-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EiuoLjri9HfvX95x0+Q4oeCR5ifGcmQdgm3Oza7rAaKT5b0kPLq880uzKWWrJyaE Nm/v3vUbCgxsR1Cn87A3DA== 0000912057-02-009227.txt : 20020415 0000912057-02-009227.hdr.sgml : 20020415 ACCESSION NUMBER: 0000912057-02-009227 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020308 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CDC NVEST FUNDS TRUST III CENTRAL INDEX KEY: 0000949683 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07345 FILM NUMBER: 02570978 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON STREET STREET 2: 6TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 617-449-2840 MAIL ADDRESS: STREET 1: 399 BOYLSTON STREET CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: NVEST FUNDS TRUST III DATE OF NAME CHANGE: 20000202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CDC NVEST FUNDS TRUST II CENTRAL INDEX KEY: 0000052136 IRS NUMBER: 041990692 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-00242 FILM NUMBER: 02570979 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST STREET 2: 4TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 617-449-2840 MAIL ADDRESS: STREET 1: 399 BOYLSTON STREET STREET 2: 6TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: TNE FUNDS TRUST DATE OF NAME CHANGE: 19940615 FORMER COMPANY: FORMER CONFORMED NAME: NVEST FUNDS TRUST II DATE OF NAME CHANGE: 20000202 FORMER COMPANY: FORMER CONFORMED NAME: NEW ENGLAND FUNDS TRUST II DATE OF NAME CHANGE: 19940615 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CDC NVEST FUNDS TRUST I CENTRAL INDEX KEY: 0000770540 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04323 FILM NUMBER: 02570980 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 8002831155 MAIL ADDRESS: STREET 1: 399 BOYLSTON STREET CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: NEW ENGLAND FUNDS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NVEST FUNDS TRUST I DATE OF NAME CHANGE: 20000202 FORMER COMPANY: FORMER CONFORMED NAME: NEW ENGLAND FUNDS TRUST I DATE OF NAME CHANGE: 19940614 N-30D 1 a2072188zn-30d.txt N-30D [CDC NVEST FUNDS (SM) LOGO] CDC IXIS Asset Management Distributors [GRAPHIC] CDC NVEST CAPITAL GROWTH FUND CDC NVEST LARGE CAP GROWTH FUND CDC NVEST TARGETED EQUITY FUND CDC NVEST GROWTH AND INCOME FUND CDC NVEST BALANCED FUND CDC NVEST LARGE CAP VALUE FUND CDC NVEST MID CAP GROWTH FUND CDC NVEST JURIKA & VOYLES RELATIVE VALUE FUND CDC NVEST SELECT FUND CDC NVEST JURIKA & VOYLES SMALL CAP GROWTH FUND CDC NVEST INTERNATIONAL EQUITY FUND See page 88 for supplement to the prospectus ANNUAL REPORT DECEMBER 31, 2001 TABLE OF CONTENTS ANNUAL REPORT DECEMBER 31, 2001 President's Letter 1 Economic Update 2 Portfolio Managers' Commentary and Performance CDC Nvest Capital Growth Fund 4 CDC Nvest Large Cap Growth Fund 6 CDC Nvest Targeted Equity Fund 8 CDC Nvest Growth and Income Fund 10 CDC Nvest Balanced Fund 12 CDC Nvest Large Cap Value Fund 14 CDC Nvest Mid Cap Growth Fund 16 CDC Nvest Jurika & Voyles Relative Value Fund 18 CDC Nvest Select Fund 20 CDC Nvest Jurika & Voyles Small Cap Growth Fund 22 CDC Nvest International Equity Fund 24 Risks of Investing in CDC Nvest Equity Funds 26 Financial Statements Schedules of Investments CDC Nvest Capital Growth Fund 28 CDC Nvest Large Cap Growth Fund 30 CDC Nvest Targeted Equity Fund 31 CDC Nvest Growth and Income Fund 32 CDC Nvest Balanced Fund 34 CDC Nvest Large Cap Value Fund 37 CDC Nvest Mid Cap Growth Fund 39 CDC Nvest Jurika & Voyles Relative Value Fund 41 CDC Nvest Select Fund 43 CDC Nvest Jurika & Voyles Small Cap Growth Fund 44 CDC Nvest International Equity Fund 46 Statements of Assets and Liabilities 48 Statements of Operations 50 Statements of Changes in Net Assets 52 Financial Highlights 56 Notes to Financial Statements 67 Report of Independent Accountants 83 Trustees' Information 84 Supplement to the Prospectus 88
PRESIDENT'S LETTER FEBRUARY 2002 [PHOTO OF JOHN T. HAILER] John T. Hailer President and Trustee CDC Nvest Funds Dear Shareholder: The past 12 months have been difficult for investors. September 11, the first recession in 10 years, and continuing market volatility have taken their toll on the financial markets. While 2002 looks promising to many observers, every investor should be prepared for volatility and shifting market trends. At CDC Nvest Funds, we recognize that today, more than ever, investors need to build a diversified portfolio. That's why we seek to provide a high level of diversification through our multi-manager approach. In 2001, we built on our commitment to diversification by introducing several new equity funds. We also strengthened some of our established funds with new, talented management teams, merged some funds and modified the objectives of others. This report gives you a chance to get to know a little more about the new managers, their strategies and unique perspectives. On the service side, we also worked to give you and your financial advisor easier access to information and to improve your understanding of your CDC Nvest Funds accounts. Confirmation and quarterly statements are now cleaner and easier to read. Our website, www.cdcnvestfunds.com, now includes extensive account access features, allowing you to perform such tasks as setting up automatic investment plans online. We believe the broad diversification and quality services we offer make it easier for you and your financial advisor to match our resources with your needs. And our affiliation with CDC IXIS Asset Management - one of the 25 largest investment management firms in the world, with $290 billion in assets as of the end of December - is helping us extend the depth and range of products we offer. The result is a family of mutual funds that spans a wide range of investment objectives and management styles, drawing on the talent of multiple firms. In addition to our commitment to providing the tools you may need to help achieve your financial goals, we believe strongly in the value your financial advisor can provide. As a professional trained in the financial markets, your advisor can make sure you understand the risks and potential benefits of different funds or strategies. But perhaps most important, as a dispassionate counselor, your advisor can give you the confidence you need to weather the difficult periods and capture the new opportunities that lie ahead, helping to keep your long-term financial plans on track. Sincerely yours, /s/ JOHN T. HAILER [SIDENOTE] WHILE 2002 LOOKS PROMISING TO MANY OBSERVERS, EVERY INVESTOR SHOULD BE PREPARED FOR VOLATILITY AND SHIFTING MARKET TRENDS. AT CDC NVEST FUNDS, WE RECOGNIZE THAT TODAY, MORE THAN EVER, INVESTORS NEED TO BUILD A DIVERSIFIED PORTFOLIO. 1 ECONOMIC UPDATE FEBRUARY 2002 In 2001: The longest economic expansion in U.S. history came to an end. The National Bureau of Economic Research announced in November that a recession officially began in March. Gross Domestic Product (GDP) numbers for the third quarter revealed a contraction of -1.3% - the first such decline in a decade. Reflecting the growing interdependence of world economies, for the first time in 30 years the economies of Europe, Japan and the U.S. all declined at the same time. EQUITIES Stock prices experienced their worst two-year stretch in nearly 30 years. The terrorist attacks of September 11 prompted a four-day halt in U.S. equities trading - the longest such stoppage since the great depression. When trading reopened on September 17, the Dow Jones Industrial Average staged its biggest one-day point drop in history, and then rebounded on hopes of a rapid economic recovery, rising 22% from the September 21 low. Trading volume on the New York Stock Exchange reached a record high for the year. Enron, one of the largest companies in the U.S., ended the year in bankruptcy. FIXED-INCOME Although bonds beat stocks for the second consecutive year, the market was extremely volatile. The Federal Reserve Board sliced the federal funds interest rate 11 times, bringing it down to 1.75% - a level not seen since the early '60s. Sales of 30-year Treasury bonds - a bond market bellweather for many years - - were suspended indefinitely, creating a short-lived spike in long-term bond prices. During the last quarter of the year, bond prices took their worst beating in more than a decade, amid expectations that the economy might come roaring back to life, setting off a new round of inflation. The difference in yield between low- and high-quality bonds was wider than it has been in ten years by the end of 2001. [CHART OF THE DOW JONES INDUSTRIAL AVERAGE IN 2001] A map of market prices and events 12/31/2000 10787 1/2/2001 10646 1/3/2001 10946 -1st Fed rate cut to 6.00% 1/4/2001 10912 1/5/2001 10662 1/8/2001 10621 1/9/2001 10573 1/10/2001 10604 1/11/2001 10610 1/12/2001 10525 1/16/2001 10653 1/17/2001 10584 1/18/2001 10678 1/19/2001 10588 1/22/2001 10578 -Bush takes presidential oath 1/23/2001 10650 1/24/2001 10647 1/25/2001 10730 1/26/2001 10660 1/29/2001 10702 1/30/2001 10881 1/31/2001 10887 -2nd Fed rate cut to 5.50% 2/1/2001 10984 2/2/2001 10864 2/5/2001 10966 2/6/2001 10957 2/7/2001 10947 2/8/2001 10881 2/9/2001 10781 2/12/2001 10947 2/13/2001 10903 2/14/2001 10795 2/15/2001 10891 2/16/2001 10800 2/20/2001 10731 2/21/2001 10527 2/22/2001 10527 2/23/2001 10442 2/26/2001 10643 2/27/2001 10637 2/28/2001 10495 3/1/2001 10450 3/2/2001 10466 3/5/2001 10562 3/6/2001 10591 3/7/2001 10730 3/8/2001 10858 3/9/2001 10645 3/12/2001 10208 3/13/2001 10291 3/14/2001 9973 3/15/2001 10031 3/16/2001 9823 3/19/2001 9959 3/20/2001 9721 -3rd Fed rate cut to 5.00% 3/21/2001 9487 3/22/2001 9389 3/23/2001 9505 3/26/2001 9688 3/27/2001 9948 3/28/2001 9785 3/29/2001 9799 3/30/2001 9879 4/2/2001 9778 4/3/2001 9486 4/4/2001 9515 4/5/2001 9918 4/6/2001 9791 4/9/2001 9845 4/10/2001 10103 4/11/2001 10013 4/12/2001 10127 4/16/2001 10159 4/17/2001 10217 4/18/2001 10616 -Surprise 4th Fed cut to 4.50% 4/19/2001 10694 4/20/2001 10580 4/23/2001 10532 4/24/2001 10454 4/25/2001 10625 4/26/2001 10692 4/27/2001 10810 4/30/2001 10735 5/1/2001 10898 5/2/2001 10877 5/3/2001 10797 5/4/2001 10951 5/7/2001 10935 5/8/2001 10884 5/9/2001 10867 5/10/2001 10910 5/11/2001 10821 5/14/2001 10877 5/15/2001 10873 -5th Fed rate cut to 4.00% 5/16/2001 11216 5/17/2001 11249 5/18/2001 11302 5/21/2001 11338 -Dow's high for the year 5/22/2001 11257 5/23/2001 11106 5/24/2001 11122 5/25/2001 11005 5/29/2001 11039 5/30/2001 10873 5/31/2001 10912 6/1/2001 10990 6/4/2001 11062 6/5/2001 11176 6/6/2001 11070 6/7/2001 11091 6/8/2001 10977 -Bush tax-act passes 6/11/2001 10922 6/12/2001 10948 6/13/2001 10872 6/14/2001 10690 6/15/2001 10624 6/18/2001 10645 6/19/2001 10597 6/20/2001 10647 6/21/2001 10715 6/22/2001 10605 6/25/2001 10504 6/26/2001 10472 6/27/2001 10435 -6th Fed rate cut to 3.75% 6/28/2001 10566 6/29/2001 10502 7/2/2001 10594 7/3/2001 10571 7/5/2001 10480 7/6/2001 10253 7/9/2001 10299 7/10/2001 10176 7/11/2001 10241 7/12/2001 10479 7/13/2001 10539 7/16/2001 10472 7/17/2001 10606 7/18/2001 10570 7/19/2001 10610 7/20/2001 10577 7/23/2001 10424 7/24/2001 10241 7/25/2001 10406 7/26/2001 10456 7/27/2001 10417 7/30/2001 10402 7/31/2001 10523 8/1/2001 10510 8/2/2001 10551 8/3/2001 10513 8/6/2001 10401 8/7/2001 10459 8/8/2001 10294 8/9/2001 10299 8/10/2001 10416 8/13/2001 10416 8/14/2001 10412 8/15/2001 10346 8/16/2001 10393 8/17/2001 10241 8/20/2001 10320 8/21/2001 10174 -7th Fed rate cut to 3.50% 8/22/2001 10277 8/23/2001 10229 8/24/2001 10423 8/27/2001 10382 8/28/2001 10222 8/29/2001 10091 8/30/2001 9920 8/31/2001 9950 9/4/2001 9997 9/5/2001 10033 9/6/2001 9841 9/7/2001 9606 9/10/2001 9606 -Terrorist attacks 9/11 9/17/2001 8921 -Market reopens; 8th Fed cut to 3.00%, Dow Falls 7.1% 9/18/2001 8903 9/19/2001 8759 9/20/2001 8376 9/21/2001 8236 -Low for the year; worst weekly loss in 61 years 9/24/2001 8604 9/25/2001 8660 9/26/2001 8567 9/27/2001 8681 9/28/2001 8848 10/1/2001 8837 10/2/2001 8951 -9th Fed rate cuts to 2.50% 10/3/2001 9124 10/4/2001 9061 10/5/2001 9120 10/8/2001 9068 10/9/2001 9052 10/10/2001 9241 10/11/2001 9410 10/12/2001 9344 10/15/2001 9348 10/16/2001 9384 10/17/2001 9233 10/18/2001 9163 10/19/2001 9204 10/22/2001 9377 10/23/2001 9340 10/24/2001 9346 10/25/2001 9463 10/26/2001 9545 10/29/2001 9270 10/30/2001 9122 10/31/2001 9075 11/1/2001 9264 -Treasury stops selling 30-year bonds 11/2/2001 9324 11/5/2001 9441 11/6/2001 9591 -10th Fed rate cut to 2.00% 11/7/2001 9554 11/8/2001 9588 11/9/2001 9608 11/12/2001 9554 11/13/2001 9751 11/14/2001 9824 11/15/2001 9872 11/16/2001 9867 11/19/2001 9976 11/20/2001 9901 11/21/2001 9835 11/23/2001 9960 11/26/2001 9983 11/27/2001 9873 11/28/2001 9712 11/29/2001 9829 11/30/2001 9852 12/3/2001 9764 -Enron files for bankruptcy protection 12/4/2001 9894 12/5/2001 10114 12/6/2001 10099 12/7/2001 10049 12/10/2001 9921 12/11/2001 9888 -11th Fed rate cut to 1.75%; below 2% for first time in 40 years 12/12/2001 9895 12/13/2001 9766 12/14/2001 9811 12/17/2001 9892 12/18/2001 9998 12/19/2001 10070 12/20/2001 9985 12/21/2001 10035 12/24/2001 10035 12/26/2001 10088 12/27/2001 10131 12/28/2001 10137 12/31/2001 10022 -OPEC announces production cuts
THE DOW JONES INDUSTRIAL AVERAGE IS AN UNMANAGED INDEX COMPOSED OF 30 OF AMERICA'S LARGEST COMPANIES. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN AN INDEX. SOURCE: BLOOMBERG, L.P. 2 RECOVERY Yet, despite all the difficulties, RESILIENT is a word being used to describe the current state of the U.S. economy and its citizens. Consumer spending, which represents two-thirds of the economy, showed signs of improving. Although the unemployment rate reached 5.7% in November - the highest rate in six years - the Conference Board also announced a 14.2% increase in its Consumer Confidence Index in November, its first gain in six months. Auto sales increased due to zero percent financing incentives. Lower mortgage rates lifted housing starts, new home sales and refinancing activities. The productivity levels for November increased at the fastest pace in more than a year. Manufacturing orders for defense goods and durables rose. And inflation remained subdued at 1.5%. PROSPECTS Expansions are a normal state for the economy, and most recessions are brief. The average length of a recession is 10 to 16 months, which would put us into the middle of 2002. Many economists predict that a combination of the Fed easing, a legislative stimulus package and low energy prices will lead to a faster recovery. Although many of the ingredients for economic recovery were coming together late last year, there are indications that it may be a different type of recovery than we've seen before. In the past, consumer spending usually provided the stimulus that got the economy moving again. However, this time consumers continued to spend at a relatively high rate during most of last year. What's more, the downturn was led by a collapse in capital spending by businesses. In the wake of sluggish or declining profits, it is difficult to expect corporate America to lead a brisk revival in the economy. On the other hand, inventories are low, and manufacturers in some sectors may need to hire back workers. As usual, there are many unanswered questions. How low will the Federal Reserve take interest rates? Can a fiscal stimulus package pass into law in time to be effective? Will oil prices stabilize near their recent, low levels? Will unemployment continue to rise? Will there be additional terrorist attacks on the U.S.? How long will the war on terrorism last and what will be the cost, in both psychological and financial terms? The answers to these questions will further test the resiliency of the economy. Most investment counselors caution investors to set realistic goals, diversify their investments and prepare for a recovery in the markets and the economy, although at a slower pace than in the exuberant '90s. [CHART OF REAL GDP] A Decade of Change - -0.5 3 2.7 4 2.7 3.6 4.4 4.3 4.1 4.1 0.5
THE CHART SHOWS THE AVERAGE ANNUAL CHANGE IN REAL GROSS DOMESTIC PRODUCT EACH YEAR SINCE 1991 - ONE OF THE LONGEST PERIODS IN HISTORY WITHOUT A RECESSION. THE CHART INCLUDES A CONTRACTION OF -1.3% IN THE THIRD QUARTER OF 2001 AND AN ESTIMATED +0.2% FOURTH-QUARTER INCREASE ANNOUNCED IN JANUARY, FOR TOTAL CHANGE OF 0.5% ESTIMATED FOR THE FULL YEAR. CALCULATED BY THE U.S. BUREAU OF LABOR STATISTICS, REAL GDP IS A MEASURE OF THE TOTAL MARKET VALUE OF ALL FINAL GOODS AND SERVICES PRODUCED IN THE U.S. IN A GIVEN YEAR, ADJUSTED FOR INFLATION. 3 CDC NVEST CAPITAL GROWTH FUND PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital STRATEGY: Invests primarily in common stock of U.S. large- and mid-cap companies in any industry INCEPTION DATE: August 3, 1992 MANAGER: Gerald H. Scriver WESTPEAK GLOBAL ADVISORS, L.P. SYMBOLS: Class A NEFCX Class B NECBX Class C NECGX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2001) Class A $11.93 Class B 10.61 Class C 10.60
MANAGEMENT DISCUSSION For the 12 months ended December 31, 2001, CDC Nvest Capital Growth Fund's Class A shares had a total return of -20.46% at net asset value, including $0.03 in reinvested distributions. For the same period, the return on the Russell 1000 Growth Index was -20.42%, while the average return on the funds in Morningstar's Large Growth category was -23.60%. VALUE STYLE DID BETTER THAN GROWTH IN 2001 Investing today is a far cry from the exuberant markets of the late 1990s. Then investors let their enthusiasm for companies with exciting new technologies guide their decisions, paying scant attention to fundamentals, including financial strength and earnings. In 2001 investors overlooked bona fide causes for enthusiasm, such as companies with innovative products, new management or other changes that might lead to short-term earnings surprises. They avoided growth-oriented sectors, including technology, and began to search for stocks that appeared to be substantially undervalued. These trends were particularly evident in the aftermath of the terrorist attacks of September 11. However, in November, investors began to show renewed interest in companies with better-than-expected earnings. MANAGER SHIFTS EMPHASIS TO QUALITY TECH STOCKS Early in the year, we emphasized attractively priced stocks of companies with the potential for steady earnings growth in a sluggish economy. As 2001 progressed, we shifted to a more neutral valuation stance, focusing on stocks with strong growth prospects that were selling at reasonable prices. This resulted in an increase in CDC Nvest Capital Growth Fund's technology investments, which appeared to be attractively valued after months of declining prices. Our focus was primarily on high-quality technology companies because we believed the market would rotate toward these issues, attracted by low valuations and prospects for improved growth. We continued this approach even after September 11, but tempered it somewhat, shifting out of companies likely to do best in stronger economic environments, into consumer staples, which include food and other basics. In an uncertain environment, we expected investors to gravitate toward steady-growth companies offering products consumers tend to use regardless of the economic backdrop. INDIVIDUAL STOCK SELECTIONS HAD MOST IMPACT Positives included microchip manufacturer Intel. The company's share price began to rise in the second half of the year after it reported earnings that, although below last year's level, were significantly ahead of analysts' forecasts. Positive earnings in the first quarter helped the stock price of electronics manufacturer Amphenol rise in the second quarter. We sold it at a profit in May when our outlook for the stock changed. Similarly, electronics manufacturer Vishay Intertechnology did well for CDC Nvest Capital Growth Fund early in the year when it announced that 2000 was an "outstanding year." We sold the stock at a profit this spring. Disappointments included Qwest Communications, which suffered in the continued downdraft of the telecommunications industry throughout 2001. Communications equipment firm Scientific-Atlanta hurt performance during the few months it was held, as the company sustained earnings disappointments and diminished prospects. Drug manufacturer Ivax also experienced a setback in September, when increased competition reduced expected sales of its generic cancer drug. OUT-OF-FAVOR GROWTH STOCKS ATTRACTIVE IN 2002 We expect the pendulum to swing back from value to growth going forward, as investors focus once again on corporate earnings as the main factor driving stock prices. Growth stocks have declined significantly, and we believe prices of many stocks fully reflect last year's pessimism. We believe a gradually improving outlook for the economy will make investors look with greater favor on companies able to post positive earnings surprises, which would provide a positive environment for CDC Nvest Capital Growth Fund. 4 INVESTMENT RESULTS THROUGH DECEMBER 31, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Capital Growth Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. [CHART OF GROWTH OF $10,000 INVESTMENT IN CLASS A SHARES]
NAV MSC RUSSELL 1000 8/3/1992 10000 9425 10000 9904 9335 10000 10120 9538 10113.79 10728 10111 10266.25 11344 10692 10711.94 12/31/1992 11490 10830 10819.17 11668 10997 10695.16 11240 10594 10523.74 11684 11012 10726.53 10941 10312 10296.89 11587 10921 10657.23 6/30/1993 11838 11157 10560.22 11563 10898 10371.29 12023 11332 10797.29 12290 11583 10717.78 12362 11652 11015.39 12031 11340 10941.72 12/31/1993 12398 11685 11129.92 12787 12052 11388.14 12454 11738 11179.52 11789 11111 10639 11772 11096 10687.87 11724 11050 10849.81 6/30/1994 11220 10575 10528.85 11651 10981 10888.47 12146 11448 11494.64 11943 11256 11339.27 12463 11746 11605.52 11919 11233 11233.5 12/31/1994 12195 11494 11421.7 12292 11585 11666.06 12779 12045 12154.79 13201 12442 12509.3 13405 12634 12782.85 13778 12986 13227.81 6/30/1995 14695 13851 13738.38 15353 14470 14309.3 15629 14731 14324.93 16157 15228 14985.24 15900 14986 14995.62 16286 15349 15578.45 12/31/1995 15945 15028 15667.76 16240 15306 16191.85 16664 15706 16487.97 16508 15559 16509.13 17331 16334 16943.5 17851 16824 17535.54 6/30/1996 17608 16596 17559.36 16395 15453 16530.56 17019 16040 16957.22 18431 17372 18192.01 18422 17363 18301.63 19340 18228 19675.75 12/31/1996 18664 17590 19290.53 19719 18585 20643.53 19177 18074 20503.75 17743 16723 19394.18 18509 17444 20682.01 20136 18978 22174.54 6/30/1997 20698 19507 23061.99 22151 20877 25101.64 21133 19918 23632.43 21771 20519 24795.37 20892 19691 23878.91 21439 20206 24893.16 12/31/1997 21879 20621 25172.03 22055 20786 25924.72 23568 22213 27874.83 24621 23205 28986.04 25059 23619 29387.16 24456 23050 28553.27 6/30/1998 25729 24249 30302.04 25487 24022 30101.46 21440 20208 25583.96 22727 21420 27549.25 24387 22985 29763.42 25852 24365 32027.38 12/31/1998 28241 26617 34915.29 29662 27956 36965.45 27995 26385 35276.75 28610 26965 37134.63 29170 27492 37182.11 28637 26990 36039.41 6/30/1999 30153 28419 38563.79 29483 27788 37338.18 29743 28033 37948.26 29309 27624 37151.09 31351 29548 39956.65 32282 30426 42112.46 12/31/1999 35226 33200 46492.49 33238 31327 44312.53 34625 32634 46478.78 37399 35249 49805.53 36290 34203 47435.56 34595 32606 45046.88 6/30/2000 36875 34755 48460.89 35920 33855 46440.68 38729 36502 50645.58 35151 33130 45854.77 33932 31981 43685.03 29355 27667 37245.56 12/31/2000 28349 26719 36067.05 29706 27998 38558.77 25673 24197 32012.57 23279 21940 28529.03 26427 24907 32137.19 26125 24623 31664.23 6/30/2001 25716 24238 30930.92 24359 22958 30157.89 22398 21110 27691.73 20098 18942 24926.96 21022 19813 26234.73 22851 21537 28754.99 12/31/2001 22549 21253 28700.95
The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. Index values are calculated from 8/31/92. AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2001
- -------------------------------------------------------------------------------- CLASS A (INCEPTION 8/3/92) 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -20.46% 3.86% 9.02% With Maximum Sales Charge(2) -25.04 2.63 8.34 - -------------------------------------------------------------------------------- CLASS B (Inception 9/13/93) 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -20.99% 3.00% 7.11% With CDSC(3) -24.93 2.80 7.11 - -------------------------------------------------------------------------------- CLASS C (Inception 12/30/94) 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -21.06% 2.99% 8.29% With Maximum Sales Charge and CDSC(3) -22.65 2.78 8.13 - -------------------------------------------------------------------------------- SINCE SINCE SINCE CLASS A CLASS B CLASS C COMPARATIVE PERFORMANCE 1 YEAR 5 YEARS INCEPTION(7) INCEPTION(7) INCEPTION(7) Russell 1000 Growth(4) -20.42% 8.27% 11.96% 12.68% 14.07% Morningstar Large Growth Fund Avg.(5) -23.60 8.10 12.16 10.40 12.60 Lipper Multi-Cap Growth Funds Avg.(6) -26.06 8.61 12.28 10.87 13.01
The table and graph do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares. PORTFOLIO FACTS
% OF NET ASSETS AS OF FUND COMPOSITION 12/31/01 6/30/01 - -------------------------------------------------------------------------------- COMMON STOCKS 99.5 99.9 - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 0.5 0.1 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/01 6/30/01 - -------------------------------------------------------------------------------- MICROSOFT CORP. 6.2 6.2 - -------------------------------------------------------------------------------- PFIZER, INC. 6.1 5.7 - -------------------------------------------------------------------------------- INTEL CORP. 6.0 4.4 - -------------------------------------------------------------------------------- GENERAL ELECTRIC CO. 5.9 9.1 - -------------------------------------------------------------------------------- INTERNATIONAL BUSINESS MACHINES CORP. 4.2 3.2 - -------------------------------------------------------------------------------- HOME DEPOT 3.8 1.7 - -------------------------------------------------------------------------------- CISCO SYSTEMS, INC. 3.5 3.0 - -------------------------------------------------------------------------------- SCHERING-PLOUGH CORP. 2.9 1.1 - -------------------------------------------------------------------------------- WAL-MART STORES, INC. 2.6 1.5 - -------------------------------------------------------------------------------- QUALCOMM, INC. 2.5 -- % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/01 6/30/01 - -------------------------------------------------------------------------------- DRUGS 17.9 12.7 - -------------------------------------------------------------------------------- COMPUTER SOFTWARE 14.6 13.8 - -------------------------------------------------------------------------------- FINANCIAL SERVICES 11.3 10.6 - -------------------------------------------------------------------------------- SEMICONDUCTORS 7.4 11.0 - -------------------------------------------------------------------------------- DRUGS & HEALTHCARE 5.4 4.8
Portfolio holdings and asset allocations will vary. See page 26 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) Russell 1000 Growth Index is an unmanaged index measuring the performance of the largest 1000 U.S. companies within the Russell 3000. (5) Morningstar Large Growth Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (6) Lipper Multi-Cap Growth Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc. (7) The since-inception performance comparisons shown for each Class of fund shares are calculated as follows: Class A from 8/31/92; Class B from 9/30/93; Class C from 12/31/94. 5 CDC NVEST LARGE CAP GROWTH FUND PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital STRATEGY: Focuses on common stock of large-cap companies that VNSM believes have better than average long-term growth potential INCEPTION DATE: September 1, 1998 MANAGER: Brian A. Grove, Christopher T. McMillin, William R. Berger VAUGHAN, NELSON, SCARBOROUGH & MCCULLOUGH, L.P. (VNSM) SYMBOLS: Class A NRLAX Class B NRLBX Class C NRLCX Class Y NRLYX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2001) Class A $13.84 Class B 13.62 Class C 13.62 Class Y 13.93
Effective with this report, the fund's performance will be reported on a calendar year basis in June and December. MANAGEMENT DISCUSSION Based on the net asset value of Class A shares, CDC Nvest Large Cap Growth Fund's total return for the period September 30 through December 31, 2001 was 11.70%. For the same period, the fund's new benchmark, the Russell 1000 Growth Index, was 15.14%, while the average return on the funds in Morningstar's Large Cap Growth category was 14.98%. When CDC Nvest Kobrick Growth Fund was reorganized into CDC Nvest Large Cap Growth Fund, its benchmark was changed to the Russell 1000 Growth Index to better reflect the fund's investment style and universe under its new manager, VNSM. VNSM'S STYLE: FOCUS ON A FEW QUALITY GROWTH STOCKS Our management style is to focus on relatively few stocks, emphasizing high-quality growth companies with strong histories of profitability and the potential to increase earnings over the next three to five years. We prefer to maintain a portfolio of 40 to 45 companies that, in addition to meeting those criteria, also hold leadership positions in their industries. We put our effort into stock selection rather than sector weightings, but we are careful not to overcommit to any one sector. The market volatility in 2001 was compounded by the tragic events of September 11. Aggressive rate cutting by the Federal Reserve Board and a reduction in federal income taxes were not enough to prevent the U.S. economy from contracting 1.3% in the third quarter - the first such shrinkage in a decade. As earnings declined in many growth sectors, growth stocks in general did not perform well. We tried to take advantage of volatile stock prices to add to the stocks we favor. MEDICAL TECH SELECTIONS DID WELL, ENERGY AND HIGH TECH MIXED Several of the healthcare stocks we selected performed well. Demand for healthcare services has been relatively resistant to economic cycles, and the sector has shown an ability to weather downturns successfully. Biotech leader Genzyme performed well from the time it came into the portfolio. Baxter (which is no longer in the portfolio), and medical-device-maker Medtronic also enhanced performance. However, shares of drug-maker Merck fell when the company warned that upcoming earnings would fall short of investor expectations. Energy was a challenging sector in the closing months of the year. Although Enron was never in the fund's portfolio, both Dynegy and El Paso were hurt by the psychological fallout affecting this energy giant. We sold Dynegy, but we are retaining El Paso in the belief that the company can recover. The fund also enjoyed some appreciation in Mitchell Energy as a result of Devon Energy's bid to acquire the company. In technology, our purchase of Intel was a positive. RECOVERY PROJECTED FOR MID TO LATE 2002 While it's impossible to pinpoint when growth might resume, we are positioning the fund for an economic recovery in mid to late 2002. Until then, we believe the economy will continue to struggle. Cuts in taxes and lower interest rates may help over time, and low energy prices will benefit many businesses if they persist, but the economic slowdown is not related to interest rates or to taxes. Instead, we believe it reflects inadequate demand and excess capacity in many industries. We believe it will take several months for those imbalances to be corrected and for corporations to resume hiring. An end to the current wave of layoffs would be an important first step in shoring up consumer confidence, a key component of any potential recovery. 6 INVESTMENT RESULTS THROUGH DECEMBER 31, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Large Cap Growth Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. [CHART OF GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES]
NAV MSC S&P 500 RUSSELL 1000 GROWTH 9/1/1998 10,000 9,425 10000 10,000 10,320 9,727 10,000.00 10,000 11,130 10,490 10813.61 10803.72 12,100 11,404 11469.49 11625.50 12/31/1998 13,762 12,971 12129.69 12673.77 15,763 14,856 12636.90 13417.95 14,572 13,735 12244.16 12804.98 15,473 14,583 12734.43 13479.36 15,713 14,809 13227.16 13496.60 14,742 13,895 12914.72 13081.81 6/30/1999 15,463 14,574 13631.56 13998.13 15,153 14,281 13205.92 13553.25 14,983 14,121 13140.59 13774.70 15,413 14,527 12780.35 13485.33 16,213 15,281 13589.10 14503.71 17,773 16,751 13868.34 15286.25 12/31/1999 21,274 20,051 14682.05 16876.14 20,284 19,118 13944.30 16084.84 22,544 21,248 13680.34 16871.16 24,075 22,691 15018.67 18078.72 21,584 20,343 14566.82 17218.46 20,674 19,485 14267.96 16351.40 6/30/2000 21,444 20,211 14619.71 17590.64 20,874 19,674 14391.14 16857.33 22,925 21,606 15285.04 18383.65 21,674 20,428 14478.09 16644.65 20,744 19,551 14416.88 15857.06 18,544 17,477 13280.26 13519.63 12/31/2000 19,316 18,206 13345.26 13091.84 19,898 18,754 13818.73 13996.30 17,604 16,592 12558.72 11620.12 15,656 14,755 11763.12 10355.65 16,937 15,963 12677.24 11665.36 16,948 15,973 12762.17 11493.68 6/30/2001 16,183 15,253 12451.56 11227.50 16,151 15,222 12328.98 10946.90 14,924 14,065 11557.08 10051.72 13,341 12,574 10622.78 9048.14 13,911 13,111 10826.29 9522.85 15,128 14,258 11655.59 10437.67 12/31/2001 14,902 14,045 11760.87 10418.05
The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. Index values are calculated from 9/30/98. * The fund's performance history includes periods from the predecessor fund.
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2001 - ---------------------------------------------------------------------------------------------------- CLASS A (Inception 9/1/98) 3 MONTHS(8) 1 YEAR(8) SINCE INCEPTION(8) Net Asset Value(1) 11.70% -22.85% 12.71% With Maximum Sales Charge(2) 5.25 -27.27 10.72 - ---------------------------------------------------------------------------------------------------- CLASS B (Inception 10/29/99) 3 MONTHS(8) 1 YEAR(8) SINCE INCEPTION(8) Net Asset Value(1) 11.46% -23.44% -4.49% With CDSC(3) 6.46 -27.27 -5.72 - ---------------------------------------------------------------------------------------------------- CLASS C (Inception 10/29/99) 3 MONTHS(8) 1 YEAR(8) SINCE INCEPTION(8) Net Asset Value(1) 11.46% -23.44% -4.49% With Maximum Sales Charge and CDSC(3) 9.38 -24.97 -4.92 - ---------------------------------------------------------------------------------------------------- CLASS Y (Inception 10/29/99) 3 MONTHS(8) 1 YEAR(8) SINCE INCEPTION(8) Net Asset Value(1) 11.80% -22.65% -3.53% - ---------------------------------------------------------------------------------------------------- SINCE SINCE CLASS A CLASS B, C, Y COMPARATIVE PERFORMANCE 3 MONTHS 1 YEAR INCEPTION(9) INCEPTION(9) S&P 500 Index(4) 10.71% -11.87% 5.12% -6.45% Russell 1000 Growth(5) 15.14 -20.42 1.27 -14.16 Morningstar Large Cap Growth Fund Avg.(6) 14.98 -23.60 4.46 -10.71 Lipper Multi-Cap Growth Funds Avg.(7) 18.84 -26.06 6.99 -9.11
The table and graph do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares. PORTFOLIO FACTS
% OF NET ASSETS AS OF FUND COMPOSITION 12/31/01 9/30/01 - -------------------------------------------------------------------------------- COMMON STOCKS 99.8 99.6 - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 0.2 0.4 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/01 9/30/01 - -------------------------------------------------------------------------------- TYCO INTERNATIONAL, LTD. 5.2 6.0 - -------------------------------------------------------------------------------- MICROSOFT CORP. 5.0 3.9 - -------------------------------------------------------------------------------- AMERICAN INTERNATIONAL GROUP, INC. 5.0 -- - -------------------------------------------------------------------------------- AMERICAN HOME PRODUCTS CORP. 4.5 4.4 - -------------------------------------------------------------------------------- SCHERING-PLOUGH CORP. 3.9 2.5 - -------------------------------------------------------------------------------- INTERNATIONAL BUSINESS MACHINES CORP. 3.8 3.0 - -------------------------------------------------------------------------------- ORACLE CORP. 3.7 3.4 - -------------------------------------------------------------------------------- EMC CORP. 3.6 2.3 - -------------------------------------------------------------------------------- THE INTERPUBLIC GROUP OF COMPANIES, INC. 3.6 2.6 - -------------------------------------------------------------------------------- WAL-MART STORES, INC. 3.6 -- % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/01 9/30/01 - -------------------------------------------------------------------------------- DRUGS & HEALTHCARE 18.8 12.8 - -------------------------------------------------------------------------------- COMPUTER SOFTWARE & SERVICES 8.7 7.4 - -------------------------------------------------------------------------------- COMPUTER HARDWARE 8.6 6.3 - -------------------------------------------------------------------------------- MANUFACTURING-DIVERSIFIED 7.3 8.0 - -------------------------------------------------------------------------------- RETAIL 6.5 6.3
Portfolio holdings and asset allocations will vary. See page 26 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. Class Y shares are available only to certain institutional investors. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) S&P 500 Index is an unmanaged index of U.S. common stock performance. (5) Russell 1000 Growth Index is an unmanaged index measuring the performance of the largest 1000 U.S. companies within the Russell 3000. (6) Morningstar Large Cap Growth Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (7) Lipper Multi-Cap Growth Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc. (8) Fund performance has been increased by expense waivers, without which performance would have been lower. (9) The since-inception performance comparisons shown for each Class of fund shares are calculated as follows: Class A from 9/30/98; Class B, C and Y from 10/31/99. 7 CDC NVEST TARGETED EQUITY FUND PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital STRATEGY: Invests primarily in a focused portfolio of companies with above-average growth potential. INCEPTION DATE: November 27, 1968 MANAGER: G. Kenneth Heebner CAPITAL GROWTH MANAGEMENT LIMITED PARTNERSHIP SYMBOLS: Class A NEFGX Class B NEBGX Class C NEGCX Class Y NEGYX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2001) Class A $7.81 Class B 7.47 Class C 7.47 Class Y 7.85
MANAGEMENT DISCUSSION In 2001, the total return on Class A shares of CDC Nvest Targeted Equity Fund was -16.20% at net asset value, including $0.03 in reinvested distributions. Standard & Poor's 500 Index, the fund's benchmark, had a return of -11.87% for the same period, while the funds in Morningstar's Large Value category had an average return of -5.30%. CDC Nvest Targeted Equity Fund was formerly named CDC Nvest Growth Fund. EXCESS CAPACITY IN TECH AND TELECOM TRIGGERED 2001 RECESSION The Federal Reserve Board cut short-term interest rates 11 times during the year in an unsuccessful effort to bring the economy out of a downward spiral toward recession. The economic slowdown began with severe overcapacity in the technology and telecommunications industries. The terrorist attacks of September 11 deepened the uncertainty that characterized most of 2001. And the airline industry, which had been in a long trough, was hard hit, along with the travel and tourism industries. Consumer confidence did not begin to show signs of recovery until the very end of the year. FUND SHIFTED FROM DEFENSIVE TO MODERATELY AGGRESSIVE CDC Nvest Targeted Equity Fund began the year in a defensive position, with industry concentrations in real estate investment trusts (REITs), food and beverage, healthcare and energy. We gradually eliminated these positions during the first half of the year, investing the proceeds in technology, retail and some stocks of financial companies. This shift to more aggressive equities was in anticipation of an economic recovery, which we expected to begin during the latter half of 2001. We believe the events of September 11 postponed the start of the recovery, which we now expect to begin early in 2002. As a result, we continued to increase exposure to economically sensitive sectors. Specifically, in the third quarter, we increased the fund's retail holdings and initiated new positions in the home-building industry, which was the fund's largest sector at year end. While home building is not generally considered a growth industry, we were impressed by some national companies - including D.R. Horton and Centex - that were growing significant market share and strong profits. Professional management and access to lower-cost capital have given these companies advantages of scale and diversification to help them compete for increasingly scarce parcels of developable land in major metropolitan areas. We believe the share price of the major national homebuilders we selected does not yet adequately reflect the companies' growth prospects over the next several years, and that they offer significant opportunities for capital appreciation. SELECTED RETAILERS DID WELL; OTHERS WERE PURCHASED TOO SOON On the positive side, home-improvement retailer Lowe's and electronic specialist Best Buy posted gains despite investors' apprehension about the impact of the economic slowdown. Although both companies experienced slower growth, their earnings came in above estimates. In hindsight, our investments in retailers J.C. Penny and Nike, computer-printer manufacturer Lexmark, and mining and metals company Inco all proved to be premature. Cigna, a leader in healthcare insurance, was hurt by cost overruns. CONSUMER CONFIDENCE TURNING UP We believe the economy will respond positively to what we regard as the strongest combination of monetary and fiscal stimuli in the post-World War II period. We also think that September 11 may come to be viewed as the low point for this cycle, in terms of consumer confidence. We believe consumers will lead the recovery, and that the anti-terrorism measures implemented by the federal government should provide the security needed to help the nation regain confidence and get back to work. 8 INVESTMENT RESULTS THROUGH DECEMBER 31, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Targeted Equity Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index, and would incur transaction costs and other expenses even if they could. [CHART OF GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES]
NAV MSC S&P500 12/31/1991 10000 9425 10000 9509 8962 9813.65 9598 9046 9940.75 9151 8625 9747.42 9366 8827 10033.61 9392 8852 10082.79 6/30/1992 9008 8490 9932.79 9008 8490 10338.57 8651 8153 10126.98 8794 8288 10245.98 8901 8389 10281.38 9196 8667 10631.46 12/31/1992 9337 8800 10761.94 9522 8975 10851.91 9189 8660 10999.82 9624 9071 11231.9 9494 8948 10960.42 9726 9167 11253.61 6/30/1993 9716 9158 11286.58 9661 9105 11241.17 9939 9367 11667.7 10115 9533 11578.21 10504 9900 11817.72 10254 9664 11705.08 12/31/1993 10391 9793 11846.6 10998 10365 12249.35 10610 10000 11916.88 9973 9399 11397.34 9983 9409 11543.5 10172 9587 11732.94 6/30/1994 9796 9233 11445.34 10137 9554 11821.17 10397 9799 12305.83 10057 9478 12004.91 10097 9516 12274.61 9516 8969 11827.59 12/31/1994 9658 9103 12003.03 9429 8887 12314.31 9887 9318 12794.22 10191 9605 13171.74 10823 10201 13559.6 11476 10816 14101.55 6/30/1995 12318 11609 14429.09 12874 12133 14907.6 12939 12195 14945.08 13175 12417 15575.8 12904 12162 15520.12 13520 12742 16201.43 12/31/1995 13338 12571 16513.5 13805 13012 17075.29 14248 13429 17234.14 14248 13429 17399.76 13982 13178 17656.29 14197 13381 18112.18 6/30/1996 14045 13238 18180.73 13224 12463 17377.51 13350 12582 17744.06 14266 13446 18743.34 15105 14236 19259.73 16281 15345 20715.51 12/31/1996 16122 15195 20305.04 17578 16567 21573.61 17286 16292 21742.69 16552 15600 20849.32 17494 16488 22093.98 18354 17298 23439.15 6/30/1997 19172 18069 24490.93 21029 19820 26438.37 19948 18801 24957.01 20970 19764 26323.52 20147 18989 25444.38 19918 18773 26622.27 12/31/1997 19918 18772 27079.48 20243 19079 27379 22022 20756 29353.71 23438 22090 30857.15 24338 22938 31167.31 23955 22577 30631.61 6/30/1998 25237 23785 31876.12 25371 23912 31536.4 20530 19349 26983.99 20677 19488 28705.12 22758 21450 31040.61 24653 23235 32923.29 12/31/1998 26571 25043 34818.4 28372 26740 36274.38 26337 24822 35147 26968 25418 36554.32 26875 25329 37968.72 26009 24514 37071.86 6/30/1999 27927 26321 39129.57 27272 25704 37907.75 27225 25660 37720.21 25612 24139 36686.14 26594 25065 39007.68 27600 26013 39809.23 12/31/1999 30605 28845 42145.02 28212 26590 40027.28 30716 28950 39269.58 31050 29264 43111.28 29881 28163 41814.24 28685 27036 40956.34 6/30/2000 28796 27140 41966.04 27878 26275 41309.94 29198 27520 43875.88 28142 26524 41559.53 28201 26579 41383.82 27937 26330 38121.14 12/31/2000 29211 27531 38307.71 26621 25090 39666.84 25778 24296 36049.95 25123 23678 33766.18 26215 24708 36390.16 25685 24208 36633.96 6/30/2001 25859 24372 35742.34 25106 23663 35390.49 23038 21713 33174.73 20812 19616 30492.83 20938 19734 31076.99 23163 21831 33457.5 12/31/2001 24479 23072 33759.72
The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains.
