-----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, JlueXcsDHoFOQN2XC2f/qof7EEHa3lCGBYW65uzPBHIMXKRmRIZvWaykQ6LIlxDX U8xLxPNq+jQHVEi2o7Qx8w== 0001127563-02-000214.txt : 20021101 0001127563-02-000214.hdr.sgml : 20021101 20021101094853 ACCESSION NUMBER: 0001127563-02-000214 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20021101 EFFECTIVENESS DATE: 20021101 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: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 002-11101 FILM NUMBER: 02805823 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 497 1 equitysai.txt EQUITY SAI [GRAPHIC OMITTED][GRAPHIC OMITTED] Statement of Additional Information - PART I May 1, 2002 (as revised November 1, 2002) for: - --------------------------------------------------------------------------------
CDC NVEST LARGE CAP GROWTH FUND CDC NVEST MID CAP GROWTH FUND CDC NVEST CAPITAL GROWTH FUND CDC NVEST SELECT FUND CDC NVEST TARGETED EQUITY FUND CDC NVEST AEW REAL ESTATE FUND CDC NVEST GROWTH AND INCOME FUND CDC NVEST JURIKA & VOYLES SMALL CAP GROWTH FUND CDC NVEST BALANCED FUND CDC NVEST INTERNATIONAL EQUITY FUND CDC NVEST JURIKA & VOYLES RELATIVE VALUE FUND CDC NVEST LARGE CAP VALUE FUND
This Statement of Additional Information (the "Statement") contains information which may be useful to investors but which is not included in the Prospectuses of the CDC Nvest Funds listed above (the "Funds" and each a "Fund"). This Statement is not a prospectus and is authorized for distribution only when accompanied or preceded by the Prospectus of the Funds dated May 1, 2002 (the "Prospectus" or "Prospectuses"). This Statement should be read together with the Prospectuses. Investors may obtain the Prospectuses without charge from CDC IXIS Asset Management Distributors, L.P. (the "Distributor", formerly CDC Nvest Funds Distributor, L.P.), Prospectus Fulfillment Desk, 399 Boylston Street, Boston, Massachusetts 02116, by calling CDC Nvest Funds at 800-225-5478 or by placing an order online at www.cdcnvestfunds.com. Part I of this Statement contains specific information about the Funds. Part II includes information about the Funds as well as other CDC Nvest Funds. CDC Nvest Capital Growth Fund, CDC Nvest Targeted Equity Fund, CDC Nvest Balanced Fund, CDC Nvest International Equity Fund, CDC Nvest Large Cap Growth Fund and CDC Nvest Jurika & Voyles Relative Value Fund are each a diversified fund and a series of CDC Nvest Funds Trust I, a registered open-end management investment company that offers a total of fifteen funds. CDC Nvest Growth and Income Fund is a diversified fund and a series of CDC Nvest Funds Trust II, a registered open-end management investment company that offers a total of five funds. CDC Nvest Large Cap Value Fund, CDC Nvest Mid Cap Growth Fund, and CDC Nvest Jurika & Voyles Small Cap Growth Fund are each a diversified fund and a series of CDC Nvest Funds Trust III, a registered open-end management investment company that currently offers a total of four funds. Effective September 17, 2002, the Distributor will no longer accept new investments in or additional investments from current shareholders of CDC Nvest Mid Cap Growth Fund as the Fund will be liquidated on or about November 22, 2002. CDC Nvest Select Fund is a non-diversified fund and a series of CDC Nvest Funds Trust III. CDC Nvest AEW Real Estate Fund is a diversified fund and a series of CDC Nvest Companies Trust I, a registered open-end management investment company that currently offers one fund. CDC Nvest Funds Trust I, CDC Nvest Funds Trust II, CDC Nvest Funds Trust III and CDC Nvest Companies Trust I are collectively referred to in Part I of this Statement as the "Trusts" and are each referred to as a "Trust." The Funds' financial statements and accompanying notes that appear in the Funds' annual and semiannual reports are incorporated by reference into Part I of this Statement. Each Fund's annual and semiannual reports contain additional performance information and are available upon request and without charge by calling 800-225-5478. XS33-1102 i Table of Contents Part I Page ---- Investment Restrictions iii Fund Charges and Expenses xviii Ownership of Fund Shares xxxvii Investment Performance of the Funds xlv Part II Miscellaneous Investment Practices 3 Management of the Trusts 28 Portfolio Transactions and Brokerage 54 Description of the Trusts and Ownership of Shares 62 Portfolio Turnover 66 How to Buy Shares 66 Net Asset Value and Public Offering Price 67 Reduced Sales Charges 68 Shareholder Services 70 Redemptions 77 Standard Performance Measures 80 Income Dividends, Capital Gain Distributions and Tax Status 85 Financial Statements 88 Appendix A - Description of Bond Ratings 89 Appendix B - Media That May Contain Fund Information 93 Appendix C - Advertising and Promotional Literature 94 ii - -------------------------------------------------------------------------------- INVESTMENT RESTRICTIONS - -------------------------------------------------------------------------------- The following is a description of restrictions on the investments to be made by the Funds. The restrictions marked with an asterisk (*) may not be changed without the vote of a majority of the outstanding voting securities of the relevant Fund (as defined in the Investment Company Act of 1940, as amended, the "1940 Act"). Except in the case of restrictions marked with a dagger (+) below, the percentages set forth below and the percentage limitations set forth in the Prospectus apply at the time of the purchase of a security and shall not be considered violated unless an excess or deficiency occurs or exists immediately after and as a result of a purchase of such security. CDC Nvest Large Cap Growth Fund CDC Nvest Large Cap Growth Fund (the "Large Cap Growth Fund") will not: *(1) With respect to 75% of its total assets, purchase any security if, as a result, more than 5% of the Fund's total assets (based on current value) would then be invested in securities of a single issuer or acquire more than 10% of the outstanding voting securities of any issuer; provided however, this limitation does not apply to government securities (as defined in the 1940 Act); *(2) Purchase any security (other than government securities) if, as a result, more than 25% of its total assets (taken at current value) would be invested in any one industry; *(3) Make short sales of securities, maintain a short position or purchase securities on margin, except that the Fund may obtain short-term credits as necessary for the clearance of security transactions and the Fund may make any short sales or maintain any short positions where the short sales or short positions would not constitute senior securities under the 1940 Act; *(4) Borrow money, except for temporary or emergency purposes; provided, however, that the Fund may loan securities, engage in reverse repurchase agreements and dollar rolls, in an amount not exceeding 33 1/3% of its total assets taken at cost; *(5) Make loans, except that the Fund may purchase or hold debt instruments in accordance with its investment objective and policies; provided however, that this restriction does not apply to repurchase agreements or loans of portfolio securities; *(6) Purchase or sell real estate, although it may purchase securities of issuers that deal in real estate, securities that are secured by interests in real estate, and securities that represent interests in real estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein; *(7) Act as underwriter, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under the federal securities laws; *(8) Issue senior securities, except for permitted borrowings or as otherwise permitted under the 1940 Act; *(9) Purchase or sell commodities, except that the Fund may purchase and sell futures contracts and options, may enter into foreign exchange contracts and may enter into swap agreements and other financial transactions not requiring the delivery of physical commodities; +(10) Invest more than 15% of the Fund's total net assets in illiquid securities (excluding Rule 144A securities and certain Section 4(2) commercial paper deemed to be liquid under guidelines established by the Trust's trustees); or iii (11) Invest less than 80% of its net assets (plus borrowings made for investment purposes) in investments in companies that have market capitalization within the capitalization range of the Russell 1000 Growth Index. Prior to any change to such policy adopted by the Board of Trustees of the Fund, the Fund will provide notice to shareholders as required by Rule 35d-1 under the 1940 Act, as such Rule may be interpreted from time to time by the staff of the SEC. The staff of the SEC is currently of the view that repurchase agreements maturing in more than seven days are illiquid and thus subject to restriction (10) above. Restrictions (3) and (8) shall be interpreted based upon no-action letters and other pronouncements of the staff of the Securities and Exchange Commission (the "SEC"). Under current pronouncements, certain Fund positions are excluded from the definition of "senior security" so long as the Fund maintains adequate cover, segregation of assets or otherwise. In restriction (11) above, the 80% policy is applied at the time of investment. However, if the Fund no longer meets the 80% policy (due to changes in the value of its portfolio holdings or other circumstances beyond its control), it must make future investments in a manner that would bring the Fund into compliance with the 80% requirement, but would not be required to sell portfolio holdings that have increased in value. CDC Nvest Capital Growth Fund CDC Nvest Capital Growth Fund (the "Capital Growth Fund") may not: (1) With respect to 75% of its total assets, purchase any security (other than U.S. government securities) if, as a result, more than 5% of the Fund's total assets (taken at current value) would then be invested in securities of a single issuer; *(2) Purchase any security (other than U.S. government securities) if, as a result, more than 25% of the Fund's total assets (taken at current value) would be invested in any one industry (in the utilities category, gas, electric, water and telephone companies will be considered as being in separate industries, and each foreign country's government (together with subdivisions thereof) will be considered to be a separate industry); (3) Purchase securities on margin (but it may obtain such short-term credits as may be necessary for the clearance of purchases and sales of securities), or make short sales except where, by virtue of ownership of other securities, it has the right to obtain, without payment of further consideration, securities equivalent in kind and amount to those sold, and the Fund will not deposit or pledge more than 10% of its total assets (taken at current value) as collateral for such sales. (For this purpose, the deposit or payment by the Fund of initial or variation margin in connection with futures contracts or related options transactions is not considered the purchase of a security on margin); (4) Acquire more than 10% of any class of securities of an issuer (other than U.S. government securities and taking all preferred stock issues of an issuer as a single class and all debt issues of an issuer as a single class) or with respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of an issuer; *(5) Borrow money in excess of 10% of its total assets (taken at cost) or 5% of its total assets (taken at current value), whichever is lower, and then only as a temporary measure for extraordinary or emergency purposes; (6) Pledge more than 15% of its total assets (taken at cost). (For the purpose of this restriction, collateral arrangements with respect to options, futures contracts and options on futures contracts and with respect to initial and variation margin are not deemed to be a pledge of assets); *(7) Make loans, except by entering into repurchase agreements or by purchase of bonds, debentures, commercial paper, corporate notes and similar evidences of indebtedness, which are a part of an issue to the public or to financial institutions, or through the lending of the Fund's portfolio securities; iv *(8) Buy or sell oil, gas or other mineral leases, rights or royalty contracts, real estate or commodities or commodity contracts, except that the Fund may buy and sell futures contracts and related options. (This restriction does not prevent the Fund from purchasing securities of companies investing in the foregoing); *(9) Act as underwriter, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws; (10) Except to the extent permitted by rule or order of the SEC, participate on a joint or joint and several basis in any trading account in securities. (The "bunching" of orders for the purchase or sale of portfolio securities with the Fund's adviser or subadviser or accounts under its management to reduce brokerage commissions, to average prices among them or to facilitate such transactions is not considered a trading account in securities for purposes of this restriction); (11) Write, purchase or sell options, except that the Fund may (a) write, purchase and sell put and call options on securities or securities indexes and (b) enter into currency forward contracts; +(12) Invest more than 15% of its net assets (taken at current value) in illiquid securities (excluding Rule 144A securities and certain Section 4(2) commercial paper deemed to be liquid under guidelines established by CDC Nvest Funds Trust I's trustees); or *(13) Issue senior securities. (For the purpose of this restriction, none of the following is deemed to be a senior security: any pledge or other encumbrance of assets permitted by restriction (6) above; any borrowing permitted by restriction (5) above; any collateral arrangements with respect to options, futures contracts and options on futures contracts and with respect to initial and variation margin; the purchase or sale of options, forward contracts, futures contracts or options on futures contracts; and the issuance of shares of beneficial interest permitted from time to time by the provisions of CDC Nvest Funds Trust I's Agreement and Declaration of Trust and by the 1940 Act, the rules thereunder, or any exemption therefrom.) The staff of the Securities and Exchange Commission (the "SEC") is currently of the view that repurchase agreements maturing in more than seven days are illiquid and thus subject to restriction (12) above. CDC Nvest Targeted Equity Fund CDC Nvest Targeted Equity Fund (the "Targeted Equity Fund") will not: *(1) With respect to 75% of its total assets, purchase any security if, as a result, more than 5% of its total assets (based on current value) would then be invested in the securities of a single issuer or acquire more than 10% of the outstanding voting securities of any issuer; provided however, this limitation does not apply to government securities as defined in the 1940 Act; *(2) Make short sales of securities, maintain a short position or purchase securities on margin, except that the Fund may obtain short-term credits as necessary for the clearance of security transactions, and the Fund may make any short sales or maintain any short positions where the short sales or short positions would not constitute "senior securities" under the 1940 Act; *(3) Purchase any security (other than U.S. government securities) if, as a result, more than 25% of the Fund's total assets (taken at current value) would be invested in any one industry. For purposes of this restriction, telephone, gas and electric public utilities are each regarded as separate industries and finance companies whose financing activities are related primarily to the activities of their parent companies are classified in the industry of their parents. For purposes of this restriction with regard to bank obligations, bank obligations are considered to be one industry, and asset-backed securities are not considered to be bank obligations; *(4) Borrow money except for temporary or emergency purposes; provided however, that the Fund may loan securities, engage in reverse repurchase agreements and dollar rolls, in an amount not exceeding 33 1/3% of its total assets taken at cost; v *(5) Make loans, except that the Fund may purchase or hold debt instruments in accordance with its investment objective and policies; provided however, this restriction does not apply to repurchase agreements or loans of portfolio securities; *(6) Purchase or sell real estate, although it may purchase securities of issuers that deal in real estate, securities that are secured by interests in real estate, and securities that represent interests in real estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein; *(7) Purchase or sell commodities, except that the Fund may purchase and sell futures contracts and options, may enter into foreign exchange contracts and may enter into swap agreements and other financial transactions not requiring the delivery of physical commodities; *(8) Act as underwriter, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws; *(9) Issue senior securities, except for permitted borrowings or as otherwise permitted under the 1940 Act; (10) Purchase options or warrants if, as a result, more than 1% of its total assets (taken at current value) would be invested in such securities; (11) Write options or warrants; +(12) Invest more than 15% of the Fund's total net assets in illiquid securities (excluding Rule 144A securities and certain Section 4(2) commercial paper deemed to be liquid under guidelines established by CDC Nvest Funds Trust I's trustees); or (13) Invest less than 80% of its net assets (plus borrowings made for investment purposes) in equity investments. Prior to any change to such policy adopted by the Board of Trustees of the Fund, the Fund will provide notice to shareholders as required by Rule 35d-1 under the 1940 Act, as such Rule may be interpreted from time to time by the staff of the SEC. The staff of the SEC is currently of the view that repurchase agreements maturing in more than seven days are illiquid and thus subject to restriction (12) above. In investment restriction (13) above, the 80% policy is applied at the time of investment. However, if the Fund no longer meets the 80% policy (due to changes in the value of its portfolio holdings or other circumstances beyond its control), it must make future investments in a manner that would bring the Fund into compliance with the 80% requirement, but would not be required to sell portfolio holdings that have increased in value. Restrictions (2) and (9) shall be interpreted based upon no-action letters and other pronouncements of the staff of the Securities and Exchange Commission (the "SEC"). Under current pronouncements, certain Fund positions are excluded from the definition of "senior security" so long as the Fund maintains adequate cover, segregation of assets or otherwise. CDC Nvest Growth and Income Fund CDC Nvest Growth and Income Fund (the "Growth and Income Fund") will not: *(1) With respect to 75% of its total assets, purchase any security if, as a result, more than 5% of its total assets (based on current value) would then be invested in the securities of a single issuer or acquire more than 10% of the outstanding voting securities of any issuer; provided however, this limitation does not apply to government securities as defined in the 1940 Act; *(2) Purchase any security (other than U.S. government securities) if, as a result, more than 25% of the Fund's total assets (taken at current value) would be invested in any one industry. For purposes of this restriction, telephone, gas and electric public utilities are each vi regarded as separate industries and finance companies