-----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, I6xjroKTYE5iwMs83msf5flWWoWeOc9F7WOLPB4SnKwMd48u8bDoTulkiIhbhPzr B/pIwvo/bmrWhjXeZfVP6g== 0001047469-03-007269.txt : 20030228 0001047469-03-007269.hdr.sgml : 20030228 20030228131123 ACCESSION NUMBER: 0001047469-03-007269 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030228 EFFECTIVENESS DATE: 20030228 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: 03585624 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: 03585625 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: NEW ENGLAND FUNDS TRUST II DATE OF NAME CHANGE: 19940615 FORMER COMPANY: FORMER CONFORMED NAME: NVEST FUNDS TRUST II DATE OF NAME CHANGE: 20000202 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: 03585626 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: NEW ENGLAND FUNDS TRUST I DATE OF NAME CHANGE: 19940614 FORMER COMPANY: FORMER CONFORMED NAME: NVEST FUNDS TRUST I DATE OF NAME CHANGE: 20000202 N-30D 1 a2104330zn-30d.txt N-30D [CDC NVEST FUNDS(SM) LOGO] ANNUAL REPORT DECEMBER 31, 2002 CDC NVEST LARGE CAP GROWTH FUND VAUGHAN, NELSON, SCARBOROUGH & MCCULLOUGH CDC NVEST CAPITAL GROWTH FUND WESTPEAK GLOBAL ADVISORS CDC NVEST TARGETED EQUITY FUND CAPITAL GROWTH MANAGEMENT LIMITED PARTNERSHIP CDC NVEST GROWTH AND INCOME FUND HARRIS ASSOCIATES CDC NVEST BALANCED FUND LOOMIS, SAYLES & COMPANY JURIKA & VOYLES CDC NVEST JURIKA & VOYLES RELATIVE VALUE FUND JURIKA & VOYLES CDC NVEST LARGE CAP VALUE FUND VAUGHAN, NELSON, SCARBOROUGH & MCCULLOUGH CDC NVEST SELECT FUND HARRIS ASSOCIATES CDC NVEST JURIKA & VOYLES SMALL CAP GROWTH FUND JURIKA & VOYLES CDC NVEST INTERNATIONAL EQUITY FUND LOOMIS, SAYLES & COMPANY SEE PAGE 86 FOR SUPPLEMENT TO THE PROSPECTUSES CDC NVEST FUNDS ANNUAL REPORT DECEMBER 31, 2002 Table of contents PRESIDENT'S LETTER 1 ECONOMIC UPDATE 2 PORTFOLIO MANAGERS' COMMENTARY AND PERFORMANCE CDC Nvest Large Cap Growth Fund 4 CDC Nvest Capital Growth Fund 6 CDC Nvest Targeted Equity Fund 8 CDC Nvest Growth and Income Fund 10 CDC Nvest Balanced Fund 12 CDC Nvest Jurika & Voyles Relative Value Fund 14 CDC Nvest Large Cap Value Fund 16 CDC Nvest Select Fund 18 CDC Nvest Jurika & Voyles Small Cap Growth Fund 20 CDC Nvest International Equity Fund 22 RISKS OF INVESTING IN CDC NVEST EQUITY FUNDS 24 SCHEDULES OF INVESTMENTS CDC Nvest Large Cap Growth Fund 26 CDC Nvest Capital Growth Fund 28 CDC Nvest Targeted Equity Fund 30 CDC Nvest Growth and Income Fund 31 CDC Nvest Balanced Fund 32 CDC Nvest Jurika & Voyles Relative Value Fund 35 CDC Nvest Large Cap Value Fund 37 CDC Nvest Select Fund 39 CDC Nvest Jurika & Voyles Small Cap Growth Fund 40 CDC Nvest International Equity Fund 42 STATEMENTS OF ASSETS AND LIABILITIES 44 STATEMENTS OF OPERATIONS 46 STATEMENTS OF CHANGES IN NET ASSETS 48 FINANCIAL HIGHLIGHTS 52 NOTES TO FINANCIAL STATEMENTS 65 REPORT OF INDEPENDENT ACCOUNTANTS 80 TRUSTEES' INFORMATION 81 ADDITIONAL INFORMATION 83 SUPPLEMENT TO THE PROSPECTUS 86
PRESIDENT'S LETTER FEBRUARY 2003 [PHOTO OF JOHN T. HAILER] John T. Hailer President CDC Nvest Funds "...A PROFESSIONAL FINANCIAL ADVISOR CAN HELP YOU TAKE THE EMOTION OUT OF INVESTING AND MAKE SOUND, RATIONAL DECISIONS FOR THE LONG TERM." Dear Shareholder: Investors will remember 2002 as a year marked by extremes. The bear market reached into its third year, questions surrounding corporate governance grew, and the threat of war with Iraq intensified. Yet even through these dark clouds, investors found some bright spots and the market delivered seven weeks of positive returns through October and November, making for the longest rally since the first quarter of 2000. It may be impossible to predict where the market will go from here, but there are steps you can take to be prepared. Now is a good time to return to such core investment principles as investing with a long-term outlook, diversifying your portfolio, managing your asset allocation, and looking to your financial advisor for guidance. This fourth principle may be the most important for these times. When you are unnerved by volatility and uncertainty, a professional financial advisor can help you take the emotion out of investing and make sound, rational decisions for the long term. As you plan your future, CDC Nvest Funds will be here for you, giving you access to the depth and strength of CDC IXIS Asset Management, a $312 billion* global money manager. Through its unique multi-manager approach we can bring you a diverse selection of investment disciplines that may help you achieve many goals in the years ahead. We thank you for continuing to place your trust in CDC Nvest Funds and look forward to helping you succeed, whatever the future brings. Sincerely, /s/ John T. Hailer *As of 12/31/02 1 ECONOMIC UPDATE FEBRUARY 2003 THE ECONOMY As 2002 drew to a close, a full economic recovery remained out of reach. Quarterly growth numbers surged to 5.0% in the first quarter and then slowed to a crawl in the fourth quarter, for an average rate for the year of 2.4%, according to the U.S. Commerce Department's advanced estimate. Layoffs continued among manufacturing companies, the result of continued sluggish demand for industrial equipment, big-ticket consumer items and air travel. The jobless rate rose to 6.0% at the end of December, according to the U.S. Department of Labor. This was an eight-year high, although labor markets actually improved in sectors that are expected to get a boost from higher defense spending. Except for basic areas like medical care and housing, low inflation is helping consumers stretch their dollar. While most retailers were disappointed with holiday sales, car sales were surprisingly strong, and spending on computers and other technology-related equipment finally came to life by the end of the year. Personal savings reached 4.4% of disposable income in the fourth quarter of 2002 - - well above the depressed levels of the past few years, but below levels prior to the stock market boom in the late 1990s. The housing market, which had remained strong all year, began to cool late in the year, only to surge again in December, pushing home building activity for all of 2002 to the highest level in 16 years. Aside from the possibility of war in Iraq, prospects for the year ahead are brighter. Strong productivity growth is expected to translate into greater profitability, and the Federal Reserve Board's November interest rate cut, the first in nearly a year, is expected to provide added stimulus for growth. [CHART] PERSONAL SAVINGS RATE VERSUS DOW JONES INDUSTRIAL AVERAGE Ten Years ended December 31, 2002
PERSONAL DOW JONES SAVINGS INDUSTRIAL RATE AVERAGE 1993 8.7 3754 1994 6.6 3834 1995 4.8 5117 1996 4.6 6448 1997 4.2 7908 1998 3.9 9181 1999 1.6 11497 2000 2.7 10787 2001 1.3 10022 2002 4.4 8342
Source: Seasonally adjusted personal savings rate, Bureau of Economic Analysis THE CHART COMPARES THE ANNUAL PERSONAL SAVINGS RATE OF ALL AMERICANS FOR EACH OF THE PAST TEN YEARS TO THE CLOSING PRICE ON THE DOW JONES INDUSTRIAL AVERAGE. AS THE DOW HEADED INTO ITS STEEP RISE IN THE LATE 1990S, THE PERSONAL SAVINGS RATE DECLINED. AS STOCK PRICES BEGAN A THREE-YEAR DECLINE IN 2000, THE SAVINGS RATE INCREASED FOR THE FIRST TIME IN TEN YEARS. THIS SUGGESTS THAT INVESTORS NO LONGER FEEL THEY CAN RELY ON DOUBLE-DIGIT RETURNS ON THEIR INVESTMENTS TO BUILD FOR THEIR FUTURE. THEY ARE REACHING DEEPER INTO THEIR POCKETS, SETTING ASIDE A GREATER PORTION OF THEIR DISPOSABLE INCOME. 2 THE EQUITY MARKETS For equity investors, 2002 was a year on the see-saw. Stock prices moved up in the first quarter, down in the second and third quarters, and back up again in the fourth quarter, raising hope that the longest bear market in recent memory could finally be over. But for the year as a whole, the gains were not enough; all major stock market indexes closed December in negative territory, making 2002 the third consecutive losing year for common stocks. Foreign stocks fared as badly as the U.S. market or even worse, as economic problems persisted around the globe. However, the market experienced a change in sentiment in the fourth quarter, as money flowed into stocks that had been hard hit a year ago. U.S.-based investors benefited from the strength of the euro versus the dollar. Asian equities were also mired in red ink, but in general, Asian markets did better than the United States. THE FIXED-INCOME MARKETS Bond investors were on a see-saw of their own, but returns generally moved counter to the stock market. However, the Fed's decision to cut short-term interest rates by a generous 0.5% in November gave the markets renewed strength in December. The yield on the benchmark ten-year U.S. Treasury bond fell from 5.1% to 4.0% by the end of the year and short-term rates dropped from 1.7% to 1.2% - their lowest level in 41 years. In general, higher-quality bonds outperformed lower-quality bonds. Municipal bonds, which had been strong performers throughout the year, were flat in the closing quarter. High-yield bonds generally lost ground during the year, as the bankruptcy rate remained high, especially in the troubled telecommunications and utilities sectors. However, in the final quarter, high-grade bonds lost ground and the high-yield sector came back to life. [CHART] HISTORICAL INTEREST RATES Quarter-by-quarter, ten years ended December 31, 2002
3-month 10-year Treasury Treasury bills bonds Dec-92 3.22 8.7 Mar-93 2.96 6.07 3.05 5.79 2.9 5.33 Dec-93 3.06 5.77 3.5 6.72 4.2 7.27 4.79 7.6 Dec-94 5.56 7.81 5.64 7.15 5.35 6.17 5.14 6.26 Dec-95 4.91 5.64 4.99 6.32 5.12 6.85 5.18 6.9 Dec-96 5.08 6.45 5.18 6.73 5.12 6.42 4.93 6.08 Dec-97 5.29 5.75 5.05 5.61 5 5.44 4.43 4.46 Dec-98 4.52 4.7 4.38 5.24 4.75 5.87 4.72 5.92 Dec-99 5.3 6.41 5.72 6.13 5.88 6.08 6.01 5.82 Dec-00 5.7 5.01 4.2 4.95 3.38 5.29 2.32 4.53 Dec-01 1.71 5.15 1.82 5.38 1.89 4.83 1.54 3.69 Dec-02 1.19 3.92
Source: Federal Reserve Board THE CHART COMPARES INTEREST RATES ON TWO MARKET BENCHMARKS OVER THE PAST DECADE. IN THE TWO YEARS SINCE THE FED BEGAN ITS STIMULUS PROGRAM, BOTH TEN-YEAR AND THREE-MONTH TREASURY RATES HAVE BEEN VOLATILE. HOWEVER, WHILE RATES ON TEN-YEAR TREASURIES DECLINED BY 20%, FROM 5.0% TO 4.0%, THREE-MONTH TREASURIES FELL BY ALMOST 80% DURING THE PERIOD, FROM 5.9% TO 1.2%. THE CHART ALSO SHOWS THAT THIS PATTERN IS UNUSUAL. HISTORICALLY, INTEREST RATES ON SHORT-TERM SECURITIES HAVE BEEN LESS VOLATILE THAN LONGER-TERM RATES. 3 CDC NVEST LARGE CAP GROWTH FUND PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital STRATEGY: Focuses on common stocks 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, Curt Rohrman 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, 2002) Class A $ 8.87 Class B 8.68 Class C 8.68 Class Y 8.97
MANAGEMENT DISCUSSION Despite a rally in the fall, economic uncertainty and geopolitical unrest caused prices in most equity markets to end the year down. With hindsight, our inclination to remain steadfast to some companies that came under fire put CDC Nvest Large Cap Growth Fund at a competitive disadvantage in 2002. The total return on Class A shares of the fund was -35.91% in 2002. For the same 12 months, the Russell 1000 Growth Index, the fund's benchmark, returned - -27.88%, while the average return on the funds in Morningstar's Large Cap Growth category was -27.73%. LARGE-CAP GROWTH STOCKS MAY BE NEARING CYCLICAL LOWS This fund focuses on large, growth-oriented companies, which were market leaders when economic growth was vigorous in the 1990s. However, during the past three years of sluggish growth, value stocks and income-producing securities held up best. In 2002, virtually all markets were affected by a widespread loss of confidence in business leaders, as one corporate scandal seemed to follow another. At VNSM, we have never believed in jumping out of a position simply because of a negative news story or if the company missed a quarterly earnings target. In some instances, our steadfastness impaired the fund's performance this year. For example, we believed firmly in the growth potential of global manufacturing giant Tyco International. The stock fell off sharply as concern about Tyco's corporate governance and accounting practices mounted. Although we sold Tyco before it reached its low for the year, it was in the portfolio long enough to detract from the fund's return. While maintaining our long-term outlook, we may be inclined to step out of the way sooner than we have in the past when a company's prospects begin to dim. We will need powerful reasons to hold it. THOSE WHO DON'T PLAY THE GAME CAN'T WIN Although the market can change course at lightning speed, investors who do not participate risk getting left in the dust. Consequently, while technology companies have led the downward slide in stock prices since the spring of 2000, we made only minor adjustments to the fund's technology holdings in 2002. Microsoft, which has been in the fund throughout the year, was actually one of the best performing tech stocks in 2002; it declined in value, but it held up better than others in the sector. We believe that Microsoft, along with technology giants Cisco and Intel, will provide a positive impetus once the economic recovery gains momentum. Another of VNSM's guiding principles has been to try to get out in front of trends, in search of future growth. Northrop Grumman, a leader in defense electronics, was a major position throughout 2002. The company has been cutting costs and recently purchased the defense piece of TRW. We believe Northrop is well positioned for growth even in the current environment. The fund's pharmaceutical selections were disappointing, but we believe low stock prices reflect the fact that 2002 did not bring a flood of new drugs to market. In our opinion, investors have failed to acknowledge strong cash flows from existing drugs. Moreover, new drugs and improved medications are in the pipeline for 2003 and 2004. In general, we believe these pipelines and demographic trends favor both the pharmaceutical and healthcare sectors. OUTLOOK IS FOR ECONOMIC RECOVERY IN 2003 Currently we expect an economic recovery some time in 2003, led by corporate spending. We believe consumer spending will be relatively weak, so we emphasized basic consumer products - life's necessities - more than durable goods, like refrigerators or stereo equipment. We continue to believe in the value of large-cap stocks of companies whose earnings prospects look promising. 4 CDC NVEST LARGE CAP GROWTH FUND INVESTMENT RESULTS THROUGH DECEMBER 31, 2002 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] GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES SEPTEMBER 1, 1998 (INCEPTION) THROUGH DECEMBER 31, 2002
NAV(1) MSC(2) RUSSELL 1000(4) 9/1/98 10000 9425 10000 10320 9727 10000 11130 10490 10804 12100 11404 11626 12/31/98 13762 12971 12674 15763 14856 13418 14572 13735 12805 15473 14583 13479 15713 14809 13497 14742 13895 13082 15463 14574 13998 15153 14281 13553 14983 14121 13775 15413 14527 13485 16213 15281 14504 17773 16751 15286 12/31/99 21274 20051 16876 20284 19118 16085 22544 21248 16871 24075 22691 18079 21584 20343 17218 20674 19485 16351 21444 20211 17591 20874 19674 16857 22925 21606 18384 21674 20428 16645 20744 19551 15857 18544 17477 13520 12/31/00 19316 18206 13092 19898 18754 13996 17604 16592 11620 15656 14755 10356 16937 15963 11665 16948 15973 11494 16183 15253 11228 16151 15222 10947 14924 14065 10052 13341 12574 9048 13911 13111 9523 15128 14258 10438 12/31/01 14902 14045 10418 14299 13477 10234 13588 12807 9809 13868 13071 10149 12458 11741 9320 12027 11335 9095 11101 10463 8254 10304 9712 7800 10164 9580 7823 8904 8392 7012 9744 9184 7655 10250 9661 8071 12/31/02 9550 9001 7513
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2002
1 YEAR(7) SINCE INCEPTION(7) CLASS A (Inception 9/1/98) Net Asset Value(1) -35.91% -1.06% With Maximum Sales Charge(2) -39.58 -2.40 CLASS B (Inception 10/29/99) Net Asset Value(1) -36.27 -15.92 With CDSC(3) -39.46 -16.67 CLASS C (Inception 10/29/99) Net Asset Value(1) -36.27 -15.92 With Maximum Sales Charge and CDSC(3) -37.55 -16.18 CLASS Y (Inception 10/29/99) Net Asset Value(1) -35.61 -15.07
SINCE SINCE CLASS A CLASS B, C, Y COMPARATIVE PERFORMANCE 1 YEAR INCEPTION(8) INCEPTION(8) Russell 1000 Growth Index(4) -27.88% -6.51% -18.76% Morningstar Large Cap Growth Fund Avg.(5) -27.73 -4.48 -16.31 Lipper Large Cap Growth Funds Avg.(6) -28.63 -5.28 -17.24
All 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. All results include reinvestment of dividends and capital gains. Current returns may be higher or lower than those shown. Class Y shares are available only to certain institutional investors. The fund's performance history includes periods from the predecessor fund. 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 12/31/02 6/30/02 - --------------------------------------------------------- COMMON STOCKS 98.2 98.0 SHORT TERM INVESTMENTS AND OTHER 1.8 2.0
% OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/02 6/30/02 - --------------------------------------------------------- WAL-MART STORES, INC. 5.3 4.8 PFIZER, INC. 4.9 4.0 MERCK & CO., INC. 4.7 3.0 MICROSOFT CORP. 4.3 5.0 CISCO SYSTEMS, INC. 3.7 2.6 NORTHROP GRUMMAN CORP. 3.5 2.9 INTEL CORP. 3.5 2.9 AMERICAN INTERNATIONAL GROUP, INC. 3.1 5.1 JOHNSON & JOHNSON 3.1 2.1 STATE STREET CORP. 3.1 3.2
% OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/02 6/30/02 - --------------------------------------------------------- PHARMACEUTICALS 13.3 13.7 AEROSPACE & DEFENSE 8.4 10.0 FINANCIAL SERVICES 6.5 6.5 RETAILERS 6.3 4.8 BEVERAGES, FOOD & TOBACCO 5.5 2.0
Portfolio holdings and asset allocations will vary. See page 24 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS (1) Does not include a sales charge. (2) Includes the maximum sales charge of 5.75%. Until 10/29/99, the fund had only one class of shares and was offered without a sales charge. Historical performance has been re-calculated to include a sales charge. (3) 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 Cap Growth Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (6) Lipper Large 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. (8) 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. 5 CDC NVEST CAPITAL GROWTH FUND PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital STRATEGY: Invests primarily in common stocks of growth-oriented companies in any industry INCEPTION DATE: August 3, 1992 MANAGER: Team Management including, among others: Thomas M. Anichini Robert A. Franz WESTPEAK GLOBAL ADVISORS, L.P. SYMBOLS: Class A NEFCX Class B NECBX Class C NECGX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2002) Class A $ 8.58 Class B 7.56 Class C 7.56
MANAGEMENT DISCUSSION During a difficult year for the stock market, CDC Nvest Capital Growth Fund focused on companies with current profits and attractive growth characteristics, selling at low valuations. These stocks performed better on a relative basis during the first nine months of 2002. However, a market shift in the fourth quarter favored more speculative stocks, which were not featured in the portfolio. This kept the fund from participating in the fourth-quarter rally as much as it might have. For the 12 months ended December 31, 2002, the fund's total return was -28.08%, based on the net asset value of Class A shares. For the same period, the return on the Russell 1000 Growth Index was -27.88%, while the average return on the funds in Morningstar's Large Growth category was -27.73%. MANAGER APPLIES PROPRIETARY MODELS, FUNDAMENTAL ANALYSIS At Westpeak, our investment process combines quantitative and fundamental analysis. With the help of proprietary computer models, we search for companies with positive growth characteristics and attractive stock valuations. We also study recent price momentum, the company's earnings history and the quality of earnings, as well as pricing trends within the industry. In addition, we periodically fine-tune the portfolio, shifting its emphasis from value to growth, or vice versa, in line with our market outlook. MARKET SHIFTED IN 2002 Although the economy grew in 2002, the recovery was less vigorous than had been expected. At the same time, a series of corporate accounting scandals created a climate of skepticism that affected all markets. However, positive sentiment helped trigger a rebound in the closing quarter, fueled by anticipation that the Federal Reserve Board would cut short-term interest rates to stimulate growth, as it did in early November. There was also a growing perception that stock prices had declined to a level that already reflected prospects for a military engagement in Iraq. Meanwhile, some technology companies reported positive earnings for the first time since 1999. TECH, MED-TECH STOCKS BROUGHT MIXED RESULTS The fund began the year with a larger allocation to technology stocks than the benchmark, but we trimmed this position as the year progressed, only to build it back up by year end, as earnings prospects for some companies began to improve. Computer hardware, software and semiconductor stocks - including Dell Computer and Storage Technology - looked attractive. We also purchased shares of Ingram Micro, which manufactures networking products and software, and QLogic, a semiconductor manufacturer. Applications software firm Oracle was among the stocks that performed well for the year; the company exceeded earnings projections in the fourth quarter. Varian Medical Services, which makes devices used in cancer treatments and x-ray products, also experienced strong earnings and sales growth. And Johnson & Johnson was a positive, in part due to preliminary approval of the company's new drug-coated stent, a product used to keep arteries open after angioplasty procedures. Disappointments in 2002 included Intel, which slumped along with other semiconductor stocks. General Electric was also a negative, as lingering questions about the firm's accounting practices held the stock back. Specialty retailer Home Depot fell on news of weak same-store sales. MANAGER EXPECTS MARKET TRENDS TO FAVOR GROWTH IN 2003 Some of the stocks that were hit the hardest during the first nine months of 2002 rebounded in the fourth quarter when investors began to notice they were undervalued. Although we think some skeletons may still lurk in corporate cupboards, we believe high-quality growth stocks have the potential to outperform value in 2003 because they are starting at low valuations. 6 CDC NVEST CAPITAL GROWTH FUND INVESTMENT RESULTS THROUGH DECEMBER 31, 2002 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] GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES DECEMBER 31, 1992 THROUGH DECEMBER 31, 2002
NET MAXIMUM RUSSELL 1000 ASSET SALES GROWTH VALUE(1) CHARGE(2) INDEX(4) 12/31/1992 $10,000 $9,425 $10,000 $10,155 $9,571 $9,885 $9,782 $9,220 $9,727 $10,169 $9,584 $9,914 $9,522 $8,975 $9,517 $10,084 $9,505 $9,850 $10,302 $9,710 $9,761 $10,063 $9,485 $9,586 $10,464 $9,862 $9,980 $10,696 $10,081 $9,906 $10,759 $10,140 $10,181 $10,471 $9,869 $10,113 12/31/1993 $10,789 $10,169 $10,287 $11,129 $10,489 $10,526 $10,839 $10,216 $10,333 $10,260 $9,670 $9,833 $10,245 $9,656 $9,879 $10,203 $9,616 $10,028 $9,765 $9,204 $9,732 $10,140 $9,557 $10,064 $10,571 $9,963 $10,624 $10,394 $9,796 $10,481 $10,846 $10,222 $10,727 $10,373 $9,776 $10,383 12/31/1994 $10,613 $10,003 $10,557 $10,698 $10,083 $10,783 $11,122 $10,482 $11,234 $11,489 $10,829 $11,562 $11,666 $10,995 $11,815 $11,991 $11,301 $12,226 $12,789 $12,054 $12,698 $13,362 $12,593 $13,226 $13,602 $12,820 $13,240 $14,062 $13,253 $13,851 $13,838 $13,042 $13,860 $14,173 $13,358 $14,399 12/31/1995 $13,877 $13,079 $14,481 $14,133 $13,321 $14,966 $14,503 $13,669 $15,240 $14,367 $13,541 $15,259 $15,083 $14,216 $15,661 $15,535 $14,642 $16,208 $15,324 $14,443 $16,230 $14,269 $13,448 $15,279 $14,811 $13,960 $15,673 $16,041 $15,118 $16,815 $16,032 $15,111 $16,916 $16,831 $15,864 $18,186 12/31/1996 $16,243 $15,309 $17,830 $17,161 $16,175 $19,081 $16,689 $15,730 $18,951 $15,442 $14,554 $17,926 $16,108 $15,182 $19,116 $17,524 $16,516 $20,496 $18,013 $16,977 $21,316 $19,277 $18,169 $23,201 $18,392 $17,335 $21,843 $18,947 $17,858 $22,918 $18,182 $17,137 $22,071 $18,658 $17,585 $23,008 12/31/1997 $19,041 $17,946 $23,266 $19,194 $18,090 $23,962 $20,511 $19,332 $25,764 $21,427 $20,195 $26,791 $21,809 $20,555 $27,162 $21,284 $20,060 $26,391 $22,391 $21,104 $28,008 $22,182 $20,906 $27,822 $18,659 $17,587 $23,647 $19,779 $18,642 $25,463 $21,224 $20,004 $27,510 $22,498 $21,205 $29,602 12/31/1998 $24,578 $23,165 $32,272 $25,814 $24,330 $34,167 $24,364 $22,963 $32,606 $24,899 $23,467 $34,323 $25,386 $23,926 $34,367 $24,922 $23,489 $33,311 $26,242 $24,733 $35,644 $25,659 $24,184 $34,511 $25,885 $24,397 $35,075 $25,507 $24,041 $34,338 $27,284 $25,716 $36,931 $28,095 $26,480 $38,924 12/31/1999 $30,657 $28,894 $42,972 $28,927 $27,264 $40,957 $30,134 $28,402 $42,960 $32,548 $30,677 $46,035 $31,583 $29,767 $43,844 $30,108 $28,376 $41,636 $32,092 $30,247 $44,792 $31,261 $29,463 $42,924 $33,705 $31,767 $46,811 $30,592 $28,833 $42,383 $29,531 $27,833 $40,377 $25,548 $24,079 $34,426 12/31/2000 $24,672 $23,254 $33,336 $25,853 $24,367 $35,639 $22,343 $21,058 $29,589 $20,259 $19,094 $26,369 $22,999 $21,676 $29,704 $22,736 $21,429 $29,267 $22,381 $21,094 $28,589 $21,199 $19,981 $27,874 $19,493 $18,372 $25,595 $17,491 $16,485 $23,040 $18,295 $17,243 $24,248 $19,887 $18,743 $26,578 12/31/2001 $19,625 $18,496 $26,528 $19,542 $18,419 $26,059 $18,835 $17,752 $24,978 $19,476 $18,356 $25,842 $18,391 $17,333 $23,733 $17,996 $16,961 $23,158 $16,515 $15,566 $21,016 $15,232 $14,356 $19,861 $15,249 $14,372 $19,920 $13,637 $12,853 $17,854 $14,624 $13,783 $19,492 $15,101 $14,232 $20,550 12/31/2002 $14,114 $13,301 $19,131
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2002
1 YEAR 5 YEAR 10 YEARS SINCE INCEPTION CLASS A (Inception 8/3/92) Net Asset Value(1) -28.08% -5.81% 3.51% -- With Maximum Sales Charge(2) -32.23 -6.92 2.89 -- CLASS B (Inception 9/13/93) Net Asset Value(1) -28.75 -6.56 -- 2.52% With CDSC(3) -32.31 -6.76 -- 2.52 CLASS C (Inception 12/30/94) Net Asset Value(1) -28.68 -6.56 -- 2.78 With Maximum Sales Charge and CDSC(3) -30.12 -6.74 -- 2.65
SINCE SINCE CLASS B CLASS C COMPARATIVE PERFORMANCE 1 YEAR 5 YEARS 10 YEARS INCEPTION(7) INCEPTION(7) Russell 1000 Growth Index(4) -27.88% -3.84% 6.70% 7.38% 7.71% Morningstar Large Growth Fund Avg.(5) -27.73 -2.72 6.22 5.62 6.63 Lipper Multi-Cap Core Funds Avg.(6) -21.74 -0.68 8.14 5.84 6.93
All 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. All results include reinvestment of dividends and capital gains. Current returns may be higher or lower than those shown. 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 12/31/02 6/30/02 - --------------------------------------------------------- COMMON STOCKS 99.5 98.9 SHORT TERM INVESTMENTS AND OTHER 0.5 1.1
% OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/02 6/30/02 - --------------------------------------------------------- JOHNSON & JOHNSON 7.1 1.0 MICROSOFT CORP. 6.4 5.4 PFIZER, INC. 4.8 3.0 DELL COMPUTER CORP. 4.6 0.2 GENERAL ELECTRIC CO. 4.6 7.2 CISCO SYSTEMS, INC. 4.4 3.5 PROCTER & GAMBLE CO. 4.1 3.2 WAL-MART STORES, INC. 4.0 3.4 INTEL CORP. 4.0 4.7 MERCK & CO., INC. 2.9 2.0
% OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/02 6/30/02 - --------------------------------------------------------- PHARMACEUTICALS 10.3 11.5 SOFTWARE 9.5 10.3 FINANCIAL SERVICES 8.0 4.5 COSMETICS & PERSONAL CARE 7.1 3.2 COMPUTERS 7.1 4.5
Portfolio holdings and asset allocations will vary. See page 24 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS (1) Does not include a sales charge. (2) Includes maximum sales charge of 5.75%. (3) 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 Core 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 B from 9/30/93; Class C from 12/31/94. 7 CDC NVEST TARGETED EQUITY FUND PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital STRATEGY: Invests primarily in a focused portfolio of common stocks, seeking 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, 2002) Class A $ 5.56 Class B 5.28 Class C 5.27 Class Y 5.63
MANAGEMENT DISCUSSION An overall decline in stock prices and disappointing results from several major stock holdings hurt CDC Nvest Targeted Equity Fund's performance in 2002. During the 12 months ended December 31, the total return on the fund's Class A shares was -28.81% at net asset value. The Standard & Poor's 500 Index, the fund's benchmark, returned -22.10% during the same period, while the funds in Morningstar's Large Blend category had an average return of -22.02%. MANAGER FOCUSED ON CONSUMER COMPANIES, HOMEBUILDERS IN 2002 The U.S. economy showed signs of recovery in the spring of 2002, but slowed dramatically in the summer before stabilizing in the fourth quarter. Overall, the pace of the recovery was slower than anticipated and all major stock indexes were down for the year, reflecting economic uncertainty, a series of corporate scandals, and the prospect for war with Iraq. Throughout the year we focused on consumer-related stocks, including retail and consumer finance, and maintained a significant position in healthcare. In spite of media reports of a housing bubble, we also remained confident that national homebuilding companies would continue to thrive. Our analysis indicated that the homebuilders we invested in were stable and growing, helped by consolidation and a competitive edge in developing scarce land. For example, homebuilding giant Lennar made several positive acquisitions during the year, and KB Home has grown through acquisition, mostly in sun-belt states. Both are well-managed companies that offer financing and other services. Our timing with Citigroup, a leading global financial services company, also proved fortuitous; we bought the stock at a low before it rebounded. HEALTHCARE, SOME OTHER SELECTIONS, HURT IN 2002 Our greatest disappointment during the year was Tenet Healthcare, one of the fund's largest holdings. Tenet's management exploited an extremely strong pricing environment and became overly aggressive with its Medicare billing. When regulators made the firm retrench, Tenet's earnings prospects fell sharply, along with the price of its shares and we sold the position. Another large healthcare position, hospital management firm HCA, was caught in the fallout from Tenet. However, there were no allegations of improper activity at HCA and it remains in the portfolio because we believe in the company's potential. Other stocks that were disappointing included national car dealer AutoNation, which failed to meet earnings expectations, and Household International, a major consumer finance company. The latter fell on declining earnings and fears that consumer advocates' criticism of the company's aggressive lending practices might lead to a credit rating downgrade. We sold both positions at a loss. USING CONTRARIAN APPROACH, MANAGER SEEKS OPPORTUNITIES IN 2003 Negative sentiment in the market has provided us with opportunities to initiate or add to positions in growth-oriented companies selling at attractive prices. Both Citigroup and HCA are examples of companies we believe have superior growth prospects that we were able to acquire at prices driven down by public controversy. Currently, we believe there are many other companies with proven track records that are trading at low prices as a result of investor concerns about the economy and the situation in Iraq. We believe the economy will resume positive growth in 2003, with most strength coming from consumer activity. We believe the Federal Reserve Board's November cut in short-term interest rates - combined with the fiscal stimulus planned by the Bush administration - should lead to a stronger economy and improved investor psychology in 2003, which could provide improved returns for equity investors. 8 CDC NVEST TARGETED EQUITY FUND INVESTMENT RESULTS THROUGH DECEMBER 31, 2002 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 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] GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES DECEMBER 31, 1992 THROUGH DECEMBER 31, 2002
NET MAXIMUM ASSET SALES S&P 500 VALUE(1) CHARGE(2) INDEX(4) 12/31/1992 $10,000 $9,425 $10,000 $10,198 $9,612 $10,084 $9,841 $9,275 $10,221 $10,307 $9,715 $10,437 $10,169 $9,584 $10,184 $10,417 $9,818 $10,457 $10,407 $9,808 $10,487 $10,347 $9,752 $10,445 $10,645 $10,033 $10,842 $10,833 $10,210 $10,758 $11,250 $10,603 $10,981 $10,982 $10,350 $10,876 12/31/1993 $11,129 $10,489 $11,008 $11,779 $11,102 $11,382 $11,363 $10,710 $11,073 $10,681 $10,067 $10,590 $10,692 $10,077 $10,726 $10,894 $10,268 $10,902 $10,492 $9,889 $10,635 $10,857 $10,233 $10,984 $11,136 $10,495 $11,435 $10,771 $10,152 $11,155 $10,814 $10,192 $11,406 $10,192 $9,606 $10,990 12/31/1994 $10,344 $9,749 $11,153 $10,099 $9,518 $11,442 $10,589 $9,980 $11,888 $10,915 $10,288 $12,239 $11,592 $10,925 $12,600 $12,291 $11,585 $13,103 $13,193 $12,434 $13,408 $13,788 $12,995 $13,852 $13,858 $13,061 $13,887 $14,111 $13,299 $14,473 $13,821 $13,026 $14,421 $14,480 $13,647 $15,054 12/31/1995 $14,285 $13,463 $15,344 $14,786 $13,936 $15,867 $15,260 $14,382 $16,014 $15,260 $14,382 $16,168 $14,975 $14,114 $16,406 $15,206 $14,331 $16,829 $15,043 $14,178 $16,894 $14,163 $13,349 $16,147 $14,298 $13,476 $16,488 $15,280 $14,401 $17,416 $16,178 $15,247 $17,896 $17,438 $16,435 $19,249 12/31/1996 $17,267 $16,274 $18,867 $18,826 $17,744 $20,046 $18,514 $17,450 $20,203 $17,727 $16,708 $19,373 $18,737 $17,659 $20,530 $19,657 $18,527 $21,780 $20,533 $19,353 $22,755 $22,523 $21,228 $24,566 $21,365 $20,136 $23,190 $22,459 $21,168 $24,460 $21,578 $20,338 $23,643 $21,332 $20,106 $24,737 12/31/1997 $21,332 $20,106 $25,162 $21,681 $20,434 $25,441 $23,586 $22,230 $27,276 $25,103 $23,659 $28,672 $26,066 $24,567 $28,961 $25,656 $24,181 $28,463 $27,029 $25,475 $29,619 $27,172 $25,610 $29,304 $21,988 $20,724 $25,067 $22,145 $20,872 $26,673 $24,375 $22,973 $28,842 $26,404 $24,885 $30,591 12/31/1998 $28,458 $26,822 $32,353 $30,387 $28,640 $33,706 $28,207 $26,585 $32,659 $28,884 $27,223 $33,965 $28,783 $27,128 $35,281 $27,856 $26,255 $34,447 $29,911 $28,191 $36,359 $29,209 $27,530 $35,224 $29,159 $27,482 $35,050 $27,431 $25,853 $34,089 $28,483 $26,845 $36,246 $29,560 $27,860 $36,983 12/31/1999 $32,778 $30,894 $39,161 $30,216 $28,478 $37,193 $32,897 $31,006 $36,489 $33,255 $31,343 $40,059 $32,004 $30,163 $38,854 $30,722 $28,956 $38,057 $30,841 $29,068 $38,995 $29,858 $28,141 $38,385 $31,272 $29,474 $40,770 $30,141 $28,408 $38,617 $30,204 $28,467 $38,454 $29,921 $28,200 $35,422 12/31/2000 $31,286 $29,487 $35,596 $28,511 $26,872 $36,858 $27,609 $26,021 $33,498 $26,907 $25,360 $31,376 $28,077 $26,462 $33,814 $27,509 $25,927 $34,040 $27,695 $26,103 $33,212 $26,890 $25,343 $32,885 $24,674 $23,255 $30,826 $22,290 $21,009 $28,337 $22,425 $21,135 $28,877 $24,808 $23,382 $31,092 12/31/2001 $26,218 $24,711 $31,365 $27,024 $25,470 $30,907 $25,782 $24,299 $30,311 $26,218 $24,711 $31,451 $26,285 $24,774 $29,544 $26,017 $24,521 $29,327 $25,177 $23,730 $27,238 $22,391 $21,104 $25,115 $22,391 $21,104 $25,279 $21,015 $19,806 $22,532 $20,511 $19,332 $24,515 $20,008 $18,857 $25,958 12/31/2002 $18,665 $17,591 $24,433
