N-CSRS 1 ncsrs-0404.txt NEW CENTURY PORTFOLIOS - N-CSRS ========================= OMB APPROVAL ========================= OMB Number: 3235-0570 Expires: October 31, 2006 Estimated average burden hours per response: 19.3 ========================= UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSRS CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-05646 ----------------------------------------- New Century Portfolios ----------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 40 William Street, Suite 100 Wellesley, Massachusetts 02481 ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Nicole M. Tremblay, Esq. Weston Financial Group, Inc. 40 William Street Wellesley, Massachusetts 02481 ------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (781) 235-7055 ---------------- Date of fiscal year end: October 31, 2004 --------------------------- Date of reporting period: April 30, 2004 --------------------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. ================================================================================ [GRAPHIC OMITTED] NEW CENTURY PORTFOLIOS NEW CENTURY CAPITAL NEW CENTURY BALANCED NEW CENTURY AGGRESSIVE NEW CENTURY INTERNATIONAL NEW CENTURY ALTERNATIVE STRATEGIES SEMI-ANNUAL REPORT SIX MONTHS ENDED APRIL 30, 2004 (UNAUDITED)
40 William Street, Suite 100, Wellesley MA 02481 781-239-0445 888-639-0102 Fax 781-237-1635
================================================================================ CONTENTS -------------------------------------------------------------------------------- PRESIDENT'S LETTER 1 NEW CENTURY PORTFOLIOS Statements of Assets and Liabilities 2 Statements of Operations 3 Statements of Changes in Net Assets 4-6 Financial Highlights 7-11 Portfolio of Investments 12-18 Notes to Financial Statements 19-24 LETTER TO SHAREHOLDERS ================================================================================ Dear Fellow Shareholders: Here is your Semi-Annual Report for the six-month period ended April 30, 2004. This report outlines important financial information for each of the New Century Portfolios. I invite you to visit our website at www.newcenturyportfolios.com for additional information. Although the U.S. equity markets slowed from their torrid pace in 2003, they have generated reasonable gains. During the six-month period ended April 30, 2004, the S&P 500 Composite Index gained 6.27%, and the NASDAQ Composite Index decreased by 0.62%. The Russell 3000 Growth Index, which reflects the performance of stocks of smaller-capitalized domestic companies, gained 4.12%. The international equity markets, as measured by the MSCI EAFE Index, gained 12.38%. The Lehman Brothers Government/Corporate Bond Index increased by 1.18% during the period. During this period, the New Century Capital Portfolio gained 5.6%, the New Century Balanced Portfolio gained 5.3% and the New Century Aggressive Portfolio gained 2.6%. The New Century International Portfolio gained 8.8% and the New Century Alternative Strategies Portfolio gained 4.5%. Although the markets have begun to move sideways after their meteoric increase over the final three quarters of 2003, we retain a positive long-term economic outlook. Inflation and interest rates are beginning to bottom; however, each remains at a low historic level. The growth in corporate earnings has also continued. Nonetheless, we will continue to monitor economic and market conditions and position the Portfolios to maximize risk-adjusted return. We thank you for selecting us to be part of your long-term investment strategy. Sincerely, /s/ Wayne M. Grzecki Wayne M. Grzecki President 1
NEW CENTURY PORTFOLIOS STATEMENTS OF ASSETS AND LIABILITIES APRIL 30, 2004 (UNAUDITED) ======================================================================================================================== NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY ALTERNATIVE CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------------------------------------------------------------------------------------------------------------------ ASSETS Investments in securities: At acquisition cost ................ $ 89,118,591 $ 66,306,271 $ 4,686,414 $ 18,306,272 $ 41,754,048 ============ ============ ============ ============ ============ At value (Note 1A) ................. $101,975,228 $ 73,849,494 $ 5,183,010 $ 21,007,974 $ 45,362,244 Dividends receivable .................... 158 18,068 6 68 8,334 Receivable for investment securities sold -- -- 313,460 -- -- Receivable for capital shares sold ...... 62,635 34,000 16,000 13,100 8,582 Other assets ............................ 11,052 8,460 567 2,136 5,429 ------------ ------------ ------------ ------------ ------------ TOTAL ASSETS ....................... 102,049,073 73,910,022 5,513,043 21,023,278 45,384,589 ------------ ------------ ------------ ------------ ------------ LIABILITIES Payable to Advisor (Note 2) .......... 100,756 84,827 1,459 19,259 54,287 Payable for investment securities purchased -- -- 321,519 120,000 110,000 Payable for capital shares redeemed .. 5,000 -- -- -- 1,000 Other accrued expenses and liabilities 13,399 14,672 5,151 6,790 5,580 ------------ ------------ ------------ ------------ ------------ TOTAL LIABILITIES .................. 119,155 99,499 328,129 146,049 170,867 ------------ ------------ ------------ ------------ ------------ NET ASSETS .............................. $101,929,918 $ 73,810,523 $ 5,184,914 $ 20,877,229 $ 45,213,722 ============ ============ ============ ============ ============ Net assets consist of: Paid-in capital ...................... $105,010,724 $ 72,626,203 $ 6,255,026 $ 17,854,072 $ 41,352,796 Accumulated net investment income (loss) (381,162) 129,026 (21,889) 32,836 11,340 Accumulated net realized gains (losses) on investments ..................... (15,556,281) (6,487,929) (1,544,819) 288,619 241,390 Unrealized appreciation of investments 12,856,637 7,543,223 496,596 2,701,702 3,608,196 ------------ ------------ ------------ ------------ ------------ Net assets .............................. $101,929,918 $ 73,810,523 $ 5,184,914 $ 20,877,229 $ 45,213,722 ============ ============ ============ ============ ============ Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) ........................ 7,808,060 6,137,545 727,537 2,210,648 4,120,762 ============ ============ ============ ============ ============ Net asset value, offering price and redemption price per share ........... $ 13.05 $ 12.03 $ 7.13 $ 9.44 $ 10.97 ============ ============ ============ ============ ============ See accompanying notes to financial statements.
