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Expires: August 31, 2011
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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, 2008
---------------------------
Date of reporting period: October 31, 2008
---------------------------
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
PORTFOLIOS
NEW CENTURY CAPITAL
NEW CENTURY BALANCED
NEW CENTURY OPPORTUNISTIC
NEW CENTURY INTERNATIONAL
NEW CENTURY ALTERNATIVE STRATEGIES
ANNUAL REPORT
YEAR ENDED OCTOBER 31, 2008
40 WILLIAM STREET, SUITE 100, WELLESLEY MA 02481
781-239-0445 888-639-0102 FAX 781-237-1635
================================================================================
CONTENTS
- --------------------------------------------------------------------------------
PRESIDENT'S LETTER TO SHAREHOLDERS 1-2
PERFORMANCE CHARTS 3-5
PORTFOLIO INFORMATION 6-10
NEW CENTURY PORTFOLIOS
Schedules of Investments 11-20
Statements of Assets and Liabilities 21
Statements of Operations 22
Statements of Changes in Net Assets 23-25
Financial Highlights 26-30
Notes to Financial Statements 31-39
Report of Independent Registered Public Accounting Firm 40
Board of Trustees and Officers 41-42
Federal Tax Information 42
About Your Portfolio's Expenses 43-45
Trustees Approval of Investment Advisory Agreements 46-48
LETTER TO SHAREHOLDERS DECEMBER 2008
================================================================================
Dear Fellow Shareholders:
I am pleased to present our 19th Annual Report.
Over the past twelve months, to say that risk and volatility have returned to
the investment markets is a colossal understatement. What began as a growing
concern over the valuation of mortgage pools and a drop in home prices,
mushroomed into a liquidity crisis that all but removed the names of household
financial organizations from our investment landscape. Our financial markets
ceased working. To paraphrase an anonymous trader - "a healthy market balances
fear and greed, right now, there is no greed in the market." Having lost
confidence in capitalism, we turned to increasing government bailouts,
guarantees, and stimulus programs.
The current financial crisis impacted all asset classes - equity, fixed income,
alternative strategies, and even cash. The benefits that generally result from
allocating a portfolio across a number of market caps, geographic locations, and
asset styles disappeared.
It is normal to become overwhelmed by current market conditions and to abandon
long-term investment strategies. However, it is precisely during these times
that we should cling to a carefully-developed long-term investment plan.
As history has demonstrated, the current market, just like prior bear markets,
will eventually recover. Perhaps the anonymous trader quoted above was actually
recommending a long-term perspective that was suggested by the following quote
from Warren Buffett - "Be fearful when others are greedy. Be greedy when others
are fearful."
We may find that the rise in the U.S. Dollar and the dramatic reduction in
energy costs will reduce the immediate threat of inflation. Also, proactive
endeavors by U.S. and Global governments may limit the duration of the current
recession and ensure that our market economy does not fail.
During the twelve-month period ended October 31, 2008, the U.S. equity markets,
as measured by the S&P 500(R) Composite Index, declined 36.10%. During the same
12-month period, the international equity markets, which had previously
outperformed the U.S. equity markets, declined 46.62%, as measured by the MSCI
EAFE Index. The fixed income market, as measured by the Lehman Brothers
Intermediate U.S. Government/Credit Index, actually gained 0.98% during the
twelve-month period ended October 31, 2008. Investment grade corporate bonds and
high yield bonds, however, declined in value as investors bid treasury bond
prices to historic low yields.
During this past year of continued market volatility, the New Century Capital
Portfolio implemented several shifts in its sector allocations. The Portfolio
reduced the foreign, large-cap, and small-cap sectors, while increasing its cash
position. The Portfolio also repositioned capital into several sectors which
typically perform well during recessionary times, such as consumer staples and
food products. The Portfolio also added investments in the biotech and
pharmaceutical sectors. Nonetheless, the New Century Capital Portfolio declined
40.06%, as compared to the S&P 500(R) Composite Index which declined 36.10%,
during the twelve-month period ended October 31, 2008.
Similar to New Century Capital, the New Century Balanced Portfolio reduced its
allocation to the large-cap, small-cap and foreign sectors, while increasing its
cash and its allocation to
1
government bonds. The Portfolio also invested in the consumer staples, food,
biotech and pharmaceutical sectors. Throughout the twelve month period, the
Portfolio reduced its equity allocation to 44%. For the twelve-month period
ended October 31, 2008, the New Century Balanced Portfolio declined 29.46% as
compared to the S&P 500(R) Composite Index which declined 36.10% and the Lehman
Brothers Intermediate U.S. Government/Credit Index which gained 0.98%.
The New Century Opportunistic Portfolio decreased its holdings in the large-cap
and emerging markets sectors while increasing its allocation to cash. Positions
in the energy, networking and global real estate sectors were reduced, while
investments in the biotech, consumer staples, and pharmaceutical sectors were
increased. The Portfolio also added a long position in the U.S. Dollar. During
the twelve-month period ended October 31, 2008, the New Century Opportunistic
Portfolio declined 37.74% while the NASDAQ Composite Index declined 39.31% and
the Russell 3000 Growth Index declined 37.04%.
Over the last twelve months, the New Century International Portfolio reduced its
allocation to China, India and Europe. The Portfolio added positions in the
global infrastructure and global materials sectors. The Portfolio also increased
its cash position and added a long position in the U.S. Dollar. The New Century
International Portfolio declined 47.52% over the twelve-month period ended
October 31, 2008. The international equity markets, as measured by the MSCI EAFE
Index, declined 46.62% during the same time period.
The New Century Alternative Strategies Portfolio maintained diversified
positions in ten investment strategies, reducing its exposure to the natural
resources category while increasing its exposure to the asset allocation
strategies. The high-yield category was expanded to include other fixed income
strategies such as municipal bond funds and foreign bond funds. The New Century
Alternative Strategies Portfolio declined 23.44% for the twelve-month period
ended October 31, 2008, as compared to the S&P 500(R) Composite Index which
declined 36.10% and the Lehman Brothers Intermediate U.S. Government/Credit
Index which gained 0.98% during the same time period.
Future performance is always unpredictable. At times like these, the future can
be terrifying. However, we remain confident in the long-term viability of the
U.S. and the global economies. We are also confident that New Century's
investment philosophy - diversification, risk assessment and long-term focus -
will enhance risk-adjusted returns.
New Century is committed to its shareholders and appreciates your selection of
New Century as part of your long-term investment strategy.
Sincerely,
/s/ Wayne M. Grzecki
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
[LINE GRAPH OMITTED]
New Century Capital
Portfolio S&P 500(R) Composite Index
-------------------------- --------------------------
Date Value Date Value
-------------------------- --------------------------
10/31/1998 $10,000 10/31/1998 $10,000
11/30/1998 10,580 11/30/1998 10,606
12/31/1998 11,413 12/31/1998 11,217
1/31/1999 11,953 1/31/1999 11,686
2/28/1999 11,506 2/28/1999 11,322
3/31/1999 12,107 3/31/1999 11,775
4/30/1999 12,431 4/30/1999 12,231
5/31/1999 12,053 5/31/1999 11,942
6/30/1999 12,648 6/30/1999 12,605
7/31/1999 12,285 7/31/1999 12,212
8/31/1999 12,239 8/31/1999 12,152
9/30/1999 12,138 9/30/1999 11,819
10/31/1999 12,894 10/31/1999 12,567
11/30/1999 13,759 11/30/1999 12,822
12/31/1999 15,376 12/31/1999 13,577
1/31/2000 14,949 1/31/2000 12,896
2/29/2000 16,507 2/29/2000 12,652
3/31/2000 16,680 3/31/2000 13,890
4/30/2000 15,441 4/30/2000 13,471
5/31/2000 14,597 5/31/2000 13,195
6/30/2000 15,515 6/30/2000 13,521
7/31/2000 15,122 7/31/2000 13,310
8/31/2000 16,360 8/31/2000 14,137
9/30/2000 15,425 9/30/2000 13,390
10/31/2000 14,818 10/31/2000 13,334
11/30/2000 13,194 11/30/2000 12,283
12/31/2000 13,450 12/31/2000 12,344
1/31/2001 13,996 1/31/2001 12,782
2/28/2001 12,547 2/28/2001 11,616
3/31/2001 11,813 3/31/2001 10,880
4/30/2001 12,752 4/30/2001 11,725
5/31/2001 12,833 5/31/2001 11,804
6/30/2001 12,600 6/30/2001 11,517
7/31/2001 12,314 7/31/2001 11,404
8/31/2001 11,715 8/31/2001 10,690
9/30/2001 10,401 9/30/2001 9,826
10/31/2001 10,705 10/31/2001 10,014
11/30/2001 11,438 11/30/2001 10,782
12/31/2001 11,653 12/31/2001 10,877
1/31/2002 11,456 1/31/2002 10,718
2/28/2002 11,232 2/28/2002 10,511
3/31/2002 11,831 3/31/2002 10,906
4/30/2002 11,438 4/30/2002 10,246
5/31/2002 11,223 5/31/2002 10,170
6/30/2002 10,427 6/30/2002 9,446
7/31/2002 9,390 7/31/2002 8,709
8/31/2002 9,426 8/31/2002 8,766
9/30/2002 8,523 9/30/2002 7,813
10/31/2002 9,023 10/31/2002 8,501
11/30/2002 9,497 11/30/2002 9,001
12/31/2002 8,979 12/31/2002 8,472
1/31/2003 8,710 1/31/2003 8,250
2/28/2003 8,549 2/28/2003 8,127
3/31/2003 8,621 3/31/2003 8,206
4/30/2003 9,283 4/30/2003 8,882
5/31/2003 9,819 5/31/2003 9,349
6/30/2003 9,936 6/30/2003 9,469
7/31/2003 10,213 7/31/2003 9,636
8/31/2003 10,508 8/31/2003 9,824
9/30/2003 10,365 9/30/2003 9,719
10/31/2003 11,053 10/31/2003 10,268
11/30/2003 11,223 11/30/2003 10,358
12/31/2003 11,617 12/31/2003 10,901
1/31/2004 11,903 1/31/2004 11,101
2/29/2004 12,100 2/29/2004 11,255
3/31/2004 12,019 3/31/2004 11,086
4/30/2004 11,670 4/30/2004 10,912
5/31/2004 11,787 5/31/2004 11,061
6/30/2004 12,073 6/30/2004 11,277
7/31/2004 11,411 7/31/2004 10,903
8/31/2004 11,375 8/31/2004 10,947
9/30/2004 11,769 9/30/2004 11,066
10/31/2004 11,966 10/31/2004 11,235
11/30/2004 12,654 11/30/2004 11,690
12/31/2004 13,101 12/31/2004 12,087
1/31/2005 12,744 1/31/2005 11,793
2/28/2005 13,083 2/28/2005 12,041
3/31/2005 12,779 3/31/2005 11,828
4/30/2005 12,305 4/30/2005 11,603
5/31/2005 12,815 5/31/2005 11,972
6/30/2005 13,083 6/30/2005 11,989
7/31/2005 13,691 7/31/2005 12,435
8/31/2005 13,638 8/31/2005 12,321
9/30/2005 13,861 9/30/2005 12,421
10/31/2005 13,450 10/31/2005 12,214
11/30/2005 13,969 11/30/2005 12,676
12/31/2005 14,112 12/31/2005 12,679
1/31/2006 14,952 1/31/2006 13,015
2/28/2006 14,774 2/28/2006 13,050
3/31/2006 15,176 3/31/2006 13,212
4/30/2006 15,435 4/30/2006 13,389
5/31/2006 14,702 5/31/2006 13,004
6/30/2006 14,666 6/30/2006 13,022
7/31/2006 14,461 7/31/2006 13,103
8/31/2006 14,657 8/31/2006 13,415
9/30/2006 14,836 9/30/2006 13,761
10/31/2006 15,409 10/31/2006 14,209
11/30/2006 15,891 11/30/2006 14,479
12/31/2006 16,017 12/31/2006 14,682
1/31/2007 16,312 1/31/2007 14,904
2/28/2007 16,142 2/28/2007 14,611
3/31/2007 16,401 3/31/2007 14,775
4/30/2007 16,982 4/30/2007 15,430
5/31/2007 17,635 5/31/2007 15,968
6/30/2007 17,474 6/30/2007 15,703
7/31/2007 16,974 7/31/2007 15,216
8/31/2007 17,045 8/31/2007 15,445
9/30/2007 17,823 9/30/2007 16,022
10/31/2007 18,494 10/31/2007 16,280
11/30/2007 17,591 11/30/2007 15,599
12/31/2007 17,513 12/31/2007 15,491
1/31/2008 16,278 1/31/2008 14,562
2/29/2008 16,005 2/29/2008 14,089
3/31/2008 15,741 3/31/2008 14,028
4/30/2008 16,693 4/30/2008 14,711
5/31/2008 17,136 5/31/2008 14,902
6/30/2008 15,958 6/30/2008 13,646
7/31/2008 15,392 7/31/2008 13,532
8/31/2008 15,301 8/31/2008 13,728
9/30/2008 13,507 9/30/2008 12,505
10/31/2008 11,085 10/31/2008 10,403
Past performance is not predictive of future performance.
--------------------------------------------
NEW CENTURY CAPITAL PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
1 YEAR 5 YEARS 10 YEARS
-40.06% 0.06% 1.03%
--------------------------------------------
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 U.S. GOVERNMENT/CREDIT INDEX
[LINE GRAPH OMITTED]
Lehman Brothers
New Century Balanced Intermediate U.S.