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2001 - ----------------------------------------------------------------------------------- CLASS A (INCEPTION 11/27/68) 1 YEAR 5 YEARS 10 YEARS 20 YEARS Net Asset Value(1) -16.20% 8.71% 9.37% 15.43% With Maximum Sales Charge(2) -21.01 7.43 8.72 15.08 - ----------------------------------------------------------------------------------- CLASS B (Inception 2/28/97) 1 YEAR SINCE INCEPTION Net Asset Value(1) -16.81% 6.65% With CDSC(3) -20.95 6.46 - ----------------------------------------------------------------------------------- CLASS C (Inception 9/1/98) 1 YEAR SINCE INCEPTION Net Asset Value(1) -16.81% 2.96% With Maximum Sales Charge and CDSC(3) -18.45 2.65 - ----------------------------------------------------------------------------------- CLASS Y (Inception 6/30/99) 1 YEAR SINCE INCEPTION Net Asset Value(1) -15.86% -4.81% - ----------------------------------------------------------------------------------- SINCE SINCE SINCE COMPARATIVE 1 5 10 20 CLASS B CLASS C CLASS Y PERFORMANCE YEAR YEARS YEARS YEARS INCEPTION(7) INCEPTION(7) INCEPTION(7) S&P 500 Index(4) -11.87% 10.70% 12.94% 15.24% 9.53% 5.12% -5.73% Morningstar Large Value Fund Average(5) -5.30 8.80 11.80 -- 8.00 7.21 -1.30 Lipper Multi Cap Value Average(6) -1.78 10.51 13.28 14.15 9.82 10.16 1.95
The table and graph do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares. PORTFOLIO FACTS
% OF NET ASSETS AS OF FUND COMPOSITION 12/31/01 6/30/01 - -------------------------------------------------------------------------------- COMMON STOCKS 99.7 99.7 - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 0.3 0.3 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/01 6/30/01 - -------------------------------------------------------------------------------- CENTEX CORP. 6.3 -- - -------------------------------------------------------------------------------- LOWE'S COMPANIES, INC. 6.2 4.7 - -------------------------------------------------------------------------------- TENET HEALTHCARE 5.9 -- - -------------------------------------------------------------------------------- KB HOME 5.9 -- - -------------------------------------------------------------------------------- LENNAR CORP. 5.7 -- - -------------------------------------------------------------------------------- WASHINGTON MUTUAL, INC. 5.6 6.1 - -------------------------------------------------------------------------------- BEST BUY CO., INC. 5.5 4.7 - -------------------------------------------------------------------------------- J.C. PENNEY COMPANY, INC. 5.4 -- - -------------------------------------------------------------------------------- GOLDEN WEST FINANCIAL CORP. 5.2 -- - -------------------------------------------------------------------------------- HOUSEHOLD INTERNATIONAL, INC. 5.1 5.3 % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/01 6/30/01 - -------------------------------------------------------------------------------- HOUSING & BUILDING MATERIAL 27.5 -- - -------------------------------------------------------------------------------- RETAIL 22.4 17.8 - -------------------------------------------------------------------------------- HEALTHCARE-SERVICES 11.8 8.3 - -------------------------------------------------------------------------------- SAVINGS & LOAN 10.8 6.1 - -------------------------------------------------------------------------------- ELECTRONIC & COMMUNICATION EQUIPMENT 9.8 8.9
Portfolio holdings and asset allocations will vary. See page 26 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and return will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those noted. Class Y shares are available to certain institutional investors only. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) S&P 500 Index is an unmanaged index of U.S. common stock performance. (5) Morningstar Large Value Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. The Morningstar Large Blend Average does not track a 20-year performance average. (6) Lipper Multi Cap Value Funds Average is the average performance without sales charges of mutual funds with a similar current investment style or objective as calculated by Lipper Inc. (7) The since-inception performance comparisons shown for each Class of fund shares are calculated as follows: Class B from 2/28/97; Class C from 9/30/98 and Class Y from 6/30/99. 9 CDC NVEST GROWTH AND INCOME FUND PORTFOLIO PROFILE OBJECTIVE: Seeks long-term capital growth and income STRATEGY: Invests primarily in common stock of large and mid-cap companies in any industry INCEPTION DATE: May 6, 1931 MANAGER: Gerald H. Scriver WESTPEAK GLOBAL ADVISORS, L.P. SYMBOLS: Class A NEFOX Class B NEGBX Class C NECOX Class Y NEOYX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2001) Class A $11.78 Class B 11.37 Class C 11.36 Class Y 11.93
Beginning in 2002, this fund will distribute any dividends annually rather than semiannually. MANAGEMENT DISCUSSION The total return on Class A shares of CDC Nvest Growth and Income Fund was - -14.58% at net asset value for the 12 months ended December 31, 2001. For the same period, the fund's benchmark, Standard & Poor's 500 Index, returned - -11.87%, while the average return on the funds in Morningstar's Large Value category was -5.30%. MARKET FAVORED VALUE-STYLE INVESTORS IN 2001 The investment style that worked best in 2001 was value oriented - investors seeking GOOD stocks at GREAT prices - rather than growth oriented - GREAT stocks at GOOD prices. Investors tended to ignore stocks of companies with attractive new products, new management or other positive changes that might lead to short-term earnings surprises. Value is generally regarded as a more conservative investment style, and it was even more popular in the wake of the terrible events of September 11. This was in stark contrast to the late '90s, when investors were inspired by the promise of new technology and innovation in telecommunications, and tended to overlook such fundamentals as track records, market breadth and financial strength. However, as 2001 drew to a close, the market seemed to be shifting back toward a growth style, emphasizing companies that may be able to surpass analysts' earnings expectations. FUND SHIFTED EMPHASIS TO GROWTH, ANTICIPATING RECOVERY The fund's investment policies allow us to shift the bias of CDC Nvest Growth and Income Fund toward value or growth as the market shifts, pursuing the best returns available at any given time. At the beginning of 2001, we were strongly biased toward value, but we gradually moved toward a more neutral stance during the first half of the year, looking for stocks offering a combination of growth potential and reasonable valuations. That led us to increase the fund's technology holdings. We focused on high-quality companies in anticipation of an improving economy, and because we expected the market to begin to recognize improving valuations in this sector. We continued to pursue this strategy after the terrorist attacks on September 11, but we also balanced the portfolio with stocks in the consumer-staples sector. Given the volatile environment, we believed the market would favor companies with steady earnings prospects, and we shifted from a neutral to a growth orientation. POSITIVE RESULTS FROM SOME STOCKS ECLIPSED BY DISAPPOINTMENTS Microchip manufacturer Intel fared well late in 2001, when the company reported better-than-expected earnings. After earnings disappointments late in 2000, semiconductor maker KLA Tencor became one of the few technology companies that consistently reported better year-over-year earnings and beat expectations in 2001. Sears Roebuck was a positive throughout the year, as forecasts for slowing economic growth led investors to favor retailers catering to price-conscious consumers. One disappointment was communications-equipment manufacturer Scientific-Atlanta, which reported lower-than-expected earnings and declining prospects. The slackening economy hurt media and entertainment firms, including fund investment Walt Disney, which fell most sharply after September 11, when Americans' reluctance to fly reduced attendance at the company's theme parks. Global Crossing, which the fund held for only a few months, declined in value along with telecommunications in general during an exceptionally bad year for that industry. EARNINGS GROWTH LIKELY TO DRIVE PRICES IN 2002 We expect corporate earnings rather than market sentiment to continue to drive stock prices. We believe the prices of many stocks currently reflect the worst possible scenario, setting the stage for a substantial rally, and we expect growth stocks to return to market leadership. As always, we will remain nimble in an effort to provide superior long-term results for CDC Nvest Growth and Income Fund shareholders. 10 INVESTMENT RESULTS THROUGH DECEMBER 31, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Growth and Income Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. [CHART OF GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES]
NAV MSC S&P500 12/31/1991 10000 9425 10000 9932 9361 9813.65 10068 9489 9940.75 9906 9336 9747.42 10230 9642 10033.61 10238 9650 10082.79 6/30/1992 10094 9514 9932.79 10514 9910 10338.57 10266 9676 10126.98 10377 9780 10245.98 10463 9862 10281.38 10799 10178 10631.46 12/31/1992 10928 10300 10761.94 10991 10359 10851.91 11152 10511 10999.82 11349 10697 11231.9 11097 10459 10960.42 11331 10680 11253.61 6/30/1993 11359 10706 11286.58 11305 10655 11241.17 11748 11072 11667.7 11630 10962 11578.21 11839 11158 11817.72 11667 10996 11705.08 12/31/1993 11797 11119 11846.6 12225 11522 12249.35 11862 11180 11916.88 11367 10713 11397.34 11461 10802 11543.5 11685 11013 11732.94 6/30/1994 11423 10767 11445.34 11762 11086 11821.17 12260 11555 12305.83 11969 11281 12004.91 12158 11459 12274.61 11742 11067 11827.59 12/31/1994 11914 11229 12003.03 12212 11510 12314.31 12615 11890 12794.22 12966 12220 13171.74 13361 12593 13559.6 13795 13001 14101.55 6/30/1995 14117 13305 14429.09 14610 13770 14907.6 14746 13898 14945.08 15393 14508 15575.8 15242 14365 15520.12 15751 14845 16201.43 12/31/1995 16098 15172 16513.5 16602 15647 17075.29 16691 15731 17234.14 16775 15810 17399.76 16831 15863 17656.29 17089 16106 18112.18 6/30/1996 16722 15761 18180.73 15891 14977 17377.51 16273 15337 17744.06 17105 16122 18743.34 17632 16618 19259.73 19199 18095 20715.51 12/31/1996 18868 17783 20305.04 19806 18667 21573.61 20051 18898 21742.69 19179 18076 20849.32 20188 19027 22093.98 21483 20247 23439.15 6/30/1997 22535 21240 24490.93 23956 22578 26438.37 23273 21935 24957.01 24710 23289 26323.52 23626 22268 25444.38 24645 23228 26622.27 12/31/1997 25176 23729 27079.48 25324 23868 27379 27358 25785 29353.71 28900 27238 30857.15 29047 27377 31167.31 28654 27006 30631.61 6/30/1998 29851 28134 31876.12 29392 27702 31536.4 24947 23513 26983.99 26189 24683 28705.12 28081 26466 31040.61 29355 27667 32923.29 12/31/1998 31200 29406 34818.4 32104 30258 36274.38 31332 29530 35147 31765 29938 36554.32 33648 31713 37968.72 33497 31571 37071.86 6/30/1999 34543 32556 39129.57 33523 31595 37907.75 33070 31168 37720.21 31729 29905 36686.14 33000 31103 39007.68 33096 31193 39809.23 12/31/1999 34148 32184 42145.02 32366 30505 40027.28 31274 29476 39269.58 33814 31869 43111.28 33257 31345 41814.24 32232 30379 40956.34 6/30/2000 32656 30778 41966.04 32455 30589 41309.94 34634 32643 43875.88 33050 31150 41559.53 33142 31236 41383.82 31168 29376 38121.14 12/31/2000 31650 29830 38307.71 31673 29852 39666.84 29791 28078 36049.95 28116 26499 33766.18 30411 28662 36390.16 30457 28706 36633.96 6/30/2001 29401 27711 35742.34 28391 26759 35390.49 26647 25115 33174.73 24421 23017 30492.83 25293 23839 31076.99 27083 25526 33457.5 12/31/2001 27037 25483 33759.72
The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains.
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2001 - ---------------------------------------------------------------------------------------------------- CLASS A (INCEPTION 5/6/31) 1 YEAR 5 YEARS 10 YEARS Net Asset Value(1) -14.58% 7.46% 10.46% With Maximum Sales Charge(2) -19.48 6.19 9.80 - ---------------------------------------------------------------------------------------------------- CLASS B (Inception 9/13/93) 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -15.15% 6.67% 9.87% With CDSC(3) -19.39 6.42 9.87 - ---------------------------------------------------------------------------------------------------- CLASS C (Inception 5/1/95) 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -15.10% 6.69% 10.37% With Maximum Sales Charge and CDSC(3) -16.82 6.47 10.21 - ---------------------------------------------------------------------------------------------------- CLASS Y (Inception 11/18/98) 1 YEAR SINCE INCEPTION Net Asset Value(1) -13.99% -1.66% - ---------------------------------------------------------------------------------------------------- SINCE SINCE SINCE CLASS B CLASS C CLASS Y COMPARATIVE PERFORMANCE 1 YEAR 5 YEARS 10 YEARS INCEPT.(7) INCEPT.(7) INCEPT.(7) S&P 500 Index(4) -11.87% 10.70% 12.94% 13.85% 14.18% 0.82% Morningstar Large Value Funds Avg.(5) -5.30 8.80 11.80 11.70 12.31 3.30 Lipper Multi-Cap Value Funds Average(6) -1.78 10.51 13.28 12.90 12.89 6.29
The table and graph do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares. PORTFOLIO FACTS
% OF NET ASSETS AS OF FUND COMPOSITION 12/31/01 6/30/01 - -------------------------------------------------------------------------------- COMMON STOCKS 99.1 98.9 - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 0.9 1.1 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/01 6/30/01 - -------------------------------------------------------------------------------- MICROSOFT CORP. 4.9 1.8 - -------------------------------------------------------------------------------- PFIZER, INC. 4.3 3.7 - -------------------------------------------------------------------------------- INTEL CORP. 4.0 -- - -------------------------------------------------------------------------------- CISCO SYSTEMS, INC. 3.1 -- - -------------------------------------------------------------------------------- PROCTER & GAMBLE CO. 3.1 -- - -------------------------------------------------------------------------------- BANK AMERICA CORP. 3.0 1.8 - -------------------------------------------------------------------------------- VERIZON COMMUNICATIONS, INC. 3.0 3.3 - -------------------------------------------------------------------------------- MERCK & CO. 3.0 2.7 - -------------------------------------------------------------------------------- BRISTOL-MYERS SQUIBB CO. 2.7 1.6 - -------------------------------------------------------------------------------- PEPSICO, INC. 2.6 1.9 % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/01 6/30/01 - -------------------------------------------------------------------------------- DRUGS 10.7 8.3 - -------------------------------------------------------------------------------- BANKS 8.2 7.9 - -------------------------------------------------------------------------------- SOFTWARE 7.8 2.5 - -------------------------------------------------------------------------------- FINANCIAL SERVICES 6.5 3.6 - -------------------------------------------------------------------------------- SEMICONDUCTORS 5.6 3.5
Portfolio holdings and asset allocations will vary. See page 26 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and return will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. Class Y shares are available to certain institutional investors only. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) S&P 500 Index is an unmanaged index of U.S. common stock performance. (5) Morningstar Large Value Funds Average is an average performance of funds with similar investment objectives as calculated without sales charges by Morningstar, Inc. (6) Lipper Multi-Cap Value Funds Average is the average performance of mutual funds with a similar current investment style or objective as calculated without sales charges by Lipper Inc. (7) The since-inception performance comparisons shown for each Class of fund shares are calculated as follows: Class B from 9/30/93; Class C from 5/31/95 and Class Y from 11/30/98. 11 CDC NVEST BALANCED FUND PORTFOLIO PROFILE OBJECTIVE: Seeks a reasonable long-term investment return from a combination of capital appreciation and moderate current income STRATEGY: Invests principally in common stocks of quality, large- to mid-cap companies in any industry, and in investment-grade bonds INCEPTION DATE: November 27, 1968 MANAGERS: Nicholas E. Moore, Guy Elliffe, Eric Hull JURIKA & VOYLES, L.P. Mark Baribeau, Pamela Czekanski, Richard Skaggs, John Hyll, Kurt Wagner LOOMIS, SAYLES & COMPANY, L.P. SYMBOLS: Class A NEFBX Class B NEBBX Class C NEBCX Class Y NEBYX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2001) Class A $9.57 Class B 9.59 Class C 9.54 Class Y 9.45
MANAGEMENT DISCUSSION For the 12 months ended December 31, 2001, the total return on Class A shares of CDC Nvest Balanced Fund was -9.07% at net asset value, including $0.16 in reinvested distributions. The fund is made up of three portfolios - growth stocks, value stocks and bonds - each with its own management team. To provide a balanced model as a benchmark, we combine 65% of the S&P 500 Index and 35% of Lehman Brothers Government/Corporate Bond Index. The return on the combined index was -4.74% in 2001, while the average return on the funds in Morningstar's Domestic Hybrid category was -3.90%. ECONOMY, INTEREST RATES HARD ON STOCKS, POSITIVE FOR BONDS Following months of debate, official acknowledgement of a recession came only recently, after the events of September 11 and before most people were aware that the threat had become a reality. At first, the Federal Reserve Board's aggressive interest rate cuts seemed to have a positive impact, but hopes for an early recovery were one of the casualties of the terrorist attacks. A stream of disappointing earnings announcements also took a toll on many stock sectors, but declining interest rates were generally beneficial for bond investors. GROWTH STOCKS HARDER HIT THAN VALUE IN 2001 Growth stocks generally proved disappointing. The fund's position in technology, although relatively small, hurt performance in the first three quarters. These holdings rebounded in the fourth quarter, but the net effect this year was negative. Meanwhile, consumer confidence held up unexpectedly well for most of the year, and consumer-cyclical stocks, including retailers, contributed to performance. Strong performers included Best Buy in consumer electronics, Lowe's in home-building and do-it-yourself, and online auction giant e-Bay. Value stocks generally outperformed growth stocks this year. The value portion of the fund focused on non-cyclical companies with relatively stable revenues and strong competitive positions. For example, positive earnings surprises boosted OM Group, a specialty chemical firm, and Hormel, a company with solid growth prospects in the usually stable food-processing sector. First Data, which processes credit card transactions, enjoyed earnings growth despite the challenging economy. However, two companies with disappointing results were energy giant Enron, which we sold before its steepest price decline, and Palm, a leading manufacturer of handheld computing devices. MANAGER SHIFTS FROM HIGH-QUALITY TO HIGH-YIELD Overall this year, CDC Nvest Balanced Fund's bond portfolio made a positive contribution to performance. When government bonds appeared overvalued, the managers shifted emphasis to mortgage-backed securities, which performed well, and to corporate bonds, including some high-yield, lower-rated issues. High-yield bonds lagged for much of the period, but strengthened toward year end as economic concerns began to wane. Disappointments included Global Crossing, whose fiber-optic network was underutilized, and Delta and Northwest airlines bonds, which were downgraded along with other airlines following the September 11 terrorist attacks. However, the decision to sell longer-maturity bonds of Ford and to buy the company's shorter-term issues was beneficial. By the end of the year, almost two-thirds of the bond portfolio was invested in corporate issues, in anticipation of a possible economic recovery. FUND'S EQUITY MANAGERS SPLIT ON OUTLOOK CDC Nvest Balanced Fund's growth managers expect growth stocks to return to favor in 2002, thanks to improving corporate fundamentals and prospects for an economic recovery. Other positive factors include low interest rates and energy prices, lower taxes and more reasonable growth stock valuations compared with a year ago. The value managers are more cautious, concerned that persistent corporate cost-cutting will lead to further layoffs. That scenario would undermine consumer confidence and delay any recovery for several months. Eventually, however, the value managers believe that low interest rates will work to stimulate the economy. 12 INVESTMENT RESULTS THROUGH DECEMBER 31, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Balanced Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. [CHART OF GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES]
NAV MSC S&P500/LB 12/31/1991 10000 9425 10000 10197 9611 9826.97 10433 9834 9927.89 10314 9721 9783.29 10532 9927 9989.86 10622 10011 10089.14 6/30/1992 10454 9853 10043.42 10784 10164 10398.93 10524 9919 10294.25 10734 10117 10422.26 10704 10089 10387.86 11096 10458 10612.44 12/31/1992 11393 10738 10760.61 11628 10960 10901 11710 11036 11077.01 11904 11219 11241.16 11760 11084 11095.02 11996 11306 11283.49 6/31/93 12110 11414 11394.99 12131 11433 11391.4 12544 11823 11762.44 12575 11852 11718.81 12690 11960 11891.63 12638 11911 11770.83 12/31/1993 13009 12261 11881.01 13502 12726 12205.72 13159 12403 11897.3 12600 11875 11458.08 12675 11946 11519.55 12718 11987 11635.26 6/30/1994 12552 11830 11438.92 12889 12148 11763.14 13225 12465 12079.84 12910 12168 11822.44 12900 12158 11993.29 12506 11787 11695.55 12/31/1994 12661 11933 11836 12819 12082 12115.79 13223 12463 12523.07 13544 12765 12796.67 13907 13107 13107.86 14405 13577 13640.1 6/30/1995 14716 13870 13888.76 14978 14117 14182.41 15058 14192 14264.24 15363 14480 14720.43 15303 14423 14751.73 15782 14874 15271.36 12/31/1995 15993 15073 15544.05 16334 15395 15939.16 16407 15464 15939.72 16413 15469 16007.58 16462 15515 16142.1 16621 15666 16430.56 6/30/1996 16665 15707 16537.3 16332 15393 16026.22 16628 15672 16252.85 17313 16318 16986.27 17826 16801 17434.03 18850 17766 18470.8 12/31/1996 18730 17653 18148.19 19053 17957 18978.63 19187 18084 19098.99 18609 17539 18459.28 18960 17870 19340.08 19717 18583 20260.9 6/30/1997 20495 19317 21004.87 21759 20507 22426.31 21120 19906 21404.58 21792 20539 22374.3 21389 20159 21887.18 21732 20483 22680.96 12/31/1997 22015 20749 23034.56 22138 20865 23305.84 22988 21666 24578.21 23584 22228 25572.39 23600 22243 25801.71 23289 21950 25513.09 6/30/1998 23359 22016 26379 22844 21530 26162.7 20814 19617 23314.31 21855 20599 24598.17 22805 21494 26074.29 23338 21996 27333.18 12/31/1998 23815 22446 28579.54 23674 22313 29568.17 23040 21716 28693.03 23469 22119 29636.8 24602 23188 30570.76 24390 22987 29926.98 6/30/1999 24687 23267 31246.3 24028 22646 30436.04 23333 21991 30309.5 22583 21284 29689.56 23070 21744 31213.72 22944 21625 31731.45 12/31/1999 22922 21604 33214.07 22255 20975 31835.94 21157 19941 31416.37 21940 20678 33998.61 21308 20083 33126.39 20952 19748 32563.38 6/30/2000 21454 20221 33341 21474 20239 32978.75 22774 21465 34733.11 22295 21013 33250.86 22036 20769 33175.75 20878 19678 31162.35 12/31/2000 21451 20218 31409.59 21612 20369 32402.21 20770 19575 30119.54 19867 18725 28665.77 20492 19313 30321 20431 19256 30517.83 6/30/2001 20054 18901 29970.45 19912 18767 29909.65 19182 18079 28558.06 17764 16742 26879.17 18232 17183 27437.98 19127 18027 28866.52 12/31/2001 19506 18384 29006.85
The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains.
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2001 - --------------------------------------------------------------------------------------------------------------- CLASS A (INCEPTION 11/27/68) 1 YEAR 5 YEARS 10 YEARS Net Asset Value(1) -9.07% 0.81% 6.91% With Maximum Sales Charge(2) -14.28 -0.37 6.28 - --------------------------------------------------------------------------------------------------------------- CLASS B (Inception 9/13/93) 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -9.72% 0.05% 4.65% With CDSC(3) -14.21 -0.23 4.65 - --------------------------------------------------------------------------------------------------------------- CLASS C (Inception 12/30/94) 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -9.77% 0.03% 5.52% With Maximum Sales Charge and CDSC(3) -11.58 -0.17 5.38 - --------------------------------------------------------------------------------------------------------------- CLASS Y (Inception 3/8/94) 1 YEAR7 5 YEARS(7) SINCE INCEPTION(7) Net Asset Value(1) -8.55% 1.29% 5.73% - --------------------------------------------------------------------------------------------------------------- SINCE SINCE SINCE CLASS B CLASS C CLASS Y COMPARATIVE PERFORMANCE 1 YEAR 5 YEARS 10 YEARS INCEPT.(8) INCEPT.(8) INCEPT.(8) S&P 500/Lehman Gov't./Corp. Blend(4) -4.74% 9.53% 10.95% 11.31% 13.26% 12.37% Morningstar Domestic Hybrid Fund Avg.(5) -3.90 7.00 9.00 8.70 10.50 9.50 Lipper Balanced Funds Average(6) -4.39 7.64 9.40 9.34 11.10 10.16
The table and graph do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares. PORTFOLIO FACTS
% OF NET ASSETS AS OF FUND COMPOSITION 12/31/01 6/30/01 - -------------------------------------------------------------------------------- COMMON STOCKS 65.8 64.6 - -------------------------------------------------------------------------------- BONDS AND NOTES 32.1 30.8 - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 2.1 4.6 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/01 6/30/01 - -------------------------------------------------------------------------------- FNMA, 7.50%, 8/01/31 3.2 -- - -------------------------------------------------------------------------------- PFIZER, INC. 2.0 0.8 - -------------------------------------------------------------------------------- FIRST DATA CORP. 1.9 1.5 - -------------------------------------------------------------------------------- FREDDIE MAC 1.8 1.6 - -------------------------------------------------------------------------------- MCGRAW-HILL CO., INC. 1.7 1.8 - -------------------------------------------------------------------------------- COMPUTER SCIENCES CORP. 1.6 0.8 - -------------------------------------------------------------------------------- FORD MOTOR CO., 7.45%, 7/16/31 1.5 1.2 - -------------------------------------------------------------------------------- US TREASURY BONDS, 7.50%, 11/15/16 1.5 -- - -------------------------------------------------------------------------------- HORMEL FOODS CORP. 1.4 1.4 - -------------------------------------------------------------------------------- KIMBERLY-CLARK CORP. 1.4 0.9 % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/01 6/30/01 - -------------------------------------------------------------------------------- MORTGAGE-BACKED 12.4 8.5 - -------------------------------------------------------------------------------- DRUGS & HEALTHCARE 10.8 10.3 - -------------------------------------------------------------------------------- SOFTWARE 7.2 6.3 - -------------------------------------------------------------------------------- COMPUTERS & BUSINESS EQUIPMENT 6.4 8.2 - -------------------------------------------------------------------------------- COMMUNICATION SERVICES 6.4 7.4
Portfolio holdings and asset allocations will vary. See page 26 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. Class Y shares are available to certain institutional investors only. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) S&P 500/Lehman Brothers Gov't./Corp. Blend is an unmanaged index made up of 65% S&P 500 and 35% of the Lehman Brothers Government/Corporate Bond Index. (5) Morningstar Domestic Hybrid Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (6) Lipper Balanced Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc. (7) Fund performance has been increased by expense waivers, without which performance would have been lower. (8) The since-inception performance comparisons shown for each Class of fund shares are calculated as follows: Class B from 9/30/93; Class C from 12/31/94 and Class Y from 3/31/94. 13 CDC NVEST LARGE CAP VALUE FUND PORTFOLIO FACTS OBJECTIVE: Seeks capital growth and dividend income STRATEGY: Invests primarily in under-valued common stocks of mid- to large-cap companies INCEPTION DATE: November 28, 1995 MANAGER: Margaret M. Buescher VAUGHAN, NELSON, SCARBOROUGH & MCCULLOUGH, L.P. (VNSM) SYMBOLS: Class A NEEIX Class B NEBIX Class C NECEX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2001) Class A $17.81 Class B 17.67 Class C 17.68
Beginning in 2002, this fund will distribute any dividends annually rather than quarterly. MANAGEMENT DISCUSSION For the 12 months ended December 31,2001,CDC Nvest Large Cap Value Fund provided a return of -3.52% for Class A shareholders at net asset value, including $0.03 in reinvested distributions. For the same period, the fund's benchmark, the Russell 1000 Value Index, returned -5.59%, and the average return on the funds in Morningstar's Large Cap Value category was -5.30%. THIRD-QUARTER GDP SHRANK 1.3% It was a difficult year, as a stream of disappointing corporate earnings sent the economy into a recession that officially began in March. In the third quarter, the Gross Domestic Product shrank 1.3%, the first such contraction in a decade. Hopes for an early recovery disappeared after the terrorist attacks on September 11. Except for a brief stock-price rally in the fourth quarter, value stocks generally outperformed growth stocks. FOCUS ON INDIVIDUAL STOCKS MORE THAN SECTORS We believe in building portfolios from the bottom up, so our first goal is to find stocks that represent the best value. We believe individual stock selection rather than industry emphasis gives CDC Nvest Large Cap Value Fund a performance edge over its benchmark. Having said that, some of the fund's best performers this year have been healthcare and financial companies, which dominated the portfolio. HCA, a nationwide operator of for-profit hospitals, benefited from cost trimming and expanded Medicare reimbursements, and Baxter Healthcare rose on increased earnings. The financial services industry is pressing ahead on the globalization front, a trend led by Citigroup, a major fund holding. When we trimmed the fund's position in American International Group after it acquired American General, the portfolio's exposure to the financial sector decreased. However, disappointments included insurer/lender Conseco, when deteriorating credit quality in the weak economy took its toll on earnings, and Mellon Bank, whose fee income declined as its managed assets contracted with the markets. Although we limited the fund's exposure to the beleaguered tech and telecommunications sectors, three tech stocks were positives: EDS, Dell Computer and Applied Materials. We also de-emphasized consumer cyclical stocks because we believed their valuations were too high for current economic conditions. And we took profits in Family Dollar Stores when it reached our price target. Deregulation continues to obscure the outlook for utilities, along with declining oil prices and fallout from the Enron bankruptcy. (Enron was never in the portfolio.) However, Duke Energy, a well-diversified and well-managed energy company, seems to have avoided some of the negative sentiment affecting the industry. The fund also benefited when Mitchell Energy was acquired by Devon Energy. In the wake of September 11, advertising giant Interpublic suffered as corporations cut back ad budgets, and Disney Corporation felt the impact of reduced travel. Although both stocks are currently depressed, we believe they have solid recovery potential in the improving economic environment we see going forward. MANAGERS ANTICIPATE GRADUAL ECONOMIC RECOVERY Late in 2001, we began a modest shift toward increased exposure to industrial stocks, in the belief that economically sensitive sectors will benefit as investors begin to anticipate an economic recovery. For example, we repurchased shares of Honeywell, a diversified manufacturer of aerospace, automation and specialty products, after the collapse of its proposed merger with General Electric. We are positioning CDC Nvest Large Cap Value Fund for an eventual economic recovery, driven by a combination of lower taxes and the Fed's 11 cuts in short-term interest rates. We think the recovery will be gradual; its timing will depend on such factors as inventory liquidation, a better employment outlook, and greater optimism on the part of consumers. 14 INVESTMENT RESULTS THROUGH DECEMBER 31, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Large Cap Value Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. [CHART OF GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES]
NAV MSC Russell 1000 11/28/1995 10000 9425 10000 10032 9455 10000 10321 9727 10251.34 10553 9947 10570.74 10698 10083 10650.68 10875 10249 10831.76 11123 10484 10873.39 11460 10801 11009.36 6/30/1996 11356 10703 11018.35 11067 10431 10601.96 11284 10635 10905.17 11701 11028 11338.65 12343 11633 11777.06 13106 12352 12631.05 12/31/1996 13067 12316 12469.9 13464 12690 13074.4 13714 12926 13266.49 13093 12340 12789.5 13542 12763 13326.82 14206 13389 14071.28 6/30/1997 14628 13787 14674.94 15603 14706 15778.99 15154 14283 15216.82 15708 14805 16136.54 14948 14089 15685.64 15582 14686 16379.18 12/30/1997 16026 15104 16857.3 15825 14915 16618.77 17083 16100 17737.57 17847 16821 18822.47 17810 16786 18948.35 17198 16209 18667.4 6/30/1998 17001 16023 18906.63 16267 15332 18572.96 13964 13161 15808.99 14768 13919 16716.37 15887 14973 18011.23 16386 15444 18850.36 12/30/1998 16453 15507 19491.94 15818 14909 19647.6 15491 14601 19370.28 15400 14514 19771.13 16796 15830 21617.76 16730 15768 21380.14 6/30/1999 17364 16365 22000.88 16960 15985 21356.77 16321 15383 20564.13 15602 14705 19845.5 16401 15458 20987.75 16138 15210 20823.61 12/30/1999 16133 15206 20924.15 15532 14638 20241.54 14328 13504 18737.69 15778 14870 21023.92 15825 14915 20779.27 16041 15119 20998.34 6/30/2000 15736 14831 20038.66 16048 15125 20289.61 17091 16108 21418.56 17056 16075 21614.69 17615 16602 22145.62 16885 15914 21323.61 12/30/2000 17587 16576 22391.92 17692 16674 22478.04 17083 16101 21852.98 16788 15823 21080.76 17473 16468 22114.6 17948 16916 22611.37 6/30/2001 17544 16535 22109.88 17258 16266 22062.88 16916 15943 21179.13 15964 15046 19688.53 15992 15073 19519.08 16735 15773 20653.84 12/31/2001 16968 15993 21140.3
The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. Index values are calculated from 11/30/95.
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2001 - ------------------------------------------------------------------------------------ CLASS A (INCEPTION 11/28/95) 1 YEAR(7) 5 YEARS(7) SINCE INCEPTION(7) Net Asset Value(1) -3.52% 5.37% 9.07% With Maximum Sales Charge(2) -9.07 4.13 8.02 - ------------------------------------------------------------------------------------ CLASS B (Inception 9/15/97) 1 YEAR(7) SINCE INCEPTION(7) Net Asset Value(1) -4.20% 1.51% With CDSC(3) -8.99 1.07 - ------------------------------------------------------------------------------------ CLASS C (Inception 9/15/97) 1 YEAR(7) SINCE INCEPTION(7) Net Asset Value(1) -4.25% 1.53% With Maximum Sales Charge and CDSC(3) -6.17 1.29 - ------------------------------------------------------------------------------------ SINCE SINCE CLASS A CLASS B AND C COMPARATIVE PERFORMANCE 1 YEAR 5 YEARS INCEPTION(8) INCEPTION(8) Russell 1000 Value Index(4) -5.59% 11.13% 13.09% 6.56% Morningstar Large Cap Value Fund Avg.(5) -5.30 8.84 10.90 4.70 Lipper Large Cap Value Funds Average(6) -6.68 8.45 10.65 4.08
The table and graph do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares. PORTFOLIO FACTS
% OF NET ASSETS AS OF FUND COMPOSITION 12/31/01 6/30/01 - -------------------------------------------------------------------------------- COMMON STOCKS 97.3 99.4 - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 2.7 0.6 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/01 6/30/01 - -------------------------------------------------------------------------------- PEPSICO, INC. 5.1 1.4 - -------------------------------------------------------------------------------- AMERICAN INTERNATIONAL GROUP, INC. 4.8 3.2 - -------------------------------------------------------------------------------- EXXON MOBIL CORP. 4.8 3.7 - -------------------------------------------------------------------------------- ACE, LTD. 4.6 4.1 - -------------------------------------------------------------------------------- FANNIE MAE 4.6 3.8 - -------------------------------------------------------------------------------- CITIGROUP, INC. 4.5 4.5 - -------------------------------------------------------------------------------- J.P. MORGAN & CO., INC. 3.5 4.4 - -------------------------------------------------------------------------------- HCA INC. 3.3 3.4 - -------------------------------------------------------------------------------- MERRILL LYNCH & CO., INC. 3.3 3.4 - -------------------------------------------------------------------------------- WASTE MANAGEMENT, INC. 3.3 2.8 - -------------------------------------------------------------------------------- % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/01 6/30/01 - -------------------------------------------------------------------------------- FINANCIAL SERVICES 17.1 17.0 - -------------------------------------------------------------------------------- INSURANCE 13.3 15.4 - -------------------------------------------------------------------------------- DRUGS & HEALTHCARE 8.9 8.4 - -------------------------------------------------------------------------------- BUSINESS SERVICES 7.6 4.7 - -------------------------------------------------------------------------------- FOOD & BEVERAGES 7.0 5.5
Portfolio holdings and asset allocations will vary. See page 26 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) Russell 1000 Value Index is an unmanaged index of the largest 1000 U.S. companies within the Russell 3000. (5) Morningstar Large Cap Value Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (6) Lipper Large Cap Value Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper, Inc. (7 Fund performance has been increased by expense waivers, without which performance would have been lower. (8) The since-inception performance comparisons shown for each Class of fund shares are calculated as follows: Class A from 11/30/95; Class B and C from 9/30/97. 15 CDC NVEST MID CAP GROWTH FUND PORTFOLIO PROFILE OBJECTIVE: Seeks long-term capital growth STRATEGY: Invests primarily in equity securities of companies with mid-size market capitalizations INCEPTION DATE: March 15, 2001 MANAGERS: Christopher R. Ely David L. Smith Philip C. Fine LOOMIS, SAYLES & COMPANY, L.P. SYMBOLS: Class A NRMAX Class B NRMBX Class C NRMCX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2001) Class A $8.15 Class B 8.11 Class C 8.11
MANAGEMENT DISCUSSION Since inception on March 15, 2001 through the end of December, the total return on Class A shares of CDC Nvest Mid Cap Growth Fund was -18.50% based on net asset value. The fund's benchmark, the Russell Midcap Growth Index, returned 0.91% for the same period, and the average return on the funds in Morningstar's Mid-Cap Growth Fund category was -2.90%. These results reflect a difficult period for aggressive stocks, during which we underestimated the velocity, depth and duration of the year's economic downturn. FUND OPENED AMID MAJOR STOCK PRICE DECLINES CDC Nvest Mid Cap Growth Fund began operations in March 2001, in the middle of the worst bear market since 1973-74. As the year progressed, it became increasingly evident that the economy was headed for recession. As growth rates slowed, many companies saw their stock prices fall on weaker earnings. Although the Federal Reserve Board responded with a series of interest rate cuts, it typically takes about 12 months for the impact of monetary policy to be reflected in the economy. The terrible events of September 11 probably postponed the start of our economic recovery. In general, the market in 2001 favored value stocks over growth stocks and defensive issues over aggressive ones, which was a negative environment for this fund. MANAGERS AVOID MARKET TIMING, STAY FULLY INVESTED We don't try to predict market swings, and we stay true to our fundamental stock picking process. Our policy is to stay fully invested in mid-cap growth stocks at all times. Typically, the portfolio has a high degree of exposure to technology. However, in response to changing market conditions, we adjusted our sector weightings in the second half of the year to strike a better balance between companies with more stable growth prospects and those whose growth is more sensitive to the economic cycle. Technology holdings had the greatest impact. Telecommunications equipment and networking stocks like Finisar, Openwave Systems and Extreme Networks hurt performance, particularly in the third quarter, as corporate customers slashed their capital spending. On the other hand, technology stocks led the market higher in the second and fourth quarters. Semiconductor companies selling into consumer markets (such as NVIDIA) or those that make the chips that enable storage area networks (such as QLogic and Brocade) were among the best performers at the end of the year. Healthcare stocks performed well during the third quarter. STAGE SEEMS SET FOR ECONOMIC RECOVERY We are optimistic for 2002. In retrospect, the events of September 11 seem to have defined the low point, in terms of confidence, for this market cycle, setting the stage for a recovery. Despite the environment of uncertainty associated with the war on terrorism, we expect to see a resurgence in stock prices some time this year. Interest rates have fallen to levels not seen in a generation. The Federal Reserve Board policy continues to incline toward easing. Energy prices have fallen sharply, and consumer confidence is rising. Cash in money market funds exceeds $2 trillion, representing a huge reserve of potential investment. Importantly, corporate earnings are beginning to improve, increasing the likelihood of a rebound in capital spending in the second half of the year. This should benefit technology stocks in particular. However, we expect the stock market to remain volatile. World events could significantly change the economy and the market. Although market conditions did not favor our growth-oriented style in 2001, we believe CDC Nvest Mid Cap Growth Fund should be well positioned to participate in the market's recovery. 16 INVESTMENT RESULTS THROUGH DECEMBER 31, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Mid Cap Growth Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. [CHART OF GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES]
NAV MSC RUSSELL MIDCAP 3/15/2001 10,000 9,425 10,000 3/31/2001 9,850 9,284 9,468 4/30/2001 11,200 10,556 11,046 5/31/2001 10,790 10,170 10,994 6/30/2001 10,430 9,830 11,000 7/31/2001 9,440 8,897 10,258 8/31/2001 8,330 7,851 9,515 9/30/2001 6,730 6,343 7,942 10/31/2001 7,340 6,918 8,777 11/30/2001 8,080 7,615 9,722 12/31/2001 8,150 7,681 10,092
The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains.