whose financing activities are related primarily to the activities of their parent companies are classified in the industry of their parents. For purposes of this restriction with regard to bank obligations, bank obligations are considered to be one industry, and asset-backed securities are not considered to be bank obligations; *(3) Make short sales of securities, maintain a short position or purchase securities on margin, except that the Fund may obtain short-term credits as necessary for the clearance of security transactions, and the Fund may make any short sales or maintain any short positions where the short sales or short positions would not constitute "senior securities" under the 1940 Act; *(4) Purchase or sell real estate, although it may purchase securities of issuers that deal in real estate, securities that are secured by interests in real estate, and securities that represent interests in real estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate interests therein; *(5) Purchase or sell commodities, except that the Fund may purchase and sell futures contracts and options, may enter into foreign exchange contracts and may enter into swap agreements and other financial transactions not requiring the delivery of physical commodities; *(6) Act as underwriter, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws; *(7) Make loans, except that the Fund may purchase or hold debt instruments in accordance with its investment objective and policies; provided however, this restriction does not apply to repurchase agreements or loans of portfolio securities; *(8) Borrow money except for temporary or emergency purposes; provided however, that the Fund may loan securities, engage in reverse repurchase agreements and dollar rolls, in an amount not exceeding 33 1/3% of its total assets taken at cost; *(9) Issue senior securities, except for permitted borrowings or as otherwise permitted under the 1940 Act; or +(10) Invest more than 15% of the Fund's total net assets in illiquid securities (excluding Rule 144A securities and certain Section 4(2) commercial paper deemed to be liquid under guidelines established by CDC Nvest Funds Trust II's trustees). The staff of the SEC is currently of the view that repurchase agreements maturing in more than seven days are illiquid and thus subject to restriction (10) above. Restrictions (3) and (9) shall be interpreted based upon no-action letters and other pronouncements of the staff of the Securities and Exchange Commission (the "SEC"). Under current pronouncements, certain Fund positions are excluded from the definition of "senior security" so long as the Fund maintains adequate cover, segregation of assets or otherwise. CDC Nvest Balanced Fund CDC Nvest Balanced Fund (the "Balanced Fund") will not: *(1) With respect to 75% of its total assets, purchase any security if, as a result, more than 5% of its total assets (based on current value) would then be invested in the securities of a single issuer or acquire more than 10% of the outstanding voting securities of any issuer; provided however, this limitation does not apply to government securities as defined in the 1940 Act; *(2) Purchase any security (other than U.S. government securities) if, as a result, more than 25% of the Fund's total assets (taken at current value) would be invested in any one industry; vii *(3) Make short sales of securities, maintain a short position or purchase securities on margin, except that the Fund may obtain short-term credits as necessary for the clearance of security transactions and the Fund may make any short sales or maintain any short positions where the short sales or short positions would not constitute senior securities under the 1940 Act; *(4) Borrow money except for temporary or emergency purposes; provided, however, that the Fund may loan securities, engage in reverse repurchase agreements and dollar rolls, in an amount not exceeding 33 1/3% of its total assets taken at cost; *(5) Make loans, except that the Fund may purchase or hold debt instruments in accordance with its investment objective and policies; provided however, that this restriction does not apply to repurchase agreements or loans of portfolio securities; *(6) Purchase or sell real estate, although it may purchase securities of issuers that deal in real estate, securities that are secured by interests in real estate, and securities that represent interests in real estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein; *(7) Act as underwriter, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws; *(8) Issue senior securities, except for permitted borrowings or as otherwise permitted under the 1940 Act; +(9) Invest more than 15% of the Fund's total net assets in illiquid securities (excluding Rule 144A securities and certain Section 4(2) commercial paper deemed to be liquid under guidelines established by CDC Nvest Funds Trust I's trustees.) (10) Purchase options or warrants if, as a result, more than 1% of its total assets (taken at current value) would be invested in such securities; or (11) Write options or warrants. The staff of the SEC is currently of the view that repurchase agreements maturing in more than seven days are illiquid and thus subject to restriction (9) above. Restrictions (3) and (8) shall be interpreted based upon no action letters and other pronouncements of the staff of the SEC. Under current pronouncements, certain fund positions are excluded from the definition of "senior security" so long as the Fund maintains adequate cover, segregation of assets or otherwise. CDC Nvest Jurika & Voyles Relative Value Fund CDC Nvest Jurika & Voyles Relative Value Fund (the "Relative Value Fund") will not: *(1) With respect to 75% of its total assets, purchase any security if, as a result, more than 5% of the Fund's total assets (based on current value) would then be invested in securities of a single issuer or acquire more than 10% of the outstanding voting securities of any issuer; provided however, this limitation does not apply to government securities (as defined in the 1940 Act); *(2) Purchase any security (other than government securities) if, as a result, more than 25% of its total assets (taken at current value) would be invested in any one industry; *(3) Make short sales of securities, maintain a short position or purchase securities on margin, except that the Fund may obtain short-term credits as necessary for the clearance of security transactions and the Fund may make any short sales or maintain any short positions where the short sales or short positions would not constitute senior securities under the 1940 Act; viii *(4) Borrow money, except for temporary or emergency purposes; provided, however, that the Fund may loan securities, engage in reverse repurchase agreements and dollar rolls, in an amount not exceeding 33 1/3% of its total assets taken at cost; *(5) Make loans, except that the Fund may purchase or hold debt instruments in accordance with its investment objective and policies; provided however, that this restriction does not apply to repurchase agreements or loans of portfolio securities; *(6) Purchase or sell real estate, although it may purchase securities of issuers that deal in real estate, securities that are secured by interests in real estate, and securities that represent interests in real estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein; *(7) Act as underwriter, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under the federal securities laws; *(8) Issue senior securities, except for permitted borrowings or as otherwise permitted under the 1940 Act; *(9) Purchase or sell commodities, except that the Fund may purchase and sell futures contracts and options, may enter into foreign exchange contracts and may enter into swap agreements and other financial transactions not requiring the delivery of physical commodities; or +(10) Invest more than 15% of the Fund's total net assets in illiquid securities (excluding Rule 144A securities and certain Section 4(2) commercial paper deemed to be liquid under guidelines established by the Trust's trustees). The Staff of the SEC is currently of the view that repurchase agreements maturing in more than seven days are illiquid and thus subject to restriction (10) above. Restrictions (3) and (8) shall be interpreted based upon no-action letters and other pronouncements of the staff of the Securities and Exchange Commission (the "SEC"). Under current pronouncements, certain Fund positions are excluded from the definition of "senior security" so long as the Fund maintains adequate cover, segregation of assets or otherwise. CDC Nvest Large Cap Value Fund CDC Nvest Large Cap Value Fund (the "Large Cap Value Fund") will not: *(1) Purchase any security (other than U.S. government securities) if, as a result, more that 25% of the Fund's total assets (taken at current value) would be invested in any one industry (in the utilities category, gas, electric, water and telephone companies will be considered as being in separate industries, and each foreign country's government (together with subdivisions thereof) will be considered to be a separate industry); (2) Purchase securities on margin (but it may obtain such short-term credits as may be necessary for the clearance of purchases and sales of securities), or make short sales except where, by virtue of ownership of other securities, it has the right to obtain, without payment of further considerations, securities equivalent in kind and amount to those sold, and the Fund will not deposit or pledge more than 10% of its total assets (taken at current value) as collateral for such sales. (For this purpose, the deposit or payment by the Fund of initial or variation margin in connection with futures contracts or related options transactions is not considered the purchase of a security on margin); *(3) Borrow money in excess of 25% of its total assets, and then only as a temporary measure for extraordinary or emergency purposes; ix (4) Pledge more than 25% of its total assets (taken at cost). (For the purpose of this restriction, collateral arrangements with respect to options, futures contracts, options on futures contracts and swap contracts and with respect to initial and variation margin are not deemed to be a pledge of assets); *(5) Make loans, except by entering into repurchase agreements or by purchase of bonds, debentures, commercial paper, corporate notes and similar evidences of indebtedness, which are a part of an issue to the public or to financial institutions, or through the lending of the Fund's portfolio securities; *(6) Buy or sell oil, gas or other mineral leases, rights or royalty contracts, real estate or commodities or commodity contracts, except that the Fund may buy and sell futures contracts, swap contracts and related options. (This restriction does not prevent the Fund from purchasing securities of companies investing in the foregoing); *(7) Act as underwriter, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws; (8) Participate on a joint or joint and several basis in any trading account in securities. (The "bunching" of orders for the purchase or sale of portfolio securities with the Fund's adviser or subadviser or accounts under its management to reduce brokerage commissions, to average prices among them or to facilitate such transactions is not considered a trading account in securities for purposes of this restriction); (9) Write, purchase or sell options, except that the Fund may (a) write, purchase and sell put and call options on securities, securities indexes or futures contracts and (b) enter into currency forward contracts; +(10) Purchase any illiquid security if, as a result, more than 15% of its net assets (taken at current value) would be invested in such securities (excluding Rule 144A securities and certain Section 4(2) commercial paper deemed to be liquid under guidelines established by CDC Nvest Funds Trust III's trustees); *(11) Issue senior securities. (For the purpose of this restriction none of the following is deemed to be a senior security: any pledge or other encumbrance of assets permitted by restrictions (2) or (4) above; any borrowing permitted by restriction (3) above; any collateral arrangements with respect to forward contracts, options, futures contracts, swap contracts and options on futures contracts or swap contracts and with respect to initial and variation margin, the purchase or sale of options,forward contracts, future contracts, swap contracts or options on futures contracts or swap contracts; and the issuance of shares of beneficial interest permitted from time to time by the provisions of the CDC Nvest Funds Trust III's Agreement and Declaration of Trust and by the 1940 Act, the rules thereunder, or any exemption therefrom); (12) With respect to 75% of its total assets, purchase any security (other than U.S. government securities) if, as a result, more than 5% of the Fund's total assets (taken at current value) would then be invested in securities of a single issuer; (13) Acquire more than 10% of any class of securities of an issuer (taking all preferred stock issues of an issuer as a single class and all debt issues of an issuer as a single class) or acquire more than 10% of the outstanding voting securities of an issuer; or (14) Invest less than 80% of its net assets (plus borrowings made for investment purposes) in investments in companies that have market capitalizations within the capitalization range of the Russell 1000 Value Index. Prior to any change to such policy adopted by the Board of Trustees of the Fund, the Fund will provide notice to shareholders as required by Rule 35d-1 under the 1940 Act, as such Rule may be interpreted from time to time by the staff of the SEC. The staff of the SEC is currently of the view that repurchase agreements maturing in more than seven days are illiquid and thus subject to restriction (10) above. x In restriction (14) above, the 80% policy is applied at the time of investment. However, if the Fund no longer meets the 80% policy (due to changes in the value of its portfolio holdings or other circumstances beyond its control), it must make future investments in a manner that would bring the Fund into compliance with the 80% requirement, but would not be required to sell portfolio holdings that have increased in value. CDC Nvest Mid Cap Growth Fund CDC Nvest Mid Cap Growth Fund (the "Mid Cap Growth Fund") will not: *(1) With respect to 75% of its total assets, purchase any security if, as a result, more than 5% of the Fund's total assets (taken at current value) would then be invested in securities of a single issuer. This limitation does not apply to U.S. government securities (as defined in the 1940 Act); *(2) With respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of any issuer; *(3) Invest more than 25% of its net assets in any one industry. This restriction does not apply to U.S. government securities. For the purposes of this restriction, gas, electric, water and telephone companies will be considered as being in separate industries and finance companies whose financing activities are related primarily to the activities of their parent companies are classified in the industry of their parents. For purposes of this restriction with regard to bank obligations, bank obligations are considered to be one industry, and asset-backed securities are not considered to be bank obligations; *(4) Make short sales of securities or maintain a short position or purchase securities on margin, except that the Fund may obtain short-term credits as necessary for the clearance of security transactions, and the Fund may make any short sales or maintain any short positions where the short sales or short positions would not constitute "senior securities" under the 1940 Act; +(5) Borrow money, except to the extent permitted under the 1940 Act; *(6) Make loans, except that the Fund may lend its portfolio securities to the extent permitted under the 1940 Act. (For purposes of this investment restriction, neither (i) entering into repurchase agreements nor (ii) purchasing debt obligations in which a Fund may invest consistent with its investment policies is considered the making of a loan); *(7) Act as underwriter of securities of other issuers except that, in the disposition of portfolio securities, it may be deemed to be an underwriter under the federal securities laws; *(8) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real estate, and securities which represent interests in real estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein; *(9) Purchase or sell commodities, except that the Fund may purchase and sell futures contracts and options, may enter into foreign exchange contracts and may enter into swap agreements and other financial transactions not requiring the delivery of physical commodities; *(10) Issue senior securities, except for permitted borrowings or as otherwise permitted under the 1940 Act; or (11) Invest less than 80% of its net assets (plus borrowings made for investment purposes) in investments in companies that have market capitalization within the capitalizations range of the Russell Mid Cap Growth Index. Prior to any change to such policy adopted by the Board of Trustees of the Fund, the Fund will provide notice to shareholders as required by Rule 35d-1 under the 1940 Act, as such Rule may be interpreted from time to time by the staff of the SEC. xi Restrictions (4) and (10) shall be interpreted based upon no-action letters and other pronouncements of the staff of the SEC. Under current pronouncements, certain Fund positions are excluded from the definition of "senior security" so long as the Fund maintains adequate cover, segregation of assets or otherwise. In restriction (11) above, the 80% policy is applied at the time of investment. However, if the Fund no longer meets the 80% policy (due to changes in the value of its portfolio holdings or other circumstances beyond its control), it must make future investments in a manner that would bring the Fund into compliance with the 80% requirement, but would not be required to sell portfolio holdings that have increased in value. In addition, it is contrary to Mid Cap Growth Fund's present policy, which may be changed without shareholder vote, to purchase any illiquid security, including any securities whose disposition is restricted under federal securities laws and securities that are not readily marketable, if, as a result, more than 15% of the Fund's total assets (based on current value) would then be invested in such securities. The staff of the SEC is presently of the view that repurchase agreements maturing in more than seven days are subject to this restriction. Until that position is revised, modified or rescinded, each Fund will conduct its operations in a manner consistent with this view. This limitation on investment in illiquid securities does not apply to certain restricted securities, including securities pursuant to Rule 144A under the Securities Act of 1933 and certain commercial paper, that the Adviser or Subadviser has determined to be liquid under procedures approved by the Board of Trustees. CDC Nvest Select Fund CDC Nvest Select Fund (the "Select Fund") may not: +(1) Acquire securities of any one issuer which (a) represent more than 10% of the voting securities of the issuer or (b) have a value greater than 10% of the value of the outstanding securities of the issuer; *(2) Invest more than 25% of its net assets in any one industry. This restriction does not apply to U.S. government securities. For purposes of this restriction, telephone, gas and electric public utilities are each regarded as separate industries and finance companies whose