........... 29,000 $ 3,004,400
Oppenheimer Developing Markets - Class A ......... 28,625 1,172,189
T. Rowe Price Emerging Europe & Mediterranean .... 101,250 3,115,467
-------------
7,292,056
-------------
TOTAL INVESTMENT COMPANIES (Cost $76,181,627)....... $ 101,406,992
-------------
================================================================================
MONEY MARKET SECURITIES -- 1.6% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligations - Class A
(Cost $1,684,639) .............................. 1,684,639 $ 1,684,639
-------------
TOTAL INVESTMENTS AT VALUE -- 100.1%
(Cost $77,866,266)................................. $ 103,091,631
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.1%)..... (146,354)
-------------
NET ASSETS -- 100.0%................................ $ 102,945,277
=============
(a) Non-income producing security.
(b) Exchange-traded fund.
See accompanying notes to financial statements.
27
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 2006
================================================================================
INVESTMENT COMPANIES -- 96.2% SHARES VALUE
- --------------------------------------------------------------------------------
LONG/SHORT EQUITY FUNDS -- 19.0%
CGM Focus ........................................ 38,533 $ 1,411,063
Diamond Hill Focus Long-Short - Class I .......... 160,282 2,947,584
Gartmore U.S. Growth Leaders Long-Short .......... 47,648 490,771
Hussman Strategic Growth ......................... 278,925 4,521,376
James Advantage Market Neutral - Class A ......... 73,702 905,066
Prudent Bear ..................................... 177,563 1,029,866
Schwab Hedged Equity ............................. 243,549 3,894,350
TFS Market Neutral(a) ............................ 45,150 568,438
Weitz Funds (The) - Partners III Opportunity ..... 248,221 2,794,969
-------------
18,563,483
-------------
MERGER ARBITRAGE FUNDS -- 15.0%
Arbitrage Fund (The) - Class R(a) ................ 211,856 2,730,819
Enterprise Mergers and Acquisitions - Class A .... 348,484 4,443,165
Gabelli ABC ...................................... 227,816 2,464,969
Merger Fund (The) ................................ 316,058 5,075,892
-------------
14,714,845
-------------
GLOBAL MACRO FUNDS -- 12.6%
Calamos Global Growth and Income - Class A ....... 101,606 1,066,863
First Eagle Global - Class A ..................... 140,800 6,809,091
Franklin Mutual Discovery - Class Z .............. 99,393 2,995,716
Oppenheimer International Bond - Class A ......... 238,022 1,409,088
-------------
12,280,758
-------------
NATURAL RESOURCES FUNDS -- 9.6%
DWS Global Commodities Stock (c) ................. 28,328 455,798
FBR Gas Utility Index ............................ 27,480 535,319
Permanent Portfolio .............................. 19,656 627,208
PIMCO Commodity Real Return Strategy - Class A ... 236,894 3,413,649
PowerShares Global Water Portfolio(b) ............ 27,000 480,600
RS Global Natural Resources - Class A ............ 67,835 2,390,493
T. Rowe Price New Era ............................ 8,442 385,861
Vanguard Precious Metals & Minerals .............. 38,910 1,152,509
-------------
9,441,437
-------------
ASSET ALLOCATION FUNDS -- 9.4%
Berwyn Income .................................... 110,546 1,355,290
FPA Crescent - Class I ........................... 103,049 2,772,014
Greenspring ...................................... 77,235 1,810,385
Leuthold Core Investment ......................... 147,973 2,704,938
Oakmark Equity and Income - Class I .............. 20,749 557,317
-------------
9,199,944
-------------
REAL ESTATE FUNDS -- 7.1%
Cohen & Steers International Realty - Class I .... 88,685 1,520,059
DWS RREEF Real Estate (c) ........................ 16,100 412,160
JPMorgan U.S. Real Estate - Class A .............. 39,989 1,004,516
Neuberger Berman Real Estate Securities Income (c) 29,000 526,640
Third Avenue Real Estate Value ................... 95,119 3,456,618
-------------
6,919,993
-------------
See accompanying notes to financial statements.