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NEW CENTURY PORTFOLIOS STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2004 (UNAUDITED) ======================================================================================================================== NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY ALTERNATIVE CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME Dividends ............................ $ 281,538 $ 957,264 $ 15,081 $ 172,112 $ 531,281 ------------ ------------ ------------ ------------ ------------ EXPENSES Investment advisory fees (Note 2) .... 503,787 369,475 26,266 93,280 149,423 Distribution costs (Note 3) .......... 105,940 57,555 5,667 20,551 26,318 Accounting fees ...................... 20,115 18,669 15,259 15,982 17,010 Administration fees (Note 2) ......... 26,043 19,836 4,295 7,355 12,090 Transfer agent fees .................. 10,500 10,500 10,500 10,500 10,500 Legal and audit fees ................. 20,536 14,558 1,110 4,328 9,264 Custody fees ......................... 10,135 8,630 1,705 3,686 6,433 Trustees' fees and expenses (Note 2) . 5,078 3,646 267 970 2,038 Insurance expense .................... 2,711 2,083 131 332 823 Other expenses ....................... 12,613 22,551 5,222 7,252 2,140 ------------ ------------ ------------ ------------ ------------ Total expenses ..................... 717,458 527,503 70,422 164,236 236,039 Less fees waived and/or expenses reimbursed by the Advisor (Note 2) . -- -- (31,023) (24,316) -- Plus previously waived investment advisory fees and expense reimbursements recouped by the Advisor (Note 2) ... -- 1,967 -- -- -- ------------ ------------ ------------ ------------ ------------ Net expenses ....................... 717,458 529,470 39,399 139,920 236,039 ------------ ------------ ------------ ------------ ------------ NET INVESTMENT INCOME (LOSS) ............ (435,920) 427,794 (24,318) 32,192 295,242 ------------ ------------ ------------ ------------ ------------ REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS Net realized gains on investments .... 3,380,335 934,089 293,610 637,391 371,462 Capital gain distributions from regulated investment companies ............... 388,246 272,087 20,496 12,092 299,500 Net change in unrealized appreciation/ (depreciation) on investments ...... 2,031,011 2,096,119 (170,628) 627,744 454,307 ------------ ------------ ------------ ------------ ------------ NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ................. 5,799,592 3,302,295 143,478 1,277,227 1,125,269 ------------ ------------ ------------ ------------ ------------ NET INCREASE IN NET ASSETS FROM OPERATIONS ............... $ 5,363,672 $ 3,730,089 $ 119,160 $ 1,309,419 $ 1,420,511 ============ ============ ============ ============ ============ See accompanying notes to financial statements.
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NEW CENTURY PORTFOLIOS STATEMENTS OF CHANGES IN NET ASSETS ============================================================================================================= NEW CENTURY NEW CENTURY CAPITAL PORTFOLIO BALANCED PORTFOLIO ------------------------------------------------------------- SIX MONTHS SIX MONTHS ENDED YEAR ENDED YEAR APRIL 30, ENDED APRIL 30, ENDED 2004 OCTOBER 31, 2004 OCTOBER 31, (UNAUDITED) 2003 (UNAUDITED) 2003 ------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net investment income (loss) ............ $ (435,920) $ ( 494,695) $ 427,794 $ 1,001,436 Net realized gains (losses) from security transactions ................. 3,380,335 (3,278,273) 934,089 (211,178) Capital gain distributions from regulated investment companies .................. 388,246 239,189 272,087 289,977 Net change in unrealized appreciation/ (depreciation) on investments ......... 2,031,011 21,012,989 2,096,119 10,080,063 ------------ ----------- ------------ ------------ Net increase in net assets from operations 5,363,672 17,479,210 3,730,089 11,160,298 ------------ ----------- ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income (Note 1E) -- -- ( 607,544) ( 1,269,163) ------------ ----------- ------------ ------------ FROM CAPITAL SHARE TRANSACTIONS Proceeds from shares sold ............... 4,552,311 5,343,302 3,139,392 4,706,871 Net asset value of shares issued in reinvestment of distributions to shareholders ....................... -- -- 566,472 1,182,279 Payments for shares redeemed ............ (3,381,831) (9,736,354) (3,458,612) (8,094,571) ------------ ----------- ------------ ------------ Net increase (decrease) in net assets from capital share transactions .............. 1,170,480 (4,393,052) 247,252 (2,205,421) ------------ ----------- ------------ ------------ TOTAL INCREASE IN NET ASSETS ............... 6,534,152 13,086,158 3,369,797 7,685,714 NET ASSETS Beginning of period ..................... 95,395,766 82,309,608 70,440,726 62,755,012 ------------ ----------- ------------ ------------ End of period ........................... $101,929,918 $ 95,395,766 $ 73,810,523 $ 70,440,726 ============ ============ ============ ============ ACCUMULATED NET INVESTMENT INCOME (LOSS) ........................... $ (381,162) $ -- $ 129,026 $ 266,822 ============ ============ ============ ============ CAPITAL SHARE ACTIVITY Sold .................................... 345,311 497,945 259,060 449,059 Reinvested .............................. -- -- 47,245 117,415 Redeemed ................................ (257,363) (937,285) (284,740) (793,113) ------------ ----------- ------------ ------------ Net increase (decrease) in shares outstanding 87,948 (439,340) 21,565 (226,639) Shares outstanding, beginning of period . 7,720,112 8,159,452 6,115,980 6,342,619 ------------ ----------- ------------ ------------ Shares outstanding, end of period ....... 7,808,060 7,720,112 6,137,545 6,115,980 ============ ============ ============ ============ See accompanying notes to financial statements.