financing activities are related primarily to the activities of their parent companies are classified in the industry of their parents. For purposes of this restriction with regard to bank obligations, bank obligations are considered to be one industry, and asset-backed securities are not considered to be bank obligations; *(3) Make short sales of securities or maintain a short position or purchase securities on margin, except that the Fund may obtain short-term credits as necessary for the clearance of security transactions, and the Fund may make any short sales or maintain any short positions where the short sales or short positions would not constitute "senior securities" under the 1940 Act; +*(4) Borrow money, except to the extent permitted under the 1940 Act; *(5) Make loans, except that the Fund may lend its portfolio securities to the extent permitted under the 1940 Act. (For the purposes of this investment restriction, neither (i) entering into repurchase agreements nor (ii) purchasing debt obligations in which a Fund may invest consistent with its investment policies is considered the making of a loan); *(6) Act as an underwriter of securities of other issuers except that, in the disposition of portfolio securities, it may be deemed to be an underwriter under the federal securities laws; *(7) Purchase or sell real estate, although it may purchase securities of issuers which deal in real estate, securities which are secured by interests in real estate, and securities which represent interests in real estate, and it may acquire and dispose of real estate or interests in real estate acquired through the exercise of its rights as a holder of debt obligations secured by real estate or interests therein; *(8) Purchase or sell commodities, except that the Fund may purchase and sell futures contracts and options, may enter into foreign exchange contracts and may enter into swap agreements and other financial transactions not requiring the delivery of physical commodities; or xii *(9) Issue senior securities, except for permitted borrowings or as otherwise permitted under the 1940 Act. Restrictions (3) and (9) shall be interpreted based upon no-action letters and other pronouncements of the staff of the SEC. Under current pronouncements, certain Fund positions are excluded from the definition of "senior security" so long as the Fund maintains adequate cover, segregation of assets or otherwise. In addition, it is contrary to Select Fund's present policy, which may be changed without shareholder vote, to purchase any illiquid security, including any securities whose disposition is restricted under federal securities laws and securities that are not readily marketable, if, as a result, more than 15% of the Fund's total assets (based on current value) would then be invested in such securities. The staff of the SEC is presently of the view that repurchase agreements maturing in more than seven days are subject to this restriction. Until that position is revised, modified or rescinded, each Fund will conduct its operations in a manner consistent with this view. This limitation on investment in illiquid securities does not apply to certain restricted securities, including securities pursuant to Rule 144A under the Securities Act of 1933 and certain commercial paper, that the Adviser or Subadviser has determined to be liquid under procedures approved by the Board of Trustees. CDC Nvest AEW Real Estate Fund CDC Nvest AEW Real Estate Fund (the "AEW Real Estate Fund") may not: *(1) With respect to 75% of the Fund's total assets, purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities ("U.S. government securities")) if, as a result, (a) more than 5% of the Fund's total assets would be invested in the securities of that issuer, or (b) the Fund would hold more than 10% of the outstanding voting securities of that issuer; *(2) Purchase the securities of any issuer (other than U.S. government securities) if, as a result, 25% or more of the Fund's total assets would be invested in the securities of companies whose principal business activities are in the same industry, except that the Fund will invest more than 25% of its total assets in securities of companies primarily engaged in the real estate industry; *(3) Issue senior securities, except as otherwise permitted by the 1940 Act; +*(4) Borrow money or pledge its assets; provided, however, that the Fund may borrow money as a temporary measure for extraordinary or emergency purposes or to meet redemptions, in amounts not exceeding 33 1/3% of its total assets and pledge its assets to secure such borrowings; and, provided, further, that the Fund will not purchase any additional portfolio securities at any time that its borrowings exceed 5% of its total assets; for the purpose of this restriction, collateral arrangements with respect to the writing of options, interest rate futures contracts, options on interest rate futures contracts, and collateral arrangements with respect to initial and variation margin are not deemed to be a pledge of assets and neither such arrangements nor the purchase or sale of futures or related options are deemed to be the issuance of a senior security; *(5) Underwrite securities of other issuers except insofar as the Fund may be deemed an underwriter under the Securities Act of 1933, as amended (the "1933 Act"), in the disposition of restricted securities; *(6) Purchase and sell real estate unless acquired as a result of ownership of securities or other instruments; provided, however, that this limitation shall not prevent the Fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business; *(7) Purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments; provided, however, that this limitation shall not prevent the Fund from purchasing or selling options and futures contracts or from investing in securities or other instruments backed by physical commodities; *(8) Lend any portfolio security or make any other loan, if, as a result, more than 33 1/3% of its total assets would be lent to other parties, it being understood that this limitation does not apply to purchases of debt securities or to repurchase agreements; xiii (9) Purchase any security on margin, except that the Fund may obtain such short-term credits as may be necessary for the clearance of transactions; for this purpose, the deposit or payment by the Fund of initial or variation margin in connection with interest rate futures contracts or related options transactions is not considered the purchase of a security on margin; (10) Make short sales of securities or maintain a short position, unless at all times when a short position is open it owns an equal amount of such securities or securities convertible into or exchangeable, without payment of any further consideration, for securities of the same issue as, and equal in amount to, the securities sold short, and unless not more than 10% of the Fund's net assets (taken at market value) is held as collateral for such sales at any one time; +(11) Invest more than 15% of the Fund's net assets in illiquid securities (excluding Rule 144A securities and certain Section 4(2) commercial paper deemed to be liquid under guidelines established by the Fund's Board of Trustees); (12) Write, purchase or sell puts, calls or combinations thereof, except that the Fund may write, purchase and sell puts, calls or combinations thereof with respect to U.S. government securities and with respect to interest rate futures contracts; (13) Invest in the securities of other investment companies, except by purchases in the open market involving only customary brokers' commissions, or in connection with a merger, consolidation or similar transaction; under the 1940 Act, the Fund may not (a) invest more than 10% of its total assets (taken at current value) in such securities, (b) own securities of any one investment company having a value in excess of 5% of the Fund's total assets taken at current value, or (c) own more than 3% of the outstanding voting stock of any one investment company; or (14) Invest less than 80% of its net assets (plus borrowings made for investment purposes) in investments of real estate investment trusts and/or real estate related companies. Prior to any change to such policy adopted by the Board of Trustees of the Fund, the Fund will provide notice to shareholders as required by Rule 35d-1 under the 1940 Act, as such Rule may be interpreted from time to time by the staff of the SEC. The Fund may (but does not currently intend to), notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company managed by AEW Management and Advisors, L.P. ("AEW") or an affiliate or successor with substantially the same fundamental investment objective, policies and limitations as the Fund. The staff of the SEC is currently of the view that repurchase agreements maturing in more than seven days are illiquid and thus subject to restriction (11) above. Restrictions (3) and (10) shall be interpreted based upon no-action letters and other pronouncements of the staff of the SEC. Under current pronouncements, certain Fund positions are excluded from the definition of "senior security" so long as the Fund maintains adequate cover, segregation of assets or otherwise. In restriction (14) above, the 80% policy is applied at the time of investment. However, if the Fund no longer meets the 80% policy (due to changes in the value of its portfolio holdings or other circumstances beyond its control), it must make future investments in a manner that would bring the Fund into compliance with the 80% requirement, but would not be required to sell portfolio holdings that have increased in value. CDC Nvest Jurika & Voyles Small Cap Growth Fund CDC Nvest Jurika & Voyles Small Cap Growth Fund (the "Small Cap Growth Fund") may not: *(1) With respect to 75% of its total assets, purchase any security if, as a result, more than 5% of its total assets (based on current value) would then be invested in the securities of a single issuer or acquire more than 10% of the outstanding voting securities of any issuer; provided however, this limitation does not apply to government securities as defined in the 1940 Act; xiv *(2) Invest more than 25% of the Fund's total assets in the securities of issuers engaged in any one industry (except securities issued by the U.S. government, its agencies or instrumentalities); (3) Purchase securities on margin (but it may obtain such short-term credits as may be necessary for the clearance of purchases and sales of securities), or make short sales except where it owns or, by virtue of ownership of other securities, it has the right to obtain, without payment of further consideration, securities equivalent in kind and amount to those sold. (For this purpose, the deposit or payment by the Fund of initial or variation margin in connection with futures contracts or related options transactions is not considered the purchase of a security on margin); *(4) Borrow money in excess of 33 1/3% of its total assets; *(5) Make loans, except by entering into repurchase agreements or by purchase of bonds, debentures, commercial paper, corporate notes and similar evidences of indebtedness, which are a part of an issue to the public or to financial institutions, or through the lending of the Fund's portfolio securities; *(6) Buy or sell real estate or commodities or commodity contracts, except that the Fund may buy and sell financial futures contracts and options, swap contracts, currency forward contracts, structured notes and other similar instruments. (This restriction does not prevent the Fund from purchasing securities of issuers that invest in the foregoing); *(7) Act as underwriter, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws; +(8) Purchase any illiquid security if, as a result, more than 15% of its net assets (taken at current value) would be invested in such securities (excluding Rule 144A securities and certain Section 4(2) commercial paper deemed to be liquid under guidelines established by CDC Nvest Fund Trust III's trustees); *(9) Issue senior securities, except as permitted by the 1940 Act or any relevant exemption thereunder. (For the purpose of this restriction none of the following is deemed to be a senior security: any pledge or other encumbrance of assets; any borrowing permitted by restriction (3) above; any collateral arrangements with respect to options or futures contracts, and with respect to initial and variation margin; and the purchase or sale of options, forward contracts, futures contracts, swap contracts and other similar instruments); or (10) Invest less than 80% of its net assets (plus borrowings made for investment purposes) in investments in companies that have market capitalization within the capitalization range of the Russell 2000 Index. Prior to any change to such policy adopted by the Board of Trustees of the Fund the Fund will provide shareholders with notice as required by Rule 35d-1 under the 1940 Act, as such Rule may be interpreted from time to time by the staff of the SEC. Although the Fund is permitted to borrow money to a limited extent, it does not currently intend to do so. The staff of the SEC is currently of the view that repurchase agreements maturing in more than seven days are illiquid and thus subject to restriction (8) above. In restriction (10) above, the 80% policy is applied at the time of investment. However, if the Fund no longer meets the 80% policy (due to changes in the value of its portfolio holdings or other circumstances beyond its control), it must make future investments in a manner that would bring the Fund into compliance with the 80% requirement, but would not be required to sell portfolio holdings that have increased in value. CDC Nvest International Equity Fund CDC Nvest International Equity Fund (the "International Equity Fund") may not: xv (1) With respect to 75% of its total assets, purchase any security (other than U.S. government securities) if, as a result, more than 5% of the Fund's total assets (taken at current value) would then be invested in securities of a single issuer; *(2) Purchase any security (other than U.S. government securities) if, as a result, more than 25% of the Fund's total assets (taken at current value) would be invested in any one industry (in the utilities category, gas, electric, water and telephone companies will be considered as being in separate industries, and each foreign country's government (together with subdivisions thereof) will be considered to be a separate industry); (3) Purchase securities on margin (but it may obtain such short-term credits as may be necessary for the clearance of purchases and sales of securities), or make short sales except where, by virtue of ownership of other securities, it has the right to obtain, without payment of further consideration, securities equivalent in kind and amount to those sold, and the Fund will not deposit or pledge more than 10% of its total assets (taken at current value) as collateral for such sales. (For this purpose, the deposit or payment by the Fund of initial or variation margin in connection with futures contracts or related options transactions is not considered the purchase of a security on margin); (4) Acquire more than 10% of any class of securities of an issuer (other than U.S. government securities and taking all preferred stock issues of an issuer as a single class and all debt issues of an issuer as a single class) or with respect to 75% of its total assets, acquire more than 10% of the outstanding voting securities of an issuer (such percentage limitations apply to closed-end management investment companies as well); *(5) Borrow money in excess of 10% of its total assets (taken at cost) or 5% of its total assets (taken at current value), whichever is lower, and then only as a temporary measure for extraordinary or emergency purposes; (6) Pledge more than 15% of its total assets (taken at cost). (For the purpose of this restriction, collateral arrangements with respect to options, futures contracts and options on futures contracts and with respect to initial and variation margin are not deemed to be a pledge of assets); *(7) Make loans, except by entering into repurchase agreements or by purchase of bonds, debentures, commercial paper, corporate notes and similar evidences of indebtedness, which are a part of an issue to the public or to financial institutions, or through the lending of the Fund's portfolio securities; *(8) Buy or sell oil, gas or other mineral leases, rights or royalty contracts, real estate or commodities or commodity contracts, except that the Fund may buy and sell futures contracts and related options. (This restriction does not prevent the Fund from purchasing securities of companies investing in the foregoing); *(9) Act as underwriter, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws; (10) Except to the extent permitted by rule or order of the SEC, participate on a joint or joint and several basis in any trading account in securities. (The "bunching" of orders for the purchase or sale of portfolio securities with the Fund's adviser or subadviser or accounts under its management to reduce brokerage commissions, to average prices among them or to facilitate such transactions is not considered a trading account in securities for purposes of this restriction); (11) Write, purchase or sell options, except that the Fund may (a) write, purchase and sell put and call options on securities, securities indexes, currencies, futures contracts, swap contracts and other similar instruments and (b) enter into currency forward contracts; +(12) Purchase any illiquid security if, as a result, more than 15% of its net assets (taken at current value) would be invested in such securities (excluding Rule 144A securities and certain Section 4(2) commercial paper deemed to be liquid under guidelines established by CDC Nvest Funds Trust I's trustees); xvi *(13) Issue senior securities. (For the purpose of this restriction none of the following is deemed to be a senior security: any pledge or other encumbrance of assets permitted by restriction (6) above; any borrowing permitted by restriction (5) above; any collateral arrangements with respect to options, futures contracts and options on futures contracts and with respect to initial and variation margin; the purchase or sale of options, forward contracts, futures contracts or options on futures contracts; and the issuance of shares of beneficial interest permitted from time to time by the provisions of CDC Nvest Funds Trust I's Agreement and Declaration of Trust and by the 1940 Act, the rules thereunder, or any exemption therefrom); or (14) Invest less than 80% of its net assets (plus borrowings made for investment purposes) in equity investments. Prior to any change to such policy adopted by the Board of Trustees of the Fund, the Fund will provide notice to shareholders as required by Rule 35d-1 under the 1940 Act, as such Rule may be interpreted from time to time by the staff of the SEC. The staff of the SEC is currently of the view that repurchase agreements maturing in more than seven days are illiquid and thus subject to restriction (12) above. In restriction (14) above, the 80% policy is applied at the time of investment. However, if the Fund no longer meets the 80% policy (due to changes in the value of its portfolio holdings or other circumstances beyond its control), it must make future investments in a manner that would bring the Fund into compliance with the 80% requirement, but would not be required to sell portfolio holdings that have increased in value. xvii - -------------------------------------------------------------------------------- FUND CHARGES AND EXPENSES - -------------------------------------------------------------------------------- ADVISORY FEES Pursuant to an advisory agreement dated October 30, 2000, Capital Growth Management Limited Partnership ("CGM") has agreed to manage the investment and reinvestment of the assets of the Targeted Equity Fund, subject to the supervision of the Board of Trustees of CDC Nvest Funds Trust I. For the services described in the advisory agreements, the Targeted Equity Fund has agreed to pay CGM an advisory fee at the annual rate set forth in the following table:
Advisory fee payable by Fund to CGM Fund (as a % of average daily net assets of the Fund) - ----------------------------------------------- ------------------------------------------------------------- Targeted Equity Fund 0.75% of the first $200 million 0.70% of the next $300 million 0.65% of the next $1.5 billion 0.60% of amounts in excess of $2 billion
Pursuant to an advisory agreement dated October 30, 2000, AEW has agreed to manage the investment and reinvestment of the assets of the AEW Real Estate Fund, subject to the supervision of the Board of Trustees of CDC Nvest Companies Trust I. For the services described in the advisory agreement, the AEW Real Estate Fund has agreed to pay AEW an advisory fee at the annual rate set forth in the following table:
Advisory fee payable by Fund to AEW Fund (as a % of average daily net assets of the Fund) - ----------------------------------------------- ------------------------------------------------------------- AEW Real Estate Fund 0.80% of the first $500 million 0.75% of amounts in excess of $500 million
Pursuant to separate advisory agreements, CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Advisers") has agreed, subject to the supervision of the Board of Trustees of the relevant Trust, to manage the investment and reinvestment of the assets of the Capital Growth, Growth and Income, Balanced, Large Cap Value, Mid Cap Growth, Select, International Equity, Small Cap Growth, Large Cap Growth and Relative Value Funds and to provide a range of administrative services to such Funds. For the services described in the advisory agreements (dated March 15, 2001 for Mid Cap Growth Fund and Select Fund, November 19, 2001 for Large Cap Growth Fund, December 3, 2001 for Relative Value Fund and October 30, 2000 for the remaining Funds), each such Fund has agreed to pay CDC IXIS Advisers an advisory fee at the annual rate set forth in the following table, reduced by the amount of any sub-advisory fees payable by the Fund to the subadviser pursuant to any sub-advisory agreement: xviii
Advisory fee payable by Fund to CDC IXIS Advisers Fund (includes any subadvisory fees paid as a % of average daily net assets of the Fund) - ----------------------------------------------- ------------------------------------------------------------- Large Cap Growth Fund 0.90% Capital Growth Fund and 0.75% of the first $200 million Balanced Fund 0.70% of the next $300 million 0.65% of amounts in excess of $500 million Growth and Income Fund and 0.70% of the first $200 million Large Cap Value Fund 0.65% of the next $300 million 0.60% of amounts in excess of $500 million Relative Value Fund 0.85% of the first $500 million 0.80% of amounts in excess of $500 million Mid Cap Growth Fund 0.95% of the first $1 billion 0.825% of amounts in excess of $1 billion Select Fund 1.00% of the first $1 billion 0.95% of amounts in excess of $1 billion Small Cap Growth Fund 0.95% of the first $200 million 0.90% of the next $300 million 0.85% of amounts in excess of $500 million International Equity Fund 0.90% of the first $200 million 0.85% of the next $300 million 0.80% of amounts in excess of $500 million
SUBADVISORY FEES The advisory agreements for the Capital Growth, Growth and Income, Balanced, Large Cap Value, Mid Cap Growth, Select, International Equity, Small Cap Growth, Large Cap Growth and Relative Value Funds each provide that CDC IXIS Advisers may delegate its responsibilities thereunder to another party. Pursuant to separate subadvisory agreements, CDC IXIS Advisers has delegated the portfolio management responsibilities of each of these Funds' assets to a subadviser. The subadviser is Loomis, Sayles & Company, L.P. ("Loomis Sayles"), in the case of the Fixed Income and Equity Growth segments of the Balanced Fund, the Mid Cap Growth Fund and the International Equity Fund, Westpeak Global Advisors, L.P. ("Westpeak"), in the case of the Capital Growth Fund, Jurika & Voyles, L.P. ("Jurika & Voyles") in the case of the Small Cap Growth Fund, the Value Equity segment of the Balanced Fund and the Relative Value Fund, Harris Associates, L.P. ("Harris Associates") in the case of the Select Fund and the Growth and Income Fund and Vaughan, Nelson, Scarborough & McCullough ("Vaughan Nelson") in the case of the Large Cap Value Fund and Large Cap Growth Fund. For the services described in the subadvisory agreements, each such Fund has agreed to pay its respective subadviser a subadvisory fee at the annual rate set forth in the following table: xix
Date of Subadvisory fee payable to subadviser (as a % of Subadvisory average daily net assets of the Fund) Fund Subadviser Agreements - ------------------- -------------- ---------------- ------------------------------------------------------- Large Cap Growth Vaughan 11/19/01 0.50% Fund Nelson Capital Growth Westpeak 10/30/00 0.40% of the first $200 million Fund 0.35% of the next $300 million 0.30% of amounts in excess of $500 million Growth and Income Harris 10/29/02 0.45% of the first $250 million Fund Associates1 0.40% of the next $250 million 0.35% of amounts in excess of $500 million Balanced Fund Loomis 4/20/01 0.535% of the first $200 million Sayles and 0.350% of the next $300 million Jurika & 0.300% of amounts in excess of $500 million Voyles Relative Value Jurika & 12/03/01 0.450% of the first $500 million Fund Voyles 0.425% of amounts in excess of $500 million Large Cap Value Vaughan 10/30/00 0.400% of the first $200 million Fund Nelson 0.325% of the next $300 million 0.275% of amounts in excess of $500 million Mid Cap Growth Loomis Sayles 3/15/01 0.550% of the first $1 billion Fund 0.425% of amounts in excess of $1 billion Select Fund Harris 3/15/01 0.60% of the first $1 billion Associates 0.55% of amounts in excess of $1 billion Small Cap Growth Jurika & 12/03/01 0.57% of the first $200 million Fund Voyles 0.50% of the next $300 million 0.43% of amounts in excess of $500 million International Loomis Sayles 10/30/00 0.40% of the first $200 million Equity Fund 0.35% of amounts in excess of $200 million
Prior to July 1, 2002, Westpeak Global Advisors, L.P. ("Westpeak") served as subadviser to the Growth and Income Fund providing for a subadvisory fee to be paid by CDC IXIS Advisers to Westpeak at the annual rate of 0.50% of the first $25 million of the Fund's average daily net assets, 0.40% of the next $75 million of the Fund's average daily net assets, 0.35% of the next $100 million of the Fund's average daily net assets and 0.30% of amounts in excess of $200 million. CDC IXIS Advisers has given a binding undertaking (for the classes indicated for the relevant funds) to reduce its advisory fee, and if necessary, to bear certain expenses associated with the Fund, to the extent necessary to limit the Fund's expense to the annual rates indicated. The undertaking will be binding on CDC IXIS Advisers until the ending date shown, and will be reevaluated on an annual basis thereafter, subject to the obligation of each Fund to pay such deferred fees or expense reimbursement in later periods to the extent that each Fund's expenses fall below the expense limit; (provided xx however, that each Fund is not obligated to pay such deferred fees or expense reimbursement more than one year after the end of the fiscal year in which the fee was deferred. Fund / Class Ending Date of Undertaking Expense Limit - ------------ -------------------------- ------------- Large Cap Growth April 30,2003 A 1.40% B 2.15% C 2.15% Y 1.15% Balanced December 31, 2003 Y 0.95 Relative Value December 31, 2004 A 1.50% B 2.25% C 2.25% Y 1.25% Large Cap Value April 30, 2003 A 1.50% B 2.25% C 2.25% Mid Cap Growth April 30, 2003 A 1.70% B 2.45% C 2.45% Select April 30, 2003 A 1.70% B 2.45% C 2.45% AEW April 30, 2003 A 1.50% B 2.25% C 2.25% Y 1.25% Small Cap Growth December 31, 2004 A 1.75% B 2.50% C 2.50% Y 1.50% xxi For the last three fiscal years (or the periods indicated) the following table shows the advisory fees (including subadvisory fees) paid by the Funds and of these amounts, the total paid to CDC IXIS Advisers and the total paid to a subadviser of a Fund: Large Cap Growth Fund1 - --------------------- 10/1/99-9/30/00 10/1/00-9/30/01 10/1/01-12/31/01 --------------- --------------- ---------------- Total Advisory Fee $1,068,635 $976,870 $140,374 CDC IXIS Advisers -- -- $30,888 Fee Earned $30,888* Fee Waived **-- Total Paid Vaughan Nelson Fee Earned -- $48,124 $109,486 Fee Waived -- $32,910 $96,638* Total Paid -- $15,214 $12,848 Kobrick Funds LLC Fee Earned $1,068,635 $928,746 -- Fee Waived $351,481 $514,839 -- Total Paid $717,154 $413,907 -- Capital Growth Fund - ------------------- 1999 2000 2001 ---- ---- ---- Total Advisory Fee $1,826,043 $1,933,858 $1,206,965 CDC IXIS Advisers Total Paid $862,232 $916,955 $563,398 Westpeak Total Paid $963,811 $1,016,903 $643,567 Targeted Equity Fund2 - -------------------- 1999 2000 2001 ---- ---- ---- Total Advisory Fee $12,879,997 $11,676,626 $8,138,041 Capital Growth Management Total Paid $12,879,997 $11,676,626 $8,138,041 xxii Growth and Income Fund7 - ---------------------- 1999 2000 2001 ---- ---- ---- Total Advisory Fee $3,843,930 $3,609,994 $2,760,399 CDC IXIS Advisers Total Paid $1,921,579 $1,819,201 $1,357,522 Westpeak Total Paid $1,922,351 $1,790,793 $1,402,877 Balanced Fund 1999 2000 2001 ---- ---- ---- Total Advisory Fee $2,517,100 $1,569,212 $1,080,327 CDC IXIS Advisers Fee Earned $1,047,478 $474,070 $309,694 Fee Waived -- -- $12,476 Total Paid $1,047,478 $474,070 $297,218 Loomis Sayles Total Paid $1,469,622 $1,095,142 $576,150 Jurika & Voyles Total Paid -- -- $194,483 Relative Value Fund3 - ------------------- 7/1/99 - 6/30/00 7/1/00 - 6/30/01 7/1/01 - 12/31/01 ---------------- ---------------- ----------------- Total Advisory Fee $272,263 $259,587 $112,241 CDC IXIS Advisers Fee Earned - - $8,972 Fee Waived $8,972* Total Paid -- ** Jurika & Voyles Fee Earned $272,263 $259,587 $103,269 Fee Waived $137,595 $116,061 $86,177* Total Paid $134,668 $143,526 $17,092 xxiii Large Cap Value Fund4 - -------------------- 1999 2000 2001 ---- ---- ---- Total Advisory Fee $196,897 $120,587 $135,087 CDC IXIS Advisers Fee Earned $84,835 $51,680 $57,895 Fee Waived $62,069 $51,680 $57,895* Total Paid $22,766 --** --** Loomis Sayles (1/1 - 5/31) Fee Earned $51,737 -- -- Fee Waived $51,737 -- -- Total Paid $0 -- -- Vaughan Nelson (6/1 - 12/31) Fee Earned $60,775 $68,907 $77,192 Fee Waived $60,775 $68,907 $77,192* Total Paid $0 -- -- Mid Cap Growth Fund 1999 2000 2001 ---- ---- ---- Total Advisory Fee -- -- $48,642 CDC IXIS Advisers Fee Earned $20,481 Fee Waived $20,481* Total Paid --** Loomis Sayles Fee Earned $28,161 Fee Waived $28,161* Total Paid $0 Select Fund 1999 2000 2001 ---- ---- ---- Total Advisory Fee -- -- $567,368 CDC IXIS Advisers Fee Earned $226,947 Fee Waived $214,528* Total Paid $12,419 Harris Associates Fee Earned $340,421 Fee Waived -- Total Paid $340,421 xxiv AEW Real Estate Fund 1999 9/1/00-1/31/01 2/1/01-1/31/02 ---- -------------- -------------- Total Advisory Fee - $1,989 $52,572 AEW Fee Earned -- $1,989 $52,572 Fee Waived -- $1,989 $52,572* Total Paid -- --** --** Small Cap Growth Fund5 - --------------------- 7/1/99-6/30/00 7/1/00-6/30/01 7/1/01-12/31/01 -------------- -------------- --------------- Total Advisory Fee $341,698 $326,712 $120,654 CDC IXIS Advisers Fee Earned $10,233 Fee Waived $4,716* Total Paid $5,517 Jurika & Voyles Fee Earned $341,698 $326,712 $110,421 Fee Waived $115,252 $148,749 $80,951* Total Paid $226,446 $177,963 $29,470 International Equity Fund6 - ------------------------- 1999 2000 2001 ---- ---- ---- Total Advisory Fee $634,275 $1,076,376 $676,887 CDC IXIS Advisers Fee Earned $352,375 $597,986 $376,048 Fee Waived $102,021 -- -- Total Paid $250,354 $597,986 $376,048 Loomis Sayles Fee Earned $281,900 $478,390 $300,839 Fee Waived $81,617 -- -- Total Paid $200,283 $478,390 $300,839 *Deferred. **CDC IXIS Advisers (or AEW as indicated) assumed additional expenses of the following Funds for the following time periods: Adviser Fund Time Period Expenses ------- ---- ----------- -------- CDC IXIS Advisers Large Cap Growth 10/1/01 - 12/31/01 $8,915 CDC IXIS Advisers Relative Value 7/1/01 - 12/31/01 $177 CDC IXIS Advisers Large Cap Value 1/1/00 - 12/31/00 $54,748 CDC IXIS Advisers Large Cap Value 1/1/01 - 12/31/01 $30,446 CDC IXIS Advisers Mid Cap Growth 1/1/01 - 12/31/01 $211,884 AEW AEW Real Estate 9/1/01 - 1/31/01 $87,814 AEW AEW Real Estate 2/1/01 - 1/31/02 $215,401 xxv 1 On November 16, 2001, Kobrick Growth Fund reorganized into the Large Cap Growth Fund and, as a result, Large Cap Growth Fund assumed the financial and accounting information of Kobrick Growth Fund. Kobrick served as adviser to Kobrick Growth Fund until June 30, 2001 pursuant to an advisory agreement dated October 30, 2000 and continued to receive advisory fees until August 30, 2001 pursuant to the terms of the advisory agreement. Vaughan Nelson served as the interim adviser through November 16, 2001 pursuant to an interim advisory agreement dated July 1, 2001. The advisory fee rate under the advisory agreement with Kobrick as adviser and under the interim advisory agreement with Vaughan Nelson as interim adviser was 1.00% of the Fund's average daily net assets. From October 1, 1999 to October 28, 1999, only one class of the Large Cap Growth Fund existed and the Fund's predecessor agreed to reduce its fees and, if necessary, to bear certain expenses related to operating the Fund in order to limit the Fund's expenses to an annual rate of 1.40% of the average daily net assets of the Fund's shares. 2 Prior to June 1, 1999, CGM served as adviser to the Targeted Equity Fund pursuant to an advisory agreement providing for an advisory fee at the annual rate of 0.75% of the first $200 million of the Fund's average daily net assets, 0.70% of the next $300 million of such assets and 0.65% of such assets in excess of $500 million. 3 On November 30, 2001, Jurika & Voyles Value + Growth Fund reorganized into the Relative Value Fund and, as a result, the Relative Value Fund assumed the financial and accounting information of Jurika & Voyles Value+Growth Fund. Jurika & Voyles served as adviser to Jurika & Voyles Value+Growth Fund through November 30, 2001 pursuant to an advisory agreement dated October 30, 2000. The advisory fee rate under this agreement was 0.85% of the Jurika & Voyles Value+Growth Fund's average daily net assets. From July 1, 1998 to November 30, 2001, Jurika & Voyles gave a binding undertaking to the Fund to reduce its fees and, if necessary, to bear certain expenses related to operating the Jurika & Voyles Value+Growth Fund in order to limit the Jurika & Voyles Value+Growth Fund's expenses to an annual rate of 1.25% of the average daily net assets of the Fund's shares. 4 From August 30, 1996 to May 31, 1999, Loomis Sayles served as subadviser to the Large Cap Value Fund pursuant to a subadvisory agreement between CDC IXIS Advisers and Loomis Sayles providing for the same subadvisory fee as is currently payable by the Large Cap Value Fund to Vaughan Nelson. For the period June 1, 1999 to July 27, 1999, Vaughan Nelson served as subadviser to the Large Cap Value Fund under an interim subadvisory agreement dated June 1, 1999 providing for the same fee that was paid to Loomis Sayles. Vaughan Nelson agreed to voluntarily waive its subadvisory fee under the interim agreement until June 30, 1999, and during this period, the Large Cap Value Fund continued to pay Loomis Sayles the subadvisory fee it would have earned if it had continued to manage the Fund's portfolio. From September 1, 1997 to June 30, 1999, Loomis Sayles voluntarily agreed to waive its entire subadvisory fee for such Fund. Since the Fund's inception and effective until April 30, 2003, CDC IXIS Advisers has given a binding undertaking to Large Cap Value Fund to reduce its advisory fee and, if necessary, to bear certain expenses associated with operating the Fund to the extent necessary to limit the Fund's expenses to the annual rate of 1.50% of average daily net assets for Class A shares, 2.25% for Class B shares and 2.25% for Class C shares ("Expense Caps" and each an "Expense Cap"). Beginning July 1, 1999, Vaughan Nelson and CDC IXIS Advisers split any fee waivers required in proportion to the subadvisory and advisory fees collected. CDC IXIS Advisers also bears any additional expense reimbursement above the fee waivers required for the Fund to meet the relevant Expense Cap. This undertaking will be binding on CDC IXIS Advisers for the life of the Fund's current Prospectus, subject to the obligation of the Fund to pay such deferred fees or expense reimbursement in later periods to the extent that the Fund's expenses fall below the annual rate of 1.50% of average daily net assets for Class A shares, 2.25% for Class B shares and 2.25% for Class C shares; provided, however, that the Fund is not obligated to pay any such deferred fees or expense reimbursement more than one year after the end of the fiscal year in which the fee was deferred. 5 On November 30, 2001, Jurika & Voyles Small-Cap Fund reorganized into the Small Cap Growth Fund (formerly, CDC Nvest Bullseye Fund) and, as a result, the Small Cap Growth Fund assumed the financial and accounting information of Jurika & Voyles Small-Cap Fund. Jurika & Voyles served as adviser to Jurika & Voyles Small-Cap Fund through November 30, 2001 pursuant to an advisory agreement dated October 30, 2000. The advisory fee rate under this agreement was 1.00% of the Jurika & Voyles Small-Cap Fund's average daily net assets. From July 1, 1998 to November 30, 2001, Jurika & Voyles gave a binding undertaking to the Jurika & Voyles Small-Cap Fund to reduce its fees and, if necessary, to bear certain xxvi expenses related to operating the Jurika & Voyles Small-Cap Fund in order to limit the Fund's expenses to an annual rate of 1.50% of the average daily net assets of the Jurika & Voyles Small-Cap Fund's shares. 6 From May 1, 1998 to April 30, 2000, CDC IXIS Advisers gave a binding undertaking to the International Equity Fund to reduce its fees and, if necessary, to bear certain expenses related to operating the Fund in order to limit the Fund's expenses to an annual rate of 2.00% of the average daily net assets of the Fund's Class A shares, 2.75% of the average daily net assets of the Fund's Class B shares, 2.75% of the average daily net assets of the Fund's Class C shares and 1.75% (prior to August 23, 1999, 1.40%) of the average daily net assets of the Fund's Class Y shares. 7 Effective July 1, 2002, Harris Associates replaced Westpeak as subadviser to the Growth and Income Fund. For more information about the Funds' advisory and subadvisory agreements, see "Management of the Trusts" in Part II of this Statement. Brokerage Commissions Set forth below are the amounts each Fund paid in brokerage commissions during the last three fiscal years and the amounts each Fund paid in brokerage transactions and brokerage commissions to brokers providing research services for the fiscal year. For a description of how transactions in portfolio securities are effected and how the Funds' subadvisers select brokers, see the section entitled "Portfolio Transactions and Brokerage" in Part II of this Statement.