S&P 500(R) Composite Index Portfolio Government/Credit Index
- -------------------------- ----------------------- ------------------------
Date Value Date Value Date Value
- ------------------------ ----------------------- ------------------------
10/31/1998 $10,000 10/31/1998 $10,000 10/31/1998 $10,000
11/30/1998 10,606 11/30/1998 10,413 11/30/1998 9,999
12/31/1998 11,217 12/31/1998 10,859 12/31/1998 10,039
1/31/1999 11,686 1/31/1999 11,114 1/31/1999 10,094
2/28/1999 11,322 2/28/1999 10,808 2/28/1999 9,946
3/31/1999 11,775 3/31/1999 11,140 3/31/1999 10,020
4/30/1999 12,231 4/30/1999 11,395 4/30/1999 10,051
5/31/1999 11,942 5/31/1999 11,148 5/31/1999 9,974
6/30/1999 12,605 6/30/1999 11,473 6/30/1999 9,981
7/31/1999 12,212 7/31/1999 11,293 7/31/1999 9,972
8/31/1999 12,152 8/31/1999 11,208 8/31/1999 9,980
9/30/1999 11,819 9/30/1999 11,131 9/30/1999 10,073
10/31/1999 12,567 10/31/1999 11,526 10/31/1999 10,099
11/30/1999 12,822 11/30/1999 11,998 11/30/1999 10,111
12/31/1999 13,577 12/31/1999 12,850 12/31/1999 10,078
1/31/2000 12,896 1/31/2000 12,582 1/31/2000 10,041
2/29/2000 12,652 2/29/2000 13,377 2/29/2000 10,123
3/31/2000 13,890 3/31/2000 13,571 3/31/2000 10,228
4/30/2000 13,471 4/30/2000 12,895 4/30/2000 10,205
5/31/2000 13,195 5/31/2000 12,442 5/31/2000 10,221
6/30/2000 13,521 6/30/2000 12,979 6/30/2000 10,401
7/31/2000 13,310 7/31/2000 12,793 7/31/2000 10,480
8/31/2000 14,137 8/31/2000 13,471 8/31/2000 10,604
9/30/2000 13,390 9/30/2000 12,979 9/30/2000 10,700
10/31/2000 13,334 10/31/2000 12,708 10/31/2000 10,749
11/30/2000 12,283 11/30/2000 12,000 11/30/2000 10,895
12/31/2000 12,344 12/31/2000 12,246 12/31/2000 11,096
1/31/2001 12,782 1/31/2001 12,583 1/31/2001 11,278
2/28/2001 11,616 2/28/2001 11,999 2/28/2001 11,384
3/31/2001 10,880 3/31/2001 11,741 3/31/2001 11,472
4/30/2001 11,725 4/30/2001 12,098 4/30/2001 11,442
5/31/2001 11,804 5/31/2001 12,147 5/31/2001 11,506
6/30/2001 11,517 6/30/2001 12,029 6/30/2001 11,548
7/31/2001 11,404 7/31/2001 11,979 7/31/2001 11,789
8/31/2001 10,690 8/31/2001 11,731 8/31/2001 11,906
9/30/2001 9,826 9/30/2001 10,987 9/30/2001 12,080
10/31/2001 10,014 10/31/2001 11,275 10/31/2001 12,281
11/30/2001 10,782 11/30/2001 11,633 11/30/2001 12,158
12/31/2001 10,877 12/31/2001 11,706 12/31/2001 12,091
1/31/2002 10,718 1/31/2002 11,616 1/31/2002 12,154
2/28/2002 10,511 2/28/2002 11,456 2/28/2002 12,250
3/31/2002 10,906 3/31/2002 11,836 3/31/2002 12,064
4/30/2002 10,246 4/30/2002 11,656 4/30/2002 12,263
5/31/2002 10,170 5/31/2002 11,516 5/31/2002 12,386
6/30/2002 9,446 6/30/2002 10,946 6/30/2002 12,492
7/31/2002 8,709 7/31/2002 10,174 7/31/2002 12,639
8/31/2002 8,766 8/31/2002 10,224 8/31/2002 12,828
9/30/2002 7,813 9/30/2002 9,683 9/30/2002 13,057
10/31/2002 8,501 10/31/2002 9,913 10/31/2002 13,006
11/30/2002 9,001 11/30/2002 10,294 11/30/2002 12,995
12/31/2002 8,472 12/31/2002 10,057 12/31/2002 13,278
1/31/2003 8,250 1/31/2003 9,894 1/31/2003 13,277
2/28/2003 8,127 2/28/2003 9,823 2/28/2003 13,464
3/31/2003 8,206 3/31/2003 9,884 3/31/2003 13,477
4/30/2003 8,882 4/30/2003 10,413 4/30/2003 13,580
5/31/2003 9,349 5/31/2003 10,851 5/31/2003 13,853
6/30/2003 9,469 6/30/2003 10,963 6/30/2003 13,843
7/31/2003 9,636 7/31/2003 11,075 7/31/2003 13,467
8/31/2003 9,824 8/31/2003 11,300 8/31/2003 13,499
9/30/2003 9,719 9/30/2003 11,280 9/30/2003 13,840
10/31/2003 10,268 10/31/2003 11,781 10/31/2003 13,710
11/30/2003 10,358 11/30/2003 11,965 11/30/2003 13,729
12/31/2003 10,901 12/31/2003 12,364 12/31/2003 13,849
1/31/2004 11,101 1/31/2004 12,621 1/31/2004 13,940
2/29/2004 11,255 2/29/2004 12,766 2/29/2004 14,083
3/31/2004 11,086 3/31/2004 12,725 3/31/2004 14,192
4/30/2004 10,912 4/30/2004 12,405 4/30/2004 13,856
5/31/2004 11,061 5/31/2004 12,425 5/31/2004 13,794
6/30/2004 11,277 6/30/2004 12,673 6/30/2004 13,835
7/31/2004 10,903 7/31/2004 12,229 7/31/2004 13,951
8/31/2004 10,947 8/31/2004 12,229 8/31/2004 14,184
9/30/2004 11,066 9/30/2004 12,498 9/30/2004 14,208
10/31/2004 11,235 10/31/2004 12,694 10/31/2004 14,304
11/30/2004 11,690 11/30/2004 13,230 11/30/2004 14,173
12/31/2004 12,087 12/31/2004 13,575 12/31/2004 14,270
1/31/2005 11,793 1/31/2005 13,314 1/31/2005 14,297
2/28/2005 12,041 2/28/2005 13,575 2/28/2005 14,218
3/31/2005 11,828 3/31/2005 13,334 3/31/2005 14,144
4/30/2005 11,603 4/30/2005 13,042 4/30/2005 14,306
5/31/2005 11,972 5/31/2005 13,397 5/31/2005 14,434
6/30/2005 11,989 6/30/2005 13,627 6/30/2005 14,495
7/31/2005 12,435 7/31/2005 14,036 7/31/2005 14,375
8/31/2005 12,321 8/31/2005 14,036 8/31/2005 14,543
9/30/2005 12,421 9/30/2005 14,109 9/30/2005 14,419
10/31/2005 12,214 10/31/2005 13,774 10/31/2005 14,340
11/30/2005 12,676 11/30/2005 14,109 11/30/2005 14,403
12/31/2005 12,679 12/31/2005 14,245 12/31/2005 14,494
1/31/2006 13,015 1/31/2006 14,777 1/31/2006 14,492
2/28/2006 13,050 2/28/2006 14,723 2/28/2006 14,502
3/31/2006 13,212 3/31/2006 14,957 3/31/2006 14,439
4/30/2006 13,389 4/30/2006 15,138 4/30/2006 14,446
5/31/2006 13,004 5/31/2006 14,723 5/31/2006 14,447
6/30/2006 13,022 6/30/2006 14,692 6/30/2006 14,469
7/31/2006 13,103 7/31/2006 14,670 7/31/2006 14,631
8/31/2006 13,415 8/31/2006 14,872 8/31/2006 14,814
9/30/2006 13,761 9/30/2006 15,042 9/30/2006 14,931
10/31/2006 14,209 10/31/2006 15,478 10/31/2006 15,010
11/30/2006 14,479 11/30/2006 15,849 11/30/2006 15,147
12/31/2006 14,682 12/31/2006 15,972 12/31/2006 15,085
1/31/2007 14,904 1/31/2007 16,176 1/31/2007 15,091
2/28/2007 14,611 2/28/2007 16,154 2/28/2007 15,299
3/31/2007 14,775 3/31/2007 16,327 3/31/2007 15,325
4/30/2007 15,430 4/30/2007 16,800 4/30/2007 15,398
5/31/2007 15,968 5/31/2007 17,198 5/31/2007 15,300
6/30/2007 15,703 6/30/2007 16,940 6/30/2007 15,303
7/31/2007 15,216 7/31/2007 16,488 7/31/2007 15,448
8/31/2007 15,445 8/31/2007 16,531 8/31/2007 15,635
9/30/2007 16,022 9/30/2007 16,983 9/30/2007 15,743
10/31/2007 16,280 10/31/2007 17,348 10/31/2007 15,858
11/30/2007 15,599 11/30/2007 16,886 11/30/2007 16,159
12/31/2007 15,491 12/31/2007 16,835 12/31/2007 16,201
1/31/2008 14,562 1/31/2008 16,150 1/31/2008 16,546
2/29/2008 14,089 2/29/2008 16,022 2/29/2008 16,690
3/31/2008 14,028 3/31/2008 15,859 3/31/2008 16,689
4/30/2008 14,711 4/30/2008 16,486 4/30/2008 16,565
5/31/2008 14,902 5/31/2008 16,672 5/31/2008 16,433
6/30/2008 13,646 6/30/2008 15,883 6/30/2008 16,434
7/31/2008 13,532 7/31/2008 15,488 7/31/2008 16,466
8/31/2008 13,728 8/31/2008 15,453 8/31/2008 16,584
9/30/2008 12,505 9/30/2008 14,118 9/30/2008 16,239
10/31/2008 10,403 10/31/2008 12,237 10/31/2008 16,017
Past performance is not predictive of future performance.
--------------------------------------------
NEW CENTURY BALANCED PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
1 YEAR 5 YEARS 10 YEARS
-29.46% 0.76% 2.04%
--------------------------------------------
(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
[LINE GRAPH OMITTED]
New Century Opportunistic
Portfolio NASDAQ Composite Index
-------------------------- --------------------------
Date Value Date Value
-------------------------- --------------------------
11/1/2000 $10,000 11/1/2000 $10,000
11/30/2000 9,040 11/30/2000 7,710
12/31/2000 9,310 12/31/2000 7,332
1/31/2001 9,480 1/31/2001 8,229
2/28/2001 8,410 2/28/2001 6,386
3/31/2001 7,930 3/31/2001 5,462
4/30/2001 8,770 4/30/2001 6,281
5/31/2001 8,790 5/31/2001 6,264
6/30/2001 8,820 6/30/2001 6,412
7/31/2001 8,440 7/31/2001 6,017
8/31/2001 7,990 8/31/2001 5,359
9/30/2001 6,980 9/30/2001 4,449
10/31/2001 7,370 10/31/2001 5,017
11/30/2001 8,010 11/30/2001 5,730
12/31/2001 7,930 12/31/2001 5,789
1/31/2002 7,690 1/31/2002 5,741
2/28/2002 7,220 2/28/2002 5,140
3/31/2002 7,690 3/31/2002 5,478
4/30/2002 7,260 4/30/2002 5,012
5/31/2002 6,960 5/31/2002 4,797
6/30/2002 6,400 6/30/2002 4,344
7/31/2002 5,660 7/31/2002 3,943
8/31/2002 5,640 8/31/2002 3,903
9/30/2002 5,110 9/30/2002 3,480
10/31/2002 5,470 10/31/2002 3,948
11/30/2002 5,820 11/30/2002 4,390
12/31/2002 5,420 12/31/2002 3,965
1/31/2003 5,300 1/31/2003 3,921
2/28/2003 5,220 2/28/2003 3,971
3/31/2003 5,280 3/31/2003 3,982
4/30/2003 5,710 4/30/2003 4,347
5/31/2003 6,180 5/31/2003 4,738
6/30/2003 6,240 6/30/2003 4,817
7/31/2003 6,510 7/31/2003 5,151
8/31/2003 6,660 8/31/2003 5,375
9/30/2003 6,540 9/30/2003 5,305
10/31/2003 6,950 10/31/2003 5,736
11/30/2003 7,080 11/30/2003 5,820
12/31/2003 7,240 12/31/2003 5,948
1/31/2004 7,600 1/31/2004 6,134
2/29/2004 7,650 2/29/2004 6,026
3/31/2004 7,480 3/31/2004 5,920
4/30/2004 7,130 4/30/2004 5,701
5/31/2004 7,260 5/31/2004 5,898
6/30/2004 7,400 6/30/2004 6,080
7/31/2004 6,950 7/31/2004 5,604
8/31/2004 6,860 8/31/2004 5,457
9/30/2004 7,210 9/30/2004 5,632
10/31/2004 7,300 10/31/2004 5,864
11/30/2004 7,810 11/30/2004 6,226
12/31/2004 7,970 12/31/2004 6,459
1/31/2005 7,800 1/31/2005 6,123
2/28/2005 8,240 2/28/2005 6,091
3/31/2005 8,010 3/31/2005 5,936
4/30/2005 7,660 4/30/2005 5,705
5/31/2005 8,040 5/31/2005 6,141
6/30/2005 8,290 6/30/2005 6,107
7/31/2005 8,790 7/31/2005 6,487
8/31/2005 8,890 8/31/2005 6,390
9/30/2005 9,170 9/30/2005 6,389
10/31/2005 8,720 10/31/2005 6,295
11/30/2005 9,080 11/30/2005 6,630
12/31/2005 9,150 12/31/2005 6,548
1/31/2006 9,840 1/31/2006 6,847
2/28/2006 9,610 2/28/2006 6,774
3/31/2006 9,820 3/31/2006 6,948
4/30/2006 9,860 4/30/2006 6,896
5/31/2006 9,230 5/31/2006 6,469
6/30/2006 9,150 6/30/2006 6,449
7/31/2006 8,950 7/31/2006 6,210
8/31/2006 9,060 8/31/2006 6,484
9/30/2006 9,090 9/30/2006 6,706
10/31/2006 9,450 10/31/2006 7,027
11/30/2006 9,830 11/30/2006 7,220
12/31/2006 9,850 12/31/2006 7,171
1/31/2007 10,000 1/31/2007 7,315
2/28/2007 9,870 2/28/2007 7,173
3/31/2007 10,020 3/31/2007 7,190
4/30/2007 10,430 4/30/2007 7,497
5/31/2007 10,900 5/31/2007 7,733
6/30/2007 10,860 6/30/2007 7,729
7/31/2007 10,730 7/31/2007 7,560
8/31/2007 10,760 8/31/2007 7,709
9/30/2007 11,330 9/30/2007 8,021
10/31/2007 11,780 10/31/2007 8,488
11/30/2007 11,150 11/30/2007 7,900
12/31/2007 11,313 12/31/2007 7,874
1/31/2008 10,339 1/31/2008 7,095
2/29/2008 10,412 2/29/2008 6,744
3/31/2008 10,194 3/31/2008 6,767
4/30/2008 10,857 4/30/2008 7,164
5/31/2008 11,282 5/31/2008 7,490
6/30/2008 10,691 6/30/2008 6,809
7/31/2008 10,101 7/31/2008 6,905
8/31/2008 10,039 8/31/2008 7,030
9/30/2008 8,795 9/30/2008 6,209
10/31/2008 7,335 10/31/2008 5,108
Past performance is not predictive of future performance.