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NEW CENTURY PORTFOLIOS STATEMENTS OF CHANGES IN NET ASSETS ============================================================================================================= NEW CENTURY NEW CENTURY AGGRESSIVE PORTFOLIO INTERNATIONAL PORTFOLIO ------------------------------------------------------------- SIX MONTHS SIX MONTHS ENDED YEAR ENDED YEAR APRIL 30, ENDED APRIL 30, ENDED 2004 OCTOBER 31, 2004 OCTOBER 31, (UNAUDITED) 2003 (UNAUDITED) 2003 ------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net investment income (loss) ............ $ (24,318) $ (41,560) $ 32,192 $ (57,062) Net realized gains (losses) from security transactions ................. 293,610 (117,066) 637,391 (132,110) Capital gain distributions from regulated investment companies .................. 20,496 9,338 12,092 10,659 Net change in unrealized appreciation/ (depreciation) on investments ......... (170,628) 1,155,927 627,744 3,373,431 ------------ ----------- ------------ ------------ Net increase in net assets from operations . 119,160 1,006,639 1,309,419 3,194,918 ------------ ----------- ------------ ------------ FROM CAPITAL SHARE TRANSACTIONS Proceeds from shares sold ............... 256,409 424,354 4,419,736 4,989,446 Payments for shares redeemed ............ (56,169) (175,881) (139,967) (551,685) ------------ ----------- ------------ ------------ Net increase in net assets from capital share transactions ...................... 200,240 248,473 4,279,769 4,437,761 ------------ ----------- ------------ ------------ TOTAL INCREASE IN NET ASSETS ............... 319,400 1,255,112 5,589,188 7,632,679 NET ASSETS Beginning of period ..................... 4,865,514 3,610,402 15,288,041 7,655,362 ------------ ----------- ------------ ------------ End of period ........................... $ 5,184,914 $ 4,865,514 $20,877,229 $15,288,041 ============ ============ ============ ============ ACCUMULATED NET INVESTMENT INCOME (LOSS) ........................... $ (21,889) $ -- $ 32,836 $ -- ============ ============ ============ ============ CAPITAL SHARE ACTIVITY Sold .................................... 34,611 71,447 463,349 667,427 Redeemed ................................ (7,397) (31,155) (14,334) (79,110) ------------ ----------- ------------ ------------ Net increase in shares outstanding ...... 27,214 40,292 449,015 588,317 Shares outstanding, beginning of period . 700,323 660,031 1,761,633 1,173,316 ------------ ----------- ------------ ------------ Shares outstanding, end of period ....... 727,537 700,323 2,210,648 1,761,633 ============ ============ ============ ============ See accompanying notes to financial statements.
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NEW CENTURY PORTFOLIOS STATEMENTS OF CHANGES IN NET ASSETS ==================================================================================================== NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO ------------------------------- SIX MONTHS ENDED YEAR APRIL 30, ENDED 2004 OCTOBER 31, (UNAUDITED) 2003 ---------------------------------------------------------------------------------------------------- FROM OPERATIONS Net investment income ............................................. $ 295,242 $ 274,065 Net realized gains (losses) from security transactions ............ 371,462 (142,839) Capital gain distributions from regulated investment companies .... 299,500 90,480 Net change in unrealized appreciation/ (depreciation) on investments ................................... 454,307 4,231,042 ----------- ----------- Net increase in net assets from operations ........................... 1,420,511 4,452,748 ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income (Note 1E) .............................. (581,288) (224,495) ----------- ----------- FROM CAPITAL SHARE TRANSACTIONS Proceeds from shares sold ......................................... 10,592,889 11,337,961 Net asset value of shares issued in reinvestment of distributions to shareholders ................................... 573,254 220,766 Payments for shares redeemed ...................................... (525,766) (1,581,670) ----------- ----------- Net increase in net assets from capital share transactions ........... 10,640,377 9,977,057 ----------- ----------- TOTAL INCREASE IN NET ASSETS ......................................... 11,479,600 14,205,310 NET ASSETS Beginning of period ............................................... 33,734,122 19,528,812 ----------- ----------- End of period ..................................................... $45,213,722 $33,734,122 =========== =========== ACCUMULATED NET INVESTMENT INCOME .................................... $ 11,340 $ 103,110 =========== =========== CAPITAL SHARE ACTIVITY Sold .............................................................. 953,155 1,156,113 Reinvested ........................................................ 52,209 23,918 Redeemed .......................................................... (47,209) (159,173) ----------- ----------- Net increase in shares outstanding ................................ 958,155 1,020,858 Shares outstanding, beginning of period ........................... 3,162,607 2,141,749 ----------- ----------- Shares outstanding, end of period ................................. 4,120,762 3,162,607 =========== =========== See accompanying notes to financial statements.