Large cap Growth Fund - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999* 2000** 2001*** ----- ------ ------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $26,660,590 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid **** $1,221,168 $1,048,313 $58,187 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $48,587 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- -------------------
*For the fiscal year ended September 30, 2000 ** For the fiscal year ended September 30, 2001 ***For the period from October 1, 2001 to December 31, 2001 ****The difference in brokerage commissions from 2000 to 2001 is due to the shorter time period in 2001
- ---------------------------------------------------------------- --------------------- -------------------- ------------------- CAPITAL GROWTH FUND - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999 2000 2001 ---- ---- ---- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $12,425,699 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid $421,755 $446,645 $305,499 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $15,335 - ---------------------------------------------------------------- --------------------- -------------------- -------------------
xxvii
TARGETED EQUITY FUND - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999 2000 2001 ---- ---- ---- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $5,795,551,783 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid $8,113,289 $10,192,921 $6,316,878 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $725,835 - ---------------------------------------------------------------- --------------------- -------------------- -------------------
GROWTH AND INCOME FUND - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999 2000 2001 ---- ---- ---- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $182,352,701 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid $952,681 $1,110,676 $1,215,373 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $236,414 - ---------------------------------------------------------------- --------------------- -------------------- -------------------
BALANCED FUND - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999 2000 2001 ---- ---- ---- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $242,923,956 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid $441,089 $464,155 $256,251 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $180,716 - ---------------------------------------------------------------- --------------------- -------------------- -------------------
xxviii
Relative value fund - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999* 2000** 2001*** ----- ------ ------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $11,259,386 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid $68,303 $37,506 $19,098 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $19,098 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- *For the fiscal year ended June 30, 2000 **For the fiscal year ended June 30, 2001 ***For the period from July 1, 2001 to December 31, 2001 - ---------------------------------------------------------------- --------------------- -------------------- -------------------
LARGE CAP VALUE FUND - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999 2000 2001 ---- ---- ---- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $9,077,109 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid $40,928 $24,468 $27,870 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $15,554 - ---------------------------------------------------------------- --------------------- -------------------- -------------------
MID CAP GROWTH FUND - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999 2000 2001* ---- ---- ----- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $17,240,502 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid NA NA $11,811 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $6,322 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- *For the period March 31, 2001 to December 31, 2001 - ---------------------------------------------------------------- --------------------- -------------------- -------------------
SELECT FUND - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999 2000 2001* ---- ---- ----- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $7,622,346 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid NA NA $257,384 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $15,759 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commisions paid to Affiliated Brokers** Harris Associates Securities, L.P. ("HASLP") $150,573 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- *For the Period March 31, 2001 to December 31, 2001 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- ** For the fiscal year ended December 31, 2001, the Fund paid 58.50% of its total brokerage commissions to HASLP and effected 58.37% of its total brokerage transactions through HASLP. - ---------------------------------------------------------------- --------------------- -------------------- -------------------
xxix
AEW REAL ESTATE FUND - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999 2000* 2001** ---- ----- ------ - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $0 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid *** NA $2,400 $20,173 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $0 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- * For the period September 1, 2000 to January 31, 2001 **For the fiscal year ending January 31, 2002 ***The difference in brokerage commissions from 2000 to 2001 is due to the fact that Classes A, B and C of the Fund were started on December 29, 2000 - ---------------------------------------------------------------- --------------------- -------------------- -------------------
SMALL CAP GROWTH FUND - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999* 2000** 2001*** ----- ------ ------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $53,811,991 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid **** $80,752 $80,508 $33,049 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $25,189 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- * For the fiscal year ended June 30, 2000 **For the fiscal year ended June 30, 2001 ***For the period July 1, 2001 to December 31, 2001 ****The difference in brokerage commissions from 2000 to 2001 is due to the shorter time period in 2001 - ---------------------------------------------------------------- --------------------- -------------------- -------------------
INTERNATIONaL EQUITY FUND - ---------------------------------------------------------------- --------------------- -------------------- ------------------- 1999 2000 2001 ---- ---- ---- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Transactions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Allocated to brokers providing research services $406,052,611 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Brokerage Commissions - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Total Brokerage Commissions Paid $751,900 $767,454 $627,514 - ---------------------------------------------------------------- --------------------- -------------------- ------------------- - ---------------------------------------------------------------- --------------------- -------------------- ------------------- Commissions paid to Brokers providing research services $627,514 - ---------------------------------------------------------------- --------------------- -------------------- -------------------
xxx Sales Charges and 12b-1 Fees As explained in Part II of this Statement, the Classes A, B and C shares of each Fund pay the Distributor fees under plans adopted pursuant to Rule 12b-1 under the 1940 Act. The following table shows the amounts of Rule 12b-1 fees paid by each Fund during the last three fiscal years (except where indicated, the Fund's fiscal year is the calendar year).
Fund 1999 2000 2001 ---- ---- ---- ----------------------------------- Large Cap Growth Fund* (Class A) $210,646 $145,784 $18,169 (Class B) $177,121 $320,506 $61,143 (Class C) $41,538 $56,473 $8,413 Capital Growth Fund (Class A) $449,506 $466,657 $286,602 (Class B) $640,502 $722,386 $443,820 (Class C) $24,404 $30,728 $19,533 Targeted Equity Fund (Class A) $4,507,150 $4,014,853 $2,749,081 (Class B) $1,130,273 $1,172,243 $847,071 (Class C) $67,804 $60,690 $44,628 Growth and Income Fund (Class A) $876,555 $813,590 $613,071 (Class B) $1,953,852 $1,848,154 $1,384,899 (Class C) $244,663 $221,749 $132,025 Balanced Fund (Class A) $500,098 $310,460 $210,487 (Class B) $784,237 $477,052 $330,386 (Class C) $52,722 $26,362 $16,321 Relative Value Fund** (Class A) -- -- $231 (Class B) -- -- -- (Class C) -- -- -- Large Cap Value Fund (Class A) $35,201 $21,525 $23,837 (Class B) $122,010 $77,120 $88,890 (Class C) $17,052 $9,048 $8,746 Mid Cap Growth Fund+ (Class A) - - $6,824 (Class B) - - $19,460 (Class C) - - $4,448 Select Fund+ (Class A) - - $47,500 (Class B) - - $249,277 (Class C) - - $128,056 AEW Real Estate Fund*** (Class A) -- $203 $8,457 (Class B) -- $185 $21,218 (Class C) -- $90 $4,932
xxxi
Small Cap Growth Fund** (Class A) - - $1,463 (Class B) - - $6,231 (Class C) - - $607 International Equity Fund (Class A) $110,048 $170,958 $103,583 (Class B) $185,331 $330,653 $219,721 (Class C) $7,292 $37,710 $34,336
* For the fiscal years ended September 30, 2000, September 30, 2001 and the period from October 1, 2001 to December 31, 2001. ** For the fiscal years ended June 30, 2000, June 30, 2001 and the period from July 1, 2001 to December 31, 2001. *** The AEW Real Estate Fund commenced operations on August 31, 2000, offering Class Y shares (and on December 29 2000, offering Classes A, B and C shares). For the fiscal years ended January 31, 2001 and 2002. + For the period March 15, 2001 to December 31, 2001. xxxii During the fiscal year ended December 31, 2001 (January 31, 2002 for AEW Real Estate Fund), the Distributor's expenses relating to each Fund's 12b-1 plans were as follows (Class B compensation to investment dealers excludes advanced commissions sold to a third party):
Large Cap Growth Fund+ (Class A shares) Compensation to Investment Dealers $14,490 Compensation to Distributor's Sales Personnel and Other Related Costs $12,593 ------- $27,083 TOTAL (Class B shares) Compensation to Investment Dealers $28,895 Compensation to Distributor's Sales Personnel and Other Related Costs $6,853 ------ $35,748 TOTAL (Class C shares) Compensation to Investment Dealers $2,602 Compensation to Distributor's Sales Personnel and Other Related Costs $674 ---- $3,276 TOTAL
Capital Growth Fund (Class A shares) Compensation to Investment Dealers $286,298 Compensation to Distributor's Sales Personnel and Other Related Costs $220,280 -------- TOTAL $506,578 (Class B shares) Compensation to Investment Dealers $432,143 Compensation to Distributor's Sales Personnel and Other Related Costs $139,458 -------- TOTAL $571,601 (Class C shares) Compensation to Investment Dealers $15,232 Compensation to Distributor's Sales Personnel and Other Related Costs $9,858 ------ TOTAL $25,090
Targeted Equity Fund (Class A shares) Compensation to Investment Dealers $2,775,647 Compensation to Distributor's Sales Personnel and Other Related Costs $896,820 -------- TOTAL $3,672,467 (Class B shares) Compensation to Investment Dealers $822,904 Compensation to Distributor's Sales Personnel and Other Related Costs $260,779 -------- TOTAL $1,083,683 (Class C shares) Compensation to Investment Dealers $38,053 Compensation to Distributor's Sales Personnel and Other Related Costs $16,314 ------- TOTAL $54,367
xxxiii
Growth and Income Fund (Class A shares) Compensation to Investment Dealers $552,785 Compensation to Distributor's Sales Personnel and Other Related Costs $764,046 -------- TOTAL $1,316,831 (Class B shares) Compensation to Investment Dealers $1,348,674 Compensation to Distributor's Sales Personnel and Other Related Costs $351,671 -------- TOTAL $1,700,345 (Class C shares) Compensation to Investment Dealers $123,184 Compensation to Distributor's Sales Personnel and Other Related Costs $63,815 ------- TOTAL $186,999
Balanced Fund (Class A shares) Compensation to Investment Dealers $210,511 Compensation to Distributor's Sales Personnel and Other Related Costs $115,614 -------- TOTAL $326,125 -------- (Class B shares) Compensation to Investment Dealers $323,803 Compensation to Distributor's Sales Personnel and Other Related Costs $80,223 ------- TOTAL $404,026 (Class C shares) Compensation to Investment Dealers $15,716 Compensation to Distributor's Sales Personnel and Other Related Costs $6,676 ------ TOTAL $22,392
Relative Value Fund+ (Class A shares) Compensation to Investment Dealers $249 Compensation to Distributor's Sales Personnel and Other Related Costs $58,765 ------- $59,014 TOTAL (Class B shares) Compensation to Investment Dealers $0 Compensation to Distributor's Sales Personnel and Other Related Costs $0 -- $0 TOTAL (Class C shares) Compensation to Investment Dealers $0 Compensation to Distributor's Sales Personnel and Other Related Costs $0 -- $0 TOTAL
xxxiv
Large Cap Value Fund (Class A shares) Compensation to Investment Dealers $21,830 Compensation to Distributor's Sales Personnel and Other Related Costs $56,435 ------- $78,265 TOTAL (Class B shares) Compensation to Investment Dealers $86,060 Compensation to Distributor's Sales Personnel and Other Related Costs $62,360 ------- $148,420 TOTAL (Class C shares) Compensation to Investment Dealers $8,861 Compensation to Distributor's Sales Personnel and Other Related Costs $5,399 ------ $14,260 TOTAL
Mid Cap Growth Fund ++ (Class A shares) $7,393 Compensation to Investment Dealers $167,901 -------- Compensation to Distributor's Sales Personnel and Other Related Costs $175,294 TOTAL (Class B shares) Compensation to Investment Dealers $16,437 Compensation to Distributor's Sales Personnel and Other Related Costs $107,299 -------- $123,736 TOTAL (Class C shares) Compensation to Investment Dealers $10,132 Compensation to Distributor's Sales Personnel and Other Related Costs $39,763 ------- $49,895 TOTAL
Select Fund++ (Class A shares) Compensation to Investment Dealers $42,942 Compensation to Distributor's Sales Personnel and Other Related Costs $1,436,989 ---------- $1,479,931 TOTAL (Class B shares) Compensation to Investment Dealers $209,760 Compensation to Distributor's Sales Personnel and Other Related Costs $1,779,719 ---------- $1,989,479 TOTAL (Class C shares) Compensation to Investment Dealers $325,008 Compensation to Distributor's Sales Personnel and Other Related Costs $1,350,455 ---------- $1,675,463 TOTAL
AEW Real Estate Fund (Class A shares) Compensation to Investment Dealers $7,587 Compensation to Distributor's Sales Personnel and Other Related Costs $176,840 -------- $184,427 TOTAL (Class B shares) Compensation to Investment Dealers $14,503 Compensation to Distributor's Sales Personnel and Other Related Costs $99,855 ------- $114,358 TOTAL
xxxv
(Class C shares) Compensation to Investment Dealers $7,687 Compensation to Distributor's Sales Personnel and Other Related Costs $30,207 ------- $37,894 TOTAL
Small Cap Growth Fund+++ (Class A shares) Compensation to Investment Dealers $19,334 Compensation to Distributor's Sales Personnel and Other Related Costs $25,347 ------- $44,681 TOTAL (Class B shares) Compensation to Investment Dealers $78,297 Compensation to Distributor's Sales Personnel and Other Related Costs $18,022 ------- $96,319 TOTAL (Class C shares) Compensation to Investment Dealers $8,049 Compensation to Distributor's Sales Personnel and Other Related Costs $9,896 ------ $17,945 TOTAL
International Equity Fund (Class A shares) Compensation to Investment Dealers $104,873 Compensation to Distributor's Sales Personnel and Other Related Costs $462,832 -------- TOTAL $567,705 (Class B shares) Compensation to Investment Dealers $207,895 Compensation to Distributor's Sales Personnel and Other Related Costs $57,451 ------- TOTAL $265,346 (Class C shares) Compensation to Investment Dealers $20,080 Compensation to Distributor's Sales Personnel and Other Related Costs $28,873 ------- TOTAL $48,953