--------------------------------------------
NEW CENTURY OPPORTUNISTIC PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
SINCE
1 YEAR 5 YEARS INCEPTION*
-37.74% 1.08% -3.80%
--------------------------------------------
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT
IN THE NEW CENTURY INTERNATIONAL PORTFOLIO AND THE MSCI EAFE INDEX
[LINE GRAPH OMITTED]
New Century International
Portfolio MSCI EAFE Index
-------------------------- --------------------------
Date Value Date Value
-------------------------- --------------------------
11/1/2000 $10,000 11/1/2000 $10,000
11/30/2000 9,460 11/30/2000 9,620
12/31/2000 9,540 12/31/2000 9,957
1/31/2001 9,570 1/31/2001 9,952
2/28/2001 9,020 2/28/2001 9,205
3/31/2001 8,320 3/31/2001 8,591
4/30/2001 8,840 4/30/2001 9,188
5/31/2001 8,710 5/31/2001 8,864
6/30/2001 8,520 6/30/2001 8,502
7/31/2001 8,300 7/31/2001 8,347
8/31/2001 8,220 8/31/2001 8,136
9/30/2001 7,170 9/30/2001 7,312
10/31/2001 7,410 10/31/2001 7,499
11/30/2001 7,640 11/30/2001 7,775
12/31/2001 7,795 12/31/2001 7,821
1/31/2002 7,675 1/31/2002 7,406
2/28/2002 7,765 2/28/2002 7,458
3/31/2002 8,206 3/31/2002 7,897
4/30/2002 8,256 4/30/2002 7,913
5/31/2002 8,326 5/31/2002 8,013
6/30/2002 7,865 6/30/2002 7,694
7/31/2002 7,094 7/31/2002 6,935
8/31/2002 7,044 8/31/2002 6,919
9/30/2002 6,282 9/30/2002 6,176
10/31/2002 6,533 10/31/2002 6,508
11/30/2002 6,893 11/30/2002 6,803
12/31/2002 6,653 12/31/2002 6,574
1/31/2003 6,573 1/31/2003 6,300
2/28/2003 6,432 2/28/2003 6,155
3/31/2003 6,292 3/31/2003 6,035
4/30/2003 6,923 4/30/2003 6,626
5/31/2003 7,414 5/31/2003 7,028
6/30/2003 7,585 6/30/2003 7,198
7/31/2003 7,695 7/31/2003 7,372
8/31/2003 7,975 8/31/2003 7,550
9/30/2003 8,106 9/30/2003 7,782
10/31/2003 8,697 10/31/2003 8,267
11/30/2003 8,797 11/30/2003 8,450
12/31/2003 9,468 12/31/2003 9,110
1/31/2004 9,578 1/31/2004 9,239
2/29/2004 9,809 2/29/2004 9,452
3/31/2004 9,929 3/31/2004 9,505
4/30/2004 9,458 4/30/2004 9,290
5/31/2004 9,408 5/31/2004 9,310
6/30/2004 9,739 6/30/2004 9,526
7/31/2004 9,338 7/31/2004 9,216
8/31/2004 9,418 8/31/2004 9,257
9/30/2004 9,759 9/30/2004 9,499
10/31/2004 10,089 10/31/2004 9,822
11/30/2004 10,831 11/30/2004 10,493
12/31/2004 11,307 12/31/2004 10,954
1/31/2005 11,163 1/31/2005 10,753
2/28/2005 11,801 2/28/2005 11,218
3/31/2005 11,369 3/31/2005 10,936
4/30/2005 11,111 4/30/2005 10,679
5/31/2005 11,214 5/31/2005 10,685
6/30/2005 11,544 6/30/2005 10,827
7/31/2005 12,069 7/31/2005 11,159
8/31/2005 12,439 8/31/2005 11,442
9/30/2005 13,037 9/30/2005 11,951
10/31/2005 12,481 10/31/2005 11,602
11/30/2005 12,913 11/30/2005 11,886
12/31/2005 13,577 12/31/2005 12,439
1/31/2006 14,730 1/31/2006 13,202
2/28/2006 14,460 2/28/2006 13,173
3/31/2006 14,938 3/31/2006 13,608
4/30/2006 15,676 4/30/2006 14,259
5/31/2006 14,471 5/31/2006 13,705
6/30/2006 14,346 6/30/2006 13,704
7/31/2006 14,429 7/31/2006 13,840
8/31/2006 14,845 8/31/2006 14,220
9/30/2006 14,917 9/30/2006 14,242
10/31/2006 15,645 10/31/2006 14,796
11/30/2006 16,320 11/30/2006 15,238
12/31/2006 17,016 12/31/2006 15,716
1/31/2007 17,081 1/31/2007 15,823
2/28/2007 16,886 2/28/2007 15,952
3/31/2007 17,502 3/31/2007 16,358
4/30/2007 18,248 4/30/2007 17,085
5/31/2007 19,059 5/31/2007 17,384
6/30/2007 19,167 6/30/2007 17,404
7/31/2007 18,973 7/31/2007 17,149
8/31/2007 18,756 8/31/2007 16,881
9/30/2007 20,183 9/30/2007 17,784
10/31/2007 21,686 10/31/2007 18,483
11/30/2007 20,335 11/30/2007 17,875
12/31/2007 20,098 12/31/2007 17,473
1/31/2008 18,348 1/31/2008 15,858
2/29/2008 18,551 2/29/2008 16,085
3/31/2008 18,156 3/31/2008 15,916
4/30/2008 19,330 4/30/2008 16,780
5/31/2008 19,714 5/31/2008 16,943
6/30/2008 17,952 6/30/2008 15,557
7/31/2008 17,151 7/31/2008 15,058
8/31/2008 16,417 8/31/2008 14,448
9/30/2008 14,215 9/30/2008 12,359
10/31/2008 11,381 10/31/2008 9,865
Past performance is not predictive of future performance.
--------------------------------------------
NEW CENTURY INTERNATIONAL PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
SINCE
1 YEAR 5 YEARS INCEPTION*
-47.52% 5.53% 1.63%
--------------------------------------------
* 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 U.S. GOVERNMENT/CREDIT INDEX
[LINE GRAPH OMITTED]
Lehman Brothers
New Century Alternative Intermediate U.S.
S&P 500(R) Composite Index Strategies Portfolio Government/Credit Index
- -------------------------- ---------------------- -----------------------
Date Value Date Value Date Value
- ----------------------- ---------------------- -----------------------
5/1/2002 $10,000 5/1/2002 $10,000 5/1/2002 $10,000
5/31/2002 9,926 5/31/2002 10,000 5/31/2002 10,100
6/30/2002 9,219 6/30/2002 9,720 6/30/2002 10,187
7/31/2002 8,500 7/31/2002 9,290 7/31/2002 10,307
8/31/2002 8,556 8/31/2002 9,340 8/31/2002 10,461
9/30/2002 7,626 9/30/2002 9,110 9/30/2002 10,648
10/31/2002 8,297 10/31/2002 9,120 10/31/2002 10,606
11/30/2002 8,786 11/30/2002 9,330 11/30/2002 10,597
12/31/2002 8,269 12/31/2002 9,325 12/31/2002 10,828
1/31/2003 8,053 1/31/2003 9,285 1/31/2003 10,827
2/28/2003 7,932 2/28/2003 9,264 2/28/2003 10,979
3/31/2003 8,009 3/31/2003 9,295 3/31/2003 10,990
4/30/2003 8,669 4/30/2003 9,618 4/30/2003 11,074
5/31/2003 9,125 5/31/2003 9,982 5/31/2003 11,296
6/30/2003 9,242 6/30/2003 10,083 6/30/2003 11,289
7/31/2003 9,405 7/31/2003 10,194 7/31/2003 10,982
8/31/2003 9,588 8/31/2003 10,376 8/31/2003 11,008
9/30/2003 9,486 9/30/2003 10,477 9/30/2003 11,286
10/31/2003 9,935 10/31/2003 10,780 10/31/2003 11,180
11/30/2003 10,022 11/30/2003 11,002 11/30/2003 11,196
12/31/2003 10,548 12/31/2003 11,270 12/31/2003 11,293
1/31/2004 10,741 1/31/2004 11,383 1/31/2004 11,368
2/29/2004 10,891 2/29/2004 11,557 2/29/2004 11,484
3/31/2004 10,726 3/31/2004 11,629 3/31/2004 11,573
4/30/2004 10,558 4/30/2004 11,260 4/30/2004 11,299
5/31/2004 10,703 5/31/2004 11,342 5/31/2004 11,248
6/30/2004 10,911 6/30/2004 11,455 6/30/2004 11,282
7/31/2004 10,550 7/31/2004 11,342 7/31/2004 11,377
8/31/2004 10,593 8/31/2004 11,414 8/31/2004 11,567
9/30/2004 10,707 9/30/2004 11,639 9/30/2004 11,586
10/31/2004 10,871 10/31/2004 11,762 10/31/2004 11,664
11/30/2004 11,311 11/30/2004 12,111 11/30/2004 11,558
12/31/2004 11,696 12/31/2004 12,290 12/31/2004 11,637
1/31/2005 11,411 1/31/2005 12,119 1/31/2005 11,659
2/28/2005 11,651 2/28/2005 12,429 2/28/2005 11,595
3/31/2005 11,444 3/31/2005 12,322 3/31/2005 11,534
4/30/2005 11,227 4/30/2005 12,130 4/30/2005 11,666
5/31/2005 11,584 5/31/2005 12,290 5/31/2005 11,771
6/30/2005 11,600 6/30/2005 12,482 6/30/2005 11,820
7/31/2005 12,032 7/31/2005 12,793 7/31/2005 11,722
8/31/2005 11,922 8/31/2005 12,889 8/31/2005 11,859
9/30/2005 12,019 9/30/2005 13,114 9/30/2005 11,758
10/31/2005 11,818 10/31/2005 12,836 10/31/2005 11,694
11/30/2005 12,265 11/30/2005 12,996 11/30/2005 11,745
12/31/2005 12,268 12/31/2005 13,189 12/31/2005 11,819
1/31/2006 12,594 1/31/2006 13,632 1/31/2006 11,817
2/28/2006 12,628 2/28/2006 13,587 2/28/2006 11,825
3/31/2006 12,784 3/31/2006 13,798 3/31/2006 11,773
4/30/2006 12,955 4/30/2006 14,030 4/30/2006 11,779
5/31/2006 12,582 5/31/2006 13,831 5/31/2006 11,780
6/30/2006 12,600 6/30/2006 13,875 6/30/2006 11,798
7/31/2006 12,678 7/31/2006 13,986 7/31/2006 11,930
8/31/2006 12,980 8/31/2006 14,107 8/31/2006 12,079
9/30/2006 13,315 9/30/2006 14,096 9/30/2006 12,174
10/31/2006 13,749 10/31/2006 14,417 10/31/2006 12,239
11/30/2006 14,010 11/30/2006 14,705 11/30/2006 12,350
12/31/2006 14,206 12/31/2006 14,779 12/31/2006 12,300
1/31/2007 14,421 1/31/2007 14,965 1/31/2007 12,305
2/28/2007 14,138 2/28/2007 14,988 2/28/2007 12,474
3/31/2007 14,296 3/31/2007 15,139 3/31/2007 12,496
4/30/2007 14,930 4/30/2007 15,406 4/30/2007 12,556
5/31/2007 15,451 5/31/2007 15,684 5/31/2007 12,475
6/30/2007 15,194 6/30/2007 15,568 6/30/2007 12,478
7/31/2007 14,723 7/31/2007 15,336 7/31/2007 12,596
8/31/2007 14,944 8/31/2007 15,371 8/31/2007 12,749
9/30/2007 15,503 9/30/2007 15,812 9/30/2007 12,837
10/31/2007 15,752 10/31/2007 16,160 10/31/2007 12,930
11/30/2007 15,094 11/30/2007 15,789 11/30/2007 13,176
12/31/2007 14,989 12/31/2007 15,789 12/31/2007 13,210
1/31/2008 14,090 1/31/2008 15,447 1/31/2008 13,492
2/29/2008 13,632 2/29/2008 15,618 2/29/2008 13,609
3/31/2008 13,573 3/31/2008 15,374 3/31/2008 13,608
4/30/2008 14,235 4/30/2008 15,776 4/30/2008 13,507
5/31/2008 14,420 5/31/2008 16,033 5/31/2008 13,399
6/30/2008 13,204 6/30/2008 15,471 6/30/2008 13,400
7/31/2008 13,093 7/31/2008 15,179 7/31/2008 13,426
8/31/2008 13,283 8/31/2008 15,118 8/31/2008 13,522
9/30/2008 12,099 9/30/2008 14,056 9/30/2008 13,241
10/31/2008 10,066 10/31/2008 12,372 10/31/2008 13,060
Past performance is not predictive of future performance.