28
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
INVESTMENT COMPANIES -- 96.2% (CONTINUED) SHARES VALUE
- --------------------------------------------------------------------------------
OPTION HEDGED FUNDS -- 7.1%
Gateway .......................................... 156,841 $ 4,219,031
Old Mutual Analytic Defensive Equity - Class Z ... 198,714 2,698,530
-------------
6,917,561
-------------
DEEP VALUE/DISTRESSED SECURITIES FUNDS -- 6.4%
Fairholme ........................................ 74,957 2,155,755
Franklin Mutual Beacon - Class Z ................. 105,906 1,852,298
Third Avenue Value ............................... 37,115 2,237,660
-------------
6,245,713
-------------
CONVERTIBLE ARBITRAGE FUNDS -- 5.0%
Calamos Market Neutral - A Shares ................ 384,309 4,907,631
-------------
HIGH YIELD FUNDS -- 5.0%
Alliance World Dollar Government II (c) .......... 10,000 135,500
Fidelity Capital & Income ........................ 112,838 982,816
MainStay High Yield Corporate Bond - Class A ..... 164,033 1,038,327
Neuberger Berman Income Opportunity (c) .......... 39,700 683,634
Pioneer High Yield - Class A ..................... 90,624 1,008,643
William High Yield - Class A ..................... 118,717 1,043,522
-------------
4,892,442
-------------
TOTAL INVESTMENT COMPANIES (Cost $79,826,302)....... $ 94,083,807
-------------
=================================================================================================================
STRUCTURED NOTES -- 1.8% PAR VALUE/UNITS VALUE
- -----------------------------------------------------------------------------------------------------------------
Eksportfinans ASA, Efficient Allocation Return Note, due 10/19/09............. $ 500,000 $ 502,400
Merrill Lynch & Co., Inc. Medium-Term Notes, Series C, due 04/05/07........... 100,000(d) 890,000
Morgan Stanley Global Medium-Term Notes, Series F, due 09/20/07............... 45,000(d) 405,000
------------
TOTAL STRUCTURED NOTES (Cost $1,950,000)........................................ $ 1,797,400
------------
================================================================================
MONEY MARKET SECURITIES -- 2.4% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligations - Class A
(Cost $2,361,247)............................ 2,361,247 $ 2,361,247
------------
TOTAL INVESTMENTS AT VALUE -- 100.4%
(Cost $84,137,549)............................. $ 98,242,454
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.4%). (431,268)
------------
NET ASSETS -- 100.0%............................ $ 97,811,186
============
(a) Non-income producing security.
(b) Exchange-traded fund.
(c) Closed-end fund.
(d) $10.00 face value per unit.
See accompanying notes to financial statements.
29
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2006
================================================================================
(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 Opportunistic Portfolio (formerly New Century Aggressive Portfolio), New
Century International Portfolio and New Century Alternative Strategies Portfolio
(together, the "Portfolios"). New Century Capital Portfolio and New Century
Balanced Portfolio commenced operations on January 31, 1989. New Century
Opportunistic Portfolio and New Century International Portfolio commenced
operations on November 1, 2000, and New Century Alternative Strategies Portfolio
commenced operations on May 1, 2002.
Weston Financial Group, Inc. (the "Advisor"), a wholly-owned subsidiary of The
Washington Trust Company, serves as the investment advisor to each Portfolio.
Weston Securities Corporation (the "Distributor"), a wholly-owned subsidiary of
Washington Trust Bancorp, Inc., serves as the distributor and principal
underwriter to each Portfolio.
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 Opportunistic 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 New Century Opportunistic Portfolio may also invest in shares
of registered investment companies that seek appreciation by investing in fixed
income securities, including high-yield, lower rated debt securities.
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).
30
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
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.
A. INVESTMENT VALUATION
--------------------
Investments, representing primarily capital stock of other open-end investment
companies, are valued at their net asset value as reported by such companies.
The Portfolios may also invest in closed-end investment companies, exchange
traded funds, and to a certain extent, directly in securities. Investments in
closed-end investment companies and exchange traded funds are valued at market
prices, as described in the paragraph below. The net asset value as reported by
open-end investment companies may be based on fair value pricing; to understand
the fair value pricing process used by such companies, consult their most
current prospectus.
Investments in securities traded on a national securities exchange are valued at
the last reported sales price; securities quoted by NASDAQ are valued at the
Nasdaq Official Closing Price; and 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. It is expected that fixed income
securities will ordinarily be traded in the over-the-counter market. When market
quotations are not readily available, fixed income securities may be valued on
the basis of prices provided by an independent pricing service. Other assets and
securities for which no quotations are readily available or for which quotations
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, except that shares of each
Portfolio are subject to a redemption fee of 2% if redeemed within 30 days of
the date of purchase. No redemption fee will be imposed on the exchange of
shares among the various Portfolios of the Trust, the
31
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
redemption of shares representing reinvested dividends or capital gain
distributions, or on amounts representing capital appreciation of shares. During
the years ended October 31, 2006 and 2005, proceeds from redemption fees totaled
$575 and $73, respectively for the New Century International Portfolio and $0
and $76, respectively, for the New Century Alternative Strategies Portfolio. No
redemption fees were collected for the New Century Capital, New Century Balanced
and New Century Opportunistic Portfolios. Any redemption fees are credited to
Paid-in capital of the applicable Portfolio.