+ For the period from October 1, 2001 to December 31, 2001. ++ For the period from March 15, 2001 to December 31, 2001. +++ For the period from July 1, 2001 to December 31, 2001. xxxvi - -------------------------------------------------------------------------------- OWNERSHIP OF FUND SHARES - -------------------------------------------------------------------------------- As of April 2, 2002, to the Trusts' knowledge, the following persons owned of record or beneficially 5% or more of the outstanding shares of the indicated classes of the Funds set forth below. - --------------------------- -------------------------------- ------------------- Fund Shareholder and Address Ownership Percentage - --------------------------- -------------------------------- ------------------- - --------------------------- -------------------------------- ------------------- Large Cap Growth Fund - --------------------------- -------------------------------- ------------------- - --------------------------- -------------------------------- ------------------- Class A MLPF&S for the Sole Benefit of 10.98% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - --------------------------- -------------------------------- ------------------- - --------------------------- -------------------------------- ------------------- Class B MLPF&S for the Sole Benefit of 7.54% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - --------------------------- -------------------------------- ------------------- - --------------------------- -------------------------------- ------------------- Class C MLPF&S for the Sole Benefit of 39.32% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - --------------------------- -------------------------------- ------------------- - --------------------------- -------------------------------- ------------------- Class Y Chase Manhattan Bank Directed 53.09% ------- Trustee for MetLife Defined Contribution Group 4 New York Plaza New York, NY 10004-2413 - --------------------------- -------------------------------- ------------------- - --------------------------- -------------------------------- ------------------- New England Life Insurance Comp. 45.00% C/o Inv. Accounting 501 Boylston Street Boston, MA 02116-3769 - --------------------------- -------------------------------- ------------------- - --------------------------- -------------------------------- ------------------- Capital Growth Fund - --------------------------- -------------------------------- ------------------- - --------------------------- -------------------------------- ------------------- Class A Deferred Compensation Plan for 6.40% ------- General Agents of New England Funds MetLife Securities Accounting Attn: Jay Langone 4100 Boy Scout Ave. Tampa, FL 33607-5740 - --------------------------- -------------------------------- ------------------- xxxvii - --------------------------- --------------------------------- ------------------ Targeted Equity Fund - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Class B MLPF&S for the Sole Benefit of 5.73% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Class C MLPF&S for the Sole Benefit of 14.62% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Class Y Chase Manhattan Bank Directed 99.37% ------- Trustee for MetLife Defined Contribution Group 4 New York Plaza, Floor 2 New York, NY 10004-2413 - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Growth and Income Fund - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Class C MLPF&S for the Sole Benefit of 11.30% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Class Y T. Rowe Price Trust Co. 40.41% ------- FBO Retirement Plan Clients P.O. Box 17215 Baltimore, MD 21297-1215 - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Metropolitan Life Insurance 30.77% GADC Dianne Lunny 501-6 Boylston Boston, MA 02116-3769 - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Chase Manhatten Bank Directed 22.51% Trustee for MetLife Defined Contribution Group 770 Broadway, 10th Floor New York, NY 10003-9522 - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Balanced Fund - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Class C Donaldson Lufkin Jenrette 17.34% ------- Securities Corporation Inc. P.O. Box 2052 Jersey City, NJ 07303-2052 - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Class Y New England Mutual Life Ins. 34.44% ------- Company Separate Inv. Accounting Attn: Brenda Harmon 501 Boylston Street, 6th Floor Boston, MA 02116-3769 - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Charles Schwab & Co. Inc. 6.88% Special Custody Account For Benefit of Custodian Attn: Mutual Funds 101 Montgomery Street San Francisco, CA 94104-4122 - --------------------------- --------------------------------- ------------------ xxxviii - --------------------------- --------------------------------- ------------------ Metropolitan Life Insurance Co. 6.33% C/o GADC - Gerald Hart - Agency Operations NELICO 501 Boylston Street, 10th Floor Boston, MA 02116-3769 - --------------------------- --------------------------------- ------------------ - --------------------------- --------------------------------- ------------------ Michael A. Roosevelt Trustee 5.01% Eva Benson Buck Charitable Lead Trust C Heller Ehrman White & McAuliffe 425 California Street, 22nd Floor San Francisco, CA 94104-2102 - --------------------------- --------------------------------- ------------------ xxxix - --------------------------- ----------------------------------- ---------------- Jurika & Voyles Relative Value Fund - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Class A Stanton Trust Co. NA Trustee for 93.81% ------- Dalsin Industries Inc. 401K PSP 3405 Annapolis Lane North Suite 100 Minneapolis, MN 55447-5343 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Class B Vanderwall Insurance Agency SIR 47.97% ------- Shirley A. Vanderwall 4029 Royal Drive Fort Collins, CO 80526-2994 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Donaldson Lufkin Jenrette 46.24% Securities Corporation Inc. P.O. Box 2052 Jersey City, NJ 07303-2052 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Class C RBC Dain Rauscher FBO 66.80% ------- Marilyn Rosenfarb 6 Princeton Road Livingston, NJ 07039-5512 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- State Street Bank & Trust Co. C/f 31.08% Starbright Foundation Nvest TSMF Plan FBO Tal Gilad 464 Bonhill Road Los Angeles, CA 90049-2324 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Class Y Vanguard Fiduciary Trust Co. 62.87% ------- Attn: Outside Funds VM 613 P.O. Box 2600 Valley Forge, PA 19482-2600 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Charles Schwab & Co Inc. 19.81% Special Custody Account For Benefit of Custodian Attn: Mutual Funds 101 Montgomery Street San Francisco, CA 94104-4122 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Chase Manhattan Bank Directed 5.79% Trustee for MetLife Defined Contribution Group 4 New York Plaza, Floor 2 New York, NY 10004-2413 - --------------------------- ----------------------------------- ---------------- xl - --------------------------- ----------------------------------- ---------------- Large Cap Value Fund - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Class B MLPF&S for the Sole Benefit of 7.92% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Class C MLPF&S for the Sole Benefit of 28.41% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Paine Webber for the Benefit of 14.03% Robert Adam, Brian King, Robert Campagnone, Kathleen Lomeli & Assoc Willimantic PST 5/1/73 P.O. Box 23 Willimantic, CT 06226-0023 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- State Street Bank and Trust Co. 5.41% Cust for the IRA Rollover of Jack M. Jensen 805 Tipperary Rd. Oregon, WI 53575-2641 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Mid Cap Growth Fund - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Class A MLPF&S for the Sole Benefit of 7.39% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Class C MLPF&S for the Sole Benefit of 29.81% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- A.G. Edwards & Sons Inc. C/f 5.41% Judith A. Edwards IRA Accout 1315 Barak Bryan, TX 77802-3204 - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Select Fund - --------------------------- ----------------------------------- ---------------- - --------------------------- ----------------------------------- ---------------- Class A MLPF&S for the Sole Benefit of 38.42% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - --------------------------- ----------------------------------- ---------------- xli - ---------------------------- ----------------------------------- --------------- Class B MLPF&S for the Sole Benefit of 30.94% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - ---------------------------- ----------------------------------- --------------- - ---------------------------- ----------------------------------- --------------- Class C MLPF&S for the Sole Benefit of 38.36% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - ---------------------------- ----------------------------------- --------------- - ---------------------------- ----------------------------------- --------------- AEW Real Estate Fund - ---------------------------- ----------------------------------- --------------- - ---------------------------- ----------------------------------- --------------- Class A Wexford Clearing Services Corp. 12.61% ------- for Ruth R. Remmel Trustee Ruth R. Remmel Rev Trust UA dtd 10/01/93 11219 Fincl Ctr Pkwy #311 Little Rock, AR 72211 - ---------------------------- ----------------------------------- --------------- - ---------------------------- ----------------------------------- --------------- MLPF&S for the Sole Benefit of 6.13% its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - ---------------------------- ----------------------------------- --------------- - ---------------------------- ----------------------------------- --------------- SSB & TC TR 5.65% Marvin Kozlov Ret Plan FBO Marvin Kozlov 325 Ronnie Ln Buffalo Grove, IL 60089-1149 - ---------------------------- ----------------------------------- --------------- - ---------------------------- ----------------------------------- --------------- Class B MLPF&S for the Sole Benefit of 11.18% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - ---------------------------- ----------------------------------- --------------- - ---------------------------- ----------------------------------- --------------- Class C MLPF&S for the Sole Benefit of 28.40% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - ---------------------------- ----------------------------------- --------------- - ---------------------------- ----------------------------------- --------------- Wexford Clearing Services Corp. 7.44% Beneva C. Farris Ttee Beneva C. Farris Rev. Tr. UA Dtd. 04/17/00 721 Farris Road Conway, AZ 72034-4906 - ---------------------------- ----------------------------------- --------------- - ---------------------------- ----------------------------------- --------------- Class Y AEW Capital Management LP 79.97% ------- Two Seaport Ln Attn: James J. Finnegan Boston, MA 02110-2001 - ---------------------------- ----------------------------------- --------------- xlii - ----------------------------- ----------------------------------- -------------- AEW Capital Management LP 20.01% Two Seaport Ln Attn: James J. Finnegan Boston, MA 02110-2001 - ----------------------------- ----------------------------------- -------------- - ----------------------------- ----------------------------------- -------------- Jurika & Voyles Small Cap Growth Fund - ----------------------------- ----------------------------------- -------------- - ----------------------------- ----------------------------------- -------------- Class C MLPF&S for the Sole Benefit of 11.06% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - ----------------------------- ----------------------------------- -------------- - ----------------------------- ----------------------------------- -------------- Pei-Te Kuo 5.22% 846 Woodward Blvd. Pasadena, CA 91107-5722 - ----------------------------- ----------------------------------- -------------- - ----------------------------- ----------------------------------- -------------- Class Y Charles Schwab & Co Inc. 39.95% ------- Special Custody Account For Benefit of Custodian Attn: Mutual Fundsd 101 Montgomery Street San Francisco, CA 94104-4122 - ----------------------------- ----------------------------------- -------------- - ----------------------------- ----------------------------------- -------------- Prudential Securities Inc. 10.14% Special Custody Account for the Exclusive Benefit of Customers - PC Attn: Mutual Funds Ron Noren 194 Wood Ave S Iselin, NJ 08830-2726 - ----------------------------- ----------------------------------- -------------- - ----------------------------- ----------------------------------- -------------- International Equity Fund - ----------------------------- ----------------------------------- -------------- - ----------------------------- ----------------------------------- -------------- Class C MLPF&S for the Sole Benefit of 48.51% ------- its Customers Attn: Fund Administration 4800 Deer Lake Drive East, 2nd Floor Jacksonville, FL 32246-6484 - ----------------------------- ----------------------------------- -------------- - ----------------------------- ----------------------------------- -------------- Class Y Metropolitan Life Insurance Co. 51.48% ------- C/o GADC - Gerald Hart - Agency Operations NELICO 501 Boylston Street, 10th Floor Boston, MA 02116-3769 - ----------------------------- ----------------------------------- -------------- - ----------------------------- ----------------------------------- -------------- Chase Manhattan Bank Directed 42.14% Trustee for MetLife Defined Contribution Group 4 New York Plaza, Floor 2 New York, NY 10004-2413 - ----------------------------- ----------------------------------- -------------- xliii As of April 2, 2002, the Donaldson Lufkin Jenrette Securities Corporation Inc. ("DLJ"), PO Box 2052, Jersey City, NJ 07303-2052, owned 28.5722%, 35.4033% and 26.3610% of the Mid Cap Growth Fund, Select Fund and AEW Real Estate Fund, respectively, and therefore may be presumed to "control" the Fund, as that term is defined in the Investment Company Act of 1940. However, such ownership may be beneficially held by individuals or entities other than DLJ. DLJ is a corporation organized under the laws of Delware. The parent of DLJ is Credit Suisse First Boston (USA), Inc. As of April 2, 2002, the Vanguard Fiduciary Trust Company ("Vanguard"), P.O. Box 2600, Valley Forge, PA 19482-2600, owned 60.4173% of the Jurika & Voyles Relative Value Fund and therefore may be presumed to "control" the Fund, as that term is defined in the Investment Company Act of 1940. However, such ownership may be beneficially held by individuals or entities other than Vanguard. Vanguard is a corporation organized under the laws of Pennsylvania. The parent of Vanguard is Vanguard Group, Inc. xliv - -------------------------------------------------------------------------------- INVESTMENT PERFORMANCE OF THE FUNDS - -------------------------------------------------------------------------------- Performance Results - Percent Change* For the Periods Ended 12/31/01
Large Cap Growth Fund+ Class A shares Aggregate Average Annual Total Return Total Return -------------------------------- ------------------------------------------- Since 1 Year Since 9/1/98** ------ -------------- As a % of 9/1/98** -------- - --------------------------------------- Net Asset Value 49.02 -22.85 12.71 Maximum Sales Charge 40.45 -27.27 10.72 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) -------------------------------- ------------------------------------------- Since 9/1/98** 1 Year As a % of 1 Year Since 9/1/98** ------ -------------- - --------------------------------------- Net Asset Value -22.85 11.74 -13.92 10.02 Maximum Sales Charge -27.27 9.78 -16.61 8.37 Class B shares Aggregate Average Annual Total Return Total Return -------------------------------- ------------------------------------------- Since As a % of 10/29/99** 1 Year Since 10/29/99** ---------- ------ ---------------- - --------------------------------------- Net Asset Value -9.49 -23.44 -4.49 Contingent Deferred Sales Charge -12.01 -27.27 -5.72 ("CDSC") and Redemption at End of Period Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) -------------------------------- ------------------------------------------- Since As a % of 1 Year 10/29/99** 1 Year Since 10/29/99** ------ ---------- ------ ---------------- - --------------------------------------- Net Asset Value -23.44 -5.74 -14.28 -4.07 CDSC and Redemption at End -27.27 -7.00 -16.61 -5.05 of Period
xlv
Class C shares Aggregate Average Annual Total Return Total Return -------------------------------- ------------------------------------------- Since As a % of 10/29/99** 1 Year Since 10/29/99** ---------- ------ ---------------- - --------------------------------------- Net Asset Value -9.49 -23.44 -4.49 Maximum Sales Charge and Redemption -10.38 -24.97 -4.92 at End of Period*** Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) -------------------------------- ------------------------------------------- Since As a % of 1 Year 10/29/99** 1 Year Since 10/29/99** ------ ---------- ------ ---------------- - --------------------------------------- Net Asset Value -23.44 -5.74 -14.28 -4.07 Maximum Sales Charge and Renemption -24.97 -6.17 -15.20 -4.41 at End of Period*** Class Y shares Aggregate Average Annual Total Return Total Return -------------------------------- ------------------------------------------- Since As a % of 10/29/99** 1 Year Since 10/29/99** ---------- ------ ---------------- - --------------------------------------- Net Asset Value -7.51 -22.65 -3.53 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) -------------------------------- ------------------------------------------- Since As a % of 1 Year 10/29/99** 1 Year Since 10/29/99** ------ ---------- ------ ---------------- - --------------------------------------- Net Asset Value -22.65 -4.79 -13.80 -3.32
xlvi
Capital Growth Fund Class A shares Aggregate Average Annual Total Return Total Return ---------------------------------- ------------- ------------------ ------------- ------------ ---------------- Since Since As a % of 5 Years 8/3/92** 1 Year 5 Years 8/3/92** ------- -------- ------ ------- -------- - --------------------------------------- - --------------------------------------- Net Asset Value 20.83 125.50 -20.46 3.86 9.02 Maximum Sales Charge 13.85 112.58 -25.04 2.63 8.34 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ------------------------------------- ---------- ---------- ------------- ------------- ------------ ---------------- Since Since As a % of 1 Year 5 Years 8/3/92** 1 Year 5 Years 8/3/92** ------ ------- -------- ------ ------- -------- - --------------------------------------- - --------------------------------------- Net Asset Value -20.55 0.91 6.74 -12.46 3.16 7.37 Maximum Sales Charge -25.12 -0.28 6.08 -15.25 2.15 6.77 Class B shares Aggregate Average Annual Total Return Total Return ---------------------------------- ------------------------------------------- Since Since As a % of 5 Years 9/13/93** 1 Year 5 Years 9/13/93** ------- --------- ------ ------- --------- - --------------------------------------- Net Asset Value 15.93 76.87 -20.99 3.00 7.11 CDSC and Redemption at End of Period 14.80 76.87 -24.93 2.80 7.11 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ------------------------------------- ---------- ---------- ------------- ------------- ------------ ---------------- Since Since As a % of 1 Year 5 Years 9/1/93** 1 Year 5 Years 9/1/93** ------ ------- -------- ------ ------- -------- - --------------------------------------- - --------------------------------------- Net Asset Value -21.08 -0.12 4.47 -12.78 2.50 5.69 CDSC and Redemption at End of Period -25.02 -0.35 4.47 -15.18 2.34 5.69 Class C shares Aggregate Average Annual Total Return Total Return ---------------------------------- ------------------------------------------- Since Since As a % of 5 Years 12/30/94** 1 Year 5 Years 12/30/94** ------- ---------- ------ ------- ---------- - --------------------------------------- Net Asset Value 15.86 74.63 -21.06 2.99 8.29 Maximum Sales Charge and Redemption 14.70 72.88 -22.65 2.78 8.13 at End of Period***