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NEW CENTURY CAPITAL PORTFOLIO FINANCIAL HIGHLIGHTS ================================================================================================================================== SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD ---------------------------------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEARS ENDED OCTOBER 31, 2004 -------------------------------------------------------------------- (UNAUDITED) 2003 2002 2001 2000 1999 ---------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ....... $ 12.36 $ 10.09 $ 11.97 $ 18.07 $ 16.71 $ 14.30 --------- --------- --------- --------- --------- --------- Income (loss) from investment operations: Net investment loss ........................ (0.06) (0.06) (0.08) (0.10) (0.14) (0.14) Net realized and unrealized gains (losses) on investments .................. 0.75 2.33 (1.80) (4.62) 2.67 4.08 --------- --------- --------- --------- --------- --------- Total from investment operations .............. 0.69 2.27 (1.88) (4.72) 2.53 3.94 --------- --------- --------- --------- --------- --------- Less distributions: Distributions from net investment income ... -- -- -- -- -- -- Distributions from net realized gains ...... -- -- -- ( 1.38) ( 1.17) ( 1.53) --------- --------- --------- --------- --------- --------- Total distributions ........................... -- -- -- (1.38) ( 1.17) ( 1.53) --------- --------- --------- --------- --------- --------- Net asset value, end of period ................ $ 13.05 $ 12.36 $ 10.09 $ 11.97 $ 18.07 $ 16.71 ========= ========= ========= ========= ========= ========= TOTAL RETURN .................................. 5.58%(a) 22.50% ( 15.71%) ( 27.77%) 14.92% 28.94% ========= ========= ========= ========= ========= ========= RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's) .......... $ 101,930 $ 95,396 $ 82,310 $ 109,873 $ 156,668 $ 120,583 ========= ========= ========= ========= ========= ========= Ratio of expenses to average net assets .... 1.41%(b) 1.45% 1.40% 1.29% 1.27% 1.39% Ratio of net investment loss to average net assets (0.86%)(b) ( 0.59%) ( 0.62%) ( 0.72%) ( 0.80%) ( 0.91%) Portfolio turnover 48%(b) 71% 59% 70% 51% 64% (a) Not annualized. (b) Annualized. See accompanying notes to financial statements.
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NEW CENTURY BALANCED PORTFOLIO FINANCIAL HIGHLIGHTS ================================================================================================================================== SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD ---------------------------------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEARS ENDED OCTOBER 31, 2004 -------------------------------------------------------------------- (UNAUDITED) 2003 2002 2001 2000 1999 ---------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ....... $ 11.52 $ 9.89 $ 11.35 $ 3.64 $ 13.42 $ 12.83 --------- --------- --------- --------- --------- --------- Income (loss) from investment operations: Net investment income ...................... 0.07 0.16 0.13 0.23 0.22 0.20 Net realized and unrealized gains (losses) on investments .................. 0.54 1.67 ( 1.49) ( 1.71) 1.17 1.68 --------- --------- --------- --------- --------- --------- Total from investment operations ........... 0.61 1.83 ( 1.36) ( 1.48) 1.39 1.88 --------- --------- --------- --------- --------- --------- Less distributions: Distributions from net investment income . ( 0.10) ( 0.20) (0.10) ( 0.23) ( 0.22) ( 0.20) Distributions from net realized gains .... -- -- -- ( 0.58) ( 0.95) ( 1.09) --------- --------- --------- --------- --------- --------- Total distributions ........................ ( 0.10) ( 0.20) ( 0.10) ( 0.81) ( 1.17) ( 1.29) --------- --------- --------- --------- --------- --------- Net asset value, end of period ............. $ 12.03 $ 11.52 $ 9.89 $ 11.35 $ 13.64 $ 13.42 ========= ========= ========= ========= ========= ========= TOTAL RETURN .................................. 5.30%(a) 18.84% ( 12.08%) ( 11.21%) 10.26% 15.26% ========= ========= ========= ========= ========= ========= RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's) .......... $ 73,811 $ 70,441 $ 62,755 $ 71,251 $ 79,553 $ 65,721 ========= ========= ========= ========= ========= ========= Ratio of expenses to average net assets .... 1.43%(b) 1.45%(c) 1.48% 1.49% 1.40% 1.46% Ratio of net investment income to average net assets ....................... 1.16%(b) 1.56%(c) 1.19% 1.87% 1.51% 1.45% Portfolio turnover ......................... 29%(b) 80% 93% 69% 43% 60% (a) Not annualized. (b) Annualized. (c) Absent fee waivers and expense reimbursements by the Advisor, the ratio of expenses to average net assets would have been 1.46% and the ratio of net investment income to average net assets would have been 1.55% for the year ended October 31, 2003 (Note 2). See accompanying notes to financial statements.
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NEW CENTURY AGGRESSIVE PORTFOLIO FINANCIAL HIGHLIGHTS ============================================================================================================= SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD ------------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEARS ENDED OCTOBER 31, 2004 ------------------------------------------- (UNAUDITED) 2003 2002 2001 ---------------------------------------------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ......... $ 6.95 $ 5.47 $ 7.37 $ 10.00 ----------- ----------- ----------- ----------- Income (loss) from investment operations: Net investment loss ........................ (0.03) (0.06) (0.07) (0.07) Net realized and unrealized gains (losses) on investments ............................ 0.21 1.54 (1.83) (2.56) ----------- ----------- ----------- ----------- Total from investment operations ............. 0.18 1.48 (1.90) (2.63) ----------- ----------- ----------- ----------- Less distributions: Distributions from net investment income ... -- -- -- -- Distributions from net realized gains ...... -- -- -- -- ----------- ----------- ----------- ----------- Total distributions .......................... -- -- -- -- ----------- ----------- ----------- ----------- Net asset value, end of period ............... $ 7.13 $ 6.95 $ 5.47 $ 7.37 =========== =========== =========== =========== TOTAL RETURN .................................... 2.59%(a) 27.06% (25.78%) (26.30%) =========== =========== =========== =========== RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's) ............ $ 5,185 $ 4,866 $ 3,610 $ 1,846 =========== =========== =========== =========== Ratios of expenses to average net assets: Before expense reimbursement and waived fees .. 2.68%(b) 3.20% 2.95% 5.90% After expense reimbursement and waived fees ... 1.50%(b) 1.50% 1.50% 1.50% Ratios of net investment loss to average net assets: Before expense reimbursement and waived fees .. (2.11%)(b) (2.73%) (2.50%) (5.35%) After expense reimbursement and waived fees ... (0.93%)(b) (1.03%) (1.05%) (0.95%) Portfolio turnover .............................. 80%(b) 78% 120% 86% (a) Not annualized. (b) Annualized. See accompanying notes to financial statements.