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2002
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION CLASS A (Inception 11/27/68) Net Asset Value(1) -28.81% -2.64% 6.44% -- With Maximum Sales Charge(2) -32.93 -3.79 5.82 -- CLASS B (Inception 2/28/97) Net Asset Value(1) -29.32 -3.34 -- -0.60% With CDSC(3) -32.85 -3.58 -- -0.68 CLASS C (Inception 9/1/98) Net Asset Value(1) -29.45 -- -- -5.65 With Maximum Sales Charge and CDSC(3) -30.90 -- -- -5.86 CLASS Y (Inception 6/30/99) Net Asset Value(1) -28.28 -- -- -12.20
SINCE SINCE SINCE COMPARATIVE 1 5 10 CLASS B CLASS C CLASS Y PERFORMANCE YEAR YEARS YEARS INCEPTION(7) INCEPTION(7) INCEPTION(7) S&P 500 Index(4) -22.10% -0.59% 9.34% 3.25% -2.04% -10.29% Morningstar Large Blend Avg.(5) -22.02 -1.47 7.85 2.17 -1.51 -9.73 Lipper Multi-Cap Value Average(6) -17.91 1.32 9.69 4.57 3.08 -3.87
All 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. All results include reinvestment of dividends and capital gains. Current returns may be higher or lower than those noted. Class Y shares are available to certain institutional investors only. 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 12/31/02 6/30/02 - --------------------------------------------------------- COMMON STOCKS 99.6 99.4 SHORT TERM INVESTMENTS AND OTHER 0.4 0.6
% OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/02 6/30/02 - --------------------------------------------------------- HCA, INC. 8.9 7.1 LENNAR CORP. 8.5 6.8 CITIGROUP, INC. 7.6 -- CENTEX CORP. 7.3 5.7 KB HOME 7.3 7.3 D.R. HORTON, INC. 5.8 5.9 PULTE HOMES, INC. 5.7 5.0 AMERICAN INTERNATIONAL GROUP, INC. 5.6 -- FIRST DATA CORP. 5.5 -- AUTOZONE, INC. 5.5 --
% OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/02 6/30/02 - --------------------------------------------------------- HOME CONSTRUCTION, FURNISHINGS & APPLIANCES 34.5 30.7 FINANCIAL SERVICES 14.9 -- PHARMACEUTICALS 10.5 6.1 HEALTH CARE PROVIDERS 8.9 25.1 COSMETICS & PERSONAL CARE 5.9 --
Portfolio holdings and asset allocations will vary. See page 24 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS (1) Does not include a sales charge. (2) Includes the maximum sales charge of 5.75%. (3) 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 Blend 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 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: Robert M. Levy Edward S. Loeb Michael J. Mangan HARRIS ASSOCIATES L.P. SYMBOLS: Class A NEFOX Class B NEGBX Class C NECOX Class Y NEOYX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2002) Class A $ 9.42 Class B 9.02 Class C 9.01 Class Y 9.59
MANAGEMENT DISCUSSION Although stocks regained some ground in the fourth quarter, slow economic growth, a series of corporate scandals and the prospect of war produced an exodus from equities that lasted through the fall of 2002. For the 12 months ended December 31, 2002, the total return on Class A shares of CDC Nvest Growth and Income Fund was -20.03%. For the same period, the fund's new benchmark, the Russell 1000 Value Index, returned -15.52%, while the Standard & Poor's 500 Index had a return of -22.10%. The average return on the funds in Morningstar's Large Blend category was -22.02% for the year. Harris Associates took over as manager of the fund on July 1, 2002, so results for the year reflect two managers' investment styles and different market conditions. HARRIS REALIGNED PORTFOLIO AT MID-YEAR Our policy in managing equity portfolios is based on maintaining a relatively concentrated portfolio, so when we began managing the fund we trimmed the number of holdings, focusing on what appeared to be the strongest positions. We analyzed each company's potential, trimmed or sold some positions and bought some new ones, trading into a sharply declining market. Our focus was on quality companies selling at a discount to our assessment of their intrinsic value. Three strong performers, Sprint, Merck and The Gap, illustrate how our search for value is designed to work. Our analysis indicated that Sprint was undervalued because investors had overreacted to fears that the telecom sector was slated for an extended business decline, which did not occur. We took advantage of low prices and were rewarded. Merck is a high-quality growth company; concerns over tighter FDA approval policies and pricing pressures from generic drugs were overdone, in our opinion. Merck's stock price reached a low for the year in August, making it attractively valued, and then rose sharply for the balance of the year. The Gap is a retailing turnaround story. A new CEO brought a strong consumer orientation and operational savvy. A revised product mix boosted sales, and the stock responded favorably. ENERGY, ADVERTISING, TECHNOLOGY HURT PERFORMANCE Shares of TXU Corp. fell sharply early in October when the Texas-based oil and gas company issued an earnings warning. We bought additional shares on weakness because we believed this company's outlook was brighter than its low valuation implied, and we continue to monitor its progress. Shares of Interpublic, a giant, worldwide advertising agency, fell because of disappointing earnings and questions about its accounting practices. Here, too, we increased exposure when the price fell. Questions about its long-term profitability drove shares of Electronic Data Systems (EDS) lower. Although we may have overvalued EDS originally and we are reevaluating our outlook, we think the market's reaction was excessive. BEAR MARKETS CAN BRING OPPORTUNITY We believe the excesses of the late 1990s may have been wrung out of the market, and today's low valuations reflect a cautious business outlook. In some cases, stock prices appear to have fallen far below any actual decline in the intrinsic value of the companies that resulted from the sluggish economy. This gave us an opportunity to purchase some high-quality companies that are usually too pricey for a value-oriented fund. Moreover, about three-quarters of the stocks in the portfolio at year end pay dividends, and these could become more attractive if legislation is passed that would reduce the impact of double taxation of dividends. Although major hurdles lie ahead in 2003, we believe that recovering profits, low interest rates and low taxes could create a much more favorable environment for equities than we have seen in the last few years. 10 CDC NVEST GROWTH & INCOME FUND INVESTMENT RESULTS THROUGH DECEMBER 31, 2002 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 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] GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES DECEMBER 31, 1992 THROUGH DECEMBER 31, 2002
NET MAXIMUM ASSET SALES S&P 500 RUSSELL 1000 VALUE(1) CHARGE(2) INDEX(5) VALUE(4) 12/31/1992 $10,000 $9,425 $10,000 $10,000 $10,057 $9,479 $10,084 $10,290 $10,205 $9,618 $10,221 $10,649 $10,385 $9,788 $10,437 $10,963 $10,155 $9,571 $10,184 $10,823 $10,369 $9,773 $10,457 $11,041 $10,394 $9,796 $10,487 $11,285 $10,344 $9,749 $10,445 $11,409 $10,750 $10,132 $10,842 $11,822 $10,642 $10,030 $10,758 $11,841 $10,833 $10,210 $10,981 $11,831 $10,675 $10,062 $10,876 $11,586 12/31/1993 $10,795 $10,174 $11,008 $11,807 $11,187 $10,543 $11,382 $12,251 $10,854 $10,230 $11,073 $11,833 $10,401 $9,803 $10,590 $11,392 $10,487 $9,884 $10,726 $11,610 $10,692 $10,078 $10,902 $11,745 $10,453 $9,852 $10,635 $11,463 $10,763 $10,144 $10,984 $11,820 $11,219 $10,574 $11,435 $12,160 $10,952 $10,322 $11,155 $11,757 $11,125 $10,485 $11,406 $11,921 $10,745 $10,127 $10,990 $11,441 12/31/1994 $10,902 $10,275 $11,153 $11,573 $11,174 $10,532 $11,442 $11,930 $11,543 $10,880 $11,888 $12,402 $11,864 $11,182 $12,239 $12,675 $12,226 $11,523 $12,600 $13,076 $12,623 $11,897 $13,103 $13,625 $12,918 $12,175 $13,408 $13,809 $13,369 $12,600 $13,852 $14,290 $13,493 $12,717 $13,887 $14,492 $14,086 $13,276 $14,473 $15,016 $13,947 $13,145 $14,421 $14,867 $14,413 $13,584 $15,054 $15,620 12/31/1995 $14,730 $13,883 $15,344 $16,013 $15,191 $14,318 $15,867 $16,512 $15,273 $14,395 $16,014 $16,636 $15,349 $14,467 $16,168 $16,919 $15,401 $14,515 $16,406 $16,984 $15,637 $14,738 $16,829 $17,197 $15,302 $14,422 $16,894 $17,211 $14,541 $13,704 $16,147 $16,560 $14,890 $14,034 $16,488 $17,034 $15,652 $14,752 $17,416 $17,711 $16,134 $15,206 $17,896 $18,396 $17,568 $16,558 $19,249 $19,730 12/31/1996 $17,265 $16,272 $18,867 $19,478 $18,124 $17,081 $20,046 $20,422 $18,348 $17,293 $20,203 $20,722 $17,550 $16,540 $19,373 $19,977 $18,472 $17,410 $20,530 $20,817 $19,657 $18,527 $21,780 $21,979 $20,621 $19,435 $22,755 $22,922 $21,920 $20,660 $24,566 $24,647 $21,296 $20,071 $23,190 $23,769 $22,610 $21,310 $24,460 $25,205 $21,619 $20,376 $23,643 $24,501 $22,551 $21,254 $24,737 $25,584 12/31/1997 $23,037 $21,713 $25,162 $26,331 $23,172 $21,840 $25,441 $25,959 $25,033 $23,594 $27,276 $27,706 $26,444 $24,924 $28,672 $29,401 $26,579 $25,051 $28,961 $29,597 $26,219 $24,712 $28,463 $29,159 $27,315 $25,744 $29,619 $29,532 $26,894 $25,348 $29,304 $29,011 $22,827 $21,515 $25,067 $24,694 $23,964 $22,586 $26,673 $26,111 $25,695 $24,218 $28,842 $28,134 $26,861 $25,316 $30,591 $29,444 12/31/1998 $28,549 $26,908 $32,353 $30,446 $29,376 $27,687 $33,706 $30,690 $28,670 $27,021 $32,659 $30,256 $29,066 $27,395 $33,965 $30,883 $30,789 $29,019 $35,281 $33,767 $30,651 $28,889 $34,447 $33,396 $31,608 $29,790 $36,359 $34,365 $30,675 $28,911 $35,224 $33,359 $30,260 $28,520 $35,050 $32,121 $29,033 $27,364 $34,089 $30,999 $30,196 $28,460 $36,246 $32,783 $30,284 $28,543 $36,983 $32,526 12/31/1999 $31,247 $29,450 $39,161 $32,684 $29,616 $27,913 $37,193 $31,617 $28,617 $26,972 $36,489 $29,268 $30,941 $29,162 $40,059 $32,839 $30,431 $28,681 $38,854 $32,457 $29,494 $27,798 $38,057 $32,799 $29,881 $28,163 $38,995 $31,300 $29,698 $27,990 $38,385 $31,692 $31,691 $29,869 $40,770 $33,456 $30,242 $28,503 $38,617 $33,762 $30,326 $28,582 $38,454 $34,591 $28,520 $26,880 $35,422 $33,307 12/31/2000 $28,961 $27,296 $35,596 $34,976 $28,982 $27,316 $36,858 $35,111 $27,260 $25,693 $33,498 $34,134 $25,727 $24,248 $31,376 $32,928 $27,827 $26,227 $33,814 $34,543 $27,869 $26,267 $34,040 $35,319 $26,903 $25,356 $33,212 $34,536 $25,979 $24,485 $32,885 $34,462 $24,383 $22,981 $30,826 $33,082 $22,346 $21,061 $28,337 $30,753 $23,144 $21,813 $28,877 $30,489 $24,782 $23,357 $31,092 $32,261 12/31/2001 $24,740 $23,318 $31,365 $33,021 $24,614 $23,199 $30,907 $32,767 $23,963 $22,585 $30,311 $32,819 $24,614 $23,199 $31,451 $34,372 $23,921 $22,546 $29,544 $33,193 $23,816 $22,447 $29,327 $33,360 $22,388 $21,101 $27,238 $31,444 $20,960 $19,755 $25,115 $28,521 $21,485 $20,249 $25,279 $28,737 $18,587 $17,518 $22,532 $25,541 $19,280 $18,171 $24,515 $27,434 $20,582 $19,398 $25,958 $29,162 12/31/2002 $19,784 $18,646 $24,433 $27,895
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2002
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION CLASS A (Inception 5/6/31) Net Asset Value(1) -20.03% -3.00% 7.06% -- With Maximum Sales Charge(2) -24.64 -4.15 6.43 -- CLASS B (Inception 9/13/93) Net Asset Value(1) -20.67 -3.72 -- 6.09% With CDSC(3) -24.63 -4.00 -- 6.09 CLASS C (Inception 5/1/95) Net Asset Value(1) -20.69 -3.74 -- 5.72 With Maximum Sales Charge and CDSC(3) -22.23 -3.93 -- 5.58 CLASS Y (Inception 11/18/98) Net Asset Value(1) -19.61 -- -- -6.36
SINCE SINCE SINCE CLASS B CLASS C CLASS Y COMPARATIVE PERFORMANCE 1 YEAR 5 YEARS 10 YEARS INCEPT.(8) INCEPT.(8) INCEPT.(8) Russell 1000 Value Index(4) -15.52% 1.16% 10.80% 9.71% 9.91% -1.32% S&P 500 Index(5) -22.10 -0.59 9.34 9.26 8.87 -5.88 Morningstar Large Blend Avg.(6) -22.02 -1.47 7.85 7.45 6.82 -4.61 Lipper Large Cap Core Funds Average(7) -23.49 -1.90 7.55 7.71 6.50 -5.92
All returns represents 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. All results include reinvestment of dividends and capital gains. Current returns may be higher or lower than those shown. Class Y shares are available to certain institutional investors only. 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 12/31/02 6/30/02 - --------------------------------------------------------- COMMON STOCKS 94.4 96.2 SHORT TERM INVESTMENTS AND OTHER 5.6 3.8
% OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/02 6/30/02 - --------------------------------------------------------- WASHINGTON MUTUAL, INC. 4.4 4.2 LIBERTY MEDIA CORP. 4.1 3.5 GUIDANT CORP. 3.9 3.2 GAP (THE), INC. 3.5 2.9 MERCK & CO., INC. 3.3 1.9 COMCAST CORP., SPECIAL CLASS A 3.3 -- INTERPUBLIC GROUP OF COS. (THE), INC. 3.3 2.5 KROGER CO. (THE) 3.0 2.9 H.J. HEINZ CO. 3.0 3.3 AOL TIME WARNER, INC. 2.9 --
% OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/02 6/30/02 - --------------------------------------------------------- MEDIA - BROADCASTING & PUBLISHING 11.8 7.2 BEVERAGES, FOOD & TOBACCO 10.0 10.7 BANKING 7.0 8.1 FOOD RETAILERS 5.6 5.3 PHARMACEUTICALS 5.0 5.0
Portfolio holdings and asset allocations will vary. See page 24 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS (1) Does not include a sales charge. (2) Includes the maximum sales charge of 5.75%. (3) 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) S&P 500 Index is an unmanaged index of U.S. common stock performance. (6) Morningstar Large Blend Average is an average performance of funds with similar investment objectives as calculated without sales charges by Morningstar, Inc. (7) Lipper Large Cap Core 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. (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 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 in value- and growth-oriented common stocks, and in investment-grade bonds INCEPTION DATE: November 27, 1968 MANAGERS: Nicholas E. Moore, Guy Elliffe, Eric Hull JURIKA & VOYLES, L.P. Mark B. Baribeau, Pamela N. Czekanski, Richard Skaggs, John Hyll, Kurt L. 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, 2002) Class A $ 8.07 Class B 8.09 Class C 8.05 Class Y 7.98
MANAGEMENT DISCUSSION Prices of most stocks continued to decline in the first part of 2002, and prices of high-quality bonds rose as investors pursued relative safety. Growth stocks got a lift in a rally that began in October, and bond prices fell, but for the balance of the year, high-quality bonds and value stocks provided better results. For the 12 months ended December 31, 2002, the total return on Class A shares of CDC Nvest Balanced Fund was -14.62%, including $0.11 per share in reinvested dividends. This fund has three segments: growth stocks, value stocks, and bonds, each with its own management team. To provide a benchmark, we combine 65% of the Standard & Poor's 500 Index and 35% of Lehman Brothers Government / Credit Index. The return on this index was -10.50% for the period, while the average return on the funds in Morningstar's Domestic Hybrid category was -9.67%. INFORMATION TECHNOLOGY WAS POSITIVE FOR LOOMIS GROWTH PORTFOLIO Growth stocks continued a three-year slide during the first part of 2002, and technology remained the hardest hit sector, but the information technology companies Loomis selected did well in the fourth-quarter rally. Good performers included Cisco Systems, Hewlett Packard and Oracle. Industrial conglomerate 3M was also positive on strong overseas sales and cost cutting. Disappointments included Concord EFS, which provides electronic verification of financial transactions, and Capital One Financial, a leading credit card issuer, both of which we sold at a loss. Although unemployment rose to 6.0% in 2002, consumer purchasing power was also up, and Loomis believes companies with strong cash flows are likely to reverse two years of restraint, improving demand for technology in 2003 and stimulating economic growth. Loomis also recently added two brokerage companies, Lehman and Goldman Sachs, in anticipation of stronger capital market activity in 2003. In Loomis' opinion, most of the uncertainties in the current outlook are external - notably the potential for military conflict with Iraq. JURIKA & VOYLES SEES SLOW GROWTH, MAINTAINS CONSERVATIVE POSTURE The broad decline in stock prices gave way in October to a rally that featured stocks and sectors that have taken a beating during the past few years, such as large-cap technology and cyclical stocks. Jurika & Voyles has consistently maintained a conservative approach, emphasizing companies with predictable earnings growth. Consequently, this portfolio held up relatively well during the declining months, but did not participate fully in the fourth-quarter rally. Portfolio stocks that performed well included Safeco, an insurance company; Sysco, a food distributor; and Wellpoint Health Network, an HMO. Unfortunately, two holdings that profoundly hurt performance included AMR Corp., parent company of American Airlines; and technology giant Electronic Data Systems. Jurika & Voyles is maintaining a conservative stance in anticipation of continued sluggish growth. While geopolitical problems and uncertain earnings are sources of concern, Jurika & Voyles believes the worst of the bear market may be over. LOOMIS PREPARED BOND PORTFOLIO FOR IMPROVING ECONOMY, BUT REMAINS CAUTIOUS While government securities experienced strong demand early in the year, when investors sought relative safety, ten-year Treasuries became more vulnerable as the year unfolded. The fund's fixed-income portfolio performed relatively well for the full year, but the best results came in the closing quarter, when interest-rates spiked for a time. The portfolio's relatively short maturity and good selection of corporate bonds helped smooth out some of the bumps. Yields are now near historic lows, and yield spreads (the difference in yields available at opposite ends of the quality spectrum) have reached historic extremes. Neither situation seems likely to endure. Loomis continues to favor some carefully selected corporate bonds as well as mortgage-related securities. Their long-term outlook is for a slow economic recovery, which should pick up once there is a resolution to the situation in Iraq. 12 CDC NVEST BALANCED FUND INVESTMENT RESULTS THROUGH DECEMBER 31, 2002 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 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] GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES DECEMBER 31, 1992 THROUGH DECEMBER 31, 2002
S&P 500/ NET MAXIMUM LEHMAN BROTHERS ASSET SALES GOVT./CREDIT VALUE(1) CHARGE(2) INDEX(4) 12/31/1992 $10,000 $9,425 $10,000 $10,206 $9,619 $10,131 $10,278 $9,687 $10,294 $10,448 $9,847 $10,448 $10,322 $9,728 $10,311 $10,529 $9,924 $10,489 $10,629 $10,018 $10,592 $10,647 $10,035 $10,589 $11,010 $10,377 $10,935 $11,037 $10,403 $10,893 $11,138 $10,497 $11,056 $11,092 $10,454 $10,944 12/31/1993 $11,418 $10,762 $11,046 $11,851 $11,170 $11,349 $11,550 $10,886 $11,062 $11,059 $10,423 $10,654 $11,125 $10,485 $10,711 $11,163 $10,521 $10,819 $11,017 $10,384 $10,638 $11,313 $10,662 $10,939 $11,608 $10,941 $11,232 $11,332 $10,680 $10,994 $11,322 $10,671 $11,151 $10,977 $10,346 $10,880 12/31/1994 $11,113 $10,474 $11,009 $11,251 $10,604 $11,269 $11,606 $10,939 $11,646 $11,888 $11,204 $11,897 $12,206 $11,504 $12,182 $12,643 $11,916 $12,678 $12,916 $12,173 $12,904 $13,146 $12,390 $13,165 $13,216 $12,456 $13,245 $13,484 $12,709 $13,656 $13,432 $12,659 $13,694 $13,852 $13,055 $14,164 12/31/1995 $14,037 $13,230 $14,415 $14,336 $13,512 $14,765 $14,401 $13,573 $14,744 $14,406 $13,577 $14,793 $14,449 $13,618 $14,899 $14,589 $13,750 $15,140 $14,627 $13,786 $15,248 $14,334 $13,510 $14,822 $14,595 $13,756 $15,012 $15,196 $14,322 $15,655 $15,646 $14,746 $16,063 $16,545 $15,594 $16,956 12/31/1996 $16,440 $15,495 $16,672 $16,723 $15,761 $17,356 $16,841 $15,873 $17,457 $16,333 $15,394 $16,918 $16,642 $15,685 $17,661 $17,306 $16,311 $18,418 $17,989 $16,955 $19,031 $19,098 $18,000 $20,220 $18,537 $17,471 $19,405 $19,127 $18,027 $20,202 $18,774 $17,694 $19,877 $19,075 $17,978 $20,512 12/31/1997 $19,323 $18,211 $20,817 $19,431 $18,314 $21,070 $20,177 $19,017 $22,042 $20,700 $19,510 $22,800 $20,714 $19,523 $22,989 $20,441 $19,266 $22,819 $20,502 $19,323 $23,502 $20,050 $18,897 $23,347 $18,268 $17,218 $21,312 $19,183 $18,080 $22,413 $20,016 $18,865 $23,542 $20,484 $19,306 $24,519 12/31/1998 $20,903 $19,701 $25,458 $20,779 $19,584 $26,213 $20,223 $19,060 $25,465 $20,599 $19,414 $26,171 $21,594 $20,352 $26,853 $21,407 $20,176 $26,344 $21,668 $20,422 $27,266 $21,089 $19,877 $26,686 $20,479 $19,302 $26,593 $19,821 $18,682 $26,204 $20,249 $19,085 $27,306 $20,138 $18,980 $27,660 12/31/1999 $20,119 $18,962 $28,660 $19,534 $18,410 $27,722 $18,570 $17,502 $27,503 $19,257 $18,150 $29,391 $18,702 $17,627 $28,765 $18,390 $17,333 $28,373 $18,830 $17,748 $29,031 $18,848 $17,764 $28,844 $19,989 $18,840 $30,151 $19,569 $18,444 $29,156 $19,341 $18,229 $29,141 $18,325 $17,271 $27,823 12/31/2000 $18,828 $17,745 $28,103 $18,969 $17,878 $28,917 $18,230 $17,182 $27,307 $17,437 $16,435 $26,226 $17,986 $16,952 $27,481 $17,933 $16,901 $27,657 $17,601 $16,589 $27,266 $17,477 $16,472 $27,330 $16,836 $15,868 $26,341 $15,591 $14,695 $25,042 $16,002 $15,082 $25,576 $16,788 $15,823 $26,704 12/31/2001 $17,120 $16,136 $26,783 $17,067 $16,085 $26,597 $16,798 $15,832 $26,342 $17,257 $16,265 $26,799 $16,935 $15,961 $25,925 $16,827 $15,859 $25,884 $16,046 $15,123 $24,763 $15,129 $14,259 $23,613 $15,237 $14,360 $23,898 $14,360 $13,534 $22,390 $14,793 $13,943 $23,595 $15,082 $14,215 $24,503 12/31/2002 $14,618 $13,779 $23,782
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2002
1 YEAR 5 YEARS 10 YEARS SINCE INCEPTION CLASS A (Inception 11/27/68) Net Asset Value(1) -14.62% -5.43% 3.87% -- With Maximum Sales Charge(2) -19.50 -6.54 3.26 -- CLASS B (Inception 9/13/93) Net Asset Value(1) -15.26 -6.15 -- 2.29% With CDSC(3) -19.48 -6.44 -- 2.29 CLASS C (Inception 12/30/94) Net Asset Value(1) -15.24 -6.16 -- 2.66 With Maximum Sales Charge and CDSC(3) -16.95 -6.34 -- 2.53 CLASS Y (Inception 3/8/94) Net Asset Value(1), -13.92 -4.92 -- 3.30
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./Credit Index(4) -10.50% 2.28% 9.05% 8.48% 9.73% 9.27% Morningstar Domestic Hybrid Fund Avg.(5) -9.67 1.49 7.04 5.43 7.72 7.19 Lipper Balanced Funds Average(6) -11.71 1.37 7.19 6.74 7.88 7.30
All 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. All results include reinvestment of dividends and capital gains. Current returns may be higher or lower than those shown. Class Y shares are available to certain institutional investors only. 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 12/31/02 6/30/02 - --------------------------------------------------------- COMMON STOCKS 57.4 62.4 BONDS AND NOTES 39.6 35.2 SHORT TERM INVESTMENTS AND OTHER 3.0 2.4
% OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/02 6/30/02 - --------------------------------------------------------- UNITED STATES TREASURY BONDS, 6.00%, 02/15/2026 4.7 1.9 GNMA, 6.00%, 01/15/2032 3.4 3.8 UNITED STATES TREASURY BONDS, 7.50%, 11/15/2016 2.4 1.8 FNMA, 6.50%, 04/01/2032 1.7 1.6 PFIZER, INC. 1.5 0.5 MICROSOFT CORP. 1.4 1.0 FNMA, 6.00%, 10/01/2016 1.4 1.1 FREDDIE MAC 1.4 1.0 CISCO SYSTEMS, INC. 1.3 1.2 MCGRAW-HILL COS. (THE), INC. 1.3 1.4
% OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/02 6/30/02 - --------------------------------------------------------- MORTGAGE-BACKED 12.7 12.3 FINANCIAL SERVICES 7.6 9.8 U.S. GOVERNMENT 7.1 3.7 OIL & GAS 4.4 3.8 PHARMACEUTICALS 4.3 4.0
Portfolio holdings and asset allocations will vary. See page 24 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS (1) Does not include a sales charge. (2) Includes the maximum sales charge of 5.75%. (3) 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./Credit Index is an unmanaged index made up of 65% of the S&P 500 and 35% of the Lehman Brothers Government/Credit 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 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, 2002) Class A $ 9.66 Class B 9.60 Class C 9.60 Class Y 9.68
MANAGEMENT DISCUSSION The broad decline in the U.S. stock market during 2002 affected all major equity groups. In the first part of the year, the market favored quality companies with steady earnings. High-risk stocks in general, and large-cap technology stocks in particular, were trounced early in the year, but they rallied in the fourth quarter. Conservative investments that had performed well early in the year did not participate in the rally. CDC Nvest Jurika & Voyles Relative Value Fund was conservatively positioned throughout the year; it held up relatively well in the first half, but was at a competitive disadvantage in the second half. For the 12 months ended December 31, 2002, the total return of the fund's Class A shares was -25.58%. The fund's benchmark, the Russell 1000 Index, returned -21.65% during the same period, while the average return on Morningstar's Large-Cap Blend category was -22.02%. MANAGER EXPECTS SLOW GROWTH, MAINTAINS CONSERVATIVE STRUCTURE Although the fund's emphasis on higher-quality companies proved to be a negative during the fourth quarter, we continue to believe that our focus on companies with steady earnings will prove to be an advantage in the months ahead. In fact, during the past three years we have consistently avoided what we believe are unrealistic earnings expectations for some companies in a sluggish economy. We have also been of the opinion that valuation levels for the stock market as a whole are still high. In general, we have been emphasizing more stable market areas, such as consumer staples, technology service firms and insurance companies. At the same time, we have been downplaying companies whose earnings are closely tied to economic cycles, like computer hardware and brokerage stocks. Good performers in the portfolio this year included Safeco Corporation, a financial services firm; Sysco Corporation, a food services firm; and Wellpoint Health Network, an HMO. We regard these as good examples of high-quality companies with stable, non-cyclical business models. Stocks that detracted from performance included AMR Corp., parent company of American Airlines; and technology giant Electronic Data Systems. These companies' earnings reflected the weak economy. BETTER QUALITY FINANCIAL INFORMATION, IMPROVED VALUES, BRIGHTEN OUTLOOK Jurika & Voyles has a distinctive investment methodology - one that emphasizes bottom-up stock selection with a macroeconomic overlay. That means we start by researching individual companies and their markets, and then work upward to an overview of market trends. Currently we remain concerned about the geopolitical environment and sluggish corporate earnings, but we believe the worst of the bear market declines are behind us. The exuberant stock valuations that marked the crest of the bull market in the late 1990s seem to have receded, and we believe that, in the aftermath of the recent corporate scandals, the quality of financial information is set to improve over the next several years. These two changes together could lay the foundation for the next bull market. From a risk/reward standpoint, we continue to believe that the most attractive opportunities are stocks of companies with good earnings quality and solid business models. Stocks of many of these companies now appear to be attractively priced. We will continue to focus on companies with good growth prospects, competitive advantages and conservative financial profiles because we believe these are the attributes companies need in order to maintain profit margins in a difficult economic environment. These attributes may also produce solid earnings growth over a three- to five-year horizon. 14 CDC NVEST JURIKA & VOYLES RELATIVE VALUE FUND INVESTMENT RESULTS THROUGH DECEMBER 31, 2002 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 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] GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES NOVEMBER 30, 2001 (INCEPTION) THROUGH DECEMBER 31, 2002
NET MAXIMUM ASSET SALES RUSSELL 1000 VALUE(1) CHARGE(2) INDEX(4) 11/30/2001 $10,000 $9,425 $10,000 $10,387 $9,790 $10,107 $10,299 $9,707 $9,978 $10,315 $9,722 $9,779 $10,771 $10,152 $10,181 $10,299 $9,707 $9,598 $10,139 $9,556 $9,513 6/30/2002 $9,467 $8,922 $8,811 $8,666 $8,168 $8,159 $8,658 $8,161 $8,202 $7,642 $7,203 $7,321 $7,962 $7,504 $7,929 $8,210 $7,738 $8,393 12/31/2002 $7,738 $7,293 $7,918
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2002
1 YEAR(7) 5 YEARS(7) SINCE INCEPTION(7) CLASS A (Inception 11/30/01) Net Asset Value(1) -25.58% -- -21.12% With Maximum Sales Charge(2) -29.85 -- -25.31 CLASS B (Inception 11/30/01) Net Asset Value(1) -26.04 -- -21.57 With CDSC(3) -29.74 -- -24.10 CLASS C (Inception 11/30/01) Net Asset Value(1) -26.04 -- -21.57 With Maximum Sales Charge and CDSC(3) -27.51 -- -22.27 CLASS Y (Inception 9/30/94) Net Asset Value(1) -25.37 -1.30% 7.74
SINCE SINCE CLASSES A,B,C CLASS Y COMPARATIVE INDEX PERFORMANCE 1 YEAR 5 YEARS INCEPTION(8) INCEPTION(8) Russell 1000 Index(4) -21.65% -0.58% -19.38% 9.84% Morningstar Large Cap Blend Avg.(5) -22.02 -1.47 -17.86 7.94 Lipper Multi Cap Value Funds Average(6) -17.89 1.05 -14.73 9.46
All 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. All results include reinvestment of dividends and capital gains. Current returns may be higher or lower than those shown. Class Y shares are available to certain institutional investors only. Class Y performance includes periods from the predecessor fund. 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 12/31/02 6/30/02 - --------------------------------------------------------- COMMON STOCKS 94.7 94.4 SHORT TERM INVESTMENTS AND OTHER 5.3 5.6
% OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/02 6/30/02 - --------------------------------------------------------- FREDDIE MAC 4.4 3.2 DEERE & CO. 3.5 3.1 MCGRAW-HILL COS. (THE), INC. 3.5 3.2 WELLPOINT HEALTH NETWORKS, INC. 3.3 2.7 MASCO CORP. 3.3 2.1 SUNCOR ENERGY, INC. 3.0 3.0 GLOBALSANTAFE CORP. 2.6 1.8 PHARMACIA CORP. 2.6 2.0 NIKE, INC., CLASS B 2.5 -- CENDANT CORP. 2.5 2.5
% OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/02 6/30/02 - --------------------------------------------------------- OIL & GAS 9.1 8.8 INSURANCE 8.9 6.7 MEDIA - BROADCASTING & PUBLISHING 5.5 4.2 PHARMACEUTICALS 5.2 5.0 HEAVY MACHINERY 5.1 4.4
Portfolio holdings and asset allocations will vary. See page 24 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS (1) Does not include a sales charge. (2) Includes the maximum sales charge of 5.75%. (3) 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 Large Cap Blend 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. (8) The since-inception performance comparisons shown for each Class of fund shares are calculated as follows: Class A, B and C from 11/30/01; Class Y from 9/30/94. 15 CDC NVEST LARGE CAP VALUE FUND PORTFOLIO PROFILE OBJECTIVE: Seeks capital growth and dividend income STRATEGY: Invests primarily in under-valued common stocks of large-cap companies INCEPTION DATE: November 28, 1995 MANAGER: Margaret M. Buescher Mark J. Roach VAUGHAN, NELSON, SCARBOROUGH & McCULLOUGH, L.P. (VNSM) SYMBOLS: Class A NEEIX Class B NEBIX Class C NECEX NET ASSET VALUE PER SHARE: (DECEMBER 31, 2002) Class A $ 13.80 Class B 13.60 Class C 13.60