xlvii
Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) -------------------------------------- --------- ---------- --------------- ------------- ------------ ---------------- Since Since As a % of 1 Year 5 Years 12/30/94** 1 Year 5 Years 12/30/94** ------ ------- ---------- ------ ------- ---------- - --------------------------------------- - --------------------------------------- Net Asset Value -21.16 -0.13 5.16 -12.83 2.49 6.62 Maximum Sales Charge and Redemption -22.75 -0.33 5.01 -13.79 2.32 6.49 at End of Period*** Targeted Equity Fund**** Class A shares Aggregate Average Annual Total Return Total Return ---------------------------------- ------------------------------------------- ------------- ------------ ---------------- As a % of 5 Years 10 Years 1 Year 5 Years 10 Years ------- -------- ------ ------- -------- - --------------------------------------- Net Asset Value 51.84 144.80 -16.20 8.71 9.37 Maximum Sales Charge 43.10 130.77 -21.01 7.43 8.72 ================================== Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) ---------------------------------- ---------- ---------- ---------- ------------- ------------ ---------------- 10 Years As a % of 1 Year 5 Years 1 Year 5 Years 10 Years ------ ------- ------ ------- -------- - --------------------------------------- - --------------------------------------- Net Asset Value -16.34 4.19 5.48 -9.86 5.68 6.14 Maximum Sales Charge -21.14 2.97 4.86 -12.79 4.63 5.58 Class B shares Aggregate Average Annual Total Return Total Return -------------------------------- ------------------------------------------- Since Since As a % of 2/28/97** 1 Year 2/28/97** --------- ------ --------- - --------------------------------------- Net Asset Value 36.57 -16.81 6.65 CDSC and Redemption at End of Period 35.37 -20.95 6.46 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) -------------------------------- ------------------------------------------- Since Since As a % of 1 Year 2/28/97** 1 Year 2/28/97** ------ --------- ------ --------- - --------------------------------------- Net Asset Value -16.96 2.07 -10.24 4.00 CDSC and Redemption at End of Period -21.10 1.84 -12.76 3.83
xlviii
Class C shares Aggregate Average Annual Total Return Total Return --------------------------- --------------------------------------- Since Since As a % of 9/1/98** 1 Year 9/1/98** -------- ------ -------- - ----------------------------------------------- Net Asset Value 10.19 -16.81 2.96 Maximum Sales Charge and Redemption at End of 9.12 -18.45 2.65 Period*** Average Annual Average Annual Total Return Total Return (After Taxes on (After Taxes on Distributions and Distributions) Sales of Fund Shares) --------------------------- --------------------------------------- Since Since As a % of 1 Year 9/1/98** 1 Year 9/1/98** ------ -------- ------ -------- - ----------------------------------------------- Net Asset Value -16.96 -0.91 -10.24 1.38 Maximum Sales Charge and Redemption at End of -18.60 -1.20 -11.24 1.14 Period*** Class Y shares Aggregate Average Annual Total Return Total Return --------------------------- --------------------------------------- As a % of Since 6/30/99** 1 Year Since 6/30/99** - --------------- ------ --------------- - ----------------------------------------------- Net Asset Value -11.62 -15.86 -4.81 Average Annual Average Annual Total Return Total Return (After Taxes on (After Taxes on Distribution and Distributions) Sales of Fund Shares) --------------------------- --------------------------------------- Since 6/30/99** As a % of 1 Year 1 Year Since 6/30/99** ------ ------ --------------- - ----------------------------------------------- Net Asset Value -16.00 -8.05 -9.66 -4.67 Growth and Income Fund Class A shares Aggregate Average Annual Total Return Total Return ----------------------------- ---------------------------------------- As a % of 5 Years 10 Years 1 Year 5 Years 10 Years ------- -------- ------ ------- -------- - ----------------------------------------------- Net Asset Value 43.29 170.35 -14.58 7.46 10.46 Maximum Sales Charge 35.02 154.79 -19.48 6.19 9.80 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) ---------------------------------- ---------- ---------- ---------- ------------- ------------ ---------------- 10 Years As a % of 1 Year 5 Years 1 Year 5 Years 10 Years ------ ------- ------ ------- -------- - --------------------------------------- - --------------------------------------- Net Asset Value -14.58 4.34 7.32 -8.88 5.18 7.54 Maximum Sales Charge -19.48 3.11 6.69 -11.86 4.13 6.97
xlix
Class B shares Aggregate Average Annual Total Return Total Return ----------------------------- ---------------------------------------- Since Since As a % of 5 Years 9/13/93** 1 Year 5 Years 9/13/93** ------- --------- ------ ------- --------- - ----------------------------------------------- Net Asset Value 38.11 118.36 -15.15 6.67 9.87 Redemption at End of Period 36.47 118.36 -19.39 6.42 9.87 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ----------------------------------- --------- --------- ------------- ------------- ------------ ---------------- 5 Years Since Since ----- As a % of 1 Year 9/1/93** 1 Year 5 Years 9/1/93** ---- -------- ------ ------- -------- - -------------------------------------- - -------------------------------------- Net Asset Value -15.15 3.60 6.48 -9.23 4.58 6.96 CDSC and Redemption at End of Period -19.39 3.32 6.48 -11.81 4.36 6.96 Class C shares Aggregate Average Annual Total Return Total Return ----------------------------- ---------------------------------------- Since Since As a % of 5 Years 5/1/95** 1 Year 5 Years 5/1/95** ------- -------- ------ ------- -------- - ----------------------------------------------- Net Asset Value 38.22 93.11 -15.10 6.69 10.37 Maximum Sales Charge and Redemption at End of 36.84 91.17 -16.82 6.47 10.21 Period*** Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ----------------------------------- --------- --------- ------------- ------------- ------------ ---------------- 5 Years Since Since ------ As a % of 1 Year 5/1/95** 1 Year 5 Years 5/1/95** ----- -------- ------ ------- -------- - -------------------------------------- - -------------------------------------- Net Asset Value -15.10 3.62 6.46 -9.19 4.60 7.19 Maximum Sales Charge and Redemption -16.82 3.41 6.30 -10.24 4.42 7.05 at End of Period***
l
Class Y shares Aggregate Annualized Total Return Total Return --------------------------- ------------------ ------------------- Since Since - As a % of 11/18/98** 1 Year 11/18/98** ---------- ------ ---------- - ----------------------------------------------- - ----------------------------------------------- Net Asset Value -5.08 -13.99 -1.66 Average Annual Average Annual Total Return Total Return (After Taxes on (After Taxes on Distributions and Distributions) Sales of Fund Shares) --------------------------- --------------------------------------- Since Since 11/18/98** - ----------- As a % of 1 Year 11/18/98** 1 Year ------ ---------- ------ - ----------------------------------------------- Net Asset Value -13.99 -3.41 -8.52 -1.64 Balanced Fund Class A shares Aggregate Average Annual Total Return Total Return ------------------------------- --------------------------------------- As a % of 5 Years 10 Years 1 Year 5 Years 10 Years ------- -------- ------ ------- -------- - ----------------------------------------------- Net Asset Value 4.14 95.06 -9.07 0.81 6.91 Maximum Sales Charge -1.85 83.83 -14.28 -0.37 6.28 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) ---------------------------------- ---------- ---------- ---------- ------------- ------------ ---------------- 10 Years As a % of 1 Year 5 Years 1 Year 5 Years 10 Years ------ ------- ------ ------- -------- - --------------------------------------- - --------------------------------------- Net Asset Value -9.65 -1.42 4.61 -5.52 0.22 4.96 Maximum Sales Charge -14.83 -2.58 3.99 -8.69 -0.73 4.42 Class B shares Aggregate Average Annual Total Return Total Return -------------------------------- ------------------------------------ Since Since As a % of 5 Years 9/13/93** 1 Year 5 Years 9/13/93** ------- --------- ------ ------- --------- - ----------------------------------------------- Net Asset Value 0.26 45.80 -9.72 0.05 4.65 CDSC and Redemption at End of Period -1.12 45.80 -14.21 -0.23 4.65 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ------------------------------------ ---------- --------- ------------- ------------- ------------ ---------------- 5 Years Since Since ------ As a % of 1 Year 9/1/93** 1 Year 5 Years 9/1/93** ----- -------- ------ ------- -------- - ------------------------------------- - ------------------------------------- Net Asset Value -9.91 -1.81 2.46 -5.92 -0.20 3.17 CDSC and Redemption at End of Period -14.40 -2.11 2.46 -8.65 -0.42 3.17
li
Class C shares Aggregate Average Annual Total Return Total Return -------------------------------- ------------------------------------ Since Since As a % of 5 Years 12/30/94** 1 Year 5 Years 12/30/94** ------- ---------- ------ ------- ---------- - ----------------------------------------------- Net Asset Value 0.16 45.71 -9.77 0.03 5.52 Maximum Sales Charge and Redemption at End of -0.17 44.30 -11.58 -0.17 5.38 Period*** Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ------------------------------------ --------- ------- ---------------- ------------- ------------ ---------------- 5 Since Since - As a % of 1 Year Years 12/30/94** 1 Year 5 Years 12/30/94** ----- ----- ---------- ------ ------- ---------- - ------------------------------------- - ------------------------------------- Net Asset Value -9.96 -1.84 3.31 -5.94 -0.21 4.00 Maximum Sales Charge and Redemption -11.77 -2.03 3.17 -7.05 -0.37 3.88 at End of Period*** Class Y shares Aggregate Average Annual Total Return Total Return -------------------------------- ------------------------------------ Since Since - As a % of 5 Years 3/8/94** 1 Year 5 Years 3/8/94** ------- -------- ------ ------- -------- - ----------------------------------------------- Net Asset Value 6.63 54.63 -8.55 1.29 5.73 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) -------------------------------- ------------------------------------ 1 Year 5 Years Since Since ----- ----- - As a % of 3/8/94** 1 Year 5 Years 3/8/94** -------- ------ ------- -------- - ----------------------------------------------- Net Asset Value -9.52 -1.24 2.95 -5.21 0.45 3.77 Relative Value Fund+ Class A shares Aggregate Average Annual Total Return Total Return -------------------------------- ----------------------------------------- Since Since As a % of 5 Years 9/30/94** 1 Year 5 Years 9/30/94** ------- --------- ------ ------- --------- - ---------------------------------------------- Net Asset Value 50.79 143.57 -8.02 8.56 13.06 Maximum Sales Charge 42.10 129.56 -13.30 7.28 12.14 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) -------------------------------------- ---------- --------- -------------- ------------- ------------ ---------------- 5 Years Since Since ------- As a % of 1 Year 9/30/94** 1 Year 5 Years 9/30/94** ---- --------- ------ ------- --------- - ------------------------------------ - ------------------------------------ Net Asset Value -10.72 5.81 10.30 -3.20 6.19 9.98 Maximum Sales Charge -15.85 4.56 9.40 -6.51 5.13 9.18
lii
Class B shares Aggregate Average Annual Total Return Total Return -------------------------------- ---------------------------------------- Since Since As a % of 5 Years 9/30/94** 1 Year 5 Years 9/30/94** ------- --------- ------ ------- --------- - ---------------------------------------------- Net Asset Value 45.36 130.88 -8.64 7.77 12.23 CDSC andRedemption at End of Period 43.49 130.88 -12.67 7.49 12.23 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) -------------------------------------- --------- ---------- -------------- ------------- ------------ ---------------- Since Since As a % of 1 Year 5 Years 9/30/94** 1 Year 5 Years 9/30/94** ----- ------- --------- ------ ------- --------- - ------------------------------------ - ------------------------------------ Net Asset Value 11.09 5.34 9.81 -3.43 5.80 9.56 CDSC and Redemption at End of -15.12 5.04 9.81 -5.89 5.56 9.56 Period Class C shares Aggregate Average Annual Total Return Total Return -------------------------------- ---------------------------------------- Since Since 9/30/94** --------- As a % of 5 Years 9/30/94** 1 Year 5 Years ------- --------- ------ ------- - ---------------------------------------------- Net Asset Value 45.36 130.88 -8.64 7.77 12.23 Maximum Sales Charge and Redemption at End 43.91 128.60 -10.34 7.55 12.08 of Period*** Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) --------------------------------------- ---------- ---------- -------------- ------------- ------------ ---------------- Since Since As a % of 1 Year 5 Years 9/30/94** 1 Year 5 Years 9/30/94** ----- ------- --------- ------ ------- --------- - ----------------------------------- - ----------------------------------- Net Asset Value -11.09 5.34 9.81 -3.43 5.80 9.56 Maximum Sales Charge and -12.76 5.13 9.66 -4.48 5.62 9.42 Redemption at End of Period*** Class Y shares Aggregate Average Annual Total Return Total Return -------------------------------- ---------------------------------------- Since Since 9/30/94** - ---------- As a % of 5 Years 9/30/94** 1 Year 5 Years ------- --------- ------ ------- - ---------------------------------------------- Net Asset Value 52.55 147.79 -7.87 8.81 13.33 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and (After Taxes on Distributions) Sales of Fund Shares) ------------------------------------------ ------------------------------------ Since 9/30/94** Since --------- - As a % of 1 Year 5 Years 1 Year 5 Years 9/30/94** ------ ------- ------ ------- --------- - ------------------------------------- Net Asset Value -10.66 5.95 10.46 -3.15 6.31 10.12
liii
Large Cap Value Fund Class A shares Aggregate Average Annual Total Return Total Return -------------------------------- ------------------------------------ Since Since As a % of 5 Years 11/28/95** 1 Year 5 Years 11/28/95** ------- ---------- ------ ------- ---------- - ----------------------------------------------- Net Asset Value 29.87 69.70 -3.52 5.37 9.07 Maximum Sales Charge 22.43 59.97 -9.07 4.13 8.02 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ------------------------------------ --------- ------- ---------------- ------------- ------------ ---------------- 5 Since Since As a % of 1 Year Years 11/28/95** 1 Year 5 Years 11/28/95** ----- ----- ---------- ------ ------- ---------- - ------------------------------------- - ------------------------------------- Net Asset Value -3.58 4.74 8.02 -2.14 4.14 7.02 Maximum Sales Charge -9.13 3.51 6.98 -5.53 3.12 6.13 Class B shares Aggregate Average Annual Total Return Total Return -------------------------------- ------------------------------------ Since Since As a % of 9/15/97** 1 Year 9/15/97** --------- ------ --------- - ----------------------------------------------- Net Asset Value 6.66 -4.20 1.51 CDSC and Redemption at End of Period 4.66 -8.99 1.07 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) -------------------------------- ------------------------------------------- Since 9/15/97** As a % of 1 Year 1 Year Since 9/15/97** ------ ------ --------------- - --------------------------------------- Net Asset Value -4.23 1.30 -2.56 1.14 CDSC and Redemption at End of Period -9.02 0.85 -5.47 0.78 Class C shares Aggregate Average Annual Total Return Total Return -------------------------------- ------------------------------------- Since Since As a % of 9/15/97** 1 Year 9/15/97** --------- ------ --------- - ----------------------------------------------- Net Asset Value 6.72 -4.25 1.53 Maximum Sales Charge and Redemption at End of 5.67 -6.17 1.29 Period***
liv
Average Annual Average Annual Total Return Total Return (After Taxes on (After Taxes on Distributions and Distributions) Sales of Fund Shares) --------------------------- --------------------------------------- Since Since As a % of 1 Year 9/15/97** 1 Year 9/15/97** ------ --------- ------ --------- - ----------------------------------------------- Net Asset Value -4.28 1.31 -2.59 1.15 Maximum Sales Charge and Redemption at End of -6.20 1.08 -3.76 0.96 Period*** Mid Cap Growth Fund Class A shares Aggregate Total Return -------------------------------- Since As a % of 3/15/01** --------- - ----------------------------------------------- Net Asset Value -18.50 Maximum Sales Charge -23.19 Aggregate Total Return Aggregate Total Return (After Taxes on As a % of (After Taxes on Distributions) Distributions and Sales of Fund Shares) -------------------------------- ------------------------------------------- -------------------------------- ------------------------------------------- Since Since 3/15/01** 3/15/01** --------- --------- - --------------------------------------- Net Asset Value -18.50 -11.27 Maximum Sales Charge -23.19 -14.12 Class B shares Aggregate Total Return -------------------------------- Since As a % of 3/15/01** --------- - ----------------------------------------------- Net Asset Value -18.90 CDSC and Redemption at End of Period -22.96