--------------------------------------------
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
AVERAGE ANNUAL TOTAL RETURNS(a)
SINCE
1 YEAR 5 YEARS INCEPTION*
-23.44% 2.79% 3.33%
--------------------------------------------
* 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, 2008 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% OF NET ASSETS)
- --------------------------------------------------------------------------------
[PIE CHART OMITTED]
Large-Cap Funds 37.5%
Sector Funds 16.9%
International Funds 14.7%
Mid-Cap Funds 10.8%
Small-Cap Funds 7.6%
Cash Equivalents 12.5%
TOP TEN LONG-TERM HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
- ----------------------------------------------- ---------------
American Funds Growth Fund of America - Class A 7.8%
iShares Dow Jones U.S. Energy Sector Index 5.4%
Marsico 21st Century 5.1%
iShares S&P MidCap 400 Value Index 4.6%
Amana Trust Income 4.1%
Fidelity Capital Appreciation 4.0%
iShares MSCI Emerging Markets Index 3.8%
iShares S&P 500 Growth Index 3.7%
Vanguard 500 Index - Investor Shares 3.6%
iShares S&P SmallCap 600 Value Index 3.3%
6
NEW CENTURY BALANCED PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2008 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% OF NET ASSETS)
- --------------------------------------------------------------------------------
[PIE CHART OMITTED]
Sector Funds 16.9%
Government Bond Funds 16.0%
Large-Cap Funds 14.3%
International Funds 9.7%
Worldwide Bond Funds 7.7%
Corporate Bond Funds 6.5%
High Quality Bond Funds 5.4%
Mid-Cap Funds 4.7%
Small-Cap Funds 4.2%
High Yield Bond Funds 2.6%
Convertible Bond Funds 2.0%
Cash Equivalents 10.0%
TOP TEN LONG-TERM HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
- ----------------------------------------------- ---------------
American Century Target Maturites Trust
Series 2015 - Investor Class 12.6%
Loomis Sayles Bond - Institutional Class 6.5%
Templeton Global Bond - Class A 6.0%
First Eagle Global - Class A 5.9%
iShares S&P 500 Index 5.2%
iShares Dow Jones U.S. Energy Sector Index 4.4%
Dodge & Cox Income 3.9%
S&P MidCap 400 Depositary Receipts 3.9%
American Funds AMCAP - Class A 3.5%
Fidelity Select Utilities Growth 3.5%
7
NEW CENTURY OPPORTUNISTIC PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2008 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% OF NET ASSETS)
- --------------------------------------------------------------------------------
[PIE CHART OMITTED]
Sector Funds 44.5%
Large-Cap Funds 28.6%
Mid-Cap Funds 9.2%
Small-Cap Funds 7.6%
Cash Equivalents 10.1%
TOP TEN LONG-TERM HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
- ----------------------------------------------- ---------------
iShares S&P 500 Growth Index 17.6%
S&P MidCap 400 Depositary Receipts 9.2%
iShares S&P 500 Value Index 7.7%
Technology Select Sector SPDR 6.7%
iShares S&P GSSI Natural Resources Index 6.3%
iShares S&P SmallCap 600 Growth Index 5.5%
Biotech HOLDRs Trust 5.2%
iShares MSCI Emerging Markets Index 5.2%
iShares Lehman 7-10 Year Treasury Bond 3.7%
iShares Dow Jones U.S. Energy Sector Index 3.3%
8
NEW CENTURY INTERNATIONAL PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2008 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% OF NET ASSETS)
- --------------------------------------------------------------------------------
[PIE CHART OMITTED]
Europe Funds 25.8%
Diversified Funds 21.8%
Americas Funds 21.4%
Asia/Pacific Funds 14.3%
Emerging Markets Funds 4.4%
Cash Equivalents 12.3%
TOP TEN LONG-TERM HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
- ----------------------------------------------- ---------------
Fidelity Canada 6.0%
PowerShares DB U.S. Dollar Index Bullish 5.6%
iShares MSCI Germany Index 5.5%
iShares MSCI United Kingdom Index 4.3%
iShares S&P Latin America 40 Index 4.2%
Vanguard European ETF 4.1%
iShares MSCI EAFE Index 4.0%
iShares S&P Global Energy Sector Index 3.8%
iShares FTSE/Xinhua China 25 Index 3.7%
iShares MSCI Switzerland Index 3.5%
9
NEWCENTURY ALTERNATIVE STRATEGIES PORTFOLIO
PORTFOLIO INFORMATION
OCTOBER 31, 2008 (UNAUDITED)
================================================================================
ASSET ALLOCATION (% OF NET ASSETS)
- --------------------------------------------------------------------------------
[PIE CHART OMITTED]
Long/Short Equity Funds 17.2%
Merger Arbitrage Funds 14.8%
Global Macro Funds 13.7%
Asset Allocation Funds 12.4%
Natural Resources Funds 7.6%
High Yield/Fixed Income Funds 7.1%
Option Hedged Funds 6.0%
Real Estate Funds 5.0%
Deep Value/Distressed Securities Funds 4.7%
Convertible Arbitrage Funds 4.1%
Structured Notes 1.7%
Cash Equivalents 5.7%
TOP TEN LONG-TERM HOLDINGS
- --------------------------------------------------------------------------------
SECURITY DESCRIPTION % OF NET ASSETS
- ----------------------------------------------- ---------------
First Eagle Global - Class A 5.1%
Hussman Strategic Growth 4.7%
Merger 4.7%
Gateway - Class A 4.5%
Calamos Market Neutral - A Shares 4.1%
Diamond Hill Long-Short - Class I 3.6%
Gabelli ABC 3.6%
Arbitrage - Class R 3.4%
FPA Crescent 3.3%
Ivy Asset Strategy - Class A 3.2%
10
NEW CENTURY CAPITAL PORTFOLIO
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2008
=======================================================================================
INVESTMENT COMPANIES -- 87.5% SHARES VALUE
- ---------------------------------------------------------------------------------------
LARGE-CAP FUNDS -- 37.5%
Amana Trust Income .................................... 143,906 $ 3,458,072
American Funds AMCAP - Class A ........................ 154,520 1,987,132
American Funds Growth Fund of America - Class A ....... 294,589 6,548,715
Fidelity Capital Appreciation ......................... 200,094 3,337,563
iShares Russell 1000 Growth Index (a) ................. 235 9,412
iShares Russell 1000 Value Index (a) .................. 28,800 1,527,552
iShares S&P 500 Growth Index (a) ...................... 64,900 3,076,909
iShares S&P 500 Index (a) ............................. 17,350 1,689,716
iShares S&P 500 Value Index (a) ....................... 51,500 2,558,005
Marsico 21st Century (b) .............................. 404,207 4,320,968
Vanguard 500 Index - Investor Shares .................. 33,703 3,011,035
------------
31,525,079
------------
SECTOR FUNDS -- 16.9%
Biotech HOLDRs Trust (a) .............................. 11,700 2,022,930
Consumer Staples Select Sector SPDR (a) ............... 62,200 1,502,752
Fidelity Select Utilities Growth ...................... 69,352 2,794,886
iShares Dow Jones U.S. Energy Sector Index (a) ........ 148,200 4,502,316
iShares Dow Jones U.S. Transportation Average Index (a) 7,500 523,350
iShares S&P GSSI Natural Resources Index (a) .......... 31,800 852,240
PowerShares Dynamic Biotechnology & Genome (a)(b) ..... 36,600 519,720
PowerShares Dynamic Food & Beverage (a) ............... 77,200 1,029,076
PowerShares Dynamic Pharmaceuticals (a) ............... 33,300 515,151
------------
14,262,421
------------
INTERNATIONAL FUNDS -- 14.7%
Dodge & Cox International Stock ....................... 89,411 2,239,755
First Eagle Global - Class A .......................... 58,958 2,031,110
iShares MSCI EAFE Growth Index (a) .................... 34,600 1,583,296
iShares MSCI EAFE Index (a) ........................... 40,200 1,793,724
iShares MSCI EAFE Value Index (a) ..................... 39,000 1,577,160
iShares MSCI Emerging Markets Index (a) ............... 124,200 3,165,858
------------
12,390,903
------------
MID-CAP FUNDS -- 10.8%
Goldman Sachs Growth Opportunities - Class A (b). ..... 170,764 2,552,918
iShares S&P MidCap 400 Growth Index (a) ............... 18,000 1,056,600
iShares S&P MidCap 400 Value Index (a) ................ 73,000 3,901,120
Janus Orion ........................................... 116,467 830,407
S&P MidCap 400 Depositary Receipts (a) ................ 7,200 742,680
------------
9,083,725
------------
SMALL-CAP FUNDS -- 7.6%
Buffalo Small Cap (b) ................................. 58,258 952,526
iShares S&P SmallCap 600 Growth Index (a) ............. 54,600 2,633,358
iShares S&P SmallCap 600 Value Index (a) .............. 53,700 2,799,381
------------
6,385,265
------------
TOTAL INVESTMENT COMPANIES (Cost $73,349,391) ............ $ 73,647,393
------------
See accompanying notes to financial statements.
11
NEW CENTURY CAPITAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2008
=======================================================================================
MONEY MARKET FUNDS -- 27.8% SHARES VALUE
- ---------------------------------------------------------------------------------------
The AIM STIT-STIC Portfolio - Institutional Class,
2.49% (c) (Cost $23,352,361) ........................ 23,352,361 $ 23,352,361
------------
TOTAL INVESTMENTS AT VALUE -- 115.3% (Cost $96,701,752) .. $ 96,999,754
LIABILITIES IN EXCESS OF OTHER ASSETS -- (15.3%) ......... (12,881,195)
------------
TOTAL NET ASSETS -- 100.0% ............................... $ 84,118,559
============
(a) Exchange-traded fund.
(b) Non-income producing security.
(c) Variable rate security. The rate shown is the effective 7-day yield as of
October 31, 2008.
See accompanying notes to financial statements.
12
NEW CENTURY BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2008
=======================================================================================
INVESTMENT COMPANIES -- 90.0% SHARES VALUE
- ---------------------------------------------------------------------------------------
SECTOR FUNDS -- 16.9%
Biotech HOLDRs Trust (a) .............................. 7,600 $ 1,314,040
Consumer Staples Select Sector SPDR (a) ............... 54,000 1,304,640
Fidelity Select Utilities Growth ...................... 53,826 2,169,208
iShares Dow Jones U.S. Energy Sector Index (a) ........ 89,400 2,715,972
iShares S&P GSSI Natural Resources Index (a) .......... 31,800 852,240
PowerShares Dynamic Biotechnology & Genome (a)(b) ..... 36,900 523,980
PowerShares Dynamic Food & Beverage (a) ............... 78,000 1,039,740
PowerShares Dynamic Pharmaceuticals (a) ............... 40,100 620,347
------------
10,540,167
------------
GOVERNMENT BOND FUNDS -- 16.0%
American Century Target Maturities Trust Series 2015 -
Investor Class ..................................... 90,573 7,874,448
iShares Lehman 3-7 Year Treasury Bond (a) ............. 5,000 550,850
iShares Lehman 7-10 Year Treasury Bond (a) ............ 6,700 588,863
iShares Lehman Aggregate Bond Fund (a) ................ 10,000 961,800
------------
9,975,961
------------
LARGE-CAP FUNDS -- 14.3%
American Funds AMCAP - Class A ........................ 169,502 2,179,790
iShares Russell 1000 Growth Index (a) ................. 19,600 784,980
iShares Russell 1000 Value Index (a) .................. 20,300 1,076,712
iShares S&P 500 Growth Index (a) ...................... 17,400 824,934
iShares S&P 500 Index (a) ............................. 33,400 3,252,826
iShares S&P 500 Value Index (a) ....................... 16,600 824,522
------------
8,943,764
------------
INTERNATIONAL FUNDS -- 9.7%
First Eagle Global - Class A .......................... 106,356 3,663,957
iShares MSCI EAFE Growth Index (a) .................... 8,000 366,080
iShares MSCI EAFE Index (a) ........................... 36,800 1,642,016
iShares MSCI EAFE Value Index (a) ..................... 9,000 363,960
------------
6,036,013
------------
WORLDWIDE BOND FUNDS -- 7.7%
Loomis Sayles Global Bond - Institutional Class ....... 81,384 1,053,922
Templeton Global Bond - Class A ....................... 342,262 3,775,147
------------
4,829,069
------------
CORPORATE BOND FUNDS -- 6.5%
Loomis Sayles Bond - Institutional Class .............. 402,389 4,048,037
------------
HIGH QUALITY BOND FUNDS -- 5.4%
Calvert Social Investment - Class I ................... 67,719 971,088
Dodge & Cox Income .................................... 216,687 2,433,393
------------
3,404,481
------------
MID-CAP FUNDS -- 4.7%
iShares S&P MidCap 400 Value Index (a) ................ 9,000 480,960
S&P MidCap 400 Depositary Receipts (a) ................ 23,580 2,432,277
------------
2,913,237
------------
See accompanying notes to financial statements.
13
NEW CENTURY BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2008
=======================================================================================
INVESTMENT COMPANIES -- 90.0% (CONTINUED) SHARES VALUE
- ---------------------------------------------------------------------------------------
SMALL-CAP FUNDS -- 4.2%
iShares S&P SmallCap 600 Growth Index (a) ............. 30,800 $ 1,485,484
iShares S&P SmallCap 600 Value Index (a) .............. 21,300 1,110,369
------------
2,595,853
------------
HIGH YIELD BOND FUNDS -- 2.6%
Loomis Sayles Institutional High Income ............... 276,807 1,602,714
------------
CONVERTIBLE BOND FUNDS -- 2.0%
Davis Appreciation & Income - Class A ................. 74,008 1,269,976
------------
TOTAL INVESTMENT COMPANIES (Cost $60,297,751) ............ $ 56,159,272
------------
=======================================================================================
MONEY MARKET FUNDS -- 23.2% SHARES VALUE
- ---------------------------------------------------------------------------------------
The AIM STIT-STIC Portfolio - Institutional Class,
2.49% (c) (Cost $14,480,535) ........................ 14,480,535 $ 14,480,535
------------
TOTAL INVESTMENTS AT VALUE -- 113.2% (Cost $74,778,286) .. $ 70,639,807
LIABILITIES IN EXCESS OF OTHER ASSETS -- (13.2%) ......... (8,216,366)
------------
TOTAL NET ASSETS -- 100.0% ............................... $ 62,423,441
============
(a) Exchange-traded fund.
(b) Non-income producing security.
(c) Variable rate security. The rate shown is the effective 7-day yield as of
October 31, 2008.
See accompanying notes to financial statements.