TOTAL RETURNS -- DECEMBER 31, 2001 - -------------------------------------------------------------------------------- CLASS A (INCEPTION 3/15/01) SINCE INCEPTION(7) Net Asset Value(1) -18.50% With Maximum Sales Charge(2) -23.19 - -------------------------------------------------------------------------------- CLASS B (Inception 3/15/01) SINCE INCEPTION(7) Net Asset Value(1) -18.90% With CDSC(3) -22.96 - -------------------------------------------------------------------------------- CLASS C (Inception 3/15/01) SINCE INCEPTION(7) Net Asset Value(1) -18.90% With Maximum Sales Charge and CDSC(3) -20.51 - -------------------------------------------------------------------------------- SINCE CLASS A, B AND C COMPARATIVE PERFORMANCE INCEPTION Russell Midcap Growth Index(4) 0.91% Morningstar MidCap Growth Avg.(5) -2.90 Lipper MidCap Growth Funds Avg.(6) -1.59
The table and graph do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares. PORTFOLIO FACTS
% OF NET ASSETS AS OF FUND COMPOSITION 12/31/01 6/30/01 - -------------------------------------------------------------------------------- COMMON STOCKS 95.6 90.0 - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 4.4 10.0 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/01 6/30/01 - -------------------------------------------------------------------------------- MARVELL TECHNOLOGY GROUP, LTD. 2.5 1.4 - -------------------------------------------------------------------------------- BROCADE COMMUNICATIONS SYSTEMS, INC. 2.2 1.7 - -------------------------------------------------------------------------------- VERITAS SOFTWARE CORP. 2.2 -- - -------------------------------------------------------------------------------- LABORATORY CORP. 2.1 1.8 - -------------------------------------------------------------------------------- BEST BUY CO., INC. 2.1 -- - -------------------------------------------------------------------------------- QLOGIC CORP. 2.1 2.5 - -------------------------------------------------------------------------------- CABOT MICROELECTRONICS CORP. 2.0 1.3 - -------------------------------------------------------------------------------- NVIDIA CORP. 2.0 -- - -------------------------------------------------------------------------------- BLOCKBUSTER, INC. 1.9 -- - -------------------------------------------------------------------------------- NETWORK ASSOCIATES, INC. 1.9 -- % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/01 6/30/01 - -------------------------------------------------------------------------------- SOFTWARE 19.6 9.1 - -------------------------------------------------------------------------------- ELECTRONICS-SEMICONDUCTORS 13.8 17.6 - -------------------------------------------------------------------------------- DRUGS & HEALTHCARE 13.4 16.0 - -------------------------------------------------------------------------------- BUSINESS SERVICES 4.7 -- - -------------------------------------------------------------------------------- COMMUNICATION SERVICES 4.1 0.9
Portfolio holdings and asset allocations will vary. See page 26 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) Russell Midcap Growth Index is an unmanaged index of mid-cap stocks of growth- oriented U.S. corporations. (5) Morningstar MidCap Growth Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (6) Lipper MidCap Growth Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper, Inc. (7) Fund performance has been increased by expense waivers, without which performance would have been lower. 17 CDC NVEST JURIKA & VOYLES RELATIVE VALUE FUND PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital STRATEGY: Emphasizes stocks of mid- to large-cap companies selling at reasonable prices INCEPTION DATE: September 30, 1994 MANAGERS: Guy Elliffe Eric Hull Nicholas E. Moore JURIKA & VOYLES, L.P. SYMBOLS: Class A NJVAX Class B NJVBX Class C NJVCX Class Y NJVYX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2001) Class A $12.98 Class B 12.98 Class C 12.98 Class Y 12.97
* Formerly Jurika & Voyles Value+Growth Fund; effective with this report, performance will be presented on a calendar-year basis, in June and December. MANAGEMENT DISCUSSION For the six months ended December 31, 2001, the total return on Class Y shares of CDC Nvest Jurika & Voyles Relative Value Fund* was -4.24%, including $1.81 in reinvested distributions. The fund's benchmark, the Russell 1000 Index, returned - -5.81% for the same period, while the average return on Morningstar's Mid-Cap Blend category was -3.80%. MANAGERS SAW 2001 RECESSION BEGINNING IN SPRING This summer market observers were debating whether the economy was in a recession or merely sluggish. We noticed that the industrial sector began contracting early in 2001, although this was masked, to some extent, by consumer activity. As the year progressed, repeated corporate layoffs began to dampen consumer confidence. In the days following the terrorist attacks on September 11, it became clear to everyone that the U.S. was in a recession. However, after establishing a low on September 21, a broad market rally got underway based primarily on expectations of a strong economic recovery. Because early in the year we had believed the market's expectations for earnings were far too optimistic, we structured the portfolio defensively. Despite their long slide, we thought stock prices did not adequately reflect the potential risks. In the wake of September 11, our approach proved to be prudent. While the fund lost ground, our focus on companies with relatively stable revenue streams and strong competitive positions helped cushion assets to some extent during this uncertain environment. DISAPPOINTMENTS ECLIPSED SUCCESSES IN 2001 The fund's best performers were those able to grow earnings despite the sagging economy. These included Blockbuster Video, which rebounded as investors recognized the value offered by its stable business model. Two other contributors were OM Group and Hormel. OM is a specialty chemical company, which has achieved 30 consecutive quarters of growth in the face of the industrial downturn. Hormel enjoys one of the best growth profiles in the packaged food industry and still seems attractively valued. The fund also benefited when First Data Corp. posted 15% earnings growth. Negatives included Enron, which suffered a highly publicized fall from grace in the wake of management's misleading treatment of off-balance-sheet liabilities. Although the fund realized a loss, we sold the stock in the mid teens, before its final, precipitous fall. AES also proved problematic, as investors became concerned about this independent power producer's emerging market exposure and weakness within its peer group. We continue to hold AES because its business model remains intact and we have faith in the company. Palm, a leader in handheld computing devices, fell along with the tech sector and experienced weaker-than-expected demand for its newer products. However, Palm is still in the fund's portfolio because we believe the market for its devices is large and growing, and the stock's valuation is low relative to projected earnings. RECOVERY COULD BE FARTHER OFF THAN MOST EXPECT As we enter the new year, once again our views differ from the consensus forecast, which calls for a relatively mild, brief economic downturn and a vigorous recovery. Although the recession in the manufacturing sector appears to be nearing a bottom, we are concerned that corporate cost cutting will lead to more job cuts. In turn, we believe this may hurt consumer confidence and spending, which could result in a gradual, relatively modest recovery. Consequently, we intend to maintain CDC Nvest Jurika & Voyles Relative Value Fund in a conservative position and avoid sectors that are sensitive to consumer spending. Our long-term forecast, however, is positive because the monetary stimulus provided by the Federal Reserve Board has established a firm base for a broad economic recovery in time. 18 INVESTMENT RESULTS THROUGH DECEMBER 31, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Jurika & Voyles Relative Value Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. [CHART OF GROWTH OF A $10,000 INVESTMENT IN CLASS Y SHARES*]
NAV RUSSELL 2000 9/30/1994 10000 10000 10140 10188.74 10080 9822.04 12/31/1994 10559 9962.07 10469 10219.59 10870 10635.55 11210 10909.23 11751 11199.07 12162 11629.06 6/30/1995 12843 11936.89 13474 12393.04 13554 12486.38 13755 13000.38 13103 12941.2 13845 13518.41 12/31/1995 13525 13724.45 13431 14168.1 13757 14352.46 13946 14481.06 14714 14701.65 14998 15055.04 6/30/1996 14398 15071.57 13410 14344.41 14146 14734.68 14829 15563.08 15134 15907.68 16263 17081.61 12/31/1996 16272 16805.2 16940 17801.81 17081 17870.08 16389 17065.13 16741 17988.48 18334 19140.55 6/30/1997 19061 19933.78 20408 21565 19786 20547.75 20994 21674.68 19760 20972.36 19684 21881.62 12/31/1997 19776 22325.99 19369 22492.31 21023 24095.71 21876 25310.97 22283 25571.18 21089 25017.89 6/30/1998 21259 25944.05 20196 25632.04 16968 21800.72 18097 23268.96 19645 25106.85 20104 26660.95 12/31/1998 20986 28359.22 20902 29371.13 20074 28439 20565 29528.71 21604 30763.68 21646 30098.61 6/30/1999 22544 31632.37 22179 30666.57 21365 30379.24 20046 29543.93 21028 31529.92 21801 32341.03 12/31/1999 23489 34289.68 22966 32885.84 22312 32797.88 24709 35786.42 25043 34593.44 25174 33698.73 6/30/2000 24607 34557.88 24869 33983.71 26394 36499.1 25740 34804.97 25973 34385.72 25202 31241.17 12/31/2000 26944 31618.81 27580 32659.23 26877 29612.83 25271 27646.04 26459 29867.37 26794 30069.27 6/30/2001 25940 29390.02 25806 28988.71 24836 27221.98 22091 24913.36 22258 25432.04 23915 27390.37 12/31/2001 24779 27682.4
The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains.
TOTAL RETURNS -- DECEMBER 31, 2001 - ----------------------------------------------------------------------------------------------------------- CLASS A (INCEPTION 11/30/01) SINCE INCEPTION(7) Net Asset Value(1) 3.87% With Maximum Sales Charge(2) -2.09 - ----------------------------------------------------------------------------------------------------------- CLASS B (Inception 11/30/01) SINCE INCEPTION(7) Net Asset Value(1) 3.88% With CDSC(3) -0.66 - ----------------------------------------------------------------------------------------------------------- CLASS C (Inception 11/30/01) SINCE INCEPTION(7) Net Asset Value(1) 3.88% With Maximum Sales Charge and CDSC(3) 1.97 - ----------------------------------------------------------------------------------------------------------- CLASS Y (Inception 9/30/94)* 6 MONTHS(7) 1 YEAR(7) 5 YEARS(7) SINCE INCEPTION(7) Net Asset Value(1) -4.24% -7.87% 8.81% 13.33% - ----------------------------------------------------------------------------------------------------------- * Class Y performance includes periods from the predecessor fund. SINCE SINCE CLASSES A, B, C CLASS Y COMPARATIVE INDEX PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS INCEPTION INCEPTION Russell 1000 Index(4) -5.81% -12.45% 10.50% 1.07% 15.08% Morningstar Mid Blend Avg.(5) -3.80 -5.00 9.60 3.76 13.10 Lipper Multi Cap Value Funds Average(6) -3.12 -1.78 10.51 2.58 13.94
The table and graph do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares. PORTFOLIO FACTS
% OF NET ASSETS AS OF FUND COMPOSITION 12/31/01 6/30/01 - -------------------------------------------------------------------------------- COMMON STOCKS 93.8 95.1 - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 6.2 4.9 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/01 6/30/01 - -------------------------------------------------------------------------------- MCGRAW-HILL COMPANIES, INC. 3.9 5.3 - -------------------------------------------------------------------------------- COMPUTER SCIENCES CORP. 3.8 2.5 - -------------------------------------------------------------------------------- HORMEL FOODS CORP. 3.8 4.8 - -------------------------------------------------------------------------------- ELECTRONIC DATA SYSTEMS CORP. 3.0 2.6 - -------------------------------------------------------------------------------- DEERE & CO. 2.9 2.4 - -------------------------------------------------------------------------------- FREDDIE MAC 2.9 2.1 - -------------------------------------------------------------------------------- WELLPOINT HEALTH NETWORKS, INC. 2.9 1.6 - -------------------------------------------------------------------------------- KIMBERLY-CLARK CORP. 2.9 3.1 - -------------------------------------------------------------------------------- FIRST DATA CORP. 2.8 2.2 - -------------------------------------------------------------------------------- SABRE GROUP HOLDINGS, INC. 2.7 3.0 % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/01 6/30/01 - -------------------------------------------------------------------------------- DRUGS & HEALTHCARE 11.7 9.9 - -------------------------------------------------------------------------------- BUSINESS SERVICES 7.3 5.2 - -------------------------------------------------------------------------------- COMPUTER SOFTWARE & SERVICES 6.8 5.1 - -------------------------------------------------------------------------------- COMPUTERS & BUSINESS EQUIPMENT 6.3 7.0 - -------------------------------------------------------------------------------- INSURANCE 6.3 4.8
Portfolio holdings and asset allocations will vary. See page 26 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) Russell 1000 Index is an unmanaged index of the largest 1000 companies in the broader Russell 3000 Index of U.S. stocks. (5) Morningstar Mid Blend Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (6) Lipper Multi Cap Value Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper, Inc. (7) Fund performance has been increased by expense waivers, without which performance would have been lower. 19 CDC NVEST SELECT FUND PORTFOLIO PROFILE OBJECTIVE: Seeks long-term capital appreciation STRATEGY: Focuses on 15 to 20 stocks of mid- to large- cap U.S. companies INCEPTION DATE: March 15, 2001 MANAGERS: William C. Nygren Floyd J. Bellman HARRIS ASSOCIATES, L.P. SYMBOLS: Class A NRSAX Class B NRSBX Class C NRSCX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2001) Class A $10.96 Class B 10.90 Class C 10.90
MANAGEMENT DISCUSSION From its March 15, 2001 inception through December 31, the total return on Class A shares of CDC Nvest Select Fund was 9.60% based on net asset value. For the same period, the total return on the fund's benchmark, Standard & Poor's 500 Stock Index, was -1.12%, while the average return on the funds in Morningstar's Mid-Cap Value category was 7.10%. VALUE STOCKS OUTPERFORMED IN VOLATILE MARKET As corporate profits shrank and layoffs increased during much of 2001, the Federal Reserve Board cut interest rates aggressively in an effort to revive the economy, but hopes for an early recovery ended on September 11. However, value stocks held up better than growth stocks, as the faltering economy forced investors to reduce their expectations for growth sectors, including technology. The market's renewed respect for value-oriented investments and companies with strong fundamentals played to our strengths. It allowed us to build a concentrated portfolio of about 20 stocks that represented good value relative to our estimates of each company's prospects. Our approach is to focus on stock selection, with little emphasis on sectors or near-term trends. Instead, we focus on internal factors, such as a company's potential for improving its operating results. We selected companies that are relatively immune to economic cycles, and which appeared to be out of favor with investors. All were chosen for their potential to ride out the current economic environment and increase earnings over the next few years. SERVICES, HEALTHCARE, TECH, MEDIA SELECTIONS DID WELL H&R Block did especially well, and we believe that increasingly complex tax rules will continue to drive more taxpayers to professional preparers. In healthcare, Guidant Corporation also did well; this medical devices company that produces heart valves from human tissue, serves a growing need unrelated to the economy. Although technology tends to be cyclical, Electronic Data Systems benefited from the weak economy when cost-conscious companies elected to outsource key technology functions. Another positive was newspaper publisher Knight-Ridder, which we purchased on a price decline; it is positioned to enjoy increased advertising revenues during an economic recovery. AUTO, FINANCIAL, ENERGY, FOOD SELECTIONS WERE DISAPPOINTING In hindsight, our purchase of Ford Motor was premature. When car sales slumped after September 11, Ford quickly offered generous rebates and 0% financing, programs that will cut into profits in the near term. However, we believe earnings should recover when business conditions improve. Another disappointing performer was Washington Mutual, whose stock price declined along with other lenders because of the slumping economy. In our opinion, the company was unfairly penalized; its loans are of high quality, cash flow is strong and earnings are increasing. Oil and gas producer Burlington Resources suffered from volatile energy prices, and supermarket operator Kroger struggled to develop new business strategies in the face of competitive pressure. MANAGERS PREPARE FOR OPPORTUNITIES IN VOLATILE MARKET Lower interest rates and the government's stimulus package may eventually translate into a more buoyant economy and better corporate earnings. We think a recovery will begin some time in 2002, but the rebound is unlikely to start as abruptly as the recession did. For one thing, the global economic slowdown will probably impact overseas sales for many U.S. companies. Although the market is likely to remain volatile, price declines place attractive opportunities within our valuation parameters, creating opportunities for value investors like us. We continue to seek quality companies with strong industry franchises and the potential to deliver superior results over the next three to five years for CDC Nvest Select Fund's shareholders. 20 INVESTMENT RESULTS THROUGH DECEMBER 31, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Select Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. [CHART OF GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES]
NAV MSC S&P500 3/15/2001 10,000 9,425 10,000 3/31/2001 10,090 9,510 9,890 4/30/2001 10,420 9,821 10,658 5/31/2001 10,690 10,075 10,729 6/30/2001 10,990 10,358 10,468 7/31/2001 11,310 10,660 10,365 8/31/2001 10,870 10,245 9,716 9/30/2001 10,240 9,651 8,931 10/31/2001 10,000 9,425 9,102 11/30/2001 10,680 10,066 9,799 12/31/2001 10,960 10,330 9,888
The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains.
TOTAL RETURNS -- DECEMBER 31, 2001 - -------------------------------------------------------------------------------- CLASS A (INCEPTION 3/15/01) SINCE INCEPTION(7) Net Asset Value(1) 9.60% With Maximum Sales Charge(2) 3.30 - -------------------------------------------------------------------------------- CLASS B (Inception 3/15/01) SINCE INCEPTION(7) Net Asset Value(1) 9.00% With CDSC(3) 4.00 - -------------------------------------------------------------------------------- CLASS C (Inception 3/15/01) SINCE INCEPTION(7) Net Asset Value(1) 9.00% With Maximum Sales Charge and CDSC(3) 6.93 - -------------------------------------------------------------------------------- SINCE CLASS A, B AND C COMPARATIVE PERFORMANCE INCEPTION S&P 500 Index(4) -1.12% Morningstar MidCap Value(5) 7.10 Lipper Multi Cap Value Funds Avg.(6) 1.84
The table and graph do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares.
% OF NET ASSETS AS OF FUND COMPOSITION 12/31/01 6/30/01 - -------------------------------------------------------------------------------- COMMON STOCKS 92.1 92.4 - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 7.9 7.6 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/01 6/30/01 - -------------------------------------------------------------------------------- WASHINGTON MUTUAL, INC. 15.1 14.4 - -------------------------------------------------------------------------------- TXU CORP. 4.6 4.4 - -------------------------------------------------------------------------------- THE KROGER CO. 4.5 4.4 - -------------------------------------------------------------------------------- AT&T CORP. 4.5 4.6 - -------------------------------------------------------------------------------- WASTE MANAGEMENT, INC. 4.4 3.8 - -------------------------------------------------------------------------------- BURLINGTON RESOURCES, INC. 4.4 4.5 - -------------------------------------------------------------------------------- KNIGHT-RIDDER, INC. 4.3 4.7 - -------------------------------------------------------------------------------- GUIDANT CORP. 4.2 -- - -------------------------------------------------------------------------------- ELECTRONIC DATA SYSTEMS CORP. 4.2 4.4 - -------------------------------------------------------------------------------- SPRINT CORP. 4.1 4.0 % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/01 6/30/01 - -------------------------------------------------------------------------------- BANKS & THRIFTS 15.1 -- - -------------------------------------------------------------------------------- RETAIL 11.5 6.4 - -------------------------------------------------------------------------------- TELECOMMUNICATIONS 8.6 8.6 - -------------------------------------------------------------------------------- COMPUTER SOFTWARE & SERVICES 7.7 8.8 - -------------------------------------------------------------------------------- UTILITIES 4.6 --
Portfolio holdings and asset allocations will vary. See page 26 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) S&P 500 Stock Index is an unmanaged index of U.S. common stock performance (5) Morningstar Midcap Value Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (6) Lipper Multi-Cap Value Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc. (7) Fund performance has been increased by expense waivers, without which performance would have been lower. 21 CDC NVEST JURIKA & VOYLES SMALL CAP GROWTH FUND PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital STRATEGY: Invests primarily in a diversified portfolio of small-cap stocks INCEPTION DATE: September 30, 1994 MANAGER: Jon Hickman JURIKA & VOYLES, L.P. SYMBOLS: Class A NFBSX Class B NFBBX Class C NFBCX Class Y NFBYX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2001) Class A $13.04 Class B 13.03 Class C 13.04 Class Y 13.05
* Jurika & Voyles Small-Cap Fund and CDC Nvest Jurika & Voyles Small Cap Growth Fund (formerly CDC Nvest Bullseye Fund) were recently reorganized. See Note 11 on page 82. Effective with this report, performance will be presented on a calendar-year basis, in June and December. MANAGEMENT DISCUSSION For the six-month period between June 30 and December 31, 2001, the total return on Class Y shares of CDC Nvest Jurika & Voyles Small Cap Growth Fund* was - -19.87%, including $0.15 in reinvested distributions. For the same period, the return on the fund's benchmark, the Russell 2000 Index, was -4.09%, while the average return on the funds in Morningstar's Small Growth category was -6.40%. MANAGER SHIFTED STRATEGIES AFTER TERRORIST ATTACKS In the third quarter of 2001, the background turned sharply negative for small companies, especially after the tragic events of September 11. Although stock prices rebounded in the fourth quarter, for many it was not enough to make up for losses incurred in the third quarter. The Federal Reserve Board's stimulus, increased government spending, lower tax rates, lower energy prices and trimmed inventories all suggest an economic recovery to come, but we believe the consensus may be expecting too much too soon. Before September 11, we had positioned the portfolio to benefit from an economic recovery that we felt would emerge toward the end of 2001. After September 11, we followed a two-pronged strategy. First, we realigned part of the portfolio to benefit from emerging trends and survive a longer period of economic weakness than we had previously expected. For example, Americans have been staying close to home, so we invested in Ruby Tuesday's, a successful restaurant chain, and AMC Entertainment, a leading movie-theater chain. We also added to the fund's defensive position in healthcare stocks, which tend to be able to provide steady, predictable earnings growth even in a slow economy. At the same time, part two of our strategy was to adjust a portion of the portfolio to be more aggressive, in anticipation of an economic recovery in 2002. This portion includes leaders in high-growth industries, including technology, whose share prices had been beaten down during most of 2001. SUCCESSES INCLUDE ACTIVISION, INTERMUNE AND GLOBAL SPORTS Our best selections included Activision, which creates software for video games. Best known for its action titles, the company has outperformed Wall Street's earnings estimates for the last six quarters in a row. InterMune enjoyed share-price gains after the Food and Drug Administration granted the biotechnology firm Fast Track status on a drug it is testing to combat a fatal lung disease. Global Sports is an aggressive, young company enjoying rapid growth by running online sales sites for established sporting good chains. NEXTCARD, MESA AIRLINES STILL IN FUND, DESPITE DISAPPOINTMENTS Our biggest disappointment was NextCard, an innovator in online consumer credit services, which suffered a sharp reversal in the third quarter when federal regulators forced the company to reclassify certain losses and increase its allowances for loan losses. NextCard revealed that it was unable to provide the capital needed to operate on its own and is seeking a buyer. We are holding the stock because we believe NextCard's loan portfolio will be worth more upon liquidation than the company's current share price. Mesa Airlines lost share value in the aftermath of September 11. We've also maintained this position because of the firm's contracts with United Airlines and our confidence that this small regional carrier will recover. MANAGER EXPECTS SMALL CAPS TO LEAD RECOVERY We believe small-cap stocks in general should fare well going forward because they tended to outperform in the past when the market and the economy emerged from downturns, and because they were so hard hit during the past nine to 12 months. Historically, the market has tended to swing back and forth between value and growth. We believe the pendulum may be about to swing back toward growth, creating a positive environment for CDC Nvest Jurika & Voyles Small Cap Growth Fund. 22 INVESTMENT RESULTS THROUGH DECEMBER 31, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Jurika & Voyles Small Cap Growth Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. [CHART OF GROWTH OF A $10,000 INVESTMENT IN CLASS Y SHARES]
NAV RUSSELL 2000 9/30/1994 10000 10000 10410 9960.53 10400 9558.26 12/31/1994 10650 9815.06 10409 9691.23 11211 10094.37 11832 10268.22 12814 10496.54 13245 10677.02 6/30/1995 14146 11230.9 15359 11877.82 15279 12123.54 15509 12340.04 15149 11788.17 16070 12283.44 12/31/1995 16210 12607.53 15816 12593.97 16690 12986.52 17691 13250.86 19683 13959.4 20503 14509.5 6/30/1996 19598 13913.7 18575 12698.42 19384 13435.7 19949 13960.75 20034 13745.59 21006 14311.97 12/31/1996 21424 14687.05 21896 14980.57 20929 14617.34 20270 13927.61 20226 13966.43 22456 15520.19 6/30/1997 23984 16185.31 26005 16938.45 27119 17326.02 29320 18594.19 27710 17777.36 27663 17662.38 12/31/1997 26536 17971.53 25705 17687.9 27159 18995.8 28669 19779.24 29320 19888.68 26993 18817.54 6/30/1998 26453 18857.12 24472 17330.56 19306 13965.32 19957 15058.21 21287 15672.34 21993 16493.46 12/31/1998 22737 17514.1 23384 17746.84 20652 16309.45 20715 16564.06 23195 18048.33 23668 18311.96 6/30/1999 25468 19140.02 25216 18614.83 24158 17925.91 24978 17929.83 25563 18002.45 29715 19077.36 12/31/1999 35431 21236.92 34357 20895.88 39899 24346.54 39236 22741.36 33836 21372.89 31042 20127.24 6/30/2000 37295 21881.76 35274 21177.75 39584 22793.63 36868 22123.72 33237 21136.12 27442 18966.47 12/31/2000 29619 20595.35 31544 21667.62 28160 20245.91 24251 19255.56 28121 20761.92 29793 21272.24 6/30/2001 32224 22006.76 29113 20815.55 26254 20143.24 20731 17431.7 22481 18451.81 24426 19880.29 12/31/2001 25683 21107.37
The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. Class A, B, and C shares were created recently; their performance results, appear below.
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2001 - ------------------------------------------------------------------------------------------------------ CLASS A (INCEPTION 11/30/01) SINCE INCEPTION(7) Net Asset Value(1) 3.82% With Maximum Sales Charge(2) -2.18 - ------------------------------------------------------------------------------------------------------ CLASS B (Inception 11/30/01) SINCE INCEPTION(7) Net Asset Value(1) 3.74% With CDSC(3) -1.26 - ------------------------------------------------------------------------------------------------------ CLASS C (Inception 11/30/01) SINCE INCEPTION(7) Net Asset Value(1) 3.82% With Maximum Sales Charge and CDSC(3) 1.77 - ------------------------------------------------------------------------------------------------------ CLASS Y (Inception 9/30/94)* 6 MONTHS(7) 1 YEAR(7) 5 YEARS(7) SINCE INCEPTION(7) Net Asset Value(1) -19.87% -13.29% 3.69% 13.89% - ------------------------------------------------------------------------------------------------------ * Class Y performance includes periods from the predecessor fund. SINCE SINCE CLASSES A, B, C CLASS Y COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS INCEPTION INCEPTION Russell 2000 Index(4) -4.09 2.49% 7.52% 6.17% 10.85% Morningstar Small Growth Avg.(5) -6.40 -9.10 8.90 6.22 11.30 Lipper Small Cap Growth Funds Avg.(6) -7.35 -10.79 8.51 6.11 11.54
The table and graph do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares. PORTFOLIO FACTS
% OF NET ASSETS AS OF FUND COMPOSITION 12/31/01 6/30/01 - -------------------------------------------------------------------------------- COMMON STOCKS 100.4 97.4 - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER (0.4) 2.6 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/01 6/30/01 - -------------------------------------------------------------------------------- MED DESIGN CORP. 2.9 3.8 - -------------------------------------------------------------------------------- DURASWITCH INDUSTRIES, INC. 2.6 2.7 - -------------------------------------------------------------------------------- DIGITAL INSIGHT CORP. 2.6 2.0 - -------------------------------------------------------------------------------- LANTRONIX, INC. 2.2 2.0 - -------------------------------------------------------------------------------- AMERICAN HEALTHWAYS, INC. 2.2 -- - -------------------------------------------------------------------------------- SHUFFLE MASTER, INC. 2.2 1.4 - -------------------------------------------------------------------------------- GLOBAL SPORTS, INC. 2.1 -- - -------------------------------------------------------------------------------- SBA COMMUNICATIONS CORP. 2.1 2.0 - -------------------------------------------------------------------------------- US UNWIRED, INC. 2.1 0.9 - -------------------------------------------------------------------------------- PHARMACEUTICAL PRODUCT DEVELOPMENT, INC. 2.1 1.1 % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/01 6/30/01 - -------------------------------------------------------------------------------- DRUGS & HEALTHCARE 13.7 11.4 - -------------------------------------------------------------------------------- COMPUTER SOFTWARE 8.1 7.0 - -------------------------------------------------------------------------------- SOFTWARE 7.3 -- - -------------------------------------------------------------------------------- RETAIL 6.3 7.8 - -------------------------------------------------------------------------------- COMMUNICATION SERVICES 5.2 2.9
Portfolio holdings and asset allocations will vary. See page 26 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) Russell 2000 Index is an unmanaged list of the 2000 smallest companies in the broader Russell 3000 Index. (5) Morningstar Small Growth Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (6) Lipper Small Cap Growth Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc. (7) Fund performance has been increased by expense waivers, without which performance would have been lower. 23 CDC NVEST INTERNATIONAL EQUITY FUND PORTFOLIO PROFILE OBJECTIVE: Seeks total return from long-term capital growth and dividend income STRATEGY: Invests primarily in equity securities of companies organized or headquartered outside of the United States INCEPTION DATE: May 21, 1992 MANAGERS: Alexander Muromcew John Tribolet Eswar Menon LOOMIS, SAYLES & COMPANY, L.P. SYMBOLS: Class A NEFIX Class B NEIBX Class C NECIX Class Y NEIYX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2001) Class A $12.72 Class B 12.14 Class C 12.18 Class Y 13.11
MANAGEMENT DISCUSSION For the 12 months ended December 31, 2001, the total return on Class A shares of CDC Nvest International Equity Fund was -23.47% at net asset value. Its benchmark, MSCI EAFE, ended the year with a return of -21.44%, while the average return on the funds in Morningstar's Foreign Stock category Funds was -21.90%. U.S. DOWNTURNS SPREAD TO MAJOR OVERSEAS MARKETS Overall, the past 12 months gave investors in international equities little to cheer about. Declining interest rates and low inflation characterized the investment climate worldwide, as the U.S. and most overseas economies continued to slow. Such major markets as the United Kingdom, Germany and Japan faced an exceptionally difficult year, while some smaller markets, including Canada, Australia and South Korea, performed relatively well. Although our industry weightings played a role, individual stock selection was the biggest contributor to performance. Despite a cooling overseas investment environment, we were able to select individual companies throughout the world that we believed had significant long-term potential. As always, fundamental analysis was the key to our investment strategy. Rather than basing our investment decisions on broad, macroeconomic issues, we judge companies on an individual basis, analyzing their revenues, earnings and balance sheets. We look for companies with rapid earnings growth, significant industry leadership, strong management and the potential for increased market share. BEST PERFORMERS FOUND IN COUNTRIES WORLDWIDE Throughout the year, our focus was on businesses that seemed likely to sustain their growth even in a slowing economy. Ryanair, an Irish-based, no-frills airline, is a good example of what we mean. Efficient management has enabled Ryanair to keep overhead costs and expenses low while they take on larger, more established airlines. Even though 2001 was one of the worst years for air travel, Ryanair increased its share of the European market. Other examples of stocks we favor include Wesfarmers, an Australian conglomerate based on GE's model, and South Korea's Samsung Electronics, which is earning handsome profits from several of its technology ventures. In Japan, Nissan Motor Company and Honda were strong performers as they both gained market share here in the U.S. We also like two biotech firms: Biovail of Canada, and Tera Pharmaceuticals of Israel. Both companies stand poised to bring generic drugs to market when a number of patents from competing firms expire over the next several years. SOME STOCKS, DISAPPOINTING IN 2001, STILL IN PORTFOLIO A worldwide economic downturn in 2001 caused many firms' earnings to fall, despite their fundamental strengths. Examples include Interbrew, the world's second largest brewing company, based in Belgium, and Germany's Alliunz Insurance, which was hurt by the fallout from the September 11 terrorist attacks in the U.S. Both are still in the portfolio because we believe in the long-term potential of these well-run companies. OTHER ECONOMIES LIKELY TO REFLECT U.S. RECOVERY Although we're cautiously optimistic about long-term prospects for economic recovery overseas, we expect continued sluggish growth for most markets worldwide. World markets today are closely intertwined. If interest-rate cuts in the U.S. help to improve this economy, many markets abroad are also likely to benefit. Moreover, equity markets throughout the world tend to move in advance of events. A rally in stock prices can occur before an economic recovery is detected. While we do not expect a return to the vigorous markets of the '90s, we will continue to focus on what we believe are quality companies and closely monitor conditions around the world, looking for attractively priced stocks for CDC Nvest International Equity Fund. 24 INVESTMENT RESULTS THROUGH DECEMBER 31, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest International Equity Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. [CHART OF GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES]
NAV MSC MSCI EAFE 5/21/1992 10000 9425 10000 10160 9576 10000 6/30/1992 9840 9274 9526 9424 8882 9282.2 9880 9312 9864.39 9680 9123 9669.6 9288 8754 9162.38 9480 8935 9248.6 12/31/1992 9503 8956 9296.44 9422 8880 9295.29 9583 9032 9576.08 10509 9905 10410.78 11282 10634 11398.79 11468 10808 11639.53 6/30/1993 11202 10558 11457.93 11677 11006 11859.01 12257 11552 12499.2 12015 11324 12217.85 12289 11583 12594.38 11548 10884 11493.49 12/31/1993 12295 11588 12323.41 13189 12431 13365.29 12999 12252 13328.28 12668 11939 12754.21 13148 12392 13295.36 13123 12369 13219.03 6/30/1994 13347 12579 13405.84 13454 12681 13534.76 13818 13024 13855.2 13371 12602 13418.82 13835 13040 13865.67 13173 12415 13199.28 12/31/1994 13286 12522 13281.93 12651 11924 12771.7 12729 11997 12735.05 13166 12409 13529.34 13509 12732 14038.17 13466 12691 13870.82 6/30/1995 13354 12587 13627.57 14100 13289 14475.97 13612 12829 13923.77 13757 12966 14195.7 13269 12506 13814.12 13603 12821 14198.48 12/31/1995 14054 13246 14770.54 13958 13155 14831.18 14019 13213 14881.32 14359 13533 15197.33 14890 14034 15639.17 14794 13944 15351.38 6/30/1996 14908 14050 15437.78 14394 13566 14986.58 14428 13599 15019.41 14623 13782 15418.42 14365 13539 15260.64 14711 13866 15867.83 12/31/1996 14513 13679 15663.71 13632 12848 15115.52 13819 13024 15362.75 13801 13008 15418.38 13614 12832 15500.19 14317 13494 16508.85 6/30/1997 14922 14064 17419.27 15412 14525 17701.08 14059 13251 16379.08 15018 14155 17296.62 13654 12869 15967.12 13358 12590 15804.35 12/31/1997 13415 12644 15942.2 13921 13120 16671.29 14713 13867 17741.02 15457 14568 18287.29 15467 14577 18432.04 15113 14244 18342.58 6/30/1998 14560 13723 18481.44 14722 13876 18668.81 12747 12014 16355.95 12440 11725 15854.5 13208 12449 17507.19 13938 13136 18404.11 12/31/1998 14313 13490 19130.14 14293 13471 19073.65 13651 12866 18619.08 13901 13102 19396.27 14504 13670 20182.18 14032 13225 19142.83 6/30/1999 14634 13793 19889.15 15286 14408 20480.33 15487 14597 20555.12 16096 15171 20762.02 17422 16421 21539.67 21461 20227 22288.06 12/31/1999 26849 25305 24288.45 25527 24059 22745.2 30180 28445 23357.5 27748 26153 24262.92 24354 22953 22986.13 22525 21229 22424.72 6/30/2000 23423 22076 23301.71 21975 20711 22324.8 22641 21339 22518.58 21545 20306 21422.11 19707 18574 20916.08 18434 17374 20131.72 12/31/2000 19183 18080 20847.27 19148 18047 20836.52 17347 16350 19274.46 15858 14947 17989.6 16736 15773 19239.73 16493 15545 18560.69 6/30/2001 16205 15273 17801.64 15731 14827 17477.75 15281 14403 17034.83 14023 13217 15309.43 14347 13522 15701.54 14508 13674 16280.34 12/31/2001 14681 13837 16377.06
The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. Index returns are calculated from 5/31/92.