C. INVESTMENT TRANSACTIONS
-----------------------
Investment transactions are recorded on a trade date basis. Gains and losses on
securities sold are determined on a specific identification method.
D. INCOME RECOGNITION
------------------
Interest, if any, is accrued on portfolio investments daily. Dividend income and
capital gain distributions are recorded on the ex-dividend date or as soon as
the information is available if after the ex-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
Opportunistic 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, 2006 and
2005.
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.
32
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
(2) INVESTMENT ADVISORY FEES, ADMINISTRATIVE
AGREEMENT AND TRUSTEES' FEES
Each Portfolio has a separate Investment Advisory Agreement with the Advisor.
Investment advisory fees for each Portfolio are computed daily and paid monthly.
The investment advisory fees for each Portfolio, except for the New Century
Alternative Strategies Portfolio, are computed 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. The investment advisory fees for New Century
Alternative Strategies Portfolio, however, 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 the
Portfolios combined.
The Advisor has contractually 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 Portfolios. This contractual fee
waiver is in place until August 31, 2007. Accordingly, for the year ended
October 31, 2006, the Advisor waived $56,057 of advisory fees for the New
Century Opportunistic Portfolio. No waiver was necessary for New Century
Capital, New Century Balanced, New Century International 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. During the year ended October 31, 2006, the Advisor
received $75,667 in recouped fees from the New Century International Portfolio.
During the year ended October 31, 2006, the Advisor did not recoup any fees
waived or other operating expenses absorbed from the New Century Opportunistic
Portfolio. The Advisor has recouped all fees waived and expenses reimbursed for
New Century Balanced Portfolio and New Century Alternative Strategies Portfolio.
No fees have been waived or reimbursed for the New Century Capital Portfolio.
33
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
As of October 31, 2006, 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 Opportunistic Portfolio............................ $ 182,226
New Century International Portfolio............................ $ 53,893
- --------------------------------------------------------------------------------
As of October 31, 2006, the Advisor may recapture a portion of the above amounts
no later than the dates as stated below:
- --------------------------------------------------------------------------------
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2007 2008 2009
- --------------------------------------------------------------------------------
New Century Opportunistic Portfolio $ 64,016 $ 62,153 $ 56,057
New Century International Portfolio $ 35,096 $ 18,797 $ --
- --------------------------------------------------------------------------------
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 a $10,000
annual retainer, paid quarterly, and a per meeting fee of $1,000. The Portfolios
will also pay each Trustee who is not affiliated with the Advisor a $1,000
special meeting fee if held independent of a Regularly Scheduled Board Meeting.
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 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, 2006, the Distributor received $164,176,
$143,879, $25,105, $186,489 and $99,217 from New Century Capital, Balanced,
Opportunistic, International and Alternative Strategies Portfolios,
respectively, pursuant to the Plan.
34
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
Also during this time, the Distributor received sales commissions and other
compensation of $124,508, $62,748, $2,327, $30,309 and $125,282 in connection
with the purchase of investment company shares by New Century Capital, Balanced,
Opportunistic, International and Alternative Strategies Portfolios,
respectively. The Distributor has voluntarily agreed to reduce 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.
(4) INVESTMENT TRANSACTIONS
For the year ended October 31, 2006, 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 OPPORTUNISTIC INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
Purchase of investment securities............. $ 13,981,288 $ 17,918,882 $ 9,605,892 $ 57,651,234 $ 24,959,625
Proceeds from sales of investment securities.. $ 13,997,561 $ 19,001,518 $ 5,221,381 $ 18,642,190 $ 10,508,050
- -----------------------------------------------------------------------------------------------------------------------------------
(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.