14
NEW CENTURY OPPORTUNISTIC PORTFOLIO
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2008
=======================================================================================
INVESTMENT COMPANIES -- 89.9% SHARES VALUE
- ---------------------------------------------------------------------------------------
SECTOR FUNDS -- 44.5%
Biotech HOLDRs Trust (a) .............................. 3,200 $ 553,280
Consumer Staples Select Sector SPDR (a) ............... 12,300 297,168
iShares Dow Jones U.S. Energy Sector Index (a) ........ 11,500 349,370
iShares Lehman 7-10 Year Treasury Bond (a) ............ 4,500 395,505
iShares MSCI Emerging Markets Index (a) ............... 21,600 550,584
iShares S&P GSSI Natural Resources Index (a) .......... 24,900 667,320
PowerShares DB U.S. Dollar Index Bullish (a)(b).. ..... 10,000 264,500
PowerShares Dynamic Biotechnology & Genome (a)(b) ..... 21,800 309,560
PowerShares Dynamic Food & Beverage (a) ............... 23,100 307,923
PowerShares Dynamic Pharmaceuticals (a) ............... 20,000 309,400
Technology Select Sector SPDR (a) ..................... 42,800 706,200
------------
4,710,810
------------
LARGE-CAP FUNDS -- 28.6%
iShares S&P 500 Growth Index (a) ...................... 39,400 1,867,954
iShares S&P 500 Value Index (a) ....................... 16,500 819,555
Vanguard Growth ETF (a) ............................... 8,000 343,280
------------
3,030,789
------------
MID-CAP FUNDS -- 9.2%
S&P MidCap 400 Depositary Receipts (a) ................ 9,402 969,816
------------
SMALL-CAP FUNDS -- 7.6%
iShares S&P SmallCap 600 Growth Index (a) ............. 12,000 578,760
iShares S&P SmallCap 600 Value Index (a) .............. 4,400 229,372
------------
808,132
------------
TOTAL INVESTMENT COMPANIES (Cost $10,390,400) ............ $ 9,519,547
------------
=======================================================================================
MONEY MARKET FUNDS -- 55.5% SHARES VALUE
- ---------------------------------------------------------------------------------------
The AIM STIT-STIC Portfolio - Institutional Class,
2.49% (c) (Cost $5,874,669) ......................... 5,874,669 $ 5,874,669
------------
TOTAL INVESTMENTS AT VALUE -- 145.4% (Cost $16,265,069) .. $ 15,394,216
LIABILITIES IN EXCESS OF OTHER ASSETS -- (45.4%) ......... (4,807,643)
------------
TOTAL NET ASSETS -- 100.0% ............................... $ 10,586,573
============
(a) Exchange-traded fund.
(b) Non-income producing security.
(c) Variable rate security. The rate shown is the effective 7-day yield as of
October 31, 2008.
See accompanying notes to financial statements.
15
NEW CENTURY INTERNATIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2008
=======================================================================================
INVESTMENT COMPANIES -- 87.7% SHARES VALUE
- ---------------------------------------------------------------------------------------
EUROPE FUNDS -- 25.8%
Franklin Mutual European - Class A .................... 46,829 $ 816,236
iShares MSCI Austria Index (a) ........................ 84,200 1,178,800
iShares MSCI France Index (a) ......................... 10,000 205,000
iShares MSCI Germany Index (a) ........................ 227,200 4,198,656
iShares MSCI Spain Index (a) .......................... 37,200 1,312,416
iShares MSCI Sweden Index (a) ......................... 58,000 882,760
iShares MSCI Switzerland Index (a) .................... 147,300 2,705,901
iShares MSCI United Kingdom Index (a) ................. 244,146 3,261,791
Ivy European Opportunities - Class A .................. 99,793 2,039,776
Vanguard European ETF (a) ............................. 74,200 3,095,624
------------
19,696,960
------------
DIVERSIFIED FUNDS -- 21.8%
Dodge & Cox International Stock ....................... 53,034 1,328,499
iShares MSCI EAFE Growth Index (a) .................... 45,500 2,082,080
iShares MSCI EAFE Index (a) ........................... 67,800 3,025,236
iShares MSCI EAFE Value Index (a) ..................... 51,000 2,062,440
iShares S&P Global Energy Sector Index Fund (a).. ..... 92,400 2,863,476
iShares S&P Global Infrastructure Index (a) ........... 36,600 1,090,680
iShares S&P Global Materials Index (a) ................ 26,700 1,063,194
Janus Overseas ........................................ 73,156 1,983,989
Oppenheimer International Small Company - Class A ..... 43,726 407,961
PowerShares International Dividend Achievers (a). ..... 63,800 733,700
------------
16,641,255
------------
AMERICAS FUNDS -- 21.4%
Fidelity Canada ....................................... 120,129 4,609,344
iShares MSCI Canada Index (a) ......................... 126,000 2,416,680
iShares MSCI Mexico Index (a) ......................... 59,800 1,847,820
iShares S&P Latin America 40 Index (a) ................ 119,000 3,165,400
PowerShares DB U.S. Dollar Index Bullish (a)(b).. ..... 161,300 4,266,385
------------
16,305,629
------------
ASIA/PACIFIC FUNDS -- 14.3%
Fidelity Japan ........................................ 194,152 1,755,138
iShares FTSE/Xinhua China 25 Index (a) ................ 111,300 2,800,308
iShares MSCI Australia Index (a) ...................... 138,100 2,070,119
iShares MSCI Japan Index (a) .......................... 143,800 1,292,762
iShares MSCI Pacific ex-Japan Index (a) ............... 64,800 1,709,424
Matthews Pacific Tiger - Class I ...................... 87,814 1,258,381
------------
10,886,132
------------
EMERGING MARKETS FUNDS -- 4.4%
iShares MSCI Emerging Markets Index (a) ............... 52,000 1,325,480
T. Rowe Price Emerging Europe & Mediterranean (b) ..... 39,542 489,526
Vanguard Emerging Markets Stock Index (a) ............. 61,000 1,537,810
------------
3,352,816
------------
TOTAL INVESTMENT COMPANIEs (Cost $72,003,847) ............ $ 66,882,792
------------
See accompanying notes to financial statements.
16
NEW CENTURY INTERNATIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2008
=======================================================================================
MONEY MARKET FUNDS -- 28.1% SHARES VALUE
- ---------------------------------------------------------------------------------------
The AIM STIT-STIC Portfolio - Institutional Class,
2.49% (c) (Cost $21,407,188) ........................ 21,407,188 $ 21,407,188
------------
TOTAL INVESTMENTS AT VALUE -- 115.8% (Cost $93,411,035) .. $ 88,289,980
LIABILITIES IN EXCESS OF OTHER ASSETS -- (15.8%) ......... (12,055,632)
------------
TOTAL NET ASSETS -- 100.0% ............................... $ 76,234,348
============
(a) Exchange-traded fund.
(b) Non-income producing security.
(c) Variable rate security. The rate shown is the effective 7-day yield as of
October 31, 2008.
See accompanying notes to financial statements.
17
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
OCTOBER 31, 2008
=======================================================================================
INVESTMENT COMPANIES -- 92.6% SHARES VALUE
- ---------------------------------------------------------------------------------------
LONG/SHORT EQUITY FUNDS -- 17.2%
CGM Focus ............................................. 72,682 $ 2,211,712
Diamond Hill Long-Short - Class I ..................... 327,163 4,877,999
Federated Prudent Bear - Class A ...................... 324,596 2,544,830
Hussman Strategic Growth .............................. 421,241 6,482,893
Schwab Hedged Equity - Select Shares .................. 264,620 3,320,980
TFS Market Neutral .................................... 139,254 1,845,113
Vanguard Market Neutral - Investor Shares ............. 191,235 2,264,223
------------
23,547,750
------------
MERGER ARBITRAGE FUNDS -- 14.8%
Arbitrage - Class R (b) ............................... 381,932 4,690,121
Gabelli Enterprises Mergers & Acquisitions - Class A .. 311,991 2,701,845
Gabelli ABC ........................................... 523,340 4,872,294
Gabelli Global Deal (c) ............................... 121,774 1,601,328
Merger ................................................ 437,008 6,389,064
------------
20,254,652
------------
GLOBAL MACRO FUNDS -- 13.7%
BlackRock Global Allocation - Class A ................. 276,890 4,189,338
First Eagle Global - Class A .......................... 204,589 7,048,077
Franklin Mutual Discovery - Class Z ................... 129,465 3,122,694
Ivy Asset Strategy - Class A .......................... 213,344 4,339,417
------------
18,699,526
------------
ASSET ALLOCATION FUNDS -- 12.4%
Berwyn Income ......................................... 174,412 1,808,655
FPA Crescent - Class I ................................ 224,440 4,549,398
Greenspring ........................................... 104,183 2,059,696
Leuthold Asset Allocation - Class I ................... 331,712 2,640,425
Leuthold Core Investment .............................. 186,807 2,409,809
Oakmark Equity & Income - Class I ..................... 153,778 3,566,119
------------
17,034,102
------------
NATURAL RESOURCES FUNDS -- 7.6%
BlackRock Real Asset Equity (c) ....................... 105,000 812,700
Permanent Portfolio ................................... 20,030 617,117
PIMCO Commodity Real Return Strategy - Class A .. ..... 375,399 3,607,580
PowerShares Water Resources Portfolio (a) ............. 153,000 2,128,230
RS Global Natural Resources - Class A ................. 38,551 818,821
SPDR Gold Trust (a)(b) ................................ 18,000 1,284,120
T. Rowe Price New Era ................................. 9,337 319,710
Vanguard Precious Metals & Minerals - Investor Shares . 59,766 801,467
------------
10,389,745
------------
HIGH YIELD/FIXED INCOME FUNDS -- 7.1%
Eaton Vance National Municipal - Class I .............. 274,922 2,339,584
Fidelity Capital & Income ............................. 407,405 2,493,319
Nuveen Multi-Strategy Income & Growth 2 (c) ........... 230,000 1,150,000
Oppenheimer International Bond - Class A .............. 246,541 1,365,839
Principal High Yield - Class A ........................ 131,225 797,848
Western Asset Emerging Markets Debt (c) ............... 143,600 1,619,808
------------
9,766,398
------------
See accompanying notes to financial statements.
18
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2008
=======================================================================================
INVESTMENT COMPANIES -- 92.6% (CONTINUED) SHARES VALUE
- ---------------------------------------------------------------------------------------
OPTION HEDGED FUNDS -- 6.0%
Eaton Vance Tax-Managed Diversified Equity Income (c) . 80,000 $ 952,000
Gateway - Class A ..................................... 249,770 6,211,769
Nuveen Equity Premium Income (c) ...................... 88,000 1,073,600
------------
8,237,369
------------
REAL ESTATE FUNDS -- 5.0%
Cohen & Steers International Realty - Class I ......... 74,665 665,264
DWS RREEF World Real Estate & Tactical Strategies (c) . 57,051 341,736
ING Global Real Estate - Class I ...................... 111,508 1,401,650
JPMorgan U.S. Real Estate - Class A ................... 170,348 1,984,551
Third Avenue Real Estate Value ........................ 150,465 2,439,043
------------
6,832,244
------------
DEEP VALUE/DISTRESSED SECURITIES FUNDS -- 4.7%
Fairholme ............................................. 135,727 3,300,870
Franklin Mutual Beacon - Class Z ...................... 170,558 1,644,183
Third Avenue Value .................................... 43,667 1,534,883
------------
6,479,936
------------
CONVERTIBLE ARBITRAGE FUNDS -- 4.1%
Calamos Market Neutral Income - A Shares .............. 511,604 5,612,294
------------
TOTAL INVESTMENT COMPANIES (Cost $148,124,415) ........... $126,854,016
------------
=======================================================================================
STRUCTURED NOTES -- 1.7% PAR VALUE/UNITS VALUE
- ---------------------------------------------------------------------------------------
Credit Suisse, Callable Yield Note, 14%, due 04/30/2009 $ 1,500,000 $ 963,300
Deutsche Bank, Buffered Underlying Security Linked Note,
due 09/28/2009 ...................................... 700,000 486,990
Morgan Stanley & Co., Inc., Bear Market Plus Note,
due 11/20/2008 (d)................................... 60,000 796,800
-----------
TOTAL STRUCTURED NOTES (Cost $2,800,000) ................. $ 2,247,090
------------
See accompanying notes to financial statements.
19
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 2008
=======================================================================================
MONEY MARKET FUNDS -- 5.9% SHARES VALUE
- ---------------------------------------------------------------------------------------
The AIM STIT-STIC Portfolio - Institutional Class,
2.49% (e) (Cost $8,133,570) ......................... 8,133,570 $ 8,133,570
------------
TOTAL INVESTMENTS AT VALUE -- 100.2% (Cost $159,057,985) . $137,234,676
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.2%) .......... (236,100)
------------
TOTAL NET ASSETS -- 100.0% ............................... $136,998,576
============
(a) Exchange-traded fund.
(b) Non-income producing security.
(c) Closed-end fund.
(d) $10.00 face value per unit.
(e) Variable rate security. The rate shown is the effective 7-day yield as of
October 31, 2008.
See accompanying notes to financial statements.
20
NEW CENTURY PORTFOLIOS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 2008
================================================================================================================================
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 .................... $ 96,701,752 $ 74,778,286 $ 16,265,069 $ 93,411,035 $ 159,057,985
============= ============= ============= ============= =============
At value (Note 1A) ..................... $ 96,999,754 $ 70,639,807 $ 15,394,216 $ 88,289,980 $ 137,234,676
Dividends and interest receivable ........ 22,204 14,491 5,051 28,883 59,991
Receivable for investment securities sold 5,509,167 2,603,431 -- 2,560,809 --
Receivable for capital shares sold ....... 1,492 2,225 6 17,326 57,143
Other assets ............................. 5,792 4,266 740 6,000 7,547
------------- ------------- ------------- ------------- -------------
TOTAL ASSETS ........................... 102,538,409 73,264,220 15,400,013 90,902,998 137,359,357
------------- ------------- ------------- ------------- -------------
LIABILITIES
Payable to Advisor (Note 2) .............. 74,156 56,023 4,606 70,947 92,160
Payable to Distributor (Note 3) .......... 14,441 12,928 1,513 12,857 12,718
Payable for investment
securities purchased ................... 18,316,065 10,761,315 4,773,837 14,531,699 189,927
Payable for capital shares redeemed ...... 2,000 1,350 26,530 19,940 49,041
Other accrued expenses and liabilities ... 13,188 9,163 6,954 33,207 16,935
------------- ------------- ------------- ------------- -------------
TOTAL LIABILITIES ...................... 18,419,850 10,840,779 4,813,440 14,668,650 360,781
------------- ------------- ------------- ------------- -------------
NET ASSETS ................................. $ 84,118,559 $ 62,423,441 $ 10,586,573 $ 76,234,348 $ 136,998,576
============= ============= ============= ============= =============
Net assets consist of:
Paid-in capital .......................... $ 93,792,689 $ 70,493,595 $ 13,846,337 $ 88,972,054 $ 158,948,027
Undistributed net investment income ...... 191,871 281,588 325 289,020 1,308,842
Accumulated net realized losses
on investments ......................... (10,164,003) (4,213,263) (2,389,236) (7,905,671) (1,434,984)
Net unrealized appreciation (depreciation)
on investments ......................... 298,002 (4,138,479) (870,853) (5,121,055) (21,823,309)
------------- ------------- ------------- ------------- -------------
Net assets ................................. $ 84,118,559 $ 62,423,441 $ 10,586,573 $ 76,234,348 $ 136,998,576
============= ============= ============= ============= =============
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ............................ 7,154,795 5,921,666 1,495,649 7,561,263 13,510,231
============= ============= ============= ============= =============
Net asset value, offering price and
redemption price per share (a) ........... $ 11.76 $ 10.54 $ 7.08 $ 10.08 $ 10.14
============= ============= ============= ============= =============
(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.