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NEW CENTURY INTERNATIONAL PORTFOLIO FINANCIAL HIGHLIGHTS ============================================================================================================= SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD ------------------------------------------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEARS ENDED OCTOBER 31, 2004 ------------------------------------------- (UNAUDITED) 2003 2002 2001 ---------------------------------------------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period ......... $ 8.68 $ 6.52 $ 7.41 $ 10.00 ----------- ----------- ----------- ----------- Income (loss) from investment operations: Net investment income (loss) ............... 0.01 (0.03) (0.06) (0.04) Net realized and unrealized gains (losses) on investments ............................ 0.75 2.19 (0.81) (2.55) ----------- ----------- ----------- ----------- Total from investment operations ............. 0.76 2.16 (0.87) (2.59) ----------- ----------- ----------- ----------- Less distributions: Distributions from net investment income ...... -- -- (0.02) -- Distributions from net realized gains ......... -- -- -- -- ----------- ----------- ----------- ----------- Total distributions ............................. -- -- (0.02) -- ----------- ----------- ----------- ----------- Net asset value, end of period .................. $ 9.44 $ 8.68 $ 6.52 $ 7.41 =========== =========== =========== =========== TOTAL RETURN .................................... 8.76%(a) 33.13% (11.84%) (25.90%) =========== =========== =========== =========== RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's) ............ $ 20,877 $ 15,288 $ 7,655 $ 731 =========== =========== =========== =========== Ratios of expenses to average net assets: Before expense reimbursement and waived fees .. 1.76%(b) 2.11% 2.54% 10.81% After expense reimbursement and waived fees ... 1.50%(b) 1.50% 1.50% 1.50% Ratios of net investment income (loss) to average net assets: Before expense reimbursement and waived fees .. 0.08%(b) (1.16%) (2.34%) (9.81%) After expense reimbursement and waived fees ... 0.34%(b) (0.55%) (1.30%) (0.50%) Portfolio turnover .............................. 35%(b) 56% 27% 83% (a) Not annualized. (b) Annualized. See accompanying notes to financial statements.
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NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO FINANCIAL HIGHLIGHTS =============================================================================================== SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD ----------------------------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEARS ENDED OCTOBER 31, 2004 ----------------------------- (UNAUDITED) 2003 2002(a) -------------------------------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period .......... $ 10.67 $ 9.12 $ 10.00 --------- -------- --------- Income (loss) from investment operations: Net investment income ....................... 0.10 0.11 0.01 Net realized and unrealized gains (losses) on investments ............................. 0.38 1.54 (0.89) --------- -------- --------- Total from investment operations .............. 0.48 1.65 (0.88) --------- -------- --------- Less distributions: Distributions from net investment income ....... (0.18) (0.10) -- Distributions from net realized gains .......... -- -- -- --------- -------- --------- Total distributions .............................. (0.18) (0.10) -- --------- -------- --------- Net asset value, end of period ................... $ 10.97 $ 10.67 $ 9.12 ========= ======== ========= TOTAL RETURN ..................................... 4.45%(b) 18.20% ( 8.80%)(b) ========= ======== ========= RATIOS/SUPPLEMENTAL DATA Net assets, end of period (000's) ............. $ 45,214 $ 33,734 $ 19,529 ========= ======== ========= Ratios of expenses to average net assets ......... 1.18%(c) 1.40% 1.49%(c)(d) Ratios of net investment income to average net assets 1.48%(c) 1.06% 0.32%(c)(d) Portfolio turnover ............................... 11%(c) 21% 7%(c)
(a) Represents the period from the initial public offering of shares (May 1, 2002) through October 31, 2002. (b) Not annualized. (c) Annualized. (d) Absent fee waivers and expense reimbursements by the Advisor, the ratio of expenses to average net assets would have been 1.72%(c) and the ratio of net investment income to average net assets would have been 0.09%(c) for the period ended October 31, 2002 (Note 2). See accompanying notes to financial statements. 11
NEW CENTURY CAPITAL PORTFOLIO PORTFOLIO OF INVESTMENTS APRIL 30, 2004 (UNAUDITED) ======================================================================================= INVESTMENT COMPANIES -- 99.5% SHARES VALUE --------------------------------------------------------------------------------------- GROWTH FUNDS -- 39.5% American Funds AMCAP - Class A (a) ................... 212,681 $ 3,643,227 American Growth Fund of America - Class A ............ 259,371 6,486,870 Calamos Growth - Class A (a) ......................... 117,564 5,284,486 Fidelity Capital Appreciation ........................ 168,209 4,190,101 Goldman Sachs Growth Opportunities - Class A (a) ..... 213,091 4,076,441 iShares Russell 1000 Growth Index .................... 78,535 3,658,160 Marsico 21st Century (a) ............................. 463,653 4,641,163 Smith Barney Large Capitalization Growth - Class A (a) 385,991 8,314,239 ----------- 40,294,687 ----------- GROWTH AND INCOME FUNDS -- 24.4% Hotchkis & Wiley Large Cap Value - Class A ........... 