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2001 - --------------------------------------------------------------------------------- CLASS A (INCEPTION 5/21/92) 1 YEAR 5 YEARS(7) SINCE INCEPTION(7) Net Asset Value(1) -23.47% 0.23% 4.08% With Maximum Sales Charge(2) -27.85 -0.96 3.44 - --------------------------------------------------------------------------------- CLASS B (Inception 9/13/93) 1 YEAR 5 YEARS(7) SINCE INCEPTION(7) Net Asset Value(1) -24.08% -0.49% 1.49% With CDSC(3) -27.87 -0.80 1.49 - --------------------------------------------------------------------------------- CLASS C (Inception 12/30/94) 1 YEAR 5 YEARS(7) SINCE INCEPTION(7) Net Asset Value(1) -24.11% -0.47% 0.74% With Maximum Sales Charge and CDSC(3) -25.61 -0.67 0.59 - --------------------------------------------------------------------------------- CLASS Y (Inception 9/9/93) 1 YEAR 5 YEARS(7) SINCE INCEPTION(7) Net Asset Value(1) -22.97% 0.87% 2.91% - --------------------------------------------------------------------------------- SINCE SINCE SINCE SINCE CLASS A CLASS B CLASS C CLASS Y COMPARATIVE PERFORMANCE 1 YEAR 5 YEARS INCEPT.(8) INCEPT.(8) INCEPT.(8) INCEPT.(8) MSCI EAFE(4) -21.44% 0.89% 5.28% 3.62% 3.04% 3.62% Morningstar Foreign Stock Fund Avg.(5) -21.90 2.30 5.90 5.10 4.60 5.10 Lipper International Funds Average(6) -21.71 1.94 5.93 4.90 4.26 4.90
The table and graph do not reflect taxes shareholders might owe on any fund distributions or when they redeem their shares. PORTFOLIO FACTS
% OF NET ASSETS AS OF FUND COMPOSITION 12/31/01 6/30/01 - -------------------------------------------------------------------------------- COMMON STOCKS 99.5 95.8 - -------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 0.5 4.2 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/01 6/30/01 - -------------------------------------------------------------------------------- CAPITA GROUP PLC 2.1 1.0 - -------------------------------------------------------------------------------- PORTUGAL TELECOM, SGPS, SA 1.9 1.2 - -------------------------------------------------------------------------------- ROYAL BANK OF SCOTLAND GROUP PLC 1.9 1.3 - -------------------------------------------------------------------------------- SYNTHES-STRATEC, INC. 1.9 1.3 - -------------------------------------------------------------------------------- VODAFONE GROUP PLC 1.7 1.3 - -------------------------------------------------------------------------------- UBS AG 1.6 1.0 - -------------------------------------------------------------------------------- ORANGE SA 1.5 0.5 - -------------------------------------------------------------------------------- TESCO 1.5 1.3 - -------------------------------------------------------------------------------- ANGLO IRISH BANK CORP., 144A 1.5 1.1 - -------------------------------------------------------------------------------- SAMSUNG ELECTRONICS 1.4 0.4 % OF NET ASSETS AS OF FIVE LARGEST COUNTRIES 12/31/01 6/30/01 - -------------------------------------------------------------------------------- UNITED KINGDOM 21.0 17.4 - -------------------------------------------------------------------------------- JAPAN 14.3 20.4 - -------------------------------------------------------------------------------- FRANCE 10.6 10.3 - -------------------------------------------------------------------------------- CANADA 8.2 6.8 - -------------------------------------------------------------------------------- SWITZERLAND 6.1 3.4
Portfolio holdings and asset allocations will vary. See page 26 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. ClassY shares are available to certain institutional investors only. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) The Morgan Stanley Capital International (MSCI) Europe Australasia Far East Index (EAFE) is an unmanaged index of common stocks traded outside the U.S. (5) Morningstar Foreign Stock Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (6) Lipper International Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc. (7) Fund performance has been increased by expense waivers for the periods indicated, without which performance would have been lower. (8) The since-inception performance comparisons shown for each Class of fund shares are calculated as follows: Class A from 5/31/92; Class B from 9/30/93; Class C from 12/31/94; Class Y from 9/30/93. 25 RISKS OF THE CDC NVEST EQUITY FUNDS Any mutual fund investment involves risk. The following notes describe some of the risks of the CDC Nvest Funds discussed in this report. These risks may affect the value of your investment. See the funds' prospectus for details. CDC Nvest Capital Growth Fund invests primarily in growth stocks, which tend to be more sensitive to market movements because their stock prices are based on future expectations. From time to time it may also invest a portion of assets in small-cap companies that are more volatile than the overall market. Frequent portfolio turnover may increase your risk of greater tax liability and lower your return from this fund. CDC Nvest Large Cap Growth Fund invests primarily in equity securities of companies with large market capitalizations that the subadviser believes have better than average long-term growth potential. Growth stocks tend to be more sensitive to market movements because their stock prices are based on future expectations. The fund invests in fewer holdings, which means changes in value of a single security (up or down) may have a greater impact on the fund's performance. CDC Nvest Targeted Equity Fund invests primarily in growth stocks, which tend to be more sensitive to market movements because their stock prices are based on future expectations. The fund may also invest in foreign securities that have special risks, including regulatory and currency risks, which may affect the value of your investment. It may also invest in real estate investment trusts (REITs) that are subject to changes in underlying real estate values, prepayment and other mortgage-related risks. Frequent portfolio turnover may increase your risk of greater tax liability and lower your return from this fund. CDC Nvest Growth and Income Fund invests primarily in growth stocks, which tend to be more sensitive to market movements because their stock prices are based on future expectations. It also invests in value stocks, which can fall out of favor with investors and may underperform growth stocks under certain market conditions. The fund may also invest in foreign and emerging market securities, which have special risks. From time to time it may invest a portion of assets in small-cap companies that are more volatile than the overall market. Frequent portfolio turnover may increase your risk of greater tax liability and lower your return from this fund. CDC Nvest Balanced Fund generally invests approximately 65% of assets in stocks and 35% in fixed-income securities. The fund's equity securities may include both growth and value stocks. Growth stocks are generally more sensitive to market movements because their stock prices are based on future expectations. Value stocks can fall out of favor with investors and may underperform growth stocks during certain market conditions. The fund may also invest in foreign securities that have special risks, and in mortgage securities that are subject to prepayment risk. Fixed-income securities are subject to credit risk, interest rate risk, and liquidity risk. CDC Nvest Large Cap Value Fund invests primarily in value stocks, which can fall out of favor with investors, and which may underperform growth stocks during certain conditions. The fund may also invest in foreign securities that have special risks, including regulatory and currency risks, which may affect the value of your investment. It may also invest in real estate investment trusts (REITs) that are subject to changes in underlying real estate values, prepayment and other mortgage-related risks. CDC Nvest Mid Cap Growth Fund invests primarily in stocks of companies that fall within the Russell Midcap Growth Index. Mid-cap growth stocks tend to be more sensitive to market movement because their stock prices are based on future expectations. The fund may also invest in foreign securities that have special risks, including regulatory and currency risks; and it may invest in Initial Public Offerings, which may involve greater risk than other investments. It may also invest in real estate investment trusts (REITs) that are subject to changes in underlying real estate values, prepayment and other mortgage-related risks CDC Nvest Jurika & Voyles Relative Value Fund invests primarily in equity securities of quality companies with medium to large market capitalizaitons that sell at a discount to Jurika & Voyles' estimates of their true value. Such stocks can fall out of favor with investors and may underperform growth stocks during certain conditions. The fund may also invest in foreign securities that have special risks, including regulatory and currency risks, which may affect the value of your investment. It may also invest in real estate investment trusts (REITs) that are subject to changes in underlying real estate values, prepayment and other mortgage-related risks. CDC Nvest Select Fund invests primarily in value stocks, which can fall out of favor with investors, and which may underperform growth stocks under certain conditions. Because the fund is non-diversified and concentrates in relatively few securities, changes in value of a single security (up or down) may have a greater impact on the fund's performance than if the fund were more broadly diversified. CDC Nvest Jurika & Voyles Small Cap Growth Fund invests primarily in stocks of quality companies having small market capitalizations. Small companies may be subject to greater price volatility, limited markets and less liquidity than larger, more established companies, which could adversely affect the value of the portfolio. Growth stocks are generally more sensitive to market movements than other types of stocks, primarily because their prices are based on future expectations. The fund may also invest in fixed-income securities that can be converted into common stock, and in real estate investment trusts (REITs) that are subject to changes in underlying real estate values, prepayment and other mortgage-related risks. CDC Nvest International Equity Fund invests in foreign and emerging market securities - strategies that have special risks, including political, economic, regulatory and currency risks. Emerging markets may be more subject to these risks than developed markets. The fund emphasizes growth stocks, which are generally more sensitive to market movements because their stock prices are based on future expectations. It also invests in stocks of small-cap and emerging-growth companies that are also more volatile than the overall market. Frequent portfolio turnover may increase your risk of greater tax liability and lower your return from this fund. NOT FDIC INSURED - MAY LOSE VALUE - NO BANK GUARANTEE 26 FINANCIAL STATEMENTS 27 CAPITAL GROWTH FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2001
SHARES DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------- COMMON STOCK -- 99.5% OF TOTAL NET ASSETS BUSINESS SERVICES -- 1.4% 24,300 First Data Corp. $ 1,906,335 ----------- COMMUNICATION SERVICES -- 0.8% 12,800 L-3 Communications Holding, Inc. (c) 1,152,000 ----------- COMPUTER HARDWARE -- 4.9% 259,900 Cisco Systems, Inc. (c) 4,706,789 55,800 EMC Corp. (c) 749,952 3,700 Lexmark International Group, Inc.(c) 218,300 81,400 Sun Microsystems, Inc. (c) 1,001,220 ----------- 6,676,261 ----------- COMPUTER SOFTWARE -- 14.6% 17,400 Cerner Corp. (c) 868,782 19,400 Electronic Arts, Inc. (c) 1,163,030 47,200 International Business Machines Corp. 5,709,312 17,200 Mentor Graphics Corp. (c) 405,404 126,400 Microsoft Corp. (c) 8,374,000 218,800 Oracle Corp. (c) 3,021,628 7,400 PeopleSoft, Inc. (c) 297,480 ----------- 19,839,636 ----------- COMPUTERS & BUSINESS EQUIPMENT -- 4.0% 117,300 Dell Computer Corp. (c) 3,188,214 60,700 Pitney Bowes, Inc. 2,282,927 ----------- 5,471,141 ----------- DRUGS -- 17.9% 42,200 Amgen, Inc. (c) 2,381,768 55,300 Bristol-Myers Squibb Co. 2,820,300 51,050 Cardinal Health, Inc. 3,300,893 6,800 Eli Lilly & Co. 534,072 16,116 King Pharmaceuticals, Inc. (c) 678,967 40,600 Merck & Co. 2,387,280 207,850 Pfizer, Inc. 8,282,823 109,500 Schering-Plough Corp. 3,921,195 ----------- 24,307,298 ----------- DRUGS & HEALTHCARE -- 5.4% 26,300 AmerisourceBergen Corp. 1,671,365 16,300 Barr Laboratories, Inc. (c) 1,293,568 33,600 Baxter International, Inc. 1,801,968 27,200 Medtronic, Inc. 1,392,912 9,000 Pharmacia & Upjohn, Inc. 383,850 12,200 Tenet Healthcare Corp. (c) 716,384 ----------- 7,260,047 ----------- ELECTRONICS -- 0.1% 6,600 Agilent Technologies, Inc. (c) 188,166 ----------- ENTERTAINMENT -- 0.3% 10,000 Pixar (c) 359,600 ----------- FINANCIAL SERVICES -- 11.3% 38,500 AmeriCredit Corp. (c) 1,214,675 44,000 Citigroup, Inc. 2,221,120 16,300 Freddie Mac 1,066,020 200,600 General Electric Co. 8,040,048 77,300 MBNA Corp. 2,720,960 ----------- 15,262,823 ----------- FOOD & BEVERAGES -- 3.8% 17,500 Hershey Foods Corp. 1,184,750 33,000 Pepsi Bottling Group, Inc. 775,500 65,100 PepsiCo, Inc. 3,169,719 ----------- 5,129,969 ----------- HEALTH CARE-PRODUCTS -- 2.9% 18,800 Johnson & Johnson, Inc. $ 1,111,080 39,400 Varian Medical Systems, Inc. (c) 2,807,644 ----------- 3,918,724 ----------- HOUSEHOLD PRODUCTS -- 3.7% 51,800 Alberto Culver Co. 2,317,532 12,000 Colgate - Palmolive Co. 693,000 25,000 Procter & Gamble Co. 1,978,250 ----------- 4,988,782 ----------- INFORMATION SERVICES -- 2.3% 16,200 Automatic Data Processing, Inc. 954,180 31,500 Electronic Data Systems Corp. 2,159,325 ----------- 3,113,505 ----------- INTERNET -- 2.5% 76,700 AOL Time Warner, Inc. (c) 2,462,070 23,300 VeriSign, Inc. (c) 886,332 ----------- 3,348,402 ----------- OIL & GAS-DRILLING EQUIPMENT -- 0.1% 4,000 Nabors Industries, Inc. (c) 137,320 ----------- PROPERTY & CASUALTY INSURANCE -- 0.2% 2,700 American International Group, Inc. 214,380 ----------- RESTAURANTS -- 0.6% 29,100 Brinker International, Inc. (c) 866,016 ----------- RETAIL -- 0.9% 19,300 eBay, Inc. (c) 1,291,170 ----------- RETAIL-DEPARTMENT STORE -- 4.6% 37,300 Kohl's Corp. (c) 2,627,412 62,300 Wal-Mart Stores, Inc. 3,585,365 ----------- 6,212,777 ----------- RETAIL-GROCERY -- 0.5% 6,900 Safeway, Inc. (c) 288,075 18,500 The Kroger Co. (c) 386,095 ----------- 674,170 ----------- RETAIL-SPECIALTY -- 4.3% 6,600 Best Buy Co., Inc. (c) 491,568 100,650 Home Depot, Inc. 5,134,156 4,300 Walgreen Co. 144,738 ----------- 5,770,462 ----------- SEMICONDUCTORS -- 7.4% 20,900 Applied Materials, Inc. (c) 838,090 256,700 Intel Corp. 8,073,215 4,900 Linear Technology Corp. 191,296 32,410 Texas Instruments, Inc. 907,480 ----------- 10,010,081 ----------- TELECOMMUNICATIONS -- 1.0% 16,900 Qwest Communications International, Inc. 238,797 4,800 SBC Communications, Inc. 188,016 35,800 Sprint Corp. (PCS Group) (c) 873,878 ----------- 1,300,691 ----------- TELECOMMUNICATIONS-EQUIPMENT -- 2.5% 66,600 QUALCOMM, Inc. (c) 3,363,300 ----------- TOBACCO -- 1.5% 35,500 Philip Morris Companies 1,627,675 13,100 UST, Inc. 458,500 ----------- 2,086,175 ----------- Total Common Stock (Identified Cost $146,522,012) 134,849,231 ----------- See accompanying notes to financial statements. 28 PRINCIPAL AMOUNT DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------- SHORT TERM INVESTMENT -- 0.8% $ 1,061,000 Repurchase Agreement with State Street Bank and Trust Co. dated 12/31/2001 at 0.85% to be repurchased at $1,061,050 on 1/02/2002, collateralized by $1,040,000 U.S. Treasury Bond, 6.000%, due 2/15/2026 valued at $1,084,687 $ 1,061,000 ------------- Total Short Term Investment (Identified Cost $1,061,000) 1,061,000 ------------- Total Investments -- 100.3% (Identified Cost $147,583,012) (b) 135,910,231 Other assets less liabilities (344,408) ------------- Total Net Assets -- 100% $135,565,823 =============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2001, the net unrealized depreciation on investments based on cost of $147,907,578 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ 12,204,145 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (24,201,492) ------------- Net unrealized depreciation $(11,997,347) =============
At December 31, 2001, the Fund had a capital loss carryover of approximately $26,648,714 which expires on December 31, 2009. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2001, the Fund has elected to defer $4,953,493 of capital losses attributable to Post-October losses. At December 31, 2001, there was no undistributed ordinary income or long-term capital gains except for unrealized appreciation/depreciation disclosed above on a tax basis. (c) Non-income producing security. See accompanying notes to financial statements. 29 LARGE CAP GROWTH FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2001
SHARES DESCRIPTION VALUE (a) - --------------------------------------------------------------------------------- COMMAN STOCK -- 99.8% OF TOTAL NET ASSETS ADVERTISING -- 3.6% 68,900 The Interpublic Group of Companies, Inc. (d) $ 2,035,306 ----------- AEROSPACE/DEFENSE -- 3.2% 53,000 Honeywell International, Inc. 1,792,460 ----------- BANKS -- 5.0% 24,900 Citigroup, Inc. 1,256,952 30,000 State Street Corp. 1,567,500 ----------- 2,824,452 ----------- BIOTECHNOLOGY -- 5.3% 20,000 Amgen, Inc. (c) 1,128,800 31,000 Genzyme Corp. (c) (d) 1,855,660 ----------- 2,984,460 ----------- BUSINESS SERVICES -- 1.2% 20,400 Waste Management, Inc. 650,964 ----------- COMPUTER HARDWARE -- 8.6% 50,000 Dell Computer Corp. (c) 1,359,000 17,600 International Business Machines Corp. 2,128,896 110,000 Sun Microsystems, Inc. 1,353,000 ----------- 4,840,896 ----------- COMPUTER NETWORKING -- 1.4% 44,000 Cisco Systems, Inc. (c) 796,840 ----------- COMPUTER PERIPHERALS -- 3.6% 151,800 EMC Corp. (c) 2,040,192 ----------- COMPUTER SOFTWARE & SERVICES --8.7% 42,500 Microsoft Corp. (c) 2,815,625 150,200 Oracle Corp. (c) 2,074,262 ----------- 4,889,887 ----------- DRUGS & HEALTHCARE -- 18.8% 41,600 American Home Products Corp. 2,552,576 8,200 Eli Lilly & Co. (d) 644,028 30,000 Medtronic, Inc. (d) 1,536,300 28,000 Merck & Co. 1,646,400 50,000 Pfizer, Inc. 1,992,500 61,000 Schering-Plough Corp. 2,184,410 ----------- 10,556,214 ----------- FOOD & BEVERAGES -- 1.7% 20,000 PepsiCo, Inc. 973,800 ----------- FREIGHT TRANSPORTATION -- 1.6% 16,300 United Parcel Service, Inc. (d) 888,350 ----------- GAS & PIPELINE UTILITIES -- 3.1% 39,100 El Paso Corp. (d) 1,744,251 ----------- INSURANCE -- 5.0% 35,000 American International Group, Inc. 2,779,000 ----------- INVESTMENT BANKING/BROKERAGE -- 2.5% 27,000 Merrill Lynch & Co., Inc. (d) 1,407,240 ----------- MANUFACTURING-DIVERSIFIED -- 7.3% 29,000 General Electric Co. 1,162,320 50,000 Tyco International, Ltd. (d) 2,945,000 ----------- 4,107,320 ----------- MEDIA & ENTERTAINMENT -- 1.0% 27,500 Walt Disney Co. 569,800 ----------- MEDICAL SERVICES -- 2.2% 15,200 Laboratory Corp. (c) (d) $ 1,228,920 ----------- MULTIMEDIA -- 1.9% 32,600 AOL Time Warner, Inc. (c) 1,046,460 ----------- RETAIL -- 6.5% 32,200 Home Depot, Inc. 1,642,522 35,000 Wal-Mart Stores, Inc. 2,014,250 ----------- 3,656,772 ----------- SEMICONDUCTORS -- 2.6% 18,300 Applied Materials, Inc. (c) 733,830 23,000 Intel Corp. 723,350 ----------- 1,457,180 ----------- TELECOMMUNICATIONS-EQUIPMENT -- 3.3% 75,000 Nokia Corp. (ADR) (d) 1,839,750 ----------- TELECOMMUNICATIONS-LONG DISTANCE -- 1.7% 65,700 Qwest Communications International, Inc. (c) 928,341 ----------- Total Common Stock (Identified Cost $56,048,823) 56,038,855 ----------- PRINCIPAL AMOUNT - -------------- SHORT TERM INVESTMENT -- 0.4% $ 244,000 Repurchase Agreement with State Street Bank and Trust Co. dated 12/31/2001 at 0.85% to be repurchased at $244,012 on 1/02/2002, collateralized by $180,000 U.S. Treasury Bond, 9.875%, due 11/15/2015 valued at $254,399 244,000 ----------- Total Short Term Investment (Identified Cost $244,000) 244,000 ----------- Total Investments -- 100.2% (Identified Cost $56,292,823) (b) 56,282,855 Other assets less liabilities (120,226) ----------- Total Net Assets -- 100% $56,162,629 ===========
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2001, the net unrealized depreciation on investments based on cost of $56,650,725 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ 2,681,419 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (3,049,289) ------------ Net unrealized depreciation $ (367,870) ============
At December 31, 2001, the Fund had a capital loss carryover of approximately $29,782,262 of which $3,696,755 expires on December 31, 2008 and $26,085,507 expires on December 31, 2009. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2001, the Fund has elected to defer $996,399 of capital losses attributable to Post-October losses. At December 31, 2001, there was no undistributed ordinary income or long-term capital gains except for unrealized appreciation/depreciation disclosed above on a tax basis. (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at December 31, 2001. ADR - An American Depositary Receipt is a certificate issued by a U.S. bank representing the right to receive securities of the foreign issuer described. The values of ADRs are significantly influenced by trading on exchanges not located in the United States. See accompanying notes to financial statements. 30 TARGETED EQUITY FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2001
SHARES DESCRIPTION VALUE (a) - ---------------------------------------------------------------------------------- COMMON STOCK -- 99.7% OF TOTAL NET ASSETS AIRLINES -- 0.8% 455,000 Southwest Airlines Co. $ 8,408,400 ------------- BUSINESS SERVICES -- 2.6% 1,443,000 Cendant Corp. (c) 28,297,230 ------------- ELECTRONIC & COMMUNICATION EQUIPMENT -- 9.8% 1,370,000 Celestica, Inc. (c) 55,334,300 2,210,000 Flextronics International, Ltd. (c) 53,017,900 ------------- 108,352,200 ------------- ELECTRONIC COMPONENTS -- 3.7% 1,320,000 Micron Technology, Inc. (c) 40,920,000 ------------- FINANCIAL SERVICES -- 5.1% 980,000 Household International, Inc. 56,781,200 ------------- FOOD & BEVERAGES -- 0.6% 95,000 Hershey Foods Corp. 6,431,500 ------------- HEALTH CARE-SERVICES -- 11.8% 1,440,000 HCA, Inc. 55,497,600 60,000 Laboratory Corporation of America Holdings (c) 4,851,000 58,000 Quest Diagnostics, Inc. (c) 4,159,180 1,115,000 Tenet Healthcare Corp. (c) 65,472,800 ------------- 129,980,580 ------------- HOUSING & BUILDING MATERIALS -- 27.5% 1,215,000 Centex Corp. 69,364,350 1,609,800 D.R. Horton, Inc. 52,254,108 1,615,000 KB HOME 64,761,500 1,345,900 Lennar Corp. 63,015,038 1,203,300 Pulte Homes, Inc. 53,751,411 ------------- 303,146,407 ------------- INSURANCE -- 0.4% 55,000 American International Group, Inc. 4,367,000 ------------- LEISURE -- 4.2% 680,000 International Game Technology (c) 46,444,000 ------------- RETAIL -- 22.4% 300,000 AutoZone, Inc. (c) 21,540,000 820,000 Best Buy Co., Inc. (c) 61,073,600 2,510,000 Dollar General Corp. 37,399,000 2,200,000 J.C. Penney Company, Inc. 59,180,000 1,480,000 Lowe's Companies, Inc. 68,686,800 ------------- 247,879,400 ------------- SAVINGS & LOAN -- 10.8% 978,000 Golden West Financial Corp. 57,555,300 1,900,000 Washington Mutual, Inc. 62,130,000 ------------- 119,685,300 ------------- Total Common Stock (Identified Cost $1,025,084,308) 1,100,693,217 ------------- PRINCIPAL AMOUNT DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------- SHORT TERM INVESTMENT -- 0.4% $ 4,555,000 American Express Credit Corp., 1.770%, 1/02/2001 $ 4,555,000 -------------- Total Short Term Investment (Identified Cost $4,555,000) 4,555,000 -------------- Total Investments -- 100.1% (Identified Cost $1,029,639,308) (b) 1,105,248,217 Other assets less liabilities 1,397,328) -------------- Total Net Assets -- 100% $1,103,850,889 ==============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2001 the net unrealized appreciation on investments based on cost of $1,033,069,243 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ 118,150,465 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (45,971,491) -------------- Net unrealized appreciation $ 72,178,974 ==============
At December 31, 2001, the Fund had a capital loss carryover of approximately $187,367,538 which expires on December 31, 2009. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. At December 31, 2001, there was no undistributed ordinary income or long-term capital gains except for unrealized appreciation/depreciation disclosed above on a tax basis. (c) Non-income producing security. See accompanying notes to financial statements. 31 GROWTH AND INCOME FUND -- SCHEDULE OF INVESTMENTS Investments of December 31, 2001
SHARES DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------- Common Stock -- 99.1% of Total Net Assets AEROSPACE/DEFENSE -- 1.5% 58,600 Honeywell International, Inc. $ 1,981,852 49,600 United Technologies Corp. 3,205,648 -------------- 5,187,500 -------------- BANKS -- 8.2% 170,400 Bank America Corp. 10,726,680 146,666 Citigroup, Inc. 7,403,700 20,500 M & T Bank Corp. 1,493,425 90,100 National City Corp. 2,634,524 90,800 North Fork Bancorp, Inc. 2,904,692 160,000 SouthTrust Corp. 3,947,200 -------------- 29,110,221 -------------- BEVERAGES-ALCOHOLIC -- 0.2% 14,600 Constellation Brands, Inc. (c) 625,610 -------------- BUSINESS SERVICES -- 2.2% 115,300 Electronic Data Systems Corp. 7,903,815 -------------- COMMUNICATION SERVICES -- 2.9% 94,000 A T & T Wireless Services, Inc. (c) . 1,350,780 18,000 L-3 Communications Holding, Inc. (c) 1,620,000 359,100 Sprint Corp. 7,210,728 -------------- 10,181,508 -------------- COMPUTER HARDWARE -- 3.2% 603,500 Cisco Systems, Inc. (c) 10,929,385 13,200 Tech Data Corp. (c) 571,296 -------------- 11,500,681 -------------- COMPUTER SOFTWARE -- 1.6% 45,600 International Business Machines Corp. 5,515,776 -------------- COMPUTERS & BUSINESS EQUIPMENT -- 4.0% 117,400 Dell Computer Corp. (c) 3,190,932 221,900 Hewlett-Packard Co. 4,557,826 173,200 Pitney Bowes, Inc. 6,514,052 -------------- 14,262,810 -------------- CONSUMER GOODS & SERVICES -- 3.9% 39,500 H & R Block, Inc. 1,765,650 66,700 Mattel, Inc. 1,147,240 136,500 Procter & Gamble Co. 10,801,245 -------------- 13,714,135 -------------- DRUGS -- 10.7% 35,500 Amgen, Inc. (c) 2,003,620 184,900 Bristol-Myers Squibb Co. 9,429,900 12,500 Eli Lilly & Co. 981,750 178,100 Merck & Co. 10,472,280 379,900 Pfizer, Inc. 15,139,015 -------------- 38,026,565 -------------- DRUGS & HEALTHCARE -- 0.3% 10,000 Amerisourcebergen Corp. 635,500 9,200 Tenet Healthcare Corp. (c) 540,224 -------------- 1,175,724 -------------- ELECTRIC UTILITIES -- 0.4% 33,800 Duke Power Co. 1,326,988 -------------- ELECTRONICS -- 2.5% 95,000 Agilent Technologies, Inc. (c) 2,708,450 76,600 QUALCOMM, Inc. (c) 3,868,300 78,900 UTStarcom, Inc. 2,248,650 -------------- 8,825,400 -------------- ENERGY -- 0.4% 65,800 Sempra Energy $ 1,615,390 -------------- ENERGY RESERVES -- 3.7% 143,600 Exxon Mobil Corp. 5,643,480 239,000 Occidental Petroleum Corp. 6,340,670 21,400 Royal Dutch Petroleum Co. 1,049,028 -------------- 13,033,178 -------------- FINANCIAL SERVICES -- 6.5% 13,700 Countrywide Credit Industries, Inc. 561,289 63,200 Fannie Mae 5,024,400 201,500 General Electric Co. 8,076,120 65,500 John Hancock Financial Services, Inc. 2,705,150 191,500 MBNA Corp. 6,740,800 -------------- 23,107,759 -------------- FOOD & BEVERAGES -- 4.6% 15,900 Hershey Foods Corp. 1,076,430 58,400 Pepsi Bottling Group, Inc. 1,372,400 186,100 PepsiCo, Inc. 9,061,209 42,800 Smithfield Foods, Inc. (c) 943,312 52,200 Sysco Corp. 1,368,684 40,900 Unilever NV 2,356,249 -------------- 16,178,284 -------------- HEALTH CARE-PRODUCTS -- 3.9% 59,300 Abbott Laboratories 3,305,975 63,800 Baxter International, Inc. 3,421,594 118,500 Johnson & Johnson, Inc. 7,003,350 -------------- 13,730,919 -------------- HEALTH CARE-SERVICES -- 1.5% 99,000 Hillenbrand Industries, Inc. 5,471,730 -------------- HOTELS & RESTAURANTS -- 0.8% 43,400 Darden Restaurants, Inc. 1,536,360 31,000 Hotel Reservations Network, Inc. (c) 1,426,000 -------------- 2,962,360 -------------- HOUSEHOLD PRODUCTS -- 0.9% 53,600 Colgate-Palmolive Co. 3,095,400 -------------- INFORMATION SERVICES -- 0.3% 15,100 First Data Corp. 1,184,595 -------------- INSURANCE -- 2.3% 35,600 American International Group, Inc. 2,826,640 75,000 Metlife, Inc. 2,376,000 18,900 Progressive Corp. 2,821,770 -------------- 8,024,410 -------------- INTERNET CONTENT -- 0.5% 43,800 VeriSign, Inc. (c) 1,666,152 -------------- MANUFACTURING-DIVERSIFIED -- 2.2% 131,900 Tyco International, Ltd. 7,768,910 -------------- MEDIA & ENTERTAINMENT -- 0.9% 100,100 AOL Time Warner, Inc. (c) 3,213,210 -------------- OIL & GAS-DRILLING EQUIPMENT -- 0.3% 26,900 Baker Hughes, Inc. 981,043 -------------- OIL & GAS-REFINING/MARKETING -- 0.6% 53,200 Valero Energy Corp. 2,027,984 -------------- PUBLISHING -- 0.4% 35,000 Deluxe Corp. 1,455,300 -------------- RAILROADS & EQUIPMENT -- 0.9% 94,100 CSX Corp. 3,298,205 -------------- See accompanying notes to financial statements. 32 SHARES DESCRIPTION VALUE (a) ------------------------------------------------------------------------ RETAIL -- 0.6% 49,700 Costco Wholesale Corp. (c) $ 2,205,686 ------------- RETAIL-DEPARTMENT STORE -- 3.0% 43,300 Kohl's Corp. (c) 3,050,052 158,100 Sears, Roebuck & Co. 7,531,884 ------------- 10,581,936 ------------- RETAIL-FOOD & DRUG -- 0.4% 42,300 Albertson's, Inc. 1,332,027 ------------- RETAIL-SPECIALTY -- 2.3% 159,000 Home Depot, Inc. 8,110,590 ------------- SEMICONDUCTORS -- 5.6% 454,400 Intel Corp. 14,290,880 113,900 KLA-TENCOR CORP. (c) 5,644,884 ------------- 19,935,764 ------------- SOFTWARE -- 7.8% 232,700 Computer Associates International, Inc. 8,025,823 260,900 Microsoft Corp. (c) 17,284,625 32,600 Nvidia Corp. (c) 2,180,940 ------------- 27,491,388 ------------- TELECOMMUNICATIONS -- 5.3% 213,500 BellSouth Corp. 8,145,025 220,800 Verizon Communications, Inc. 10,479,168 ------------- 18,624,193 ------------- TOBACCO -- 1.8% 97,000 Philip Morris Companies, Inc. 4,447,450 51,000 UST, Inc. 1,785,000 ------------- 6,232,450 ------------- Total Common Stock (Identified Cost $339,808,085) 350,685,596 ------------- PRINCIPAL AMOUNT DESCRIPTION VALUE (a) - ----------------------------------------------------------------------- SHORT TERM INVESTMENT -- 0.3% $ 1,181,000 Repurchase Agreement with State Street Bank and Trust Co. dated 12/31/2001 at 0.85% to be repurchased at $1,181,056 on 1/02/2002, collateralized by $1,155,000 U.S. Treasury Bond, 6.000%, due 2/15/2026 valued at $1,204,628 $ 1,181,000 ------------- Total Short Term Investment (Identified Cost $1,181,000) 1,181,000 ------------- Total Investments -- 99.4% (Identified Cost $340,989,085) (b) 351,866,596 Other assets less liabilities 2,103,279 ------------- Total Net Assets -- 100% $ 353,969,875 =============
(a) See Note 2a of Notes to Financial Statements (b) Federal Tax Information: At December 31, 2001, the net unrealized appreciation on investments based on cost of $341,620,094 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ 26,484,079 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (16,237,577) ------------- Net unrealized appreciation $ 10,246,502 =============
At December 31, 2001, the Fund had a capital loss carryover of approximately $89,846,413 of which $19,895,206 expires on December 31, 2008 and $69,951,207 expires on December 31, 2009. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2001, the Fund has elected to defer $1,928,057 of capital losses attributable to Post-October losses. At December 31, 2001, there was no undistributed ordinary income or long-term capital gains except for unrealized appreciation/depreciation disclosed above on a tax basis. (c) Non-income producing security. See accompanying notes to financial statements. 33 BALANCED FUND - SCHEDULE OF INVESTMENTS Investments as of December 31, 2001
SHARES DESCRIPTION VALUE (a) - ---------------------------------------------------------------------- COMMON STOCK-- 65.8% AIR TRAVEL -- 0.8% 54,200 AMR Corp. (c) $ 1,201,614 ------------- AIRLINES -- 0.4% 31,600 Southwest Airlines Co. 583,968 ------------- AUTO PARTS -- 0.3% 21,700 Goodyear Tire & Rubber Co. 516,677 ------------- AUTOMOTIVE -- 0.7% 19,800 Harley-Davidson, Inc. 1,075,338 ------------- BANKS-- 2.2% 27,600 Citigroup, Inc. 1,393,248 14,800 Comerica, Inc. 848,040 23,400 Wells Fargo & Co. 1,016,730 ------------- 3,258,018 ------------- BUSINESS SERVICES -- 4.7% 47,900 Cendant Corp. (c) 939,319 38,600 Concord EFS, Inc. (c) 1,265,308 17,600 Ecolab, Inc. 708,400 35,700 First Data Corp. 2,800,665 30,200 Sabre Group Holdings, Inc. (c) 1,278,970 ------------- 6,992,662 ------------- CHEMICALS -- 1.4% 22,700 OM Group, Inc. 1,502,513 15,300 Rohm & Haas Co. 529,839 ------------- 2,032,352 ------------- COMMUNICATION SERVICES -- 4.7% 56,800 AT&T Wireless Services, Inc. 816,216 7,000 L-3 Communications Holding, Inc. (c) 630,000 40,900 McGraw-Hill Co., Inc. 2,494,082 11,500 Omnicom Group, Inc. 1,027,525 32,700 SBC Communications, Inc. 1,280,859 24,400 The Interpublic Group of Companies, Inc. 720,776 ------------- 6,969,458 ------------- COMPUTER-NETWORKING -- 0.3% 12,400 Brocade Communications Systems, Inc. (c) 410,688 COMPUTER SOFTWARE & Services -- 0.4% 14,100 VERITAS Software Corp. (c) 632,103 ------------- COMPUTERS & BUSINESS EQUIPMENT -- 6.4% 116,800 3Com Corp. (c) 745,184 21,200 Analog Devices, Inc. (c) 941,068 97,100 Cisco Systems, Inc. (c) 1,758,481 54,400 Dell Computer Corp. (c) 1,478,592 6,400 International Business Machines Corp. 774,144 33,400 LSI Logic Corp. (c) 527,052 16,300 Maxim Integrated Products, Inc. (c) 855,913 161,100 Palm, Inc. (c) 625,068 32,600 SanDisk Corp. (c) 469,440 25,100 Scientific-Atlanta, Inc. 600,894 23,200 STMicroelectronics NV 734,744 ------------- 9,510,580 ------------- CONSTRUCTION -- 0.3% 14,000 Baker Hughes, Inc. 510,580 ------------- DOMESTIC OIL -- 1.6% 10,100 ChevronTexaco Corp. 905,061 46,900 Suncor Energy, Inc. 1,544,886 ------------- 2,449,947 ------------- DRUGS & HEALTHCARE -- 10.8% 13,800 AmerisourceBergen Corp. $ 876,990 18,300 Baxter International, Inc. 981,429 10,000 Bristol-Myers Squibb Co. 510,000 16,300 Forest Laboratories, Inc. (c) 1,335,785 23,600 Johnson & Johnson, Inc. 1,394,760 28,000 King Pharmaceuticals, Inc. (c) 1,179,640 20,300 Medtronic, Inc. 1,039,563 76,800 Pfizer, Inc. 3,060,480 30,036 Pharmacia Corp. 1,281,035 14,700 Schering-Plough Corp. 526,407 10,100 Stryker Corp. (c) 589,537 21,000 Tenet Healthcare Corp. (c) 1,233,120 13,400 UnitedHealth Group, Inc. 948,318 10,900 Wellpoint Health Networks, Inc. (c) 1,273,665 ------------- 16,230,729 ------------- ELECTRIC UTILITIES -- 0.6% 52,000 AES Corp. (c) 850,200 ------------- FINANCIAL-CONSUMER/DIVERSIFIED -- 1.8% 42,100 Freddie Mac 2,753,340 ------------- FINANCIAL SERVICES -- 1.4% 8,700 Fannie Mae 691,650 23,400 Nationwide Financial Services 970,164 5,800 USA Education, Inc. 487,316 ------------- 2,149,130 ------------- FOOD & BEVERAGES -- 2.2% 75,500 Hormel Foods Corp. 2,028,685 27,500 PepsiCo, Inc. 1,338,975 ------------- 3,367,660 ------------- HOTELS & RESTAURANTS -- 1.0% 29,300 Brinker International, Inc. (c) 871,968 21,500 Wendy's International, Inc. 627,155 ------------- 1,499,123 ------------- HOUSEHOLD PRODUCTS -- 1.4% 33,800 Kimberly-Clark Corp. 2,021,240 ------------- INDUSTRIAL MACHINERY -- 1.2% 40,200 Cognex Corp. (c) 1,029,522 17,600 Deere & Co. 768,416 ------------- 1,797,938 ------------- INSURANCE -- 2.7% 26,000 Allmerica Financial Corp. 1,158,300 6,600 American International Group, Inc. .. 524,040 9,200 Hartford Financial Services Group, Inc. 578,036 44,000 Principal Financial Group 1,056,000 22,700 Protective Life Corp. 656,711 ------------- 3,973,087 ------------- INVESTMENT BANKING/BROKER/MANAGEMENT -- 0.7% 16,800 Lehman Brothers Holdings, Inc. 1,122,240 ------------- INVESTMENT BANKING/BROKERAGE -- 1.1% 15,700 Moody's Corp. 625,802 10,400 The Goldman Sachs Group, Inc. 964,600 ------------- 1,590,402 ------------- MANUFACTURING-DIVERSIFIED -- 2.0% 47,700 General Electric Co. 1,911,816 17,200 Tyco International, Ltd. 1,013,080 ------------- 2,924,896 ------------- OIL & GAS-EXPLORATION & PRODUCTION -- 0.7% 36,100 GlobalSantaFe Corp. 1,029,572 ------------- See accompany notes to financial statements. 34 SHARES DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------- RETAIL -- 4.0% 13,100 Autozone, Inc. (c) $ 940,580 18,600 Bed Bath & Beyond, Inc. (c) 630,540 16,800 Best Buy Co., Inc. (c) 1,251,264 39,800 Blockbuster, Inc. 1,002,960 10,900 eBay, Inc. (c) 729,210 31,800 Lowe's Co., Inc. 1,475,838 ----------- 6,030,392 ----------- RETAIL-GROCERY -- 0.8% 12,100 Safeway, Inc. (c) 505,175 28,000 Sysco Corp. 734,160 ----------- 1,239,335 ----------- RETAIL-SPECIALTY -- 1.3% 38,500 Home Depot, Inc. 1,963,885 ----------- SOFTWARE -- 7.2% 4,700 Affiliated Computer Services, Inc. (c) 498,811 31,000 Citrix Systems, Inc. (c) 702,460 47,800 Computer Sciences Corp. (c) 2,341,244 19,400 Electronic Data Systems Corp 1,329,870 29,000 Microsoft Corp. (c) 1,921,250 8,800 NVIDIA Corp. (c) 588,720 64,100 Oracle Corp. (c) 885,221 18,500 PeopleSoft, Inc. (c) 743,700 27,800 Siebel Systems, Inc. (c) 777,844 79,200 Transaction Systems Architects, Inc. (c) 970,992 ----------- 10,760,112 ----------- TRUCKING & FREIGHT FORWARDING -- 0.7% 18,800 United Parcel Service, Inc. 1,024,600 ----------- Total Common Stock (Identified Cost $98,145,551) 98,471,866 ----------- RATINGS (d) (UNAUDITED) ----------------------- PRINCIPAL STANDARD AMOUNT MOODY'S & POOR'S VALUE (a) - --------------------------------------------------------------------------------------------- BONDS AND NOTES -- 32.1% OF TOTAL NET ASSETS AEROSPACE/DEFENSE -- 1.2% $ 1,780,000 Raytheon Co., 6.300%, 3/15/2005 Baa3 BBB- 1,820,192 ---------- AIRLINES -- 0.3% 600,000 Delta Air Lines, Inc., 9.200%, 9/23/2014 Ba1 BBB 483,900 ---------- AUTOMOTIVE -- 1.5% 2,465,000 Ford Motor Co., 7.450%, 7/16/2031 A3 BBB+ 2,261,712 ---------- BANKS -- 0.9% 1,300,000 Capital One Bank, 6.875%, 2/01/2006 Baa2 BBB- 1,265,927 ---------- CHEMICALS -- 2.8% 1,500,000 Dow Chemical Co., 7.375%, 11/01/2029 A1 A 1,636,050 1,000,000 IMC Global, Inc., 7.625%, 11/01/2005 Ba2 B+ 946,510 600,000 Lyondell Chemical Co., 10.875%, 5/01/2009 B2 B+ 555,000 1,000,000 Rohm & Haas Co., 7.850%, 7/15/2029 A3 A- 1,113,040 ---------- 4,250,600 ---------- COMMUNICATION SERVICES -- 1.7% 1,800,000 Clear Channel Communications, Inc., 7.650%, 9/15/2010 Baa3 BBB- 1,858,320 675,000 Sprint Capital Corp., 6.125%, 11/15/2008 Baa1 BBB+ 656,559 ---------- 2,514,879 ---------- ELECTRIC UTILITIES -- 1.2% 700,000 AES Corp., 9.375%, 9/15/2010 Ba1 BB 607,537 1,000,000 Calpine Corp., 7.625%, 4/15/2006 Ba1 BB+ 895,000 300,000 Keyspan Corp., 7.250%, 11/15/2005 A3 A 319,815 ---------- 1,822,352 ---------- FINANCE & BANKING -- 2.3% $ 600,000 First Chicago NBD Corp., 6.125%, 2/15/2006 A1 A- $ 616,194 1,500,000 General Motors Acceptance Corp., 6.750%, 1/15/2006 A2 BBB+ 1,519,245 1,000,000 Household Finance Corp., 6.500%, 11/15/2008 A2 A 1,002,020 300,000 Reliastar Financial Corp., 8.000%, 10/30/2006 Aa3 AA- 330,249 ------------- 3,467,708 ------------- HOTELS & RESTAURANTS -- 1.1% 600,000 Host Marriott LP, 9.500%, 1/15/2007 NA BB 603,000 950,000 Tricon Global Restaurants, Inc., 8.500%, 4/15/2006 Ba1 BB 980,875 ------------- 1,583,875 ------------- INDUSTRIALS -- 1.0% 600,000 Conoco Funding Co., 6.350%, 10/15/2011 Baa1 BBB+ 607,734 800,000 TRW, Inc., 7.625%, 3/15/2006 Baa2 BBB 836,048 ------------- 1,443,782 ------------- INVESTMENT BANKING/BROKER/MANAGEMENT -- 0.3% 500,000 Lehman Brothers Holdings, Inc., 6.250%, 5/15/2006 A2 A 512,640 ------------- MORTGAGE BACKED -- 12.4% 1,000,000 Federal Home Loan Mortgage Corp., 7.000%, 3/15/2010 Aaa AAA 1,088,120 758,763 Federal Home Loan Mortgage Corp., 6.500%, 7/01/2016 Aaa AAA 775,509 940,672 Federal Home Loan Mortgage Corp., 6.000%, 7/01/2028 Aaa AAA 923,918 727,791 Federal Home Loan Mortgage Corp., 7.000%, 5/01/2031 Aaa AAA 742,114 275,000 Federal National Mortgage Association, 5.750%, 4/15/2003 Aaa AAA 286,044 760,000 Federal National Mortgage Association, 7.125%, 3/15/2007 Aaa AAA 837,072 575,000 Federal National Mortgage Association, 6.375%, 6/15/2009 Aaa AAA 605,998 1,144,647 Federal National Mortgage Association, 6.000%, 5/01/2016 Aaa AAA 1,147,508 1,395,316 Federal National Mortgage Association, 6.000%, 10/01/2016 Aaa AAA 1,398,804 854,955 Federal National Mortgage Association, 6.500%, 7/01/2028 Aaa AAA 856,818 547,023 Federal National Mortgage Association, 7.000%, 10/01/2029 Aaa AAA 557,279 1,168,890 Federal National Mortgage Association, 6.000%, 5/01/2031 Aaa AAA 1,142,953 4,673,880 Federal National Mortgage Association, 7.500%, 8/01/2031 Aaa AAA 4,822,837 841,850 Federal National Mortgage Association, 6.500%, 9/01/2031 Aaa AAA 842,919 1,395,477 Federal National Mortgage Association, 6.000%, 11/01/2031 Aaa AAA 1,364,511 461,932 Government National Mortgage Association, 8.000%, 12/15/2025 Aaa AAA 486,475 657,395 Government National Mortgage Association, 7.000%, 11/15/2028 Aaa AAA 671,568 ------------- 18,550,447 ------------- OIL & GAS-EXPLORATION & PRODUCTION -- 0.5% 730,000 Kerr Mcgee Corp., 5.875%, 9/15/2006 Baa2 BBB 726,759 ------------- PAPER & FOREST PRODUCTS -- 0.6% 1,000,000 Fort James Corp., 6.875%, 9/15/2007 Baa3 BBB- 945,070 ------------- REAL ESTATE INVESTMENT TRUSTS -- 0.7% 1,000,000 Simon Property Group LP, 6.375%, 11/15/2007 - BBB 989,740 ------------- See accompanying notes to financial statements 35 RATINGS (d) (UNAUDITED) ----------------------- PRINCIPAL STANDARD AMOUNT MOODY'S & POOR'S VALUE (a) - --------------------------------------------------------------------------------------------- RETAIL -- 0.2% $ 280,000 Target Corp., 7.500%, 8/15/2010 A2 A+ $ 307,096 ------------ U.S. GOVERNMENT AND AGENCIES -- 3.4% 1,875,000 United States Treasury Bonds, 7.500%, 11/15/2016 Aaa AAA 2,217,187 1,200,000 United States Treasury Bonds, 6.000%, 2/15/2026 Aaa AAA 1,234,692 815,000 United States Treasury Notes, 7.000%, 7/15/2006 Aaa AAA 901,080 710,000 United States Treasury Notes, 6.500%, 2/15/2010 Aaa AAA 779,339 ------------ 5,132,298 ------------ Total Bonds and Notes (Identified Cost $47,970,802) 48,078,977 ------------ SHORT TERM INVESTMENTS -- 1.7% $ 2,104,000 Repurchase Agreement with State Street Bank and Trust Co. dated 12/31/2001 at 0.85% to be repurchased at $2,104,099 on 1/02/2002, collateralized by $2,060,000 U.S. Treasury Bond, 6.000%, due 2/15/2026 valued at $2,148,514 2,104,000 383,000 Repurchase Agreement with State Street Bank and Trust Co. dated 12/31/2001 at 0.85% to be repurchased at $383,018 on 1/02/2002, collateralized by $395,000 U.S. Treasury Bond, zero coupon, due 5/23/2002 valued at $392,254 383,000 ------------ Total Short Term Investments (Identified Cost $2,487,000) 2,487,000 ------------ Total Investments -- 99.6% (Identified Cost $148,603,353) (b) 149,037,843 Other assets less liabilities 667,854 ------------ Total Net Assets -- 100% $149,705,697 ============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2001, the net unrealized depreciation on investments based on cost of $149,387,985 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ 7,352,965 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value. (7,703,107) ------------ Net unrealized depreciation $ (350,142) ============