21
NEW CENTURY PORTFOLIOS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2008
==========================================================================================================================
NEW CENTURY
NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY ALTERNATIVE
CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends ............................... $ 1,667,532 $ 2,570,444 $ 131,559 $ 3,669,623 $ 3,417,568
Interest ................................ -- -- -- -- 106,129
------------ ------------ ------------ ------------ ------------
Total income .......................... 1,667,532 2,570,444 131,559 3,669,623 3,523,697
------------ ------------ ------------ ------------ ------------
EXPENSES
Investment advisory fees (Note 2) ....... 1,163,448 834,819 146,200 1,179,953 1,073,937
Distribution costs (Note 3) ............. 211,564 161,708 32,483 213,137 144,634
Accounting fees ......................... 42,216 38,313 31,497 42,495 44,342
Administration fees (Note 2).. .......... 33,187 24,730 9,436 33,573 38,215
Legal and audit fees .................... 26,857 18,995 4,421 28,091 31,338
Transfer agent fees ..................... 21,071 21,000 21,000 21,000 21,726
Custody and bank service fees. .......... 22,911 15,169 4,662 21,634 28,293
Trustees' fees and expenses (Note 2) .... 19,383 13,302 2,372 19,715 23,832
Insurance expense ....................... 10,141 6,853 1,068 9,665 10,040
Postage and supplies .................... 8,207 4,901 2,734 6,462 6,887
Other expenses .......................... 8,983 7,554 5,022 10,059 12,940
------------ ------------ ------------ ------------ ------------
Total expenses ........................ 1,567,968 1,147,344 260,895 1,585,784 1,436,184
Less fees waived by the Advisor (Note 2) -- -- (41,595) -- --
Plus previously waived investment
advisory fees and expense
reimbursements recouped
by the Advisor (Note 2) ............... -- -- -- 18,797 --
------------ ------------ ------------ ------------ ------------
Net expenses .......................... 1,567,968 1,147,344 219,300 1,604,581 1,436,184
------------ ------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) .............. 99,564 1,423,100 (87,741) 2,065,042 2,087,513
------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Net realized losses on investments ...... (13,968,157) (5,827,215) (2,629,023) (12,761,412) (4,079,115)
Capital gain distributions from regulated
investment companies .................. 4,895,351 1,970,480 409,448 5,535,179 5,212,537
Net change in unrealized appreciation
(depreciation) on investments ......... (47,999,307) (24,432,963) (4,068,236) (66,231,378) (43,649,109)
------------ ------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
LOSSES ON INVESTMENTS ................... (57,072,113) (28,289,698) (6,287,811) (73,457,611) (42,515,687)
------------ ------------ ------------ ------------ ------------
NET DECREASE IN NET
ASSETS FROM OPERATIONS .................. $(56,972,549) $(26,866,598) $ (6,375,552) $(71,392,569) $(40,428,174)
============ ============ ============ ============ ============
See accompanying notes to financial statements.
22
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,
2008 2007 2008 2007
- ---------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) ................... $ 99,564 $ (429,610) $ 1,423,100 $ 1,101,913
Net realized gains (losses) from
security transactions ........................ (13,968,157) 6,828,808 (5,827,215) 3,862,192
Capital gain distributions from regulated
investment companies ......................... 4,895,351 3,213,012 1,970,480 1,512,727
Net change in unrealized appreciation
(depreciation) on investments ................ (47,999,307) 14,826,015 (24,432,963) 3,805,605
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
from operations ................................ (56,972,549) 24,438,225 (26,866,598) 10,282,437
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) ........... (998,890) -- (1,727,951) (1,085,845)
From net realized gains on security
transactions (Note 1E) ....................... (5,981,681) -- (4,963,213) --
------------- ------------- ------------- -------------
Decrease in net assets from
distributions to shareholders .................. (6,980,571) -- (6,691,164) (1,085,845)
------------- ------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ...................... 5,466,809 5,930,937 1,980,783 2,918,012
Proceeds from redemption
fees collected (Note 1B) ..................... 93 29 43 56
Net asset value of shares issued in reinvestment
of distributions to shareholders ............. 6,680,167 -- 6,441,127 1,045,536
Payments for shares redeemed ................... (8,303,148) (10,029,342) (7,492,684) (3,907,332)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets from
capital share transactions ..................... 3,843,921 (4,098,376) 929,269 56,272
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS .................................. (60,109,199) 20,339,849 (32,628,493) 9,252,864
NET ASSETS
Beginning of year .............................. 144,227,758 123,887,909 95,051,934 85,799,070
------------- ------------- ------------- -------------
End of year .................................... $ 84,118,559 $ 144,227,758 $ 62,423,441 $ 95,051,934
============= ============= ============= =============
UNDISTRIBUTED NET
INVESTMENT INCOME .............................. $ 191,871 $ -- $ 281,588 $ 334,483
============= ============= ============= =============
CAPITAL SHARE ACTIVITY
Sold ........................................... 345,411 313,592 144,570 189,069
Reinvested ..................................... 359,535 -- 444,216 70,406
Redeemed ....................................... (525,669) (527,053) (561,016) (253,201)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding .. 179,277 (213,461) 27,770 6,274
Shares outstanding, beginning of year .......... 6,975,518 7,188,979 5,893,896 5,887,622
------------- ------------- ------------- -------------
Shares outstanding, end of year ................ 7,154,795 6,975,518 5,921,666 5,893,896
============= ============= ============= =============
See accompanying notes to financial statements.
23
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,
2008 2007 2008 2007
- ---------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income (loss) ................... $ (87,741) $ (64,268) $ 2,065,042 $ 134,961
Net realized gains (losses) from
security transactions ........................ (2,629,023) 766,321 (12,761,412) 2,068,729
Capital gain distributions from regulated
investment companies ......................... 409,448 38,924 5,535,179 2,227,454
Net change in unrealized appreciation
(depreciation) on investments ................ (4,068,236) 2,126,149 (66,231,378) 35,884,958
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
from operations ................................ (6,375,552) 2,867,126 (71,392,569) 40,316,102
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) ........... (65,157) -- (2,455,459) (383,067)
From net realized gains on security
transactions (Note 1E) ....................... (464,131) -- (3,446,048) (4,023,814)
------------- ------------- ------------- -------------
Decrease in net assets from
distributions to shareholders .................. (529,288) -- (5,901,507) (4,406,881)
------------- ------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ...................... 2,921,340 1,357,331 15,672,710 13,917,872
Proceeds from redemption
fees collected (Note 1B) ..................... 29 -- 1,655 201
Net asset value of shares issued in reinvestment
of distributions to shareholders ............. 529,288 -- 4,112,509 3,515,727
Payments for shares redeemed ................... (894,407) (1,238,154) (13,674,851) (8,871,897)
------------- ------------- ------------- -------------
Net increase in net assets from capital
share transactions ............................. 2,556,250 119,177 6,112,023 8,561,903
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS .................................. (4,348,590) 2,986,303 (71,182,053) 44,471,124
NET ASSETS
Beginning of year .............................. 14,935,163 11,948,860 147,416,401 102,945,277
------------- ------------- ------------- -------------
End of year .................................... $ 10,586,573 $ 14,935,163 $ 76,234,348 $ 147,416,401
============= ============= ============= =============
UNDISTRIBUTED NET
INVESTMENT INCOME .............................. $ 325 $ -- $ 289,020 $ --
============= ============= ============= =============
CAPITAL SHARE ACTIVITY
Sold ........................................... 281,392 125,648 968,648 822,999
Reinvested ..................................... 48,470 -- 231,040 223,363
Redeemed ....................................... (102,198) (122,107) (985,571) (537,029)
------------- ------------- ------------- -------------
Net increase in shares outstanding ............. 227,664 3,541 214,117 509,333
Shares outstanding, beginning of year .......... 1,267,985 1,264,444 7,347,146 6,837,813
------------- ------------- ------------- -------------
Shares outstanding, end of year ................ 1,495,649 1,267,985 7,561,263 7,347,146
============= ============= ============= =============
See accompanying notes to financial statements.
24
NEW CENTURY PORTFOLIOS
STATEMENTS OF CHANGES IN NET ASSETS
=======================================================================================================
NEW CENTURY ALTERNATIVE
STRATEGIES PORTFOLIO
------------------------------
YEAR YEAR
ENDED ENDED
OCTOBER 31, OCTOBER 31,
2008 2007
- -------------------------------------------------------------------------------------------------------
FROM OPERATIONS
Net investment income ............................................. $ 2,087,513 $ 1,200,031
Net realized gains (losses) from security transactions ............ (4,079,115) 744,343
Capital gain distributions from regulated investment companies .... 5,212,537 3,137,271
Net change in unrealized appreciation (depreciation) on investments (43,649,109) 7,720,895
------------- -------------
Net increase (decrease) in net assets from operations ................ (40,428,174) 12,802,540
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income (Note 1E) .............................. (3,290,139) (2,420,775)
From net realized gains on security transactions (Note 1E) ........ (2,850,232) (2,247,380)
------------- -------------
Decrease in net assets from distributions to shareholders ............ (6,140,371) (4,668,155)
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ......................................... 66,371,741 25,078,251
Proceeds from redemption fees collected (Note 1B) ................. 20,136 29
Net asset value of shares issued in reinvestment of
distributions to shareholders .................................. 6,072,156 4,619,812
Payments for shares redeemed ...................................... (17,013,854) (7,526,721)
------------- -------------
Net increase in net assets from capital share transactions.. ......... 55,450,179 22,171,371
------------- -------------
TOTAL INCREASE IN NET ASSETS ......................................... 8,881,634 30,305,756
NET ASSETS
Beginning of year ................................................. 128,116,942 97,811,186
------------- -------------
End of year ....................................................... $ 136,998,576 $ 128,116,942
============= =============
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ........................... $ 1,308,842 $ (45,582)
============= =============
CAPITAL SHARE ACTIVITY
Sold .............................................................. 5,294,506 1,895,144
Reinvested ........................................................ 469,255 362,623
Redeemed .......................................................... (1,450,613) (568,214)
------------- -------------
Net increase in shares outstanding ................................ 4,313,148 1,689,553
Shares outstanding, beginning of year ............................. 9,197,083 7,507,530
------------- -------------
Shares outstanding, end of year ................................... 13,510,231 9,197,083
============= =============
See accompanying notes to financial statements.
25
NEW CENTURY CAPITAL PORTFOLIO
FINANCIAL HIGHLIGHTS
==========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- --------------------------------------------------------------------------------------------------------------------------
YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year ........ $ 20.68 $ 17.23 $ 15.04 $ 13.38 $ 12.36
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income (loss) ............ 0.02 (0.06) (0.08) (0.09) (0.12)
Net realized and unrealized gains
(losses) on investments ............... (7.94) 3.51 2.27 1.75 1.14
---------- ---------- ---------- ---------- ----------
Total from investment operations .......... (7.92) 3.45 2.19 1.66 1.02
---------- ---------- ---------- ---------- ----------
Less distributions:
Distributions from net
investment income ..................... (0.14) -- -- -- --
Distributions from net realized gains ... (0.86) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions ....................... (1.00) -- -- -- --
---------- ---------- ---------- ---------- ----------
Proceeds from redemption fees collected ... 0.00(a) 0.00(a) -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year .............. $ 11.76 $ 20.68 $ 17.23 $ 15.04 $ 13.38
========== ========== ========== ========== ==========
TOTAL RETURN (b) ............................ (40.06%) 20.02% 14.56% 12.41% 8.25%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ........... $ 84,119 $ 144,228 $ 123,888 $ 110,578 $ 103,260
========== ========== ========== ========== ==========
Ratio of expenses to average net assets (c) 1.29% 1.25% 1.27% 1.35% 1.41%
Ratio of net investment income (loss)
to average net assets (d) ............... 0.08% (0.32%) (0.47%) (0.57%) (0.91%)
Portfolio turnover ........................ 27% 21% 12% 13% 48%
(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 years covered, which assumes dividends or capital
gains distributions, if any, are reinvested in shares of the Portfolio.
Returns shown do not reflect the taxes a shareholder would pay on
Portfolio distributions, if any, 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 (loss) 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.
26
NEW CENTURY BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
==========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- --------------------------------------------------------------------------------------------------------------------------
YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year ........ $ 16.13 $ 14.57 $ 13.15 $ 12.30 $ 11.52
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ................... 0.25 0.19 0.17 0.15 0.11
Net realized and unrealized gains
(losses) on investments ............... (4.69) 1.56 1.44 0.89 0.78
---------- ---------- ---------- ---------- ----------
Total from investment operations .......... (4.44) 1.75 1.61 1.04 0.89
---------- ---------- ---------- ---------- ----------
Less distributions:
Distributions from net
investment income ..................... (0.30) (0.19) (0.19) (0.19) (0.11)
Distributions from net realized gains ... (0.85) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions ....................... (1.15) (0.19) (0.19) (0.19) (0.11)
---------- ---------- ---------- ---------- ----------
Proceeds from redemption fees collected ... 0.00(a) 0.00(a) -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year .............. $ 10.54 $ 16.13 $ 14.57 $ 13.15 $ 12.30
========== ========== ========== ========== ==========
TOTAL RETURN (b) ............................ (29.46%) 12.09% 12.37% 8.51% 7.75%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ........... $ 62,423 $ 95,052 $ 85,799 $ 77,128 $ 74,327
========== ========== ========== ========== ==========
Ratio of expenses to average net assets (d) 1.38% 1.35% 1.38% 1.38% 1.42%(c)
Ratio of net investment income
to average net assets (e) ............... 1.71% 1.21% 1.20% 1.12% 0.88%(c)
Portfolio turnover ........................ 22% 28% 22% 21% 44%
(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 years covered, which assumes dividends or capital
gains distributions, if any, are reinvested in shares of the Portfolio.
Returns shown do not reflect the taxes a shareholder would pay on
Portfolio distributions, if any, or the redemption of Portfolio shares.
(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.