35
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
For the year ended October 31, 2006, the following reclassifications were made
as a result of permanent differences between the financial statement and income
tax reporting requirements:
- --------------------------------------------------------------------------------------------------------
DECREASE
INCREASE IN ACCUMULATED
ACCUMULATED NET NET REALIZED DECREASE IN
INVESTMENT GAINS(LOSSES) PAID IN
INCOME (LOSS) ON INVESTMENTS CAPITAL
- --------------------------------------------------------------------------------------------------------
New Century Capital Portfolio....................... $ 556,605 $ (208,771) $ (347,834)
New Century Balanced Portfolio...................... 170,570 (170,570) --
New Century Opportunistic Portfolio................. 98,253 (16,020) (82,233)
New Century International Portfolio................. 403,469 (195,233) (208,236)
New Century Alternative Strategies Portfolio........ 843,852 (843,852) --
- --------------------------------------------------------------------------------------------------------
These reclassifications did not change the net assets of the Portfolios.
The tax character of distributable earnings at October 31, 2006 was as follows:
- -----------------------------------------------------------------------------------------------------------------------------------
NEW
NEW NEW NEW NEW CENTURY
CENTURY CENTURY CENTURY CENTURY ALTERNATIVE
CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
Undistributed ordinary income................. $ -- $ 227,009 $ -- $ -- $ 401,149
Unrealized appreciation....................... 33,467,052 16,381,784 1,047,796 25,225,365 14,061,741
Capital loss carryforwards.................... (3,929,333) (317,777) (329,546) -- --
Undistributed long-term gains................. -- -- -- 3,421,784 2,021,819
------------ ------------ ------------ ------------ ------------
Total distributable earnings.................. $ 29,537,719 $ 16,291,016 $ 718,250 $ 28,647,149 $ 16,484,709
============ ============ ============ ============ ============
- -----------------------------------------------------------------------------------------------------------------------------------
The following information is based upon the federal income tax cost of
investment securities as of October 31, 2006:
- -----------------------------------------------------------------------------------------------------------------------------------
NEW
NEW NEW NEW NEW CENTURY
CENTURY CENTURY CENTURY CENTURY ALTERNATIVE
CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
Tax cost of portfolio investments............. $ 90,580,226 $ 69,507,766 $ 10,913,671 $ 77,866,266 $ 84,180,713
============ ============ ============ ============ ============
Gross unrealized appreciation................. $ 33,467,458 $ 16,514,617 $ 1,264,171 $ 25,302,299 $ 14,713,041
Gross unrealized depreciation................. (406) (132,833) (216,375) (76,934) (651,300)
------------ ------------ ------------ ------------ ------------
Net unrealized appreciation................... $ 33,467,052 $ 16,381,784 $ 1,047,796 $ 25,225,365 $ 14,061,741
============ ============ ============ ============ ============
- -----------------------------------------------------------------------------------------------------------------------------------
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for New Century Capital, Balanced, Opportunistic
and Alternative Strategies Portfolios is due to certain timing differences in
the recognition of capital losses under income tax regulations and accounting
principles generally
36
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
accepted in the United States of America. These "book/tax" differences are
temporary in nature and are primarily due to the tax deferral of losses on wash
sales. For the New Century Alternative Strategies Portfolio, the difference
between tax basis undistributed ordinary income and accumulated undistributed
net investment income is due to the tax treatment of net short-term capital
gains and the requirement to accrue income on structured notes for tax purposes.
As of October 31, 2006, 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 OPPORTUNISTIC
EXPIRES OCTOBER 31, PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------
2010......................... $ 798,303 $ 174,247 $ 212,888
2011......................... 3,131,030 143,530 116,658
----------- ------------ -----------
$ 3,929,333 $ 317,777 $ 329,546
=========== ============ ===========
- --------------------------------------------------------------------------------
During the year ended October 31, 2006, the following amounts of capital loss
carryforwards were utilized to offset current year realized gains:
- --------------------------------------------------------------------------------
New Century Capital Portfolio................................. $ 5,056,131
New Century Balanced Portfolio................................ $ 2,676,737
New Century Opportunistic Portfolio........................... $ 961,234
- --------------------------------------------------------------------------------
(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.
(7) NEW ACCOUNTING PRONOUNCEMENTS
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 (FIN 48) "Accounting for Uncertainty in Income Taxes". FIN
48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax
37
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2006
================================================================================
positions taken in the course of preparing each Portfolio's tax returns to
determine whether the tax positions are "more-likely-than-not" of being
sustained by the applicable tax authority. Tax benefits of positions not deemed
to meet the more-likely-than-not threshold would be booked as a tax expense in
the current year and recognized as: a liability for unrecognized tax benefits; a
reduction of an income tax refund receivable; a reduction of deferred tax asset;
an increase in deferred tax liability; or a combination thereof. Adoption of FIN
48 is required for fiscal years beginning after December 15, 2006. At this time,
management is evaluating the implications of FIN 48 and its impact on the
financial statements has not yet been determined.