MANAGEMENT DISCUSSION A long bear market, geopolitical unrest and an uncertain economic outlook kept investors on edge in 2002. All the major stock market indexes finished the year with negative returns. After trailing in the first half of the year, large-cap stocks held up better than small-company stocks during the second half. Although it benefited from the fourth-quarter rally, CDC Nvest Large Cap Value Fund's emphasis on the largest companies - which were hit hardest in this summer's downturn - caused it to lag its benchmark. For the 12 months ended December 31, 2002, the fund's return was -22.51% on Class A shares, including $0.0022 per share in reinvested distributions. For the same period, the fund's benchmark, the Russell 1000 Value Index, returned -15.52%, and the average return on Morningstar's Large Value Funds category was -18.92%. SKITTISH INVESTORS SOLD FIRST, ASKED QUESTIONS LATER Declining markets present opportunities for value-oriented investors, whose goal is to buy low, sell high. Unfortunately, there are no guarantees the stock price will recover soon, or ever. In this year's sluggish economy, sellers outnumbered buyers, sometimes by a wide margin. For example, at one point shares of Intel seemed to be priced as if semiconductor sales might continue in a slump indefinitely. We believe the world's leading chip manufacturer--Intel--should benefit once an economic recovery fuels the market, so we bought the stock on weakness and were rewarded when prices rose in October and November. However, we purchased Tenet Healthcare when its stock plunged following criticism of its billing practices; it has yet to return to favor. We also bought hospital management firm HCA, which was caught in Tenet's downdraft and weakness in the healthcare sector. HCA's share price is now moving back in the right direction. On the other hand, we sold Electronic Data Systems at a loss when falling revenues in its profitable consulting division brought the company's outlook into question. RESULTS FROM FINANCIAL SERVICES, TECHNOLOGY WERE MIXED U.S. Bancorp is one of our success stories; it overcame problems related to some of its acquisitions and is growing its core business successfully. We also initiated a position in Capital One Financial last year. Analysts have expressed concern about Capital One's ability to maintain its growth while defaults are on the rise, but the company has a strong balance sheet and its long-term outlook appears to be improving. Nonetheless, demand for the stock has been anemic. Brokerage companies suffered deep declines after allegations of conflicts of interest on the part of analysts and investment bankers. Portfolio holdings JP Morgan and Citigroup regained momentum as settlements began to take shape, although both ended down for the year. Early in the year we took advantage of low valuations to increase the fund's holdings in some leading technology companies, including Cisco Systems, IBM and Microsoft. We believe these companies are positioned to benefit from any pickup in corporate technology spending, and their strong balance sheets should help them weather further downturns. THE ECONOMY MAY SURPRISE FORECASTERS Few observers are predicting strong economic growth, but we think positive surprises are more likely than renewed disappointment in 2003. If investor confidence returns, we believe attractively valued stocks of large companies may provide solid returns in the next few years. Historically, a scenario of slow economic expansion has favored value stocks over growth. In general, this year we are focusing on companies expected to grow earnings at 15% a year, but whose stock prices do not appear to reflect that potential. Similarly, we look for stocks priced severely below our estimate of their potential. 16 CDC NVEST LARGE CAP VALUE FUND INVESTMENT RESULTS THROUGH DECEMBER 31, 2002 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 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] GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES NOVEMBER 28, 1995 (INCEPTION) THROUGH DECEMBER 31, 2002
NET MAXIMUM ASSET SALES RUSSELL 1000 VALUE(1) CHARGE(2) VALUE INDEX(4) 11/28/1995 $10,000 $9,425 $10,000 $10,032 $9,455 $10,000 12/31/1995 $10,321 $9,727 $10,251 $10,553 $9,947 $10,571 $10,698 $10,083 $10,651 $10,875 $10,249 $10,832 $11,123 $10,484 $10,873 $11,460 $10,801 $11,009 $11,356 $10,703 $11,018 $11,067 $10,431 $10,602 $11,284 $10,635 $10,905 $11,701 $11,028 $11,339 $12,343 $11,633 $11,777 $13,106 $12,352 $12,631 12/31/1996 $13,067 $12,316 $12,470 $13,464 $12,690 $13,074 $13,714 $12,926 $13,266 $13,093 $12,340 $12,790 $13,542 $12,763 $13,327 $14,206 $13,389 $14,071 $14,628 $13,787 $14,675 $15,603 $14,706 $15,779 $15,154 $14,283 $15,217 $15,708 $14,805 $16,137 $14,948 $14,089 $15,686 $15,582 $14,686 $16,379 12/31/1997 $16,026 $15,104 $16,857 $15,825 $14,915 $16,619 $17,083 $16,100 $17,738 $17,847 $16,821 $18,822 $17,810 $16,786 $18,948 $17,198 $16,209 $18,667 $17,001 $16,023 $18,907 $16,267 $15,332 $18,573 $13,964 $13,161 $15,809 $14,768 $13,919 $16,716 $15,887 $14,973 $18,011 $16,386 $15,444 $18,850 12/31/1998 $16,453 $15,507 $19,492 $15,818 $14,909 $19,648 $15,491 $14,601 $19,370 $15,400 $14,514 $19,771 $16,796 $15,830 $21,618 $16,730 $15,768 $21,380 $17,364 $16,365 $22,001 $16,960 $15,985 $21,357 $16,321 $15,383 $20,564 $15,602 $14,705 $19,846 $16,401 $15,458 $20,988 $16,138 $15,210 $20,824 12/31/1999 $16,133 $15,206 $20,924 $15,532 $14,638 $20,242 $14,328 $13,504 $18,738 $15,778 $14,870 $21,024 $15,825 $14,915 $20,779 $16,041 $15,119 $20,998 $15,736 $14,831 $20,039 $16,048 $15,125 $20,290 $17,091 $16,108 $21,419 $17,056 $16,075 $21,615 $17,615 $16,602 $22,146 $16,885 $15,914 $21,324 12/31/2000 $17,587 $16,576 $22,392 $17,692 $16,674 $22,478 $17,083 $16,101 $21,853 $16,788 $15,823 $21,081 $17,473 $16,468 $22,115 $17,948 $16,916 $22,611 $17,544 $16,535 $22,110 $17,258 $16,266 $22,063 $16,916 $15,943 $21,179 $15,964 $15,046 $19,689 $15,992 $15,073 $19,519 $16,735 $15,773 $20,654 12/31/2001 $16,968 $15,993 $21,140 $16,702 $15,741 $20,977 $16,673 $15,714 $21,011 $17,368 $16,370 $22,005 $16,683 $15,723 $21,250 $16,644 $15,687 $21,357 $15,341 $14,459 $20,131 $14,131 $13,318 $18,259 $14,036 $13,229 $18,397 $12,149 $11,451 $16,352 $13,245 $12,483 $17,563 $13,931 $13,130 $18,670 12/31/2002 $13,149 $12,393 $17,859
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2002
1 YEAR(7) 5 YEARS(7) SINCE INCEPTION(7) CLASS A (Inception 11/28/95) Net Asset Value(1) -22.51% -3.88% 3.94% With Maximum Sales Charge(2) -26.97 -5.01 3.08 CLASS B (Inception 9/15/97) Net Asset Value(1) -23.02 -4.57 -3.66 With CDSC(3) -26.87 -4.94 -3.83 CLASS C (Inception 9/15/97) Net Asset Value(1) -23.07 -4.57 -3.66 With Maximum Sales Charge and CDSC(3) -24.60 -4.76 -3.84
SINCE SINCE CLASS A CLASS B AND C COMPARATIVE PERFORMANCE 1 YEAR 5 YEARS INCEPTION(8) INCEPTION(8) Russell 1000 Value Index(4) -15.52% 1.16% 8.53% 1.97% Morningstar Large Value Fund Average(5) -18.92 -0.54 6.07 -0.35 Lipper Large Cap Value Funds Average(6) -19.95 -1.03 5.82 -0.98
All 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. All results include reinvestment of dividends and capital gains. Current returns may be higher or lower than those shown. 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 12/31/02 6/30/02 - --------------------------------------------------------- COMMON STOCKS 98.1 95.9 SHORT TERM INVESTMENTS AND OTHER 1.9 4.1
% OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/02 6/30/02 - --------------------------------------------------------- EXXON MOBIL CORP. 5.8 5.5 CITIGROUP, INC. 3.0 3.8 PEPSICO, INC. 2.9 4.0 PHARMACIA CORP. 2.6 2.0 RADIAN GROUP, INC. 2.6 2.5 FANNIE MAE 2.5 4.7 AVERY DENNISON CORP. 2.4 2.1 MELLON FINANCIAL CORP. 2.4 2.8 AMERICAN INTERNATIONAL GROUP, INC. 2.4 4.5 EMERSON ELECTRIC CO. 2.3 2.0
% OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/02 6/30/02 - --------------------------------------------------------- FINANCIAL SERVICES 12.7 16.9 INSURANCE 10.8 10.6 BANKING 10.7 6.6 OIL & GAS 9.2 11.5 BEVERAGES, FOOD & TOBACCO 8.3 8.1
Portfolio holdings and asset allocations will vary. See page 24 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS (1) Does not include a sales charge. (2) Includes the maximum sales charge of 5.75%. (3) 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 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. 17 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, 2002) Class A $ 9.24 Class B 9.12 Class C 9.12
MANAGEMENT DISCUSSION After gaining ground on positive economic news early in 2002, the equity markets dropped sharply this summer, and a rally in the fourth quarter was not strong enough to compensate for the summer's downturn. The failure of the economy to establish positive momentum, an uncertain outlook for corporate profits, and global tensions all fed investor concerns. CDC Nvest Select Fund's total return for the 12 months ended December 31, 2002 was -15.69% based on the net asset value of Class A shares. Although still in negative territory for the full year, the fund held a comfortable margin over its benchmark, the Standard & Poor's 500 Stock Index, which returned -22.10% for the year. The fund's results were also better than the -18.92% average return on Morningstar's Large Value Funds category. FINANCIAL, ENERGY AND MANUFACTURING HOLDINGS WERE STRONG Washington Mutual, the largest thrift in the United States, has made effective use of cash flow in a series of successful acquisitions and is extending into the New York area. The company is also somewhat sheltered from any increase in interest rates because its mortgage-servicing business adds consistency to earnings. Although it has been a positive for the fund, shares continue to trade below our estimate of its potential value. Energy explorer and developer Burlington Resources also performed well as demand for natural gas is outstripping new supplies. However, we believe this stock is also undervalued relative to comparable companies in this consolidating industry. Tool company Black & Decker benefited from improving finances, a vigorous housing market, innovative product design, and strong sales. COMPANY-SPECIFIC PROBLEMS, WEAKNESS IN TELECOM, HURT RESULTS Shares of Electronic Data Systems (EDS) fell sharply. Management unexpectedly slashed earnings estimates when clients cancelled or deferred high-margin consulting projects. We are reevaluating our position in EDS. Texas Utilities' European energy trading unit was hurt when a competitor filed for bankruptcy. This clouded the company's financial outlook, and we sold the stock. However, we continue to hold cardiovascular products specialist Guidant despite weak performance; coated stents - devices that open diseased arteries and deliver medication - remain a promising initiative. H&R Block suffered when reports circulated that it vastly overstated its liability in a class-action lawsuit. We took advantage of price weakness to purchase additional shares; prices had partially recovered by the end of December. We eliminated AT&T because of deteriorating conditions in the telecommunications business and falling long distance prices. However, we continue to hold Sprint because of more favorable local phone pricing and the company's strength in network services. Despite sector weakness, we are optimistic about Novell's efforts to shift its business focus on finding solutions for client needs. Novell's Secure Identity Management system ties together a client's new and old information systems, giving users simple, secure access to authorized information from anywhere. Systems solutions of this kind are growing in popularity among hospitals and other large organizations. MANAGER SEES STRONG PROSPECTS FOR VALUE INVESTORS We believe the extended decline in stock prices has expanded opportunities to invest in quality stocks at greatly reduced prices. Even some traditional growth companies can now be considered for value-oriented portfolios. Moreover, the dividends on some of our holdings are competitive with bond yields, even without giving weight to possible appreciation. We expect economic growth to resume before long. Sustained growth would have a positive impact on corporate earnings and, historically, earnings have determined the long-term performance of stocks. 18 CDC NVEST SELECT FUND INVESTMENT RESULTS THROUGH DECEMBER 31, 2002 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 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] GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES MARCH 15, 2001 (INCEPTION) THROUGH DECEMBER 31, 2002
NET MAXIMUM S&P 500 ASSET SALES STOCK VALUE(1) CHARGE(2) INDEX(4) 3/15/2001 $10,000 $9,425 $10,000 $10,090 $9,510 $10,000 $10,420 $9,821 $10,777 $10,690 $10,075 $10,849 6/30/2001 $10,990 $10,358 $10,585 $11,310 $10,660 $10,481 $10,870 $10,245 $9,825 $10,240 $9,651 $9,032 $10,000 $9,425 $9,204 $10,680 $10,066 $9,910 12/31/2001 $10,960 $10,330 $9,997 $10,890 $10,264 $9,851 $10,600 $9,990 $9,661 $10,910 $10,283 $10,024 $10,860 $10,235 $9,416 $10,930 $10,301 $9,347 6/30/2002 $10,080 $9,500 $8,681 $9,620 $9,067 $8,005 $9,960 $9,387 $8,057 $8,570 $8,077 $7,181 $8,970 $8,454 $7,813 $9,470 $8,925 $8,273 12/31/2002 $9,240 $8,709 $7,745
AVERAGE ANNUAL TOTAL RETURNS--DECEMBER 31, 2002
1 YEAR(7) SINCE INCEPTION(7) CLASS A (Inception 3/15/01) Net Asset Value(1) -15.69% -4.30% With Maximum Sales Charge(2) -20.55 -7.40 CLASS B (Inception 3/15/01) Net Asset Value(1) -16.33 -5.00 With CDSC(3) -20.51 -7.13 CLASS C (Inception 3/15/01) Net Asset Value(1) -16.33 -5.00 With Maximum Sales Charge and CDSC(3) -17.99 -5.52
SINCE CLASS A, B, C COMPARATIVE PERFORMANCE 1 YEAR INCEPTION(8) S&P 500 Stock Index(4) -22.10% -13.56% Morningstar Large Cap Value Avg.(5) -18.92 -10.55 Lipper Multi Cap Value Funds Avg.(6) -17.89 -9.07
All 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. All results include reinvestment of dividends and capital gains. Current returns may be higher or lower than those shown. 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 12/31/02 6/30/02 - --------------------------------------------------------- COMMON STOCKS 93.0 90.1 SHORT TERM INVESTMENTS AND OTHER 7.0 9.9
% OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/02 6/30/02 - --------------------------------------------------------- WASHINGTON MUTUAL, INC. 16.6 16.7 H&R BLOCK, INC. 7.4 5.0 BURLINGTON RESOURCES, INC. 5.2 4.5 FIRST DATA CORP. 5.1 4.5 KNIGHT-RIDDER, INC. 4.9 4.7 OMNICARE, INC. 4.7 3.9 CHIRON CORP. 4.6 3.5 LIBERTY MEDIA CORP. 4.6 2.7 KROGER CO. (THE) 4.4 4.8 J.C. PENNEY CO., INC. 4.4 3.2
% OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/02 6/30/02 - --------------------------------------------------------- BANKING 16.6 16.7 MEDIA - BROADCASTING & PUBLISHING 13.5 7.4 COMMERCIAL SERVICES 11.7 8.7 SOFTWARE 7.8 6.9 OIL & GAS 5.2 4.5
Portfolio holdings and asset allocations will vary. See page 24 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS (1) Does not include a sales charge. (2) Includes the maximum sales charge of 5.75%. (3) 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 Large 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. (8) The since-inception performance comparisons shown are calculated from 3/31/01. 19 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: John 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, 2002) Class A $ 7.10 Class B 7.04 Class C 7.04 Class Y 7.13*
* EFFECTIVE FEBRUARY 1, 2003 THE FUND WILL BE MANAGED BY A TEAM AT JURIKA & VOYLES. MANAGEMENT DISCUSSION All the major equity indexes ended 2002 in negative territory, despite a rally in the fourth quarter. Although they are usually among the most volatile, small-cap growth stocks were not first out of the starting gate in the rally, as investors paid more attention to big-name technology stocks than small, growth-oriented companies. For the 12 months ended December 31, 2002, the total return on Class A shares of CDC Nvest Jurika & Voyles Small Cap Growth Fund was -45.55%. For the same period, the return on the fund's benchmark, the Russell 2000 Index, was -20.48%, while the average return on the funds in the Morningstar Small Growth Index was - -29.72%. CLIMATE OF UNCERTAINTY WAS NEGATIVE FOR GROWTH STOCKS The sluggish recovery was a major concern for investors throughout 2002. Valuations of growth stocks fell more than other market areas. While retail sales remained surprisingly strong, consumer confidence declined, and corporate governance scandals shook investor confidence. The possibility of war with Iraq only added to uncertainty. IMPATIENT WITH PROMISE, INVESTORS WANT PRESENT-DAY PROFITS This fund tends to feature young companies with great promise for future growth, but few investors were of a mind to speculate in 2002. Duraswitch Industries was the fund's largest holding at mid-year; the company markets and licenses new technology for electronic switches worldwide, but it has taken longer to get products to market than had been anticipated. Digital Insight Corp, which provides internet banking services, was the second largest holding at the end of June. Even though it got off to a strong start, exceeding earnings expectations, the challenging economy dimmed its outlook. Both stocks fell significantly during the year, but we continue to hold them. Other disappointments included US Unwired, a promising telecommunications company; its higher-than-expected expenses cut into profits. Concurrent Computer Corporation shifted its focus to its video-on-demand software, but a slow rollout caused the stock to underperform. And shares of medical technology company Thoratec declined even after it had received regulatory approval for its heart pump, designed to help patients with end-stage congestive heart failure. MANAGER BALANCED AGGRESSIVE AND DEFENSIVE STOCKS Although 2002 was hard on aggressive small-cap and high-tech stocks in general, there were bright spots. For example, the fund owns Nextel Communications, which beat earnings expectations by increasing market share. ebookers, a European online travel ticketing service, also helped performance. And some established companies appear to be entering a new period of profitability. Archive storage company Iron Mountain is moving into digital storage; the company's revenues are now covering fixed costs, so future profit growth will go immediately to the bottom line. However, as a defensive measure, we built a strong position in healthcare stocks early in the year, because this sector tends to be relatively immune to economic slowdowns. For example, we purchased Stericycle, a leader in the medical waste field with very little competition. We also favored consumer stocks, emphasizing those in the restaurant and home entertainment area. Our reasoning was that the slow economy would incline people to seek low-cost recreational activities closer to home. MANAGER FORECASTS IMPROVED CORPORATE SPENDING We expect corporate spending to improve in 2003, along with prospects for the technology sector. In particular, those dot-com firms that have survived the long economic downturn should benefit. Although we remain cautious, we believe the fear factor that has held the equity market in check should dissipate as the economy recovers. If so, valuations of small-cap growth stocks should begin to reflect their potential. 20 CDC NVEST JURIKA & VOYLES SMALL CAP GROWTH FUND INVESTMENT RESULTS THROUGH DECEMBER 31, 2002 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 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] GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES NOVEMBER 30, 2001 (INCEPTION) THROUGH DECEMBER 31, 2002
NET MAXIMUM ASSET SALES RUSSELL 2000 VALUE(1) CHARGE(2) INDEX(4) 11/30/2001 $10,000 $9,425 $10,000 $10,382 $9,785 $10,617 $9,952 $9,380 $10,507 $8,742 $8,239 $10,219 $9,530 $8,982 $11,040 $8,814 $8,307 $11,141 $8,392 $7,909 $10,646 6/30/2002 $7,611 $7,174 $10,118 $5,884 $5,545 $8,590 $5,653 $5,328 $8,568 $5,104 $4,810 $7,953 $5,549 $5,230 $8,208 $6,218 $5,861 $8,940 12/31/2002 $5,653 $5,328 $8,442
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2002
1 YEAR(7) 5 YEARS(7) SINCE INCEPTION(7) CLASS A (Inception 11/30/01) Net Asset Value(1) -45.55% -- -40.89% With Maximum Sales Charge(2) -48.70 -- -44.04 CLASS B (Inception 11/30/01) Net Asset Value(1) -45.97 -- -41.35 With CDSC(3) -48.67 -- -43.52 CLASS C (Inception 11/30/01) Net Asset Value(1) -46.01 -- -41.35 With Maximum Sales Charge and CDSC(3) -47.08 -- -41.90 CLASS Y (Inception 9/30/94) Net Asset Value(1) -45.36 -11.96% 4.19
SINCE SINCE CLASS A, B, C CLASS Y COMPARATIVE PERFORMANCE 1 YEAR 5 YEARS INCEPTION(8) INCEPTION(8) Russell 2000 Index(4) -20.48% -1.36% -14.47% 6.48% Morningstar Small Growth Fund Avg.(5) -29.72 -2.31 -21.44 6.17 Lipper Small Cap Growth Funds Avg.(6) -28.42 -1.10 -23.71 5.12
All 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. All results include reinvestment of dividends and capital gains. Current returns may be higher or lower than those shown. Class Y shares are only available to certain institutional investors. Class Y performance includes periods from the predecessor fund. 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 12/31/02 6/30/02 - ---------------------------------------------------------- COMMON STOCKS 101.2 99.1 SHORT TERM INVESTMENTS AND OTHER (1.2) 0.9
% OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/02 6/30/02 - ---------------------------------------------------------- LOOKSMART, LTD. 3.3 0.8 SUREBEAM CORP., CLASS A 3.2 1.6 AMERICAN HEALTHWAYS, INC. 2.3 1.2 CONCEPTUS, INC. 2.2 1.2 INTRADO, INC. 2.2 2.2 HOLLYWOOD ENTERTAINMENT CORP. 2.1 1.9 GIVEN IMAGING, LTD. 2.1 1.3 ALLOY, INC. 2.0 0.9 IRON MOUNTAIN, INC. 1.9 -- RAINDANCE COMMUNICATIONS, INC. 1.9 2.1
% OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 12/31/02 6/30/02 - ---------------------------------------------------------- INTERNET 21.4 15.7 MEDICAL SUPPLIES 10.4 8.4 COMMERCIAL SERVICES 9.4 4.9 OIL & GAS 8.1 9.9 SOFTWARE 5.7 4.6
Portfolio holdings and asset allocations will vary. See page 24 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS (1) Does not include a sales charge. (2) Includes the maximum sales charge of 5.75%. (3) 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. (8) The since-inception performance comparisons for each class of fund shares are calculated as follows: Class A, B and C from 11/30/01; Class Y from 9/30/94. 21 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, 2002) Class A $ 10.04 Class B 9.51 Class C 9.49 Class Y 10.43
MANAGEMENT DISCUSSION Although most major stock markets ended 2002 in negative territory, there was a clear change in sentiment in the fourth quarter that caused money to flow into some sectors that have been in the doldrums for more than two years. CDC Nvest International Equity Fund didn't do as well as its benchmark or its competitor group primarily because of its emphasis on growth stocks. Although growth stocks seemed to rebound in the fourth quarter, value stocks held up better during the first three quarters. Consequently, for the 12 months ended December 31, 2002, the total return on fund shares was -21.07%, based on the net asset value of Class A shares. The fund's benchmark, the MSCI EAFE Index, ended the year with a return of -15.66%, while the average return on the funds in Morningstar's Foreign Stock Funds category was -16.35%. SOME PREVIOUSLY DOWN-TRODDEN SECTORS RALLIED The fund benefited from its emphasis on telecommunications companies during the year. These included KPN, Telekom Austria and Vodafone. However, shares of Nokia declined when the company lowered its sales forecast. Although the fund had a relatively small position in the financial sector, the stocks we selected did well. These included U.K.-based Barclays, Anglo Irish Bank and Royal Bank of Scotland; European financial-service companies Credit Suisse, ING and UniCredito Italiano; and Royal Bank of Canada, which we sold at a profit before the end of the year. Good selection among energy companies also helped the fund, including two Canadian firms, Precision Drilling and EnCana, as well as Italian oil and gas producer ENI, and Russia's leading integrated oil company, Lukoil. HEALTHCARE, CONSUMER STAPLES, INFORMATION TECHNOLOGY ENDED 2002 DOWN Some healthcare holdings, notably brand-name pharmaceutical companies Novartis and Glaxo Smithkline, hurt performance, eclipsed by generic drug makers, which did well. Our consumer staples selections were disappointing, and we missed opportunities in the food and drug retailing industry. Our emphasis on information technology was also a negative this year. Disappointments included Japanese-based electronic game maker Sega, which experienced poor U.S. sales, and French-based Cap Gemini Ernst & Young, which was hurt by concerns over slowing revenue growth. We sold both positions at a loss before the end of the year. Autoliv - a Swedish-based world leader in automotive safety devices - got off to a good start, but its stock price declined as concerns about worldwide auto sales mounted. However, we look for renewed growth for this company in 2003. Japan was one of the better performing countries for the year, but the fund was underweight in this country relative to the benchmark. MANAGER BELIEVES EARNINGS WILL DRIVE STOCK PRICES IN 2003 We believe the fourth-quarter price rally reflected investors' fears of missing the boat rather than any concrete evidence of solid growth. Many investors are quick to rotate out of one market area into another that seems hot without taking the time to research the fundamentals. We expect fundamentals to be very important in 2003. Many companies have reduced their expenses and are poised for growth when the economy turns around. This improved operating efficiency should spur the markets to positive returns, especially when coupled with an accommodating U.S. Federal Reserve Bank and a U.S. administration determined to implement pro-growth policies. In our opinion, the market has overreacted on the downside, in search of safety, and most of the excesses of the past have now been wrung out of the system. In the short term, we continue to expect volatility as investors react to troubling news. However, as the market moves beyond the current geopolitical turmoil, we believe investors will again reward companies that produce solid earnings growth in economic centers around the world. 22 CDC NVEST INTERNATIONAL EQUITY FUND INVESTMENT RESULTS THROUGH DECEMBER 31,2002 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 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] GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES DECEMBER 31, 1992 THROUGH DECEMBER 31, 2002
NET MAXIMUM ASSET SALES VALUE(1) CHARGE(2) MSCI EAFE(4) 12/31/1992 $10,000 $9,425 $10,000 $9,915 $9,345 $10,002 $10,085 $9,505 $10,307 $11,059 $10,423 $11,208 $11,873 $11,190 $12,275 $12,068 $11,374 $12,537 $11,788 $11,110 $12,345 $12,288 $11,582 $12,780 $12,899 $12,157 $13,472 $12,644 $11,917 $13,172 $12,932 $12,189 $13,581 $12,153 $11,454 $12,397 12/31/1993 $12,939 $12,195 $13,294 $13,880 $13,082 $14,421 $13,680 $12,893 $14,384 $13,331 $12,564 $13,768 $13,836 $13,041 $14,355 $13,810 $13,016 $14,276 $14,045 $13,238 $14,481 $14,159 $13,344 $14,623 $14,542 $13,706 $14,973 $14,071 $13,262 $14,504 $14,559 $13,722 $14,991 $13,862 $13,065 $14,273 12/31/1994 $13,981 $13,177 $14,366 $13,314 $12,548 $13,818 $13,395 $12,625 $13,782 $13,855 $13,058 $14,645 $14,216 $13,398 $15,200 $14,171 $13,356 $15,022 $14,053 $13,245 $14,763 $14,838 $13,985 $15,686 $14,324 $13,500 $15,092 $14,477 $13,645 $15,390 $13,963 $13,160 $14,980 $14,315 $13,492 $15,401 12/31/1995 $14,789 $13,939 $16,026 $14,689 $13,844 $16,095 $14,753 $13,904 $16,154 $15,110 $14,241 $16,501 $15,670 $14,769 $16,985 $15,569 $14,674 $16,676 $15,688 $14,786 $16,774 $15,147 $14,276 $16,288 $15,184 $14,311 $16,328 $15,388 $14,503 $16,766 $15,117 $14,248 $16,598 $15,482 $14,591 $17,263 12/31/1996 $15,273 $14,395 $17,045 $14,346 $13,521 $16,452 $14,542 $13,706 $16,726 $14,524 $13,689 $16,790 $14,327 $13,503 $16,883 $15,067 $14,200 $17,986 $15,703 $14,801 $18,982 $16,218 $15,286 $19,293 $14,795 $13,944 $17,856 $15,804 $14,896 $18,861 $14,368 $13,542 $17,415 $14,057 $13,249 $17,241 12/31/1997 $14,117 $13,306 $17,396 $14,650 $13,807 $18,195 $15,483 $14,593 $19,367 $16,266 $15,331 $19,968 $16,276 $15,340 $20,130 $15,905 $14,990 $20,037 $15,322 $14,441 $20,194 $15,493 $14,602 $20,403 $13,414 $12,643 $17,880 $13,092 $12,339 $17,336 $13,900 $13,100 $19,148 $14,667 $13,824 $20,134 12/31/1998 $15,062 $14,196 $20,933 $15,041 $14,176 $20,876 $14,365 $13,539 $20,383 $14,629 $13,788 $21,239 $15,263 $14,385 $22,104 $14,766 $13,917 $20,971 $15,400 $14,515 $21,793 $16,087 $15,162 $22,446 $16,298 $15,361 $22,533 $16,939 $15,965 $22,765 $18,334 $17,280 $23,623 $22,585 $21,286 $24,448 12/31/1999 $28,254 $26,629 $26,647 $26,863 $25,319 $24,959 $31,760 $29,934 $25,635 $29,201 $27,522 $26,634 $25,629 $24,155 $25,237 $23,704 $22,341 $24,626 $24,649 $23,232 $25,595 $23,125 $21,795 $24,527 $23,826 $22,456 $24,745 $22,673 $21,369 $23,545 $20,738 $19,546 $22,993 $19,399 $18,283 $22,136 12/31/2000 $20,187 $19,026 $22,928 $20,150 $18,991 $22,917 $18,255 $17,206 $21,201 $16,689 $15,729 $19,797 $17,612 $16,599 $21,185 $17,357 $16,359 $20,455 $17,053 $16,072 $19,626 $16,555 $15,603 $19,270 $16,081 $15,157 $18,786 $14,758 $13,909 $16,887 $15,098 $14,230 $17,319 $15,268 $14,390 $17,959 12/31/2001 $15,450 $14,562 $18,066 $14,648 $13,806 $17,107 $14,770 $13,920 $17,228 $15,341 $14,459 $18,252 $15,122 $14,253 $18,300 $15,280 $14,401 $18,549 $14,600 $13,760 $17,817 $13,191 $12,432 $16,060 $13,069 $12,318 $16,027 $11,733 $11,059 $14,310 $12,158 $11,459 $15,080 $12,766 $12,032 $15,766 12/31/2002 $12,195 $11,494 $15,237
AVERAGE ANNUAL TOTAL RETURNS -- DECEMBER 31, 2002
1 YEAR 5 YEARS(7) 10 YEARS(7) SINCE INCEPTION(7) CLASS A (Inception 5/21/92) Net Asset Value(1) -21.07% -2.89% 2.00% -- With Maximum Sales Charge(2) -25.63 -4.03 1.40 -- CLASS B (Inception 9/13/93) Net Asset Value(1) -21.66 -3.65 -- -1.30% With CDSC(3) -25.58 -3.97 -- -1.30 CLASS C (Inception 12/30/94) Net Asset Value(1) -22.09 -3.74 -- -2.44 With Maximum Sales Charge and CDSC(3) -23.62 -3.93 -- -2.57 CLASS Y (Inception 9/9/93) Net Asset Value(1) -20.44 -2.29 -- 0.10
SINCE SINCE SINCE CLASS B CLASS C CLASS Y COMPARATIVE PERFORMANCE 1 YEAR 5 YEARS 10 YEARS INCEPT.(8) INCEPT.(8) INCEPT.(8) MSCI EAFE(4) -15.66% -2.61% 4.30% 1.59% 0.74% 1.59% Morningstar Foreign Stock Fund Avg.(5) -16.35 -2.09 4.86 2.97 2.03 2.97 Lipper International Funds Average(6) -16.67 -2.63 4.76 2.54 1.53 2.54
All 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. All results include reinvestment of dividends and capital gains. Current returns may be higher or lower than those shown. ClassY shares are available to certain institutional investors only. 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 12/31/02 6/30/02 - ---------------------------------------------------------- COMMON STOCKS 95.7 97.9 SHORT TERM INVESTMENTS AND OTHER 4.3 2.1
% OF NET ASSETS AS OF TEN LARGEST HOLDINGS 12/31/02 6/30/02 - ---------------------------------------------------------- VODAFONE GROUP PLC 2.6 1.6 ANGLO IRISH BANK CORP., 144A 2.2 1.9 UBS AG 2.1 1.8 ROYAL BANK OF SCOTLAND GROUP PLC 2.1 2.6 KONINKLIJKE (ROYAL) KPN NV 1.9 -- TELEKOM AUSTRIA AG 1.8 -- STORA ENSO OYJ 1.7 1.7 BRITISH SKY BROADCASTING PLC 1.7 1.2 ENI SPA 1.7 1.6 CREDIT SUISSE GROUP 1.6 1.0
% OF NET ASSETS AS OF FIVE LARGEST COUNTRIES 12/31/02 6/30/02 - ---------------------------------------------------------- UNITED KINGDOM 21.6 22.8 JAPAN 12.0 14.2 SWITZERLAND 8.5 8.5 ITALY 6.8 4.8 FRANCE 5.1 7.5
Portfolio holdings and asset allocations will vary. See page 24 for information on the possible risks associated with an investment in this fund. NOTES TO CHARTS (1) Does not include a sales charge. (2) Includes the maximum sales charge of 5.75%. (3) 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 B from 9/30/93; Class C from 12/31/94; Class Y from 9/30/93. 23 CDC NVEST EQUITY FUNDS RISKS The views expressed in this report reflect those of the portfolio managers as of the dates indicated. The managers' views are subject to change at any time without notice based on changes in market or other conditions. References to specific securities or industries should not be regarded as investment advice. Because these funds are actively managed, there is no assurance that they will continue to invest in the securities or industries mentioned. 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. THE FUNDS CDC NVEST LARGE CAP GROWTH FUND invests primarily in common stocks of companies with large market capitalizations that the manager believes have above-average long-term growth potential. CDC NVEST CAPITAL GROWTH FUND invests primarily in common stocks of growth-oriented companies. Its focus is primarily on large- and mid-cap companies, but it may also invest in small-cap stocks. CDC NVEST TARGETED EQUITY FUND invests primarily in a focused portfolio of common stocks of large companies. It may also invest in foreign securities and REITs. CDC NVEST GROWTH AND INCOME FUND may invest in growth stocks or value stocks of large- and mid-size companies. It may also invest in foreign securities. CDC NVEST BALANCED FUND invests approximately 65% of assets in common stocks and 35% in fixed-income securities. The fund's equity securities are allocated between growth and value stocks. It may also invest in foreign securities. CDC NVEST JURIKA & VOYLES RELATIVE VALUE FUND invests primarily in equity securities of quality companies with mid to large capitalizations. The fund may also invest in foreign securities and REITs. CDC NVEST LARGE CAP VALUE FUND invests primarily in value stocks. It may also invest in foreign securities. CDC NVEST SELECT FUND invests primarily in a concentrated portfolio of value stocks. CDC NVEST JURIKA & VOYLES SMALL CAP GROWTH FUND invests primarily in growth stocks of quality companies with small market capitalizations. CDC NVEST INTERNATIONAL EQUITY FUND invests primarily in growth-oriented companies outside the U.S., including emerging markets. THE RISKS SMALL-CAP STOCKS represent ownership of less well known, untried companies with little or no track record; they may have limited financial and management resources. Small-cap stocks may also be more volatile in price than the overall market and less liquid than large-cap stocks. EMERGING GROWTH STOCKS represent ownership of small, rapidly growing companies that are typically more volatile than the overall market. These stocks expose investors to the risks of small-cap stocks. GROWTH STOCKS tend to be more sensitive to market movements because their stock prices are based on future expectations, which may not be realized. VALUE STOCKS may fall out of favor with investors and underperform the broader market; there is no guarantee that they will return to favor. CONCENTRATING ON FEW STOCKS allows changes in the value of a single security (up or down) to have a greater impact on the fund's performance than it would if the fund were more broadly diversified. This means fund shares may be more volatile in price and more vulnerable to losses. FOREIGN AND EMERGING MARKET SECURITIES convey special risks, including political, economic, regulatory and currency risks, as well as differing accounting standards. Emerging markets may be more subject to these risks than developed markets. REAL ESTATE INVESTMENT TRUSTS (REITS) may change in price with underlying real estate values, rising interest rates, limited diversification of holdings. They may also incur other mortgage-related risks, such as pre-payment risks. NOT FDIC INSURED - MAY LOSE VALUE - NO BANK GUARANTEE 24 FINANCIAL STATEMENTS 25 LARGE CAP GROWTH FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2002