lv
Aggregate Total Return Aggregate (After Taxes on Distributions) Total Return (After Taxes on Distributions and Sales of Fund Shares) -------------------------------- ------------------------------------------- -------------------------------- ------------------------------------------- Since Since As a % of 3/15/01** 3/15/01** --------- --------- - --------------------------------------- Net Asset Value -18.90 -11.51 CDSC and Redemption at End of Period -22.96 -13.98 Class C shares Aggregate Total Return -------------------------------- Since As a % of 3/15/01** --------- - ----------------------------------------------- Net Asset Value -18.90 Maximum Sales Charge and Redemption at End of -20.51 Period*** Aggregate Aggregate Total Return Total Return (After Taxes on (After Taxes on Distributions and Distributions) Sales of Fund Shares) --------------------------- --------------------------------------- Since Since ----- As a % of 3/15/01** 3/15/01** --------- --------- - ----------------------------------------------- Net Asset Value -18.90 -11.51 Maximum Sales Charge and Redemption at End of -20.51 -12.49 Period*** Select Fund Class A shares Aggregate Total Return -------------------------------- Since As a % of 3/15/01** --------- - ----------------------------------------------- Net Asset Value 9.60 Maximum Sales Charge 3.30
lvi
Aggregate Total Return Aggregate Total Return (After Taxes on (After Taxes on Distributions) Distributions and Sales of Fund Shares) -------------------------------- ------- ------------------------------------------- -------------------------------- ------- ------------------------------------------- As a % of Since 3/15/01** Since 3/15/01** --------------- --------------- - --------------------------------------- Net Asset Value 9.60 5.85 Maximum Sales Charge 3.30 2.01 Class B shares Aggregate Total Return -------------------------------- Since As a % of 3/15/01** --------- - ----------------------------------------------- Net Asset Value 9.00 CDSC and Redemption at End of Period 4.00 Aggregate Aggregate Total Return Total Return (After Taxes on Distributions and Sales As a % of (After Taxes on Distributions) of Fund Shares) -------------------------------- ------------------------------------------- -------------------------------- ------------------------------------------- Since 3/15/01** Since 3/15/01** --------------- --------------- - --------------------------------------- Net Asset Value 9.00 5.48 CDSC and Redemption at End of Period 4.00 2.44 Class C shares Aggregate Total Return -------------------------------- Since As a % of 3/15/01** --------- - ----------------------------------------------- Net Asset Value 9.00 Maximum Sales Charge and Redemption at End of 6.93 Period***
lvii
Aggregate Aggregate Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) -------------------------------- ------------------------------------------- -------------------------------- ------------------------------------------- As a % of Since 3/15/01** Since 3/15/01** --------------- --------------- - --------------------------------------- Net Asset Value 9.00 5.48 Maximum Sales Charge and Redemption 6.93 4.22 at End of Period*** AEW Real Estate Fund Class A shares Aggregate Total Return Average Annual Total Return ------------------------------------ ---------------------------------- Since Since As a % of 12/29/00** 1 Year 12/29/00** ---------- ------ ---------- - --------------------------------------- - --------------------------------------- Net Asset Value 12.99 12.99 12.91 Maximum Sales Charge 6.45 6.45 6.41 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) -------------------------------------- ---------- -------- ---------------- ------------- ------------ ---------------- 1 Year Since Since ---- As a % of 12/29/00** 1 Year 12/29/00** ---------- ------ ---------- - ------------------------------------- - ------------------------------------- Net Asset Value 11.18 11.12 7.94 9.45 Maximum Sales Charge 4.75 4.72 3.95 4.30 Class B shares Aggregate Average Annual Total Return Total Return --------------------------------- --------------------------------------- As a % of Since 12/29/00** 1 Year Since 12/29/00** ---------------- ------ ---------------- 1 Year As a % of Since 12/29/00*** - ---------------------------------------------- Net Asset Value 12.22 12.22 12.15 CDSC and Redemption at End of Period 8.22 7.22 8.17
lviii
Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) -------------------------------------- ---------- --------- --------------- ------------- ------------ ---------------- 1 Year Since Since ----- As a % of 12/29/00** 1 Year 12/29/00** ---------- ------ ---------- - ------------------------------------- - ------------------------------------- Net Asset Value 10.83 10.77 7.49 9.06 CDSC and Redemption at End of Period 5.83 6.79 4.44 5.88 Class C shares Aggregate Average Annual Total Return Total Return -------------------------------- ---------------------------------------- Since Since ----- - As a % of 12/29/00** 1 Year 12/29/00** - ---------- ------ ---------- - ---------------------------------------------- Net Asset Value 12.31 12.31 12.24 Maximum Sales Charge and Redemption at End 11.15 10.16 11.09 of Period Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ------------------------------------ --------- ------- ---------------- ------------- ------------ ---------------- Since Since As a % of 1 Year 12/29/00** 1 Year 12/29/00** ---- ---------- ------ ---------- - ------------------------------------- - ------------------------------------- Net Asset Value 10.92 10.86 7.54 9.13 Maximum Sales Charge and Redemption 8.79 9.73 6.24 8.22 at End of Period*** Class Y shares Aggregate Average Annual Total Return Total Return -------------------------------- ---------------------------------------- Since 8/31/00** As a % of Since 8/31/00** 1 Year --------------- ------ - ---------------------------------------------- Net Asset Value 23.18 13.31 16.91 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) ----------------------------------- -------------------------------------- 1 Year Since Since ----- - As a % of 8/31/00** 1 Year 8/31/00** --------- ------ --------- - ---------------------------------------------- Net Asset Value 10.77 14.03 8.11 12.12
lix
Small Cap Growth Fund++ Class A shares Aggregate Average Annual Total Return Total Return -------------------------------- ----------------------------------------- Since Since ---------------- As a % of 5 Years 9/30/94** 1 Year 5 Years 9/30/94** ------- --------- ------ ------- --------- - ---------------------------------------------- Net Asset Value 18.34 152.09 -13.55 3.42 13.60 Maximum Sales Charge 11.51 137.61 -18.53 2.20 12.68 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) ----------------------------------- --------- -------- -------------- ------------- ------------ ---------------- 5 Years Since Since ------ As a % of 1Year 9/30/94** 1 Year 5 Years 9/30/94** ---- --------- ------ ------- --------- - -------------------------------------- - -------------------------------------- Net Asset Value -13.77 -0.78 9.88 -8.12 0.89 9.72 Maximum Sales Charge 18.73 -1.95 8.98 -11.16 -0.07 8.92 Class B shares Aggregate Average Annual Total Return Total Return -------------------------------- ---------------------------------------- Since Since As a % of 5 Years 9/30/94** 1 Year 5 Years 9/30/94** ------- --------- ------ ------- --------- - ---------------------------------------------- Net Asset Value 13.96 138.79 -14.21 2.65 12.75 CDSC and Redemption at End of Period 12.63 138.79 -18.49 2.41 12.75 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ------------------------------------ ---------- -------- -------------- ------------- ------------ ---------------- 5 Years Since Since ------ As a % of 1 Year 9/30/94** 1 Year 5 Years 9/30/94** ----- --------- ------ ------- --------- - ------------------------------------- - ------------------------------------- Net Asset Value -14.20 -1.23 9.38 -8.38 0.54 9.29 CDSC and Redemption at End of Period -18.47 -1.52 9.38 -10.98 0.33 9.29 Class C shares Aggregate Average Annual Total Return Total Return -------------------------------- ---------------------------------------- Since Since 9/30/94** --------- As a % of 5 Years 9/30/94** 1 Year 5 Years ------- --------- ------ ------- - ---------------------------------------------- Net Asset Value 14.05 138.98 -14.14 2.66 12.76 Maximum Sales Charge and Redemption at End 12.89 136.61 -15.83 2.45 12.61 of Period***
lx
Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ------------------------------------ --------- --------- -------------- ------------- ------------ ---------------- 5 Years Since Since ------ As a % of 1 Year 9/30/94*** 1 Year 5 Years 9/30/94*** ----- ---------- ------ ------- ---------- - ------------------------------------- - ------------------------------------- Net Asset Value -14.13 -1.22 9.39 -8.34 0.55 9.30 Maximum Sales Charge and Redemption -15.82 -1.42 9.24 -9.37 0.38 9.17 at End of Period**** Class Y shares Aggregate Average Annual Total Return Total Return -------------------------------- ---------------------------------------- Since Since 9/30/94** - ---------- As a % of 5 Years 9/30/94** 1 Year 5 Years ------- --------- ------ ------- - ---------------------------------------------- Net Asset Value 19.88 156.82 -13.29 3.69 13.89 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and (After Taxes on Distributions) Sales of Fund Shares) ----------------------------------- ------------------------------------ 1 Year 5 Years Since Since ---- ------ - As a % of 9/30/94** 1 Year 5 Years 9/30/94** --------- ------ ------- --------- - --------------------------------------------- Net Asset Value -13.59 -0.61 10.05 -8.01 1.02 9.87 International Equity Fund Class A shares Aggregate Average Annual Total Return Total Return ---------------------------------- --------------------------------------- Since Since - As a % of 5 Years 5/21/92** 1 Year 5 Years 5/21/92** ------- --------- ------ ------- --------- - ---------------------------------------------- Net Asset Value 1.16 46.82 -23.47 0.23 4.08 Maximum Sales Charge -4.69 38.40 -27.85 -0.96 3.44 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions) (After Taxes on Distributions and Sales of Fund Shares) ----------------------------------- --------- -------- -------------- ------------- ------------ ---------------- 5 Years Since Since ----- As a % of 1 Year 5/21/92** 1 Year 5 Years 5/21/92** ---- --------- ------ ------- --------- - -------------------------------------- - -------------------------------------- Net Asset Value -23.47 -1.35 2.87 -14.29 -0.22 2.99 Maximum Sales Charge -27.85 -2.51 2.24 -16.96 -1.15 2.45
lxi
Class B shares Aggregate Average Annual Total Return Total Return -------------------------------- --------------------------------------- Since Since As a % of 5 Years 9/13/93*** 1 Year 5 Years 9/13/93*** ------- ---------- ------ ------- ---------- - ---------------------------------------------- Net Asset Value -2.42 13.07 -24.08 -0.49 1.49 CDSC and Redemption at End of Period -3.94 13.07 -27.87 -0.80 1.49 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ------------------------------------ ---------- --------- ------------- ------------- ------------ ---------------- 5 Years Since Since ------ As a % of 1 Year 9/1/93** 1 Year 5 Years 9/1/93** ----- -------- ------ ------- -------- - ------------------------------------- - ------------------------------------- Net Asset Value -24.08 -1.98 0.20 -14.66 -0.72 0.84 CDSC and Redemption at End of Period -27.87 -2.31 0.20 -16.98 -0.97 0.84 Class C shares Aggregate Average Annual Total Return Total Return -------------------------------- ---------------------------------------- ----------- ---------------- Since Since As a % of 5 Years 12/30/94** 1 Year 5 Years 12/30/94** ------- ---------- ------ ------- ---------- - ---------------------------------------------- Net Asset Value -2.35 5.29 -24.11 -0.47 0.74 Maximum Sales Charge and Redemption at End -3.32 4.20 -25.61 -0.67 0.59 of Period*** ==================================== Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and Sales (After Taxes on Distributions) of Fund Shares) ------------------------------------ --------- ------- ---------------- ------------- ------------ ---------------- 5 Since Since - As a % of 1 Year Years 12/30/94** 1 Year 5 Years 12/30/94** ---- ----- ---------- ------ ------- ---------- - ------------------------------------- - ------------------------------------- Net Asset Value -24.11 -1.96 -0.48 -14.68 -0.71 0.30 Maximum Sales Charge and Redemption -25.61 -2.15 -0.63 -15.60 -0.86 0.18 at End of Period*** Class Y shares Aggregate Average Annual Total Return Total Return -------------------------------- ---------------------------------------- Since 9/9/93** Since 9/9/93** --------- --------- As a % of 5 Years 1 Year 5 Years ------- ------ ------- - ---------------------------------------------- Net Asset Value 4.43 26.92 -22.97 0.87 2.91 Average Annual Average Annual Total Return Total Return (After Taxes on Distributions and (After Taxes on Distributions) Sales of Fund Shares) ------------------------------------ ------------------------------------ 5 Years Since Since ------ - As a % of 1 Year 9/9/93** 1 Year 5 Years 9/9/93** ----- -------- ------ ------- -------- - ------------------------------------------- Net Asset Value -22.97 -0.82 1.43 -13.99 0.22 1.88
lxii * Federal regulations require these examples to be calculated using a $1,000 investment. The normal minimum initial investment in shares of the Funds is $2,500, however. ** Commencement of Fund operations or offering of specified class of shares. *** Class C share performance assumes a 1.00% front-end sales charge and, for the 1 year period, a 1.00% CDSC that applies to sales within one year of purchase. Class C shares for accounts established on or after December 1, 2000 are subject to the 1.00% front-end load. Class C shares for accounts established before December 1, 2000 are not subject to the 1.00% front-end load. **** The numbers presented for Class A shares of the Targeted Equity Fund reflect the maximum front-end sales charge currently in effect. Prior to March 3, 1997, a higher maximum front-end sales charge was in effect, so that the total returns achieved by investors may have been lower than those shown above. + Until October 29, 1999, the Fund had only one class of shares and was offered without a sales charge. Therefore, performance results of Class A have been restated to account for fees and expenses under the Fund's multiple class structure. ++ Until November 30, 2001, the Fund had only one class of shares and offered those shares without a sales charge. Therefore, performance results have been restated to account for fees and expenses under the Fund's multiple class structure. Classes A, B and C shares commenced operations on November 30, 2001. During all periods shown, the Fund's total annual operating expenses have been limited under a binding expense cap arrangement. Therefore, the restatement of the Fund's performance to reflect Classes A, B and C performance is based on the net expenses of these Classes after taking into effect the Fund's current cap/waiver arrangements. The foregoing data represents past performance only and is not a prediction as to the future returns of any Fund. The investment return and principal value of an investment in any Fund will fluctuate so that the investor's shares, when redeemed, may be worth more or less than their original cost. lxiii Supplement dated November 1, 2002 to the Statement of Additional Information - Part II for CDC Nvest Funds Trust I, CDC Nvest Funds Trust II, CDC Nvest Funds Trust III and CDC Nvest Companies Trust I dated May 1, 2002, as supplemented from time to time Effective November 1, 2002, CDC Nvest Funds Trust II on behalf of CDC Nvest Growth and Income Fund (the "Fund"), Harris Associates L.P. ("Harris Associates") and CDC IXIS Asset Management Advisers, L.P. entered into a new subadvisory agreement (the "New Subadvisory Agreement") following approval of the New Subadvisory Agreement at a shareholder meeting held on October 29, 2002. The New Subadvisory Agreement replaces the interim subadvisory agreement, effective July 1, 2002, in which Harris Associates replaced Westpeak Global Advisors, L.P. ("Westpeak") as the subadviser to the Fund. Accordingly, any reference to Westpeak as subadviser to the Fund is replaced with Harris Associates. ******************************************************************************** In addition, the following sentence is added to the end of the Reverse Repurchase Agreement disclosure on page 18: Dollar rolls are a special type of reverse repurchase agreement in which the portfolio instrument transferred by the Fund is a mortgage-related security. The Fund gives up the cash flows during the transaction period but has use of the cash proceeds. ******************************************************************************** Effective November 1, 2002, CDC Nvest Growth and Income Fund, CDC Nvest Targeted Equity Fund and CDC Nvest Star Value Fund (the "Funds") will be permitted to engage in securities lending. Accordingly, the term "Loans of Portfolio Securities" is added under each Fund in the section entitled "Miscellaneous Investment Practices", which begins on page 3. ******************************************************************************** Effective September 17, 2002, CDC IXIS Asset Management Distributors, L.P. will no longer accept new investments in or additional investments from current shareholders of CDC Nvest Mid Cap Growth Fund (the "Fund") as the Fund will be liquidated on or about November 22, 2002. SP175-1102 -----END PRIVACY-ENHANCED MESSAGE-----