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007 and interim periods within those fiscal years.
The changes to current generally accepted accounting principles from the
application of this Statement relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements. As of October 31, 2006, each Portfolio does not believe the
adoption of SFAS No. 157 will impact the amounts reported in the financial
statements, however, additional disclosures may be required about the inputs
used to develop the measurements and the effect of certain of the measurements
reported on the Statements of Changes in Net Assets for a fiscal period.
38
NEW CENTURY PORTFOLIOS
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
================================================================================
To the Shareholders and Board of Trustees of
New Century Portfolios
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of New Century Capital Portfolio, New Century
Balanced Portfolio, New Century Opportunistic Portfolio, New Century
International Portfolio and New Century Alternative Strategies Portfolio, each a
series of shares of beneficial interest of New Century Portfolios, as of October
31, 2006, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years and period in the
five-year period then ended. These financial statements and financial highlights
are the responsibility of the Funds' 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 audits 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, 2006 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
Opportunistic Portfolio, New Century International Portfolio and New Century
Alternative Strategies Portfolio as of October 31, 2006, the results of their
operations for the year then ended, the changes in their net assets for each of
the years in the two-year period then ended, and their financial highlights for
the each of the years and period in the five-year period then ended, 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 16, 2006
NEW CENTURY PORTFOLIOS
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
PORTFOLIOS IN OTHER
NAME, POSITION(S) FUND COMPLEX DIRECTORSHIPS
ADDRESS LENGTH OF HELD WITH PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE TIME SERVED NEW CENTURY DURING PAST 5 YEARS BY TRUSTEE TRUSTEE
- ---------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES:
- ---------------------------------------------------------------------------------------------------------------------------------
*Douglas A. Biggar Since 1988 Chairman/ Managing Director, 5 None
40 William Street, Trustee Weston Financial Group, Inc.;
Suite 100 Vice President of Weston
Wellesley, MA 02481 Securities Corporation.
(age 59)
- ---------------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES:
- ---------------------------------------------------------------------------------------------------------------------------------
Stanley H. Cooper, Esq. Since 1988 Trustee Attorney in private practice. 5 None
One Ashford Lane
Andover, MA 01810
(age 59)
- ---------------------------------------------------------------------------------------------------------------------------------
Roger Eastman, CPA Since 1989 Trustee Retired; Formerly, the Executive 5 None
10682 Gulfshore Drive C-103 Vice President and Chief Operating
Naples, FL 34108 Officer, Danvers Savings Bank
(age 76) (from 3/97 to 12/03).
- ---------------------------------------------------------------------------------------------------------------------------------
Michael A. Diorio, CPA Since 1988 Trustee Executive Director, Milford 5 Director,
11 Calvin Drive Housing Authority (since 11/04); Milford
Milford, MA 01757 Town Accountant, Town of National
(age 61) Canton, MA (from 3/01 to 10/04). Bank & Trust
since 1996
- ---------------------------------------------------------------------------------------------------------------------------------
OFFICERS:
- ---------------------------------------------------------------------------------------------------------------------------------
Wayne M. Grzecki Since 1996 President President, Weston Financial
40 William Street, Group, Inc.; President of
Suite 100 Weston Securities Corporation.
Wellesley, MA 02481
(age 55)
- ---------------------------------------------------------------------------------------------------------------------------------
Ronald A. Sugameli Since 1997 Vice Managing Director,
40 William Street, President Weston Financial Group, Inc.;
Suite 100 Vice President of
Wellesley, MA 02481 Weston Securities Corporation.
(age 54)
- ---------------------------------------------------------------------------------------------------------------------------------
40
NEW CENTURY PORTFOLIOS
BOARD OF TRUSTEES AND OFFICERS (UNAUDITED)
(CONTINUED)
=================================================================================================================================
NAME, POSITION(S)
ADDRESS LENGTH OF HELD WITH PRINCIPAL OCCUPATION(S)
AND AGE TIME SERVED NEW CENTURY DURING PAST 5 YEARS
- ---------------------------------------------------------------------------------------------------------------------------------
Nicole M. Tremblay, Esq. Since 2002 CFO, Treasurer, Vice President, Chief Compliance
40 William Street, Chief Officer, Weston Financial Group,
Suite 100 Compliance Inc.; Vice President, Chief Compliance
Wellesley, MA 02481 Officer and Officer, and General Securities Principal
(age 32) Secretary of Weston Securities Corporation
(Since 11/02); prior thereto Assistant
Counsel, GoldK, Inc. (from 5/02 to 10/02);
Consultant, Allmerica Financial Life
Insurance & Annuity Co. (from 3/02
to 5/02); and Compliance Review Officer,
Sun Life Financial (from 1/96 to 2/02)
- ---------------------------------------------------------------------------------------------------------------------------------
* Douglas A. Biggar is considered to be an "interested person" of the Company
within the meaning of Section 2(a)(19) of the Investment Company Act of
1940, as amended. Mr. Biggar is an interested person because he is an
officer of the Advisor and Distributor.