SHARES DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------------------- COMMON STOCKS -- 98.2% OF TOTAL NET ASSETS AEROSPACE & DEFENSE -- 8.4% 21,400 Honeywell International, Inc. $ 513,600 9,100 Northrop Grumman Corp. 882,700 23,100 Raytheon Co. 710,325 -------------- 2,106,625 -------------- BANKING -- 4.1% 19,600 State Street Corp. 764,400 5,400 Wells Fargo & Co. 253,098 -------------- 1,017,498 -------------- BEVERAGES, FOOD & TOBACCO -- 5.5% 10,300 Anheuser-Busch Cos., Inc. 498,520 14,700 PepsiCo, Inc. 620,634 8,500 Sysco Corp. 253,215 -------------- 1,372,369 -------------- BIOTECHNOLOGY -- 2.8% 14,700 Amgen, Inc.(c) 710,598 -------------- BUILDING MATERIALS -- 2.1% 21,700 Home Depot, Inc. 519,932 -------------- COMMERCIAL SERVICES -- 1.9% 45,700 Cendant Corp.(c) 478,936 -------------- COMMUNICATIONS -- 3.7% 69,900 Cisco Systems, Inc.(c) 915,690 -------------- COMPUTERS -- 4.7% 19,000 Dell Computer Corp.(c) 508,060 8,700 International Business Machines Corp. 674,250 -------------- 1,182,310 -------------- COSMETICS & PERSONAL CARE -- 1.0% 4,900 Colgate-Palmolive Co. 256,907 -------------- ELECTRICAL EQUIPMENT -- 4.3% 7,400 Emerson Electric Co. 376,290 29,000 General Electric Co. 706,150 -------------- 1,082,440 -------------- FINANCIAL SERVICES -- 6.5% 8,600 American Express Co. 304,010 9,200 Citigroup, Inc. 323,748 8,600 Fannie Mae 553,238 6,700 Goldman Sachs Group, Inc. 456,270 -------------- 1,637,266 -------------- FOOD RETAILERS -- 1.8% 30,000 Kroger Co. (The)(c) 463,500 -------------- HEALTH CARE PROVIDERS -- 2.3% 13,800 HCA, Inc. 572,700 -------------- HEALTHCARE-SERVICES -- 1.0% 11,300 Laboratory Corp. of America Holdings(c) 262,612 -------------- HOUSEHOLD PRODUCTS -- 3.1% 14,300 Johnson & Johnson 768,053 -------------- INSURANCE -- 5.3% 9,900 AMBAC Financial Group, Inc. 556,776 13,400 American International Group, Inc. 775,190 -------------- 1,331,966 -------------- MEDIA - BROADCASTING & PUBLISHING -- 0.8% 5,500 Clear Channel Communications, Inc.(c) $ 205,095 -------------- MEDICAL SUPPLIES -- 3.2% 8,400 Baxter International, Inc.(d) 235,200 12,200 Medtronic, Inc. 556,320 -------------- 791,520 -------------- OIL & GAS -- 4.3% 6,400 Anadarko Petroleum Corp. 306,560 7,500 BJ Services Co.(c) 242,325 14,100 Ocean Energy, Inc. 281,577 10,300 Transocean, Inc. 238,960 -------------- 1,069,422 -------------- PHARMACEUTICALS -- 13.3% 21,800 Bristol-Myers Squibb Co. 504,670 6,700 Eli Lilly & Co. 425,450 20,800 Merck & Co., Inc. 1,177,488 40,000 Pfizer, Inc. 1,222,800 -------------- 3,330,408 -------------- RESTAURANTS -- 1.1% 8,200 Brinker International, Inc.(c) 264,450 -------------- RETAILERS -- 6.3% 8,700 Walgreen Co. 253,953 26,200 Wal-Mart Stores, Inc. 1,323,362 -------------- 1,577,315 -------------- SEMICONDUCTORS -- 5.4% 9,400 Analog Devices, Inc.(c) 224,378 19,200 Applied Materials, Inc.(c) 250,176 56,000 Intel Corp. 871,920 -------------- 1,346,474 -------------- SOFTWARE -- 4.3% 20,900 Microsoft Corp.(c) 1,080,530 -------------- TRANSPORTATION -- 1.0% 3,900 United Parcel Service, Inc., Class B 246,012 -------------- Total Common Stocks (Identified Cost $30,431,431) 24,590,628 -------------- PRINCIPAL AMOUNT - ------------- SHORT TERM INVESTMENTS -- 3.0% $ 510,941 Repurchase Agreement with Investors Bank & Trust Co. dated 12/31/2002 at 1.00% to be repurchased at $510,969 on 1/02/2003, collateralized by $521,535 Federal Home Loan Mortgage Bond, 3.67%, due 10/15/2008 valued at $536,488 510,941 4,945 Bank of Montreal, 1.320%, 1/30/2003 (e) 4,945 48,905 BNP Paribas, 1.320%, 2/07/2003(e) 48,905 29,343 Canadian Imperial Bank of Commerce, 1.225%, 5/19/2003(e) 29,343 9,781 Comerica Bank, 1.400%, 11/19/2003(e) 9,781 48,905 Dreyfus Cash Management Plus Fund, 1.358%, 1/02/2003(e) 48,905 4,890 Galaxy Funding, 1.353%, 2/07/2003(e) 4,890 9,781 Goldman Sachs Group, Inc., 1.363%, 1/02/2003(e) 9,781 9,781 Liberty Lighthouse Funding, 1.343%, 1/14/2003(e) 9,781
See accompanying notes to financial statements. 26
PRINCIPAL AMOUNT DESCRIPTION VALUE (a) - -------------------------------------------------------------------------------------------- SHORT TERM INVESTMENTS -- CONTINUED $ 50,861 Merrimac Cash Fund, Premium Class, 1.422%, 1/02/2003(e) $ 50,861 26,408 Royal Bank of Scotland, 1.33%, 1/15/2003(e) 26,408 -------------- Total Short Term Investments (Identified Cost $754,541) 754,541 -------------- Total Investments -- 101.2% (Identified Cost $31,185,972)(b) 25,345,169 Other assets less liabilities (297,530) -------------- Total Net Assets -- 100% $ 25,047,639 --------------
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2002, the net unrealized depreciation on investments based on cost of $31,256,315 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 $ 118,516 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (6,029,662) -------------- Net unrealized depreciation $ (5,911,146) ==============
At December 31, 2002, the Fund had a capital loss carryover of approximately $41,153,499 of which $3,696,755 expires on December 31, 2008, $26,085,507 expires on December 31, 2009 and $11,371,237 expires on December 31, 2010. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2002, the Fund has elected to defer $1,881,354 of capital losses attributable to Post-October losses. (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at December 31, 2002. (e) Represents investments of securities lending collateral. See accompanying notes to financial statements. 27 CAPITAL GROWTH FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2002
SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- COMMON STOCKS -- 99.5% OF TOTAL NET ASSETS AEROSPACE & DEFENSE -- 1.0% 6,900 Curtiss-Wright Corp. $ 440,358 6,100 Lockheed Martin Corp. 352,275 -------------- 792,633 -------------- BANKING -- 0.9% 18,135 Cathay Bancorp, Inc. 688,949 -------------- BEVERAGES, FOOD & TOBACCO -- 1.0% 17,700 PepsiCo, Inc. 747,294 -------------- BIOTECHNOLOGY -- 2.1% 20,200 Amgen, Inc.(c) 976,468 92,400 Ribapharm, Inc.(c) 605,220 -------------- 1,581,688 -------------- BUILDING MATERIALS -- 1.9% 61,350 Home Depot, Inc. 1,469,946 -------------- COMMERCIAL SERVICES -- 0.6% 10,900 H&R Block, Inc. 438,180 -------------- COMMUNICATIONS -- 5.1% 104,600 AT&T Wireless Services, Inc.(c) 590,990 251,600 Cisco Systems, Inc.(c) 3,295,960 -------------- 3,886,950 -------------- COMPUTER SOFTWARE & PROCESSING-- 0.8% 39,000 Ingram Micro, Inc., Class A(c) 481,650 4,400 Tech Data Corp.(c)(d) 118,624 -------------- 600,274 -------------- COMPUTERS -- 7.1% 130,200 Dell Computer Corp.(c) 3,481,548 13,200 International Business Machines Corp. 1,023,000 24,900 Storage Technology Corp.(c) 533,358 17,500 Syntel, Inc.(c) 367,675 -------------- 5,405,581 -------------- COSMETICS & PERSONAL CARE -- 7.1% 17,600 Gillette Co. (The) 534,336 15,500 Kimberly-Clark Corp. 735,785 85,400 Nu Skin Enterprises, Inc., Class A 1,022,238 36,400 Procter & Gamble Co. 3,128,216 -------------- 5,420,575 -------------- ELECTRICAL EQUIPMENT -- 4.6% 142,600 General Electric Co. 3,472,310 -------------- ENVIRONMENTAL CONTROL -- 0.3% 6,100 Stericycle, Inc.(c) 197,512 -------------- FINANCIAL SERVICES -- 8.0% 26,900 American Express Co. 950,915 15,900 Capital One Financial Corp .(d) 472,548 28,100 Fannie Mae 1,807,673 11,200 Freddie Mac 661,360 100,800 MBNA Corp. 1,917,216 31,100 World Acceptance Corp.(c) 236,671 -------------- 6,046,383 -------------- HEALTH CARE PROVIDERS -- 4.8% 8,700 Pediatrix Medical Group(c) 348,522 20,200 UnitedHealth Group, Inc. 1,686,700 22,100 WellPoint Health Networks, Inc.(c) 1,572,636 -------------- 3,607,858 -------------- HOME CONSTRUCTION, FURNISHINGS & APPLIANCES -- 0.9% 2,000 NVR, Inc.(c)(d) $ 651,000 -------------- HOUSEHOLD PRODUCTS -- 7.1% 100,400 Johnson & Johnson 5,392,484 -------------- INTERNET -- 0.2% 9,200 Yahoo!, Inc.(c) 150,420 -------------- MEDIA - BROADCASTING & PUBLISHING -- 3.1% 6,700 Courier Corp. 307,128 68,400 USA Networks, Inc.(c)(d) 1,563,624 12,000 Westwood One, Inc.(c) 448,320 -------------- 2,319,072 -------------- MEDICAL SUPPLIES -- 6.4% 26,200 ALARIS Medical, Inc.(c) 159,820 23,700 Allergan, Inc. 1,365,594 15,600 Becton, Dickinson & Co. 478,764 11,500 Boston Scientific Corp.(c) 488,980 10,600 St. Jude Medical, Inc.(c) 421,032 25,000 STERIS Corp.(c) 606,250 27,700 Varian Medical Systems, Inc.(c) 1,373,920 -------------- 4,894,360 -------------- OFFICE/BUSINESS EQUIPMENT-- 0.5% 32,600 Ennis Business Forms, Inc. 378,812 -------------- OIL & GAS -- 3.2% 22,500 Anadarko Petroleum Corp. 1,077,750 9,100 Apache Corp. 518,609 26,600 Houston Exploration Co.(c) 813,960 -------------- 2,410,319 -------------- PHARMACEUTICALS -- 10.3% 19,800 Abbott Laboratories 792,000 10,600 Medimmune, Inc.(c) 288,002 38,600 Merck & Co., Inc. 2,185,146 11,200 Mylan Laboratories, Inc. 390,880 118,650 Pfizer, Inc.(d) 3,627,130 25,400 Schering-Plough Corp. 563,880 -------------- 7,847,038 -------------- RETAILERS -- 4.4% 14,000 Staples, Inc.(c) 256,200 60,600 Wal-Mart Stores, Inc. 3,060,906 -------------- 3,317,106 -------------- SEMICONDUCTORS -- 6.8% 25,100 Applied Materials, Inc.(c) 327,053 193,300 Intel Corp. 3,009,681 14,600 Microchip Technology, Inc. 356,970 18,000 QLogic Corp.(c)(d) 621,180 56,310 Texas Instruments, Inc. 845,213 -------------- 5,160,097 -------------- SOFTWARE -- 9.5% 12,200 BMC Software, Inc.(c) 208,742 20,100 Citrix Systems, Inc.(c) 247,632 48,800 Compuware Corp.(c) 234,240 3,100 Electronic Arts, Inc.(c) 154,287 20,300 First Data Corp. 718,823 93,500 Microsoft Corp.(c) 4,833,950 77,300 Oracle Corp.(c) 834,840 -------------- 7,232,514 --------------
See accompanying notes to financial statements. 28
SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- TEXTILES, CLOTHING & FABRICS -- 1.3% 8,300 Coach, Inc.(c) $ 273,236 7,600 Jones Apparel Group, Inc.(c) 269,344 9,600 NIKE, Inc., Class B 426,912 -------------- 969,492 -------------- TOYS/GAMES/HOBBIES -- 0.2% 13,800 Racing Champions Ertl Corp.(c) 188,370 -------------- TRANSPORTATION -- 0.3% 11,400 Swift Transportation Co., Inc.(c) 228,205 -------------- Total Common Stocks (Identified Cost $96,363,251) 75,495,422 -------------- PRINCIPAL AMOUNT --------- SHORT TERM INVESTMENTS -- 9.6% $ 591,513 Repurchase Agreement with Investors Bank & Trust Co. dated 12/31/2002 at 1.00% to be repurchased at $591,546 on 1/02/2003, collateralized by $574,886 Small Business Administration Bond, 5.125%, due 4/25/2016 valued at $621,089 591,513 134,948 Bank of Montreal, 1.320%, 1/30/2003(e) 134,948 1,334,663 BNP Paribas, 1.320%, 2/07/2003(e) 1,334,663 800,798 Canadian Imperial Bank of Commerce, 1.225%, 5/19/2003(e) 800,798 266,933 Comerica Bank, 1.400%, 11/19/2003(e) 266,933 1,334,663 Dreyfus Cash Management Plus Fund, 1.358%, 1/02/2003(e) 1,334,663 133,466 Galaxy Funding, 1.353%, 2/07/2003(e) 133,466 266,933 Goldman Sachs Group, Inc., 1.363%, 1/02/2003 (e) 266,933 266,933 Liberty Lighthouse Funding, 1.343%, 1/14/2003(e) 266,933 1,388,049 Merrimac Cash Fund, Premium Class, 1.422%, 1/02/2003(e) 1,388,049 720,718 Royal Bank of Scotland, 1.33%, 1/15/2003 (e) 720,718 -------------- Total Short Term Investments (Identified Cost $7,239,617) 7,239,617 -------------- Total Investments -- 109.1% (Identified Cost $103,602,868) (b) 82,735,039 Other assets less liabilities (6,891,356) -------------- Total Net Assets -- 100% $ 75,843,683 ==============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2002, the net unrealized depreciation on investments based on cost of $103,737,203 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 $ 2,811,420 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (23,813,584) -------------- Net unrealized depreciation $ (21,002,164) ==============
At December 31, 2002, the Fund had a capital loss carryover of approximately $53,531,761 of which $26,648,714 expires on December 31, 2009 and $26,883,047 expires on December 31, 2010. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2002, the Fund has elected to defer $2,293,916 of capital losses attributable to Post-October losses. (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at December 31, 2002. (e) Represents investments of securities lending collateral. See accompanying notes to financial statements. 29 TARGETED EQUITY FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2002
SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- COMMON STOCKS -- 99.6% OF TOTAL NET ASSETS BANKING -- 3.6% 135,000 Fifth Third Bancorp $ 7,904,250 220,000 Golden West Financial Corp. 15,798,200 -------------- 23,702,450 -------------- COSMETICS & PERSONAL CARE -- 5.9% 595,000 Avon Products, Inc. 32,052,650 75,000 Procter & Gamble Co. 6,445,500 -------------- 38,498,150 -------------- FINANCIAL SERVICES -- 14.9% 1,410,000 Citigroup, Inc. 49,617,900 462,000 Lehman Brothers Holdings, Inc. 24,619,980 1,220,000 MBNA Corp. 23,204,400 -------------- 97,442,280 -------------- HEALTH CARE PROVIDERS -- 8.9% 1,410,000 HCA, Inc. 58,515,000 -------------- HOME CONSTRUCTION, FURNISHINGS & APPLIANCES -- 34.5% 955,000 Centex Corp.(d) 47,941,000 2,197,200 D.R. Horton, Inc. 38,121,420 1,110,000 KB HOME(d) 47,563,500 1,075,900 Lennar Corp.(d) 55,516,440 781,300 Pulte Homes, Inc. 37,400,831 -------------- 226,543,191 -------------- INSURANCE -- 5.6% 630,000 American International Group, Inc. 36,445,500 -------------- PHARMACEUTICALS -- 10.5% 270,000 Forest Laboratories, Inc.(c) 26,519,400 800,000 Schering-Plough Corp. 17,760,000 645,000 Teva Pharmaceutical Industries, Ltd. (ADR)(d) 24,903,450 -------------- 69,182,850 -------------- RETAILERS -- 10.2% 510,000 Autozone, Inc.(c) 36,031,500 2,010,000 Gap (The), Inc.(d) 31,195,200 -------------- 67,226,700 -------------- SOFTWARE -- 5.5% 1,020,000 First Data Corp. 36,118,200 -------------- Total Common Stocks (Identified Cost $609,858,326) 653,674,321 -------------- PRINCIPAL AMOUNT DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- SHORT TERM INVESTMENTS -- 2.9% $ 4,180,516 Repurchase Agreement with Investors Bank & Trust Co. dated 12/31/2002 at 1.00% to be repurchased at $4,180,748 on 1/02/2003, collateralized by $4,267,197 Federal Home Loan Mortgage Bond, 3.67%, due 10/15/2008 valued at $4,389,542 $ 4,180,516 299,773 Bank of Montreal, 1.320%, 1/30/2003(e) 299,773 2,964,811 BNP Paribas, 1.320%, 2/07/2003(e) 2,964,811 1,778,887 Canadian Imperial Bank of Commerce, 1.225%, 5/19/2003(e) 1,778,887 592,962 Comerica Bank, 1.400%, 11/19/2003(e) 592,962 2,964,811 Dreyfus Cash Management Plus Fund, 1.358%, 1/02/2003(e) 2,964,811 296,481 Galaxy Funding, 1.353%, 2/07/2003(e) 296,481 592,962 Goldman Sachs Group, Inc., 1.363%, 1/02/2003(e) 592,962 592,962 Liberty Lighthouse Funding, 1.343%, 1/14/2003(e) 592,962 3,083,403 Merrimac Cash Fund, Premium Class, 1.422%, 1/02/2003(e) 3,083,403 1,600,998 Royal Bank of Scotland, 1.33%, 1/15/2003(e) 1,600,998 -------------- Total Short Term Investments (Identified Cost $18,948,566) 18,948,566 -------------- Total Investments-- 102.5% (Identified Cost $628,806,892) (b) 672,622,887 Other assets less liabilities (16,292,123) -------------- Total Net Assets-- 100% $ 656,330,764 ==============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2002, the net unrealized appreciation on investments based on cost of $628,907,353 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 $ 61,251,623 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (17,536,089) -------------- Net unrealized appreciation $ 43,715,534 ==============
At December 31, 2002, the Fund had a capital loss carryover of approximately $382,471,007 of which $187,367,538 expires on December 31, 2009 and $195,103,469 expires on December 31, 2010. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2002, the Fund has elected to defer $51,910,302 of capital losses attributable to Post-October losses. (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at December 31, 2002. (e) Represents investments of securities lending collateral. ADR An American Depositary Receipt (ADR) 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 GROWTH AND INCOME FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2002
SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- COMMON STOCKS -- 94.4% OF TOTAL NET ASSETS ADVERTISING -- 3.3% 509,600 Interpublic Group of Cos. (The), Inc. $ 7,175,168 -------------- AEROSPACE & DEFENSE -- 3.9% 95,200 Boeing Co. (The) 3,140,648 223,400 Honeywell International, Inc. 5,361,600 -------------- 8,502,248 -------------- BANKING -- 7.0% 267,300 US Bancorp 5,672,106 278,200 Washington Mutual, Inc. 9,606,246 -------------- 15,278,352 -------------- BEVERAGES, FOOD & TOBACCO -- 10.0% 88,158 Del Monte Foods Co.(c) 678,816 113,400 Diageo PLC (ADR) 4,966,920 84,800 General Mills, Inc. 3,981,360 197,400 H.J. Heinz Co. 6,488,538 150,000 Kraft Foods, Inc. 5,839,500 -------------- 21,955,134 -------------- BUILDING MATERIALS -- 5.1% 201,900 Home Depot, Inc. 4,837,524 299,000 Masco Corp. 6,293,950 -------------- 11,131,474 -------------- COMMERCIAL SERVICES -- 2.5% 514,100 Cendant Corp.(c) 5,387,768 -------------- COMMUNICATIONS -- 3.8% 516,300 General Motors Corp., Class H (Hughes Electronics Corp.)(c) 5,524,410 333,700 Motorola, Inc. 2,886,505 -------------- 8,410,915 -------------- COMPUTERS -- 2.3% 271,300 Electronic Data Systems Corp. 5,000,059 -------------- ELECTRIC UTILITIES -- 3.7% 148,900 Duke Energy Corp. 2,909,506 274,800 TXU Corp. 5,133,264 -------------- 8,042,770 -------------- ENTERTAINMENT & LEISURE -- 2.8% 378,000 Walt Disney Co. (The) 6,165,180 -------------- ENVIRONMENTAL CONTROL -- 2.2% 212,900 Waste Management, Inc. 4,879,668 -------------- FINANCIAL SERVICES -- 2.6% 88,400 Fannie Mae 5,686,772 -------------- FOOD RETAILERS -- 5.6% 431,000 Kroger Co. (The)(c) 6,658,950 241,600 Safeway, Inc.(c) 5,643,776 -------------- 12,302,726 -------------- HOUSEHOLD PRODUCTS -- 2.2% 103,000 Fortune Brands, Inc. 4,790,530 -------------- INDUSTRIAL - DIVERSIFIED -- 1.1% 37,900 Illinois Tool Works, Inc. 2,458,194 -------------- MEDIA - BROADCASTING & PUBLISHING -- 11.8% 481,300 AOL Time Warner, Inc.(c) 6,305,031 321,400 Comcast Corp., Special Class A(c) 7,250,784 47,300 Gannett Co., Inc. 3,396,140 1,004,800 Liberty Media Corp.(c) 8,982,912 -------------- 25,934,867 -------------- MEDICAL SUPPLIES -- 3.8% 273,800 Guidant Corp.(c) $ 8,446,730 -------------- OIL & GAS -- 5.0% 147,000 Burlington Resources, Inc. 6,269,550 95,446 ConocoPhillips 4,618,632 -------------- 10,888,182 -------------- PHARMACEUTICALS -- 5.0% 68,100 Abbott Laboratories 2,724,000 42,300 Bristol-Myers Squibb Co. 979,245 128,200 Merck & Co., Inc. 7,257,402 -------------- 10,960,647 -------------- RESTAURANTS -- 2.3% 316,800 McDonald's Corp. 5,094,144 -------------- RETAILERS -- 3.5% 496,300 Gap (The), Inc. 7,702,576 -------------- SOFTWARE -- 2.5% 158,200 First Data Corp. 5,601,862 -------------- TELEPHONE SYSTEMS -- 1.4% 205,800 Sprint Corp. (FON Group) 2,979,984 -------------- TOYS/GAMES/HOBBIES -- 1.0% 111,500 Mattel, Inc. 2,135,225 -------------- Total Common Stocks (Identified Cost $236,870,320) 206,911,175 -------------- PRINCIPAL AMOUNT --------- SHORT TERM INVESTMENTS -- 4.6% $ 10,020,845 Repurchase Agreement with Investors Bank & Trust Co. dated 12/31/2002 at 1.00% to be repurchased at $10,021,402 on 1/02/2003, collateralized by $10,448,339 Government National Mortgage Bond, 1.87%, due 1/16/2032 valued at $10,521,887 10,020,845 -------------- Total Short Term Investment (Identified Cost $10,020,845) 10,020,845 -------------- Total Investments -- 99.0% (Identified Cost $246,891,165) (b) 216,932,020 Other assets less liabilities 2,263,725 -------------- Total Net Assets -- 100% $ 219,195,745 ==============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2002, the net unrealized depreciation on investments based on cost of $247,455,730 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 $ 3,436,464 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (33,960,174) -------------- Net unrealized depreciation $ (30,523,710) ==============
At December 31, 2002, the Fund had a capital loss carryover of approximately $109,950,271 of which $19,895,206 expires on December 31, 2008, $69,951,207 expires on December 31, 2009 and $20,103,858 expires on December 31, 2010. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2002, the Fund has elected to defer $4,943,400 of capital losses attributable to Post-October losses. (c) Non-income producing security. ADR An American Depositary Receipt (ADR) 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. 31 BALANCED FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2002
SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- COMMON STOCKS -- 57.4% OF TOTAL NET ASSETS ADVERTISING -- 0.5% 8,050 Omnicom Group, Inc. $ 520,030 -------------- AIRLINES -- 0.8% 54,200 AMR Corp. Delaware (d) 357,720 31,600 Southwest Airlines Co. 439,240 -------------- 796,960 -------------- AUTOMOTIVE -- 0.7% 14,625 Harley-Davidson, Inc. 675,675 -------------- BANKING -- 3.3% 12,850 Bank of America Corp. (e) 893,974 14,100 Bank One Corp. 515,355 11,400 Comerica, Inc. 492,936 18,100 Mellon Financial Corp. 472,591 19,800 Wells Fargo & Co. 928,026 -------------- 3,302,882 -------------- BEVERAGES, FOOD & TOBACCO -- 1.6% 12,100 Hormel Foods Corp. 282,293 8,875 Kraft Foods, Inc. 345,504 7,450 PepsiCo, Inc. 314,539 22,875 Sysco Corp. 681,446 -------------- 1,623,782 -------------- BIOTECHNOLOGY -- 0.7% 12,850 Amgen, Inc. (d) 679,177 -------------- BUILDING MATERIALS -- 0.8% 41,150 Masco Corp. 866,207 -------------- CHEMICALS -- 0.5% 15,300 Rohm & Haas Co. 496,944 -------------- COMMERCIAL SERVICES -- 1.6% 71,200 Cendant Corp. (d)(e) 746,176 21,150 Moody's Corp. 873,283 -------------- 1,619,459 -------------- COMMUNICATIONS -- 3.1% 116,800 3Com Corp. (d) 540,784 103,150 Cisco Systems, Inc. (d) 1,351,265 54,900 Nextel Communications, Inc. (d) 634,095 8,350 QUALCOMM, Inc. (d) 303,856 28,900 Scientific-Atlanta, Inc. 342,754 -------------- 3,172,754 -------------- COMPUTERS -- 3.5% 23,100 Computer Sciences Corp. (d)(e) 795,795 25,475 Dell Computer Corp. (d) 681,201 15,800 Electronic Data Systems Corp. 291,194 55,375 Hewlett-Packard Co. 961,310 8,150 International Business Machines Corp. 631,625 10,900 SanDisk Corp. (d)(e) 221,270 -------------- 3,582,395 -------------- COSMETICS & PERSONAL CARE -- 0.7% 8,500 Kimberly-Clark Corp. 403,495 3,150 Procter & Gamble Co. 270,711 -------------- 674,206 -------------- ELECTRICAL EQUIPMENT -- 1.6% 10,600 Emerson Electric Co. 539,010 44,100 General Electric Co. 1,073,835 -------------- 1,612,845 -------------- ENTERTAINMENT & LEISURE -- 0.6% 34,000 Blockbuster, Inc., Class A $ 416,500 13,100 Sabre Holdings Corp. (d) 237,241 -------------- 653,741 -------------- FINANCIAL SERVICES -- 3.8% 30,350 Citigroup, Inc. 1,068,016 23,300 Freddie Mac 1,375,865 4,225 Goldman Sachs Group, Inc. 287,722 13,325 Lehman Brothers Holdings, Inc. 710,089 4,000 SLM Corp. 415,440 -------------- 3,857,132 -------------- FOOD RETAILERS -- 0.5% 20,500 Safeway, Inc. (d) 478,880 -------------- HEALTH CARE PROVIDERS -- 2.0% 11,600 UnitedHealth Group, Inc. 968,600 14,200 WellPoint Health Networks, Inc. (d) 1,010,472 -------------- 1,979,072 -------------- HEALTHCARE-SERVICES -- 0.5% 8,800 Quest Diagnostics, Inc. (d)(e) 500,720 -------------- HEAVY CONSTRUCTION -- 0.5% 19,700 Fluor Corp. 551,600 -------------- HEAVY MACHINERY -- 1.3% 26,200 Cognex Corp. (d) 482,866 17,600 Deere & Co. 806,960 -------------- 1,289,826 -------------- HOUSEHOLD PRODUCTS -- 0.7% 13,550 Johnson & Johnson 727,770 -------------- INDUSTRIAL - DIVERSIFIED -- 1.1% 8,700 3M Co. 1,072,710 -------------- INSURANCE -- 2.5% 9,700 American International Group, Inc. 561,145 13,000 IPC Holdings, Ltd. (d) 410,020 5,700 PartnerRe, Ltd. 295,374 22,700 Protective Life Corp. 624,704 8,500 Prudential Financial, Inc. 269,790 11,300 Safeco Corp. 391,771 -------------- 2,552,804 -------------- INTERNET -- 0.6% 5,075 eBay, Inc. (d) 344,187 7,475 Symantec Corp. (d) 302,364 -------------- 646,551 -------------- MEDIA - BROADCASTING & PUBLISHING -- 3.2% 18,450 Clear Channel Communications, Inc. (d) 688,001 7,400 Gannett Co., Inc. 531,320 21,600 McGraw-Hill Cos. (The), Inc. 1,305,504 16,450 Viacom, Inc., Class B (d)(e) 670,502 -------------- 3,195,327 -------------- MEDICAL SUPPLIES -- 1.1% 9,950 Medtronic, Inc. 453,720 15,500 Zimmer Holdings, Inc. (d) 643,560 -------------- 1,097,280 -------------- OIL & GAS -- 2.9% 14,000 Baker Hughes, Inc. 450,660 12,100 ChevronTexaco Corp. 804,408 29,100 GlobalSantaFe Corp. 707,712
See accompanying notes to financial statements. 32
SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- OIL & GAS -- CONTINUED 61,200 Suncor Energy, Inc. $ 959,004 -------------- 2,921,784 -------------- PHARMACEUTICALS -- 4.3% 9,900 Bristol-Myers Squibb Co. 229,185 5,225 Cardinal Health, Inc. 309,268 7,600 Eli Lilly & Co. 482,600 9,775 Forest Laboratories, Inc. (d) 960,101 50,275 Pfizer, Inc. 1,536,907 19,536 Pharmacia Corp. 816,605 -------------- 4,334,666 -------------- RESTAURANTS -- 1.3% 29,300 Brinker International, Inc. (d) 944,925 12,200 Wendy's International, Inc. 330,254 -------------- 1,275,179 -------------- RETAILERS -- 4.1% 4,125 Autozone, Inc. (d) 291,431 14,225 Bed Bath & Beyond, Inc. (d) 491,189 20,525 Best Buy Co., Inc. (d) 495,679 8,100 Costco Wholesale Corp. (d) 227,286 18,100 Federated Department Stores, Inc. (d) 520,556 45,400 Gap (The), Inc. 704,608 6,450 Kohl's Corp. (d) 360,878 20,225 Wal-Mart Stores, Inc. 1,021,565 -------------- 4,113,192 -------------- SEMICONDUCTORS -- 1.3% 43,500 LSI Logic Corp. (d) 250,995 19,950 Microchip Technology, Inc. 487,778 4,500 QLogic Corp. (d)(e) 155,295 23,200 STMicroelectronics NV (e) 452,632 -------------- 1,346,700 -------------- SOFTWARE -- 3.9% 31,900 Activision, Inc. (d)(e) 465,421 5,050 Electronic Arts, Inc. (d) 251,339 9,900 First Data Corp. 350,559 9,075 Intuit, Inc. (d) 425,799 27,350 Microsoft Corp. (d) 1,413,995 48,275 Oracle Corp. (d) 521,370 79,200 Transaction Systems Architects, Inc. (d) 514,800 -------------- 3,943,283 -------------- TELEPHONE SYSTEMS -- 0.7% 25,200 SBC Communications, Inc. 683,172 -------------- TEXTILES, CLOTHING & FABRICS -- 0.6% 14,700 NIKE, Inc., Class B 653,709 -------------- TRANSPORTATION -- 0.5% 26,800 Norfolk Southern Corp. 535,732 -------------- Total Common Stocks (Identified Cost $66,556,250) 58,034,146 -------------- RATINGS(c) -------------- PRINCIPAL (UNAUDITED) AMOUNT MOODY'S - -------------------------------------------------------------------------------------------------------------- BONDS AND NOTES -- 39.6% AIRLINES -- 0.4% $ 600,000 Delta Air Lines, Inc. 0/9.200%, 9/23/2014 Ba1 $ 431,448 --------------- ASSET-BACKED -- 0.7% 700,000 Capital Auto Receivables Asset Trust, Series 2002-3, Class A3 3.580%, 10/16/2006 Aaa 722,435 --------------- AUTOMOTIVE -- 1.1% $ 1,265,000 Ford Motor Co. 7.450%, 7/16/2031 Baa1 $ 1,100,384 --------------- BANKING -- 0.6% 600,000 US Bancorp 5.100%, 7/15/2007 -- 642,260 --------------- BEVERAGES, FOOD & TOBACCO -- 1.8% 200,000 ConAgra Foods, Inc. 6.750%, 9/15/2011 -- 227,432 260,000 Kellogg Co. 6.600%, 4/01/2011 Baa2 292,824 1,200,000 Kraft Foods, Inc. 5.625%, 11/01/2011 A2 1,282,877 --------------- 1,803,133 --------------- CHEMICALS -- 1.7% 1,000,000 IMC Global, Inc. 7.625%, 11/01/2005 Ba3 960,000 600,000 Lyondell Chemical Co. 10.875%, 5/01/2009 (e) B2 513,000 200,000 Rohm & Haas Co. 7.850%, 7/15/2029 A3 250,060 --------------- 1,723,060 --------------- ELECTRIC UTILITIES -- 1.6% 700,000 Consolidated Edison Co. of New York 5.625%, 7/01/2012 A1 748,541 650,000 Dominion Resources, Inc. 5.700%, 9/17/2012 -- 674,151 200,000 Duke Energy Corp. 6.250%, 1/15/2012 A1 208,734 --------------- 1,631,426 --------------- FINANCIAL SERVICES -- 3.8% 700,000 Capital One Bank 6.875%, 2/01/2006 Baa2 677,216 850,000 Countrywide Home Loans, Inc., Medium Term Note 5.500%, 2/01/2007 A3 902,493 500,000 General Electric Capital Corp. 6.000%, 6/15/2012 Aaa 539,837 225,000 General Electric Capital Corp., Medium Term Note 6.750%, 3/15/2032 (e) Aaa 248,758 900,000 International Lease Finance Corp. 6.375%, 3/15/2009 A1 961,456 440,000 Lehman Brothers Holdings, Inc. 7.000%, 2/01/2008 A2 497,445 --------------- 3,827,205 --------------- FOREST PRODUCTS & PAPER-- 1.4% 1,000,000 Fort James Corp. 6.875%, 9/15/2007 Ba1 950,000 425,000 Weyerhaeuser Co. 5.950%, 11/01/2008 -- 453,685 --------------- 1,403,685 --------------- INSURANCE -- 0.3% 300,000 ReliaStar Financial Corp. 8.000%, 10/30/2006 Aa3 342,856 --------------- LODGING -- 0.6% 600,000 Host Marriott LP 9.500%, 1/15/2007 -- 609,000 --------------- MEDIA - BROADCASTING & PUBLISHING -- 1.1% 600,000 AOL Time Warner, Inc. 6.625%, 5/15/2029 Baa1 551,654
See accompanying notes to financial statements. 33
RATINGS (c) -------------- PRINCIPAL (UNAUDITED) AMOUNT DESCRIPTION MOODY'S VALUE (a) - -------------------------------------------------------------------------------------------------------------- MEDIA - BROADCASTING & PUBLISHING -- CONTINUED $ 500,000 Clear Channel Communications, Inc. 7.650%, 9/15/2010 Baa3 $ 566,426 --------------- 1,118,080 --------------- MORTGAGE-BACKED -- 12.7% 488,404 Federal Home Loan Mortgage Corp. 6.500%, 7/01/2016 Aaa 516,490 354,664 Federal Home Loan Mortgage Corp. 7.000%, 5/01/2031 Aaa 372,772 1,094,911 Federal National Mortgage Association 5.500%, 5/01/2017 Aaa 1,136,801 1,335,964 Federal National Mortgage Association 6.000%, 10/01/2016 Aaa 1,398,507 812,580 Federal National Mortgage Association 6.000%, 5/01/2016 Aaa 850,621 540,516 Federal National Mortgage Association 6.500%, 7/01/2028 Aaa 563,694 1,638,483 Federal National Mortgage Association 6.500%, 4/01/2032 Aaa 1,706,768 537,193 Federal National Mortgage Association 6.500%, 9/01/2031 Aaa 559,591 269,296 Federal National Mortgage Association 7.000%, 10/01/2029 Aaa 283,493 1,186,366 Federal National Mortgage Association 7.500%, 8/01/2031 Aaa 1,259,612 3,257,267 Government National Mortgage Association 6.000%, 1/15/2032 Aaa 3,395,731 401,404 Government National Mortgage Association 7.000%, 11/15/2028 Aaa 426,460 311,882 Government National Mortgage Association 8.000%, 12/15/2025 Aaa 340,537 --------------- 12,811,077 --------------- OIL & GAS -- 1.5% 400,000 Devon Financing Corp. ULC 6.875%, 9/30/2011 -- 445,543 600,000 ENSCO International, Inc. 6.750%, 11/15/2007 -- 668,040 400,000 Kerr-McGee Corp. 5.875%, 9/15/2006 Baa2 433,657 --------------- 1,547,240 --------------- REITS - MALLS -- 1.1% 1,000,000 Simon Property Group LP 6.375%, 11/15/2007 Baa1 1,081,679 --------------- RESTAURANTS -- 1.0% 950,000 Yum! Brands, Inc. 8.500%, 4/15/2006 Ba1 1,009,375 --------------- RETAILERS-- 0.3% 280,000 Target Corp. 7.500%, 8/15/2010 A2 332,386 --------------- TELEPHONE SYSTEMS-- 0.8% 675,000 Sprint Capital Corp. 6.125%, 11/15/2008 Baa3 614,250 200,000 Verizon New Jersey, Inc. 5.875%, 1/17/2012 -- 211,903 --------------- 826,153 --------------- U.S. GOVERNMENT -- 7.1% 4,100,000 United States Treasury Bonds 6.000%, 2/15/2026 Aaa 4,698,506 $ 1,875,000 United States Treasury Bonds 7.500%, 11/15/2016 Aaa $ 2,452,001 --------------- 7,150,507 --------------- Total Bonds and Notes (Identified Cost $38,657,969) 40,113,389 --------------- PRINCIPAL AMOUNT --------- SHORT TERM INVESTMENTS -- 7.8% 2,927,257 Repurchase Agreement with Investors Bank & Trust Co. dated 12/31/2002 at 1.00% to be repurchased at $2,927,420 on 1/02/2003, collateralized by $3,041,515 Federal Home Loan Mortgage Bond, 5.102%, due 2/01/2026 valued at $3,073,694 2,927,257 100,732 Bank of Montreal, 1.320%, 1/30/2003 (f) 100,732 996,257 BNP Paribas, 1.320%, 2/07/2003 (f) 996,257 597,754 Canadian Imperial Bank of Commerce, 1.225%, 5/19/2003 (f) 597,754 199,251 Comerica Bank, 1.400%, 11/19/2003 (f) 199,251 996,257 Dreyfus Cash Management Plus Fund, 1.358%, 1/02/2003 (f) 996,257 99,626 Galaxy Funding, 1.353%, 2/07/2003 (f) 99,626 199,251 Goldman Sachs Group, Inc., 1.363%, 1/02/2003 (f) 199,251 199,251 Liberty Lighthouse Funding, 1.343%, 1/14/2003 (f) 199,251 1,036,107 Merrimac Cash Fund, Premium Class, 1.422%, 1/02/2003 (f) 1,036,107 537,978 Royal Bank of Scotland, 1.33%, 1/15/2003 (f) 537,978 --------------- Total Short Term Investments (Identified Cost $7,889,721) 7,889,721 --------------- Total Investments -- 104.8% (Identified Cost $113,103,940) (b) 106,037,256 Other assets less liabilities (4,897,508) --------------- Total Net Assets -- 100% $ 101,139,748 ===============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2002, the net unrealized depreciation on investments based on cost of $113,554,679 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 $ 3,157,153 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (10,674,576) --------------- Net unrealized depreciation $ (7,517,423) ===============
At December 31, 2002, the Fund had a capital loss carryover of approximately $44,041,807 of which $15,926,671 expires on December 31, 2008, $14,747,536 expires on December 31, 2009 and $13,367,600 expires on December 31, 2010. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2002, the Fund has elected to defer $639,357 of capital losses attributable to Post-October losses. At December 31, 2002, the components of distributable earnings, excluding unrealized appreciation/depreciation, disclosed on a tax basis consisted of $129,989 in undistributed ordinary income and $0 in undistributed long-term gains. (c) The ratings shown are believed to be the most recent ratings available at December 31, 2002. Securities are generally rated at the time of issuance. Rating agencies may revise their ratings 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, 2002. 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. (d) Non-income producing security. (e) All or a portion of this security was on loan to brokers at December 31, 2002. (f) Represents investments of securities lending collateral. See accompanying notes to financial statements. 34 JURIKA & VOYLES RELATIVE VALUE FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2002
SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- COMMON STOCKS -- 94.7% OF TOTAL NET ASSETS AIRLINES -- 2.1% 22,700 AMR Corp. Delaware (c) $ 149,820 15,175 Southwest Airlines Co. 210,932 -------------- 360,752 -------------- BANKING -- 4.9% 7,400 Comerica, Inc. 319,976 11,400 Mellon Financial Corp. 297,654 4,700 Wells Fargo & Co. 220,289 -------------- 837,919 -------------- BEVERAGES, FOOD & TOBACCO -- 3.1% 14,200 Hormel Foods Corp. 331,286 6,500 Sysco Corp. 193,635 -------------- 524,921 -------------- BUILDING MATERIALS -- 3.3% 26,700 Masco Corp. 562,035 -------------- CHEMICALS -- 1.6% 8,500 Rohm & Haas Co. 276,080 -------------- COMMERCIAL SERVICES -- 2.5% 40,000 Cendant Corp. (c)(d) 419,200 -------------- COMMUNICATIONS -- 2.7% 51,000 3Com Corp. (c) 236,130 18,300 Scientific-Atlanta, Inc. (d) 217,038 -------------- 453,168 -------------- COMPUTERS -- 3.7% 9,000 Computer Sciences Corp. (c)(d) 310,050 9,800 Electronic Data Systems Corp. 180,614 6,600 SanDisk Corp. (c) 133,980 -------------- 624,644 -------------- COSMETICS & PERSONAL CARE -- 1.5% 5,500 Kimberly-Clark Corp. 261,085 -------------- ELECTRICAL EQUIPMENT -- 2.0% 6,800 Emerson Electric Co. 345,780 -------------- ENTERTAINMENT & LEISURE -- 2.4% 21,200 Blockbuster, Inc., Class A 259,700 8,100 Sabre Holdings Corp. (c) 146,691 -------------- 406,391 -------------- FINANCIAL SERVICES -- 4.4% 12,700 Freddie Mac 749,935 -------------- FOOD RETAILERS -- 1.5% 11,200 Safeway, Inc. (c) 261,632 -------------- HEALTH CARE PROVIDERS -- 3.3% 8,000 WellPoint Health Networks, Inc. (c) 569,280 -------------- HEAVY CONSTRUCTION -- 2.0% 12,400 Fluor Corp. 347,200 -------------- HEAVY MACHINERY -- 5.1% 15,100 Cognex Corp. (c) 278,293 13,000 Deere & Co. 596,050 -------------- 874,343 -------------- INSURANCE -- 8.9% 6,100 American International Group, Inc. $ 352,885 8,400 IPC Holdings, Ltd. (c) 264,936 3,800 PartnerRe, Ltd. 196,916 10,800 Protective Life Corp. 297,216 5,300 Prudential Financial, Inc. 168,222 7,100 Safeco Corp. 246,157 -------------- 1,526,332 -------------- MEDIA - BROADCASTING & PUBLISHING -- 5.5% 4,700 Gannett Co., Inc. 337,460 9,800 McGraw-Hill Cos. (The), Inc. 592,312 -------------- 929,772 -------------- OIL & GAS -- 9.1% 6,100 Baker Hughes, Inc. 196,359 6,000 ChevronTexaco Corp. 398,880 18,500 GlobalSantaFe Corp. 449,920 32,600 Suncor Energy, Inc. 510,842 -------------- 1,556,001 -------------- PHARMACEUTICALS -- 5.2% 6,400 Bristol-Myers Squibb Co. 148,160 9,300 Pfizer, Inc. 284,301 10,702 Pharmacia Corp. 447,344 -------------- 879,805 -------------- RESTAURANTS -- 3.5% 11,900 Brinker International, Inc. (c) 383,775 7,900 Wendy's International, Inc. 213,853 -------------- 597,628 -------------- RETAILERS -- 2.8% 5,200 Costco Wholesale Corp. (c) 145,912 11,600 Federated Department Stores, Inc. (c) 333,616 -------------- 479,528 -------------- SEMICONDUCTORS -- 2.5% 26,800 LSI Logic Corp. (c) 154,636 13,600 STMicroelectronics NV (d) 265,336 -------------- 419,972 -------------- SOFTWARE -- 4.4% 20,600 Activision, Inc. (c)(d) 300,554 6,300 First Data Corp. 223,083 34,300 Transaction Systems Architects, Inc. (c) 222,950 -------------- 746,587 -------------- TELEPHONE SYSTEMS -- 2.2% 13,900 SBC Communications, Inc. 376,829 -------------- TEXTILES, CLOTHING & FABRICS -- 2.5% 9,500 NIKE, Inc., Class B 422,465 -------------- TRANSPORTATION -- 2.0% 17,000 Norfolk Southern Corp. 339,830 -------------- Total Common Stocks (Identified Cost $19,548,447) 16,149,114 --------------
See accompanying notes to financial statements. 35
PRINCIPAL AMOUNT DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- SHORT TERM INVESTMENTS -- 12.8% $ 924,043 Repurchase Agreement with Investors Bank & Trust Co. dated 12/31/2002 at 1.00% to be repurchased at $924,094 on 1/02/2003, collateralized by $905,375 Small Business Administration Bond, 5.375%, due 6/25/2014 valued at $970,245 $ 924,043 25,536 Bank of Montreal, 1.320%, 1/30/2003 (e) 25,536 252,554 BNP Paribas, 1.320%, 2/07/2003 (e) 252,554 151,533 Canadian Imperial Bank of Commerce, 1.225%, 5/19/2003 (e) 151,533 50,511 Comerica Bank, 1.400%, 11/19/2003 (e) 50,511 252,554 Dreyfus Cash Management Plus Fund, 1.358%, 1/02/2003 (e) 252,554 25,255 Galaxy Funding, 1.353%, 2/07/2003 (e) 25,255 50,511 Goldman Sachs Group, Inc., 1.363%, 1/02/2003 (e) 50,511 50,511 Liberty Lighthouse Funding, 1.343%, 1/14/2003 (e) 50,511 262,656 Merrimac Cash Fund, Premium Class, 1.422%, 1/02/2003 (e) 262,656 136,379 Royal Bank of Scotland, 1.33%, 1/15/2003 (e) 136,379 -------------- Total Short Term Investments (Identified Cost $2,182,043) 2,182,043 -------------- Total Investments -- 107.5% (Identified Cost $21,730,490) (b) 18,331,157 Other assets less liabilities (1,275,779) -------------- Total Net Assets -- 100% $ 17,055,378 ==============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2002, the net unrealized depreciation on investments based on cost of $21,848,301 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 $ 956,703 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (4,473,847) -------------- Net unrealized depreciation $ (3,517,144) ==============
At December 31, 2002, the Fund had a capital loss carryover of approximately $3,163,163 of which $3,163,163 expires on December 31, 2010. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2002, the Fund has elected to defer $114,573 of capital losses attributable to Post-October losses. (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at December 31, 2002. (e) Represents investments of securities lending collateral. See accompanying notes to financial statements. 36 LARGE CAP VALUE FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2002
SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- COMMON STOCKS -- 98.1% OF TOTAL NET ASSETS AEROSPACE & DEFENSE -- 3.8% 1,900 General Dynamics Corp. $ 150,803 6,300 Goodrich Corp. 115,416 8,600 Raytheon Co. 264,450 -------------- 530,669 -------------- BANKING -- 10.7% 4,000 Bank of America Corp. (d) 278,280 12,900 Bank Of New York Co. (The), Inc. 309,084 12,600 Mellon Financial Corp. 328,986 10,300 US Bancorp 218,566 6,200 Wachovia Corp. 225,928 4,000 Washington Mutual, Inc. 138,120 -------------- 1,498,964 -------------- BEVERAGES, FOOD & TOBACCO -- 8.3% 4,000 Anheuser-Busch Cos., Inc. 193,600 3,000 Coca-Cola Co. (The) 131,460 3,500 General Mills, Inc. 164,325 6,500 Kraft Foods, Inc. 253,045 9,740 PepsiCo, Inc. 411,223 -------------- 1,153,653 -------------- BUILDING MATERIALS -- 2.0% 2,200 American Standard Cos., Inc. (c) 156,508 3,400 Lowe's Cos., Inc. 127,500 -------------- 284,008 -------------- COMMERCIAL SERVICES -- 0.9% 12,100 Cendant Corp. (c) 126,808 -------------- COMMUNICATIONS -- 1.3% 13,500 Cisco Systems, Inc. (c) 176,850 -------------- COMPUTERS -- 3.5% 6,200 Dell Computer Corp. (c) 165,788 9,600 Hewlett-Packard Co. 166,656 2,000 International Business Machines Corp. 155,000 -------------- 487,444 -------------- COSMETICS & PERSONAL CARE -- 1.0% 2,700 Colgate-Palmolive Co. 141,561 -------------- ELECTRIC UTILITIES -- 1.0% 4,400 FirstEnergy Corp. 145,068 -------------- ELECTRICAL EQUIPMENT -- 3.7% 6,200 Emerson Electric Co. 315,270 8,400 General Electric Co. 204,540 -------------- 519,810 -------------- ELECTRONICS -- 1.1% 1,900 Johnson Controls, Inc. 152,323 -------------- FINANCIAL SERVICES -- 11.7% 4,000 American Express Co. 141,400 4,800 Capital One Financial Corp. (d) 142,656 11,800 Citigroup, Inc. 415,242 5,400 Fannie Mae 347,382 2,700 Goldman Sachs Group, Inc. 183,870 10,500 J.P. Morgan Chase & Co. 252,000 4,000 Merrill Lynch & Co., Inc. 151,800 -------------- 1,634,350 -------------- FOREST PRODUCTS & PAPER -- 1.0% 10,900 Sappi, Ltd. (ADR) 144,098 -------------- HEALTH CARE PROVIDERS -- 3.2% 7,400 HCA, Inc. $ 307,100 8,400 Tenet Healthcare Corp. (c) 137,760 -------------- 444,860 -------------- HOUSEHOLD PRODUCTS -- 2.4% 5,400 Avery Dennison Corp. 329,832 -------------- INSURANCE -- 10.8% 8,800 ACE, Ltd. 258,192 3,500 AMBAC Financial Group, Inc. 196,840 5,674 American International Group, Inc. 328,241 4,500 Marsh & McLennan Cos., Inc. 207,945 9,900 Radian Group, Inc. 367,785 10,507 Travelers Property Casualty Corp. (c) 153,927 -------------- 1,512,930 -------------- LODGING -- 1.0% 2,500 Mandalay Resort Group (c) 76,525 2,000 MGM MIRAGE (c) 65,940 -------------- 142,465 -------------- MEDIA - BROADCASTING & PUBLISHING -- 2.5% 3,100 Gannett Co., Inc. 222,580 2,200 McGraw-Hill Cos. (The), Inc. 132,968 -------------- 355,548 -------------- MEDICAL SUPPLIES -- 1.1% 5,600 Baxter International, Inc. (d) 156,800 -------------- OIL & GAS -- 9.2% 5,600 Baker Hughes, Inc. 180,264 23,100 Exxon Mobil Corp. 807,114 3,500 Kerr-McGee Corp. 155,050 6,000 Transocean, Inc. 139,200 -------------- 1,281,628 -------------- PHARMACEUTICALS -- 4.7% 5,200 Merck & Co., Inc. 294,372 8,800 Pharmacia Corp. 367,840 -------------- 662,212 -------------- RESTAURANTS -- 1.8% 7,100 Outback Steakhouse, Inc. 244,524 -------------- RETAILERS -- 4.8% 10,300 CVS Corp. 257,191 10,800 Office Depot, Inc. (c) 159,408 4,500 Target Corp. 135,000 2,500 Wal-Mart Stores, Inc. 126,275 -------------- 677,874 -------------- SEMICONDUCTORS -- 1.9% 10,300 Applied Materials, Inc. (c) 134,209 8,800 Intel Corp. 137,016 -------------- 271,225 -------------- SOFTWARE -- 1.1% 2,900 Microsoft Corp. (c) 149,930 -------------- TELEPHONE SYSTEMS -- 3.6% 8,200 BellSouth Corp. 212,134 7,516 Verizon Communications, Inc. 291,245 -------------- 503,379 -------------- TOTAL COMMON STOCKS (IDENTIFIED COST $14,671,192) 13,728,813 ==============
See accompanying notes to financial statements. 37
UNITS DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- CONVERTIBLE SECURITY -- 1.0% FINANCIAL SERVICES -- 1.0% 9,550 Merrill Lynch & Co., Inc., 8% STRIDES exchangeable for shares of Cisco Systems common stock, zero coupon $ 133,891 -------------- Total Convertible Security (Identified Cost $158,079) 133,891 -------------- PRINCIPAL AMOUNT - ------------ SHORT TERM INVESTMENTS -- 5.3% $ 147,561 Repurchase Agreement with Investors Bank & Trust Co. dated 12/31/2002 at 1.00% to be repurchased at $147,569 on 1/02/2003, collateralized by $153,522 Federal National Mortgage Association Bond, 4.748%, due 10/01/2026 valued at $155,006 147,561 12,163 Bank of Montreal, 1.320%, 1/30/2003 (e) 12,163 120,295 BNP Paribas, 1.320%, 2/07/2003 (e) 120,295 72,177 Canadian Imperial Bank of Commerce, 1.225%, 5/19/2003 (e) 72,177 24,059 Comerica Bank, 1.400%, 11/19/2003 (e) 24,059 120,294 Dreyfus Cash Management Plus Fund, 1.358%, 1/02/2003 (e) 120,294 12,029 Galaxy Funding, 1.353%, 2/07/2003 (e) 12,029 24,059 Goldman Sachs Group, Inc., 1.363%, 1/02/2003 (e) 24,059 24,059 Liberty Lighthouse Funding, 1.343%, 1/14/2003 (e) 24,059 125,106 Merrimac Cash Fund, Premium Class, 1.422%, 1/02/2003 (e) 125,106 64,959 Royal Bank of Scotland, 1.33%, 1/15/2003 (e) 64,959 -------------- Total Short Term Investments (Identified Cost $746,761) 746,761 -------------- Total Investments -- 104.4% (Identified Cost $15,576,032) (b) 14,609,465 Other assets less liabilities (618,884) -------------- Total Net Assets -- 100% $ 13,990,581 ==============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2003, the net unrealized depreciation on investments based on cost of $15,631,263 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 $ 428,342 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (1,450,140) -------------- Net unrealized depreciation $ (1,021,798) ==============
At December 31, 2003, the Fund had a capital loss carryover of approximately $2,504,354 of which $254,837 expires on December 31, 2008 and $2,249,517 expires on December 31, 2010. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2003, the Fund has elected to defer $1,088,261 of capital losses attributable to Post-October losses. At December 31, 2003, the components of distributable earnings, excluding unrealized appreciation/depreciation, disclosed on a tax basis consisted of $2,567 in undistributed ordinary income and $0 in undistributed long-term gains. (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at December 31, 2002. (e) Represents investments of securities lending collateral. ADR An American Depositary Receipt (ADR) 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 SELECT FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2002
SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- COMMON STOCKS -- 92.9% OF TOTAL NET ASSETS BANKING -- 16.6% 1,158,000 Washington Mutual, Inc. $ 39,985,740 -------------- BIOTECHNOLOGY -- 4.6% 292,800 Chiron Corp. (c)(d) 11,009,280 -------------- COMMERCIAL SERVICES -- 11.7% 441,900 H&R Block, Inc. 17,764,380 355,000 Valassis Communications, Inc. (c) 10,447,650 -------------- 28,212,030 -------------- COMPUTERS -- 2.4% 314,900 Electronic Data Systems Corp. 5,803,607 -------------- ENVIRONMENTAL CONTROL -- 4.4% 458,000 Waste Management, Inc. 10,497,360 -------------- FOOD RETAILERS -- 4.4% 683,000 Kroger Co. (The) (c) 10,552,350 -------------- MEDIA - BROADCASTING & PUBLISHING -- 13.5% 759,300 AOL Time Warner, Inc. (c) 9,946,830 185,300 Knight-Ridder, Inc. 11,720,225 1,226,400 Liberty Media Corp. (c) 10,964,016 -------------- 32,631,071 -------------- MEDICAL SUPPLIES -- 3.7% 286,500 Guidant Corp. (c) 8,838,525 -------------- OIL & GAS -- 5.2% 293,600 Burlington Resources, Inc. 12,522,040 -------------- PHARMACEUTICALS -- 4.7% 476,000 Omnicare, Inc. 11,343,080 -------------- RESTAURANTS -- 2.0% 197,400 Yum! Brands, Inc. (c) 4,781,028 -------------- RETAILERS -- 4.4% 458,200 J.C. Penney Co., Inc. (d) 10,543,182 -------------- SOFTWARE -- 7.8% 345,700 First Data Corp. 12,241,237 1,981,000 Novell, Inc. (c) 6,616,540 -------------- 18,857,777 -------------- TELEPHONE SYSTEMS -- 3.6% 603,700 SPRINT CORP. (FON Group) 8,741,576 -------------- TOOLS -- 3.9% 219,800 Black & Decker Corp. 9,427,222 -------------- Total Common Stocks (Identified Cost $243,813,012) 223,745,868 -------------- PRINCIPAL AMOUNT DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- SHORT TERM INVESTMENTS -- 14.4% $ 17,444,018 Repurchase Agreement with Investors Bank & Trust Co. dated 12/31/2002 at 1.00% to be repurchased at $17,444,987 on 1/02/2003, collateralized by $18,264,658 Federal Home Loan Mortgage Bond, 1.97%, due 3/15/2032 valued at $18,323,025 $ 17,444,018 348,018 Bank of Montreal, 1.320%, 1/30/2003 (e) 348,018 3,441,964 BNP Paribas, 1.320%, 2/07/2003 (e) 3,441,964 2,065,178 Canadian Imperial Bank of Commerce, 1.225%, 5/19/2003 (e) 2,065,178 688,393 Comerica Bank, 1.400%, 11/19/2003 (e) 688,393 3,441,964 Dreyfus Cash Management Plus Fund, 1.358%, 1/02/2003 (e) 3,441,964 344,196 Galaxy Funding, 1.353%, 2/07/2003 (e) 344,196 688,392 Goldman Sachs Group, Inc., 1.363%, 1/02/2003 (e) 688,392 688,393 Liberty Lighthouse Funding, 1.343%, 1/14/2003 (e) 688,393 3,579,642 Merrimac Cash Fund, Premium Class, 1.422%, 1/02/2003 (e) 3,579,642 1,858,660 Royal Bank of Scotland, 1.33%, 1/15/2003 (e) 1,858,660 -------------- Total Short Term Investments (Identified Cost $34,588,818) 34,588,818 -------------- Total Investments -- 107.3% (Identified Cost $278,401,830) (b) 258,334,686 Other assets less liabilities (17,611,244) -------------- Total Net Assets -- 100% $ 240,723,442 ==============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2003, the net unrealized depreciation on investments based on cost of $278,401,830 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 $ 6,424,488 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (26,491,632) -------------- Net unrealized depreciation $ (20,067,144) ==============
At December 31, 2003, the Fund had a capital loss carryover of approximately $8,193,164 of which $1,480,080 expires on December 31, 2009 and $6,713,084 expires on December 31, 2010. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2003, the Fund has elected to defer $7,802,742 of capital losses attributable to Post-October losses. (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at December 31, 2002. (e) Represents investments of securities lending collateral. See accompanying notes to financial statements. 39 JURIKA & VOYLES SMALL CAP GROWTH FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2002
SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- COMMON STOCKS -- 101.2% OF TOTAL NET ASSETS ADVERTISING -- 2.1% 27,500 Given Imaging, Ltd. (c)(d) $ 254,650 -------------- BANKING -- 1.3% 12,500 STERLING BANCSHARES, INC. 152,875 -------------- BEVERAGES, FOOD & TOBACCO -- 0.0% 19,500 Suprema Specialties, Inc. (c)(e) 390 -------------- BIOTECHNOLOGY -- 2.2% 7,000 Martek Biosciences Corp. (c)(d) 176,120 21,000 Xoma, Ltd. (c) 88,830 -------------- 264,950 -------------- COMMERCIAL SERVICES -- 9.4% 15,000 Administaff, Inc. (c)(d) 90,000 10,500 AMN Healthcare Services, Inc. (c)(d) 177,555 6,500 Coinstar, Inc. (c) 147,225 29,000 Euronet Worldwide, Inc. (c) 217,790 7,000 Iron Mountain, Inc. (c) 231,070 5,750 Pharmaceutical Product Development, Inc. (c) 168,302 10,000 ProxyMed, Inc. (c) 104,400 -------------- 1,136,342 -------------- COMMUNICATIONS -- 4.4% 26,500 Intrado, Inc. (c) 263,119 13,000 Nextel Communications, Inc. (c) 150,150 92,000 Q Comm International, Inc. (c) 66,240 110,000 US Unwired, Inc. (c) 53,900 -------------- 533,409 -------------- COMPUTERS -- 5.4% 42,000 Concurrent Computer Corp. (c) 120,960 12,500 Fidelity National Information Solutions, Inc. (c) 215,625 187,500 LivePerson, Inc. (c) 176,250 23,600 Maxtor Corp. (c) 119,416 13,500 Wave Systems Corp., Class A (c) 17,955 -------------- 650,206 -------------- ELECTRONICS -- 4.4% 75,000 Duraswitch Industries, Inc. (c) 71,250 22,500 Globespan Virata, Inc. (c) 99,225 40,000 IMAX Corp. (c) 161,600 22,000 Kopin Corp. (c) 86,240 22,000 Sonic Solutions (c)(d) 110,000 -------------- 528,315 -------------- ENTERTAINMENT & LEISURE -- 2.1% 17,100 Hollywood Entertainment Corp. (c)(d) 258,210 -------------- ENVIRONMENTAL CONTROL -- 1.5% 5,700 Stericycle, Inc. (c)(d) 184,560 -------------- FINANCIAL SERVICES -- 1.3% 5,000 Federal Agriculture Mortgage Corp. (c)(d) 153,200 -------------- HEALTH CARE PROVIDERS -- 0.1% 1,000 VistaCare, Inc., Class A (c) 16,000 -------------- HEALTHCARE-SERVICES -- 2.3% 16,000 American Healthways, Inc. (c)(d) 280,000 -------------- HEAVY CONSTRUCTION -- 1.2% 4,600 Chicago Bridge & Iron Co. NV 138,920 -------------- HEAVY MACHINERY -- 3.2% 95,000 SureBeam Corp., Class A (c)(d) 383,800 -------------- INSURANCE -- 1.8% 15,400 Safety Insurance Group, Inc. (c) 221,452 -------------- INTERNET -- 21.4% 22,000 Alloy, Inc. (c)(d) $ 240,900 45,000 Chordiant Software, Inc. (c) 64,800 100,000 Click2learn, Inc. (c) 75,000 20,000 Digital Insight Corp. (c) 173,800 22,500 DoubleClick, Inc. (c) 127,350 29,000 Earthlink, Inc. (c) 158,050 16,500 ebookers PLC (ADR) (c)(d) 208,230 45,000 Imanage, Inc. (c) 144,000 7,500 Internet Security Systems, Inc. (c)(d) 137,475 175,500 Intraware, Inc. (c) 193,050 6,400 LendingTree, Inc. (c)(d) 82,432 160,000 LookSmart, Ltd. (c) 396,800 70,000 Raindance Communications, Inc. (c) 226,100 15,000 VeriSign, Inc. (c) 120,300 9,500 Verity, Inc. (c) 127,215 16,200 WatchGuard Technologies, Inc. (c) 103,372 -------------- 2,578,874 -------------- LODGING -- 1.1% 7,700 Station Casinos, Inc. (c)(d) 136,290 -------------- MEDIA - BROADCASTING & PUBLISHING -- 0.9% 7,500 Cumulus Media, Inc. (c) 111,525 -------------- MEDICAL SUPPLIES -- 10.4% 22,500 Conceptus, Inc. (c)(d) 269,550 5,900 Exactech, Inc. (c) 114,696 28,000 HealtheTech, Inc. (c)(d) 175,000 75,500 LifePoint, Inc. (c) 117,780 19,000 Med-Design Corp. (c)(d) 153,102 65,700 Medwave, Inc. (c) 62,415 37,500 Rita Medical Systems, Inc. (c) 189,375 22,500 Thoratec Corp. (c) 171,675 -------------- 1,253,593 -------------- OIL & GAS -- 8.1% 4,000 Atwood Oceanics, Inc. (c)(d) 120,400 14,000 Headwaters, Inc. (c) 217,140 7,500 Quicksilver Resources, Inc. (c) 168,225 8,000 Remington Oil Gas Corp. (c) 131,280 6,500 Tetra Technologies, Inc. (c) 138,905 20,000 Ultra Petroleum Corp. (c) 198,000 -------------- 973,950 -------------- PHARMACEUTICALS -- 3.0% 8,000 aaiPharma, Inc. (c)(d) 112,160 7,500 Adolor Corp. (c) 102,900 24,000 Hollis-Eden Pharmaceuticals (c)(d) 140,400 -------------- 355,460 -------------- RESTAURANTS -- 0.9% 4,500 California Pizza Kitchen, Inc. (c) 113,400 -------------- RETAILERS -- 1.9% 9,500 GameStop Corp. (c) 93,100 6,500 World Fuel Services Corp. 133,250 -------------- 226,350 -------------- SEMICONDUCTORS -- 2.8% 9,000 Emulex Corp. (c) 166,950 23,600 Ibis Technology Corp. (c) 110,920 10,000 Silicon Image, Inc. (c) 60,000 -------------- 337,870 --------------
See accompanying notes to financial statements. 40
SHARES DESCRIPTION VALUE(a) - -------------------------------------------------------------------------------------------- SOFTWARE -- 5.7% 25,400 Activcard SA (c) $ 217,170 14,000 Activision, Inc. (c)(d) 204,260 230,700 Sagent Technology, Inc. (c) 69,210 57,500 SkillSoft PLC (ADR) (c) 158,125 41,500 VA Software Corp. (c) 37,765 -------------- 686,530 -------------- TRANSPORTATION -- 2.3% 11,000 Celadon Group, Inc. (c) 129,459 6,000 P.A.M. Transportation Services, Inc. (c) 151,260 -------------- 280,719 -------------- Total Common Stocks (Identified Cost $18,154,571) 12,211,840 -------------- PRINCIPAL AMOUNT - ------------ SHORT TERM INVESTMENTS -- 31.2% $ 76,344 Bank of Montreal, 1.320%, 1/30/2003 (f) 76,344 755,059 BNP Paribas, 1.320%, 2/07/2003 (f) 755,059 453,035 Canadian Imperial Bank of Commerce, 1.225%, 5/19/2003 (f) 453,035 151,012 Comerica Bank, 1.400%, 11/19/2003 (f) 151,012 755,059 Dreyfus Cash Management Plus Fund, 1.358%, 1/02/2003 (f) 755,059 75,506 Galaxy Funding, 1.353%, 2/07/2003 (f) 75,506 151,012 Goldman Sachs Group, Inc., 1.363%, 1/02/2003 (f) 151,012 151,012 Liberty Lighthouse Funding, 1.343%, 1/14/2003 (f) 151,012 785,262 Merrimac Cash Fund, Premium Class, 1.422%, 1/02/2003 (f) 785,262 407,732 Royal Bank of Scotland, 1.33%, 1/15/2003 (f) 407,732 -------------- Total Short Term Investments (Identified Cost $3,761,033) 3,761,033 -------------- Total Investments -- 132.4% (Identified Cost $21,915,604)(b) 15,972,873 Other assets less liabilities (3,908,991) -------------- Total Net Assets -- 100% $ 12,063,882 ==============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2003, the net unrealized depreciation on investments based on cost of $22,160,678 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 $ 325,576 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (6,513,381) -------------- Net unrealized depreciation $ (6,187,805) ==============
At December 31, 2003, the Fund had a capital loss carryover of approximately $16,834,586 of which $6,245,133 expires on December 31, 2008, $1,234,672 expires on December 31, 2009 and $9,354,781 expires on December 31, 2010. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2003, the Fund has elected to defer $851,064 of capital losses attributable to Post-October losses. (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at December 31, 2002. (e) Issuer filed petition under Chapter 7 of the Federal Bankruptcy Code. (f) Represents investments of securities lending collateral. ADR An American Depositary Receipt (ADR) 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. 41 INTERNATIONAL EQUITY FUND -- SCHEDULE OF INVESTMENTS Investments as of December 31, 2002
SHARES DESCRIPTION VALUE(a) - ------------------------------------------------------------------------------- COMMON STOCKS -- 95.7% OF TOTAL NET ASSETS AUSTRALIA -- 4.5% 58,000 Amcor, Ltd. $ 277,011 18,050 CSL, Ltd. 219,327 162,000 John Fairfax Holdings, Ltd. 293,449 73,000 News Corp., Ltd. 471,439 18,750 Rio Tinto, Ltd. 358,098 ----------- 1,619,324 ----------- AUSTRIA -- 1.8% 62,000 Telekom Austria AG (c) 627,467 ----------- CANADA-- 5.0% 32,400 Agrium, Inc. (d) 366,445 13,854 EnCana Corp. 427,937 15,477 Fairmont Hotels & Resorts, Inc. 358,895 10,500 Precision Drilling Corp., Class A (c) 338,763 13,200 Toronto-Dominion Bank (The) 284,278 ----------- 1,776,318 ----------- FINLAND -- 3.8% 21,800 Nokia OYJ (ADR) 337,900 59,000 Stora Enso OYJ 621,856 12,400 UPM-Kymmene OYJ 397,938 ----------- 1,357,694 ----------- FRANCE -- 5.1% 7,100 Aventis SA 385,709 10,700 Pechiney SA, Class A (d) 375,251 5,900 Sanofi-Synthelabo SA 360,429 2,500 Technip-Coflexip SA 178,812 3,740 TotalFinaElf SA 533,828 ----------- 1,834,029 ----------- GERMANY -- 2.2% 9,700 Altana AG (d) 440,486 7,800 Deutsche Bank AG 359,113 ----------- 799,599 ----------- GREECE -- 2.3% 42,100 Greek Organization of Football Prognostics SA 443,290 27,350 Public Power Corp. 378,046 ----------- 821,336 ----------- HONG KONG -- 1.4% 76,000 China Mobile (Hong Kong), Ltd. (c) 181,265 188,100 Esprit Holdings, Ltd. 315,970 ----------- 497,235 ----------- INDIA -- 0.6% 10,225 Dr. Reddy's Laboratories, Ltd. (ADR) 197,649 ----------- IRELAND -- 3.6% 109,600 Anglo Irish Bank Corp., 144A (c) 781,612 73,400 Ryanair Holdings PLC (c) 511,905 ----------- 1,293,517 ----------- ISRAEL -- 1.0% 9,000 Teva Pharmaceutical Industries, Ltd. (ADR) 347,490 ----------- ITALY -- 6.8% 47,555 Banco Popolare di Verona e Novara Scrl 530,153 37,450 Eni SpA (d) 595,027 181,100 IntesaBci SpA 381,757 48,000 Mediaset SpA 365,468 27,900 Saipem SpA 186,387 93,000 UniCredito Italiano SpA (d) 371,604 ----------- 2,430,396 ----------- JAPAN -- 12.0% 23,700 Bridgestone Corp. (d) $ 293,356 13,000 Canon, Inc. 489,306 47 Fuji Television Network, Inc. 189,171 1,600 Funai Electric Co., Ltd. 186,999 105 Japan Telecom Holdings Co., Ltd. 325,362 37,150 JFE Holdings, Inc. (c) 450,768 66,000 JGC Corp. 369,013 2,300 Keyence Corp. 399,924 70,800 Nissan Motor Co., Ltd. 552,044 4,200 Nitto Denko Corp. 119,535 2,400 Rohm Co., Ltd. 305,355 7,300 Sony Corp. (d) 304,884 7,500 Uni-Charm Corp. 297,449 ----------- 4,283,166 ----------- MEXICO -- 0.5% 72,600 Wal-Mart de Mexico SA de CV, Series V 164,500 ----------- NETHERLANDS -- 4.8% 10,200 DSM NV 464,047 23,900 ING Groep NV 404,551 103,100 Koninklijke (Royal) KPN NV (c) 670,382 10,200 Koninklijke (Royal) Philips Electronics NV 178,644 ----------- 1,717,624 ----------- REPUBLIC OF KOREA -- 0.5% 630 Samsung Electronics Co., Ltd. 166,789 ----------- RUSSIA -- 1.0% 5,900 LUKOIL (ADR) (d) 361,375 ----------- SINGAPORE -- 0.8% 29,000 Singapore Press Holdings, Ltd. 304,269 ----------- SOUTH AFRICA -- 1.9% 3,100 Impala Platinum Holdings, Ltd. 197,015 34,840 Sappi, Ltd. 465,183 ----------- 662,198 ----------- SPAIN -- 3.5% 8,500 Altadis SA 193,799 93,700 Amadeus Global Travel Distribution SA 386,193 9,800 Banco Popular Espanol 400,524 10,800 Grupo Ferrovial SA 273,535 ----------- 1,254,051 ----------- SWEDEN -- 1.6% 27,600 Autoliv, Inc. (SDR) 566,602 ----------- SWITZERLAND -- 8.5% 8,700 Converium Holding AG (c) 421,353 26,900 Credit Suisse Group (c) 583,345 1,730 Nestle SA 366,409 7,700 Novartis AG 280,805 13,250 STMicroelectronics NV (d) 258,508 5,760 Swiss Reinsurance 377,644 15,500 UBS AG (c) 752,928 ----------- 3,040,992 ----------- TAIWAN -- 0.4% 21,144 Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) (c) 149,065 ----------- THAILAND -- 0.5% 6,700 Siam Cement Public Co. (The), Ltd. 194,090 -----------
See accompanying notes to financial statements. 42
SHARES DESCRIPTION VALUE(a) - ------------------------------------------------------------------------------- UNITED KINGDOM -- 21.6% 20,200 Anglo American PLC $ 299,941 85,700 Barclays PLC 531,079 75,075 BHP Billiton PLC 400,889 61,600 BP PLC 422,881 60,300 British Sky Broadcasting PLC (c) 620,206 32,700 Diageo PLC 355,279 18,000 GlaxoSmithKline PLC 344,487 170,800 Hilton Group PLC 459,116 95,000 Imperial Chemical Industries PLC 351,698 15,200 Imperial Tobacco Group PLC 258,115 483,400 Invensys PLC 410,438 155,350 Kingfisher PLC 556,364 40,356 Pearson PLC 373,178 31,200 Royal Bank of Scotland Group PLC 747,266 115,000 Tesco PLC 359,102 505,971 Vodafone Group PLC 922,320 78,800 William Hill PLC 287,919 ------------ 7,700,278 ------------ TOTAL COMMON STOCKS (Identified Cost $33,879,015) 34,167,053 ------------ PREFERRED STOCKS -- 0.6% GERMANY -- 0.6% 500 Porsche AG (d) 207,652 ------------ Total Preferred Stocks (Identified Cost $199,135) 207,652 ------------ PRINCIPAL AMOUNT - ----------- SHORT TERM INVESTMENTS-- 11.6% $ 1,306,035 Repurchase Agreement with Investors Bank & Trust Co. dated 12/31/2002 at 1.00% to be repurchased at $1,306,108 on 1/02/2003, collateralized by $1,361,807 Federal National Mortgage Association Bond, 4.517%, due 6/01/2018 valued at $1,371,476 1,306,035 57,497 Bank of Montreal, 1.320%, 1/30/2003(e) 57,497 568,658 BNP Paribas, 1.320%, 2/07/2003(e) 568,658 341,195 Canadian Imperial Bank of Commerce, 1.225%, 5/19/2003(e) 341,195 113,732 Comerica Bank, 1.400%, 11/19/2003(e) 113,732 568,658 Dreyfus Cash Management Plus Fund, 1.358%, 1/02/2003(e) 568,658 56,866 Galaxy Funding, 1.353%, 2/07/2003(e) 56,866 113,732 Goldman Sachs Group, Inc., 1.363%, 1/02/2003(e) 113,732 113,732 Liberty Lighthouse Funding, 1.343%, 1/14/2003(e) 113,732 591,405 Merrimac Cash Fund, Premium Class, 1.422%, 1/02/2003(e) 591,405 307,075 Royal Bank of Scotland, 1.33%, 1/15/2003(e) 307,075 ------------ Total Short Term Investments (Identified Cost $4,138,585) 4,138,585 ------------ Total Investments -- 107.9% (Identified Cost $38,216,735)(b) 38,513,290 Other assets less liabilities (2,805,516) ------------ Total Net Assets -- 100% $ 35,707,774 ============
(a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At December 31, 2003, the net unrealized appreciation on investments based on cost of $38,490,018 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 $ 1,745,882 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value (1,722,610) ------------ Net unrealized appreciation $ 23,272 ============
At December 31, 2003, the Fund had a capital loss carryover of approximately $30,663,018 of which $20,761,210 expires on December 31, 2009 and $9,901,808 expires on December 31, 2010. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2003, the Fund has elected to defer $1,702,210 of capital losses and $37,437 of foreign currency losses attributable to Post-October losses. (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at December 31, 2002. (e) Represents investments of securities lending collateral. ADR An American Depositary Receipt (ADR) 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. SDR Swedish Depositary Receipt 144A Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $781,612 or 2.2% of net assets. INDUSTRY HOLDINGS AT DECEMBER 31, 2002 (UNAUDITED) Banking 16.0% Financial Services 11.6 Oil & Gas 8.1 Pharmaceuticals 7.3 Media - Broadcasting & Publishing 7.1 Telephone Systems 4.6 Automotive 4.6 Forest Products & Paper 4.1 Communications 4.1 Chemicals 3.6 Insurance 3.4 Entertainment & Leisure 3.3 Metals 3.3 Beverages, Food & Tobacco 3.2 Mining 2.5 Semiconductors 2.5 Heavy Construction 2.3 Retailers 2.1 Other, less than 2% each 14.2
See accompanying notes to financial statements. 43 STATEMENTS OF ASSETS & LIABILITIES December 31, 2002
LARGE CAP CAPITAL GROWTH TARGETED EQUITY GROWTH AND GROWTH FUND FUND FUND INCOME FUND --------------- --------------- --------------- --------------- ASSETS Investments at cost $ 31,185,972 $ 103,602,868 $ 628,806,892 $ 246,891,165 Net unrealized appreciation (depreciation) (5,840,803) (20,867,829) 43,815,995 (29,959,145) --------------- --------------- --------------- --------------- Investments at value 25,345,169 82,735,039 672,622,887 216,932,020 Cash -- -- -- -- Receivable for Fund shares sold 3,309 36,480 430,007 119,625 Receivable for securities sold -- -- 25,686,801 3,415,637 Dividends and interest receivable 37,737 71,260 221,254 404,682 Tax reclaims receivable -- -- -- -- Receivable from investment adviser 31,713 -- -- -- Securities lending income receivable 486 3,054 3,038 -- --------------- --------------- --------------- --------------- TOTAL ASSETS 25,418,414 82,845,833 698,963,987 220,871,964 --------------- --------------- --------------- --------------- LIABILITIES Collateral on securities loaned, at value 243,600 6,648,104 14,768,050 -- Payable for securities purchased -- -- 25,134,631 973,873 Payable for Fund shares redeemed 62,718 164,411 1,649,052 357,134 Payable to custodian bank -- -- -- -- Management fees payable -- 50,398 404,458 131,755 Deferred Trustees' fees 2,081 42,027 224,700 50,241 Transfer agent fees payable 18,531 44,708 343,515 103,490 Accounting and administrative fees payable 5,945 4,489 38,511 12,668 Other accounts payable and accrued expenses 37,900 48,013 70,306 47,058 --------------- --------------- --------------- --------------- TOTAL LIABILITIES 370,775 7,002,150 42,633,223 1,676,219 --------------- --------------- --------------- --------------- NET ASSETS $ 25,047,639 $ 75,843,683 $ 656,330,764 $ 219,195,745 =============== =============== =============== =============== NET ASSETS CONSIST OF: Paid in capital $ 73,995,719 $ 152,713,551 $ 1,047,235,053 $ 364,667,788 Undistributed (overdistributed) net investment income (loss) (2,081) (42,027) (238,514) (54,661) Accumulated net realized gain (loss) on investments (43,105,196) (55,960,012) (434,481,770) (115,458,237) Net unrealized appreciation (depreciation) of investments (5,840,803) (20,867,829) 43,815,995 (29,959,145) --------------- --------------- --------------- --------------- NET ASSETS $ 25,047,639 $ 75,843,683 $ 656,330,764 $ 219,195,745 =============== =============== =============== =============== COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE: CLASS A SHARES: Net assets $ 11,339,960 $ 58,729,055 $ 602,988,696 $ 130,750,754 =============== =============== =============== =============== Shares of beneficial interest 1,278,849 6,847,787 108,356,587 13,884,768 =============== =============== =============== =============== Net asset value and redemption price per share $ 8.87 $ 8.58 $ 5.56 $ 9.42 =============== =============== =============== =============== Offering price per share $ 9.41 $ 9.10 $ 5.90 $ 9.99 =============== =============== =============== =============== CLASS B SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) Net assets $ 11,758,335 $ 16,267,440 $ 45,633,047 $ 71,436,056 =============== =============== =============== =============== Shares of beneficial interest 1,354,702 2,150,695 8,646,993 7,921,199 =============== =============== =============== =============== Net asset value and offering price per share $ 8.68 $ 7.56 $ 5.28 $ 9.02 =============== =============== =============== =============== CLASS C SHARES: (redemption price is equal to net asset value less any applicable contingent defered sales charges) Net assets $ 1,156,931 $ 847,188 $ 2,187,103 $ 6,439,893 =============== =============== =============== =============== Shares of beneficial interest 133,276 112,120 414,682 714,978 =============== =============== =============== =============== Net asset value per share $ 8.68 $ 7.56 $ 5.27 $ 9.01 =============== =============== =============== =============== Offering price per share $ 8.77 $ 7.64 $ 5.32 $ 9.10 =============== =============== =============== =============== CLASS Y SHARES: Net assets $ 792,413 $ -- $ 5,521,918 $ 10,569,042 =============== =============== =============== =============== Shares of beneficial interest 88,386 -- 981,568 1,101,789 =============== =============== =============== =============== Net asset value, offering and redemption price per share $ 8.97 $ -- $ 5.63 $ 9.59 =============== =============== =============== ===============