140,710 2,703,037 iShares Dow Jones Select Dividend Index Fund ......... 21,900 1,175,154 iShares Russell 1000 Value Index ..................... 14,800 861,360 iShares S&P 500 Index ................................ 61,150 6,787,650 iShares S&P MidCap 400/BARRA Value Index ............. 27,500 3,059,375 SEI S&P 500 Index - Class E .......................... 126,050 4,312,172 Vanguard 500 Index - Investor Shares ................. 58,140 5,951,808 ----------- 24,850,556 ----------- SMALL COMPANY FUNDS -- 18.7% Buffalo Small Cap (a) ................................ 50,748 1,249,920 iShares S&P SmallCap 600/BARRA Growth Index .......... 21,700 1,967,756 iShares S&P SmallCap 600/BARRA Value Index ........... 13,700 1,408,086 Royce Opportunity - Investor Class (a) ............... 585,059 7,184,531 William Blair Small Cap Growth - Class I (a) ......... 309,278 7,249,476 ----------- 19,059,769 ----------- FOREIGN STOCK FUNDS -- 10.4% Driehaus International Discovery (a) ................. 106,612 3,231,407 Franklin Mutual Discovery - Class Z .................. 942 20,051 iShares MSCI EAFE Index .............................. 23,900 3,271,910 iShares MSCI Emerging Markets Index .................. 17,100 2,706,930 iShares MSCI Japan Index ............................. 47,000 476,580 Tocqueville International Value (The) ................ 72,849 886,571 ----------- 10,593,449 ----------- AGGRESSIVE FUNDS -- 6.5% Smith Barney Aggressive Growth - Class A (a) ......... 76,148 6,649,962 ----------- TOTAL INVESTMENT COMPANIES (Cost $88,591,786) ........... $ 101,448,423 ----------- ======================================================================================= MONEY MARKET SECURITIES -- 0.5% SHARES VALUE --------------------------------------------------------------------------------------- First American Treasury Obligation - Class A (Cost $526,805) ..................................... 526,805 $ 526,805 ----------- TOTAL INVESTMENTS AT VALUE--100.0% (Cost $89,118,591) $ 101,975,228 LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.0%) ....... (45,310) ----------- NET ASSETS-- 100.0% .................................. $ 101,929,918 ============= (a) Non-income producing security. See accompanying notes to financial statements. 12 NEW CENTURY BALANCED PORTFOLIO PORTFOLIO OF INVESTMENTS APRIL 30, 2004 (UNAUDITED) ======================================================================================= INVESTMENT COMPANIES -- 99.3% SHARES VALUE --------------------------------------------------------------------------------------- GROWTH AND INCOME FUNDS -- 26.6% Dodge & Cox Stock .................................... 25,748 $ 2,989,606 Franklin Mutual Shares - Class Z ..................... 2,358 50,248 Hotchkis & Wiley Large Cap Value - Class A ........... 200,257 3,846,936 iShares Russell 1000 Value Index ..................... 200 11,640 iShares S&P 500 Index ................................ 76,400 8,480,400 SEI S&P 500 Index - Class E ......................... 86,293 2,952,095 Vanguard 500 Index - Investor Shares ................. 12,698 1,299,940 ----------- 19,630,865 ----------- GROWTH FUNDS -- 18.0% American Funds AMCAP - Class A (a) ................... 204,538 3,503,743 Calamos Growth - Class A(a) ......................... 28,965 1,301,991 Fidelity Capital Appreciation ........................ 67,398 1,678,891 iShares Russell 1000 Growth Index .................... 16,300 759,254 S&P MidCap 400 Depositary Receipts ................... 17,580 1,873,149 Smith Barney Large Capitalization Growth - Class A(a) 194,593 4,191,538 ----------- 13,308,566 ----------- HIGH YIELD BOND FUNDS -- 12.5% Fidelity Advisor High Income Advantage - Class I ..... 238,323 2,199,716 MainStay High Yield Corporate Bond - Class A ......... 351,138 2,191,101 Pioneer High Yield - Class A ......................... 412,261 4,835,815 ----------- 9,226,632 ----------- SMALL COMPANY FUNDS -- 12.0% iShares S&P SmallCap 600/BARRA Growth Index .......... 15,400 1,396,472 iShares S&P SmallCap 600/BARRA Value Index ........... 13,900 1,428,642 Royce Opportunity - Investor Class (a) ............... 242,765 2,981,148 William Blair Small Cap Growth - Class I (a) ......... 130,068 3,048,790 ----------- 8,855,052 ----------- GOVERNMENT CORPORATE BOND FUNDS -- 9.2% Loomis Sayles Bond - Institutional Class ............. 367,650 4,764,745 Rydex Series - Juno - Investor Class (a) ............. 94,476 2,001,944 ----------- 6,766,689 ----------- FOREIGN STOCK FUNDS -- 8.1% Driehaus International Discovery (a) ................. 29,565 896,118 iShares MSCI EAFE Index .............................. 24,700 3,381,430 Tocqueville International Value (The) ................ 142,684 1,736,459 ----------- 6,014,007 ----------- CONVERTIBLE SECURITY FUNDS -- 5.1% Calamos Growth and Income - Class A .................. 73,664 2,021,349 Smith Barney Convertible - Class A ................... 97,935 1,705,043 ----------- 3,726,392 ----------- 13 NEW CENTURY BALANCED PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2004 (UNAUDITED) ======================================================================================= INVESTMENT COMPANIES -- 99.3% (Continued) SHARES VALUE --------------------------------------------------------------------------------------- WORLDWIDE BOND FUNDS -- 4.2% Payden Global Fixed Income ........................... 141,536 $ 1,406,872 PIMCO Foreign Bond - Institutional Class ............. 161,994 1,697,694 ----------- 3,104,566 ----------- HIGH QUALITY BOND FUNDS -- 3.6% Dodge & Cox Income ................................... 