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.
41
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. As a shareholder of the Portfolios, you may incur two types of
costs: (1) transaction costs, including redemption fees; and (2) ongoing costs,
including management fees, distribution (12b-1) fees and other expenses. The
following examples are intended to help you understand ongoing costs (in
dollars) of investing in the Portfolios and to compare these costs with the
ongoing costs of investing in other mutual funds.
A Portfolio's expenses are expressed as a percentage of its average net assets.
This figure is known as the expense ratio. The examples in the tables 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 sales loads. However, a
redemption fee of 2% is applied on the sale of shares of the Portfolios held for
less than 30 days.
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.
42
NEW CENTURY PORTFOLIOS
ABOUT YOUR PORTFOLIO'S EXPENSES (UNAUDITED)
(CONTINUED)
================================================================================
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
May 1, 2006 October 31, 2006 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 998.30 $6.14
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,019.06 $6.21
- --------------------------------------------------------------------------------
* Expenses are equal to the New Century Capital Portfolio's annualized
expense ratio of 1.22% for the period, multiplied by the average account
value over the period, multiplied by 184/365 (to reflect the one-half year
period).
NEW CENTURY BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
May 1, 2006 October 31, 2006 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,022.50 $7.03
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.25 $7.02
- --------------------------------------------------------------------------------
* Expenses are equal to the New Century Balanced Portfolio's annualized
expense ratio of 1.38% for the period, multiplied by the average account
value over the period, multiplied by 184/365 (to reflect the one-half year
period).
NEW CENTURY OPPORTUNISTIC PORTFOLIO
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
May 1, 2006 October 31, 2006 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 958.40 $7.40
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,017.64 $7.63
- --------------------------------------------------------------------------------
* Expenses are equal to the New Century Opportunistic Portfolio's annualized
expense ratio of 1.50% for the period, multiplied by the average account
value over the period, multiplied by 184/365 (to reflect the one-half year
period).
43
NEW CENTURY PORTFOLIOS
ABOUT YOUR PORTFOLIO'S EXPENSES (UNAUDITED)
(CONTINUED)
================================================================================
NEW CENTURY INTERNATIONAL PORTFOLIO
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
May 1, 2006 October 31, 2006 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 998.00 $7.55
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,017.64 $7.63
- --------------------------------------------------------------------------------
* 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 184/365 (to reflect the one-half year
period).
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
- --------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
May 1, 2006 October 31, 2006 During Period*
- --------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $1,027.60 $5.67
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,019.61 $5.65
- --------------------------------------------------------------------------------
* Expenses are equal to the New Century Alternative Strategies Portfolio's
annualized expense ratio of 1.11% for the period, multiplied by the average
account value over the period, multiplied by 184/365 (to reflect the
one-half year period).
FEDERAL TAX INFORMATION (UNAUDITED)
================================================================================
In accordance with federal tax requirements, the following provides shareholders
with information concerning distributions from ordinary income and net realized
gains made by the Portfolios during the year ended October 31, 2006. During the
year ended October 31, 2006, the New Century International Portfolio and New
Century Alternative Strategies Portfolio paid long-term capital gains
distributions of $684,174 and $455,936, respectively. For the fiscal year ended
October 31, 2006, certain dividends paid by the Portfolios may be subject to a
maximum tax rate of 15%, as provided by the Jobs and Growth Tax Relief
Reconciliation Act of 2003. The New Century Balanced Portfolio and the New
Century Alternative Strategies Portfolio intend to designate up to a maximum
amount of $1,111,490 and $2,149,410, respectively, as taxed at a maximum rate of
15%. As required by federal regulations, complete information will be computed
and reported in conjunction with your 2006 Form 1099-DIV.