At December 31, 2001, the Fund had a capital loss carryover of approximately $31,124,206 of which $15,926,671 expires on December 31, 2008 and $15,197,535 expires on December 31, 2009. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. At December 31, 2001, there was no undistributed ordinary income or long-term capital gains except for unrealized appreciation/depreciation disclosed above on a tax basis. (c) Non-income producing security. (d) The ratings shown are believed to be the most recent ratings available at December 31, 2001. Securities are generally rated at the time of issuance. The rating agencies may revise their rating from time to time. As a result, there can be no assurance that the same ratings would be assigned if the securities were rated at December 31, 2001. The Fund's subadviser independently evaluates the Fund's portfolio securities and in making investment decisions does not rely solely on the ratings of agencies. See accompanying notes to financial statements 36 LARGE CAP VALUE FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2001
SHARES DESCRIPTION VALUE (a) -------------------------------------------------------------------------------- COMMON STOCK -- 97.3% OF TOTAL NET ASSETS AEROSPACE -- 2.1% 12,800 Honeywell International, Inc. $ 432,896 ----------- BANKS -- 5.2% 7,000 Bank of America Corp. 440,650 17,000 Mellon Financial Corp. 639,540 ----------- 1,080,190 ----------- BROADCAST MEDIA -- 1.4% 14,500 The Walt Disney Co. 300,440 ----------- BUSINESS SERVICES -- 7.6% 6,400 Electronic Data Systems Corp. 438,720 15,200 The Interpublic Group of Companies, Inc. 449,008 21,700 Waste Management, Inc. 692,447 ----------- 1,580,175 ----------- CHEMICALS -- 1.5% 7,500 E.l. du Pont de Nemours & Co. 318,825 ----------- COMMUNICATION SERVICES -- 6.2% 10,000 AT&T Corp. 181,400 10,600 BellSouth Corp. 404,390 8,000 Qwest Communications International, Inc. (c) 113,040 9,516 Verizon Communications, Inc. 451,629 10,100 WorldCom, Inc. (c) 142,208 ----------- 1,292,667 ----------- COMPUTERS & Business Equipment -- 3.4% 4,400 Applied Materials, Inc. (c) 176,440 14,600 Dell Computer Corp. (c) 396,828 7,000 Hewlett-Packard Co. 143,780 ----------- 717,048 ----------- DOMESTIC OIL -- 4.8% 25,300 Exxon Mobil Corp. 994,290 ----------- DRUGS & HEALTHCARE -- 8.9% 11,800 Baxter International, Inc. 632,834 5,400 Merck & Co. 317,520 10,000 Pharmacia Corp. 426,500 13,200 Schering-Plough Corp. 472,692 ----------- 1,849,546 ----------- ELECTRIC UTILITIES -- 3.1% 16,600 Duke Energy Corp. 651,716 ----------- FINANCIAL SERVICES -- 17.1% 18,700 Citigroup, Inc. 943,976 12,000 Fannie Mae 954,000 19,900 J.P. Morgan Chase & Co., Inc. 723,365 13,300 Merrill Lynch & Co., Inc. 693,196 2,800 The Goldman Sachs Group, Inc. 259,700 ----------- 3,574,237 ----------- FOOD & BEVERAGES -- 7.0% 11,600 Kraft Foods, Inc. 394,748 21,940 PepsiCo, Inc. 1,068,259 ----------- 1,463,007 ----------- HEALTH CARE -- 3.3% 18,000 HCA, Inc. $ 693,720 ----------- INSURANCE -- 13.3% 24,000 ACE, Ltd. 963,600 12,574 American International Group, Inc. 998,376 9,800 Radian Group, Inc. 420,910 9,200 St. Paul Companies 404,524 ----------- 2,787,410 ----------- INTERNATIONAL OIL -- 4.6% 9,200 BP PLC (ADR) 427,892 12,800 Shell Transport & Trading Co. PLC (ADR) 530,560 ----------- 958,452 ----------- OFFICE FURNISHINGS & SUPPLIES -- 2.0% 7,400 Avery Dennison Corp. 418,322 ----------- PAPER & FOREST PRODUCTS -- 2.9% 5,300 Kimberly-Clark Corp. 316,940 5,300 Weyerhaeuser Co. 286,624 ----------- 603,564 ----------- RETAIL -- 1.0% 7,400 CVS Corp. 219,040 ----------- TOBACCO -- 1.9% 8,500 Philip Morris Companies, Inc. 389,725 ----------- Total Common Stock (Identified Cost $19,963,468) 20,325,270 ----------- UNITS ----- WARRANTS -- 0.0% TRANSPORTATION -- 0.0% 86 Seabulk International, Inc. (c) 305 54 Seabulk International, Inc. (c) 20 ----------- Total Warrants (Identified Cost $0) 325 ----------- CONVERTIBLE SECURITY -- 0.8% COMPUTERS & BUSINESS EQUIPMENT -- 0.8% 9,850 Merrill Lynch & Co., Inc., 8% STRIDES exchangable for shares of Cisco Systems Common Stock, Zero Coupon, 171,390 ----------- Total Convertible Security (Identified Cost $163,045) 171,390 ----------- See accompanying notes to financial statements. 37 PRINCIPAL AMOUNT DESCRIPTION VALUE (a) -------------------------------------------------------------------------------------------- SHORT TERM INVESTMENT -- 1.9% $ 387,000 Repurchase Agreement with State Street Bank and Trust Co. dated 12/31/2001 at 0.85% to be repurchased at $387,018 on 1/02/2002, collateralized by $350,000 U.S. Treasury Note, 7.500%, due 02/15/2005 valued at $396,265 $ 387,000 ------------ Total Short Term Investment (Identified Cost $387,000) 387,000 ------------ Total Investments -- 100.0% (Identified Cost $20,513,513) (b) 20,883,985 Other assets less liabilities (4,211) ------------ Total Net Assets -- 100% $ 20,879,774 ------------
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2001, the net unrealized appreciation on investments based on cost of $20,513,513 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ 1,980,971 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (1,610,499) ------------ Net unrealized appreciation $ 370,472 ============
At December 31, 2001, the Fund had a capital loss carryover of approximately $253,498 which expires on December 31, 2008. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. At December 31, 2001, the components of distributable earnings, excluding unrealized appreciation/depreciation, disclosed above on a tax basis, consisted of $264 in undistributed ordinary income and $0 in undistributed long-term gain. (c) Non-income producing security. ADR An American Depositary Receipt is a certificate issued by a U.S. bank representing the right to receive securities of the foreign issuer described. The values of ADRs are significantly influenced by trading on exchanges not located in the United States. See accompanying notes to financial statements. 38 MID CAP GROWTH FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2001
SHARES DESCRIPTION VALUE (a) - ------------------------------------------------------------------------------- COMMON STOCK -- 95.6% OF TOTAL NET ASSETS ADVERTISING -- 1.3% 3,250 TMP Worldwide, Inc. (c) $ 139,425 ----------- APPAREL & TEXTILES -- 1.6% 4,150 Coach, Inc. (c) 161,767 ----------- BANKS -- 1.0% 1,550 Investors Financial Services Corp. .. 102,626 ----------- BIOTECHNOLOGY -- 2.3% 3,000 Affymetrix, Inc. 113,250 ----------- 1,950 Invitrogen Corp. (c) 120,764 ----------- 234,014 ----------- BROADCAST MEDIA -- 1.6% 6,400 Cox Radio, Inc. 163,072 ----------- BUSINESS SERVICES -- 4.7% 3,200 ChoicePoint, Inc. (c) 162,208 4,900 Concord EFS, Inc. (c) 160,622 3,950 CSG Systems International, Inc. (c) . 159,777 ----------- 482,607 ----------- CHEMICALS -- 2.0% 2,600 Cabot Microelectronics Corp. (c) 206,050 ----------- COMMUNICATION EQUIPMENT -- 2.6% 3,650 Ciena Corp. 52,232 4,750 Juniper Networks, Inc. (c) 90,012 4,450 UTStarcom, Inc. (c) 126,825 ----------- 269,069 ----------- COMMUNICATION SERVICES -- 4.1% 6,400 Gemstar-TV Guide International, Inc. (c) 177,280 1,150 L-3 Communications Holding, Inc. (c) 103,500 4,900 Westwood One, Inc. (c) 147,245 ----------- 428,025 ----------- COMPUTER NETWORKING -- 1.3% 14,750 Enterasys Networks, Inc. (c) 130,538 COMPUTER SOFTWARE & SERVICES -- 1.6% 4,800 Mercury Interactive Corp. (c) 163,104 ----------- COMPUTERS & BUSINESS EQUIPMENT -- 1.0% 7,750 ATI Technologies, Inc. 98,425 ----------- DRUGS & HEALTHCARE -- 13.4% 4,400 Abgenix, Inc. (c) 148,016 2,000 Barr Laboratories, Inc. 158,720 3,100 Biovail Corp. (c) 174,375 1,600 Cephalon, Inc. (c) 120,936 1,250 Enzon, Inc. (c) 70,350 2,350 ICOS Corp. (c) 134,984 2,200 IDEC Pharmaceuticals Corp. (c) 151,646 2,750 Laboratory Corp. (c) 222,337 2,450 Mylan Laboratories, Inc. 91,875 3,450 Protein Design Labs, Inc. (c) 113,160 ----------- 1,386,399 ----------- EDUCATION -- 1.3% 4,150 Apollo Group (c) 135,249 ----------- ELECTRONICS-SEMICONDUCTORS -- 13.8% 5,450 Cree Research, Inc. (c) 160,557 4,150 Flextronics International, Ltd. (c) . 99,558 5,650 Intersil Holding Corp. (c) 182,212 3,500 KLA-Tencor Corp. (c) 173,460 7,200 Marvell Technology Group, Ltd. (c) .. 257,904 4,900 QLogic Corp. (c) 218,099 4,950 RF Micro Devices, Inc. (c) $ 95,189 3,600 Semtech Corp. (c) 128,484 2,050 Sepracor, Inc. (c) 116,973 ----------- 1,432,436 ----------- ENTERTAINMENT -- 1.2% 1,800 International Game Technology (c) 122,940 ----------- FINANCIAL SERVICES -- 1.5% 5,100 AmeriCredit Corp. (c) 160,905 ----------- HEALTH CARE-MEDICAL TECHNOLOGY -- 1.5% 5,950 Cytyc Corp. (c) 155,295 ----------- INSURANCE -- 1.0% 3,100 Arthur J. Gallagher & Co. 106,919 ----------- INTERNET -- 1.5% 9,700 Riverstone Networks, Inc. (c) 161,020 ----------- INVESTMENT COMPANIES -- 1.4% 4,250 Labranche & Co., Inc. 146,455 ----------- NETWORK SYSTEMS -- 2.8% 5,000 Network Appliance, Inc. (c) 109,350 5,300 Polycom, Inc. (c) 180,571 ----------- 289,921 ----------- OIL & GAS-DRILLING & EQUIPMENT -- 3.0% 6,300 ENSCO International, Inc. 156,555 4,100 Weatherford International, Inc. 152,766 ----------- 309,321 ----------- OIL & GAS-EXPLORATION & PRODUCTION -- 1.6% 4,750 Nabors Industries, Inc. (c) 163,068 ----------- RETAIL -- 4.0% 2,950 Best Buy Co., Inc. (c) 219,716 7,850 Blockbuster, Inc. 197,820 ----------- 417,536 ----------- SOFTWARE -- 19.6% 1,500 Affiliated Computer Services, Inc. (c) 159,195 3,600 Check Point Software Technolgies, Ltd. 143,604 4,050 Internet Security Systems, Inc. 129,843 3,950 Intuit, Inc. (c) 168,981 7,500 Network Associates, Inc. (c) 193,875 3,050 Nvidia Corp. (c) 204,045 3,650 Overture Services, Inc. (c) 129,320 4,750 Perot Systems Corp. 96,995 6,050 Quest Software, Inc. (c) 133,765 5,350 Siebel Systems, Inc. (c) 149,693 2,750 THQ, Inc. 133,293 10,750 TIBCO Software, Inc. (c) 160,497 5,150 VERITAS Software Corp. (c) 230,874 ----------- 2,033,980 ----------- TELECOMMUNICATIONS-EQUIPMENT -- 2.9% 7,000 Brocade Communications Systems, Inc. (c) 231,840 11,300 ONI Systems Corp. (c) 70,851 ----------- 302,691 ----------- Total Common Stock (Identified Cost $9,157,181 ) 9,902,857 ----------- See accompanying notes to financial statements. 39 PRINCIPAL AMOUNT DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------------------- SHORT TERM INVESTMENT-- 6.1% $ 630,000 Repurchase Agreement with State Street Bank and Trust Co. dated 12/31/2001 at 0.85% to be repurchased at$630,030 on 1/02/2002, collateralized by $620,000 U.S. Treasury Bond, 6.00%, due 02/15/2026 valued at $646,640 $ 630,000 ------------ Total Short Term Investment (Identified Cost $630,000) 630,000 ------------ Total Investments-- 101.7% (Identified Cost $9,787,181) (b) 10,532,857 Other assets less liabilities (178,524) ------------ Total Net Assets-- 100% $ 10,354,333 ============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2001, the net unrealized appreciation on investments based on cost of $9,811,502 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ 1,014,024 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (292,669) ------------ Net unrealized appreciation $ 721,355 ============
At December 31, 2001, the Fund had a capital loss carryover of approximately $2,414,681 which expires on December 31, 2009. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2001, the Fund has elected to defer $240,177 of capital losses attributable to Post-October losses. At December 31, 2001, there was no undistributed ordinary income or long-term capital gains except for unrealized appreciation/depreciation disclosed above on a tax basis. (c) Non-income producing security. See accompanying notes to financial statements. 40 JURIKA & VOYLES RELATIVE VALUE FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2001
SHARES DESCRIPTION VALUE (a) - ------------------------------------------------------------------------- COMMON STOCK -- 93.8% OF TOTAL NET ASSETS ADVERTISING -- 1.1% 10,200 The Interpublic Group of Companies, Inc. $ 301,308 ------------ AIRLINES -- 3.2% 22,700 AMR Corp. (c) 503,259 19,375 Southwest Airlines 358,050 ------------ 861,309 ------------ AUTO PARTS -- 1.0% 11,400 Goodyear Tire & Rubber Co. 271,434 ------------ BANKS -- 2.9% 6,600 Comerica, Inc. 378,180 9,800 Wells Fargo & Co. 425,810 ------------ 803,990 ------------ BUSINESS SERVICES -- 7.3% 23,700 Cendant Corp. (c) 464,757 9,900 First Data Corp. 776,655 17,500 Sabre Group Holdings, Inc. (c) 741,125 ------------ 1,982,537 ------------ CHEMICALS -- 4.4% 7,200 Ecolab, Inc. 289,800 9,600 OM Group, Inc. 635,424 8,400 Rohm & Haas Co. 290,892 ------------ 1,216,116 ------------ COMMUNICATION SERVICES -- 4.2% 29,900 AT&T Wireless Services, Inc. (c) 429,663 18,400 SBC Communications, Inc. 720,728 ------------ 1,150,391 ------------ COMPUTER SOFTWARE & SERVICES -- 6.8% 21,000 Computer Sciences Corp. (c) 1,028,580 12,000 Electronic Data Systems Corp. 822,600 ------------ 1,851,180 ------------ COMPUTERS & BUSINESS EQUIPMENT -- 6.3% 64,100 3Com Corp. (c) 408,958 14,000 LSI Logic Corp. (c) 220,920 66,900 Palm, Inc. (c) 259,572 14,100 SanDisk Corp. (c) 203,040 12,100 Scientific-Atlanta, Inc. 289,674 10,800 STMicroelectronics NV 342,036 ------------ 1,724,200 ------------ CONSTRUCTION -- 1.1% 8,100 Baker Hughes, Inc. 295,407 ------------ DRUGS & HEALTHCARE -- 11.7% 11,200 Baxter International, Inc. 600,656 5,300 Bristol-Myers Squibb Co. 270,300 18,200 Pfizer, Inc. 725,270 12,702 Pharmacia & Upjohn, Inc. (c) 541,740 7,700 Schering-Plough Corp. 275,737 6,700 Wellpoint Health Networks, Inc. (c) . 782,895 ------------ 3,196,598 ------------ ELECTRIC UTILITIES -- 1.3% 22,500 AES Corp. (c) $ 367,875 ------------ FINANCIAL SERVICES -- 4.4% 12,200 Freddie Mac 797,880 9,900 Nationwide Financial Services 410,454 ------------ 1,208,334 ------------ FOOD & BEVERAGES -- 3.8% 38,200 Hormel Foods Corp. 1,026,434 ------------ FOOD PROCESSING -- 1.4% 14,700 Sysco Corp. 385,434 ------------ HOTELS & RESTAURANTS -- 2.3% 12,100 Brinker International, Inc. 360,096 8,800 Wendy's International, Inc. 256,696 ------------ 616,792 ------------ INDUSTRIAL MACHINERY -- 4.6% 18,100 Cognex Corp. (c) 463,541 18,300 Deere & Co. 798,978 ------------ 1,262,519 ------------ INSURANCE -- 6.3% 13,500 Allmerica Financial Corp. 601,425 4,200 Hartford Financial Services Group, Inc. 263,886 24,200 Principal Financial Group (c) 580,800 9,300 Protective Life Corp. 269,049 ------------ 1,715,160 ------------ OIL & GAS -- 6.1% 6,200 Chevron-Texaco Corp. 555,582 15,700 GlobalSantaFe Corp. 447,764 19,800 Suncor Energy, Inc. 652,212 ------------ 1,655,558 ------------ PAPER & FOREST PRODUCTS -- 2.8% 13,000 Kimberly-Clark Corp. 777,400 ------------ PUBLISHING -- 3.9% 17,300 McGraw-Hill Companies, Inc. 1,054,954 ------------ RETAIL -- 2.3% 24,500 Blockbuster, Inc. 617,400 ------------ RETAIL-GROCERY -- 1.0% 6,500 Safeway, Inc. (c) 271,375 ------------ SOFTWARE -- 1.5% 34,300 Transaction Systems Architects, Inc. (c) 420,518 ------------ TRUCKING & FREIGHT FORWARDING -- 2.1% 10,700 United Parcel Service, Inc. 583,150 ------------ Total Common Stock (Identified Cost $25,666,149) 25,617,373 ------------ See accompanying notes to financial statements. 41 PRINCIPAL AMOUNT DESCRIPTION VALUE (a) -------------------------------------------------------------------------------------------- SHORT TERM INVESTMENT-- 6.2% $ 1,699,000 Repurchase Agreement with State Street Bank and Trust Co. dated 12/31/2001 at 0.85% to be repurchased at$1,669,080 on 1/02/2002, collateralized by $1,740,000 zero coupon U.S. Treasury Bill, due 2/28/2002 valued at $1,735,137 $ 1,699,000 ------------ Total Short Term Investment (Identified Cost $1,699,000) 1,699,000 ------------ Total Investments -- 100.0% (Identified Cost $27,365,149) (b) 27,316,373 Other assets less liabilities (5,728) ------------ Total Net Assets -- 100% $ 27,310,645 ============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2001 the net unrealized depreciation on investments based on cost of $27,511,064 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ 3,475,011 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (3,669,702) ------------ Net unrealized depreciation $ (194,691) ============
For the year ended December 31, 2001, the Fund has elected to defer $144,310 of capital losses attributable to Post-October losses. At December 31, 2001, there was no undistributed ordinary income or long-term capital gains except for unrealized appreciation/depreciation disclosed above on a tax basis. (c) Non-income producing security. See accompanying notes to financial statements. 42 SELECT FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2001
SHARES DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------- COMMON STOCK -- 92.1% OF TOTAL NET ASSETS AUTO & RELATED -- 2.5% 229,200 Ford Motor Co. $ 3,603,024 ------------ BANKS & THRIFTS -- 15.1% 660,400 Washington Mutual, Inc. 21,595,080 ------------ COMMUNICATION SERVICES -- 2.9% 292,100 Liberty Media Corp. (c) 4,089,400 ------------ COMPUTER SOFTWARE & SERVICES --7.7% 68,600 First Data Corp. 5,381,670 1,214,500 Novell, Inc. (c) 5,574,555 ------------ 10,956,225 ------------ CONSUMER GOODS & SERVICES -- 3.1% 97,840 H & R Block, Inc. 4,373,448 ------------ DRUGS & HEALTHCARE -- 3.6% 208,400 Omnicare, Inc. 5,184,992 ------------ HARDWARE -- 3.4% 129,800 Black & Decker Corp. 4,897,354 ------------ MEDIA & ENTERTAINMENT -- 4.2% 87,200 Electronic Data Systems Corp. 5,977,560 ------------ MEDICAL PRODUCTS -- 4.2% 121,000 Guidant Corp. (c) 6,025,800 ------------ OIL & GAS-EXPLORATION & PRODUCTION -- 4.4% 167,700 Burlington Resources, Inc. 6,295,458 ------------ PHARMACEUTICAL -- 3.9% 128,800 Chiron Corp. (c) 5,646,592 ------------ PUBLISHING -- 4.3% 94,930 Knight-Ridder, Inc. 6,163,805 ------------ RETAIL -- 11.5% 193,500 J.C. Penney, Inc. 5,205,150 309,600 The Kroger Co. (c) 6,461,352 98,700 Tricon Global Restaurants, Inc. (c) 4,856,040 ------------ 16,522,542 ------------ SPECIALTY PRINTING -- 3.7% 147,500 Valassis Communications, Inc. (c) 5,253,950 ------------ TELECOMMUNICATIONS -- 8.6% 354,500 AT&T Corp. 6,430,630 292,000 Sprint Corp. 5,863,360 ------------ 12,293,990 ------------ UTILITIES -- 4.6% 139,400 TXU Corp. 6,572,710 ------------ WASTE MANAGEMENT -- 4.4% 198,500 Waste Management, Inc. 6,334,135 ------------ Total Common Stock (Identified Cost $125,844,474) 131,786,065 ------------ PRINCIPAL AMOUNT DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------------------- SHORT TERM INVESTMENTS-- 8.7% $12,452,000 Repurchase Agreement with State Street Bank and Trust Co. dated 12/31/2001 at 1.57% to be repurchased at $12,453,086 on 1/02/2002, collateralized by $12,180,000 U.S. Treasury Bond, 6.00%, due 2/15/2026 valued at $12,703,350 $ 12,452,000 ------------ Total Short Term Investment (Identified Cost $12,452,000) 12,452,000 ------------ Total Investments-- 100.8% (Identified Cost $138,296,474) (b) 144,238,065 Other assets less liabilities (1,174,449) ------------ Total Net Assets-- 100% $143,063,616 ============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2001 the net unrealized appreciation on investments based on cost of $138,296,474 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $11,062,214 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (5,120,623) =========== Net unrealized appreciation $ 5,941,591 ===========
At December 31, 2001, the Fund had a capital loss carryover of approximately $1,480,080 which expires on December 31, 2009. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. At December 31, 2001, there was no undistributed ordinary income or long-term capital gains except for unrealized appreciation/depreciation disclosed above on a tax basis. (c) Non-income producing security. See accompanying notes to financial statements. 43 JURIKA & VOYLES SMALL CAP GROWTH FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2001
SHARES DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------- COMMON STOCK -- 100.4% OF TOTAL NET ASSETS AIRLINES -- 0.9% 35,000 Mesa Air Group, Inc. (c) $ 263,200 ----------- BANKS -- 1.9% 7,000 City National Corp. 327,950 10,000 Silicon Valley Bancshares (c) 267,300 ----------- 595,250 ----------- BUILDING CONSTRUCTION -- 0.6% 12,500 Craftmade International, Inc. 196,375 ----------- BUSINESS SERVICES -- 4.8% 15,500 Cornell Companies, Inc. (c) 273,575 25,100 Headwaters, Inc. (c) 287,646 109,500 Infonow Corp. (c) 407,340 15,000 Quovadx, Inc. (c) 137,250 17,500 Steiner Leisure, Ltd. (c) 371,875 ----------- 1,477,686 ----------- CHEMICALS -- 0.4% 33,900 Landec Corp. (c) 127,125 ----------- COMMERCIAL SERVICES -- 3.9% 16,000 Copart, Inc. (c) 581,920 59,500 Surebeam Corp. (c) 622,965 ----------- 1,204,885 ----------- COMMUNICATION -- 1.6% 22,000 Finisar Corp. (c) 223,740 22,500 Harmonic, Inc. (c) 270,450 ----------- 494,190 ----------- COMMUNICATION SERVICES -- 5.2% 37,500 Centillium Communications, Inc. (c) . 294,750 50,000 SBA Communcations Corp. (c) 651,000 63,500 US Unwired, Inc. (c) 646,430 ----------- 1,592,180 ----------- COMPUTER SOFTWARE -- 8.1% 21,000 Activision, Inc. (c) 546,210 35,400 Digital Insight Corp. (c) 791,544 71,400 Quadramed Corp. (c) 603,330 41,500 Trizetto Group, Inc. (c) 544,480 ----------- 2,485,564 ----------- COMPUTER SOFTWARE & Services -- 0.1% 5,000 eLoyalty Corp. (c) 26,550 ----------- COMPUTER PERIPHERALS -- 3.2% 18,000 Concurrent Computer Corp. (c) 267,300 107,000 Lantronix, Inc. (c) 676,240 13,500 Wave Systems Corp. (c) 30,240 ----------- 973,780 ----------- COMPUTERS & BUSINESS EQUIPMENT -- 3.3% 45,000 Logicvision, Inc. (c) 573,750 12,500 Pixelworks, Inc. (c) 200,750 12,500 SonicWALL, Inc. (c) 243,000 ----------- 1,017,500 ----------- DRUGS & HEALTHCARE -- 13.7% 21,000 American Healthways, Inc. 670,740 37,500 Cardiodynamics International Corp. (c) 247,875 3,000 Closure Medical Corp. 70,080 17,500 Given Imaging (c) 312,550 7,500 Intermune, Inc. (c) 369,450 15,500 Lincare Holdings, Inc. 444,075 13,000 Martek Biosciences Corp. (c) 282,750 15,000 Medamicus, Inc. (c) 233,400 6,500 Northwest Biotherapeutics, Inc. (c) . 32,500 23,000 Novavax, Inc. (c) $ 324,300 13,250 Pediatrix Medical Group (c) 449,440 8,500 Taro Pharmaceutical Industries, Ltd. (c) 339,575 24,000 Wright Med Group, Inc. (c) 429,600 ----------- 4,206,335 ----------- ELECTRONICS -- 3.7% 95,000 Duraswitch Industries, Inc. (c) 807,500 12,500 Plexus Corp. (c) 332,000 ----------- 1,139,500 ----------- FINANCIAL SERVICES-- 5.1% 10,000 Allied Capital Corp. 260,000 47,500 eSpeed, Inc. (c) 393,300 42,500 Knight Trading Group, Inc. (c) 468,350 16,000 Metris Co. 411,360 36,300 Nextcard, Inc. (c) 18,876 ----------- 1,551,886 ----------- FOOD & BEVERAGES -- 0.6% 19,500 Suprema Specialties, Inc. (c) (d) 177,450 ----------- GAMING & LOTTERY -- 2.1% 42,000 Shuffle Master, Inc. (c) 658,140 ----------- HARDWARE & TOOLS -- 0.6% 6,500 Electro Scientific Industries, Inc. (c) 195,065 ----------- HEALTHCARE-MEDICAL PRODUCTS & SUPPLIES -- 2.4% 65,700 Medwave, Inc. (c) 137,970 35,000 Thoratec Labs Corp. (c) 595,000 ----------- 732,970 ----------- HEALTH CARE-PRODUCTS -- 2.9% 45,500 Med Design Corp. (c) 896,350 ----------- HEALTH CARE-SERVICES -- 2.8% 19,900 Pharmaceutical Product Development, Inc. 642,969 6,500 Renal Care Group (c) 208,650 ----------- 851,619 ----------- HOTELS & RESTAURANTS -- 1.4% 22,500 Main Street & Main, Inc. (c) 111,150 15,000 Ruby Tuesday, Inc. 309,450 ----------- 420,600 ----------- INSURANCE -- 1.4% 20,000 Amerigroup Corp. (c) 436,000 ----------- INTERNET -- 2.5% 37,000 Earthlink, Inc. (c) 450,290 200,000 LivePerson, Inc. (c) 66,000 40,000 StorageNetworks, Inc. (c) 247,200 ----------- 763,490 ----------- MEDIA & ENTERTAINMENT -- 0.9% 22,500 AMC Entertainment, Inc. (c) 270,000 ----------- OIL & GAS-DRILLING EQUIPMENT -- 0.6% 20,000 Key Energy Group (c) 184,000 ----------- OIL & GAS-EXPLORATION & PRODUCTION -- 3.4% 17,500 Core Laboratories NV (c) 245,350 15,000 Remington Oil Gas Corp. (c) 259,500 19,100 Superior Energy Services, Inc. (c) .. 165,215 62,500 Ultra Petroleum Corp. (c) 380,625 ----------- 1,050,690 ----------- RAILROADS & EQUIPMENT -- 1.5% 6,500 Genesee & Wyoming, Inc. (c) 212,225 13,500 Knight Transportation, Inc. (c) 253,530 ----------- 465,755 ----------- See accompanying notes to financial statements. 44 SHARES DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS -- 1.8% 9,000 Alexandria Real Estate Equity $ 369,900 13,000 American Land Lease, Inc. 170,300 ----------- 540,200 ----------- RETAIL -- 6.3% 15,000 1-800-Flowers.com, Inc. (c) 234,000 8,750 Electronics Boutique Holdings Corp. (c) 349,475 9,500 Foot Locker, Inc. (c) 148,675 32,700 Global Sports, Inc. (c) 652,365 10,500 Pacific Sunwear of California, Inc. (c) 214,410 9,500 Rent-A-Center, Inc. (c) 318,915 ----------- 1,917,840 ----------- RETAIL-GROCERY -- 1.4% 22,500 Fleming Companies, Inc. 416,250 ----------- SEMICONDUCTORS -- 4.0% 15,500 Cirrus Logic (c) 204,910 35,000 Ibis Technology Corp. (c) 520,450 15,500 Monolithic Systems Technology, Inc. (c) 319,300 8,000 Power Integrations, Inc. (c) 182,720 ----------- 1,227,380 ----------- SOFTWARE -- 7.3% 17,700 Activcard SA (c) 166,203 85,000 Click2Learn, Inc. (c) 255,000 18,000 iManage, Inc. (c) 142,020 10,500 Precise Software Solutions, Ltd. (c) 216,930 37,000 Raindance Communications, Inc. (c) 211,270 14,000 Serena Software, Inc. (c) 304,360 13,000 Smartforce PLC (c) 321,750 21,200 Stellent, Inc. (c) 626,672 ----------- 2,244,205 ----------- Total Common Stock (Identified Cost $31,371,880) 30,800,010 ----------- Total Investments -- 100.4% (Identified Cost $31,371,880) (b) 30,800,010 Other assets less liabilities (127,124) ----------- Total Net Assets -- 100% $30,672,886 ===========
(a) See Note 2a of Notes to Financial Statements (b) Federal Tax Information: At December 31, 2001, the net unrealized depreciation on investments based on cost of $31,866,583 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ 2,475,699 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (3,542,272) ------------- Net unrealized depreciation $ (1,066,573) =============
At December 31, 2001, the Fund had a capital loss carryover of approximately $7,479,805 of which $6,245,133 expires on December 31, 2008 and $1,234,672 expires on December 31, 2009. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2001, the Fund has elected to defer $2,948,929 of capital losses attributable to Post-October losses. At December 31, 2001, there was no undistributed ordinary income or long-term capital gains except for unrealized appreciation/depreciation disclosed above on a tax basis. (c) Non-income producing security. (d) Security valued at fair value as determined in good faith by or under the direction of the Board of Trustees. See accompanying notes to financial statements. 45 INTERNATIONAL EQUITY FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2001
SHARES DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------- COMMON STOCK -- 99.5% OF TOTAL INVESTMENTS AUSTRALIA -- 4.7% 214,300 Foster's Brewing Group, Ltd. $ 533,091 272,200 Macquarie Infrastructure Group 487,640 38,400 Rio Tinto, Ltd. 731,285 38,800 Wesfarmers, Ltd. 615,455 59,200 Westpac Bank Corp., 144A 477,400 ----------- 2,844,871 ----------- BELGIUM -- 1.3% 27,800 Interbrew 760,945 ----------- CANADA -- 8.2% 14,000 Biovail Corp. (c) 781,813 24,850 Canadian Pacific Railway 500,964 15,000 Celestica, Inc. (c) 602,901 16,877 Fairmont Hotels Resorts, Inc. 402,025 12,654 Pancanadian Energy Corp. 328,211 27,200 Rogers Communication, Inc. (c) 463,270 16,000 Royal Bank of Canada 520,806 22,400 Sun Life Financial Services, Inc. 477,598 8,400 Talisman Energy, Inc. 319,161 48,700 TransCanada Pipelines, Ltd. 607,718 ----------- 5,004,467 ----------- DENMARK -- 2.1% 38,900 Danske Bank A/S 624,129 15,800 Novo Nordisk A/S 646,052 ----------- 1,270,181 ----------- FINLAND -- 2.2% 26,700 Nokia OYJ 688,293 48,500 Stora Enso OYJ 620,817 ----------- 1,309,110 ----------- FRANCE -- 10.6% 8,600 Aventis SA 610,509 13,300 Carrefour SA 691,397 6,300 Compagnie Francaise d'Etudes et de Construc 841,192 101,600 Orange SA (c) 920,672 10,800 Sanofi-Synthelabo SA 805,621 16,900 STMicroelectronics NV 535,223 15,620 Thales 538,786 5,140 TotalFinaElf SA 733,890 14,100 Vivendi Universal SA 771,894 ----------- 6,449,184 ----------- GERMANY -- 4.6% 2,600 Allianz AG 615,628 17,800 Bayerische Motoren Werke AG 620,319 39,200 Infineon Technologies AG 800,815 2,700 Muenchener Rueckversicherungs-Gesellschaft 732,918 ----------- 2,769,680 ----------- HONG KONG -- 1.7% 970,000 Huaneng Power International, Inc. 584,656 193,000 Wharf Holdings 471,501 ----------- 1,056,157 ----------- INDIA -- 0.9% 29,700 Dr. Reddy's Laboratories, Ltd. 562,815 ----------- IRELAND -- 4.4% 227,900 Anglo Irish Bank Corp., 144A 882,464 67,500 Bank Of Ireland 626,087 13,800 Elan Corp., PLC (ADR) (c) 621,828 85,600 Ryanair Holdings (c) 540,997 ----------- 2,671,376 ----------- ISRAEL -- 2.4% 20,400 Amdocs, Ltd. (c) $ 692,988 8,100 Taro Pharmaceutical Industries, Ltd. (c) 323,595 7,600 Teva Pharmaceutical Industries, Ltd. (ADR) 468,388 ----------- 1,484,971 ----------- ITALY -- 2.1% 55,350 Eni SpA 693,719 50,000 Riunione Adriatica di Sicurta SpA 588,834 ----------- 1,282,553 ----------- JAPAN -- 14.3% 15,000 Canon, Inc. 516,373 18,600 Honda Motor Co. 742,524 11,000 Kao Corp. 228,799 1,500 Keyence Corp. 249,485 35,000 Kirin Brewery Co. 250,324 12,500 Matsumotokiyoshi Co., Ltd. 441,760 51,000 Mitsubishi Pharma 575,361 44,000 NEC Corp. 449,034 4,300 Nintendo Co. 753,263 12,000 Nippon System Development Co., Ltd. . 478,132 132,000 Nissan Motor Co., Ltd. 700,252 9,600 Nitto Denko Corp. 222,029 60,000 Onward Kashiyama Co., Ltd. 576,139 7,400 Orix Corp. 663,125 26,400 Sega Corp. (c) 526,952 2,840 Shohkoh Fund & Co. 225,448 4,800 Sony Corp. 219,464 6,300 Takefuji Corp. 455,874 16,000 Yamanouchi Pharmaceutical Company, Ltd. 422,563 ----------- 8,696,901 ----------- NETHERLANDS -- 3.1% 35,700 ASM Lithography Holding NV (c) 608,685 23,469 Fortis 607,926 23,200 Koninklijke Ahold NV 674,891 ----------- 1,891,502 ----------- PORTUGAL -- 1.9% 147,255 Portugal Telecom, SGPS, SA (c) 1,146,942 ----------- SINGAPORE -- 1.7% 161,000 City Developments, Ltd. 527,511 70,000 DBS Group Holdings 523,152 ----------- 1,050,663 ----------- SOUTH AFRICA -- 0.7% 26,400 Anglo American PLC 399,539 SOUTH KOREA -- 2.2% 4,000 Samsung Electronics 852,885 12,470 Samsung Securities Co., Ltd. (c) 456,010 ----------- 1,308,895 ----------- SPAIN -- 3.3% 72,500 Banco Santander Central Hispano SA (c) 607,283 44,800 Grupo Ferrovial, SA 785,212 46,213 Telefonica SA (ADR) (c) 618,282 ----------- 2,010,777 ----------- SWITZERLAND -- 6.1% 4,200 Converuim Holdings AG (c) 204,230 3,600 Nestle SA 767,896 6,300 Swiss Reinsurance (c) 633,948 1,640 Synthes-Stratec, Inc. 1,142,347 19,200 UBS AG (c) 969,487 ----------- 3,717,908 ----------- See accompanying notes to financial statements. 46 SHARES DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------- UNITED KINGDOM--21.0% 109,900 Allied Domecq PLC $ 650,674 132,900 BHP Billiton PLC 674,303 98,200 BP PLC 762,355 28,600 British Sky Broadcast (c) 314,335 182,800 Capita Group PLC 1,302,861 192,700 Centrica PLC 621,927 96,000 Compass Group PLC 718,758 67,600 Diageo PLC 771,473 92,900 Dixons Group PLC 317,386 24,600 Glaxosmithkline 616,204 233,900 Hilton 717,492 51,500 HSBC Holdings PLC 603,457 55,400 Kingfisher 322,967 76,700 Reed International 635,586 47,100 Royal Bank of Scotland Group PLC 1,144,884 52,600 Shire Pharmaceuticals Group PLC (c) . 657,641 249,300 Tesco 902,456 387,971 Vodafone Group PLC 1,013,847 12,748,606 ---------- Total Common Stock (Identified Cost $59,997,597) 60,438,043 ---------- PRINCIPAL AMOUNT - ---------------- SHORT TERM INVESTMENT -- 0.3% $ 172,000 Repurchase Agreement with State Street Bank and Trust Co. dated 12/31/2001 at 0.85% to be repurchased at $172,008 on 1/02/2002, collateralized by $125,000 U.S. Treasury Bond, 12.000%, due 8/15/2013 valued at $179,336 172,000 ------------ Total Short Term Investment (Identified Cost $172,000) 172,000 ------------ Total Investments -- 99.8% (Identified Cost $60,169,597) (b) 60,610,043 Other assets less liabilities 143,681 ------------ Total Net Assets -- 100% $ 60,753,724 ============
(a) See Note 2a of Notes to Financial Statements (b) Federal Tax Information: At December 31, 2001, the net unrealized depreciation on investments based on cost of $60,694,117 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost $ 3,492,970 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value. (3,577,044) ------------ Net unrealized depreciation $ (84,074) ============
At December 31, 2001, the Fund had a capital loss carryover of approximately $20,761,210 of which expires on December 31, 2009. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2001, the Fund has elected to defer $1,504,908 of capital losses attributable to Post-October losses. At December 31, 2001, there was no undistributed ordinary income or long-term capital gains except for unrealized appreciation/depreciation disclosed above on a tax basis. (c) Non-income producing security. ADR An American Depositary Receipt is a certificate issued by a U.S. bank representing the right to receive securities of the foreign issuer described. The values of ADRs are significantly influenced by trading on exchanges not located in the United States. 144A Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $1,359,864 or 2.2% of net assets. INDUSTRY HOLDINGS AT DECEMBER 31, 2001 Banks 12.6% Drugs & Healthcare 11.7% Telecommunications 6.9% Beverages 4.9% Semiconductor & Equipment 4.6% Insurance 4.6% Retail 4.5% Financial Services 3.6% Oil & Gas 3.5% Automotive 3.4% Hotels & Restaurants 3.0% Metals & Mining 3.0% Media & Entertainment 2.8% Technology 2.8% Construction 2.7% Electrical Equipment 2.3% Business Services 2.1% Utilities 2.0% Other, less than 2.0% each 19.0%
See accompanying notes to financial statements. 47 STATEMENT OF ASSETS & LIABILITIES December 31, 2001