205,031 2,618,245 ----------- TOTAL INVESTMENT COMPANIES (Cost $65,707,791) ........... $ 73,251,014 ----------- ======================================================================================= MONEY MARKET SECURITIES -- 0.8% SHARES VALUE --------------------------------------------------------------------------------------- First American Treasury Obligation - Class A (Cost $598,480) ..................................... 598,480 $ 598,480 ----------- TOTAL INVESTMENTS AT VALUE-- 100.1% (Cost $66,306,271) .. $ 73,849,494 LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.1%) .......... ( 38,971) ----------- NET ASSETS-- 100.0% $ 73,810,523 ============ (a) Non-income producing security. See accompanying notes to financial statements. 14 NEW CENTURY AGGRESSIVE PORTFOLIO PORTFOLIO OF INVESTMENTS APRIL 30, 2004 (UNAUDITED) ======================================================================================= INVESTMENT COMPANIES -- 99.3% SHARES VALUE --------------------------------------------------------------------------------------- SECTOR FUNDS -- 53.8% Biotech HOLDRs Trust ................................. 2,400 $ 359,832 iShares Dow Jones U.S. Energy Sector Index ........... 5,600 299,488 iShares Goldman Sachs Natural Resources Index ........ 2,000 216,760 iShares Goldman Sachs Networking Index (a) ........... 11,100 301,587 iShares Goldman Sachs Semiconductor Index (a) ........ 5,800 320,740 iShares MSCI Emerging Markets Index .................. 2,900 459,070 iShares Nasdaq Biotechnology Index (a) ............... 4,000 311,040 S&P Technology Select Sector Depositary Receipt ...... 26,800 519,652 ----------- 2,788,169 ----------- SMALL-CAP FUNDS -- 15.8% Buffalo Small Cap (a) ................................ 9,872 243,143 Perritt Micro Cap Opportunities ...................... 9,865 240,424 Royce Opportunity - Investor Class (a) ............... 27,412 336,620 ----------- 820,187 ----------- LARGE-CAP FUNDS -- 15.8% Fidelity Capital Appreciation ........................ 9,621 239,673 Smith Barney Aggressive Growth - Class A (a) ......... 3,943 344,325 Smith Barney Large Capitalization Growth - Class A (a) 10,817 232,991 ----------- 816,989 ----------- MID-CAP FUNDS -- 13.9% Calamos Growth - Class A (a) ......................... 2,724 122,439 iShares S&P MidCap 400/BARRA Growth Index ............ 1,500 181,020 S&P MidCap 400 Depositary Receipts ................... 3,902 415,758 ----------- 719,217 ----------- TOTAL INVESTMENT COMPANIES (Cost $4,647,966) ............ $ 5,144,562 ----------- ======================================================================================= MONEY MARKET SECURITIES -- 0.7% SHARES VALUE --------------------------------------------------------------------------------------- First American Treasury Obligation - Class A (Cost $38,448) ....................................... 38,448 $ 38,448 ----------- TOTAL INVESTMENTS AT VALUE-- 100.0% (Cost $4,686,414) ... $ 5,183,010 OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.0% ............ 1,904 ----------- NET ASSETS-- 100.0% ..................................... $ 5,184,914 =========== (a) Non-income producing security. See accompanying notes to financial statements. 15 NEW CENTURY INTERNATIONAL PORTFOLIO PORTFOLIO OF INVESTMENTS APRIL 30, 2004 (UNAUDITED) ======================================================================================= INVESTMENT COMPANIES -- 99.4% SHARES VALUE --------------------------------------------------------------------------------------- ASIA/PACIFIC FUNDS -- 28.9% Fidelity Japan Smaller Companies ..................... 65,953 $ 817,821 iShares MSCI Australia Index ......................... 47,100 612,771 iShares MSCI Japan Index ............................. 157,605 1,598,115 iShares MSCI Pacific Ex-Japan Index .................. 8,100 583,200 iShares MSCI South Korea Index ....................... 13,000 336,050 Matthews China ....................................... 59,929 789,870 Matthews Japan (a) ................................... 59,673 906,431 Matthews Pacific Tiger - Class I ..................... 28,845 384,496 ----------- 6,028,754 ----------- EUROPE FUNDS -- 27.7% iShares MSCI Austria Index ........................... 55,900 894,959 iShares MSCI Belgium Index ........................... 21,300 286,059 iShares MSCI Germany Index ........................... 97,200 1,511,460 iShares MSCI Sweden Index ............................ 79,500 1,318,110 iShares MSCI United Kingdom Index .................... 45,646 711,621 Ivy European Opportunities - Class A ................. 48,059 1,073,642 ----------- 5,795,851 ----------- DIVERSIFIED FUNDS -- 24.0% Driehaus International Discovery (a) ................. 49,355 1,495,941 iShares MSCI EAFE Index .............................. 10,300 1,410,070 Oakmark International - Class I ...................... 15,921 291,680 Tocqueville International Value (The) ................ 148,469 1,806,871 ----------- 5,004,562 ----------- AMERICAS FUNDS -- 9.7% iShares MSCI Canada Index ............................ 76,700 1,025,479 iShares MSCI Mexico Index ............................ 21,000 395,010 iShares S&P Latin American 40 Index .................. 11,000 615,780 ----------- 2,036,269 ----------- EMERGING MARKETS FUNDS -- 9.1% Dreyfus Premier Emerging Markets - Class A ........... 23,001 394,003 Driehaus Emerging Markets Growth (a) ................. 14,444 289,745 iShares MSCI Emerging Markets Index .................. 3,100 490,730 T. Rowe Price Emerging Europe & Mediterranean ........ 