44
NEW CENTURY PORTFOLIOS
TRUSTEES APPROVAL OF INVESTMENT
ADVISORY AGREEMENTS (UNAUDITED)
================================================================================
Weston Financial Group, Inc. ("Weston") serves as the investment adviser to each
Portfolio of the Trust. The Board of Trustees most recently approved the
continuance of the investment advisory agreements (collectively, the "Advisory
Agreements") between the Trust, on behalf of each of the Capital, Balanced,
Opportunistic, International and Alternative Strategies Portfolios, and Weston
at a regular meeting of the Board of Trustees held on September 21, 2006. The
September 21, 2006 regular meeting of the Board of Trustees was called, in part,
to act upon the continuance of such Advisory Agreements. These approvals by the
Board of Trustees were unanimous, and therefore included a majority of those
trustees who are not "interested persons" of the Trust, as that term is defined
in the Investment Company Act of 1940, as amended (the Independent Trustees"),
and by a majority of the entire Board.
Prior to the meeting, the Board received and reviewed certain materials from
Weston. The materials included: (i) a memorandum prepared by independent counsel
setting forth the Board's fiduciary duties, responsibilities and the factors
they should consider in their evaluation of the renewal of the Advisory
Agreements; (ii) information on the background and experience of each Portfolio
Manager; (iii) information from a third-party provider concerning investment
management fees paid by other, similar mutual funds; (iv) several memorandums
from the Investment Company Institute concerning mutual fund fees and expenses
in the industry; (v) a copy of the Advisory Agreements; and (vi) performance
information comparing each Portfolio to its relevant benchmark index.
The Board of Trustees decided to approve the renewal of the Advisory Agreements
for a one-year period commencing November 1, 2006 based upon their evaluation
of: (i) the long-term relationship between Weston and the Trust; (ii) Weston's
commitment to compliance; (iii) the nature, extent and quality of the services
provided; (iv) the performance of each Portfolio; and (v) the costs of the
services provided and the profitability of each entity from its relationship
with the Portfolios.
It was noted that during the Board's consideration of the factors listed above,
different trustees gave different weight to different items. In general, the
trustees considered it to be significant that the proposed investment advisory
arrangements would assure a continuity of relationships to service the
Portfolios because of Weston's familiarity with each Portfolio, its investment
objectives and policies, its portfolio composition, and the Trust's policies
regarding matters such as brokerage allocation, record-keeping systems, and
other operational issues.
The Board specifically noted the long-standing and cooperative working
relationship between Weston and the Trust. They also noted last year's change in
control of Weston, whereby it became a subsidiary of The Washington Trust
Company, concluding that the change had been beneficial. Further, the trustees
focused on the commitment by the
45
NEW CENTURY PORTFOLIOS
TRUSTEES APPROVAL OF INVESTMENT
ADVISORY AGREEMENTS (UNAUDITED) (CONTINUED)
================================================================================
officers of Weston and the continuity of the values and relationships that have
existed with Weston during the course of its relationship with the Trust. The
Independent Trustees concluded that the commitment to compliance, and the
continued operation of Weston under The Washington Trust Company umbrella, would
provide consistency and continuity to the Trust and its shareholders, and could
offer a potential for further opportunities for growth that could benefit
shareholders. The trustees also noted with approval, the strong commitment to
compliance that Weston has evidenced over the past few years, including the
hiring of an attorney to head the compliance function as the Chief Compliance
Officer.
The trustees considered the terms and conditions of the existing Advisory
Agreements that were being renewed, noting that the terms and conditions were
the same including the provision for advisory fees. The trustees also considered
the nature, quality and scope of the investment advisory services that had been
provided to the Portfolios by Weston in the past and the services that are
expected to continue in the future. Further the trustees considered the Weston
personnel assigned to service the Portfolios, the unique aspects of Weston's
operations, information concerning Weston's code of ethics and Weston's
compliance programs.
The trustees considered the performance results of each of the Portfolios over
various time periods. They reviewed information comparing each Portfolio's
performance with the performance of comparable funds and with each Portfolio's
benchmark. The trustees noted that for the year-to-date period ended August 31,
2006, the Alternative Strategies Portfolios had outperformed its respective
benchmarks and the Capital, Balanced, Opportunistic and International Portfolio
had slightly under performed their respective benchmarks. In general, the
trustees noted that the Portfolios had been performing competitively in the
industry and were pleased with their results given the decline in the market
earlier in the year.
The trustees also reviewed the average expense ratios of similar equity mutual
funds within the industry. They discussed the mutual funds' fixed expenses, such
as the use of outside service providers for transfer agency and fund accounting.
It was also noted that, as a fund-of-funds complex, the Trust had a different
expense ratio structure than other funds within the industry.