CAPITAL GROWTH LARGE CAP TARGETED EQUITY GROWTH AND FUND GROWTH FUND FUND INCOME FUND ---------------- --------------- ---------------- --------------- ASSETS Investments at cost $ 147,583,012 $ 56,292,823 $ 1,029,639,308 $ 340,989,085 Net unrealized appreciation (depreciation) (11,672,781) (9,968) 75,608,909 10,877,511 ---------------- --------------- ---------------- --------------- Investments at value 135,910,231 56,282,855 1,105,248,217 351,866,596 Cash 581 397 3,580 98 Foreign cash at value (identified cost $80,606) -- -- -- -- Investments held as collateral for loaned securities -- 10,878,109 -- -- Receivable for Fund shares sold 199,179 18,805 278,548 129,120 Receivable for securities sold 685,347 -- 26,528,662 2,712,166 Dividends and interest receivable 115,201 35,707 319,468 452,962 Tax reclaims receivable -- -- -- -- Receivable from investment adviser -- -- -- -- Securities lending income receivable 4,751 -- -- -- Unamortized organization expense -- -- -- -- Other assets -- 48,136 -- -- ---------------- --------------- ---------------- --------------- TOTAL ASSETS 136,915,290 67,264,009 1,132,378,475 355,160,942 ---------------- --------------- ---------------- --------------- LIABILITIES Collateral on securities loaned, at value -- 10,878,109 -- -- Payable for securities purchased -- -- 24,546,174 694,490 Payable for Fund shares redeemed 1,091,591 131,882 2,551,359 -- Custodial Bank -- -- -- -- Management fees payable 88,462 1,719 630,963 206,339 Deferred Trustees' fees 45,431 -- 244,143 51,729 Transfer agent fees payable 64,058 38,830 367,463 148,477 Accounting and administrative fees payable 5,858 5,945 45,938 15,117 Other accounts payable and accrued expenses 54,067 44,895 141,546 74,915 ---------------- --------------- ---------------- --------------- TOTAL LIABILITIES 1,349,467 11,101,380 28,527,586 1,191,067 ---------------- --------------- ---------------- --------------- NET ASSETS $ 135,565,823 $ 56,162,629 $ 1,103,850,889 $ 353,969,875 ================ =============== ================ =============== NET ASSETS CONSIST OF: Paid in capital $ 179,246,848 $ 87,309,160 $ 1,219,297,410 $ 435,553,990 Undistributed (overdistributed) net investment income (81,471) -- (257,957) (56,149) Accumulated net realized gain (loss) on investments (31,926,773) (31,136,563) (190,797,473) (92,405,477) Net unrealized appreciation (depreciation) of investments and foreign currency transactions (11,672,781) (9,968) 75,608,909 10,877,511 ---------------- --------------- ---------------- --------------- NET ASSETS $ 135,565,823 $ 56,162,629 $ 1,103,850,889 $ 353,969,875 ================ =============== ================ =============== COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE: CLASS A SHARES: Net assets $ 98,411,750 $ 27,872,890 $ 1,012,160,852 $ 211,138,080 ================ =============== ================ =============== Shares of beneficial interest 8,247,606 2,013,420 129,526,222 17,917,623 ================ =============== ================ =============== Net asset value and redemption price per share $ 11.93 $ 13.84 $ 7.81 $ 11.78 ================ =============== ================ =============== Offering price per share $ 12.66 $ 14.68 $ 8.29 $ 12.50 ================ =============== ================ =============== CLASS B SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) Net assets $ 35,409,372 $ 24,086,531 $ 78,743,560 $ 120,360,837 ================ =============== ================ =============== Shares of beneficial interest 3,338,617 1,768,087 10,541,386 10,586,024 ================ =============== ================ =============== Net asset value and offering price per share $ 10.61 $ 13.62 $ 7.47 $ 11.37 ================ =============== ================ =============== CLASS C SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) Net assets $ 1,744,701 $ 3,007,478 $ 4,161,744 $ 10,553,121 ================ =============== ================ =============== Shares of beneficial interest 164,591 220,767 556,910 929,278 ================ =============== ================ =============== Net asset value per share $ 10.60 $ 13.62 $ 7.47 $ 11.36 ================ =============== ================ =============== Offering price per share $ 10.71 $ 13.76 $ 7.55 $ 11.47 ================ =============== ================ =============== CLASS Y SHARES: Net assets $ -- $ 1,195,730 $ 8,784,733 $ 11,917,837 ================ =============== ================ =============== Shares of beneficial interest -- 85,841 1,118,369 999,137 ================ =============== ================ =============== Net asset value, offering and redemption price per share $ -- $ 13.93 $ 7.85 $ 11.93 ================ =============== ================ =============== See accompanying notes to financial statements. 48 JURIKA & VOYLES BALANCED LARGE CAP MID CAP RELATIVE VALUE FUND VALUE FUND GROWTH FUND* FUND --------------- ---------------- ---------------- -------------- ASSETS Investments at cost $ 148,603,353 $ 20,513,513 $ 9,787,181 $ 27,365,149 Net unrealized appreciation (depreciation) 434,490 370,472 745,676 (48,776) --------------- ---------------- --------------- --------------- Investments at value 149,037,843 20,883,985 10,532,857 27,316,373 Cash 1,791 523 301 720 Foreign cash at value (identified cost $80,606) -- -- -- -- Investments held as collateral for loaned securities -- -- -- -- Receivable for Fund shares sold 76,700 37,772 106,068 6,129 Receivable for securities sold 9,724,039 -- 49,003 -- Dividends and interest receivable 788,303 26,505 516 23,211 Tax reclaims receivable 61 -- -- -- Receivable from investment adviser -- 8,821 40,091 17,133 Securities lending income receivable -- 2,482 2,500 -- Unamortized organization expense -- -- -- -- Other assets -- -- -- 47,951 --------------- ---------------- ---------------- --------------- TOTAL ASSETS 159,628,737 20,960,088 10,731,336 27,411,517 --------------- ---------------- ---------------- --------------- LIABILITIES Collateral on securities loaned, at value -- -- -- -- Payable for securities purchased -- -- 311,245 -- Payable for Fund shares redeemed 9,583,174 21,933 2,867 44,923 Custodial Bank -- -- -- -- Management fees payable 99,675 -- -- -- Deferred Trustees' fees 83,993 8,483 2,262 -- Transfer agent fees payable 59,190 9,909 7,017 17,900 Accounting and administrative fees payable 6,546 869 25,678 5,945 Other accounts payable and accrued expenses 90,462 39,120 27,934 32,104 --------------- ---------------- ---------------- --------------- TOTAL LIABILITIES 9,923,040 80,314 377,003 100,872 --------------- ---------------- ---------------- --------------- NET ASSETS $ 149,705,697 $ 20,879,774 $ 10,354,333 $ 27,310,645 =============== ================ ================ =============== NET ASSETS CONSIST OF: Paid in capital $ 180,778,027 $ 20,770,852 $ 12,293,984 $ 27,649,646 Undistributed (overdistributed) net investment income (83,993) (8,052) (6,148) -- Accumulated net realized gain (loss) on investments (31,422,827) (253,498) (2,679,179) (290,225) Net unrealized appreciation (depreciation) of investments and foreign currency transactions 434,490 370,472 745,676 (48,776) --------------- ---------------- ---------------- --------------- NET ASSETS $ 149,705,697 $ 20,879,774 $ 10,354,333 $ 27,310,645 =============== ================ ================ =============== COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE: CLASS A SHARES: Net assets $ 74,801,645 $ 10,185,435 $ 5,198,024 $ 1,277,307 =============== ================ ================ =============== Shares of beneficial interest 7,820,200 571,873 637,415 98,418 =============== ================ ================ =============== Net asset value and redemption price per share $ 9.57 $ 17.81 $ 8.15 $ 12.98 =============== ================ ================ =============== Offering price per share $ 10.15 $ 18.90 $ 8.65 $ 13.77 =============== ================ ================ =============== CLASS B SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) $ 28,562,447 $ 9,911,134 $ 4,223,101 $ 12.98 Net assets =============== ================ ================ =============== 2,979,254 560,899 520,941 1 Shares of beneficial interest =============== ================ ================ =============== $ 9.59 $ 17.67 $ 8.11 $ 12.98 Net asset value and offering price per share =============== ================ ================ =============== CLASS C SHARES: (redemption price is equal to net asset value less any applicable $ 1,392,487 $ 783,205 $ 933,208 $ 12.98 contingent deferred sales charges) --------------- ---------------- ---------------- --------------- Net assets 145,922 44,294 115,060 1 =============== ================ ================ =============== Shares of beneficial interest $ 9.54 $ 17.68 $ 8.11 $ 12.98 =============== ================ ================ =============== Net asset value per share $ 9.64 $ 17.86 $ 8.19 $ 13.11 =============== ================ ================ =============== Offering price per share CLASS Y SHARES: Net assets $ 44,949,118 $ -- $ -- $ 26,033,312 --------------- ---------------- ---------------- --------------- Shares of beneficial interest 4,754,256 -- -- 2,006,856 =============== ================ ================ =============== Net asset value, offering and redemption price Per share $ 9.45 $ -- $ -- $ 12.97 =============== ================ ================ =============== JURIKA & VOYLES SELECT SMALL CAP INTERNATIONAL FUND* GROWTH FUND EQUITY FUND ---------------- --------------- ---------------- ASSETS Investments at cost $ 138,296,474 $ 31,371,880 $ 60,169,597 Net unrealized appreciation (depreciation) 5,941,591 (571,870) 440,446 --------------- --------------- ---------------- Investments at value 144,238,065 30,800,010 60,610,043 Cash 619 -- 847 Foreign cash at value (identified cost $80,606) -- -- 80,190 Investments held as collateral for loaned securities -- -- -- Receivable for Fund shares sold -- 13,314 49,833 Receivable for securities sold 1,942,602 350,245 446,288 Dividends and interest receivable 113,264 920 57,082 Tax reclaims receivable -- -- 32,164 Receivable from investment adviser -- -- -- Securities lending income receivable 2,500 2,836 3,333 Unamortized organization expense -- 5,216 -- Other assets -- 15,776 -- ---------------- --------------- ---------------- TOTAL ASSETS 146,297,050 31,188,317 61,279,780 ---------------- --------------- ---------------- LIABILITIES Collateral on securities loaned, at value -- -- -- Payable for securities purchased 2,760,676 216,002 270,206 Payable for Fund shares redeemed 130,409 82,167 63,469 Custodial Bank -- 129,804 -- Management fees payable 218,901 8,295 46,513 Deferred Trustees' fees 3,424 7,640 33,327 Transfer agent fees payable 58,719 18,479 29,825 Accounting and administrative fees payable 16,605 1,338 2,566 Other accounts payable and accrued expenses 44,700 51,706 80,150 ---------------- --------------- ---------------- TOTAL LIABILITIES 3,233,434 515,431 526,056 ---------------- --------------- ---------------- NET ASSETS $ 143,063,616 $ 30,672,886 $ 60,753,724 ================ =============== ================ NET ASSETS CONSIST OF: Paid in capital $ 138,646,338 $ 42,175,833 $ 83,185,422 Undistributed (overdistributed) net investment income (44,233) (4,457) 82,940 Accumulated net realized gain (loss) on investments (1,480,080) (10,926,620) (22,790,638) Net unrealized appreciation (depreciation) of investments and foreign currency transactions 5,941,591 (571,870) 441,880 ---------------- --------------- ---------------- NET ASSETS $ 143,063,616 $ 30,672,886 $ 60,753,724 ================ =============== ================ COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE: CLASS A SHARES: Net assets $ 45,986,941 $ 6,901,676 $ 33,772,622 ================ =============== ================ Shares of beneficial interest 4,196,674 529,099 2,655,943 ================ =============== ================ Net asset value and redemption price per share $ 10.96 $ 13.04 $ 12.72 ================ =============== ================ Offering price per share $ 11.63 $ 13.84 $ 13.50 ================ =============== ================ CLASS B SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) Net assets $ 62,670,727 $ 7,367,847 $ 17,549,045 ================ =============== ================ Shares of beneficial interest 5,752,093 565,241 1,445,715 ================ =============== ================ Net asset value and offering price per share $ 10.90 $ 13.03 $ 12.14 ================ =============== ================ CLASS C SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) Net assets $ 34,405,948 $ 722,203 $ 2,182,990 ---------------- --------------- ---------------- Shares of beneficial interest 3,157,730 55,402 179,192 ================ =============== ================ Net asset value per share $ 10.90 $ 13.04 $ 12.18 ================ =============== ================ Offering price per share $ 11.01 $ 13.17 $ 12.30 ================ =============== ================ CLASS Y SHARES: Net assets $ -- $ 15,681,160 $ 7,249,067 ---------------- --------------- ---------------- Shares of beneficial interest -- 1,201,375 552,824 ================ =============== ================ Net asset value, offering and redemption price per share $ -- $ 13.05 $ 13.11 ================ =============== ================
* The Mid Cap Growth Fund and Select Fund commenced operation on March 15, 2001. 49 STATEMENTS OF OPERATIONS
CAPITAL GROWTH LARGE CAP TARGETED GROWTH AND BALANCED FUND GROWTH FUND (1) EQUITY INCOME FUND FUND FUND ----------- ------------------------ - ---------- ----------- ----------- FOR THE PERIOD OCTOBER 1, 2001 YEAR ENDED THROUGH YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, SEPTEMBER 30, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2001 2001 2001 2001 2001 2001 -------------- ------------ -------------- ------------- ------------ ------------ INVESTMENT INCOME Dividends $ 872,143 $ 100,276 $ 678,234 $ 11,954,241 $ 5,475,717 $ 721,288 Interest 49,452 4,703 157,584 195,835 109,151 3,893,173 Securities lending income 39,092 9,979 72,036 -- -- -- Less net foreign taxes withheld -- -- -- (681,261) (11,112) (2,293) -------------- ------------ -------------- ------------- ------------ ------------ 960,687 114,958 907,854 11,468,815 5,573,756 4,612,168 -------------- ------------ -------------- ------------- ------------ ------------ Expenses Management fees 1,206,965 140,374 976,870 8,138,041 2,760,399 1,080,327 Service fees - Class A 286,602 18,169 145,784 2,749,081 613,071 210,487 Service and distribution fees - Class B 443,820 61,143 320,506 847,071 1,384,899 330,386 Service and distribution fees - Class C 19,533 8,413 56,473 44,628 132,025 16,321 Trustees' fees and expenses 14,503 9,200 41,978 64,267 26,553 13,736 Accounting and administrative 74,676 17,644 76,480 557,169 190,310 63,803 Custodian 83,116 16,365 77,681 203,678 114,715 169,962 Transfer agent - Class A, Class B, Class C 686,600 86,987 289,976 4,156,761 1,566,757 501,376 Transfer agent - Class Y -- 303 1,676 8,566 12,371 25,178 Shareholder servicing fees - Class Y -- -- -- -- -- -- Audit and tax services 27,284 20,158 32,452 30,300 27,506 33,850 Legal 12,524 1,269 45,458 105,101 31,299 15,694 Printing 40,123 2,282 31,032 129,854 62,328 93,321 Registration 36,151 6,027 88,901 32,498 55,217 47,653 Amortization of organization expenses -- -- -- -- -- -- Miscellaneous 18,971 2,886 8,646 99,978 51,941 35,869 -------------- ------------ -------------- ------------- ------------ ----------- Total expenses before reductions 2,950,868 391,220 2,193,913 17,166,993 7,029,391 2,637,963 -------------- ------------ -------------- ------------- ------------ ----------- Less waiver/reimbursement -- (136,441) (547,749) -- -- (12,476) Less reductions (52,099) (6,400) (190,330) (404,267) (171,423) (41,363) -------------- ------------ -------------- ------------- ------------ ----------- Net expenses 2,898,769 248,379 1,455,834 16,762,726 6,857,968 2,584,124 -------------- ------------ -------------- ------------- ------------ ----------- Net investment income (loss) (1,938,082) (133,421) (547,980) (5,293,911) (1,284,212) 2,028,044 -------------- ------------ -------------- ------------- ------------ ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Realized gain (loss) on: Investments - net (29,195,372) (4,260,358) (19,628,575) (117,503,746) (63,368,674) (10,723,157) Foreign currency transactions - net -- -- -- -- -- -- Change in unrealized appreciation (depreciation) of: Investments - net (8,639,961) 10,670,520 (23,534,168) (127,041,857) (4,879,802) (5,725,622) Foreign currency transactions - net -- -- -- -- -- -- -------------- ------------ -------------- ------------- ------------ ------------ Net realized and unrealized gain (loss) on investments and foreign currency transactions (37,835,333) 6,410,162 (43,162,743) (244,545,603) (68,248,476) (16,448,779) -------------- ------------ -------------- ------------- ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (39,773,415) $6,276,741 $(43,710,723) $(249,839,514)$(69,532,688)$ (14,420,735) =========== =========== ========== = =========== =========== =========== See accompanying notes to financial statements. 50 JURIKA & VOYLES LARGE CAP MID CAP RELATIVE VALUE VALUE FUND GROWTH FUND* FUND (2) ----------- ----------- ------------------------- FOR THE PERIOD FOR THE PERIOD MARCH 15, 2001 JULY 1, 2001 YEAR ENDED THROUGH THROUGH YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 30, 2001 2001 2001 2001 ----------- ----------- ----------- ------------ INVESTMENT INCOME Dividends $ 349,844 $ 4,256 $ 121,750 $ 272,968 Interest 14,876 9,081 16,815 51,380 Securities lending income 13,144 1,595 -- -- Less net foreign taxes withheld (2,727) -- (323) -- ----------- ----------- ----------- ------------ 375,137 14,932 138,242 324,348 ----------- ----------- ----------- ------------ Expenses Management fees 135,087 48,642 112,241 259,587 Service fees - Class A 23,837 6,824 231 -- Service and distribution fees - Class B 88,890 19,460 -- -- Service and distribution fees - Class C 8,746 4,448 -- -- Trustees' fees and expenses 7,800 5,314 10,549 17,221 Accounting and administrative 9,089 55,809 22,712 40,000 Custodian 61,547 72,764 23,537 48,090 Transfer agent - Class A, Class B, Class C 89,689 57,213 6,669 -- Transfer agent - Class Y -- -- 14,549 28,236 Shareholder servicing fees - Class Y -- -- 24,727 58,184 Audit and tax services 23,907 13,900 21,214 17,003 Legal 1,992 3,958 2,194 4,672 Printing 25,022 14,322 1,609 3,500 Registration 45,297 59,189 17,381 11,486 Amortization of organization expenses -- -- -- -- Miscellaneous 7,305 3,659 2,946 7,156 ----------- ----------- ----------- ------------ Total expenses before reductions 528,208 365,502 260,559 495,135 ----------- ----------- ----------- ------------ Less waiver/reimbursement 165,533) (260,526) (95,326) (116,061) Less reductions (8,604) (1,401) -- -- ---------- ----------- ----------- ------------ Net expenses 354,071 103,575 165,233 379,074 ---------- ----------- ----------- ------------ Net investment income (loss) 21,066 (88,643) (26,991) (54,726) ---------- ----------- ----------- ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Realized gain (loss) on: Investments - net 644,900 (2,679,179) 585,808 3,092,815 Foreign currency transactions - net -- -- -- -- Change in unrealized appreciation (depreciation) of: Investments - net (1,375,821) 745,676 (1,803,428) (1,509,676) Foreign currency transactions - net -- -- -- -- ----------- ----------- ---------- ------------- Net realized and unrealized gain (loss) on investments and (730,921) (1,933,503) (1,217,620) 1,583,139 foreign currency transactions ----------- ----------- ----------- ------------- NET INCREASE (DECREASE) IN NET ASSETS $ (709,855) $(2,022,146) $(1,244,611) $1,528,413 RESULTING FROM OPERATIONS =========== =========== =========== ============= JURIKA & VOYLES SELECT SMALL CAP INTERNATIONAL FUND* GROWTH FUND (3) EQUITY FUND ----------- ------------------------ ------------------ FOR THE PERIOD FOR THE PERIOD MARCH 15, 2001 JULY 1, 2001 THROUGH THROUGH YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, JUNE 30, DECEMBER 31, 2001 2001 2001 2001 -------------- ----------- ----------- ---------- INVESTMENT INCOME Dividends $ 724,520 $ 29,957 $ 74,929 $ 1,056,249 Interest 152,965 2,478 27,992 70,846 Securities lending income 1,595 4,926 -- 46,819 Less net foreign taxes withheld -- -- -- (119,488 ----------- ----------- ----------- ----------- 879,080 37,361 102,921 1,054,426 ----------- ----------- ----------- ------------ Expenses Management fees Service fees - Class A 567,368 120,654 326,712 676,887 Service and distribution fees - Class B 47,500 1,463 -- 103,583 Service and distribution fees - Class C 249,277 6,231 -- 219,721 Trustees' fees and expenses 128,056 607 -- 34,336 Accounting and administrative 8,146 6,304 16,642 10,399 Custodian 55,808 21,441 40,000 34,862 Transfer agent - Class A, Class B, Class C 59,467 41,840 79,428 176,045 Transfer agent - Class Y 228,152 9,077 -- 332,161 Shareholder servicing fees - Class Y -- 31,514 53,502 8,370 Audit and tax services -- 13,893 48,560 -- Legal 23,900 2,657 16,552 36,669 Printing 5,354 876 4,852 7,915 Registration 24,055 6,352 29,562 39,033 Amortization of organization expenses 60,123 11,441 14,983 54,411 Miscellaneous -- 355 -- -- 4,867 1,321 3,228 11,687 Total expenses before reductions ----------- ----------- ----------- ----------- 1,462,073 276,026 634,021 1,746,079 Less waiver/reimbursement ----------- ----------- ----------- ----------- Less reductions (214,528) (85,667) -- (148,749) (36,440) -- -- (372) Net expenses ----------- ----------- ----------- ----------- 1,211,105 190,359 485,272 1,745,707 Net investment income (loss) ----------- ----------- ----------- ----------- (332,025) (152,998) (382,351) (691,281) ----------- ----------- ----------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Realized gain (loss) on: Investments - net (1,480,080) (6,725,182) 1,142,239 (19,729,529) Foreign currency transactions - net -- -- (123,443) Change in unrealized appreciation (depreciation) of: Investments - net 5,941,591 829,380 (6,860,499) (1,543,763) Foreign currency transactions - net -- -- -- (35,111) ----------- ----------- ----------- ----------- Net realized and unrealized gain (loss) on investments and foreign currency transactions 4,461,511 (5,895,802) (5,718,260) (21,431,846) ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 4,129,486 $(6,048,800) $ (6,100,611) $(22,123,127) (22,123,127) =========== =========== =========== ===========
* The Mid Cap Growth Fund and Select Fund commenced operations on March 15, 2001. (1) Financial information for Kobrick Growth Fund which was reorganized into CDC Nvest Large Cap Growth Fund on November 16, 2001. (2) Financial information for Jurika & Voyles Value+Growth Fund which was reorganized into CDC Nvest Jurika & Voyles Relative Value Fund on November 30, 2001. (3) Financial information for Jurika & Voyles Small-Cap Fund which was reorganized into CDC Nvest Jurika & Voyles Small Cap Growth Fund on November 30, 2001. 51 STATEMENT OF CHANGES IN NET ASSETS
CAPITAL GROWTH LARGE CAP GROWTH FUND FUND (1) ----------------------------- -------------------------------------------- FOR THE PERIOD OCTOBER 1, 2001 YEAR ENDED THROUGH YEAR ENDED DECEMBER 31, DECEMBER 31, SEPTEMBER 30, 2001 2000 2001 2001 2000 ------------- -------------- ------------- ------------- -------------- FROM OPERATIONS: Net investment income (loss) $ (1,938,082) $ (2,661,117) $ (133,421) $ (547,980) $ (811,344) Net realized gain (loss) on investments and foreign currency transactions (29,195,372) 36,617,435 (4,260,358) (19,628,575) 9,912,487 Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions (8,639,961) (84,752,540) 10,670,520 (23,534,168) 11,832,995 ------------- -------------- ------------- ------------- -------------- Increase (decrease) in net assets resulting from operations (39,773,415) (50,796,222) 6,276,741 (43,710,723) 20,934,138 ------------- -------------- ------------- ------------- -------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A -- -- -- -- -- Class B -- -- -- -- -- Class C -- -- -- -- -- Class Y -- -- -- -- -- Short-Term capital gain Class A (281,476) (10,343,094) -- (6,637,774) -- Class B (113,682) (4,446,241) -- (2,464,991) -- Class C (5,301) (190,085) -- (432,053) -- Class Y -- -- -- (106,463) -- Long-Term capital gain Class A -- (17,733,791) -- -- -- Class B -- (7,626,799) -- -- -- Class C -- (326,589) -- -- -- Class Y -- -- -- -- -- ------------- -------------- ------------- ------------- -------------- (400,459) (40,666,599) -- (9,641,281) -- ------------- -------------- ------------- ------------- -------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (27,056,007) 15,399,125 (5,263,049) (38,558,890) 79,298,613 ------------- -------------- ------------- ------------- -------------- Total increase (decrease) in net assets (67,229,881) (76,063,696) 1,013,692 (91,910,894) 100,232,751 NET ASSETS Beginning of the period 202,795,704 278,859,400 55,148,937 147,059,831 46,827,080 ------------- -------------- ------------- ------------- -------------- End of the period $ 135,565,823 $ 202,795,704 $ 56,162,629 $ 55,148,937 $ 147,059,831 ============= ============== ============= ============= ============== UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME $ (81,471) $ (31,167) $ -- $ (14,411) $ (1,525) ============= ============== ============= ============= ============== See accompanying notes to financial statements. 52 TARGETED EQUITY GROWTH AND INCOME FUND FUND ----------------------------- ----------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2001 2000 2001 2000 -------------- -------------- -------------- ------------- FROM OPERATIONS: Net investment income (loss) $ (5,293,911) $ 13,575,437 $ (1,284,212) $ (1,289,466) Net realized gain (loss) on investments and (117,503,746) 12,770,111 (63,368,674) (28,022,955) foreign currency transactions Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions (127,041,857) (118,691,383) (4,879,802) (15,665,445) Increase (decrease) in net assets resulting ------------- ------------- -------------- ------------- from operations (249,839,514) (92,345,835) (69,532,688) (44,977,866) ------------- ------------- -------------- ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A (4,807,922) (8,340,768) -- -- Class B (386,970) (147,789) -- -- Class C (19,590) (7,510) -- -- Class Y (40,392) (114,156) -- -- Short-Term capital gain Class A -- (69,759,990) -- (9,846,335) Class B -- (5,294,878) -- (5,698,512) Class C -- (269,344) -- (657,800) Class Y -- (579,627) -- (324,610) Long-Term capital gain Class A -- (87,836,685) -- -- Class B -- (6,863,634) -- -- Class C -- (337,586) -- -- Class Y -- (741,929) -- -- -------------- -------------- -------------- ------------- (5,254,874) (180,293,896) -- (16,527,257) -------------- -------------- -------------- ------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (180,783,920) (218,727,513) (62,483,375) (86,001,450) -------------- -------------- -------------- ------------- Total increase (decrease) in net assets (435,878,308) (491,367,244) (132,016,063) (147,506,573) NET ASSETS Beginning of the period 1,539,729,197 2,031,096,441 485,985,938 633,492,511 End of the period -------------- -------------- -------------- ------------- $1,103,850,889 $1,539,729,197 $ 353,969,875 $ 485,985,938 UNDISTRIBUTED (OVERDISTRIBUTED) NET ============== ============= ============== ============= INVESTMENT INCOME $ (257,957) $ 5,486,267 $ (56,149) $ (37,026) ============== ============= ============== ============= BALANCED LARGE CAP VALUE FUND FUND ----------------------------- ----------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2001 2000 2001 2000 ------------- -------------- ------------- -------------- FROM OPERATIONS: Net investment income (loss) $ 2,028,044 $ 4,200,131 $ 21,066 $ 101,551 Net realized gain (loss) on investments and foreign currency transactions (10,723,157) (20,039,633) 644,900 (675,512) Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions (5,725,622) (1,389,661) (1,375,821) 1,684,729 ------------- ------------- -------------- ------------- Increase (decrease) in net assets resulting (14,420,735) (17,229,163) (709,855) 1,110,768 from operations ------------- ------------- -------------- ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A (1,372,986) (2,671,815) (16,658) (98,327) Class B (185,032) (324,462) (7,435) (14,783) Class C (9,369) (18,562) (795) (1,897) Class Y (713,204) (1,218,118) -- -- Short-Term capital gain Class A -- -- -- -- Class B -- -- -- -- Class C -- -- -- -- Class Y -- -- -- -- Long-Term capital gain Class A -- (15,553) -- -- Class B -- (6,046) -- -- Class C -- (308) -- -- Class Y -- (4,792) -- -- -------------- ------------- -------------- ------------- (2,280,591) (4,259,656) (24,888) (115,007) -------------- ------------- -------------- ------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (4,896,033) (92,677,754) 4,466,121 (6,117,119) -------------- ------------- -------------- ------------- Total increase (decrease) in net assets (21,597,359) (114,166,573) 3,731,378 (5,121,358) NET ASSETS Beginning of the period 171,303,056 285,469,629 17,148,396 22,269,754 -------------- ------------- -------------- ------------- End of the period $ 149,705,697 $ 171,303,056 $ 20,879,774 $ 17,148,396 ============== ============= ============== ============= UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME $ (83,993) $ 7,469 $ (8,052) $ 6,101 ============== ============= ============== =============
(1) Financial information for Kobrick Growth Fund which was reorganized into CDC Nvest Large Cap Growth Fund on November 16, 2001. 53
JURIKA & VOYLES MID CAP GROWTH RELATIVE VALUE SELECT FUND* FUND (1) FUND* -------------- -------------------------------------------- ------------- FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD MARCH 15, 2001 JULY 1, 2001 MARCH 15, 2001 THROUGH THROUGH YEAR ENDED THROUGH DECEMBER 31, DECEMBER 31, JUNE 30, DECEMBER 31, 2001 2001 2001 2000 2001 -------------- ------------- -------------- ------------- ------------- FROM OPERATIONS: Net investment income (loss) $ (88,643) $ (26,991) $ (54,726) $ (1,964) $ (332,025) Net realized gain (loss) on investments and foreign currency transactions (2,679,179) 585,808 3,092,815 3,909,122 1,480,080) Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions 745,676 (1,803,428) (1,509,676) (1,533,508) 5,941,591 -------------- ------------- -------------- ------------- ------------- Increase (decrease) in net assets resulting from operations (2,022,146) (1,244,611) 1,528,413 2,373,650 4,129,486 -------------- ------------- -------------- ------------- ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A -- -- -- -- -- Class B -- -- -- -- -- Class C -- -- -- -- -- Class Y -- -- -- (84,879) -- Short-Term capital gain Class A -- (33,244) -- -- -- Class B -- (1) -- -- -- Class C -- (1) -- -- -- Class Y -- (673,333) (2,360,046) (974,823) -- Long-Term capital gain Class A -- (122,465) -- -- -- Class B -- (1) -- -- -- Class C -- (1) -- -- -- Class Y -- (2,480,458) (1,661,038) -- -- -------------- ------------- -------------- ------------- ------------- -- (3,309,504) (4,021,084) (1,059,702) -- -------------- ------------- -------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS 12,376,479 2,777,668 2,024,688 (10,072,019) 138,934,130 -------------- ------------- -------------- ------------- ------------- Total increase (decrease) in net assets 10,354,333 (1,776,447) (467,983) (8,758,071) 143,063,616 NET ASSETS Beginning of the period -- 29,087,092 29,555,075 38,313,146 -- -------------- ------------- -------------- ------------- ------------- End of the period $ 10,354,333 $ 27,310,645 $ 29,087,092 $ 29,555,075 $ 143,063,616 ============== ============= ============== ============= ============= UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME $ (6,148) $ -- $ 1,073 $ 2,090 $ (44,233) ============== ============= ============== ============= ============= See accompanying notes to financial statements. 54 JURIKA & VOYLES SMALL CAP GROWTH INTERNATIONAL EQUITY FUND (2) FUND --------------------------------------------- ----------------------------- FOR THE PERIOD JULY 1, 2001 THROUGH YEAR ENDED YEAR ENDED DECEMBER 31, JUNE 30, DECEMBER 31, 2001 2001 2000 2001 2000 ------------- -------------- -------------- -------------- ------------- FROM OPERATIONS: Net investment income (loss) $ (152,998) $ (382,351) $ (391,388) $ (691,281) $ (1,396,809) Net realized gain (loss) on (6,725,182) 1,142,239 8,129,566 (19,852,972) 3,406,865 investments and foreign currency transactions Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions 829,380 (6,860,499) 4,637,086 (1,578,874) (42,495,629) Increase (decrease) in net assets resulting from operations ------------- ------------- -------------- ------------- ------------- (6,048,800) (6,100,611) 12,375,264 (22,123,127) (40,485,573) ------------- ------------- -------------- ------------- ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A -- -- -- -- (558,378) Class B -- -- -- -- (292,183) Class C -- -- -- -- (40,426) Class Y -- -- -- -- (115,432) Short-Term capital gain Class A -- -- -- -- (3,095,952) Class B -- -- -- -- (1,639,114) Class C -- -- -- -- (234,074) Class Y (100,347) (5,422,734) -- -- (640,874) Long-Term capital gain Class A -- -- -- -- (1,680,769) Class B -- -- -- -- (902,864) Class C -- -- -- -- (139,135) Class Y (113,581) (520,505) -- -- (346,865) ------------- ------------- -------------- ------------- ------------- (213,928) (5,943,239) -- -- (9,686,066) ------------- ------------- -------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS 5,360,387 445,645 214,012 (18,558,412) 39,656,764 ------------- ------------- -------------- ------------- ------------- Total increase (decrease) in net assets (902,341) (11,598,205) 12,589,276 (40,681,539) (10,514,875) NET ASSETS Beginning of the period 31,575,227 43,173,432 30,584,156 101,435,263 111,950,138 ------------- ------------- -------------- ------------- ------------- End of the period $ 30,672,886 $ 31,575,227 $ 43,173,432 $ 60,753,724 $ 101,435,263 ============= ============= ============== ============= ============= UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME $ (4,457) $ 4,201 $ 3,900 $ (82,940) $ (29,010) ============= ============= ============== ============= =============
* The Mid Cap Growth Fund and Select Fund commenced operations on March 15, 2001. (1) Financial information for Jurika & Voyles Value+Growth Fund which was reorganized into CDC Nvest Jurika & Voyles Relative Value Fund on November 30, 2001. (2) Financial information for Jurika & Voyles Small-Cap Fund which was reorganized into CDC Nvest Jurika & Voyles Small Cap Growth Fund on November 30, 2001. 55 FINANCIAL HIGHLIGHTS For a share outstanding throughout each period.
INCOME (LOSS) FROM INVESTMENT OPERATIONS: LESS DISTRIBUTIONS: ---------------------------------------- --------------------------------- NET ASSET VALUE, NET NET REALIZED DIVIDENDS DISTRIBUTIONS BEGINNING INVESTMENT AND UNREALIZED TOTAL FROM FROM FROM NET OF INCOME GAIN (LOSS) ON INVESTMENT NET REALIZED RETURN OF THE PERIOD (LOSS) (d) INVESTMENTS OPERATIONS INVESTMENT CAPITAL CAPITAL TOTAL INCOME GAINS DISTRIBUTIONS --------- ----------- ---------- ------------- ---------- ------------ --------- ------------- CAPITAL GROWTH FUND CLASS A 12/31/2001 $15.04 $(0.13) $(2.95) $(3.08) $ -- $(0.03) $ -- $(0.03) 12/31/2000 22.86 (0.18) (4.14) (4.32) -- (3.50) -- (3.50) 12/31/1999 20.67 (0.13) 5.05 4.92 -- (2.73) -- (2.73) 12/31/1998 19.95 (0.13) 5.18 5.05 -- (4.33) -- (4.33) 12/31/1997 19.27 (0.18) 3.43 3.25 -- (2.57) -- (2.57) CLASS B 12/31/2001 13.47 (0.20) (2.63) (2.83) -- (0.03) -- (0.03) 12/31/2000 21.06 (0.32) (3.77) (4.09) -- (3.50) -- (3.50) 12/31/1999 19.37 (0.27) 4.69 4.42 -- (2.73) -- (2.73) 12/31/1998 19.10 (0.27) 4.87 4.60 -- (4.33) -- (4.33) 12/31/1997 18.74 (0.32) 3.25 2.93 -- (2.57) -- (2.57) CLASS C 12/31/2001 13.47 (0.20) (2.64) (2.84) -- (0.03) -- (0.03) 12/31/2000 21.06 (0.32) (3.77) (4.09) -- (3.50) -- (3.50) 12/31/1999 19.37 (0.27) 4.69 4.42 -- (2.73) -- (2.73) 12/31/1998 19.11 (0.27) 4.86 4.59 -- (4.33) -- (4.33) 12/31/1997 18.74 (0.34) 3.28 2.94 -- (2.57) -- (2.57) LARGE CAP GROWTH FUND* CLASS A 12/31/2001(f) $12.39 $(0.02) $ 1.47 $ 1.45 $ -- $ -- $ -- $ -- 9/30/2001 21.67 (0.05) (7.87) (7.92) -- (1.36) -- (1.36) 9/30/2000 15.41 (0.13) 6.39 6.26 -- -- -- -- 9/30/1999 10.32 (0.08) 5.17(k) 5.09 0.00(e) -- -- 0.00(e) 9/30/1998(g) 10.00 0.00(e) 0.32 0.32 -- -- -- -- CLASS B 12/31/2001(f) 12.22 (0.04) 1.44 1.40 -- -- -- -- 9/30/2001 21.53 (0.17) (7.78) (7.95) -- (1.36) -- (1.36) 9/30/2000(h) 16.21 (0.26) 5.58 5.32 -- -- -- -- CLASS C 12/31/2001(f) 12.22 (0.04) 1.44 1.40 -- -- -- -- 9/30/2001 21.54 (0.17) (7.79) (7.96) -- (1.36) -- (1.36) 9/30/2000(h) 16.21 (0.26) 5.59 5.33 -- -- -- -- CLASS Y 12/31/2001(f) 12.46 (0.01) 1.48 1.47 -- -- -- -- 9/30/2001 21.73 (0.01) (7.90) (7.91) -- (1.36) -- (1.36) 9/30/2000(h) 16.21 (0.06) 5.58 5.52 -- -- -- -- See accompanying notes to financial statements. 56 RATIOS TO AVERAGE NET ASSETS: ------------------------------------------ NET ASSET NET ASSETS, EXPENSES VALUE, TOTAL END OF AFTER EXPENSE NET INVESTMENT PORTFOLIO END OF RETURN THE PERIOD EXPENSES REDUCTIONS INCOME (LOSS) TURNOVER THE PERIOD (%) (a) (000) (%) (b) (%)(b)(c) (%) (b) RATE (%) ----------- ----------- ----------- ----------- ----------- ------------- ----------- CAPITAL GROWTH FUND CLASS A 12/31/2001 $11.93 (20.5) $ 98,412 1.62 1.58 (0.99) 90 12/31/2000 15.04 (19.5) 143,425 1.40 1.37 (0.80) 118 12/31/1999 22.86 24.7 200,821 1.39 1.39 (0.61) 124 12/31/1998 20.67 29.0 175,511 1.46 1.46 (0.62) 136 12/31/1997 19.95 17.2 149,734 1.45 1.45 (0.87) 48 CLASS B 12/31/2001 10.61 (21.0) 35,409 2.37 2.33 (1.74) 90 12/31/2000 13.47 (20.1) 56,884 2.15 2.12 (1.55) 118 12/31/1999 21.06 23.8 74,774 2.14 2.14 (1.36) 124 12/31/1998 19.37 28.2 57,796 2.21 2.21 (1.37) 136 12/31/1997 19.10 15.9 45,546 2.20 2.20 (1.62) 48 CLASS C 12/31/2001 10.60 (21.1) 1,745 2.37 2.33 (1.74) 90 12/31/2000 13.47 (20.1) 2,487 2.15 2.12 (1.55) 118 12/31/1999 21.06 23.8 3,110 2.14 2.14 (1.36) 124 12/31/1998 19.37 28.1 1,609 2.21 2.21 (1.37) 136 12/31/1997 19.11 15.9 979 2.20 2.20 (1.62) 48 LARGE CAP GROWTH FUND* CLASS A 12/31/2001(f) $13.84 11.7(i) $ 27,873 1.40(j) 1.36(j) (0.56) 27 9/30/2001 12.39 (38.5)(i) 27,668 1.40(j) 1.19(j) (0.27) 724 9/30/2000 21.67 40.6(i) 103,087 1.40(j) 1.29(j) (0.62) 826 9/30/1999 15.41 49.4(i) 46,827 1.40(j) 1.40(j) (0.55) 632 9/30/1998(g) 10.32 3.2(i) 1,054 1.40(j) 1.40(j) 0.32 11 CLASS B 12/31/2001(f) 13.62 11.5(i) 24,087 2.15(j) 2.11(j) (1.31) 27 9/30/2001 12.22 (38.9)(i) 22,811 2.15(j) 1.98(j) (1.04) 724 9/30/2000(h) 21.53 32.8(i) 35,680 2.15(j) 1.99(j) (1.30) 826 CLASS C 12/31/2001(f) 13.62 11.5(i) 3,007 2.15(j) 2.11(j) (1.33) 27 9/30/2001 12.22 (38.9)(i) 3,419 2.15(j) 1.98(j) (1.04) 724 9/30/2000(h) 21.54 32.9(i) 6,546 2.15(j) 2.01(j) (1.32) 826 CLASS Y 12/31/2001(f) 13.93 11.8(i) 1,196 1.15(j) 1.11(j) (0.32) 27 9/30/2001 12.46 (38.3)(i) 1,251 1.15(j) 0.98(j) (0.06) 724 9/30/2000(h) 21.73 34.1(i) 1,746 1.15(j) 0.95(j) (0.28) 826
* The financial information for the periods through November 16, 2001 reflects the financial information for Kobrick Growth Fund's Class A shares, Class B shares, Class C shares and Class Y shares which were reorganized into Class A shares, Class B shares, Class C shares and Class Y shares of Large Cap Growth Fund, respectively, as of November 16, 2001. The predecessor Fund was advised by Kobrick funds LLC until July 1, 2001 and had a September 30 fiscal year end. (a) A sales charge for Class A and Class C shares and a contingent deferred sales charge for Class B and Class C shares are not reflected in in total return calculations. Periods less than one year are not annualized. (b) Computed on an annualized basis for periods less than one year. (c) Certain Funds have entered into agreements with certain brokers to rebate a portion of brokerage commissions. The rebated commissions are used to reduce operating expenses of the Fund. (d) Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (e) Amount rounds to less than $0.01 per share. (f) For the three months ended December 31, 2001. (g) For the period September 1, 1998 (inception) through September 30, 1998. (h) For the period October 29, 1999 (inception) through September 30, 2000. (i) Had certain expenses not been reduced during the periods shown, total returns would have been lower. (j) The investment adviser agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement, expense ratios would have been higher. (k) Amount shown for a share outstanding does not correspond with the net realized and unrealized gain (loss) on investments due to the timing of sales and repurchases of Fund shares in relation to fluctuating market values of the investments of the Fund. 57 FINANCIAL HIGHLIGHTS For a share outstanding throughout each period.
INCOME (LOSS) FROM INVESTMENT OPERATIONS: LESS DISTRIBUTIONS: ---------------------------------------- ----------------------------------------------- NET ASSET VALUE, NET NET REALIZED DIVIDENDS DISTRIBUTIONS BEGINNING INVESTMENT AND UNREALIZED TOTAL FROM FROM NET FROM NET OF INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED RETURN OF TOTAL THE PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME CAPITAL GAINS CAPITAL DISTRIBUTIONS --------- ----------- -------------- ------------ ---------- -------------- --------- ------------- TARGETED EQUITY FUND CLASS A 12/31/2001 $ 9.36 $(0.03)(d) $(1.49) $(1.52) $(0.03) $ -- $ -- $(0.03) 12/31/2000 11.00 0.09(d) (0.60) (0.51) (0.06) (1.07) -- (1.13) 12/31/1999 11.36 0.02 1.57 1.59 -- (1.95) -- (1.95) 12/31/1998 10.41 0.08(d) 3.00 3.08 (0.10) (1.67) (0.36) (2.13) 12/31/1997 11.63 0.01 2.79 2.80 -- (4.02) -- (4.02) CLASS B 12/31/2001 9.02 (0.09)(d) (1.43) (1.52) (0.03) -- -- (0.03) 12/31/2000 10.67 0.01(d) (0.58) (0.57) (0.01) (1.07) -- (1.08) 12/31/1999 11.15 (0.05) 1.52 1.47 -- (1.95) -- (1.95) 12/31/1998 10.32 0.00(d)(e) 2.95 2.95 (0.06) (1.67) (0.39) (2.12) 12/31/1997(f) 12.47 (0.07) 1.94 1.87 -- (4.02) -- (4.02) CLASS C 12/31/2001 9.02 (0.09)(d) (1.43) (1.52) (0.03) -- -- (0.03) 12/31/2000 10.67 0.01(d) (0.58) (0.57) (0.01) (1.07) -- (1.08) 12/31/1999 11.15 (0.05) 1.52 1.47 -- (1.95) -- (1.95) 12/31/1998(g) 11.18 0.00(d)(e) 2.09 2.09 (0.06) (1.67) (0.39) (2.12) CLASS Y 12/31/2001 9.37 0.01(d) (1.50) (1.49) (0.03) -- -- (0.03) 12/31/2000 11.01 0.12(d) (0.60) (0.48) (0.09) (1.07) -- (1.16) 12/31/1999(h) 11.94 0.03 0.99 1.02 -- (1.95) -- (1.95) GROWTH AND INCOME FUND CLASS A 12/31/2001 $ 13.79 $(0.01)(d) $(2.00) $(2.01) $ -- $ -- $ -- $ -- 12/31/2000 15.33 0.01(d) (1.09) (1.08) -- (0.46) -- (0.46) 12/31/1999 16.57 0.08 1.40 1.48 (0.06) (2.66) -- (2.72) 12/31/1998 15.35 0.04 3.29 3.33 (0.01) (2.10) -- (2.11) 12/31/1997 13.87 0.07(d) 4.40 4.47 (0.06) (2.93) -- (2.99) CLASS B 12/31/2001 13.40 (0.10)(d) (1.93) (2.03) -- -- -- -- 12/31/2000 15.03 (0.10)(d) (1.07) (1.17) -- (0.46) -- (0.46) 12/31/1999 16.37 (0.04) 1.36 1.32 -- (2.66) -- (2.66) 12/31/1998 15.28 (0.05) 3.24 3.19 -- (2.10) -- (2.10) 12/31/1997 13.87 (0.05)(d) 4.40 4.35 (0.01) (2.93) -- (2.94) CLASS C 12/31/2001 13.38 (0.10)(d) (1.92) (2.02) -- -- -- -- 12/31/2000 15.01 (0.10)(d) (1.07) (1.17) -- (0.46) -- (0.46) 12/31/1999 16.35 (0.04) 1.36 1.32 -- (2.66) -- (2.66) 12/31/1998 15.28 (0.04) 3.21 3.17 -- (2.10) -- (2.10) 12/31/1997 13.85 (0.05)(d) 4.42 4.37 (0.01) (2.93) -- (2.94) CLASS Y 12/31/2001 13.87 0.06(d) (2.00) (1.94) -- -- -- -- 12/31/2000 15.36 0.07(d) (1.10) (1.03) -- (0.46) -- (0.46) 12/31/1999 16.57 0.02 1.51 1.53 (0.08) (2.66) -- (2.74) 12/31/1998(i) 15.42 0.02 1.22 1.24 (0.02) (0.07) -- (0.09) See accompanying notes to financial statements. 58 RATIOS TO AVERAGE NET ASSETS: ------------------------------------------ NET ASSET NET ASSETS, EXPENSES VALUE, TOTAL END OF AFTER EXPENSE NET INVESTMENT PORTFOLIO END OF RETURN THE PERIOD EXPENSES REDUCTIONS INCOME (LOSS) TURNOVER THE PERIOD (%) (a) (000) (%) (b) (%) (b) (c) (%) (b) RATE (%) ----------- ----------- ----------- ----------- ----------- ----------- ----------- TARGETED EQUITY FUND CLASS A 12/31/2001 $ 7.81 (16.2) $1,012,161 1.38 1.35 (0.39) 243 12/31/2000 9.36 (4.6) 1,413,685 1.18 1.16 0.83 266 12/31/1999 11.00 15.2 1,871,138 1.12 1.12 0.23 206 12/31/1998 11.36 33.4 1,825,107 1.12 1.12 0.74 202 12/31/1997 10.41 23.5 1,459,747 1.12 1.12 0.08 214 CLASS B 12/31/2001 7.47 (16.8) 78,744 2.13 2.10 (1.14) 243 12/31/2000 9.02 (5.2) 107,594 1.93 1.91 0.08 266 12/31/1999 10.67 14.4 135,786 1.87 1.87 (0.52) 206 12/31/1998 11.15 32.4 75,444 1.87 1.87 (0.01) 202 12/31/1997(f) 10.32 14.4 17,757 1.87 1.87 (0.67) 214 CLASS C 12/31/2001 7.47 (16.8) 4,162 2.13 2.10 (1.14) 243 12/31/2000 9.02 (5.2) 5,830 1.93 1.91 0.08 266 12/31/1999 10.67 14.4 8,754 1.87 1.87 (0.52) 206 12/31/1998(g) 11.15 22.2 2,030 1.87 1.87 (0.01) 202 CLASS Y 12/31/2001 7.85 (15.9) 8,785 0.87 0.83 0.13 243 12/31/2000 9.37 (4.2) 12,260 0.85 0.83 1.16 266 12/31/1999(h) 11.01 9.7 15,418 0.87 0.87 0.48 206 GROWTH AND INCOME FUND CLASS A 12/31/2001 $ 11.78 (14.6) $ 211,138 1.46 1.41 (0.05) 154 12/31/2000 13.79 (7.3) 290,714 1.31 1.28 0.04 139 12/31/1999 15.33 9.5 375,676 1.21 1.21 0.48 133 12/31/1998 16.57 23.9 304,139 1.23 1.23 0.33 114 12/31/1997 15.35 33.4 220,912 1.25 1.25 0.46 103 CLASS B 12/31/2001 11.37 (15.1) 120,361 2.21 2.16 (0.80) 154 12/31/2000 13.40 (8.1) 165,767 2.06 2.03 (0.71) 139 12/31/1999 15.03 8.6 216,457 1.96 1.96 (0.27) 133 12/31/1998 16.37 23.1 153,369 1.98 1.98 (0.42) 114 12/31/1997 15.28 32.4 81,066 2.00 2.00 (0.29) 103 CLASS C 12/31/2001 11.36 (15.1) 10,553 2.21 2.16 (0.80) 154 12/31/2000 13.38 (8.1) 19,373 2.06 2.03 (0.71) 139 12/31/1999 15.01 8.6 26,983 1.96 1.96 (0.27) 133 12/31/1998 16.35 22.9 18,288 1.98 1.98 (0.42) 114 12/31/1997 15.28 32.6 6,735 2.00 2.00 (0.29) 103 CLASS Y 12/31/2001 11.93 (14.0) 11,918 0.91 0.87 0.52 154 12/31/2000 13.87 (7.0) 10,131 0.87 0.84 0.48 139 12/31/1999 15.36 9.8 14,377 0.96 0.96 (0.73) 133 12/31/1998(i) 16.57 8.1 1 0.98 0.98 0.58 114
(a) A sales charge for Class A and Class C shares and a contingent deferred sales charge for Class B and Class C shares are not reflected in in total return calculations. Periods less than one year are not annualized. (b) Computed on an annualized basis for periods less than one year. (c) Certain Funds have entered into agreements with certain brokers to rebate a portion of brokerage commissions. The rebated commissions are used to reduce operating expenses of the Fund. (d) Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (e) Amount rounds to less than $0.01 per share. (f) For the period February 28, 1997 (inception) through December 31, 1997. (g) For the period September 1, 1998 (inception) through December 31, 1998. (h) For the period June 30, 1999 (inception) through December 31, 1999. (i) For the period November 18, 1998 (inception) through December 31, 1998. 59 FINANCIAL HIGHLIGHTS For a share outstanding throughout each period.