See accompanying notes to financial statements. 44
JURIKA & VOYLES BALANCED RELATIVE VALUE LARGE CAP FUND FUND VALUE FUND --------------- --------------- --------------- ASSETS Investments at cost $ 113,103,940 $ 21,730,490 $ 15,576,032 Net unrealized appreciation (depreciation) (7,066,684) (3,399,333) (966,567) --------------- --------------- --------------- Investments at value 106,037,256 18,331,157 14,609,465 Cash -- -- 6,808 Receivable for Fund shares sold 80,063 1,755 8,453 Receivable for securities sold 574,087 -- -- Dividends and interest receivable 624,161 20,304 20,008 Tax reclaims receivable -- -- -- Receivable from investment adviser -- 20,202 9,824 Securities lending income receivable 1,110 -- 16 --------------- --------------- --------------- TOTAL ASSETS 107,316,677 18,377,334 14,654,574 --------------- --------------- --------------- LIABILITIES Collateral on securities loaned, at value 4,962,464 1,258,000 599,200 Payable for securities purchased 705,556 -- -- Payable for Fund shares redeemed 297,063 9,871 13,229 Payable to custodian bank -- 6,808 -- Management fees payable 36,471 -- -- Deferred Trustees' fees 74,014 1,840 8,953 Transfer agent fees payable 41,933 6,162 6,842 Accounting and administrative fees payable 5,889 5,945 824 Other accounts payable and accrued expenses 53,539 33,330 34,945 --------------- ---------------- --------------- TOTAL LIABILITIES 6,176,929 1,321,956 663,993 --------------- ---------------- --------------- NET ASSETS $ 101,139,748 $ 17,055,378 $ 13,990,581 =============== =============== =============== NET ASSETS CONSIST OF: Paid in capital $ 153,282,515 $ 23,852,098 $ 18,611,213 Undistributed (overdistributed) net investment income (loss) 55,820 (1,840) (6,219) Accumulated net realized gain (loss) on investments (45,131,903) (3,395,547) (3,647,846) Net unrealized appreciation (depreciation) of investments (7,066,684) (3,399,333) (966,567) --------------- --------------- --------------- NET ASSETS $ 101,139,748 $ 17,055,378 $ 13,990,581 =============== =============== =============== COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE: CLASS A SHARES: Net assets $ 55,135,380 $ 865,672 $ 5,951,986 =============== =============== =============== Shares of beneficial interest 6,835,907 89,595 431,187 =============== =============== =============== Net asset value and redemption price per share $ 8.07 $ 9.66 $ 13.80 =============== =============== =============== Offering price per share $ 8.56 $ 10.25 $ 14.64 =============== =============== =============== CLASS B SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) Net assets $ 15,976,922 $ 105,339 $ 7,384,486 =============== =============== =============== Shares of beneficial interest 1,975,999 10,968 543,166 =============== =============== =============== Net asset value and offering price per share $ 8.09 $ 9.60 $ 13.60 =============== =============== =============== CLASS C SHARES: (redemption price is equal to net asset value less any applicable contingent defered sales charges) Net assets $ 1,060,427 $ 22,604 $ 654,109 =============== =============== =============== Shares of beneficial interest 131,722 2,355 48,086 =============== =============== =============== Net asset value per share $ 8.05 $ 9.60 $ 13.60 =============== =============== =============== Offering price per share $ 8.13 $ 9.70 $ 13.74 =============== =============== =============== CLASS Y SHARES: Net assets $ 28,967,019 $ 16,061,763 $ -- =============== =============== =============== Shares of beneficial interest 3,631,582 1,659,182 -- =============== =============== =============== Net asset value, offering and redemption price per share $ 7.98 $ 9.68 $ -- =============== =============== =============== JURIKA & VOYLES SELECT SMALL CAP INTERNATIONAL FUND GROWTH FUND EQUITY FUND --------------- --------------- --------------- ASSETS Investments at cost $ 278,401,830 $ 21,915,604 $ 38,216,735 Net unrealized appreciation (depreciation) (20,067,144) (5,942,731) 296,555 --------------- --------------- --------------- Investments at value 258,334,686 15,972,873 38,513,290 Cash -- -- -- Receivable for Fund shares sold 654,829 6,706 7,433 Receivable for securities sold -- -- 157,074 Dividends and interest receivable 107,314 643 45,830 Tax reclaims receivable -- -- 29,849 Receivable from investment adviser -- 22,543 -- Securities lending income receivable 11,258 2,873 513 --------------- --------------- --------------- TOTAL ASSETS 259,108,087 16,005,638 38,753,989 --------------- --------------- --------------- LIABILITIES Collateral on securities loaned, at value 17,144,800 3,761,033 2,832,550 Payable for securities purchased -- 30,975 -- Payable for Fund shares redeemed 589,290 41,179 71,517 Payable to custodian bank -- 58,942 -- Management fees payable 470,952 -- 27,812 Deferred Trustees' fees 8,974 8,254 30,555 Transfer agent fees payable 95,082 7,414 21,588 Accounting and administrative fees payable 5,945 725 2,064 Other accounts payable and accrued expenses 69,602 33,234 60,129 --------------- --------------- --------------- TOTAL LIABILITIES 18,384,645 3,941,756 3,046,215 --------------- ---------------- --------------- NET ASSETS $ 240,723,442 $ 12,063,882 $ 35,707,774 =============== =============== =============== NET ASSETS CONSIST OF: Paid in capital $ 276,795,466 $ 35,945,591 $ 68,118,786 Undistributed (overdistributed) net investment income (loss) (8,974) (8,254) (75,294) Accumulated net realized gain (loss) on investments (15,995,906) (17,930,724) (32,638,511) Net unrealized appreciation (depreciation) of investments (20,067,144) (5,942,731) 302,793 --------------- --------------- --------------- NET ASSETS $ 240,723,442 $ 12,063,882 $ 35,707,774 =============== =============== =============== COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE: CLASS A SHARES: Net assets $ 68,660,130 $ 2,821,139 $ 22,232,424 =============== =============== =============== Shares of beneficial interest 7,428,824 397,541 2,214,016 =============== =============== =============== Net asset value and redemption price per share $ 9.24 $ 7.10 $ 10.04 =============== =============== =============== Offering price per share $ 9.80 $ 7.53 $ 10.65 =============== =============== =============== CLASS B SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) Net assets $ 85,794,177 $ 3,085,330 $ 8,950,335 =============== =============== =============== Shares of beneficial interest 9,408,944 438,258 941,280 =============== =============== =============== Net asset value and offering price per share $ 9.12 $ 7.04 $ 9.51 =============== =============== =============== CLASS C SHARES: (redemption price is equal to net asset value less any applicable contingent defered sales charges) Net assets $ 86,269,135 $ 296,964 $ 1,194,644 =============== =============== =============== Shares of beneficial interest 9,459,288 42,156 125,881 =============== =============== =============== Net asset value per share $ 9.12 $ 7.04 $ 9.49 =============== =============== =============== Offering price per share $ 9.21 $ 7.11 $ 9.59 =============== =============== =============== CLASS Y SHARES: Net assets $ -- $ 5,860,449 $ 3,330,371 =============== =============== =============== Shares of beneficial interest -- 822,413 319,259 =============== =============== =============== Net asset value, offering and redemption price per share $ -- $ 7.13 $ 10.43 =============== =============== ===============
45 STATEMENTS OF OPERATIONS For the Year Ended December 31, 2002
LARGE CAP CAPITAL GROWTH TARGETED EQUITY GROWTH AND GROWTH FUND FUND FUND INCOME FUND --------------- --------------- --------------- --------------- INVESTMENT INCOME Dividends $ 359,623 $ 874,027 $ 4,827,214 $ 4,458,645 Interest 5,356 12,471 57,087 64,840 Securities lending income 12,113 20,015 4,413 -- Less net foreign taxes withheld -- -- -- (7,382) --------------- --------------- --------------- --------------- 377,092 906,513 4,888,714 4,516,103 --------------- --------------- --------------- --------------- Expenses Management fees 336,604 777,861 6,317,642 1,933,542 Service fees - Class A 44,663 195,192 2,106,363 421,102 Service and distribution fees - Class B 167,484 243,257 647,092 935,177 Service and distribution fees - Class C 18,686 13,043 34,480 80,657 Trustees' fees and expenses 8,934 6,554 32,270 18,185 Accounting and administrative 70,000 57,966 515,966 158,120 Custodian 52,525 62,492 157,166 76,098 Transfer agent fees - Class A, Class B, Class C 218,573 525,331 3,742,342 1,210,427 Transfer agent fees - Class Y 917 -- 7,365 12,069 Audit and tax services 32,518 33,969 37,816 34,349 Legal 3,860 8,718 68,643 27,984 Shareholder Reporting 26,277 32,575 187,236 107,768 Registration 93,499 34,767 61,739 51,572 Amortization of organizational costs -- -- -- -- Miscellaneous 1,243 13,111 49,308 25,738 --------------- --------------- --------------- --------------- Total expenses before reductions 1,075,783 2,004,836 13,965,428 5,092,788 --------------- --------------- --------------- --------------- Less reimbursement/waiver (415,584) -- -- -- Less reductions (9,082) (39,908) (743,955) (72,686) --------------- --------------- --------------- --------------- Net expenses 651,117 1,964,928 13,221,473 5,020,102 --------------- --------------- --------------- --------------- Net investment income (loss) (274,025) (1,058,415) (8,332,759) (503,999) --------------- --------------- --------------- --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Realized gain (loss) on: Investments - net (11,968,632) (24,033,239) (243,684,297) (23,052,758) Foreign currency transactions - net -- -- -- -- Change in unrealized appreciation (depreciation) of: Investments - net (5,830,835) (9,195,048) (31,792,914) (40,836,656) Foreign currency transactions - net -- -- -- -- --------------- --------------- --------------- --------------- Net realized and unrealized gain (loss) on investments and foreign currency transactions (17,799,467) (33,228,287) (275,477,211) (63,889,414) --------------- --------------- --------------- --------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (18,073,492) $ (34,286,702) $ (283,809,970) $ (64,393,413) =============== =============== =============== ===============
See accompanying notes to financial statements 46
JURIKA & VOYLES BALANCED RELATIVE VALUE LARGE CAP FUND FUND VALUE FUND --------------- --------------- --------------- INVESTMENT INCOME Dividends $ 653,333 $ 237,305 $ 330,596 Interest 2,939,843 10,081 3,390 Securities lending income 7,632 1,409 2,024 Less net foreign taxes withheld (780) (431) (751) --------------- --------------- --------------- 3,600,028 248,364 335,259 --------------- --------------- --------------- Expenses Management fees 942,522 190,578 125,893 Service fees - Class A 162,264 2,472 21,024 Service and distribution fees - Class B 217,990 648 87,931 Service and distribution fees - Class C 12,489 176 7,826 Trustees' fees and expenses 1,520 7,634 6,393 Accounting and administrative 70,972 70,000 10,119 Custodian 80,737 50,765 54,164 Transfer agent fees - Class A, Class B, Class C 422,878 55,463 86,525 Transfer agent fees - Class Y 37,721 21,346 -- Audit and tax services 39,656 30,546 30,536 Legal 13,637 2,541 1,180 Shareholder Reporting 31,508 5,498 4,046 Registration 43,785 89,930 32,868 Amortization of organizational costs -- -- -- Miscellaneous 9,477 6,108 6,334 --------------- --------------- --------------- Total expenses before reductions 2,087,156 533,705 474,839 --------------- --------------- --------------- Less reimbursement/waiver (77,675) (250,645) (133,549) Less reductions (43,236) -- (9,073) --------------- --------------- --------------- Net expenses 1,966,245 283,060 332,217 --------------- --------------- --------------- Net investment income (loss) 1,633,783 (34,696) 3,042 --------------- --------------- --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Realized gain (loss) on: Investments - net (13,613,643) (3,105,064) (3,393,009) Foreign currency transactions - net 15 -- -- Change in unrealized appreciation (depreciation) of: Investments - net (7,501,174) (3,350,557) (1,337,039) Foreign currency transactions - net -- -- -- --------------- --------------- --------------- Net realized and unrealized gain (loss) on investments and foreign currency transactions (21,114,802) (6,455,621) (4,730,048) --------------- --------------- --------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (19,481,019) $ (6,490,317) $ (4,727,006) =============== =============== =============== JURIKA & VOYLES SELECT SMALL CAP INTERNATIONAL FUND GROWTH FUND EQUITY FUND --------------- --------------- --------------- INVESTMENT INCOME Dividends $ 2,712,917 $ 26,954 $ 766,817 Interest 216,549 4,112 44,830 Securities lending income 28,871 27,667 27,518 Less net foreign taxes withheld -- (41) (58,636) --------------- --------------- --------------- 2,958,337 58,692 780,529 --------------- --------------- --------------- Expenses Management fees 2,201,287 183,867 428,168 Service fees - Class A 160,533 10,963 70,788 Service and distribution fees - Class B 838,330 47,664 129,014 Service and distribution fees - Class C 720,847 4,736 16,136 Trustees' fees and expenses 19,775 6,538 4,660 Accounting and administrative 70,000 10,716 26,632 Custodian 60,364 63,539 138,473 Transfer agent fees - Class A, Class B, Class C 814,450 79,332 252,688 Transfer agent fees - Class Y -- 9,730 4,743 Audit and tax services 33,066 30,542 50,344 Legal 26,827 2,657 2,722 Shareholder Reporting 73,980 12,693 10,796 Registration 84,095 58,027 42,987 Amortization of organizational costs -- 5,778 -- Miscellaneous 16,154 5,216 6,615 --------------- --------------- --------------- Total expenses before reductions 5,119,708 531,998 1,184,766 --------------- --------------- --------------- Less reimbursement/waiver (208,138) (178,598) -- Less reductions (22,263) (4,410) (9,443) --------------- --------------- --------------- Net expenses 4,889,307 348,990 1,175,323 --------------- --------------- --------------- Net investment income (loss) (1,930,970) (290,298) (394,794) --------------- --------------- --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Realized gain (loss) on: Investments - net (14,515,826) (7,005,352) (9,847,872) Foreign currency transactions - net -- -- (143,486) Change in unrealized appreciation (depreciation) of: Investments - net (26,008,735) (5,370,861) (143,891) Foreign currency transactions - net -- -- 4,804 --------------- --------------- --------------- Net realized and unrealized gain (loss) on investments and foreign currency transactions (40,524,561) (12,376,213) (10,130,445) --------------- --------------- --------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (42,455,531) $ (12,666,511) $ (10,525,239) =============== =============== ===============
47 STATEMENTS OF CHANGES IN NET ASSETS
LARGE CAP GROWTH CAPITAL GROWTH FUND FUND ------------------------------------------------ ------------------------------- FOR THE PERIOD YEAR OCTOBER 1, 2001 YEAR YEAR ENDED THROUGH ENDED ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, SEPTEMBER 30, DECEMBER 31, DECEMBER 31, 2002 2001(1) 2001(1) 2002 2001 -------------- --------------- -------------- -------------- -------------- FROM OPERATIONS: Net investment income (loss) $ (274,025) $ (133,421) $ (547,980) $ (1,058,415) $ (1,938,082) Net realized gain (loss) on investments and foreign currency transactions (11,968,632) (4,260,358) (19,628,575) (24,033,239) (29,195,372) Net change in unrealized appreciation (depreciation) of investments and foreign currency transactions (5,830,835) 10,670,520 (23,534,168) (9,195,048) (8,639,961) -------------- -------------- -------------- -------------- -------------- Increase (decrease) in net assets resulting from operations (18,073,492) 6,276,741 (43,710,723) (34,286,702) (39,773,415) -------------- -------------- -------------- -------------- -------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A -- -- -- -- -- Class B -- -- -- -- -- Class C -- -- -- -- -- Class Y -- -- -- -- -- Short-Term capital gain Class A -- -- (6,637,774) -- (281,476) Class B -- -- (2,464,991) -- (113,682) Class C -- -- (432,053) -- (5,301) Class Y -- -- (106,463) -- -- Long-Term capital gain Class A -- -- -- -- -- Class B -- -- -- -- -- Class C -- -- -- -- -- Class Y -- -- -- -- -- -------------- -------------- -------------- -------------- -------------- -- -- (9,641,281) -- (400,459) -------------- -------------- -------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (13,041,498) (5,263,049) (38,558,890) (25,435,438) (27,056,007) -------------- -------------- -------------- -------------- -------------- Total increase (decrease) in net assets (31,114,990) 1,013,692 (91,910,894) (59,722,140) (67,229,881) NET ASSETS Beginning of period 56,162,629 55,148,937 147,059,831 135,565,823 202,795,704 -------------- -------------- -------------- -------------- -------------- End of period $ 25,047,639 $ 56,162,629 $ 55,148,937 $ 75,843,683 $ 135,565,823 ============== ============== ============== ============== ============== UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME (LOSS) $ (2,081) $ -- $ (14,411) $ (42,027) $ (81,471) ============== ============== ============== ============== ==============
(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. See accompanying notes to financial statements. 48
TARGETED EQUITY GROWTH AND INCOME FUND FUND -------------------------------- ------------------------------- YEAR YEAR ENDED YEAR ENDED ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2002 2001 2002 2001 --------------- --------------- -------------- -------------- FROM OPERATIONS: Net investment income (loss) $ (8,332,759) $ (5,293,911) $ (503,999) $ (1,284,212) Net realized gain (loss) on investments and foreign currency transactions (243,684,297) (117,503,746) (23,052,758) (63,368,674) Net change in unrealized appreciation (depreciation) of investments and foreign currency transactions (31,792,914) (127,041,857) (40,836,656) (4,879,802) --------------- --------------- -------------- -------------- Increase (decrease) in net assets resulting from operations (283,809,970) (249,839,514) (64,393,413) (69,532,688) --------------- --------------- -------------- -------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A -- (4,807,922) -- -- Class B -- (386,970) -- -- Class C -- (19,590) -- -- Class Y -- (40,392) -- -- Short-Term capital gain Class A -- -- -- -- Class B -- -- -- -- Class C -- -- -- -- Class Y -- -- -- -- Long-Term capital gain Class A -- -- -- -- Class B -- -- -- -- Class C -- -- -- -- Class Y -- -- -- -- --------------- --------------- -------------- -------------- -- (5,254,874) -- -- --------------- --------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (163,710,155) (180,783,920) (70,380,717) (62,483,375) --------------- --------------- -------------- -------------- Total increase (decrease) in net assets (447,520,125) (435,878,308) (134,774,130) (132,016,063) NET ASSETS Beginning of period 1,103,850,889 1,539,729,197 353,969,875 485,985,938 --------------- --------------- -------------- -------------- End of period $ 656,330,764 $ 1,103,850,889 $ 219,195,745 $ 353,969,875 =============== =============== ============== ============== UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME (LOSS) $ (238,514) $ (257,957) $ (54,661) $ (56,149) =============== =============== ============== ============== JURIKA & VOYLES BALANCED RELATIVE VALUE FUND FUND ------------------------------- ------------------------------------------------ FOR THE PERIOD YEAR YEAR JULY 1, 2001 ENDED YEAR ENDED ENDED THROUGH YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, JUNE 30, 2002 2001 2002 2001(2) 2001 (2) -------------- -------------- -------------- -------------- -------------- FROM OPERATIONS: Net investment income (loss) $ 1,633,783 $ 2,028,044 $ (34,696) $ (26,991) $ (54,726) Net realized gain (loss) on investments and foreign currency transactions (13,613,628) (10,723,157) (3,105,064) 585,808 3,092,815 Net change in unrealized appreciation (depreciation) of investments and foreign currency transactions (7,501,174) (5,725,622) (3,350,557) (1,803,428) (1,509,676) -------------- -------------- -------------- -------------- -------------- Increase (decrease) in net assets resulting from operations (19,481,019) (14,420,735) (6,490,317) (1,244,611) 1,528,413 -------------- -------------- -------------- -------------- -------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A (795,057) (1,372,986) -- -- -- Class B (90,484) (185,032) -- -- -- Class C (5,506) (9,369) -- -- -- Class Y (698,370) (713,204) -- -- -- Short-Term capital gain Class A -- -- -- (33,244) -- Class B -- -- -- (1) -- Class C -- -- -- (1) -- Class Y -- -- -- (673,333) (2,360,046) Long-Term capital gain Class A -- -- -- (122,465) -- Class B -- -- -- (1) -- Class C -- -- -- (1) -- Class Y -- -- -- (2,480,458) (1,661,038) -------------- -------------- -------------- -------------- -------------- (1,589,417) (2,280,591) -- (3,309,504) (4,021,084) -------------- -------------- -------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (27,495,513) (4,896,033) (3,764,950) 2,777,668 2,024,688 -------------- -------------- -------------- -------------- -------------- Total increase (decrease) in net assets (48,565,949) (21,597,359) (10,255,267) (1,776,447) (467,983) NET ASSETS Beginning of period 149,705,697 171,303,056 27,310,645 29,087,092 29,555,075 -------------- -------------- -------------- -------------- -------------- End of period $ 101,139,748 $ 149,705,697 $ 17,055,378 $ 27,310,645 $ 29,087,092 ============== ============== ============== ============== ============== UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME (LOSS) $ 55,820 $ (83,993) $ (1,840) $ -- $ 1,073 ============== ============== ============== ============== ==============
49 STATEMENTS OF CHANGES IN NET ASSETS
LARGE CAP VALUE SELECT FUND FUND ------------------------------- ------------------------------- FOR THE PERIOD YEAR YEAR MARCH 15, 2001 ENDED YEAR ENDED ENDED THROUGH DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2002 2001 2002 2001(1) -------------- --------------- -------------- -------------- FROM OPERATIONS: Net investment income (loss) $ 3,042 $ 21,066 $ (1,930,970) $ (332,025) Net realized gain (loss) on investments and foreign currency transactions (3,393,009) 644,900 (14,515,826) (1,480,080) Net change in unrealized appreciation (depreciation) of investments and foreign currency transactions (1,337,039) (1,375,821) (26,008,735) 5,941,591 -------------- -------------- -------------- -------------- Increase (decrease) in net assets resulting from operations (4,727,006) (709,855) (42,455,531) 4,129,486 -------------- -------------- -------------- -------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A (1,236) (16,658) -- -- Class B (1,252) (7,435) -- -- Class C (115) (795) -- -- Short-Term capital gain Class Y -- -- -- -- Long-Term capital gain Class Y -- -- -- -- -------------- -------------- -------------- -------------- (2,603) (24,888) -- -- -------------- -------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (2,159,584) 4,466,121 140,115,357 138,934,130 -------------- -------------- -------------- -------------- Total increase (decrease) in net assets (6,889,193) 3,731,378 97,659,826 143,063,616 NET ASSETS Beginning of period 20,879,774 17,148,396 143,063,616 -- -------------- -------------- -------------- -------------- End of period $ 13,990,581 $ 20,879,774 $ 240,723,442 $ 143,063,616 ============== ============== ============== ============== UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME (LOSS) $ (6,219) $ (8,052) $ (8,974) $ (44,233) ============== ============== ============== ==============
(1) The Select Fund commenced operations on March 15, 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. See accompanying notes to financial statements. 50
JURIKA & VOYLES SMALL CAP GROWTH INTERNATIONAL EQUITY FUND FUND ------------------------------------------------ ------------------------------- FOR THE PERIOD YEAR JULY 1, 2001 YEAR ENDED THROUGH YEAR ENDED ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, JUNE 30, DECEMBER 31, DECEMBER 31, 2002 2001(2) 2001(2) 2002 2001 -------------- -------------- -------------- -------------- -------------- FROM OPERATIONS: Net investment income (loss) $ (290,298) $ (152,998) $ (382,351) $ (394,794) $ (691,281) Net realized gain (loss) on investments and foreign currency transactions (7,005,352) (6,725,182) 1,142,239 (9,991,358) (19,852,972) Net change in unrealized appreciation (depreciation) of investments and foreign currency transactions (5,370,861) 829,380 (6,860,499) (139,087) (1,578,874) -------------- -------------- -------------- -------------- -------------- Increase (decrease) in net assets resulting from operations (12,666,511) (6,048,800) (6,100,611) (10,525,239) (22,123,127) -------------- -------------- -------------- -------------- -------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A -- -- -- -- -- Class B -- -- -- -- -- Class C -- -- -- -- -- Short-Term capital gain Class Y -- (100,347) (5,422,734) -- -- Long-Term capital gain Class Y -- (113,581) (520,505) -- -- -------------- -------------- -------------- -------------- -------------- -- (213,928) (5,943,239) -- -- -------------- -------------- -------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (5,942,493) 5,360,387 445,645 (14,520,711) (18,558,412) -------------- -------------- -------------- -------------- -------------- Total increase (decrease) in net assets (18,609,004) (902,341) (11,598,205) (25,045,950) (40,681,539) NET ASSETS Beginning of period 30,672,886 31,575,227 43,173,432 60,753,724 101,435,263 -------------- -------------- -------------- -------------- -------------- End of period $ 12,063,882 $ 30,672,886 $ 31,575,227 $ 35,707,774 $ 60,753,724 ============== ============== ============== ============== ============== UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME (LOSS) $ (8,254) $ (4,457) $ 4,201 $ (75,294) $ (82,940) ============== ============== ============== ============== ==============
51 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)(d) INVESTMENTS OPERATIONS INCOME CAPITAL GAINS CAPITAL DISTRIBUTIONS ---------- ---------- -------------- ---------- -------------- ------------- --------- ------------- LARGE CAP GROWTH FUND* CLASS A 12/31/2002 $ 13.84 $ (0.04) $ (4.93) $ (4.97) $ -- $ -- $ -- $ -- 12/31/2001(k) 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(h) 5.09 0.00(g) -- -- 0.00(g) 9/30/1998(i) 10.00 0.00(g) 0.32 0.32 -- -- -- -- CLASS B 12/31/2002 13.62 (0.12) (4.82) (4.94) -- -- -- -- 12/31/2001(k) 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(j) 16.21 (0.26) 5.58 5.32 -- -- -- -- CLASS C 12/31/2002 13.62 (0.12) (4.82) (4.94) -- -- -- -- 12/31/2001(k) 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(j) 16.21 (0.26) 5.59 5.33 -- -- -- -- CLASS Y 12/31/2002 13.93 (0.01) (4.95) (4.96) -- -- -- -- 12/31/2001(k) 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(j) 16.21 (0.06) 5.58 5.52 -- -- -- -- CAPITAL GROWTH FUND CLASS A 12/31/2002 $ 11.93 $ (0.09) $ (3.26) $ (3.35) $ -- $ -- $ -- $ -- 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) CLASS B 12/31/2002 10.61 (0.15) (2.90) (3.05) -- -- -- -- 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) CLASS C 12/31/2002 10.60 (0.14) (2.90) (3.04) -- -- -- -- 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)
* 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 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) Had certain expenses not been reduced during the periods shown, total returns would have been lower. (f) 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. See accompanying notes to financial statements. 52
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(%) ---------- ---------- -------------- ----------- ------------- -------------- ----------- LARGE CAP GROWTH FUND* CLASS A 12/31/2002 $ 8.87 (35.9)(e) $ 11,340 1.40(f) 1.37(f) (0.37) 44 12/31/2001(k) 13.84 11.7(e) 27,873 1.40(f) 1.36(f) (0.56) 27 9/30/2001 12.39 (38.5)(e) 27,668 1.40(f) 1.19(f) (0.27) 724 9/30/2000 21.67 40.6(e) 103,087 1.40(f) 1.29(f) (0.62) 826 9/30/1999 15.41 49.4(e) 46,827 1.40(f) 1.40(f) (0.55) 632 9/30/1998(i) 10.32 3.2(e) 1,054 1.40(f) 1.40(f) 0.32 11 CLASS B 12/31/2002 8.68 (36.3)(e) 11,758 2.15(f) 2.12(f) (1.12) 44 12/31/2001(k) 13.62 11.5(e) 24,087 2.15(f) 2.11(f) (1.31) 27 9/30/2001 12.22 (38.9)(e) 22,811 2.15(f) 1.98(f) (1.04) 724 9/30/2000(j) 21.53 32.8(e) 35,680 2.15(f) 1.99(f) (1.30) 826 CLASS C 12/31/2002 8.68 (36.3)(e) 1,157 2.15(f) 2.12(f) (1.12) 44 12/31/2001(k) 13.62 11.5(e) 3,007 2.15(f) 2.11(f) (1.33) 27 9/30/2001 12.22 (38.9)(e) 3,419 2.15(f) 1.98(f) (1.04) 724 9/30/2000(j) 21.54 32.9(e) 6,546 2.15(f) 2.01(f) (1.32) 826 CLASS Y 12/31/2002 8.97 (35.6)(e) 792 1.15(f) 1.12(f) (0.12) 44 12/31/2001(k) 13.93 11.8(e) 1,196 1.15(f) 1.11(f) (0.32) 27 9/30/2001 12.46 (38.3)(e) 1,251 1.15(f) 0.98(f) (0.06) 724 9/30/2000(j) 21.73 34.1(e) 1,746 1.15(f) 0.95(f) (0.28) 826 CAPITAL GROWTH FUND CLASS A 12/31/2002 $ 8.58 (28.1) $ 58,729 1.75 1.71 (0.84) 103 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 CLASS B 12/31/2002 7.56 (28.8) 16,267 2.50 2.46 (1.59) 103 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 CLASS C 12/31/2002 7.56 (28.7) 847 2.50 2.46 (1.59) 103 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
(g) Amount rounds to less than $0.01 per share. (h) 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. (i) For the period September 1, 1998 (inception) through September 30, 1998. (j) For the period October 29, 1999 (inception) through September 30, 2000. (k) For the three months ended December 31, 2001. 53
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 ---------- ---------- -------------- ---------- -------------- ------------- --------- ------------- TARGETED EQUITY FUND CLASS A 12/31/2002 $ 7.81 $ (0.06)(d) $ (2.19) $ (2.25) $ -- $ -- $ -- $ -- 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) CLASS B 12/31/2002 7.47 (0.11)(d) (2.08) (2.19) -- -- -- -- 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) CLASS C 12/31/2002 7.47 (0.11)(d) (2.09) (2.20) -- -- -- -- 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(f) 11.18 0.00(d)(e) 2.09 2.09 (0.06) (1.67) (0.39) (2.12) CLASS Y 12/31/2002 7.85 (0.02)(d) (2.20) (2.22) -- -- -- -- 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(g) 11.94 0.03 0.99 1.02 -- (1.95) -- (1.95) GROWTH AND INCOME FUND CLASS A 12/31/2002 $ 11.78 $ 0.01(d) $ (2.37) $ (2.36) $ -- $ -- $ -- $ -- 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) CLASS B 12/31/2002 11.37 (0.07)(d) (2.28) (2.35) -- -- -- -- 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) CLASS C 12/31/2002 11.36 (0.07)(d) (2.28) (2.35) -- -- -- -- 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)
See accompanying notes to financial statements. 54
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 12/31/2002 $ 5.56 (28.8) $ 602,989 1.47 1.39 (0.86) 223 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 CLASS B 12/31/2002 5.28 (29.3) 45,633 2.23 2.15 (1.62) 223 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 CLASS C 12/31/2002 5.27 (29.5) 2,187 2.23 2.15 (1.62) 223 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(f) 11.15 22.2 2,030 1.87 1.87 (0.01) 202 CLASS Y 12/31/2002 5.63 (28.3) 5,522 0.92 0.84 (0.31) 223 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(g) 11.01 9.7 15,418 0.87 0.87 0.48 206 GROWTH AND INCOME FUND CLASS A 12/31/2002 $ 9.42 (20.0) $ 130,751 1.56 1.54 0.07 195 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 CLASS B 12/31/2002 9.02 (20.7) 71,436 2.31 2.29 (0.68) 195 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 CLASS C 12/31/2002 9.01 (20.7) 6,440 2.31 2.29 (0.68) 195 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
(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 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 September 1, 1998 (inception) through December 31, 1998. (g) For the period June 30, 1999 (inception) through December 31, 1999. 55