27
NEW CENTURY OPPORTUNISTIC PORTFOLIO
FINANCIAL HIGHLIGHTS
==========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- --------------------------------------------------------------------------------------------------------------------------
YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year ........ $ 11.78 $ 9.45 $ 8.72 $ 7.30 $ 6.95
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment loss ..................... (0.05) (0.05) (0.08) (0.06) (0.07)
Net realized and unrealized gains
(losses) on investments ............... (4.26) 2.38 0.81 1.48 0.42
---------- ---------- ---------- ---------- ----------
Total from investment operations .......... (4.31) 2.33 0.73 1.42 0.35
---------- ---------- ---------- ---------- ----------
Less distributions:
Distributions from net
investment income ..................... (0.05) -- -- -- --
Distributions from net realized gains ... (0.34) -- -- -- --
---------- ---------- ---------- ---------- ----------
Total distributions ....................... (0.39) -- -- -- --
---------- ---------- ---------- ---------- ----------
Proceeds from redemption fees collected ... 0.00(a) -- -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year .............. $ 7.08 $ 11.78 $ 9.45 $ 8.72 $ 7.30
========== ========== ========== ========== ==========
TOTAL RETURN (b) ............................ (37.74%) 24.66% 8.37% 19.45% 5.04%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ........... $ 10,587 $ 14,935 $ 11,949 $ 6,891 $ 5,512
========== ========== ========== ========== ==========
Ratios of expenses to average net assets:
Before expense reimbursement
and waived fees (c) ................... 1.79% 1.88% 2.00% 2.56% 2.71%
After expense reimbursement
and waived fees (c) ................... 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 (d) ................... (0.89%) (0.88%) (1.39%) (1.80%) (2.27%)
After expense reimbursement
and waived fees (d) ................... (0.60%) (0.50%) (0.89%) (0.74%) (1.06%)
Portfolio turnover ........................ 56% 47% 49% 19% 68%
(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 years covered, which assumes dividends or capital
gains distributions, if any, are reinvested in shares of the Portfolio.
Returns shown do not reflect the taxes a shareholder would pay on
Portfolio distributions, if any, 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 loss 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.
28
NEW CENTURY INTERNATIONAL PORTFOLIO
FINANCIAL HIGHLIGHTS
==========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- --------------------------------------------------------------------------------------------------------------------------
YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year ........ $ 20.06 $ 15.06 $ 12.12 $ 10.07 $ 8.68
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income (loss) ............ 0.28 0.03 (0.06) (0.06) (0.05)
Net realized and unrealized gains
(losses) on investments .............. (9.47) 5.61 3.12 2.42 1.44
---------- ---------- ---------- ---------- ----------
Total from investment operations .......... (9.19) 5.64 3.06 2.36 1.39
---------- ---------- ---------- ---------- ----------
Less distributions:
Distributions from net
investment income ..................... (0.33) (0.06) -- -- --
Distributions from net realized gains ... (0.46) (0.58) (0.12) (0.31) --
---------- ---------- ---------- ---------- ----------
Total distributions ....................... (0.79) (0.64) (0.12) (0.31) --
---------- ---------- ---------- ---------- ----------
Proceeds from redemption fees collected ... 0.00(a) 0.00(a) 0.00(a) 0.00(a) --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year .............. $ 10.08 $ 20.06 $ 15.06 $ 12.12 $ 10.07
========== ========== ========== ========== ==========
TOTAL RETURN (b) ............................ (47.52%) 38.62% 25.35% 23.70% 16.01%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ........... $ 76,234 $ 147,416 $ 102,945 $ 45,014 $ 24,449
========== ========== ========== ========== ==========
Ratios of expenses to average net assets:
Before expense reimbursement
and waived fees (c) ................... 1.29% 1.35% 1.50% 1.55% 1.74%
After expense reimbursement
and waived fees (c) ................... 1.29%(e) 1.35%(e) 1.50% (e) 1.50% 1.50%
Ratios of net investment income (loss) to
average net assets:
Before expense reimbursement
and waived fees (d) ................... 1.66% 0.11% (0.46%) (0.72%) (0.88%)
After expense reimbursement
and waived fees (d) ................... 1.66%(e) 0.11%(e) (0.46%)(e) (0.67%) (0.64%)
Portfolio turnover ........................ 34% 10% 22% 3% 45%
(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 years covered, which assumes dividends or capital
gains distributions, if any, are reinvested in shares of the Portfolio.
Returns shown do not reflect the taxes a shareholder would pay on
Portfolio distributions, if any, 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 (loss) 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 ratios of expenses to average net assets would have been
1.28%, 1.32% and 1.41% and the ratios of net investment income (loss) to
average net assets would have been 1.68%, 0.14% and (0.37%) for the years
ended October 31, 2008, 2007 and 2006, respectively (Note 2).
See accompanying notes to financial statements.
29
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
FINANCIAL HIGHLIGHTS
==========================================================================================================================
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
- --------------------------------------------------------------------------------------------------------------------------
YEARS ENDED OCTOBER 31,
--------------------------------------------------------------------------
2008 2007 2006 2005 2004
- --------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year ........ $ 13.93 $ 13.03 $ 11.99 $ 11.46 $ 10.67
---------- ---------- ---------- ---------- ----------
Income (loss) from investment operations:
Net investment income ................... 0.27 0.18 0.21 0.15 0.14
Net realized and unrealized gains
(losses) on investments ............... (3.39) 1.34 1.23 0.87 0.83
---------- ---------- ---------- ---------- ----------
Total from investment operations .......... (3.12) 1.52 1.44 1.02 0.97
---------- ---------- ---------- ---------- ----------
Less distributions:
Distributions from net
investment income ..................... (0.36) (0.32) (0.33) (0.24) (0.18)
Distributions from net realized gains ... (0.31) (0.30) (0.07) (0.25) --
---------- ---------- ---------- ---------- ----------
Total distributions ....................... (0.67) (0.62) (0.40) (0.49) (0.18)
---------- ---------- ---------- ---------- ----------
Proceeds from redemption fees collected ... 0.00(a) 0.00(a) -- 0.00(a) --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year .............. $ 10.14 $ 13.93 $ 13.03 $ 11.99 $ 11.46
========== ========== ========== ========== ==========
TOTAL RETURN (b) ............................ (23.44%) 12.09% 12.32% 9.12% 9.12%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's) ........... $ 136,999 $ 128,117 $ 97,811 $ 76,560 $ 51,635
========== ========== ========== ========== ==========
Ratios of expenses to average net assets (c) 1.00% 1.06% 1.08% 1.06% 1.12%
Ratios of net investment income
to average net assets (d) ............... 1.46% 1.07% 1.43% 1.06% 1.04%
Portfolio turnover ........................ 17% 8% 12% 11% 11%
(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 years covered, which assumes dividends or capital
gains distributions, if any, are reinvested in shares of the Portfolio.
Returns shown do not reflect the taxes a shareholder would pay on
Portfolio distributions, if any, 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.
See accompanying notes to financial statements.
30
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2008
================================================================================
(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, 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), fixed income securities (domestic and foreign), or in a
composite of such securities. This Portfolio maintains at least 25% of its
assets in fixed income securities by selecting registered investment companies
that invest in such securities.
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), fixed income securities that seek appreciation such as high-yield,
lower rated debt securities (domestic or foreign), or other securities that are
selected by those investment companies to achieve growth.
31
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2008
================================================================================
The investment objective of New Century International Portfolio is to provide
capital growth, with a secondary objective to provide income, while managing
risk. This Portfolio seeks to achieve its objectives by investing primarily in
shares of registered investment companies that emphasize investments in equities
and fixed income securities (foreign, worldwide, emerging markets and domestic).
The investment objective of New Century Alternative Strategies Portfolio is to
provide long-term capital appreciation, with a secondary objective to earn
income, while managing risk. This Portfolio seeks to achieve its objectives by
investing primarily in shares of other registered investment companies that
emphasize alternative strategies.
The price of shares of each Portfolio fluctuates daily and there is no assurance
that the Portfolios will be successful in achieving their stated investment
objectives.
The following is a summary of significant accounting policies consistently
followed by the Portfolios in the preparation of their financial statements.
These policies are in conformity with accounting principles generally accepted
in the United States of America.
A. INVESTMENT VALUATION
--------------------
Investments in shares 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, exchange
traded funds and direct investments in securities 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 or included
in NASDAQ are generally valued at the last reported sales price, the closing
price or the 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 their
fair value as determined in good faith by the Advisor under the procedures
established by the Board of Trustees. Short-term investments are valued at
amortized cost which approximates market value.
32
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2008
================================================================================
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 is imposed on the exchange of shares
among the various Portfolios of the Trust, the redemption of shares representing
reinvested dividends or capital gain distributions, or on amounts representing
capital appreciation of shares. During the years ended October 31, 2008 and
2007, proceeds from redemption fees totaled $93 and $29, respectively, for New
Century Capital Portfolio, $43 and $56, respectively, for New Century Balanced
Portfolio, $29 and $0, respectively, for New Century Opportunistic Portfolio,
$1,655 and $201, respectively, for New Century International Portfolio and
$20,136 and $29, respectively, for New Century Alternative Strategies Portfolio.
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 New Century Balanced and New Century
Alternative Strategies Portfolios. Dividends from net investment income, if any,
are declared and paid annually to shareholders of 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. The tax character
of distributions paid during the years ended October 31, 2008 and 2007 was as
follows:
33
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2008
================================================================================
- --------------------------------------------------------------------------------------------
ORDINARY LONG-TERM TOTAL
YEAR ENDED INCOME CAPITAL GAINS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------
NEW CENTURY CAPITAL PORTFOLIO
October 31, 2008 ......................... $ 998,890 $ 5,981,681 $ 6,980,571
October 31, 2007 ......................... $ -- $ -- $ --
NEW CENTURY BALANCED PORTFOLIO
October 31, 2008 ......................... $ 1,727,951 $ 4,963,213 $ 6,691,164
October 31, 2007 ......................... $ 1,085,845 $ -- $ 1,085,845
NEW CENTURY OPPORTUNISTIC PORTFOLIO
October 31, 2008 ......................... $ 65,157 $ 464,131 $ 529,288
October 31, 2007 ......................... $ -- $ -- $ --
NEW CENTURY INTERNATIONAL PORTFOLIO
October 31, 2008 ......................... $ 2,455,459 $ 3,446,048 $ 5,901,507
October 31, 2007 ......................... $ 383,067 $ 4,023,814 $ 4,406,881
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO
October 31, 2008 ......................... $ 3,290,139 $ 2,850,232 $ 6,140,371
October 31, 2007 ......................... $ 2,646,336 $ 2,021,819 $ 4,668,155
- --------------------------------------------------------------------------------------------
The differences between the book and tax basis of distributions for the years
ended October 31, 2008 and 2007 are permanent in nature and are primarily due to
differing treatments of net short-term gains.
F. COST OF OPERATIONS
------------------
The Portfolios bear all costs of their operations other than expenses
specifically assumed by the Advisor. Expenses directly attributable to a
Portfolio are charged to that Portfolio; other expenses are allocated
proportionately among the Portfolios in relation to the net assets of each
Portfolio.
G. USE OF ESTIMATES
----------------
In preparing financial statements in accordance with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that affect the reported amount of assets and
liabilities, the disclosure of contingent assets and liabilities, and revenues
and expenses during the reporting period. Actual results could differ from those
estimates.
(2) INVESTMENT ADVISORY 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 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.
34
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2008
================================================================================
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. The total expenses do
not include a Portfolio's proportionate share of expenses of the underlying
investment companies in which such Portfolio invests. This contractual fee
waiver is in place until October 31, 2009. Accordingly, for the year ended
October 31, 2008, the Advisor waived $41,595 of advisory fees for 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, 2008, the Advisor
received $18,797 in recouped fees from New Century International Portfolio.
During the year ended October 31, 2008, the Advisor did not recoup any fees
waived or other operating expenses absorbed from 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 New Century Capital Portfolio.
As of October 31, 2008, the amounts available for reimbursement that have been
paid and/or waived by the Advisor on behalf of New Century Opportunistic
Portfolio are $146,312. As of October 31, 2008, the Advisor may recapture a
portion of such amounts no later than the dates as stated below:
- --------------------------------------------------------------------------------
OCTOBER 31, OCTOBER 31, OCTOBER 31,
2009 2010 2011
- --------------------------------------------------------------------------------
New Century Opportunistic Portfolio... $ 56,057 $ 48,660 $ 41,595
- --------------------------------------------------------------------------------
35
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2008
================================================================================
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 based on 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 $15,000
annual retainer, paid quarterly, and a per meeting fee of $2,500. The Portfolios
will also pay each Trustee who is not affiliated with the Advisor a $2,500
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, 2008, the Distributor received $211,564,
$161,708, $32,483, $213,137 and $144,634 from New Century Capital, Balanced,
Opportunistic, International and Alternative Strategies Portfolios,
respectively, pursuant to the Plan. As described below, these net amounts were
offset by the sales commissions and other compensation received by the
Distributor.
During the year ended October 31, 2008, the Distributor also received sales
commissions and other compensation of $96,259, $50,430, $3,410, $102,624 and
$219,912 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.
36
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2008
================================================================================
(4) INVESTMENT TRANSACTIONS
For the year ended October 31, 2008, 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 .......... $ 31,729,732 $ 18,310,928 $ 9,121,512 $ 41,917,439 $ 74,276,421
Proceeds from sales of investment securities $ 38,967,256 $ 24,588,654 $ 7,557,165 $ 40,075,504 $ 22,951,712
- ----------------------------------------------------------------------------------------------------------------------------
(5) TAX MATTERS
It is each Portfolio's policy to comply with the special provisions of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Portfolio so
qualifies and distributes at least 90% of its taxable net income, the Portfolio
(but not the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Portfolio's intention to declare as
dividends in each calendar year at least 98% of its net investment income
(earned during the calendar year) and 98% of its net realized capital gains
(earned during the twelve months ended October 31) plus undistributed amounts
from prior years.
For the year ended October 31, 2008, the following reclassifications were made
as a result of permanent differences between the financial statement and income
tax reporting requirements:
- --------------------------------------------------------------------------------
DECREASE IN
INCREASE IN ACCUMULATED
UNDISTRIBUTED NET REALIZED
NET INVESTMENT LOSSES ON
INCOME INVESTMENTS
- --------------------------------------------------------------------------------
New Century Capital Portfolio .................. $ 1,091,197 $(1,091,197)
New Century Balanced Portfolio ................. 251,956 (251,956)
New Century Opportunistic Portfolio ............ 153,223 (153,223)
New Century International Portfolio ............ 679,437 (679,437)
New Century Alternative Strategies Portfolio ... 2,557,050 (2,557,050)
- --------------------------------------------------------------------------------
These reclassifications did not change the net assets of the Portfolios.