INCOME (LOSS) FROM INVESTMENT OPERATIONS: LESS DISTRIBUTIONS: ---------------------------------------- ----------------------------------------- NET ASSET VALUE, NET NET REALIZED DIVIDENDS DISTRIBUTIONS BEGINNING INVESTMENT AND UNREALIZED TOTAL FROM FROM FROM NET OF INCOME GAIN (LOSS) ON INVESTMENT NET INVESTMENT REALIZED RETURN OF TOTAL THE PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME CAPITAL GAINS CAPITAL DISTRIBUTIONS --------- ----------- ---------- ---------- -------------- ---------- --------- ---------- BALANCED FUND CLASS A 12/31/2001(j) $10.70 $0.15(d) $(1.12) $(0.97) $(0.16) $ -- $ -- $(0.16) 12/31/2000 11.69 0.23 (0.98) (0.75) (0.24) 0.00(e) -- (0.24) 12/31/1999 13.52 0.32 (0.82) (0.50) (0.32) (1.01) -- (1.33) 12/31/1998 14.25 0.33 0.74 1.07 (0.32) (1.48) -- (1.80) 12/31/1997 13.94 0.33 2.05 2.38 (0.33) (1.74) -- (2.07) CLASS B 12/31/2001(j) 10.68 0.07(d) (1.11) (1.04) (0.05) -- -- (0.05) 12/31/2000 11.58 0.16 (0.99) (0.83) (0.07) 0.00(e) -- (0.07) 12/31/1999 13.40 0.21 (0.80) (0.59) (0.22) (1.01) -- (1.23) 12/31/1998 14.15 0.21 0.74 0.95 (0.22) (1.48) -- (1.70) 12/31/1997 13.86 0.23 2.03 2.26 (0.23) (1.74) -- (1.97) CLASS C 12/31/2001(j) 10.63 0.07(d) (1.11) (1.04) (0.05) -- -- (0.05) 12/31/2000 11.53 0.16 (0.99) (0.83) (0.07) 0.00(e) -- (0.07) 12/31/1999 13.35 0.21 (0.80) (0.59) (0.22) (1.01) -- (1.23) 12/31/1998 14.10 0.21 0.74 0.95 (0.22) (1.48) -- (1.70) 12/31/1997 13.82 0.23 2.02 2.25 (0.23) (1.74) -- (1.97) CLASS Y 12/31/2001(j) 10.62 0.21(d) (1.12) (0.91) (0.26) -- -- (0.26) 12/31/2000 11.71 0.28 (0.98) (0.70) (0.39) 0.00(e) -- (0.39) 12/31/1999 13.54 0.36 (0.81) (0.45) (0.37) (1.01) -- (1.38) 12/31/1998 14.27 0.39 0.74 1.13 (0.38) (1.48) -- (1.86) 12/31/1997 13.95 0.40 2.06 2.46 (0.40) (1.74) -- (2.14) LARGE CAP VALUE FUND CLASS A 12/31/2001 $18.49 $0.09(d) $(0.74) $(0.65) $(0.03) $ -- $ -- $(0.03) 12/31/2000 17.16 0.16(d) 1.37 1.53 (0.20) -- -- (0.20) 12/31/1999 17.62 0.17 (0.51) (0.34) (0.12) 0.00(e) -- (0.12) 12/31/1998 17.59 0.26(d) 0.20(f) 0.46 (0.26) (0.17) -- (0.43) 12/31/1997 15.15 0.25 3.15 3.40 (0.26) (0.70) -- (0.96) CLASS B 12/31/2001 18.46 (0.05)(d) (0.73) (0.78) (0.01) -- -- (0.01) 12/31/2000 17.10 0.04(d) 1.35 1.39 (0.03) -- -- (0.03) 12/31/1999 17.62 0.03 (0.50) (0.47) (0.05) 0.00(e) -- (0.05) 12/31/1998 17.59 0.13(d) 0.20(f) 0.33 (0.13) (0.17) -- (0.30) 12/31/1997(i) 17.06 0.03 0.60 0.63 (0.04) (0.06) -- (0.10) CLASS C 12/31/2001 18.48 (0.05)(d) (0.74) (0.79) (0.01) -- -- (0.01) 12/31/2000 17.11 0.04(d) 1.36 1.40 (0.03) -- -- (0.03) 12/31/1999 17.63 0.03 (0.50) (0.47) (0.05) 0.00(e) -- (0.05) 12/31/1998 17.59 0.13(d) 0.21(f) 0.34 (0.13) (0.17) -- (0.30) 12/31/1997(i) 17.06 0.03 0.60 0.63 (0.04) (0.06) -- (0.10) See accompanying notes to financial statements. 60 RATIOS TO AVERAGE NET ASSETS: ------------------------------------------ NET ASSET NET ASSETS, EXPENSES VALUE, TOTAL END OF AFTER EXPENSE NET INVESTMENT PORTFOLIO END OF RETURN THE PERIOD EXPENSES REDUCTIONS INCOME (LOSS) TURNOVER THE PERIOD (%) (a) (000) (%) (b) (%) (b) (c) (%) (b) RATE (%) ----------- ----------- ----------- ----------- ----------- ----------- ----------- BALANCED FUND CLASS A 12/31/2001(j) $ 9.57 (9.1) $ 74,802 1.75 1.73 1.48 190 12/31/2000 10.70 (6.4) 100,993 1.56 1.52 2.08 133 12/31/1999 11.69 (3.8) 167,943 1.33 1.33 2.30 61 12/31/1998 13.52 8.2 222,866 1.30 1.30 2.25 81 12/31/1997 14.25 17.5 233,421 1.29 1.29 2.25 69 CLASS B 12/31/2001(j) 9.59 (9.7) 28,562 2.50 2.47 0.73 190 12/31/2000 10.68 (7.2) 39,548 2.31 2.27 1.33 133 12/31/1999 11.58 (4.4) 65,492 2.08 2.08 1.55 61 12/31/1998 13.40 7.3 84,255 2.05 2.05 1.50 81 12/31/1997 14.15 16.7 76,558 2.04 2.04 1.50 69 CLASS C 12/31/2001(j) 9.54 (9.8) 1,392 2.50 2.47 0.73 190 12/31/2000 10.63 (7.2) 2,022 2.31 2.27 1.33 133 12/31/1999 11.53 (4.5) 4,454 2.08 2.08 1.55 61 12/31/1998 13.35 7.3 5,480 2.05 2.05 1.50 81 12/31/1997 14.10 16.6 4,596 2.04 2.04 1.50 69 CLASS Y 12/31/2001(j) 9.45 (8.6)(h) 44,949 1.13(g) 1.10(g) 2.10 190 12/31/2000 10.62 (6.0) 28,740 1.02 0.97 2.63 133 12/31/1999 11.71 (3.3) 47,130 0.93 0.93 2.68 61 12/31/1998 13.54 8.6 73,212 0.90 0.90 2.65 81 12/31/1997 14.27 18.1 85,620 0.88 0.88 2.66 69 LARGE CAP VALUE FUND CLASS A 12/31/2001 $17.81 (3.5)(h) $10,185 1.50(g) 1.46(g) 0.49 31 12/31/2000 18.49 9.0(h) 8,510 1.50(g) 1.47(g) 0.96 31 12/31/1999 17.16 (1.9)(h) 11,291 1.50(g) 1.50(g) 0.94 93 12/31/1998 17.62 2.7(h) 17,839 1.50(g) 1.50(g) 1.48 61 12/31/1997 17.59 22.6(h) 14,681 1.50(g) 1.50(g) 1.76 33 CLASS B 12/31/2001 17.67 (4.2)(h) 9,911 2.25(g) 2.21(g) (0.26) 31 12/31/2000 18.46 8.2(h) 7,839 2.25(g) 2.22(g) 0.21 31 12/31/1999 17.10 (2.7)(h) 9,643 2.25(g) 2.25(g) 0.19 93 12/31/1998 17.62 2.0(h) 16,623 2.25(g) 2.25(g) 0.73 61 12/31/1997(i) 17.59 3.7(h) 9,375 2.25(g) 2.25(g) 1.01 33 CLASS C 12/31/2001 17.68 (4.3)(h) 783 2.25(g) 2.21(g) (0.25) 31 12/31/2000 18.48 8.2(h) 799 2.25(g) 2.22(g) 0.21 31 12/31/1999 17.11 (2.7)(h) 1,336 2.25(g) 2.25(g) 0.19 93 12/31/1998 17.63 2.0(h) 2,101 2.25(g) 2.25(g) 0.73 61 12/31/1997(i) 17.59 3.7(h) 1,596 2.25(g) 2.25(g) 1.01 33
(a) A sales charge for Class A and Class C shares and a contingent deferred sales charge for Class B and Class C shares are not reflected in in total return calculations. Periods less than one year are not annualized. (b) Computed on an annualized basis for periods less than one year. (c) Certain Funds have entered into agreements with certain brokers to rebate a portion of brokerage commissions. The rebated commissions are used to reduce operating expenses of the Fund. (d) Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (e) Amount rounds to less than $0.01 per share. (f) The amount shown for a share outstanding does not correspond with the aggregate net gain/(loss) for the period ended December 31, 1998, due to the timing of purchases and redemptioms of Fund shares in relation to fluctuating market values of the investments of the Fund. (g) The investment adviser agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement, expense ratios would have been higher. (h) Had certain expenses not been reduced during the period total return would have been lower. (i) For the period September 15, 1997 (inception) through December 31, 1997. (j) As required, effective January 1, 2001, the Balanced Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium on debt securities. The effect of this change for the year ended December 31, 2001 was to decrease net investment income per share by $0.01 and increase net realized and unrealized gains and losses per share by $0.01 for Class A, Class B, Class C and Class Y. The effect of this change also was to decrease the ratio of net investment income to average net assets from 1.56% to 1.48% for Class A, from 0.81% to 0.73% for Class B, from 0.81% to 0.73% for Class C and from 2.18% to 2.10% for Class Y. Per share, ratios and supplemental data for periods prior to January 1, 2001 have not been restated to reflect this change in presentation. 61 FINANCIAL HIGHLIGHTS For a share outstanding throughout each period.
INCOME (LOSS) FROM INVESTMENT OPERATIONS: ------------------------------------------ NET ASSET VALUE, NET NET REALIZED BEGINNING INVESTMENT AND UNREALIZED TOTAL FROM OF INCOME GAIN (LOSS) ON INVESTMENT THE PERIOD (LOSS) INVESTMENTS OPERATIONS ---------- ---------- -------------- ------------- MID CAP GROWTH FUND CLASS A 12/31/2001(f) $10.00 $(0.09)(d) $(1.76) $(1.85) CLASS B 12/31/2001(f) 10.00 (0.14)(d) (1.75) (1.89) CLASS C 12/31/2001(f) 10.00 (0.14)(d) (1.75) (1.89) JURIKA & VOYLES RELATIVE VALUE FUND CLASS A 12/31/2001(i) $14.29 $ -- $ 0.50 $ 0.50 CLASS B 12/31/2001(i) 14.29 -- 0.50 0.50 CLASS C 12/31/2001(i) 14.29 -- 0.50 0.50 CLASS Y* 12/31/2001(g) 15.49 (0.01) (0.70) (0.71) 6/30/2001 16.94 (0.03) 0.97 0.94 6/30/2000 16.06 0.00 (j) 1.41 1.41 6/30/1999 16.20 0.03 0.82 0.85 6/30/1998 16.27 0.01 1.77 1.78 6/30/1997 13.69 0.10 4.03 4.13 SELECT FUND CLASS A 2001(f) $10.00 $(0.01)(d) $ 0.97 $ 0.96 CLASS B 2001(f) 10.00 (0.07)(d) 0.97 0.90 CLASS C 2001(f) 10.00 (0.07)(d) 0.97 0.90 JURIKA & VOYLES SMALL CAP GROWTH FUND CLASS A 12/31/2001(i) $12.56 $(0.01)(d) $ 0.49 $ 0.48 CLASS B 12/31/2001(i) 12.56 (0.02)(d) 0.49 0.47 CLASS C 12/31/2001(i) 12.56 (0.02)(d) 0.50 0.48 CLASS Y** 12/31/2001(g) 16.48 (0.08)(d) (3.20) (3.28) 6/30/2001 23.62 (0.20) (3.36) (3.56) 6/30/2000 16.13 (0.21) 7.70 7.49 6/30/1999 19.10 (0.14) (0.93) (1.07) 6/30/1998 21.83 (0.17) 2.40 2.23 6/30/1997 18.39 (0.01) 4.04 4.03 LESS DISTRIBUTIONS: ----------------------------------------------------------- DIVIDENDS DISTRIBUTIONS FROM FROM NET NET INVESTMENT REALIZED RETURN OF TOTAL INCOME CAPITAL GAINS CAPITAL DISTRIBUTIONS ------------- -------------- --------- ------------- MID CAP GROWTH FUND CLASS A 12/31/2001(f) $ -- $ -- $ -- $ -- CLASS B 12/31/2001(f) -- -- -- -- CLASS C 12/31/2001(f) -- -- -- -- JURIKA & VOYLES RELATIVE VALUE FUND CLASS A 12/31/2001(i) $ -- $(1.81) $ -- $ (1.81) CLASS B 12/31/2001(i) -- (1.81) -- (1.81) CLASS C 12/31/2001(i) -- (1.81) -- (1.81) CLASS Y* 12/31/2001(g) -- (1.81) -- (1.81) 6/30/2001 -- (2.39) -- (2.39) 6/30/2000 (0.04) (0.49) -- (0.53) 6/30/1999 -- (0.99) -- (0.99) 6/30/1998 (0.04) (1.81) -- (1.85) 6/30/1997 (0.10) (1.45) -- (1.55) SELECT FUND CLASS A 2001(f) $ -- $ -- $ -- $ -- CLASS B 2001(f) -- -- -- -- CLASS C 2001(f) -- -- -- -- JURIKA & VOYLES SMALL CAP GROWTH FUND CLASS A 12/31/2001(i) $ -- $ -- $ -- $ -- CLASS B 12/31/2001(i) -- -- -- -- CLASS C 12/31/2001(i) -- -- -- -- CLASS Y** 12/31/2001(g) -- (0.15) -- (0.15) 6/30/2001 -- (3.58) -- (3.58) 6/30/2000 -- -- -- -- 6/30/1999 -- (1.90) -- (1.90) 6/30/1998 -- (4.96) -- (4.96) 6/30/1997 -- (0.59) -- (0.59) See accompanying notes to financial statements 62 RATIOS TO AVERAGE NET ASSETS: ------------------------------------------ NET ASSET NET ASSETS, EXPENSES VALUE, TOTAL END OF AFTER EXPENSE NET INVESTMENT PORTFOLIO END OF RETURN THE PERIOD EXPENSES REDUCTIONS INCOME (LOSS) TURNOVER THE PERIOD (%) (a) (h) (000) (%) (b) (e) (%) (b) (c) (e) (%) (b) RATE (%) ----------- ----------- ------------ ----------- ---------------- ------------- ----------- MID CAP GROWTH FUND CLASS A 12/31/2001(f) $ 8.15 (18.5) $ 5,198 1.70 1.67 (1.36) 191 CLASS B 12/31/2001(f) 8.11 (18.9) 4,223 2.45 2.42 (2.16) 191 CLASS C 12/31/2001(f) 8.11 (18.9) 933 2.45 2.42 (2.14) 191 JURIKA & VOYLES RELATIVE VALUE FUND CLASS A 12/31/2001(i) $12.98 3.9 $ 1,277 1.50 1.50 (0.20) 21 CLASS B 12/31/2001(i) 12.98 3.9 --(k) 2.25 2.25 -- 21 CLASS C 12/31/2001(i) 12.98 3.9 --(k) 2.25 2.25 -- 21 CLASS Y* 12/31/2001(g) 12.97 (4.2) 26,033 1.25 1.25 (0.20) 21 6/30/2001 15.49 5.4 29,100 1.25 1.25 (0.18) 51 6/30/2000 16.94 9.2 29,600 1.25 1.25 (0.01) 79 6/30/1999 16.06 6.1 38,300 1.25 1.25 0.22 92 6/30/1998 16.20 11.5 47,400 1.25 1.25 0.09 61 6/30/1997 16.27 32.4 24,000 1.26 1.26 0.45 160 SELECT FUND CLASS A 2001(f) $10.96 9.6 $ 45,987 1.70 1.63 (0.08) 10 CLASS B 2001(f) 10.90 9.0 62,671 2.45 2.39 (0.83) 10 CLASS C 2001(f) 10.90 9.0 34,406 2.45 2.39 (0.86) 10 JURIKA & VOYLES SMALL CAP GROWTH FUND CLASS A 12/31/2001(i) $13.04 3.8 $ 6,902 1.75 1.75 (1.31) 96 CLASS B 12/31/2001(i) 13.03 3.7 7,368 2.50 2.50 (2.06) 96 CLASS C 12/31/2001(i) 13.04 3.8 722 2.50 2.50 (2.06) 96 CLASS Y** 12/31/2001(g) 13.05 (19.9) 15,681 1.50 1.50 (1.21) 96 6/30/2001 16.48 (14.1) 31,600 1.50 1.50 (0.17) 203 6/30/2000 23.62 46.4 43,200 1.50 1.50 (1.14) 283 6/30/1999 16.13 (3.8) 30,600 1.50 1.50 (0.66) 180 6/30/1998 19.10 10.3 90,900 1.50 1.50 (0.59) 169 6/30/1997 21.83 22.5 123,100 1.50 1.50 (0.08) 305
* The financial information for the periods through November 30, 2001 reflects the financial information for Jurika & Voyles Value+Growth Fund's shares which were reorganized into Class Y shares of CDC Nvest Jurika & Voyles Relative Value Fund as of November 30, 2001. Jurika & Voyles Value+Growth Fund had a June 30 fiscal year end. ** The financial information for the periods through November 30, 2001 reflects the financial information for Jurika & Voyles Small-Cap Fund's shares which were reorganized into Class Y shares of CDC Nvest Jurika & Voyles Small Cap Growth Fund as of November 30, 2001. Jurika & Voyles Small-Cap Fund had a June 30 fiscal year end. (a) A sales charge for Class A and Class C shares and a contingent deferred sales charge for Class B and Class C shares are not reflected in in total return calculations. Periods less than one year are not annualized. (b) Computed on an annualized basis for periods less than one year. (c) Certain Funds have entered into agreements with certain brokers to rebate a portion of brokerage commissions. The rebated commissions are used to reduce operating expenses of the Fund. (d) Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (e) The investment adviser agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement, expense ratios would have been higher. (f) For the period March 15, 2001 (inception) through December 31, 2001. (g) For the period July 1, 2001 through December 31, 2001. (h) Had certain expenses not been reduced during the period, total returns would have been lower. (i) For the period November 30, 2001 (inception) through December 31, 2001. (j) Amount rounds to less than $0.01 per share. (k) Amount is less than $500. 63
INCOME (LOSS) FROM INVESTMENT OPERATIONS: ---------------------------------------- NET ASSET VALUE, NET NET REALIZED BEGINNING INVESTMENT AND UNREALIZED TOTAL FROM OF INCOME GAIN (LOSS) ON INVESTMENT THE PERIOD (LOSS) (d) INVESTMENTS OPERATIONS ---------- ---------- -------------- ------------- INTERNATIONAL EQUITY FUND CLASS A 12/31/2001 $16.62 $(0.10) $(3.80) $(3.90) 12/31/2000 25.39 (0.22) (6.90) (7.12) 12/31/1999 14.26 (0.03) 12.31 12.28 12/31/1998 14.06 0.15 0.77 0.92 12/31/1997 16.31 0.09 (1.25) (1.16) CLASS B 12/31/2001 15.99 (0.20) (3.65) (3.85) 12/31/2000 24.71 (0.37) (6.70) (7.07) 12/31/1999 13.98 (0.15) 12.01 11.86 12/31/1998 13.71 0.04 0.75 0.79 12/31/1997 16.00 (0.03) (1.17) (1.20) CLASS C 12/31/2001 16.05 (0.20) (3.67) (3.87) 12/31/2000 24.78 (0.34) (6.74) (7.08) 12/31/1999 14.02 (0.15) 12.04 11.89 12/31/1998 13.74 0.05 0.75 0.80 12/31/1997 16.03 (0.03) (1.17) (1.20) CLASS Y 12/31/2001 17.02 (0.02) (3.89) (3.91) 12/31/2000 25.81 (0.10) (7.04) (7.14) 12/31/1999 14.45 0.02 12.54 12.56 12/31/1998 14.35 0.25 0.77 1.02 12/31/1997 16.48 0.19 (1.23) (1.04) LESS DISTRIBUTIONS: ----------------------------------------------------------- DIVIDENDS DISTRIBUTIONS FROM FROM NET NET INVESTMENT REALIZED RETURN OF TOTAL INCOME CAPITAL GAINS CAPITAL DISTRIBUTIONS ------------- -------------- --------- ------------- INTERNATIONAL EQUITY FUND CLASS A 12/31/2001 $ -- $ -- $ -- $ -- 12/31/2000 (0.17) (1.48) -- (1.65) 12/31/1999 (0.02) (1.13) -- (1.15) 12/31/1998 (0.44) (0.28) -- (0.72) 12/31/1997 -- (1.09) -- (1.09) CLASS B 12/31/2001 -- -- -- -- 12/31/2000 (0.17) (1.48) -- (1.65) 12/31/1999 -- (1.13) -- (1.13) 12/31/1998 (0.24) (0.28) -- (0.52) 12/31/1997 -- (1.09) -- (1.09) CLASS C 12/31/2001 -- -- -- -- 12/31/2000 (0.17) (1.48) -- (1.65) 12/31/1999 -- (1.13) -- (1.13) 12/31/1998 (0.24) (0.28) -- (0.52) 12/31/1997 -- (1.09) -- (1.09) CLASS Y 12/31/2001 -- -- -- -- 12/31/2000 (0.17) (1.48) -- (1.65) 12/31/1999 (0.07) (1.13) -- (1.20) 12/31/1998 (0.64) (0.28) -- (0.92) 12/31/1997 -- (1.09) -- (1.09) See accompanying notes to financial statements 64 RATIOS TO AVERAGE NET ASSETS -------------------------------------------- NET ASSET NET ASSETS, EXPENSES VALUE, TOTAL END OF AFTER EXPENSE NET INVESTMENT PORTFOLIO END OF RETURN THE PERIOD EXPENSES REDUCTIONS INCOME (LOSS) TURNOVER THE PERIOD (%)(a)(b) (000) (%) (%)(c) (%) RATE (%) ----------- ----------- ----------- ----------- ----------- ----------- ----------- INTERNATIONAL EQUITY FUND CLASS A 12/31/2001 $12.72 (23.5) $33,773 2.14 2.14 (0.74) 172 12/31/2000 16.62 (28.6) 54,826 1.96 1.96 (1.01) 212 12/31/1999 25.39 87.6(b) 67,197 2.00(e) 2.00(e) (0.15) 229 12/31/1998 14.26 6.7(b) 47,444 1.91(e) 1.91(e) 1.04 105 12/31/1997 14.06 (7.6)(b) 57,845 1.75(e) 1.75(e) 0.62 154 CLASS B 12/31/2001 12.14 (24.1) 17,549 2.89 2.89 (1.48) 172 12/31/2000 15.99 (29.2) 29,013 2.71 2.71 (1.76) 212 12/31/1999 24.71 86.3(b) 29,045 2.75(e) 2.75(e) (0.90) 229 12/31/1998 13.98 5.8(b) 19,797 2.66(e) 2.66(e) 0.29 105 12/31/1997 13.71 (8.0)(b) 25,216 2.50(e) 2.50(e) (0.13) 154 CLASS C 12/31/2001 12.18 (24.1) 2,183 2.89 2.89 (1.50) 172 12/31/2000 16.05 (29.1) 5,656 2.71 2.71 (1.76) 212 12/31/1999 24.78 86.2(b) 1,267 2.75(e) 2.75(e) (0.90) 229 12/31/1998 14.02 5.9(b) 860 2.66(e) 2.66(e) 0.29 105 12/31/1997 13.74 (8.0)(b) 843 2.50(e) 2.50(e) (0.13) 154 CLASS Y 12/31/2001 13.11 (23.0) 7,249 1.49 1.49 (0.11) 172 12/31/2000 17.02 (28.2) 11,940 1.39 1.39 (0.44) 212 12/31/1999 25.81 88.6(b) 14,441 1.55(e) 1.55(e) 0.10 229 12/31/1998 14.45 7.3(b) 5,552 1.31(e) 1.31(e) 1.64 105 12/31/1997 14.35 (6.7)(b) 4,752 1.15(e) 1.15(e) 1.22 154
(a) A sales charge for Class A and Class C shares and a contingent deferred sales charge for Class B and Class C shares are not reflected in in total return calculations. (b) Had certain expenses not been reduced during the period, total returns would have been lower. (c) Certain Funds have entered into agreements with certain brokers to rebate a portion of brokerage commissions. The rebated commissions are used to reduce operating expenses of the Fund. (d) Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (e) The investment adviser agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement, expense ratios would have been higher 65 NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2001 1. ORGANIZATION. CDC Nvest Funds Trust I, formerly Nvest Funds Trust I, CDC Nvest Funds Trust II, formerly Nvest Funds Trust II and CDC Nvest Funds Trust III, formerly Nvest Funds Trust III, (the "Trusts" and each a "Trust") are organized as Massachusetts business trusts. Each Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Each Declaration of Trust permits the Trustees to issue an unlimited number of shares of the Trust in multiple series (individually, a "Fund" and, collectively, the "Funds"). Information presented in these financial statements pertains to the equity funds of the Trusts, the financial statements of the other Funds of the Trusts are presented in separate reports. The following table provides a list of the Funds included in this report. CDC NVEST FUNDS TRUST I: CDC Nvest Capital Growth Fund (the "Capital Growth Fund"), formerly Nvest Capital Growth Fund CDC Nvest Large Cap Growth Fund (the "Large Cap Growth Fund") CDC Nvest Targeted Equity Fund (the "Targeted Equity Fund"), formerly Nvest Growth Fund CDC Nvest Balanced Fund (the "Balanced Fund"), formerly Nvest Balanced Fund CDC Nvest Jurika & Voyles Relative Value Fund (the "Relative Value Fund") CDC Nvest International Equity Fund (the "International Equity Fund"), formerly Nvest International Equity Fund CDC NVEST FUNDS TRUST II: CDC Nvest Growth and Income Fund (the "Growth and Income Fund"), formerly Nvest Growth and Income Fund CDC NVEST FUNDS TRUST III: CDC Nvest Large Cap Value Fund (the "Large Cap Value Fund"), formerly Nvest Large Cap Value Fund CDC Nvest Mid Cap Growth Fund (the "Mid Cap Growth Fund") CDC Nvest Select Fund (the "Select Fund") CDC Nvest Jurika & Voyles Small Cap Growth Fund (the "Small Cap Growth Fund") Each Fund offers Class A, Class B, and Class C shares. Large Cap Growth Fund, Targeted Equity Fund, Growth and Income Fund, Balanced Fund, Relative Value Fund, Small Cap Growth Fund and International Equity Fund also offer Class Y shares. Class A shares are sold with a maximum front end sales charge of 5.75%. Class B shares do not pay a front end sales charge, but pay a higher ongoing distribution fee than Class A shares for eight years (at which point they automatically convert to Class A shares), and are subject to a contingent deferred sales charge ("CDSC") if those shares are redeemed within six years of purchase (or five years if purchased before May 1, 1997). Class C shares are sold with a maximum front end sales charge of 1.00%, do not convert to any other class of shares and pay a higher ongoing distribution fee than Class A shares and may be subject to a CDSC of 1.00% if those shares are redeemed within one year. Class Y shares do not pay a front end sales charge, a CDSC or distribution fees. They are intended for institutional investors with a minimum initial investment of $1,000,000. Expenses of a Fund are borne pro rata by the holders of each class of shares, except that each class bears expenses unique to that class (including the Rule 12b-1 service and distribution fees and transfer agent fees applicable to such class), and votes as a class only with respect to its own Rule 12b-1 Plan. Shares of each class would receive their pro rata share of the net assets of a Fund, if the Fund were liquidated. The Trustees approve separate dividends from net investment income on each class of shares. 2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of significant accounting policies consistently followed by each Fund in the preparation of its financial statements. The Funds' financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. Certain reclassifications were made to prior year amounts to conform with current year presentation. a. SECURITY VALUATION. Equity securities are valued on the basis of valuations furnished to the Fund by a pricing service which has been authorized by the Trustees. The pricing service provides the last reported sale price for securities listed on an applicable securities exchange or on the NASDAQ national market system, or, if no sale was reported and in the case of over-the-counter securities not so listed, the last reported bid price. Debt securities (other than short-term obligations with a remaining maturity of less than sixty days) are valued on the basis of valuations furnished by a pricing service authorized by the Board of Trustees, which service determines valuations for normal, institutional-size trading units of such securities using market information, transactions for comparable securities and various relationships between securites which are generally recognized by institutional traders. Short-term obligations with a remaining maturity of less than sixty days are stated at amortized cost, which approximates market value. All other securities and assets are valued at their fair value as determined in good faith by the Fund's investment adviser and subadviser, under the supervision of the Fund's Trustees. b. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME. Security transactions are accounted for on trade date. Dividend income is recorded on ex-dividend date and interest income is recorded on an accrual basis. Interest income is increased by the accretion of discount and decreased by the amortization of premium. Investment income is recorded net of foreign taxes withheld when recovery of such taxes is uncertain. In determining net gain or loss on securities sold, the cost of securities has been determined on an identified cost basis. c. FOREIGN CURRENCY TRANSLATION. The books and records of the Funds are maintained in U.S. dollars. The value of securities, currencies and other assets and liabilities denominated in currencies other than U.S. dollars are translated into U.S. dollars based upon foreign exchange rates prevailing at the end of the period. Purchases and sales of investment securities, income and expenses are translated on the respective dates of such transactions. 67 Since the values of investment securities are presented at the foreign exchange rates prevailing at the end of the period, it is not practical to isolate that portion of the results of operations arising from changes in exchange rates from fluctuations arising from changes in market prices of the investment securities. Such changes are included with the net realized and unrealized gain or loss on investments. Net realized foreign exchange gains or losses arise from: sales of foreign currency, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities at the end of the fiscal periods, resulting from changes in exchange rates. d. FORWARD FOREIGN CURRENCY CONTRACTS. The International Equity Fund may use foreign currency contracts to facilitate transactions in foreign securities and to manage the Fund's currency exposure. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge the Fund's investments against currency fluctuation. Also, a contract to buy or sell can offset a previous contract. These contracts involve market risk in excess of the unrealized gain or loss reflected in the Fund's Statement of Assets and Liabilities. The U.S. dollar value of the currencies the Fund has committed to buy or sell (if any) is shown in the portfolio composition under the caption "Forward Currency Contracts Outstanding." These amounts represent the aggregate exposure to each currency the Fund has acquired or hedged through currency contracts outstanding at period end. All contracts are "marked-to-market" daily at the applicable exchange rates and any gains or losses are recorded for financial statement purposes as unrealized until settlement date. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. e. FEDERAL AND FOREIGN INCOME TAXES. The Trusts treat each Fund as a separate entity for federal income tax purposes. Each Fund intends to meet the requirements of the Internal Revenue Code applicable to regulated investment companies, and to distribute to its shareholders substantially all of its net investment income and any net realized capital gains, at least annually. Accordingly, no provision for federal income tax has been made. A Fund may be subject to foreign taxes on income and gains on investments that are accrued based upon the Fund's understanding of the tax rules and regulations that exist in the countries in which the Fund invests. Foreign governments may also impose taxes or other payments on investments with respect to foreign securities, such taxes are accrued as applicable. f. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions are recorded on ex-dividend date. The timing and characterization of certain income and capital gains distributions are determined in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for book and tax purposes of items such as distributions from real estate investment trusts, net operating losses, paydowns on mortgage-backed securities, non-deductible expenses, foreign currency transactions and gains realized from passive foreign investment companies. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to capital accounts. Distributions from net investment income and short-term capital gains are considered to be ordinary income for tax purposes. g. REPURCHASE AGREEMENTS. Each Fund, through its custodian, receives delivery of the underlying securities collateralizing repurchase agreements. It is each Fund's policy that the market value of the collateral be at least equal to 100% of the repurchase price, including interest. Each Fund's subadviser (adviser for the Targeted Equity Fund) is responsible for determining that the value of the collateral is at all times at least equal to the repurchase price, including interest. Repurchase agreements could involve certain risks in the event of default or insolvency of the counterparty including possible delays or restrictions upon a Fund's ability to dispose of the underlying securities. h. ORGANIZATION EXPENSE. Costs incurred by Small Cap Growth Fund in connection with the Fund's organization and initial registration, amounting to $21,223 in the aggregate, are being amortized over 60 months. 3. PURCHASES AND SALES OF SECURITIES. For the period ended December 31, 2001, purchases and sales of securities (excluding U.S. Government/Agency securities and short-term investments) were as follows:
FUND PURCHASES SALES ---- --------- ----- Capital Growth Fund $ 144,373,989 $ 172,350,187 Large Cap Growth Fund 14,993,112 20,303,093 Targeted Equity Fund 2,943,312,423 3,141,194,172 Growth and Income Fund 626,721,536 691,570,048 Balanced Fund 222,544,389 261,296,264 Large Cap Value Fund 10,313,269 5,918,166 Mid Cap Growth Fund 21,003,264 9,166,905 Relative Value Fund 5,221,550 6,037,835 Select Fund 132,567,556 5,243,003 Small Cap Growth Fund 24,795,346 32,571,486 International Equity Fund 125,908,726 139,943,334
For the year ended December 31, 2001, purchases and sales of U.S. Government/Agency securities by Balanced Fund were $46,011,539 and $ 45,990,580, respectively. 68 4a. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES. CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Advisers") is the investment adviser to each of the Funds except the Targeted Equity Fund. Capital Growth Management Limited Partnership ("CGM") is the investment adviser to the Targeted Equity Fund. Under the terms of the management agreements, each Fund pays a management fee at the following annual rates, calculated daily and payable monthly, based on each Fund's average daily net assets:
Percentage of Average Daily Net Assets ----------------------------------------------------------------- FIRST NEXT NEXT NEXT OVER FUND $200 MILLION $300 MILLION $500 MILLION $1 BILLION $2 BILLION ---- ------------ ------------ ------------ ------------- ---------- Capital Growth Fund 0.750% 0.700% 0.650% 0.650% 0.650% Large Cap Growth Fund 0.900% 0.900% 0.900% 0.900% 0.900% Targeted Equity Fund 0.750% 0.700% 0.650% 0.650% 0.600% Growth and Income Fund 0.700% 0.650% 0.600% 0.600% 0.600% Balanced Fund 0.750% 0.700% 0.650% 0.650% 0.650% Large Cap Value Fund 0.700% 0.650% 0.600% 0.600% 0.600% Mid Cap Growth Fund 0.950% 0.950% 0.950% 0.825% 0.825% Relative Value Fund 0.850% 0.850% 0.800% 0.800% 0.800% Select Fund 1.000% 1.000% 1.000% 0.950% 0.950% Small Cap Growth Fund 0.950% 0.900% 0.850% 0.850% 0.850% International Equity Fund 0.900% 0.850% 0.800% 0.800% 0.800%
For the period ended December 31, 2001, the management fees and waivers for each Fund were as follows:
GROSS WAIVER OF NET PERCENTAGE OF AVERAGE MANAGEMENT MANAGEMENT MANAGEMENT DAILY NET ASSETS --------------------- FUND FEE FEE FEE GROSS NET ---- ---------- ---------- ---------- ----- --- Capital Growth Fund $1,206,965 $ -- $1,206,965 0.750% 0.750% Large Cap Growth Fund 140,374 136,441 3,933 0.966%* 0.027%* Targeted Equity Fund 8,138,041 -- 8,138,041 0.679% 0.679% Growth and Income Fund 2,760,399 -- 2,760,399 0.674% 0.674% Balanced Fund 1,080,327 12,476 1,067,851 0.750% 0.741% Large Cap Value Fund 135,087 135,087 -- 0.700% 0.000% Mid Cap Growth Fund 48,642 48,642 -- 0.950%* 0.000%* Relative Value Fund 112,241 95,326 16,915 0.850%* 0.128%* Select Fund 567,368 214,528 352,840 1.000%* 0.620%* Small Cap Growth Fund 120,654 85,667 34,987 0.989%* 0.287%* International Equity Fund 676,887 -- 676,887 0.900% 0.900%
* Annualized Management fees for Kobrick Growth Fund and Jurika & Voyles Small-Cap Fund were each payable at the annual rate of 1.00% of average net assets prior to the Funds reorganization into Large Cap Growth Fund and Small Cap Growth Fund, respectively. CDC IXIS Advisers has entered into subadviser agreements for each Fund listed below. Payments to CDC IXIS Advisers are reduced by payments to the subadvisers. Capital Growth Fund Westpeak Global Advisors, L.P. Mid Cap Growth Fund Loomis, Sayles & Company, L.P. Large Cap Growth Fund Vaughan, Nelson, Scarborough & Relative Value Fund Jurika & Voyles, L.P. McCullough, L.P. Growth and Income Fund Westpeak Global Advisors, L.P. Select Fund Harris Associates, L.P. Balanced Fund Loomis, Sayles & Company, L.P. Small Cap Growth Fund Jurika & Voyles, L.P. Jurika & Voyles, L.P. International Equity Fund Loomis, Sayles & Company, L.P. Large Cap Value Fund Vaughan, Nelson, Scarborough & McCullough, L.P.
CDC IXIS Advisers and each of the subadvisers are wholly-owned subsidiaries of CDC IXIS Asset Management North America, L.P. CGM is a 50% owned subsidiary of CDC IXIS Asset Management North America, L.P. Certain officers and directors of CDC IXIS Advisers are also officers or Trustees of the Funds. b. ACCOUNTING AND ADMINISTRATIVE EXPENSE. CDC IXIS Asset Management Services, Inc. ("CIS"), a wholly owned subsidiary of CDC IXIS Asset Management North America, L.P., performs certain accounting and administrative services for the Funds. Pursuant to an agreement among the Trusts, CDC Nvest Cash Management Trust, CDC Nvest Tax Exempt Money Market Trust, CDC Nvest Companies Trust I and CIS each Fund pays CIS its pro rata portion of a group fee for these services representing the higher amount based on the following calculations: (1) PERCENTAGE OF ELIGIBLE AVERAGE DAILY NET ASSETS
FIRST NEXT OVER $5 BILLION $5 BILLION $10 BILLION ---------- ---------- ----------- 0.0350% 0.0325% 0.0300%
or (2) Each Fund's pro rata portion, based on eligible assets, of the annual aggregate minimum fee of $2.5 million. 69 Funds that became effective after January 1, 2001, pay the higher amount of the asset based fee or an annual fee of $70,000. For the period ended December 31, 2001, amounts paid to CIS for accounting and administrative expense were as follows:
ACCOUNTING AND PERCENTAGE OF AVERAGE FUND ADMINISTRATION DAILY NET ASSETS ---- -------------- --------------------- Capital Growth Fund $ 74,676 0.046% Large Cap Growth Fund 17,644 0.121%* Targeted Equity Fund 557,169 0.047% Growth and Income Fund 190,310 0.046% Balanced Fund 63,803 0.044% Large Cap Value Fund 9,089 0.047% Mid Cap Growth Fund 55,809 1.090%* Relative Value Fund 5,945 0.045%* Select Fund 55,808 0.098%* Small Cap Growth Fund 1,337 0.012%* International Equity Fund 34,862 0.046%
* Annualized c. TRANSFER AGENT FEES. CIS is the transfer and shareholder servicing agent for each Fund and has subcontracted with Boston Financial Data Services ("BFDS") to serve as sub-transfer agent. Each Fund pays CIS service fees for servicing shareholder accounts. Class A, B and C shareholders pay service fees monthly representing the higher amount based on the following calculations: (1) Annual aggregate fee determined by applying an annual fee rate (see schedule below) to the eligible average daily net assets. Eligible assets are the average daily net assets of all non-networked accounts in equity funds offered within the CDC Nvest Family of Funds for which there are exchange privileges among the Funds.