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 ---------- ---------- -------------- ---------- -------------- ------------- --------- ------------- GROWTH AND INCOME FUND (CONT'D) CLASS Y 12/31/2002 $ 11.93 $ 0.07(d) $ (2.41) $ (2.34) $ -- $ -- $ -- $ -- 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(k) 15.42 0.02 1.22 1.24 (0.02) (0.07) -- (0.09) BALANCED FUND CLASS A 12/31/02 $ 9.57 $ 0.11(d) $ (1.50) $ (1.39) $ (0.11) $ -- $ -- $ (0.11) 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(g) -- (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) CLASS B 12/31/02 9.59 0.04(d) (1.50) (1.46) (0.04) -- -- (0.04) 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(g) -- (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) CLASS C 12/31/02 9.54 0.04(d) (1.49) (1.45) (0.04) -- -- (0.04) 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(g) -- (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) CLASS Y 12/31/02 9.45 0.15(d) (1.45) (1.30) (0.17) -- -- (0.17) 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(g) -- (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) JURIKA & VOYLES RELATIVE VALUE FUND CLASS A 12/31/2002 $ 12.98 $(0.04)(d) $ (3.28) $ (3.32) $ -- $ -- $ -- $ -- 12/31/2001(h) 14.29 -- 0.50 0.50 -- (1.81) -- (1.81) CLASS B 12/31/2002 12.98 (0.11)(d) (3.27) (3.38) -- -- -- -- 12/31/2001(h) 14.29 -- 0.50 0.50 -- (1.81) -- (1.81) CLASS C 12/31/2002 12.98 (0.12)(d) (3.26) (3.38) -- -- -- -- 12/31/2001(h) 14.29 -- 0.50 0.50 -- (1.81) -- (1.81)
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(%) ---------- ---------- -------------- ----------- ------------- -------------- ----------- GROWTH AND INCOME FUND (CONT'D) CLASS Y 12/31/2002 $ 9.59 (19.6) $ 10,569 0.96 0.94 0.66 195 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(k) 16.57 8.1 1 0.98 0.98 0.58 114 BALANCED FUND CLASS A 12/31/02 $ 8.07 (14.6)(e) $ 55,135 1.68(f) 1.65(f) 1.22 89 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 CLASS B 12/31/02 8.09 (15.3)(e) 15,977 2.43(f) 2.40(f) 0.47 89 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 CLASS C 12/31/02 8.05 (15.2)(e) 1,060 2.43(f) 2.40(f) 0.47 89 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 CLASS Y 12/31/02 7.98 (13.9)(e) 28,967 0.95(f) 0.92(f) 1.94 89 12/31/2001(j) 9.45 (8.6)(e) 44,949 1.13(f) 1.10(f) 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 JURIKA & VOYLES RELATIVE VALUE FUND CLASS A 12/31/2002 $ 9.66 (25.6)(e) $ 866 1.50(f) 1.50(f) (0.39) 42 12/31/2001(h) 12.98 3.9(e) 1,277 1.50(f) 1.50(f) (0.20) 21 CLASS B 12/31/2002 9.60 (26.0)(e) 105 2.25(f) 2.25(f) (1.14) 42 12/31/2001(h) 12.98 3.9(e) --(i) 2.25(f) 2.25(f) -- 21 CLASS C 12/31/2002 9.60 (26.0)(e) 23 2.25(f) 2.25(f) (1.14) 42 12/31/2001(h) 12.98 3.9(e) --(i) 2.25(f) 2.25(f) -- 21
(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 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) Had certain expenses not been reduced during the period total return would have been lower. (f) 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. (g) Amount rounds to less than $0.01 per share. (h) For the period November 30, 2001 (inception) through December 31, 2001. (i) Amount is less than $500. (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 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. (k) For the period November 18, 1998 (inception) through December 31, 1998. 57
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 ---------- ---------- -------------- ---------- ------------- ------------- --------- ------------- JURIKA & VOYLES RELATIVE VALUE FUND (CONT'D) CLASS Y* 12/31/2002 $ 12.97 $ (0.02)(d) $ (3.27) $ (3.29) $ -- $ -- $ -- $ -- 12/31/2001(k) 15.49 (0.01) (0.70) (0.71) -- (1.81) -- (1.81) 6/30/2001 16.94 (0.03) 0.97 0.94 -- (2.39) -- (2.39) 6/30/2000 16.06 0.00(g) 1.41 1.41 (0.04) (0.49) -- (0.53) 6/30/1999 16.20 0.03 0.82 0.85 -- (0.99) -- (0.99) 6/30/1998 16.27 0.01 1.77 1.78 (0.04) (1.81) -- (1.85) LARGE CAP VALUE FUND CLASS A 12/31/2002 $ 17.81 $ 0.07(d) $ (4.08) $ (4.01) $ 0.00(g) $ -- $ -- $ 0.00(g) 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(g) -- (0.12) 12/31/1998 17.59 0.26(d) 0.20(h) 0.46 (0.26) (0.17) -- (0.43) CLASS B 12/31/2002 17.67 (0.05)(d) (4.02) (4.07) 0.00(g) -- -- 0.00(g) 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(g) -- (0.05) 12/31/1998 17.59 0.13(d) 0.20(h) 0.33 (0.13) (0.17) -- (0.30) CLASS C 12/31/2002 17.68 (0.05)(d) (4.03) (4.08) 0.00(g) -- -- 0.00(g) 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(g) -- (0.05) 12/31/1998 17.59 0.13(d) 0.21(h) 0.34 (0.13) (0.17) -- (0.30) SELECT FUND CLASS A 12/31/2002 $ 10.96 $ (0.03)(d) $ (1.69) $ (1.72) $ -- $ -- $ -- $ -- 12/31/2001(j) 10.00 (0.01)(d) 0.97 0.96 -- -- -- -- CLASS B 12/31/2002 10.90 (0.11)(d) (1.67) (1.78) -- -- -- -- 12/31/2001(j) 10.00 (0.07)(d) 0.97 0.90 -- -- -- -- CLASS C 12/31/2002 10.90 (0.11)(d) (1.67) (1.78) -- -- -- -- 12/31/2001(j) 10.00 (0.07)(d) 0.97 0.90 -- -- -- --
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)(e) (000) (%) (b)(f) (%) (b)(c)(f) (%) (b) RATE (%) ---------- ---------- ----------- ---------- ------------- -------------- --------- JURIKA & VOYLES RELATIVE VALUE FUND (CONT'D) CLASS Y* 12/31/2002 $ 9.68 (25.4) $ 16,062 1.25 1.25 (0.14) 42 12/31/2001(k) 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 LARGE CAP VALUE FUND CLASS A 12/31/2002 $ 13.80 (22.5) $ 5,952 1.50 1.45 0.42 55 12/31/2001 17.81 (3.5) 10,185 1.50 1.46 0.49 31 12/31/2000 18.49 9.0 8,510 1.50 1.47 0.96 31 12/31/1999 17.16 (1.9) 11,291 1.50 1.50 0.94 93 12/31/1998 17.62 2.7 17,839 1.50 1.50 1.48 61 CLASS B 12/31/2002 13.60 (23.0) 7,384 2.25 2.20 (0.33) 55 12/31/2001 17.67 (4.2) 9,911 2.25 2.21 (0.26) 31 12/31/2000 18.46 8.2 7,839 2.25 2.22 0.21 31 12/31/1999 17.10 (2.7) 9,643 2.25 2.25 0.19 93 12/31/1998 17.62 2.0 16,623 2.25 2.25 0.73 61 CLASS C 12/31/2002 13.60 (23.1) 654 2.25 2.20 (0.33) 55 12/31/2001 17.68 (4.3) 783 2.25 2.21 (0.25) 31 12/31/2000 18.48 8.2 799 2.25 2.22 0.21 31 12/31/1999 17.11 (2.7) 1,336 2.25 2.25 0.19 93 12/31/1998 17.63 2.0 2,101 2.25 2.25 0.73 61 SELECT FUND CLASS A 12/31/2002 $ 9.24 (15.7) $ 68,660 1.70 1.69 (0.35) 12 12/31/2001(j) 10.96 9.6 45,987 1.70 1.63 (0.08) 10 CLASS B 12/31/2002 9.12 (16.3) 85,794 2.45 2.44 (1.10) 12 12/31/2001(j) 10.90 9.0 62,671 2.45 2.39 (0.83) 10 CLASS C 12/31/2002 9.12 (16.3) 86,269 2.45 2.44 (1.10) 12 12/31/2001(j) 10.90 9.0 34,406 2.45 2.39 (0.86) 10
* 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. (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 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) Had certain expenses not been reduced during the period, total returns would have been lower. (f) 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. (g) Amount rounds to less than $0.01 per share. (h) 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 redemptions of Fund shares in relation to fluctuating market values of the investments of the Fund. (i) For the period September 15, 1997 (inception) through December 31, 1997. (j) For the period March 15, 2001 (inception) through December 31, 2001. (k) For the period July 1, 2001 through December 31, 2001. 59
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 ---------- ---------- -------------- ----------- -------------- ------------- --------- ------------- JURIKA & VOYLES SMALL CAP GROWTH FUND CLASS A 12/31/2002 $ 13.04 $ (0.13)(d) $ (5.81) $ (5.94) $ -- $ -- $ -- $ -- 12/31/2001(h) 12.56 (0.01)(d) 0.49 0.48 -- -- -- -- CLASS B 12/31/2002 13.03 (0.21)(d) (5.78) (5.99) -- -- -- -- 12/31/2001(h) 12.56 (0.02)(d) 0.49 0.47 -- -- -- -- CLASS C 12/31/2002 13.04 (0.20)(d) (5.80) (6.00) -- -- -- -- 12/31/2001(h) 12.56 (0.02)(d) 0.50 0.48 -- -- -- -- CLASS Y* 12/31/2002 13.05 (0.11)(d) (5.81) (5.92) -- -- -- -- 12/31/2001(g) 16.48 (0.08)(d) (3.20) (3.28) -- (0.15) -- (0.15) 6/30/2001 23.62 (0.20) (3.36) (3.56) -- (3.58) -- (3.58) 6/30/2000 16.13 (0.21) 7.70 7.49 -- -- -- -- 6/30/1999 19.10 (0.14) (0.93) (1.07) -- (1.90) -- (1.90) 6/30/1998 21.83 (0.17) 2.40 2.23 -- (4.96) -- (4.96) INTERNATIONAL EQUITY FUND CLASS A 12/31/2002 $ 12.72 $ (0.08)(d) $ (2.60) $ (2.68) $ -- $ -- $ -- $ -- 12/31/2001 16.62 (0.10)(d) (3.80) (3.90) -- -- -- -- 12/31/2000 25.39 (0.22)(d) (6.90) (7.12) (0.17) (1.48) -- (1.65) 12/31/1999 14.26 (0.03)(d) 12.31 12.28 (0.02) (1.13) -- (1.15) 12/31/1998 14.06 0.15(d) 0.77 0.92 (0.44) (0.28) -- (0.72) CLASS B 12/31/2002 12.14 (0.16)(d) (2.47) (2.63) -- -- -- -- 12/31/2001 15.99 (0.20)(d) (3.65) (3.85) -- -- -- -- 12/31/2000 24.71 (0.37)(d) (6.70) (7.07) (0.17) (1.48) -- (1.65) 12/31/1999 13.98 (0.15)(d) 12.01 11.86 -- (1.13) -- (1.13) 12/31/1998 13.71 0.04(d) 0.75 0.79 (0.24) (0.28) -- (0.52)
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 (%) ---------- -------- ----------- ---------- ------------- -------------- --------- JURIKA & VOYLES SMALL CAP GROWTH FUND CLASS A 12/31/2002 $ 7.10 (45.6)(e) $ 2,821 1.75(f) 1.73(f) (1.42) 163 12/31/2001(h) 13.04 3.8(e) 6,902 1.75(f) 1.75(f) (1.31) 96 CLASS B 12/31/2002 7.04 (46.0)(e) 3,085 2.50(f) 2.48(f) (2.17) 163 12/31/2001(h) 13.03 3.7(e) 7,368 2.50(f) 2.50(f) (2.06) 96 CLASS C 12/31/2002 7.04 (46.0)(e) 297 2.50(f) 2.48(f) (2.17) 163 12/31/2001(h) 13.04 3.8(e) 722 2.50(f) 2.50(f) (2.06) 96 CLASS Y* 12/31/2002 7.13 (45.4)(e) 5,860 1.50(f) 1.48(f) (1.17) 163 12/31/2001(g) 13.05 (19.9)(e) 15,681 1.50(f) 1.50(f) (1.21) 96 6/30/2001 16.48 (14.1)(e) 31,600 1.50(f) 1.50(f) (0.17) 203 6/30/2000 23.62 46.4(e) 43,200 1.50(f) 1.50(f) (1.14) 283 6/30/1999 16.13 (3.8)(e) 30,600 1.50(f) 1.50(f) (0.66) 180 6/30/1998 19.10 10.3(e) 90,900 1.50(f) 1.50(f) (0.59) 169 INTERNATIONAL EQUITY FUND CLASS A 12/31/2002 $ 10.04 (21.1) $ 22,232 2.34 2.32 (0.67) 125 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(e) 67,197 2.00(f) 2.00(f) (0.15) 229 12/31/1998 14.26 6.7(e) 47,444 1.91(f) 1.91(f) 1.04 105 CLASS B 12/31/2002 9.51 (21.7) 8,950 3.09 3.07 (1.43) 125 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(e) 29,045 2.75(f) 2.75(f) (0.90) 229 12/31/1998 13.98 5.8(e) 19,797 2.66(f) 2.66(f) 0.29 105
* 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 total return calculations. (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 broker 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) Had certain expenses not been reduced during the period, total returns would have been lower. (f) The investment adviser agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement, expenses would have been higher. (g) For the period July 1, 2001 through December 31, 2001. (h) For the period November 30, 2001 (inception) through December 31, 2001. 61
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)(c) INVESTMENTS OPERATIONS INCOME CAPITAL GAINS CAPITAL DISTRIBUTIONS ---------- ---------- -------------- ---------- -------------- ------------ --------- ------------- INTERNATIONAL EQUITY FUND (CONT'D) CLASS C 12/31/2002 $ 12.18 $ (0.16) $ (2.53) $ (2.69) $ -- $ -- $ -- $ -- 12/31/2001 16.05 (0.20) (3.67) (3.87) -- -- -- -- 12/31/2000 24.78 (0.34) (6.74) (7.08) (0.17) (1.48) -- (1.65) 12/31/1999 14.02 (0.15) 12.04 11.89 -- (1.13) -- (1.13) 12/31/1998 13.74 0.05 0.75 0.80 (0.24) (0.28) -- (0.52) CLASS Y 12/31/2002 13.11 0.01 (2.69) (2.68) -- -- -- -- 12/31/2001 17.02 (0.02) (3.89) (3.91) -- -- -- -- 12/31/2000 25.81 (0.10) (7.04) (7.14) (0.17) (1.48) -- (1.65) 12/31/1999 14.45 0.02 12.54 12.56 (0.07) (1.13) -- (1.20) 12/31/1998 14.35 0.25 0.77 1.02 (0.64) (0.28) -- (0.92)
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) (000) (%)(b) (%)(b)(c) (%)(b) RATE (%) ---------- -------- ----------- ---------- ------------- -------------- --------- INTERNATIONAL EQUITY FUND (CONT'D) CLASS C 12/31/2002 $ 9.49 (22.1) $ 1,195 3.09 3.07 (1.43) 125 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(e) 1,267 2.75(d) 2.75(d) (0.90) 229 12/31/1998 14.02 5.9(e) 860 2.66(d) 2.66(d) 0.29 105 CLASS Y 12/31/2002 10.43 (20.4) 3,330 1.60 1.58 0.07 125 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(e) 14,441 1.55(d) 1.55(d) 0.10 229 12/31/1998 14.45 7.3(e) 5,552 1.31(d) 1.31(d) 1.64 105
(a) A sales charge and a contingent deferred sales charge for Class C shares are not reflected in total return calculations. (b) Certain Funds have entered into agreements with certain brokers to rebate a portion of broker commissions. The rebated commissions are used to reduce operating expenses of the Fund. (c) Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (d) 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. (e) Had certain expenses not been reduced during the period, total returns would have been lower. 63 NOTES TO FINANCIAL STATEMENTS 64 NOTES TO FINANCIAL STATEMENTS For the Year Ended December 31, 2002 1. ORGANIZATION. CDC Nvest Funds Trust I, CDC Nvest Funds Trust II and CDC 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 Large Cap Growth Fund (the "Large Cap Growth Fund") CDC Nvest Capital Growth Fund (the "Capital Growth Fund") CDC Nvest Targeted Equity Fund (the "Targeted Equity Fund") CDC Nvest Balanced Fund (the "Balanced Fund") CDC Nvest Jurika & Voyles Relative Value Fund (the "Relative Value Fund") CDC Nvest International Equity Fund (the "International Equity Fund") CDC NVEST FUNDS TRUST II: CDC Nvest Growth and Income Fund (the "Growth and Income Fund") CDC NVEST FUNDS TRUST III: CDC Nvest Large Cap Value Fund (the "Large Cap Value 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. 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. 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 securities 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, or in the case of certain foreign securities, as soon as the Fund is notified. 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. 65 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. Effective May 1, 2002, the dividend payment frequency has changed for Large Cap Value Fund from quarterly to annually and for Growth and Income Fund from semiannually to annually. 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, has been fully amortized as of December 31, 2002. 3. PURCHASES AND SALES OF SECURITIES. For the year ended December 31, 2002, purchases and sales of securities (excluding U.S. Government/Agency securities and short-term investments) were as follows:
FUND PURCHASES SALES FUND PURCHASES SALES ---- --------- ----- ---- --------- ----- Large Cap Growth Fund $ 16,398,806 $ 30,047,566 Relative Value Fund $ 8,944,294 $ 11,947,028 Capital Growth Fund 105,961,815 132,085,871 Large Cap Value Fund 9,704,755 11,602,178 Targeted Equity Fund 2,042,862,559 2,214,389,822 Select Fund 155,988,899 23,504,535 Growth and Income Fund 538,462,799 618,347,665 Small Cap Growth Fund 31,733,519 37,836,768 Balanced Fund 90,310,686 112,235,343 International Equity Fund 58,027,751 74,049,065
For the year ended December 31, 2002, purchases and sales of U.S. Government/Agency securities by Balanced Fund were $18,979,562 and $23,705,921, respectively. 66 4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES. a. MANAGEMENT FEES. 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 ---- ------------ ------------ ------------ ------------ ------------ Large Cap Growth Fund 0.900% 0.900% 0.900% 0.900% 0.900% Capital Growth Fund 0.750% 0.700% 0.650% 0.650% 0.650% 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% Relative Value Fund 0.850% 0.850% 0.800% 0.800% 0.800% Large Cap Value Fund 0.700% 0.650% 0.600% 0.600% 0.600% 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 year ended December 31, 2002, the management fees and waivers for each Fund were as follows:
PERCENTAGE OF AVERAGE GROSS WAIVER OF NET DAILY NET ASSETS MANAGEMENT MANAGEMENT MANAGEMENT --------------------------- FUND FEE FEE FEE GROSS NET ---- ------------ ------------ ------------ ------------ ------------ Large Cap Growth Fund $ 336,604 $ 196,094 $ 140,510 0.900% 0.376% Capital Growth Fund 777,861 -- 777,861 0.750% 0.750% Targeted Equity Fund 6,317,642 -- 6,317,642 0.688% 0.688% Growth and Income Fund 1,933,542 -- 1,933,542 0.685% 0.685% Balanced Fund 942,522 -- 942,522 0.750% 0.750% Relative Value Fund 190,578 173,836 16,742 0.850% 0.075% Large Cap Value Fund 125,893 47,024 78,869 0.700% 0.439% Select Fund 2,201,287 -- 2,201,287 1.000% 1.000% Small Cap Growth Fund 183,867 89,536 94,331 0.950% 0.487% International Equity Fund 428,168 -- 428,168 0.900% 0.900%
CDC IXIS Advisers has entered into subadvisory agreements for each Fund listed below. Payments to CDC IXIS Advisers are reduced by payments to the subadvisers. Large Cap Growth Fund Vaughan, Nelson, Scarborough & McCullough, L.P. Capital Growth Fund Westpeak Global Advisors, L.P. Growth and Income Fund Harris Associates L.P. Balanced Fund Loomis, Sayles & Company, L.P. Jurika & Voyles, L.P. Relative Value Fund Jurika & Voyles, L.P. Large Cap Value Fund Vaughan, Nelson, Scarborough & McCullough, L.P. Select Fund Harris Associates, L.P. Small Cap Growth Fund Jurika & Voyles, L.P. International Equity Fund Loomis, Sayles & Company, 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., ("CDC IXIS North America") performs certain accounting and administrative services for the Funds and has subcontracted with Investors Bank & Trust Company ("IBT") to serve as subadministrator. 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. 67 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 year ended December 31, 2002, fees paid to CIS for accounting and administrative expense were as follows:
ACCOUNTING AND PERCENTAGE OF AVERAGE FUND ADMINISTRATIVE DAILY NET ASSETS ---- -------------- --------------------- Large Cap Growth Fund $ 70,000 0.187% Capital Growth Fund 57,966 0.056% Targeted Equity Fund 515,966 0.056% Growth and Income Fund 158,120 0.056% Balanced Fund 70,972 0.056% Relative Value Fund 70,000 0.312% Large Cap Value Fund 10,119 0.056% Select Fund 70,000 0.032% Small Cap Growth Fund 10,716 0.055% International Equity Fund 26,632 0.056%
Effective January 1, 2003, the annual aggregate fee based on average daily net assets changed to 0.060% on the first $5 billion in average daily net assets, 0.050% on the next $5 billion in average daily net assets and 0.045% on average daily net assets over $10 billion. The annual aggregate minimum fee also changed to $3.4 million. 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. Classes A, B and C 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 $10.1 million. In addition, pursuant to other servicing agreements, Class A, B and C 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 year ended December 31, 2002, amounts paid to CIS as compensation for its services as transfer agent were as follows:
TRANSFER AGENT FUND FEE ---- -------------- Large Cap Growth Fund $ 126,745 Capital Growth Fund 367,794 Targeted Equity Fund 3,111,797 Growth and Income Fund 894,117 Balanced Fund 353,904 Relative Value Fund 74,992 Large Cap Value 56,608 Select Fund 512,989 Small Cap Growth Fund 63,376 International Equity Fund 155,751
68 Effective January 1, 2003, the annual aggregate minimum fee changed to $9.8 million. d. 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"). 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 North America), 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, each 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, each 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 year ended December 31, 2002, the Funds paid the following service and distribution fees:
SERVICE FEE DISTRIBUTION FEE ------------------------------------------ --------------------------- FUND CLASS A CLASS B CLASS C CLASS B CLASS C ---- ------------ ------------ ------------ ------------ ------------ Large Cap Growth Fund $ 44,663 $ 41,871 $ 4,672 $ 125,613 $ 14,014 Capital Growth Fund 195,192 60,814 3,261 182,443 9,782 Targeted Equity Fund 2,106,363 161,773 8,620 485,319 25,860 Growth and Income Fund 421,102 233,794 20,164 701,383 60,493 Balanced Fund 162,264 54,497 3,122 163,493 9,367 Relative Value Fund 2,472 162 44 486 132 Large Cap Value 21,024 21,983 1,957 65,948 5,869 Select Fund 160,533 209,583 180,212 628,747 540,635 Small Cap Growth Fund 10,963 11,916 1,184 35,748 3,552 International Equity Fund 70,788 32,254 4,034 96,760 12,102
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 reimbursable 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, 2002 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 year ended December 31, 2002 were as follows:
FUND ----- Large Cap Growth Fund $ 138,621 Capital Growth Fund 181,881 Targeted Equity Fund 665,198 Growth and Income Fund 497,352 Balanced Fund 132,310 Relative Value Fund 3,388 Large Cap Value 55,828 Select Fund 1,759,061 Small Cap Growth Fund 36,357 International Equity Fund 80,359
69 e. 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 North America, CIS or their affiliates. Each other Trustee receives a retainer fee at the annual rate of $45,000 and meeting attendance fees of $4,500 for each meeting of the Board of Trustees attended. Each committee member receives an additional retainer fee at the annual rate of $7,000 while each committee chairman receives a retainer fee (beyond the $7,000 fee) at the annual rate of $5,000. The retainer fees assume four Board or Committee meetings per year; Trustees are compensated for each additional committee and board meeting, in excess of four meetings per year, at the rate of $1,750 and $4,500, respectively. 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 a designated Fund or certain other CDC Nvest Funds on the normal payment date. Deferred amounts remain in the Funds until distributed in accordance with the Plan. f. PUBLISHING SERVICES. CIS performs certain desktop publishing services for the Funds. Fees for these services are presented in the statements of operations as shareholder reporting. For the year ended December 31, 2002, amounts paid to CIS as compensation for these services were as follows:
PUBLISHING FUND SERVICES FEE - ---- ------------ Large Cap Growth Fund $ 3,563 Capital Growth Fund 2,204 Targeted Equity Fund 2,956 Growth and Income Fund 3,890 Balanced Fund 2,483 Relative Value Fund $ 3,210 Large Cap Value Fund 2,846 Select Fund 2,846 Small Cap Growth Fund 3,592 International Equity Fund 2,204
5. LINE OF CREDIT. The Funds that comprise the CDC Nvest Funds Trusts participate in a $50,000,000 committed line of credit provided by IBT. 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 0.10% 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 year ended December 31, 2002. 6. SECURITY LENDING. Each Fund has entered into an agreement with IBT, as agent of the Funds, to lend securities to certain designated borrowers. 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. The market value of securities on loan to borrowers and the value of collateral held by the Funds with respect to such loans at December 31, 2002, is as follows:
MARKET VALUE OF VALUE OF COLLATERAL FUND SECURITIES ON LOAN RECEIVED ---- ------------------ ------------------- Large Cap Growth Fund $ 233,772 $ 243,600 Capital Growth Fund 6,441,286 6,648,104 Targeted Equity Fund 14,137,132 14,768,050 Balanced Fund 4,813,475 4,962,464 Relative Value Fund 1,219,040 1,258,000 Large Cap Value Fund 579,576 599,200 Select Fund 16,376,445 17,144,800 Small Cap Growth Fund 3,427,810 3,761,033 International Equity 2,696,740 2,832,550
70 7. 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 year ended December 31, 2002, expenses were reduced under these agreements as follows:
FUND REDUCTIONS ---- ------------ Large Cap Growth Fund $ 9,082 Capital Growth Fund 39,908 Targeted Equity Fund 743,955 Growth and Income Fund 72,686 Balanced Fund 43,236 Large Cap Value 9,073 Select Fund 22,263 Small Cap Growth Fund 4,410 International Equity Fund 9,443
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. For the year ended December 31, 2002, and in addition to the waiver of management fees as discussed in Note 4, certain class level expenses have been reimbursed as follows: Large Cap Growth Fund $219,490; Balanced Fund $77,675; Relative Value Fund $76,809; Large Cap Value Fund $86,525; Select Fund $208,138, and Small Cap Growth Fund $89,062. 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, 2002, 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:
EXPENSE LIMIT AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS EXPENSES SUBJECT ----------------------------------- EXPIRATION TO POSSIBLE FUND CLASS A CLASS B CLASS C CLASS Y OF WAIVER REIMBURSEMENT ---- ------- ------- ------- ------- ----------------- ---------------- Large Cap Growth Fund 1.40% 2.15% 2.15% 1.15% April 30, 2003 $ 415,584 Balanced Fund --% --% --% 0.95% December 31, 2003 77,675 Relative Value Fund 1.50% 2.25% 2.25% 1.25% December 31, 2004 250,645 Large Cap Value Fund 1.50% 2.25% 2.25% --% April 30, 2003 133,549 Select Fund 1.70% 2.45% 2.45% --% April 30, 2003 208,138 Small Cap Growth Fund 1.75% 2.50% 2.50% 1.50% December 31, 2004 178,598
8. CONCENTRATION OF RISK. 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, 2002: Japan 12.0% and United Kingdom 21.6%. 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. 71 9. Capital Shares. Each Fund may issue an unlimited number of shares of beneficial interest. Transactions in capital shares were as follows:
LARGE CAP GROWTH FUND --------------------------------------------------------------------- FOR THE PERIOD YEAR ENDED OCTOBER 1, 2001 THROUGH DECEMBER 31, 2002 DECEMBER 31, 2001 (a) --------------------------------- --------------------------------- SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- CLASS A Shares sold 202,098 $ 2,343,505 64,336 $ 876,119 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 202,098 2,343,505 64,336 876,119 Shares repurchased (936,669) (10,274,458) (283,145) (3,844,814) --------------- --------------- --------------- --------------- Net increase (decrease) (734,571) $ (7,930,953) (218,809) $ (2,968,695) --------------- --------------- --------------- --------------- CLASS B Shares sold 131,877 $ 1,421,109 36,462 $ 495,303 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 131,877 1,421,109 36,462 495,303 Shares repurchased (545,262) (5,619,744) (135,018) (1,808,744) --------------- --------------- --------------- --------------- Net increase (decrease) (413,385) $ (4,198,635) (98,556) $ (1,313,441) --------------- --------------- --------------- --------------- CLASS C Shares sold 16,263 $ 176,036 5,761 $ 78,878 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 16,263 176,036 5,761 78,878 Shares repurchased (103,754) (1,097,229) (64,731) (866,069) --------------- --------------- --------------- --------------- Net increase (decrease) (87,491) $ (921,193) (58,970) $ (787,191) --------------- --------------- --------------- --------------- CLASS Y Shares sold 24,593 $ 275,632 7,922 $ 107,634 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 24,593 275,632 7,922 107,634 Shares repurchased (22,048) (266,349) (22,487) (301,356) --------------- --------------- --------------- --------------- Net increase (decrease) 2,545 $ 9,283 (14,565) $ (193,722) --------------- --------------- --------------- --------------- Increase (decrease) derived from capital shares transactions (1,232,902) $ (13,041,498) (390,900) $ (5,263,049) =============== =============== =============== =============== LARGE CAP GROWTH FUND --------------------------------- YEAR ENDED SEPTEMBER 30, 2001 (a) --------------------------------- SHARES AMOUNT --------------- --------------- CLASS A Shares sold 717,163 $ 12,809,760 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- Distributions from net realized gain 348,180 6,204,561 --------------- --------------- 1,065,343 19,014,321 Shares repurchased (3,590,481) (62,510,964) --------------- --------------- Net increase (decrease) (2,525,138) $ (43,496,643) --------------- --------------- CLASS B Shares sold 668,197 $ 11,535,951 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- Distributions from net realized gain 129,881 2,294,996 --------------- --------------- 798,078 13,830,947 Shares repurchased (588,332) (9,134,751) --------------- --------------- Net increase (decrease) 209,746 $ 4,696,196 --------------- --------------- CLASS C Shares sold 126,239 $ 2,109,406 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- Distributions from net realized gain 13,269 234,468 --------------- --------------- 139,508 2,343,874 Shares repurchased (163,692) (2,468,578) --------------- --------------- Net increase (decrease) (24,184) $ (124,704) --------------- --------------- CLASS Y Shares sold 88,119 $ 1,477,323 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- Distributions from net realized gain 5,900 105,486 --------------- --------------- 94,019 1,582,809 Shares repurchased (73,955) (1,216,548) --------------- --------------- Net increase (decrease) 20,064 $ 366,261 --------------- --------------- Increase (decrease) derived from capital shares transactions (2,319,512) $ (38,558,890) =============== ===============
(a) Financial information for Kobrick Growth Fund which was reorganized into CDC Nvest Large Cap Growth Fund on November 30, 2001. 72
CAPITAL GROWTH FUND --------------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2002 DECEMBER 31, 2001 --------------------------------- --------------------------------- SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- CLASS A Shares sold 761,322 $ 8,210,459 1,055,218 $ 13,148,699 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- 22,408 272,010 --------------- --------------- --------------- --------------- 761,322 8,210,459 1,077,626 13,420,709 Shares repurchased (2,161,141) (22,158,435) (2,365,014) (30,219,377) --------------- --------------- --------------- --------------- Net increase (decrease) (1,399,819) $ (13,947,976) (1,287,388) $ (16,798,668) --------------- --------------- --------------- --------------- CLASS B Shares sold 237,784 $ 2,165,602 371,713 $ 4,321,421 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- 10,307 111,634 --------------- --------------- --------------- --------------- 237,784 2,165,602 382,020 4,433,055 Shares repurchased (1,425,706) (13,198,190) (1,265,123) (14,453,783) --------------- --------------- --------------- --------------- Net increase (decrease) (1,187,922) $ (11,032,588) (883,103) $ (10,020,728) --------------- --------------- --------------- --------------- CLASS C Shares sold 19,550 $ 183,007 34,361 $ 393,899 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- 470 5,079 --------------- --------------- --------------- --------------- 19,550 183,007 34,831 398,978 Shares repurchased (72,021) (637,881) (54,929) (635,589) --------------- --------------- --------------- --------------- Net increase (decrease) (52,471) $ (454,874) (20,098) $ (236,611) --------------- --------------- --------------- --------------- 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 (2,640,213) $ (25,435,438) (2,190,589) $ (27,056,007) =============== =============== =============== =============== TARGETED EQUITY FUND --------------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2002 DECEMBER 31, 2001 --------------------------------- --------------------------------- SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- CLASS A Shares sold 2,888,014 $ 20,668,849 4,625,921 $ 37,397,822 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- 588,286 4,641,577 Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 2,888,013 20,668,849 5,214,207 42,039,399 Shares repurchased (24,057,649) (169,752,395) (26,670,516) (210,005,714) --------------- --------------- --------------- --------------- Net increase (decrease) (21,169,635) $ (149,083,546) (21,456,309) $ (167,966,315) --------------- --------------- --------------- --------------- CLASS B Shares sold 808,645 $ 5,457,636 1,033,167 $ 7,768,966 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- 47,010 355,864 Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 808,645 5,457,636 1,080,177 8,124,830 Shares repurchased (2,703,038) (18,188,643) (2,507,370) (18,748,868) --------------- --------------- --------------- --------------- Net increase (decrease) (1,894,393) $ (12,731,007) (1,427,193) $ (10,624,038) --------------- --------------- --------------- --------------- CLASS C Shares sold 42,117 $ 286,122 97,093 $ 747,803 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- 1,961 14,842 Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 42,117 286,122 99,054 762,645 Shares repurchased (184,345) (1,163,741) (188,267) (1,437,665) --------------- --------------- --------------- --------------- Net increase (decrease) (142,228) $ (877,619) (89,213) $ (675,020) --------------- --------------- --------------- --------------- CLASS Y Shares sold 72,523 $ 518,150 102,858 $ 807,171 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- 5,087 40,392 Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 72,523 518,150 107,945 847,563 Shares repurchased (209,324) (1,536,133) (297,678) (2,366,110) --------------- --------------- --------------- --------------- Net increase (decrease) (136,801) $ (1,017,983) (189,733) $ (1,518,547) --------------- --------------- --------------- --------------- Increase (decrease) derived from capital shares transactions (23,343,057) $ (163,710,155) (23,162,448) $ (180,783,920) =============== =============== =============== ===============
73