37
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2008
================================================================================
The tax character of distributable earnings at October 31, 2008 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 ........ $ 191,871 $ 281,588 $ 325 $ 289,020 $ 1,239,164
Unrealized appreciation (depreciation) 298,002 (4,280,605) (887,296) (5,121,055) (21,778,914)
Capital loss carryforwards.. ......... (10,164,003) (4,071,137) (2,372,793) (7,905,671) (1,409,701)
------------ ------------ ------------ ------------ ------------
Total accumulated deficit ............ $ (9,674,130) $ (8,070,154) $ (3,259,764) $(12,737,706) $(21,949,451)
============ ============ ============ ============ ============
- ---------------------------------------------------------------------------------------------------------------------------
The following information is based upon the federal income tax cost of
investment securities as of October 31, 2008:
- ------------------------------------------------------------------------------------------------------------------------------------
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 ........ $ 96,701,752 $ 74,920,412 $ 16,281,512 $ 93,411,035 $ 159,013,590
============= ============= ============= ============= =============
Gross unrealized appreciation ............ $ 6,159,527 $ 1,975,261 $ 348,429 $ 4,638,779 $ 3,757,312
Gross unrealized depreciation ............ (5,861,525) (6,255,866) (1,235,725) (9,759,834) (25,536,226)
------------- ------------- ------------- ------------- -------------
Net unrealized appreciation (depreciation) $ 298,002 $ (4,280,605) $ (887,296) $ (5,121,055) $ (21,778,914)
============= ============= ============= ============= =============
- ------------------------------------------------------------------------------------------------------------------------------------
The difference between the federal income tax cost of portfolio investments and
the financial statement cost for New Century 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 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 New Century Alternative Strategies Portfolio, the
difference between tax basis undistributed ordinary income and undistributed net
investment income is due to the requirement to accrue income on certain
structured notes for tax purposes.
As of October 31, 2008, the Portfolios had the following capital loss
carryforwards for federal income tax purposes. These capital loss carryforwards
may be utilized in future years to offset net realized capital gains, if any,
prior to distributing such gains to shareholders.
- --------------------------------------------------------------------------------------------------
NEW
NEW NEW NEW NEW CENTURY
CENTURY CENTURY CENTURY CENTURY ALTERNATIVE
CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES
EXPIRES OCTOBER 31, PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------
2016 .................. $10,164,003 $4,071,137 $2,372,793 $7,905,671 $1,409,701
- --------------------------------------------------------------------------------------------------
38
NEW CENTURY PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
OCTOBER 31, 2008
================================================================================
The Financial Accounting Standards Board's ("FASB") Interpretation No. 48 ("FIN
48") "Accounting for Uncertainty in Income Taxes" 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 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 positions not deemed to meet the
"more-likely-than-not" threshold would be recorded as a tax benefit or expense
in the current year. As required by FIN?48, management has analyzed the Funds'
tax positions taken on Federal income tax returns for all open tax years (tax
years ended October 31, 2005 through October 31, 2008) and has concluded that no
provision for income tax is required in these financial statements.
(6) CONTINGENCIES AND COMMITMENTS
New Century indemnifies its officers and Trustees for certain liabilities that
might arise from the 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 PRONOUNCEMENT
FASB's Statement of Financial Accounting Standards ("SFAS") No. 157 "Fair Value
Measurements" 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 SFAS No. 157
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,
2008, each Portfolio does not believe the adoption of SFAS No. 157 will impact
the amounts reported in the financial statements; however, additional
disclosures will 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.
39
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 schedules 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, 2008, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the 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, 2008 by correspondence with
the custodian and broker. 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, 2008, the results of their
operations for the year then ended, the changes in their net assets for each of
the two years in the period then ended, and their financial highlights for the
each of the five years in the 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
December 23, 2008
40
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 YEARSBY TRUSTEE TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEES:
- ------------------------------------------------------------------------------------------------------------------------------------
*Douglas A. Biggar Since 1988 Trustee Managing Director, 5 None
40 William Street, Weston Financial Group, Inc.;
Suite 100 Vice President of Weston
Wellesley, MA 02481 Securities Corporation.
(age 61)
- ------------------------------------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEES:
- ------------------------------------------------------------------------------------------------------------------------------------
Stanley H. Cooper, Esq. Since 2008 Chairman Attorney in private practice. 5 None
One Ashford Lane Since 1988 Trustee
Andover, MA 01810
(age 61)
- ------------------------------------------------------------------------------------------------------------------------------------
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 78) (from 3/97 to 12/03).
- ------------------------------------------------------------------------------------------------------------------------------------
Michael A. Diorio, CPA Since 1988 Trustee Executive Director, Milford 5 Director,
11 Calvin Drive Housing Authority (since 10/04); Milford
Milford, MA 01757 Town Accountant, Town of National
(age 63) Canton, MA (from 3/01 to 10/04). Bank & Trust
since 1996
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICERS:
- ------------------------------------------------------------------------------------------------------------------------------------
Wayne M. Grzecki Since 1996 President President and Director Weston
40 William Street, Financial Group, Inc.; President
Suite 100 and Director of Weston Securities
Wellesley, MA 02481 Corporation.
(age 57)
- ------------------------------------------------------------------------------------------------------------------------------------
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 56)
- ------------------------------------------------------------------------------------------------------------------------------------
41
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 34) Secretary of Weston Securities Corporation.
- ------------------------------------------------------------------------------------------------------------
* Douglas A. Biggar is considered to be an "interested person" of the Trust
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.
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, 2008. During the
year ended October 31, 2008, New Century Capital Portfolio, New Century Balanced
Portfolio, New Century Opportunistic Portfolio, New Century International
Portfolio and New Century Alternative Strategies Portfolio paid long-term
capital gains distributions of $5,981,681, $4,963,213, $464,131, $3,446,048 and
$2,850,232, respectively. For the year ended October 31, 2008, 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. New Century
Capital Portfolio, New Century Balanced Portfolio, New Century Opportunistic
Portfolio, New Century International Portfolio and New Century Alternative
Strategies Portfolio intend to designate up to a maximum of $998,890,
$1,727,951, $65,157, $2,455,459 and $3,290,139, 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 2008 Form 1099-DIV.
42
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 mutual fund's ongoing costs 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 (May 1, 2008) and held for the entire period (October 31, 2008).
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 mutual 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. In addition, the
calculations do not reflect the Portfolios' proportionate shares of expenses of
the underlying investment companies in which the Portfolios invest.
43
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, 2008 October 31, 2008 During Period*
- -----------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 664.00 $5.54
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.55 $6.72
- -----------------------------------------------------------------------------------
* Expenses are equal to the New Century Capital Portfolio's annualized
expense ratio of 1.32% 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, 2008 October 31, 2008 During Period*
- -----------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 742.30 $6.15
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.15 $7.12
- -----------------------------------------------------------------------------------
* Expenses are equal to the New Century Balanced Portfolio's annualized
expense ratio of 1.40% for the period, multiplied by the average account
value over the period, multiplied by 184/365 (to reflect the one-half year
period).
NEW CENTURY OPPORTUNISTIC PORTFOLIO
- -----------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
May 1, 2008 October 31, 2008 During Period*
- -----------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 675.60 $6.34
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).
44
NEW CENTURY PORTFOLIOS
ABOUT YOUR PORTFOLIO'S EXPENSES (UNAUDITED) (CONTINUED)
================================================================================
NEW CENTURY INTERNATIONAL PORTFOLIO
- -----------------------------------------------------------------------------------
Beginning Ending
Account Value Account Value Expenses Paid
May 1, 2008 October 31, 2008 During Period*
- -----------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 588.80 $5.01
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,018.90 $6.36
- -----------------------------------------------------------------------------------
* Expenses are equal to the New Century International Portfolio's annualized
expense ratio of 1.25% 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, 2008 October 31, 2008 During Period*
- -----------------------------------------------------------------------------------
Based on Actual Fund Return $1,000.00 $ 784.20 $4.32
Based on Hypothetical 5% Return
(before expenses) $1,000.00 $1,020.37 $4.89
- -----------------------------------------------------------------------------------
* Expenses are equal to the New Century Alternative Strategies Portfolio's
annualized expense ratio of 0.96% for the period, multiplied by the
average account value over the period, multiplied by 184/365 (to reflect
the one-half year period).
45
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. At a regularly scheduled meeting held on September 4,
2008, the Board of Trustees (the "Board") of the Trust, approved the continuance
of the investment advisory agreements (collectively, the "Advisory Agreements")
for an additional one-year period through October 31, 2009 on behalf of each of
the Capital, Balanced, Opportunistic, International and Alternative Strategies
Portfolio and Weston. These approvals by the Board 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, and by a majority of the entire Board.
In reaching this decision, the Board took into consideration information
furnished to them throughout the year, as well as information prepared for their
review of the Agreements at the September 4, 2008, including legal advice of
independent counsel. The materials provided in advance of the meeting 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) a copy of the
Advisory Agreements; and (iv) performance information comparing each Portfolio
to its relevant benchmark index.
After considering the information reviewed at the meeting, the Board decided to
approve the renewal of the Advisory Agreements for a one-year period commencing
November 1, 2008 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.
In evaluating the various factors noted above, the Trustees gave different
weight to different items. In general, the Trustees determined it would be most
significant that the proposed Advisory Agreements would assure a continuity of
relationships to service each of the Portfolios. Further, the Trustees believe a
long-term relationship with a capable, conscientious advisor and personnel is in
the best interest of shareholders and such shareholders have benefited from such
continuity and Weston's strong commitment to compliance. The Trustees noted
specifically that management has been extremely responsive to any issues raised
by the Board. The Trustees also expressed their pleasure with the strong
relationship that has developed between the Board and the Trust's Chief
Compliance Officer. In addition, in evaluating the nature, quality and extent of
the services provided by Weston to the Portfolios in the past and the services
that are expected to continue in the future, the Trustees considered that Weston
is a quality firm with a reputation for integrity and honesty. The Board also
considered biographical information about each Portfolio's manager, the
administrative services performed by Weston, financial information regarding
Weston, the commitment to compliance, and the financial support Weston provides
to the Portfolios.
46
NEW CENTURY PORTFOLIOS
TRUSTEES APPROVAL OF INVESTMENT
ADVISORY AGREEMENTS (UNAUDITED) (CONTINUED)
================================================================================
Furthermore, the Board noted this was the third year since the change in control
of Weston, whereby it became a wholly-owned subsidiary of The Washington Trust
Company, concluding that the change had been beneficial to the Portfolios and
their shareholders. The Trustees also 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 Board reviewed information on the performance of each Portfolio for various
time periods along with performance information of a relevant securities index
or indexes. They also reviewed information provided by Morningstar, Inc. on each
Portfolio's risk-adjusted performance. In general, the Board noted that the
Portfolios had been performing competitively in the industry and were pleased
with their results, including their Morningstar ratings. The Board expressed
their satisfaction with the experience and performance of the two portfolio
managers. They also noted Weston's prudent investment management style.
The Board considered the investment advisory fees paid by each Portfolio
directly and in comparison to the fees paid by a peer group of funds within the
industry. The peer groups consist of similar funds with the same investment
style and Morningstar Category and similar asset size as each Portfolio. The
Board was advised that the investment advisory fees charged by the Portfolios
were within an acceptable range based on the average of the investment advisory
fees charged by other, similar funds within the industry. It was noted that the
Capital, Balanced, Opportunistic 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 Board also discussed Weston's expense
limitation agreements with each Portfolio. Pursuant to these expense limitation
agreements, Weston has agreed to waive fees and/or reimburse certain other
expenses so that the ratio of total operating expenses of each Portfolio was
limited to 1.50% of such Portfolio's average net assets. The Board concluded the
investment advisory fees charged were fair and reasonable. The Trustees also
noted that the breakpoints and expense limitation agreements demonstrated
Weston's commitment to the Trust and its shareholders.
The Board also reviewed the average total 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 most other funds within the
industry.
The Board considered the extent to which economies of scale would be realized as
the Portfolios grow and whether fee levels reflect these economies of scale for
the benefit of investors. The Board noted Weston's representation that certain
Portfolio expenses are relatively fixed and unrelated to asset size and that
Weston may enjoy some economies of scale as a Portfolio's assets grow. In
considering whether fee levels reflect economies of scale for the benefit of
shareholders, the Board reviewed each Portfolio's asset size, breakpoints for
those Portfolios, the Portfolios' total and net expense ratios and the expense
caps in place, and concluded that they reasonably reflect appropriate
recognition of any economies of scale.
47
NEW CENTURY PORTFOLIOS
TRUSTEES APPROVAL OF INVESTMENT
ADVISORY AGREEMENTS (UNAUDITED) (CONTINUED)
================================================================================
The Board noted that the total 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 Board reviewed and discussed other aspects of Weston, such as the
profitability of the investment advisor, the benefits each party received from
such a 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 (Rule 12b-1) plan. The Board 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 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 Board was
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.
48
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================================================================================
INVESTMENT ADVISOR AND ADMINISTRATOR
Weston Financial Group, Inc.
Wellesley, MA
DISTRIBUTOR
Weston Securities Corporation
Wellesley, MA
COUNSEL
Greenberg 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 fees, expenses 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 $53,000 and $50,000 with
respect to the registrant's fiscal years ended October 31, 2008 and
2007, 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 $10,000 with respect to the
registrant's fiscal years ended October 31, 2008 and 2007,
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, 2008 and 2007, aggregate
non-audit fees of $10,000 and $10,000, respectively, were billed by
the registrant's accountant for services rendered to the registrant.
No non-audit fees were billed in either of the last two fiscal years
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
--------------------------------------------------------------------
By (Signature and Title)* /s/ Wayne M. Grzecki
--------------------------------------------------
Wayne M. Grzecki, President
Date January 6, 2009
-----------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Wayne M. Grzecki
--------------------------------------------------
Wayne M. Grzecki, President
Date January 6, 2009
-----------------------------
By (Signature and Title)* /s/ Nicole M. Tremblay
--------------------------------------------------
Nicole M. Tremblay, Treasurer
Date January 6, 2009
-----------------------------
* Print the name and title of each signing officer under his or her signature.