FIRST NEXT OVER $5.7 BILLION $5 BILLION $10.7 BILLION ------------ ---------- ------------- 0.184% 0.180% 0.175%
Each Class of shares is subject to an annual class minimum of $18,000. or (2) An allocated portion, based on eligible assets, of an annual aggregate minimum fee of $10.5 million. In addition, pursuant to other servicing agreements, Class A, B and C shareholders pay service fees to other firms that provide similar services for their own shareholder accounts. Class Y shareholders pay service fees monthly at an annual rate of 0.10% of their average daily net assets. CIS and BFDS and other firms are also reimbursed by the Funds for out-of-pocket expenses. For the period ended December 31, 2001, amounts paid to CIS as compensation for its services as transfer agent were as follows:
TRANSFER AGENT FUND FEE ---- -------------- Capital Growth Fund $ 455,785 Large Cap Growth Fund 42,350 Targeted Equity Fund 3,274,559 Growth and Income Fund 1,053,903 Balanced Fund 366,634 Large Cap Value Fund 58,691 Mid Cap Growth Fund 42,968 Relative Value Fund 17,427 Select Fund 122,629 Small Cap Growth Fund 17,046 International Equity Fund 196,617
d. SHAREHOLDER SERVICING FEES. Pursuant to Shareholder Services Plan (the "Plan"), prior to their reorganization into Relative Value Fund and Small Cap Growth Fund, respectively, Jurika & Voyles Value+Growth Fund and Jurika & Voyles Small-Cap Fund each reimbursed Jurika & Voyles, L.P. for expenses incurred, not to exceed 0.25% of each Fund's average daily net assets, for shareholder services provided. Under the Plan, Jurika & Voyles, L.P. as Services Coordinator provided, or arranged for others to provide, certain specified shareholder services to shareholders of the Funds. e. SERVICE AND DISTRIBUTION FEES. Pursuant to Rule 12b-1 under the 1940 Act, the Trusts have adopted a Service Plan relating to each Fund's Class A shares (the "Class A Plan") and Service and Distribution Plans relating to each Fund's Class B and Class C shares (the "Class B and Class C Plans"). 70 Under the Class A Plan, the Fund pays CDC IXIS Asset Management Distributors, L.P. ("CDC IXIS Distributors"), the Fund's distributor (a wholly owned subsidiary of CDC IXIS Asset Management North America, L.P. ), a monthly service fee at the annual rate of 0.25% of the average daily net assets attributable to the Fund's Class A shares, as reimbursement for expenses incurred by CDC IXIS Distributors in providing personal services to investors in Class A shares and/or the maintenance of shareholder accounts. Under the Class B and Class C Plans, the Fund pays CDC IXIS Distributors a monthly service fee at the annual rate of 0.25% of the average daily net assets attributable to the Fund's Class B and Class C shares, as compensation for services provided and expenses incurred by CDC IXIS Distributors in providing personal services to investors in Class B and Class C shares and/or the maintenance of shareholder accounts. Also under the Class B and Class C Plans, the Fund pays CDC IXIS Distributors a monthly distribution fee at the annual rate of 0.75% of the average daily net assets attributable to the Fund's Class B and Class C shares, as compensation for services provided and expenses incurred by CDC IXIS Distributors in connection with the marketing or sale of Class B and Class C shares. For the period ended December 31, 2001, the Funds paid the following service and distribution fees:
SERVICE FEE DISTRIBUTION FEE ------------------------------------------------------------------------- FUND CLASS A CLASS B CLASS C CLASS B CLASS C ---- ------- ------- ------- ------- ------- Capital Growth Fund $ 286,602 $110,955 $ 4,883 $ 332,865 $14,650 Large Cap Growth Fund 18,169 15,286 2,103 45,857 6,310 Targeted Equity Fund 2,749,081 211,768 11,157 635,303 33,471 Growth and Income Fund 613,071 346,225 33,006 1,038,674 99,019 Balanced Fund 210,487 82,597 4,080 247,789 12,241 Large Cap Value Fund 23,837 22,223 2,187 66,667 6,559 Mid Cap Growth Fund 6,824 4,865 1,112 14,595 3,336 Relative Value Fund 231 -- -- -- -- Select Fund 47,500 62,319 32,014 186,958 96,042 Small Cap Growth Fund 1,463 1,558 152 4,673 455 International Equity Fund 103,583 54,930 8,584 164,791 25,752
Prior to September 13, 1993 for Capital Growth Fund, Balanced Fund and International Equity Fund and June 1, 1993 for Targeted Equity Fund, to the extent that reimburseable expenses of CDC IXIS Distributors in prior years exceeded the maximum amount payable under the Plan for that year, such expenses could be carried forward for reimbursement in future years in which the Class A Plan remains in effect. Unreimbursed expenses carried forward at December 31, 2001 are as follows:
FUND ---- Capital Growth Fund $ 563,284 Targeted Equity Fund 2,030,882 Balanced Fund 2,041,399 International Equity Fund 514,256
Commissions (including contingent deferred sales charges) on Fund shares paid to CDC IXIS Distributors by investors in shares of the Funds during the period ended December 31, 2001 were as follows:
FUND ---- Capital Growth Fund $ 260,298 Targeted Equity Fund 1,107,164 Balanced Fund 177,730 Mid Cap Growth Fund 154,602 Select Fund 991,680 International Equity Fund 150,850 Large Cap Growth Fund $ 31,813 Growth and Income Fund 652,844 Large Cap Value Fund 75,911 Relative Value Fund 12,265 Small Cap Growth Fund 1,427
f. TRUSTEES FEES AND EXPENSES. The Funds do not pay any compensation directly to their officers or Trustees who are directors, officers or employees of CDC IXIS Advisers, CDC IXIS Distributors, CDC IXIS Asset Management North America, L.P., CIS or their affiliates. Each other Trustee receives a retainer fee at the annual rate of $40,000 and meeting attendance fees of $3,500 for each meeting of the Board of Trustees attended. Each committee member receives an additional retainer fee at the annual rate of $6,000 while each committee chairman receives a retainer fee (beyond the $6,000 fee) at the annual rate of $4,000. These fees are allocated to the various CDC Nvest Funds based on a formula that takes into account, among other factors, the relative net assets of each Fund. A deferred compensation plan (the "Plan") is available to the Trustees on a voluntary basis. Each participating Trustee will receive an amount equal to the value that such deferred compensation would have been had it been invested in the Funds or certain other CDC Nvest Funds on the normal payment date. Deferred amounts remain in the Funds until distributed in accordance with the Plan. 71 5. CAPITAL SHARES. Each Fund may issue an unlimited number of shares of beneficial interest. Transactions in capital shares were as follows:
CAPITAL GROWTH FUND ------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 --------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT ----------- ------------ ----------- ------------ CLASS A Shares sold 1,055,218 $ 13,148,699 2,070,086 $ 47,256,732 Shares issued in connection with the reinvestment of: Distributions from net realized gain 22,408 272,010 1,719,068 27,349,712 ----------- ------------ ----------- ------------ 1,077,626 13,420,709 3,789,154 74,606,444 Shares repurchased (2,365,014) (30,219,377) (3,040,068) (68,575,974) ----------- ------------ ----------- ------------ Net increase (decrease) (1,287,388) $(16,798,668) 749,086 $ 6,030,470 ----------- ------------ ----------- ------------ CLASS B Shares sold 371,713 $ 4,321,421 741,402 $ 15,265,298 Shares issued in connection with the reinvestment of: Distributions from net realized gain 10,307 111,634 826,447 11,800,258 ----------- ------------ ----------- ------------ 382,020 4,433,055 1,567,849 27,065,556 Shares repurchased (1,265,123) (14,453,783) (896,553) (18,087,383) ----------- ------------ ----------- ------------ Net increase (decrease) (883,103) $(10,020,728) 671,296 $ 8,978,173 ----------- ------------ ----------- ------------ CLASS C Shares sold 34,361 $ 393,899 97,875 $ 2,003,918 Shares issued in connection with the reinvestment of: Distributions from net realized gain 470 5,079 34,957 498,562 ----------- ------------ ----------- ------------ 34,831 398,978 132,832 2,502,480 Shares repurchased (54,929) (635,589) (95,844) (1,967,375) ----------- ------------ ----------- ------------ Net increase (decrease) (20,098) $ (236,611) 36,988 $ 535,105 ----------- ------------ ----------- ------------ CLASS Y Shares sold -- $ -- 7,479 $ 175,584 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- -- -- Shares issued - merger -- -- -- -- ----------- ------------ ----------- ------------ -- -- 7,479 175,584 Shares repurchased -- -- (14,198) (320,207) ----------- ------------ ----------- ------------ Net increase (decrease) -- $ -- (6,719) $ (144,623) ----------- ------------ ----------- ------------ Increase (decrease) derived from capital shares transactions (2,190,589) $(27,056,007) 1,450,651 $ 15,399,125 =========== ============ =========== ============ 72 LARGE CAP GROWTH FUND (b) ------------------------------------------------------------- FOR THE PERIOD OCTOBER 1, 2001 THROUGH YEAR ENDED DECEMBER 31, 2001 SEPTEMBER 30, 2001 --------------------------- ------------------------------ - SHARES AMOUNT SHARES AMOUNT ---------- ------------ ----------- ----------- CLASS A Shares sold 64,336 $ 876,119 717,163 $ 12,809,760 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- 348,180 6,204,561 ---------- ------------ ----------- ------------ 64,336 876,119 1,065,343 19,014,321 Shares repurchased (283,145) (3,844,814) (3,590,481) (62,510,964) ---------- ------------ ----------- ------------ Net increase (decrease) (218,809) $ (2,968,695) (2,525,138) $ 43,496,643 ---------- ------------ ----------- ------------ CLASS B Shares sold 36,462 $ 495,303 668,197 $ 11,535,951 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- 129,881 2,294,996 ---------- ------------ ----------- ------------ 36,462 495,303 798,078 13,830,947 Shares repurchased (135,018) (1,808,744) (588,332) (9,134,751) ---------- ------------ ----------- ------------ Net increase (decrease) (98,556) $ (1,313,441) 209,746 $ 4,696,196 ---------- ------------ ----------- ------------ CLASS C Shares sold 5,761 $ 78,878 126,239 $ 2,109,406 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- 13,269 234,468 ---------- ------------ ----------- ------------ 5,761 78,878 139,508 2,343,874 Shares repurchased (64,731) (866,069) (163,692) (2,468,578) ---------- ------------ ----------- ------------ Net increase (decrease) (58,970) $ (787,191) (24,184) $ (124,704) ---------- ------------ ----------- ------------ CLASS Y Shares sold 7,922 107,634 88,119 $ 1,477,323 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- 5,900 105,486 Shares issued - merger -- -- -- -- ---------- ------------- ----------- ------------ 7,922 107,634 94,019 1,582,809 Shares repurchased (22,487) (301,356) (73,955) (1,216,548) ---------- ------------ ----------- ------------ Net increase (decrease) (14,565) $ (193,722) 20,064 $ 366,261 ---------- ------------ ----------- ------------ Increase (decrease) derived from capital shares transactions (390,900) $(5,263,049) (2,319,512) $(38,558,890) ========== ============ =========== ============ LARGE CAP GROWTH FUND (b) ------------------------------- YEAR ENDED (a) SEPTEMBER 30, 2000 --------------------------- SHARES AMOUNT ----------- ------------ CLASS A Shares sold 19,651,948 $ 371,992,961 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- ------------- -------------- 19,651,948 371,992,961 Shares repurchased (17,933,965) (335,964,185) ------------- -------------- Net increase (decrease) 1,717,983 $ 36,028,776 ------------- -------------- CLASS B Shares sold 1,765,474 $ 37,723,733 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- ------------- -------------- 1,765,474 37,723,733 Shares repurchased (108,577) (2,358,591) ------------- -------------- Net increase (decrease) 1,656,897 $ 35,365,142 ------------- -------------- CLASS C Shares sold 325,023 $ 6,644,269 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- ------------- -------------- 325,023 6,644,269 Shares repurchased (21,102) (447,028) ------------- -------------- Net increase (decrease) 303,921 $ 6,197,241 ------------- -------------- CLASS Y Shares sold 96,501 $ 2,045,140 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- Shares issued - merger -- -- ------------- -------------- 96,501 2,045,140 Shares repurchased (16,159) (337,686) ------------- -------------- Net increase (decrease) 80,342 $ 1,707,454 ------------- -------------- Increase (decrease) derived from capital shares transactions 3,759,143 $ 79,298,613 ============= ==============
(a) For the period October 29, 1999 (commencement of operations) through September 30, 2000 for Class B, Class C and Class Y. (b) Financial Information for Kobrick Growth Fund which was reorganized into CDC Nvest Large Cap Growth Fund on November 16, 2001. 73
TARGETED EQUITY FUND ---------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 --------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT ----------- ------------ ----------- ------------ CLASS A Shares sold 4,625,921 $ 37,397,822 6,442,912 $ 67,793,846 Shares issued in connection with the reinvestment of: Dividends from net investment income 588,286 4,641,577 862,365 8,037,715 Distributions from net realized gain -- -- 15,943,237 152,763,355 ------------- ------------- ----------- ------------- 5,214,207 42,039,399 23,248,514 228,594,916 Shares repurchased (26,670,516) (210,005,714) (42,339,597) (435,596,467) ------------- ------------- ----------- ------------- Net increase (decrease) (21,456,309) $(167,966,315) (19,091,083) $(207,001,551) ------------- ------------- ----------- ------------- CLASS B Shares sold 1,033,167 $ 7,768,966 1,867,464 $ 18,801,530 Shares issued in connection with the reinvestment of: Dividends from net investment income 47,010 355,864 13,645 132,353 Distributions from net realized gain -- -- 1,212,653 11,187,136 ------------- ------------- ----------- ------------- 1,080,177 8,124,830 3,093,762 30,121,019 Shares repurchased (2,507,370) (18,748,868) (3,849,341) (38,906,352) ------------- ------------- ----------- ------------- Net increase (decrease) (1,427,193) $ (10,624,038) (755,579) $ (8,785,333) ------------- ------------- ----------- ------------- CLASS C Shares sold 97,093 $ 747,803 220,068 $ 2,116,323 Shares issued in connection with the reinvestment of: Dividends from net investment income 1,961 14,842 519 5,036 Distributions from net realized gain -- -- 47,518 437,813 ------------- ------------- ----------- ------------- 99,054 762,645 268,105 2,559,172 Shares repurchased (188,267) (1,437,665) (442,204) (4,430,762) ------------- ------------- ----------- ------------- Net increase (decrease) (89,213) $ (675,020) (174,099) $ (1,871,590) ------------- ------------- ----------- ------------- CLASS Y Shares sold 102,858 $ 807,171 139,551 $ 1,464,823 Shares issued in connection with the reinvestment of: Dividends from net investment income 5,087 40,392 12,302 114,156 Distributions from net realized gain -- -- 137,485 1,321,552 Shares issued - merger -- -- -- -- ------------- ------------- ----------- ------------- 107,945 847,563 289,338 2,900,531 Shares repurchased (297,678) (2,366,110) (381,854) (3,969,570) ------------- ------------- ----------- ------------- Net increase (decrease) (189,733) $ (1,518,547) (92,516) $ (1,069,039) ------------- ------------- ----------- ------------- Increase (decrease) derived from capital shares transactions (23,162,448) $(180,783,920) (20,113,277) $(218,727,513) ============= ============= =========== ============= 74 GROWTH AND INCOME FUND ---------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 --------------------------- ------------------------------ SHARES AMOUNT SHARES AMOUNT ---------- ----------- ----------- ----------- CLASS A Shares sold 2,062,745 $ 25,706,467 2,873,932 $ 42,008,117 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- 563,741 8,467,385 ----------- ------------- ----------- ------------ 2,062,745 25,706,467 3,437,673 50,555,502 Shares repurchased (5,231,087) (64,972,389) (6,850,800) (99,658,068) ----------- ------------- ----------- ------------ Net increase (decrease) (3,168,342) $ (39,265,922) (3,413,127) $(49,102,566) ---------- ------------- ----------- ------------ CLASS B Shares sold 942,184 $ 11,377,030 2,001,301 $ 28,452,164 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- 363,541 5,322,243 ----------- ------------- ----------- ------------ 942,184 11,377,030 2,364,842 33,774,407 Shares repurchased (2,726,089) (32,387,884) (4,398,290) (62,609,963) ----------- ------------- ----------- ------------ Net increase (decrease) (1,783,905) $ (21,010,854) (2,033,448) $(28,835,556) ----------- ------------- ----------- ------------ CLASS C Shares sold 163,720 $ 2,000,380 351,286 $ 4,982,198 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- 38,767 566,773 ----------- ------------- ----------- ------------ 163,720 2,000,380 390,053 5,548,971 Shares repurchased (682,118) (8,083,997) (740,101) (10,572,630) ----------- ------------- ----------- ------------ Net increase (decrease) (518,398) $ (6,083,617) (350,048) $ (5,023,659) ----------- ------------- ----------- ------------ CLASS Y Shares sold 536,860 $ 7,211,722 156,868 $ 2,289,327 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- 21,472 324,011 Shares issued - merger -- -- -- -- ----------- ------------- ----------- ------------ 536,860 7,211,722 178,340 2,613,338 Shares repurchased (267,927) (3,334,704) (384,312) (5,653,007) ----------- ------------- ----------- ------------ Net increase (decrease) 268,933 $ 3,877,018 (205,972) $ (3,039,669) ----------- ------------- ----------- ------------ Increase (decrease) derived from capital shares transactions (5,201,712) $ (62,483,375) (6,002,595) $(86,001,450) =========== ============= =========== ============ BALANCE FUND ------------ YEAR ENDED YEAR ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 ---------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------- --------- -------- CLASS A Shares sold 513,132 $ 4,954,670 506,126 $ 5,568,331 Shares issued in connection with the reinvestment of: Dividends from net investment income 132,216 1,279,105 229,172 2,510,444 Distributions from net realized gain -- -- 1,303 14,819 ---------- ------------- ---------- ------------ 645,348 6,233,775 736,601 8,093,594 Shares repurchased (2,267,482) (22,274,701) (5,656,229) (62,263,739) ---------- ------------- ---------- ------------ Net increase (decrease) (1,622,134) $ (16,040,926) (4,919,628) $(54,170,145) ---------- ------------- ---------- ------------ CLASS B Shares sold 276,607 $ 2,708,455 342,695 $ 3,724,246 Shares issued in connection with the reinvestment of: Dividends from net investment income 17,951 177,217 28,811 313,046 Distributions from net realized gain -- -- 518 5,835 ----------- ------------- ---------- ------------ 294,558 2,885,672 372,024 4,043,127 Shares repurchased (1,017,696) (9,930,751) (2,362,349) (25,785,001) --------- ------------- ---------- ------------ Net increase (decrease) (723,138) $ (7,045,079) (1,990,325) $(21,741,874) ---------- ------------- ---------- ------------ CLASS C Shares sold 18,560 $ 187,397 24,535 $ 268,681 Shares issued in connection with the reinvestment of: Dividends from net investment income 903 8,870 1,600 17,303 Distributions from net realized gain -- -- 26 288 ---------- ------------- ---------- ------------ 19,463 196,267 26,161 286,272 Shares repurchased (63,709) (628,357) (222,250) (2,417,313) ---------- ------------- ---------- ------------ Net increase (decrease) (44,246) $ (432,090) (196,089) $ (2,131,041) ---------- ------------- ---------- ------------ CLASS Y Shares sold 222,722 $ 2,148,493 196,077 $ 2,129,973 Shares issued in connection with the reinvestment of: Dividends from net investment income 74,800 707,905 111,724 1,218,118 Distributions from net realized gain -- -- 421 4,792 Shares issued - merger 3,661,941 34,040,542 -- -- ---------- ------------- ---------- ------------ 3,959,463 36,896,940 308,222 3,352,883 Shares repurchased (1,911,519) (18,274,878) (1,627,899) (17,987,577) ---------- ------------- ---------- ------------ Net increase (decrease) 2,047,944 $ 18,622,062 (1,319,677) $(14,634,694) ---------- ------------- ---------- ------------ Increase (decrease) derived from capital shares transactions (341,574) $ (4,896,033) (8,425,719) $(92,677,754) ========== ============= ========== ============
75
LARGE CAP VALUE FUND ------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 --------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT ----------- ------------ ----------- ------------ CLASS A Shares sold 229,029 $ 4,102,256 82,121 $ 1,442,544 Shares issued in connection with the reinvestment of: Dividends from net investment income 419 7,682 5,430 94,701 Distributions from net realized gains -- -- -- -- --------- ------------ -------- ------------ 229,448 4,109,938 87,551 1,537,245 Shares repurchased (117,929) (2,096,523) (285,382) (4,785,760) --------- ------------ -------- ------------ Net increase (decrease) 111,519 $ 2,013,415 (197,831) $ (3,248,515) --------- ------------ -------- ------------ CLASS B Shares sold 226,765 $ 4,033,396 67,804 $ 1,171,513 Shares issued in connection with the reinvestment of: Dividends from net investment income 357 6,518 752 12,942 --------- ------------ -------- ------------ 227,122 4,039,914 68,556 1,184,455 Shares repurchased (90,859) (1,606,712) (207,958) (3,466,428) --------- ------------ -------- ------------ Net increase (decrease) 136,263 $ 2,433,202 (139,402) $ (2,281,973) --------- ------------ -------- ------------ CLASS C Shares sold 20,994 $ 374,861 66,438 $ 1,155,252 Shares issued in connection with the reinvestment of: Dividends from net investment income 33 604 94 1,626 --------- ------------ ----------- ------------ 21,027 375,465 66,532 1,156,878 Shares repurchased (19,973) (355,961) (101,382) (1,743,509) --------- ------------ ----------- ------------ Net increase (decrease) 1,054 $ 19,504 (34,850) $ (586,631) --------- ------------ ----------- ------------ CLASS Y Shares sold -- $ -- -- $ -- Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- -- -- --------- ------------ ----------- ------------ -- -- -- -- Shares repurchased -- -- -- -- --------- ------------ ----------- ------------ Net increase (decrease) -- $ -- -- $ -- --------- ------------ ----------- ------------ Increase (decrease) derived from capital shares transactions 248,836 $ 4,466,121 (372,083) $ (6,117,119) ========= ============ =========== ============ 76 MID CAP GROWTH FUND JURIKA & VOYLES RELATIVE VALUE FUND (c) --------------------------- ------------------------------------ FOR THE PERIOD FOR THE PERIOD MARCH 15, 2001 (a) JULY 1, 2001 THROUGH THROUGH DECEMBER 31, 2001 DECEMBER 31, 2001 (b) --------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------ ----------- ----------- CLASS A Shares sold 734,413 $ 7,105,770 86,080 1,277,351 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gains -- -- 12,338 155,709 --------- ------------ ----------- ----------- 734,413 7,105,770 98,418 1,383,060 Shares repurchased (96,998) (788,870) -- -- --------- ------------ ----------- ----------- Net increase (decrease) 637,415 $ 6,316,900 98,418 $ 1,383,060 --------- ------------ ----------- ----------- CLASS B Shares sold 562,268 $ 5,284,486 1 $ 15 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- --------- ------------ ----------- ----------- 562,268 5,284,486 1 15 Shares repurchased (41,327) (326,828) -- -- --------- ------------ ----------- ----------- Net increase (decrease) 520,941 $ 4,957,658 1 $ 15 --------- ------------ ----------- ----------- CLASS C Shares sold 122,780 $ 1,166,382 1 $ 15 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- --------- ------------ ----------- ----------- 122,780 1,166,382 1 15 Shares repurchased (7,720) (64,461) -- -- --------- ------------ ----------- ----------- Net increase (decrease) 115,060 $ 1,101,921 1 $ 15 --------- ------------ ----------- ----------- CLASS Y Shares sold -- $ -- 97,090 $ 1,390,709 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- 249,781 3,149,734 --------- ------------ ----------- ----------- -- -- 346,871 4,540,443 Shares repurchased -- -- (217,898) (3,145,865) --------- ------------ ----------- ----------- Net increase (decrease) -- $ -- 128,973 $ 1,394,578 --------- ------------ ----------- ----------- Increase (decrease) derived from capital shares transactions 1,273,416 $ 12,376,479 227,393 $ 2,777,668 ========= ============ =========== =========== JURIKA & VOYLES RELATIVE VALUE FUND (c) ------------------------------------------------------------------ YEAR ENDED JUNE 30, YEAR ENDED JUNE 30, 2001 2000 ---------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT ----------- ------------ ---------- ------------ CLASS A Shares sold -- $ -- -- $ -- Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gains -- -- -- -- ----------- ------------ ---------- ------------ -- -- -- -- Shares repurchased -- -- -- -- ----------- ------------ ---------- ------------ Net increase (decrease) -- $ -- -- $ -- ----------- ------------ ---------- ------------ CLASS B Shares sold -- $ -- -- $ -- Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- ----------- ------------ ---------- ------------ -- -- -- -- Shares repurchased -- -- -- -- ----------- ------------ ---------- ------------ Net increase (decrease) -- $ -- -- $ -- ----------- ------------ ---------- ------------ CLASS C Shares sold -- $ -- -- $ -- Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- ----------- ------------ ---------- ------------ -- -- -- -- Shares repurchased -- -- -- -- ----------- ------------ ---------- ------------ Net increase (decrease) -- $ -- -- $ -- ----------- ------------ ---------- ------------ CLASS Y Shares sold 172,383 $ 2,861,688 370,130 $ 5,976,405 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain 254,897 4,009,533 68,972 1,055,965 ----------- ------------ ---------- ------------ 427,280 6,871,221 439,102 7,032,370 Shares repurchased (294,086) (4,846,533) (1,080,284) (17,104,389) ----------- ------------ ---------- ------------ Net increase (decrease) 133,194 $ 2,024,688 (641,182) $(10,072,019) ----------- ------------ ---------- ------------ Increase (decrease) derived from capital shares transactions 133,194 2,024,688 (641,182) (10,072,019) =========== ============ ========== ============
(a) Commencement of operations (b) For the period November 30, 2001, (commencement of operations) through December 31, 2001 for Class A, Class B and Class C. (c) Financial information for Jurika & Voyles Value+Growth Fund which was reorganized into CDC Nvest Jurika & Voyles Relative Value Fund on November 30, 2001. 77
SELECT FUND --------------------------- FOR THE PERIOD MARCH 15, 2001(a) THROUGH DECEMBER 31, 2001 --------------------------- SHARES AMOUNT -------------- ------------- CLASS A Shares sold 4,617,531 $ 49,019,114 Shares issued - merger -- -- ----------- ------------ 4,617,531 49,019,114 Shares repurchased (420,857) (4,377,186) ----------- ------------ Net increase (decrease) 4,196,674 $ 44,641,928 ----------- ------------ CLASS B Shares sold 6,104,522 $ 64,412,960 Shares issued - merger -- -- ----------- ------------ 6,104,522 64,412,960 Shares repurchased (352,429) (3,649,748) ----------- ------------ Net increase (decrease) 5,752,093 $ 60,763,212 ----------- ------------ CLASS C Shares sold 3,251,976 $ 34,508,557 Shares issued - merger -- -- ----------- ------------ 3,251,976 34,508,557 Shares repurchased (94,246) (979,567) ----------- ------------ Net increase (decrease) 3,157,730 $ 33,528,990 ----------- ------------ CLASS Y Shares sold -- $ -- Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- Distributions from net realized gain -- -- ----------- ------------ -- -- Shares repurchased -- -- ----------- ------------ Net increase (decrease) -- $ -- ----------- ------------ Increase (decrease) derived from capital shares transactions 13,106,497 $138,934,130 =========== ============ 78 JURIKA & VOYLES SMALL CAP GROWTH FUND (c) ----------------------------------------------------------- FOR THE PERIOD JULY 1, 2001 THROUGH DECEMBER 31, 2001(b) --------------------------- SHARES AMOUNT ---------- ------------ CLASS A Shares sold 3,024 $ 38,922 Shares issued - merger 540,019 6,784,591 ---------- ------------ 543,043 6,823,513 Shares repurchased (13,944) (179,854) ---------- ------------ Net increase (decrease) 529,099 $ 6,643,659 ---------- ------------ CLASS B Shares sold 5,729 $ 74,183 Shares issued - merger 570,477 7,166,841 ---------- ------------ 576,206 7,241,024 Shares repurchased (10,965) (142,096) ---------- ------------ Net increase (decrease) 565,241 7,098,928 ---------- ------------ CLASS C Shares sold 67 $ 856 Shares issued - merger 55,875 701,995 ---------- ------------ 55,942 702,851 Shares repurchased (540) (6,967) ---------- ------------ Net increase (decrease) 55,402 $ 695,884 ---------- ------------ CLASS Y Shares sold 232,714 $ 3,491,365 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- Distributions from net realized gain -- -- ---------- ------------ 232,714 3,491,365 Shares repurchased (947,565) (12,569,449) ---------- ------------ Net increase (decrease) (714,851) $ (9,078,084) ---------- ------------ Increase (decrease) derived from capital shares transactions 434,891 $ 5,360,387 ========== ============ JURIKA & VOYLES SMALL CAP GROWTH FUND (c) -------------------------------------------------------------- YEAR ENDED YEAR ENDED JUNE 30, 2001 JUNE 30, 2000 --------------------------- ---------------------------- SHARES AMOUNT SHARES AMOUNT ----------- ------------ ----------- ------------- CLASS A Shares sold -- $ -- -- $ -- Shares issued - merger -- -- -- -- ----------- ------------ ----------- ------------- -- -- -- -- Shares repurchased -- -- -- -- ----------- ------------ ----------- ------------- Net increase (decrease) -- $ -- -- $ -- ----------- ------------ ----------- ------------- CLASS B Shares sold -- $ -- -- $ -- Shares issued - merger -- -- -- -- ----------- ------------ ----------- ------------- -- -- -- -- Shares repurchased -- -- -- -- ----------- ------------ ----------- ------------- Net increase (decrease) -- -- -- -- ----------- ------------ ----------- ------------- CLASS C Shares sold -- $ -- -- $ -- Shares issued - merger -- -- -- -- ----------- ------------ ----------- ------------- -- -- -- -- Shares repurchased -- -- -- -- ----------- ------------ ----------- ------------- Net increase (decrease) -- $ -- -- $ -- ----------- ------------ ----------- ------------- CLASS Y Shares sold 568,696 $ 9,592,292 831,597 $ 17,447,304 Shares issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain 367,044 5,667,152 -- -- ----------- ------------ ----------- ------------- 935,740 15,259,444 831,597 17,447,304 Shares repurchased (847,206) (14,813,799) (900,222) (17,233,292) ----------- ------------ ----------- ------------- Net increase (decrease) 88,534 $ 445,645 (68,625) $ 214,012 ----------- ------------ ----------- ------------- Increase (decrease) derived from capital shares transactions 88,534 $ 445,645 (68,625) $ 214,012 =========== ============ =========== =============
(a) Commencement of operations (b) For the period November 30, 2001, (commencement of operations) through December 31, 2001 for Class A, Class B and Class C. (c) Financial information for Jurika & Voyles Small-Cap Fund which was reorganized into CDC Nvest Jurika & Voyles Small Cap Growth Fund on November 30, 2001. 79
INTERNATIONAL EQUITY FUND -------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2001 DECEMBER 31, 2000 --------------------------- --------------------------- SHARES AMOUNT SHARES AMOUNT ----------- ------------ ----------- ------------ CLASS A Shares sold 2,564,768 $ 35,852,024 6,041,069 $130,410,637 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- 273,220 5,057,795 ----------- ------------ ----------- ------------ 2,564,768 35,852,024 6,314,289 135,468,432 Shares repurchased (3,207,465) (44,877,051) (5,661,976) (120,604,737) ----------- ------------ ----------- ------------ Net increase (decrease) (642,697) $ (9,025,027) 652,313 $ 14,863,695 ----------- ------------ ----------- ------------ CLASS B Shares sold 138,289 $ 1,869,978 885,381 $ 20,233,007 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- 148,131 2,640,281 ----------- ------------ ----------- ------------ 138,289 1,869,978 1,033,512 22,873,288 Shares repurchased (507,291) (6,696,617) (394,426) (8,217,240) ----------- ------------ ----------- ------------ Net increase (decrease) (369,002) $ (4,826,639) 639,086 $ 14,656,048 ----------- ------------ ----------- ------------ CLASS C Shares sold 322,285 $ 4,973,553 717,222 $ 13,840,232 Shares issued in connection with the reinvestment of: Distributions from net realized gain -- -- 14,535 258,483 ----------- ------------ ----------- ------------ 322,285 4,973,553 731,757 14,098,715 Shares repurchased (495,496) (7,406,722) (430,484) (7,767,471) ----------- ------------ ----------- ------------ Net increase (decrease) (173,211) $ (2,433,169) 301,273 $ 6,331,244 ----------- ------------ ----------- ------------ CLASS Y Shares sold 92,618 $ 1,334,169 287,339 $ 7,194,382 Shares issued in connection with the reinvestment of Distributions from net realized gain -- -- 57,967 1,096,473 ----------- ------------ ----------- ------------ 92,618 1,334,169 345,306 8,290,855 Shares repurchased (241,290) (3,607,746) (203,374) (4,485,078) ----------- ------------ ----------- ------------ Net increase (decrease) (148,672) $ (2,273,577) 141,932 $ 3,805,777 ----------- ------------ ----------- ------------ Increase (decrease) derived from capital shares transactions (1,333,582) $(18,558,412) 1,734,604 $ 39,656,764 =========== ============ =========== ============
80 6. LINE OF CREDIT. Each Fund, except Large Cap Growth Fund, Mid Cap Growth Fund, Relative Value Fund and Select Fund, along with certain other Funds that comprise the CDC Nvest Funds Trusts participate in a $100,000,000 committed line of credit provided by Citibank, N.A. under a credit agreement (the "Agreement") dated March 2, 2001. Advances under the Agreement are taken primarily for temporary or emergency purposes. Borrowings under the Agreement bear interest at a rate tied to one of several short-term rates that may be selected by the lender from time to time. In addition, the Funds are charged a facility fee equal to 0.08% per annum on the unused portion of the line of credit. The annual cost of maintaining the line of credit and the facility fee is apportioned pro rata among the participating Funds. There were no borrowings as of or during the period ended December 31, 2001. 7. SECURITY LENDING. Each Fund except Targeted Equity Fund, Growth and Income Fund, Balanced Fund and Relative Value Fund have entered into an agreement with a third party to lend their securities. The loans are collateralized at all times with cash or securities with a market value at least equal to the market value of the securities on loan. The Funds receive fees for lending their securities. At December 31, 2001, all funds except Large Cap Growth Fund had no securities on loan. Large Cap Growth Fund loaned securities having a market value of $10,436,787 and collateralized by cash in the amount of $10,878,109 which was invested in a short-term investment. 8. EXPENSE REDUCTIONS AND CONTINGENT EXPENSE OBLIGATIONS. Each Fund has entered into agreements with certain brokers whereby the brokers will rebate a portion of brokerage commissions. Amounts earned by the Funds under such agreements are presented as a reduction of expenses in the statements of operations. For the period ended December 31, 2001, expenses were reduced under these agreements as follows:
Fund Reductions Fund Reductions ---- ---------- ---- ---------- Capital Growth Fund $ 52,099 Large Cap Growth Fund $ 6,400 Targeted Equity Fund 404,267 Growth and Income Fund 171,423 Balanced Fund 41,363 Large Cap Value Fund 8,604 Mid Cap Growth Fund 1,401 Relative Value Fund -- Select Fund 36,440 Small Cap Growth Fund -- International Equity Fund 372
CDC IXIS Advisers has given binding undertakings to certain Funds to defer its management fees and, if necessary, bear certain expenses associated with these Funds to limit their operating expenses. These undertakings are in effect until the dates indicated below and will be reevaluated on an annual basis. If in the following fiscal year the actual operating expenses of a Fund that previously received a deferral or reimbursement are less than the expense limit for that Fund, the Fund is required to pay an amount of additional expense that is the lower of the difference between the expense limit and the actual amount of fees previously waived or expenses reimbursed. At December 31, 2001, the expense limits as a percentage of average daily net assets and amounts subject to possible reimbursement under the expense limitation agreements were as follows:
Cumulative Expenses Waived Expense Limit as a Percentage Expiration or Reimbursed Subject of Average Daily Net Assets of Waiver To Future Payment ------------------------------ ----------- -------------------------- CLASS A CLASS B CLASS C CLASS Y ------- ------- ------- ------- Large Cap Growth Fund 1.40% 2.15% 2.15% 1.15% April 30, 2003 $136,441 Balanced Fund -- -- -- 0.95% December 31, 2003 12,476 Large Cap Value Fund 1.50% 2.25% 2.25% -- April 30, 2002 165,533 Mid Cap Growth Fund 1.70% 2.45% 2.45% -- April 30, 2002 240,794 Relative Value Fund 1.50% 2.25% 2.25% 1.25% December 31, 2004 95,326 Select Fund 1.70% 2.45% 2.45% -- April 30, 2002 203,868 Small Cap Growth Fund 1.75% 2.50% 2.50% 1.50% December 31, 2004 85,667
9. CONCENTRATION OF RISK. The Select Fund is a non-diversified Fund. Compared with diversified mutual funds, the Fund may invest a greater percentage of its assets in a particular company. Therefore, the Fund's returns could be significantly affected by the performance of any one of the small number of stocks in its portfolio. International Equity Fund had the following geographic concentrations in excess of 10% of its total net assets at December 31, 2001: France 10.6%, Japan 14.3%, United Kingdom 21.0%. The Fund pursues its objectives by investing in foreign securities. There are certain risks involved in investing in foreign securities which are in addition to the usual risks inherent in domestic investments. These risks include those resulting from future adverse political or economic developments and the possible imposition of currency exchange blockages or other foreign governmental laws or restrictions. 10. CHANGE IN ACCOUNTING PRINCIPLE. As required, effective January 1, 2001, the Balanced Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium on debt securities. Prior to January 1, 2001, the Fund did not amortize premiums on debt securities. The cumulative effect of this accounting change had no impact on total net assets of the Fund, but resulted in $36,690 reduction in cost of securities and a corresponding increase in unrealized appreciation, based on securities held by the Fund on January 1, 2001. 81 The effect of this change for the period ended December 31, 2001 was to decrease net investment income by $106,629, decrease net unrealized appreciation by $679, and increase net realized gains by $107,308. The statement of changes in net assets and financial highlights for prior periods have not been restated to reflect this change in presentation. 11. ACQUISITION OF ASSETS. After the close of business on November 16, 2001, Kobrick Growth Fund was reorganized into the Large Cap Growth Fund, a newly established series of CDC Nvest Funds Trust I pursuant to a plan of reorganization approved by its shareholders on November 9, 2001. The financial statements of Large Cap Growth Fund reflect the historical financial results of the Kobrick Growth Fund. Additionally, the fiscal year end was changed from September 30th to December 31st. After the close of business on November 30, 2001, Balanced Fund acquired all the assets and liabilities of Jurika & Voyles Balanced Fund pursuant to a plan of reorganization approved by its shareholders on November 16, 2001. The acquisition was accomplished by a tax-free exchange of 3,661,941 Class Y shares of the Fund for 2,845,082 shares of Jurika & Voyles Balanced Fund. Jurika & Voyles Balanced Fund net assets at that date ($34,040,542), including $283,939 of net unrealized appreciation, were combined with those of the Fund. The aggregate net assets of Balanced Fund immediately before the acquisition were $124,261,568. The combined net assets of the Fund immediately following the acquisition were $158,302,110. After the close of business on November 30, 2001, Jurika & Voyles Value+Growth Fund was reorganized into the Relative Value Fund, a newly established series of CDC Nvest Funds Trust I, pursuant to a plan of reorganization approved by its shareholders on November 16, 2001. The financial statements of Relative Value Fund reflect the historical financial results of the Jurika & Voyles Value+Growth Fund. Additionally, the fiscal year end was changed from June 30th to December 31st. After the close of business on November 30, 2001, Small Cap Growth Fund (the "Fund") acquired the assets and liabilities of the Jurika & Voyles Small-Cap Fund ("J & V") in a tax-free reorganization in exchange for shares of the Fund pursuant to a plan of reorganization approved by the J & V shareholders on November 16, 2001. For financial reporting purposes, the financial results of J & V will survive. Accordingly, the financial statements presented for the Fund reflect the historical results of J & V. Additionally, the fiscal year end of J & V was changed from June 30th to December 31st. The number and value of shares issued by the Fund were in amounts equal to the number and value of shares held by J & V shareholders as of the reorganization date. The number and value of shares issued in connection with the reorganization are presented in Footnote 5 - Capital Shares. The Fund's net assets at that date ($14,653,427) including $1,650,081 in unrealized depreciation were combined with those of J & V. The aggregate net assets of J & V immediately before the acquisition were $18,476,221. The combined net assets immediately after the acquisition were $33,129,648. 82 REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees and Shareholders of CDC Nvest Funds Trust I, CDC Nvest Funds Trust II, and CDC Nvest Funds Trust III: In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of CDC Nvest Capital Growth Fund, CDC Nvest Large Cap Growth Fund (formerly Kobrick Growth Fund), CDC Nvest Targeted Equity Fund, CDC Nvest Growth and Income Fund, CDC Nvest Balanced Fund, CDC Nvest Large Cap Value Fund, CDC Nvest Mid Cap Growth Fund, CDC Nvest Jurika & Voyles Relative Value Fund (formerly Jurika & Voyles Value+Growth Fund), CDC Nvest Select Fund, CDC Nvest Jurika & Voyles Small Cap Growth Fund (formerly Jurika & Voyles Small-Cap Fund) and CDC Nvest International Equity Fund (series of CDC Nvest Funds Trust I, CDC Nvest Funds Trust II, or CDC Nvest Funds Trust III, hereafter referred to as the "Funds") at December 31, 2001, the results of each of their operations, the changes in each of their net assets and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2001 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Boston, Massachusetts February 8, 2002 83 TRUSTEES' INFORMATION The Funds are governed by a Board of Trustees, which is responsible for generally overseeing the conduct of Fund business and for protecting the interests of shareholders. The trustees meet periodically throughout the year to oversee the Funds' activities, review contractual arrangements with companies that provide services to the Funds and review the Fund's performance.
TERM OF OFFICE POSITIONS HELD AND LENGTH OF NAME, AGE AND ADDRESS WITH FUND TIME SERVED ----------------------------- ----------------------------- ----------------- INDEPENDENT TRUSTEES GRAHAM T. ALLISON, JR. (62) Trustee Until retirement* 399 Boylston Street Contract Review and 18 years Boston, MA 02116 Governance Committee Member DANIEL M. CAIN (57) Trustee Until retirement* 452 Fifth Avenue Chairman of the Audit Committee 6 years New York, NY 10018 KENNETH J. COWAN (70) Trustee Until retirement* 399 Boylston Street Chairman of the Contract Review and 27 years Boston, MA 02116 Governance Committee RICHARD DARMAN (59) Trustee Until retirement* 1001 Pennsylvania Avenue, N.W. Contract Review and 6 years Washington, D.C. 20004 Governance Committee Member SANDRA O. MOOSE (60) Trustee Until retirement* One Exchange Place Audit Committee Member 20 years Boston, MA 02109 JOHN A. SHANE (69) Trustee Until retirement* 200 Unicorn Park Drive Audit Committee Member 20 years Woburn, MA 01801 PENDLETON P. WHITE (71) Trustee Until retirement* 6 Breckenridge Lane Contract Review and 21 years Savannah, GA 31411 Governance Committee Member 84 NUMBER OF PRINCIPAL OCCUPATION(S) PORTFOLIOS IN FUND NAME AGE AND ADDRESS DURING PAST 5 YEARS COMPLEX OVERSEEN OTHER DIRECTORSHIPS HELD - -------------------- ----------------------- ------------------ ------------------------ INDEPENDENT TRUSTEES GRAHAM T. ALLISON, JR. (62) Douglas Dillon Professor 27 Director, Taubman Centers, Inc. 399 Boylston Street and Director for the Board Member, USEC Inc. Boston, MA 02116 Belfer Center of Science and International Affairs, John F. Kennedy School of Government, Harvard University DANIEL M. CAIN (57) President and CEO, Cain 27 Trustee for Universal Health Realty 452 Fifth Avenue Brothers & Company, Incorporated Income Trust New York, NY 10018 (investment banking) Director, eBenX, Inc. Director, PASC KENNETH J. COWAN (70) Retired 27 None 399 Boylston Street Boston, MA 02116 RICHARD DARMAN (59) Partner, The Carlyle Group 27 Director, Frontier Ventures 1001 Pennsylvania Avenue, N.W (investments); Professor, Corporation Washington, D.C. 20004. John F. Kennedy School of Government, Director, Neptune Communications Harvard University Corporation Director, Enumerate Solutions, Inc. SANDRA O. MOOSE (60) Senior Vice President and Director, 27 Director, Verizon Corporation One Exchange Place The Boston Consulting Group, Inc. Director, Rohm and Haas Company Boston, MA 02109 (management consulting) JOHN A. SHANE (69) President, Palmer Service Corporation 27 Director, Arch Communications Group 200 Unicorn Park Drive (venture capital organization) Inc. Woburn, MA 01801 Director, Eastern Bank Corporation Director, Gensym Corporation Director, Overland Data Inc. PENDLETON P. WHITE (71) Retired 27 None 6 Breckenridge Lane Savannah, GA 31411
* All Trustees serve until retirement or resignation from the Board. The current retirement age is 72. 85
TERM OF OFFICE POSITIONS HELD AND LENGTH OF NAME, AGE AND ADDRESS WITH FUND TIME SERVED ----------------------------- ----------------------------- ----------------- INTERESTED TRUSTEES JOHN T. HAILER (41) Trustee Not Applicable 399 Boylston Street President 2 years Boston, MA 02116 PETER S. VOSS (55) Trustee Not Applicable 399 Boylston Street Chairman of the Board 10 years Boston, MA 02116 OFFICERS THOMAS P. CUNNINGHAM (56) Treasurer Not Applicable 399 Boylston Street Boston, MA 02116 JOHN E. PELLETIER (37) Secretary and Clerk Not Applicable 399 Boylston Street Boston, MA 02116 86 NUMBER OF PRINCIPAL OCCUPATION(S) PORTFOLIOS IN FUND NAME, AGE AND ADDRESS DURING PAST 5 YEARS COMPLEX OVERSEEN OTHER DIRECTORSHIPS HELD ----------------------------- ------------------------ ------------------ ------------------------ INTERESTED TRUSTEES JOHN T. HAILER (41) President and Chief Executive Officer, 27 None* 399 Boylston Street CDC IXIS Asset Management Distributors, Boston, MA 02116 L.P.; Senior Vice President, Fidelity Investments PETER S. VOSS (55) Director, President and Chief Executive 27 Trustee of Harris Associates 399 Boylston Street Officer, CDC IXIS Asset Management Investment Trust** Boston, MA 02116 North America, L.P. OFFICERS Senior Vice President, CDC IXIS Asset 27 None THOMAS P. CUNNINGHAM (56) Management Services; 399 Boylston Street Senior Vice President, CDC IXIS Asset Boston, MA 02116 Management Advisors; Vice President, Allmerica Financial Life Insurance and Annuity Company; Treasurer, Allmerica Investment Trust; Vice President, First Data Investor Services Group JOHN E. PELLETIER (37) Senior Vice President, General Counsel, 27 None 399 Boylston Street Secretary and Clerk CDC IXIS Boston, MA 02116 Distribution Corporation; Senior Vice President, General Counsel, Secretary and Clerk, CDC IXIS Asset Management Distributors, L.P.; Senior Vice President, General Counsel, Secretary and Clerk, CDC IXIS Asset Management Advisors, L.P.; Executive Vice President, General Counsel Secretary, Clerk and Director CDC IXIS Asset Management Services; Senior Vice President and General Counsel, Funds Distributor, Inc.; Vice President and General Counsel, Boston Institutional Group; Senior Vice President and General Counsel, Financial Research Corporation
* Mr. Hailer is an interested person of the CDC Nvest Funds because he holds the following positions with affiliated persons of the CDC Nvest Funds Trusts: Director and Executive Vice President of CDC IXIS Asset Management Distribution Corporation; President and Chief Executive Officer of CDC IXIS Asset Management Advisers, L.P. ** Mr. Voss is an interested person of the CDC Nvest Funds because he holds the following positions with affiliated persons of the CDC Nvest Funds Trusts: Director of CDC IXIS Asset Management Services; Director of CDC IXIS Asset Management Distribution Corporation; Director of AEW Capital Management, Inc. Director of Harris Associates, Inc.; Director of Jurika & Voyles, Inc.; Director of Loomis, Sayles & Company, Inc.; Director of Reich & Tang Asset Management Inc.; Director of Westpeak Investment Advisors, Inc.; Director of Vaughan, Nelson, Scarborough & McConnell, Inc. 87 SUPPLEMENT TO THE PROSPECTUS Supplement dated February 19, 2002 to the currently effective CDC Nvest Equity Funds, CDC Nvest Star Funds and CDC Nvest Star Growth Fund Classes A, B and C and Class Y Prospectuses EFFECTIVE JANUARY 1, 2002 THE FOLLOWING TABLE IN THE "IT'S EASY TO OPEN AN ACCOUNT" SECTION AND THE "RETIREMENT PLANS" PARAGRAPH UNDER "ADDITIONAL INVESTOR SERVICES" ARE REVISED TO REFLECT THE ADDITION OF COVERDELL EDUCATION SAVINGS ACCOUNTS IN THE CLASSES A, B AND C PROSPECTUSES:
MINIMUM TO OPEN AN ACCOUNT MINIMUM TO USING INVESTMENT BUILDER MINIMUM FOR TYPE OF ACCOUNT OPEN AN ACCOUNT OR PAYROLL DEDUCTION EXISTING ACCOUNTS Any account other than those listed below $ 2,500 $100 $100 Accounts registered under the Uniform Gifts to Minors Act ("UGMA") or the Uniform Transfers to Minors Act ("UTMA") $ 2,500 $100 $100 Individual Retirement Accounts ("IRAs") $ 500 $100 $100 Coverdell Education Savings Accounts $ 500 $100 $100 Retirement plans with tax benefits such as corporate pension, profit sharing and Keogh plans $ 250 $100 $100 Payroll Deduction Investment Programs for SARSEP*, SEP, SIMPLE IRA, 403(b)(7) and certain other retirement plans $ 25 N/A $ 25
Effective March 1, 2002, all references to the Investment Builder Program and Payroll Deduction minimum shall be revised to reflect a reduction in the minimum from $100 per month to $25 per month. The sections of the prospectuses affected are "It's Easy to Open an Account", "Buying Shares" and "Additional Investor Services." EFFECTIVE JANUARY 1, 2002, THE FOLLOWING IS ADDED TO THE PARAGRAPH RELATING TO WESTPEAK GLOBAL ADVISORS, L.P. IN THE "MEET THE FUNDS' INVESTMENT ADVISERS AND SUBADVISERS' SECTION: Westpeak employs a team approach in managing each Fund's portfolio. Members of each Fund's portfolio management team includes, among others: Gerald Scriver, Westpeak's founder and Chairman, who also serves as chairman of Westpeak's Investment Policy Committee; Robert Franz, Westpeak's Chief Investment Officer; and Thomas Anichini, a Vice President of Westpeak. 88 CDC NVEST FUNDS CDC Nvest AEW Real Estate Fund CDC Nvest Balanced Fund CDC Nvest Bond Income Fund CDC Nvest Capital Growth Fund CDC Nvest Cash Management Trust-- Money Market Series* CDC Nvest Government Securities Fund CDC Nvest Growth and Income Fund CDC Nvest High Income Fund CDC Nvest International Equity Fund CDC Nvest Jurika & Voyles Relative Value Fund CDC Nvest Jurika & Voyles Small Cap Growth Fund CDC Nvest Large Cap Growth Fund CDC Nvest Large Cap Value Fund CDC Nvest Limited Term U.S. Government Fund CDC Nvest Massachusetts Tax Free Income Fund CDC Nvest Mid Cap Growth Fund CDC Nvest Municipal Income Fund CDC Nvest Select Fund CDC Nvest Short Term Corporate Income Fund CDC Nvest Star Advisers Fund CDC Nvest Star Growth Fund CDC Nvest Star Small Cap Fund CDC Nvest Star Value Fund CDC Nvest Star Worldwide Fund CDC Nvest Strategic Income Fund CDC Nvest Targeted Equity Fund CDC Nvest Tax Exempt Money Market Trust* INVESTMENT MANAGERS AEW MANAGEMENT AND ADVISORS MONTGOMERY ASSET MANAGEMENT CAPITAL GROWTH MANAGEMENT RS INVESTMENT MANAGEMENT HARRIS ASSOCIATES/OAKMARK FUNDS REICH & TANG ASSET MANAGEMENT JURIKA & VOYLES VAUGHAN, NELSON, SCARBOROUGH LOOMIS, SAYLES & COMPANY & MCCULLOUGH MERCURY ADVISORS WESTPEAK GLOBAL ADVISORS MILLER ANDERSON For current fund performance, ask your financial representative, access the CDC Nvest Funds website at www.cdcnvestfunds.com, or call CDC Nvest Funds at 800-225-5478 for the current edition of FUND FACTS. This material is authorized for distribution to prospective investors when it is preceded or accompanied by the Fund's current prospectus, which contains information about sales charges, management and other items of interest. Investors are advised to read the prospectus carefully before investing. CDC IXIS Asset Management Distributors, L.P., and other firms selling shares of CDC Nvest Funds are members of the National Association of Securities Dealers, Inc. (NASD). As a service to investors, the NASD has asked that we inform you of the availability of a brochure on its Public Disclosure Program. The program provides access to information about securities firms and their representatives. Investors may obtain a copy by contacting the NASD at 800-289-9999 or by visiting their website at www.NASDR.com * Investments in money market funds are not insured or guaranteed by the FDIC or any government agency. 89 [CDC NVEST FUNDS(SM) LOGO] PASSPORT STANDARD CDC IXIS Asset Management Distributors U.S. POSTAGE PAID P.O. Box 8551 BROCKTON, MA PERMIT NO. 770. Boston, Massachusetts 02266-8551 www.cdcnvestfunds.com TO THE HOUSEHOLD OF: DROWNING IN PAPER? Go to: www.cdcnvestfunds.com Click on: Sign up now for E-delivery* Get your next CDC Nvest Funds report online. *Not available for Corporate Retirement Plans and SIMPLE IRAs -----END PRIVACY-ENHANCED MESSAGE-----