GROWTH AND INCOME FUND --------------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2002 DECEMBER 31, 2001 --------------------------------- --------------------------------- SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- CLASS A Shares sold 945,632 $ 10,205,721 2,062,745 $ 25,706,467 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- --------------- --------------- --------------- --------------- 945,632 10,205,721 2,062,745 25,706,467 Shares repurchased (4,978,487) (52,521,283) (5,231,087) (64,972,389) --------------- --------------- --------------- --------------- Net increase (decrease) (4,032,855) $ (42,315,562) (3,168,342) $ (39,265,922) --------------- --------------- --------------- --------------- CLASS B Shares sold 601,736 $ 6,071,959 942,184 $ 11,377,030 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- --------------- --------------- --------------- --------------- 601,736 6,071,959 942,184 11,377,030 Shares repurchased (3,266,561) (33,165,088) (2,726,089) (32,387,884) --------------- --------------- --------------- --------------- Net increase (decrease) (2,664,825) $ (27,093,129) (1,783,905) $ (21,010,854) --------------- --------------- --------------- --------------- CLASS C Shares sold 96,568 $ 935,777 163,720 $ 2,000,380 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- --------------- --------------- --------------- --------------- 96,568 935,777 163,720 2,000,380 Shares repurchased (310,868) (3,192,896) (682,118) (8,083,997) --------------- --------------- --------------- --------------- Net increase (decrease) (214,300) $ (2,257,119) (518,398) $ (6,083,617) --------------- --------------- --------------- --------------- CLASS Y Shares sold 331,631 $ 3,818,587 536,860 $ 7,211,722 Shares issued - merger -- -- -- -- Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- --------------- --------------- --------------- --------------- 331,631 3,818,587 536,860 7,211,722 Shares repurchased (228,979) (2,533,494) (267,927) (3,334,704) --------------- --------------- --------------- --------------- Net increase (decrease) 102,652 $ 1,285,093 268,933 $ 3,877,018 --------------- --------------- --------------- --------------- Increase (decrease) derived from capital shares transactions (6,809,328) $ (70,380,717) (5,201,712) $ (62,483,375) =============== =============== =============== ===============
74
BALANCED FUND --------------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2002 DECEMBER 31, 2001 --------------------------------- --------------------------------- SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- CLASS A Shares sold 741,867 $ 6,572,716 513,132 $ 4,954,670 Shares Issued in connection with the reinvestment of: Dividends from net investment income 84,117 741,269 132,216 1,279,105 --------------- --------------- --------------- --------------- 825,984 7,313,985 645,348 6,233,775 Shares repurchased (1,810,277) (16,010,078) (2,267,482) (22,274,701) --------------- --------------- --------------- --------------- Net increase (decrease) (984,293) $ (8,696,093) (1,622,134) $ (16,040,926) --------------- --------------- --------------- --------------- CLASS B Shares sold 225,395 $ 1,970,185 276,607 $ 2,708,455 Shares Issued in connection with the reinvestment of: Dividends from net investment income 9,830 86,298 17,951 177,217 --------------- --------------- --------------- --------------- 235,225 2,056,483 294,558 2,885,672 Shares repurchased (1,238,480) (11,031,558) (1,017,696) (9,930,751) --------------- --------------- --------------- --------------- Net increase (decrease) (1,003,255) $ (8,975,075) (723,138) $ (7,045,079) --------------- --------------- --------------- --------------- CLASS C Shares sold 13,020 $ 114,402 18,560 $ 187,397 Shares Issued in connection with the reinvestment of: Dividends from net investment income 607 5,277 903 8,870 --------------- --------------- --------------- --------------- 13,627 119,679 19,463 196,267 Shares repurchased (27,827) (238,978) (63,709) (628,357) --------------- --------------- --------------- --------------- Net increase (decrease) (14,200) $ (119,299) (44,246) $ (432,090) --------------- --------------- --------------- --------------- CLASS Y Shares sold 1,225,757 $ 11,435,712 222,722 $ 2,148,493 Shares issued - merger -- -- 3,661,941 34,040,542 Shares Issued in connection with the reinvestment of: Dividends from net investment income 77,935 680,906 74,800 707,905 --------------- --------------- --------------- --------------- 1,303,692 12,116,618 3,959,463 36,896,940 Shares repurchased (2,426,366) (21,821,664) (1,911,519) (18,274,878) --------------- --------------- --------------- --------------- Net increase (decrease) (1,122,674) $ (9,705,046) 2,047,944 $ 18,622,062 --------------- --------------- --------------- --------------- Increase (decrease) derived from capital shares transactions (3,124,422) $ (27,495,513) (341,574) $ (4,896,033) =============== =============== =============== ===============
75
JURIKA & VOYLES RELATIVE VALUE FUND --------------------------------------------------------------------- FOR THE PERIOD YEAR ENDED JULY 1, 2001 THROUGH DECEMBER 31, 2002 DECEMBER 31, 2001(a)(b) --------------------------------- --------------------------------- SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- CLASS A Shares sold 36,952 $ 452,079 86,080 $ 1,227,351 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- 12,338 155,709 --------------- --------------- --------------- --------------- 36,952 452,079 98,418 1,383,060 Shares repurchased (45,775) (557,698) -- -- --------------- --------------- --------------- --------------- Net increase (decrease) (8,823) $ (105,619) 98,418 $ 1,383,060 --------------- --------------- --------------- --------------- CLASS B Shares sold 13,297 $ 157,062 1 $ 15 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- --------------- --------------- --------------- --------------- 13,297 157,062 1 15 Shares repurchased (2,330) (23,498) -- -- --------------- --------------- --------------- --------------- Net increase (decrease) 10,967 $ 133,564 1 $ 15 --------------- --------------- --------------- --------------- CLASS C Shares sold 2,355 $ 28,898 1 $ 15 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- --------------- --------------- --------------- --------------- 2,355 28,898 1 15 Shares repurchased (1) (11) -- -- --------------- --------------- --------------- --------------- Net increase (decrease) 2,354 $ 28,887 1 $ 15 --------------- --------------- --------------- --------------- CLASS Y Shares sold 103,363 $ 1,161,860 97,090 $ 1,390,709 Shares Issued in connection with the reinvestment of: Distributions from net realized gain -- -- 249,781 3,149,734 --------------- --------------- --------------- --------------- 103,363 1,161,860 346,871 4,540,443 Shares repurchased (451,037) (4,983,642) (217,898) (3,145,865) --------------- --------------- --------------- --------------- Net increase (decrease) (347,674) $ (3,821,782) 128,973 $ 1,394,578 --------------- --------------- --------------- --------------- Increase (decrease) derived from capital shares transactions (343,176) $ (3,764,950) 227,393 $ 2,777,668 =============== =============== =============== =============== JURIKA & VOYLES RELATIVE VALUE FUND ----------------------------------- YEAR ENDED JUNE 30, 2001(a) --------------------------------- SHARES AMOUNT --------------- --------------- CLASS A 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) -- $ -- --------------- --------------- 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 Shares Issued in connection with the reinvestment of: Distributions from net realized gain 254,897 4,009,533 --------------- --------------- 427,280 6,871,221 Shares repurchased (294,086) (4,846,533) --------------- --------------- Net increase (decrease) 133,194 $ 2,024,688 --------------- --------------- Increase (decrease) derived from capital shares transactions 133,194 $ 2,024,688 =============== ===============
(a) Financial information for Jurika & Voyles Value+Growth Fund which was reorganized into CDC Nvest Jurika & Voyles Relative Value Fund on November 30, 2001. (b) For the period November 30, 2001, (commencement of operations) through December 31, 2001 for Class A, Class B and Class C. (c) Select Fund commenced operations on March 15, 2001. 76
LARGE CAP VALUE FUND --------------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2002 DECEMBER 31, 2001 --------------------------------- --------------------------------- SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- CLASS A Shares sold 88,932 $ 1,452,066 229,029 $ 4,102,256 Shares Issued in connection with the reinvestment of: Dividends from net investment income 67 1,136 419 7,682 Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 88,999 1,453,202 229,448 4,109,938 Shares repurchased (229,685) (3,496,485) (117,929) (2,096,523) --------------- --------------- --------------- --------------- Net increase (decrease) (140,686) $ (2,043,283) 111,519 $ 2,013,415 --------------- --------------- --------------- --------------- CLASS B Shares sold 144,085 $ 2,327,774 226,765 $ 4,033,396 Shares Issued in connection with the reinvestment of: Dividends from net investment income 60 1,010 357 6,518 --------------- --------------- --------------- --------------- 144,145 2,328,784 227,122 4,039,914 Shares repurchased (161,878) (2,525,578) (90,859) (1,606,712) --------------- --------------- --------------- --------------- Net increase (decrease) (17,733) $ (196,794) 136,263 $ 2,433,202 --------------- --------------- --------------- --------------- CLASS C Shares sold 17,865 $ 288,834 20,994 $ 374,861 Shares Issued in connection with the reinvestment of: Dividends from net investment income 5 75 33 604 --------------- --------------- --------------- --------------- 17,870 288,909 21,027 375,465 Shares repurchased (14,078) (208,416) (19,973) (355,961) --------------- --------------- --------------- --------------- Net increase (decrease) 3,792 $ 80,493 1,054 $ 19,504 --------------- --------------- --------------- --------------- CLASS Y Shares sold -- $ -- -- $ -- Shares Issued in connection with the reinvestment of: Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- -- -- -- -- Shares repurchased -- -- -- -- --------------- --------------- --------------- --------------- Net increase (decrease) -- $ -- -- $ -- --------------- --------------- --------------- --------------- Increase (decrease) derived from capital shares transactions (154,627) $ (2,159,584) 248,836 $ 4,466,121 =============== =============== =============== =============== SELECT FUND --------------------------------------------------------------------- FOR THE PERIOD YEAR ENDED MARCH 15, 2001(c) DECEMBER 31, 2002 THROUGH DECEMBER 31, 2001 --------------------------------- --------------------------------- SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- CLASS A Shares sold 5,396,731 $ 55,604,458 4,617,531 $ 49,019,114 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 5,396,731 55,604,458 4,617,531 49,019,114 Shares repurchased (2,164,581) (21,141,953) (420,857) (4,377,186) --------------- --------------- --------------- --------------- Net increase (decrease) 3,232,150 $ 34,462,505 4,196,674 $ 44,641,928 --------------- --------------- --------------- --------------- CLASS B Shares sold 5,734,108 $ 59,212,895 6,104,522 $ 64,412,960 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- --------------- --------------- --------------- --------------- 5,734,108 59,212,895 6,104,522 64,412,960 Shares repurchased (2,077,257) (19,685,531) (352,429) (3,649,748) --------------- --------------- --------------- --------------- Net increase (decrease) 3,656,851 $ 39,527,364 5,752,093 $ 60,763,212 --------------- --------------- --------------- --------------- CLASS C Shares sold 7,600,954 $ 78,413,530 3,251,976 $ 34,508,557 Shares Issued in connection with the reinvestment of: Dividends from net investment income -- -- -- -- --------------- --------------- --------------- --------------- 7,600,954 78,413,530 3,251,976 34,508,557 Shares repurchased (1,299,396) (12,288,042) (94,246) (979,567) --------------- --------------- --------------- --------------- Net increase (decrease) 6,301,558 $ 66,125,488 3,157,730 $ 33,528,990 --------------- --------------- --------------- --------------- CLASS Y Shares sold -- $ -- -- $ -- Shares Issued in connection with the reinvestment of: Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- -- -- -- -- Shares repurchased -- -- -- -- --------------- --------------- --------------- --------------- Net increase (decrease) -- $ -- -- $ -- --------------- --------------- --------------- --------------- Increase (decrease) derived from capital shares transactions 13,190,559 $ 140,115,357 13,106,497 $ 138,934,130 =============== =============== =============== ===============
77
JURIKA & VOYLES SMALL CAP GROWTH FUND --------------------------------------------------------------------- FOR THE PERIOD YEAR ENDED JULY 1, 2001 THROUGH DECEMBER 31, 2002 DECEMBER 31, 2001(a)(b) --------------------------------- --------------------------------- SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- CLASS A Shares sold 50,619 $ 453,360 3,024 $ 38,922 Shares issued - merger -- -- 540,019 6,784,591 --------------- --------------- --------------- --------------- 50,619 453,360 543,043 6,823,513 Shares repurchased (182,177) (1,684,154) (13,944) (179,854) --------------- --------------- --------------- --------------- Net increase (decrease) (131,558) $ (1,230,794) 529,099 $ 6,643,659 --------------- --------------- --------------- --------------- CLASS B Shares sold 42,401 $ 405,569 5,729 $ 74,183 Shares issued - merger -- -- 570,477 7,166,841 --------------- --------------- --------------- --------------- 42,401 405,569 576,206 7,241,024 Shares repurchased (169,384) (1,566,608) (10,965) (142,096) --------------- --------------- --------------- --------------- Net increase (decrease) (126,983) $ (1,161,039) 565,241 $ 7,098,928 --------------- --------------- --------------- --------------- CLASS C Shares sold 3,009 $ 32,784 67 $ 856 Shares issued - merger -- -- 55,875 701,995 --------------- --------------- --------------- --------------- 3,009 32,784 55,942 702,851 Shares repurchased (16,255) (148,557) (540) (6,967) --------------- --------------- --------------- --------------- Net increase (decrease) (13,246) $ (115,773) 55,402 $ 695,884 --------------- --------------- --------------- --------------- CLASS Y Shares sold 35,196 $ 374,901 232,714 $ 3,491,365 Shares Issued in connection with the reinvestment of: Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 35,196 374,901 232,714 3,491,365 Shares repurchased (414,158) (3,809,788) (947,565) (12,569,449) --------------- --------------- --------------- --------------- Net increase (decrease) (378,962) $ (3,434,887) (714,851) $ (9,078,084) --------------- --------------- --------------- --------------- Increase (decrease) derived from capital shares transactions (650,749) $ (5,942,493) 434,891 $ 5,360,387 =============== =============== =============== =============== JURIKA & VOYLES SMALL CAP GROWTH FUND ------------------------------------- YEAR ENDED JUNE 30, 2001 (a) --------------------------------- 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 Shares Issued in connection with the reinvestment of: Distributions from net realized gain 367,044 5,667,152 --------------- --------------- 935,740 15,259,444 Shares repurchased (847,206) (14,813,799) --------------- --------------- Net increase (decrease) 88,534 $ 445,645 --------------- --------------- Increase (decrease) derived from capital shares transactions 88,534 $ 445,645 =============== ===============
(a) Financial information for Jurika & Voyles Small-Cap Fund which was reorganized into CDC Nvest Jurika & Voyles Small Cap Growth Fund on November 30, 2001. (b) For the period November 30, 2001, (commencement of operations) through December 31, 2001 for Class A, Class B and Class C. 10. 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. 78
INTERNATIONAL EQUITY FUND --------------------------------------------------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, 2002 DECEMBER 31, 2001 --------------------------------- --------------------------------- SHARES AMOUNT SHARES AMOUNT --------------- --------------- --------------- --------------- CLASS A Shares sold 2,754,333 $ 29,936,420 2,564,768 $ 35,852,024 Shares issued - merger -- -- -- -- --------------- --------------- --------------- --------------- 2,754,333 29,936,420 2,564,768 35,852,024 Shares repurchased (3,196,260) (35,287,699) (3,207,465) (44,877,051) --------------- --------------- --------------- --------------- Net increase (decrease) (441,927) $ (5,351,279) (642,697) $ (9,025,027) --------------- --------------- --------------- --------------- CLASS B Shares sold 82,990 $ 907,560 138,289 $ 1,869,978 Shares issued - merger -- -- -- -- --------------- --------------- --------------- --------------- 82,990 907,560 138,289 1,869,978 Shares repurchased (587,425) (6,411,587) (507,291) (6,696,617) --------------- --------------- --------------- --------------- Net increase (decrease) (504,435) $ (5,504,027) (369,002) $ (4,826,639) --------------- --------------- --------------- --------------- CLASS C Shares sold 322,458 $ 3,276,144 322,285 $ 4,973,553 Shares issued - merger -- -- -- -- --------------- --------------- --------------- --------------- 322,458 3,276,144 322,285 4,973,553 Shares repurchased (375,769) (3,937,764) (495,496) (7,406,722) --------------- --------------- --------------- --------------- Net increase (decrease) (53,311) $ (661,620) (173,211) $ (2,433,169) --------------- --------------- --------------- --------------- CLASS Y Shares sold 18,164 $ 231,399 92,618 $ 1,334,169 Shares Issued in connection with the reinvestment of: Distributions from net realized gain -- -- -- -- --------------- --------------- --------------- --------------- 18,164 231,399 92,618 1,334,169 Shares repurchased (251,729) (3,235,184) (241,290) (3,607,746) --------------- --------------- --------------- --------------- Net increase (decrease) (233,565) $ (3,003,785) (148,672) $ (2,273,577) --------------- --------------- --------------- --------------- Increase (decrease) derived from capital shares transactions (1,233,238) $ (14,520,711) (1,333,582) $ (18,558,412) =============== =============== =============== ===============
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 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 Note 9 - 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. 79 REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees of CDC Nvest Funds Trust I, CDC Nvest Trust II, and CDC Nvest 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 Large Cap Growth Fund, CDC Nvest Capital Growth Fund, CDC Nvest Targeted Equity Fund, CDC Nvest Growth and Income Fund, CDC Nvest Balanced Fund, CDC Nvest Jurika & Voyles Relative Value Fund, CDC Nvest Large Cap Value Fund, CDC Nvest Select Fund, CDC Nvest Jurika & Voyles Small Cap Growth 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, 2002, and 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, 2002 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Boston, Massachusetts February 13, 2003 80 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 Funds' performance.
POSITION(S) HELD WITH NUMBER OF PORTFOLIOS IN FUNDS, LENGTH OF TIME PRINCIPAL OCCUPATION(S) FUND COMPLEX OVERSEEN AND NAME, AGE AND ADDRESS SERVED AND TERM OF OFFICE(4) DURING PAST 5 YEARS OTHER DIRECTORSHIPS HELD --------------------- ---------------------------- ------------------------------- ----------------------------- INDEPENDENT TRUSTEES GRAHAM T. ALLISON, JR. (63) Trustee (2)(3); Douglas Dillon Professor and 27; Director, Taubman 399 Boylston Street 19 years Director for the Belfer Center Centers, Inc.; Board Boston, MA 02116 of Science and International Member, USEC Inc. Affairs, John F. Kennedy School of Government, Harvard University DANIEL M. CAIN (58) Trustee, Chairman (1); President and CEO, Cain 27; Trustee, Universal 452 Fifth Avenue 7 years Brothers & Company, Health Realty Income Trust; New York, NY 10018 Incorporated (investment Director, eBenX, Inc.; banking) Director, PASC KENNETH J. COWAN (71) Trustee, Chairman (2)(3); Retired 27 399 Boylston Street 28 years None Boston, MA 02116 RICHARD DARMAN (59) Trustee (2)(3); Partner, The Carlyle Group 27; Director and Vice 399 Boylston Street 7 years (investments); Professor, John Chairman, AES Corporation Boston, MA 02116 F. Kennedy School of Government, Harvard University SANDRA O. MOOSE (61) Trustee (1); Senior Vice President and 27; Director, Verizon One Exchange Place 21 years Director, The Boston Communications; Director, Boston, MA 02109 Consulting Group, Inc. Rohm and Haas Company (management consulting) JOHN A. SHANE (70) Trustee (1); President, Palmer Service 27; Director, Eastern Bank 200 Unicorn Park Drive 21 years Corporation (venture capital Corporation; Director, Gensym Woburn, MA 01801 organization) Corporation; Director, Overland Storage, Inc.; Director, ABT Associates Inc. PENDLETON P. WHITE (72) Trustee (2)(3); Retired 27; 6 Breckenridge Lane 22 years None Savannah, GA 31411 INTERESTED TRUSTEES JOHN T. HAILER (42) President and Chief President and Chief Executive 27; 399 Boylston Street Executive Officer, Trustee; Officer, CDC IXIS Asset None(5) Boston, MA 02116 3 years Management Distributors, L.P.; Senior Vice President, Fidelity Investments
81
POSITION(S) HELD WITH NUMBER OF PORTFOLIOS IN FUNDS, LENGTH OF TIME PRINCIPAL OCCUPATION(S) FUND COMPLEX OVERSEEN AND NAME, AGE AND ADDRESS SERVED AND TERM OF OFFICE(4) DURING PAST 5 YEARS OTHER DIRECTORSHIPS HELD --------------------- ---------------------------- ------------------------------- ----------------------------- INTERESTED TRUSTEES (CONTINUED) PETER S. VOSS (56) Chairman of the Board, Director, President and Chief 27; 399 Boylston Street Trustee; Executive Officer, CDC IXIS Trustee of Harris Boston, MA 02116 11 years Asset Management North Associates Investment America, L.P. Trust(6) OFFICERS MARK E. BRADLEY (43) Treasurer; Senior Vice President, CDC 27; 399 Boylston Street Not Applicable IXIS Asset Management None Boston, MA 02116 Services; Senior Vice President, CDC IXIS Asset Management Advisers; Vice President and Assistant Treasurer, MFS Investment Management JOHN E. PELLETIER (38) Secretary and Clerk; Senior Vice President, General 27; 399 Boylston Street Not Applicable Counsel, Secretary and Clerk, None Boston, MA 02116 CDC IXIS 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 Advisers, L.P.; Executive Vice President, General Counsel, Secretary, Clerk and Director, CDCIXIS Asset Management Services, Inc.
(1) Member of Audit Committee. (2) Member of Contract Review Committee. (3) Member of Governance Committee. (1) All Trustees serve until retirement, resignation or removal from the Board. The current retirement age is 72. (2) 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. (3) 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 and Chairman of CDC IXIS Asset Management Associates, Inc. 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 Global Advisors, Inc.; Director of Vaughan, Nelson, Scarborough & McCullough, Inc. 82 ADDITIONAL INFORMATION -- TARGETED EQUITY FUND SHAREHOLDER MEETING (UNAUDITED). At a special shareholders' meeting held on October 29, 2002, shareholders of the CDC Nvest Targeted Equity Fund (hereinafter referred to as the "Fund") voted for the following proposals: 1A. Proposal to amend the Fund's fundamental policy relating to diversification.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 57,610,343.775 2,826,229.130 3,617,619.421 0.000 64,054,192.326
1B. Proposal to amend the Fund's fundamental policy relating to industry concentration.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 57,007,850.207 3,281,587.877 3,764,754.242 0.000 64,054,192.326
1C. Proposal to amend the Fund's fundamental policy relating to short sales and margin purchases.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 55,761,373.218 4,413,085.687 3,879,733.421 0.000 64,054,192.326
1D. Proposal to amend the Fund's fundamental policy regarding borrowing.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 53,956,404.140 5,988,796.644 4,108,991.542 0.000 64,054,192.326
1E. Proposal to amend the Fund's fundamental policy regarding loans.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 54,318,949.108 5,557,418.463 4,177,824.755 0.000 64,054,192.326
1F. Proposal to amend the Fund's fundamental policy prohibiting purchases and sales of real estate.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 56,038,096.520 3,997,191.236 4,018,904.570 0.000 64,054,192.326
1G. Proposal to amend the Fund's fundamental policy prohibiting purchases and sales of commodities.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 55,463,576.704 4,521,832.693 4,068,782.929 0.000 64,054,192.326
1H. Proposal to amend the Fund's fundamental policy relating to issuing senior securities.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 55,361,272.363 4,239,452.166 4,453,467.797 0.000 64,054,192.326
1I. Proposal to reclassify the Fund's fundamental policy regarding options or warrants.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 54,885,285.699 4,884,730.614 4,284,176.013 0.000 64,054,192.326
1J. Proposal to eliminate the Fund's fundamental policy regarding pledging.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 54,622,544.647 4,918,672.448 4,512,975.231 0.000 64,054,192.326
83 1K. Proposal to eliminate the Fund's fundamental policy concerning unseasoned businesses.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 54,916,661.938 4,799,723.066 4,337,807.322 0.000 64,054,192.326
1L. Proposal to eliminate the Fund's fundamental policy prohibiting purchases of securities if held by the Trust's or investment adviser's trustees/directors and officers.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 55,261,908.253 4,461,863.535 4,330,420.538 0.000 64,054,192.326
1M. Proposal to eliminate the Fund's fundamental policy concerning exercising control or management.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 56,063,845.323 3,519,151.385 4,471,195.618 0.000 64,054,192.326
1N. Proposal to eliminate the Fund's fundamental policy relating to joint trading accounts.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 56,017,732.384 3,497,530.746 4,538,929.196 0.000 64,054,192.326
1O. Proposal to eliminate the Fund's fundamental policy concerning investing in other investment companies.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 55,733,795.355 4,079,753.114 4,240,643.857 0.000 64,054,192.326
ADDITIONAL INFORMATION -- GROWTH AND INCOME FUND SHAREHOLDER MEETING (UNAUDITED). At a special shareholders' meeting held on October 29, 2002, shareholders of the CDC Nvest Growth and Income Fund (hereinafter referred to as the "Fund") voted for the following proposals: 1 Approval of a new subadvisory agreement among CDC Nvest Funds Trust II, on behalf of the Fund, CDC IXIS Asset Management Advisers, L.P. and Harris Associates L.P.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ------------ 13,379,903.777 217,321.210 712,490.271 0.000 14, 309,715.258
2A. Proposal to amend the Fund's fundamental policy relating to diversification.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,878,341.845 344,239.360 823,967.053 2,263,167.000 14,309,715.258
2B. Proposal to amend the Fund's fundamental policy relating to industry concentration.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,748,062.675 420,210.699 877,274.884 2,264,167.000 14,309,715.258
2C. Proposal to amend the Fund's fundamental policy relating to short sales and margin purchases.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,446,691.568 635,654.178 963,202.512 2,264,167.000 14,309,715.258
84 2D. Proposal to amend the Fund's fundamental policy regarding borrowing.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,282,071.995 815,277.341 948,198.922 2,264,167.000 14,309,715.258
2E. Proposal to amend the Fund's fundamental policy regarding loans.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,289,609.111 801,797.815 954,141.332 2,264,167.000 14,309,715.258
2F. Proposal to amend the Fund's fundamental policy prohibiting purchases and sales of real estate.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,579,751.581 584,196.282 881,600.395 2,264,167.000 14,309,715.258
2G. Proposal to amend the Fund's fundamental policy prohibiting purchases and sales of commodities.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,539,667.782 604,556.384 901,324.092 2,264,167.000 14,309,715.258
2H. Proposal to amend the Fund's fundamental policy relating to issuing senior securities.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,638,743.644 476,307.265 930,497.349 2,264,167.000 14,309,715.258
2I. Proposal to amend the Fund's fundamental policy relating to underwriting of securities.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,589,961.622 541,571.383 914,015.253 2,264,167.000 14,309,715.258
2J. Proposal to eliminate the Fund's fundamental policy concerning unseasoned businesses.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,230,550.361 828,098.182 986,900.715 2,264,166.000 14,309,715.258
2K. Proposal to eliminate the Fund's fundamental policy prohibiting purchases of securities if held by the Trust's or investment adviser's trustees/directors and officers.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,457,355.072 678,734.227 909,458.959 2,264,167.000 14,309,715.258
2L. Proposal to eliminate the Fund's fundamental policy concerning investing in other investment companies.
VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 10,468,195.485 679,054.828 898,297.945 2,264,167.000 14,309,715.258
85 SUPPLEMENT TO THE PROSPECTUSES CDC NVEST LARGE CAP GROWTH FUND CDC NVEST STAR GROWTH FUND SUPPLEMENT DATED FEBRUARY 25, 2003 TO CDC NVEST EQUITY FUNDS CLASSES A, B AND C AND CLASS Y PROSPECTUSES EACH DATED MAY 1, 2002 AS REVISED JULY 1, 2002, CDC NVEST STAR FUNDS CLASSES A, B AND C PROSPECTUS DATED MAY 1, 2002 AS REVISED DECEMBER 2, 2002 AND CDC NVEST STAR FUNDS CLASS Y PROSPECTUS DATED MAY 1, 2002 (THE "PROSPECTUSES") Effective February 2003, William R. Berger replaced Christopher McMillin as co-portfolio manager of the CDC NVEST LARGE CAP GROWTH FUND and a segment of the CDC NVEST STAR GROWTH FUND. 86 REGULAR INVESTING PAYS FIVE GOOD REASONS TO INVEST REGULARLY 1. It's an easy way to build assets. 2. It's convenient and effortless. 3. It requires a low minimum to get started. 4. It can help you reach important long-term goals like financing retirement or college funding. 5. It can help you benefit from the ups and downs of the market. With Investment Builder, CDC Nvest Funds' automatic investment program, you can invest as little as $100 a month in your CDC Nvest fund automatically -- without even writing a check. And, as you can see from the chart below, your monthly investments can really add up over time. [CHART] THE POWER OF MONTHLY INVESTING
25 YEARS $100 $ 95,837 $200 $191,673 $500 $479,183
Assumes an 8% fixed rate of return compounded monthly and does not allow for taxes. Results are not indicative of the past or future results of any CDC Nvest Funds. The value and return on CDC Nvest Funds fluctuate with changing market conditions. This program cannot assure a profit nor protect against a loss in a declining market. It does, however, ensure that you buy more shares when the price is low and fewer shares when the price is high. Because this program involves continuous investment in securities regardless of fluctuating prices, investors should consider their financial ability to continue purchases during periods of high or low prices. You can start an Investment Builder program with your current CDC Nvest Funds account. To add Investment Builder to your account today, call your financial representative or CDC Nvest Funds at 800-225-5478. PLEASE CALL CDC NVEST FUNDS FOR A PROSPECTUS, WHICH CONTAINS MORE INFORMATION, INCLUDING CHARGES AND OTHER ONGOING EXPENSES. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST. 87 SAVING FOR RETIREMENT AN EARLY START CAN MAKE A BIG DIFFERENCE With today's life spans, you may be retired for 20 years or more after you complete your working career. Living these retirement years the way you've dreamed of will require considerable financial resources. While it's never too late to start a retirement savings program, it's certainly never too early: The sooner you begin, the longer the time your money has to grow. The chart below illustrates this point dramatically. One investor starts at age 30, saves for just 10 years, then leaves the investment to grow. The second investor starts 10 years later but saves much longer -- for 25 years, in fact. Can you guess which investor accumulated the greater retirement nest egg? For the answer, look at the chart. [CHART] TWO HYPOTHETICAL INVESTMENTS
AGE 30 AGE 40 AGE 65 Investor A 0 $214,295 Investor B 0 $157,909
Assumes an 8% fixed rate of return. This illustration does not reflect the effect of any taxes. Results are not indicative of the past or future results of any CDC Nvest Fund. The value and returns on CDC Nvest funds will fluctuate with changing market conditions. Investor A invested $20,000, less than half of Investor B's commitment -- and for less than half the time. Yet Investor A wound up with a much greater retirement nest egg. The reason? It's all thanks to an early start and the power of compounding. CDC Nvest Funds has prepared a number of informative retirement planning guides. Call your financial representative or CDC Nvest Funds today at 800-225-5478, and ask for the guide that best fits your personal needs. We will include a prospectus, which contains more information, including charges and other ongoing expenses. Please read the prospectus carefully before you invest. 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 Municipal Income Fund CDC Nvest Select Fund CDC Nvest Short Term Bond 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* *Investments in money market funds are not insured or guaranteed by the FDIC or any government agency. INVESTMENT MANAGERS AEW Management and Advisors Capital Growth Management Hansberger Global Investors, Inc. Harris Associates/Oakmark Funds Jurika & Voyles Loomis, Sayles & Company Mercury Advisors Miller Anderson RS Investment Management Reich & Tang Asset Management Salomon Brothers Asset Management Vaughan, Nelson, Scarborough & McCullough Westpeak Global Advisors 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.NASD.com. [CDC NVEST FUNDS(SM) LOGO] P.O. Box 8551 Boston, Massachusetts 02266-8551 www.cdcnvestfunds.com TO THE HOUSEHOLD OF: ARE YOU DROWNING IN PAPER? [GRAPHIC] LET E-DELIVERY COME TO YOUR RESCUE! GET YOUR NEXT CDC NVEST FUNDS REPORT OR STATEMENT ONLINE INSTEAD OF THROUGH THE MAIL. SIGN UP AT www.cdcnvestfunds.com. EF58-1202 -----END PRIVACY-ENHANCED MESSAGE-----