The trustees considered the investment advisory fees paid by each Portfolio
directly and in comparison to the fees paid by similar funds within the
industry, and information concerning the performance of each Portfolio. The
trustees were advised that the investment advisory fee charged by the
Alternative Strategies Portfolio was comparable to the investment advisory fees
charged by other, similar funds within the industry and that the investment
advisory fees charged by the other Portfolios were on track with other similar
funds within the industry; and that, the Capital, Balanced, Opportunistic
46
NEW CENTURY PORTFOLIOS
TRUSTEES APPROVAL OF INVESTMENT
ADVISORY AGREEMENTS (UNAUDITED) (CONTINUED)
================================================================================
and International Portfolios do offer a breakpoint for assets in excess of $100
million that could lower the investment advisory fees as assets grow. The
trustees noted that the fees and expenses of the Portfolios were deemed to be
fair and reasonable based on the information provided at the Board Meeting with
respect to other funds in the industry.
The trustees reviewed and discussed other aspects of Weston, such as the
profitability of the investment adviser, the benefits each party received from
such long-term relationship, and the fact that Weston and its affiliates
received other compensation from the relationship such as fees as administrator
and fees under a distribution (12b-1) plan. The trustees also noted that one of
the trustees, Mr. Biggar was an affiliate of Weston and the Trust's Distributor
and would benefit by the continuance of the investment advisory and distribution
agreements.
In their deliberations, the trustees did not consider the extent to which
economies of scale would be realized as a Portfolio grows, although the
indications that Weston does look for such growth was acknowledged. The Board
did not rely upon comparisons of the services to be rendered and the amounts to
be paid under the contract with those under other investment advisory contracts,
such as contracts of the same and other investment advisers with other
registered investment companies or other types of clients (e.g., pension funds
and other institutional investors). These factors were considered not to be
relevant in a situation where the trustees were determining whether to
re-approve the agreements with an existing entity on the same terms and
conditions. Such factors would be relevant to considering and approving new
investment advisory agreements with other investment advisory entities.
47
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================================================================================
INVESTMENT ADVISOR AND ADMINISTRATOR
Weston Financial Group, Inc.
Wellesley, MA
DISTRIBUTOR
Weston Securities Corporation
Wellesley, MA
COUNSEL
Greenburg Traurig, LLP
Philadelphia, PA
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Briggs, Bunting & Dougherty, LLP
Philadelphia, PA
TRANSFER AGENT
Ultimus Fund Solutions, LLC
Cincinnati, OH
CUSTODIAN
U.S. Bank, N.A.
Cincinnati, OH
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the Portfolios. This report is
authorized for distribution to prospective investors in the Portfolios only if
preceded or accompanied by an effective Prospectus which contains details
concerning the management fee expense and other pertinent information.
A description of the policies and procedures that the 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.
The Portfolios file a complete listing of portfolio holdings with the SEC for
the first and third quarters of each fiscal year on Form N-Q. The Portfolios'
Forms N-Q are available without charge upon request by calling 1-888-639-0102,
or on the SEC's website at http://www.sec.gov. The Portfolios' Forms N-Q may be
reviewed and copied at the SEC's Public Reference Room in Washington, DC, or by
calling 1-800-SEC-0330.
================================================================================
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 12(a)(1), a
copy of 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 $45,000 and $45,000 with respect to the
registrant's fiscal years ended October 31, 2006 and 2005,
respectively.
(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 $10,000 and $7,500 with respect to the registrant's
fiscal years ended October 31, 2006 and 2005, 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 not adopted pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation
S-X.
(e)(2) None of 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) Less than 50% of hours 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, 2006 and 2005, aggregate
non-audit fees of $10,000 and $7,500, respectively, were billed by the
registrant's accountant for services rendered to the registrant.
During the fiscal years ended October 31, 2006 and 2005, aggregate
non-audit fees of $0 and $7,596, 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 that
were not previously approved 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 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. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant has a standing nominating committee responsible for the selection
and nomination 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 11. 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 second fiscal quarter of the period covered by this
report that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 12. 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
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By (Signature and Title)* /s/ Wayne M. Grzecki
-----------------------------------------------------
Wayne M. Grzecki, President
Date January 3, 2007
------------------------------------------
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 3, 2007
------------------------------------------
By (Signature and Title)* /s/ Nicole M. Tremblay
-----------------------------------------------------
Nicole M. Tremblay, Treasurer
Date January 3, 2007
------------------------------------------
* Print the name and title of each signing officer under his or her signature.