55,266 724,539 ----------- 1,899,017 ----------- TOTAL INVESTMENT COMPANIES (Cost $18,062,751)............ $ 20,764,453 ----------- ======================================================================================= MONEY MARKET SECURITIES -- 1.2% SHARES VALUE --------------------------------------------------------------------------------------- First American Treasury Obligation - Class A (Cost $243,521) ..................................... 243,521 $ 243,521 ----------- TOTAL INVESTMENTS AT VALUE-- 100.6% (Cost $18,306,272)... $ 21,007,974 LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.6%) .......... ( 130,745) ----------- NET ASSETS-- 100.0% ..................................... $ 20,877,229 =========== (a) Non-income producing security. See accompanying notes to financial statements. 16 NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO PORTFOLIO OF INVESTMENTS APRIL 30, 2004 (UNAUDITED) ======================================================================================= INVESTMENT COMPANIES -- 98.3% SHARES VALUE --------------------------------------------------------------------------------------- MERGER ARBITRAGE FUNDS -- 17.3% Arbitrage Fund (The) - Class R (a) ................... 191,643 $ 2,382,119 Enterprise Mergers and Acquisitions - Class A (a) .... 97,715 1,087,564 Gabelli ABC .......................................... 88,846 876,022 Merger Fund (The) .................................... 225,661 3,472,924 ----------- 7,818,629 ----------- GLOBAL MACRO FUNDS -- 12.5% First Eagle SoGen Global - Class A ................... 105,998 3,611,350 Franklin Mutual Discovery - Class Z .................. 51,075 1,086,881 Prudent Global Income ................................ 79,775 964,485 ----------- 5,662,716 ----------- LONG/SHORT EQUITY FUNDS -- 11.5% CGM Focus (a) ........................................ 15,422 434,283 Hussman Strategic Growth (a) ......................... 142,106 2,246,700 Needham Growth (a) ................................... 32,454 931,437 Needham Small Cap Growth (a) ......................... 27,901 462,883 Prudent Bear ......................................... 103,567 614,152 Franklin Templeton Global Long-Short - Class A (a) ... 46,556 520,497 ----------- 5,209,952 ----------- ASSET ALLOCATION FUNDS -- 11.3% Berwyn Income ........................................ 59,283 688,277 FPA Crescent - Class I ............................... 48,654 1,094,228 Greenspring .......................................... 60,713 1,233,071 Leuthold Core Investment ............................. 100,017 1,477,245 Oakmark Equity and Income - Class I .................. 433 10,000 Rydex Series - Juno - Investor Class (a) ............. 27,907 591,342 ----------- 5,094,163 ----------- HIGH YIELD FUNDS -- 8.5% Calamos High Yield - Class A ......................... 87,589 943,333 Columbia High Yield - Class Z ........................ 1,236 10,725 Fidelity Capital & Income ............................ 59,511 472,519 MainStay High Yield Corporate Bond - Class A ........ 203,316 1,268,695 Pioneer High Yield - Class A ......................... 96,902 1,136,658 ----------- 3,831,930 ----------- REAL ESTATE INVESTMENT TRUST FUNDS -- 7.8% AIM Select Real Estate Income (b) .................... 19,670 290,723 Alpine Realty Income and Growth - Class Y ............ 61,048 1,029,260 iShares Dow Jones U.S. Real Estate Index ............. 3,790 352,849 Security Capital U.S. Real Estate Shares ............. 64,769 899,644 Third Avenue Real Estate Value ....................... 43,396 934,752 ----------- 3,507,228 ----------- NATURAL RESOURCES FUNDS -- 7.7% Permanent Portfolio .................................. 24,343 587,152 PIMCO Commodity Real Return Strategy - Class A ....... 95,032 1,395,070 RS Global Natural Resources (a) ...................... 67,453 1,299,154 T. Rowe Price New Era ................................ 7,544 207,153 ----------- 3,488,529 ----------- 17 NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO PORTFOLIO OF INVESTMENTS (CONTINUED) APRIL 30, 2004 (UNAUDITED) ======================================================================================= INVESTMENT COMPANIES -- 98.3% (Continued) SHARES VALUE --------------------------------------------------------------------------------------- CONVERTIBLE ARBITRAGE FUNDS -- 7.2% Calamos Market Neutral - A Shares .................... 228,886 $ 3,273,071 ----------- OPTIONS/HEDGED FUNDS -- 6.0% Gateway .............................................. 117,059 2,713,434 ----------- DEEP VALUE/DISTRESSED SECURITIES FUNDS -- 5.1% Fidelity Leveraged Company Stock (a) ................. 23,037 448,985 Franklin Mutual Beacon - Class Z ..................... 80,425 1,167,764 Third Avenue Value ................................... 16,134 697,815 ----------- 2,314,564 ----------- MARKET NEUTRAL FUNDS -- 3.4% J.P. Morgan Market Neutral - Institutional Shares (a) 13,045 187,984 Laudus Rosenberg U.S. Large/Mid Capitalization Long/Short Equity (a) ............................... 22,590 238,102 Laudus Rosenberg Value Long/Short Equity (a) ......... 31,396 302,975 Phoenix Capital Market Neutral - Class A (a) ......... 73,071 814,005 ----------- 1,543,066 ----------- TOTAL INVESTMENT COMPANIES (Cost $40,848,336) ........... $44,457,282 ----------- ======================================================================================= COMMON STOCKS -- 0.2% SHARES VALUE --------------------------------------------------------------------------------------- Plum Creek Timber Company, Inc. (Cost $87,952) ...................................... 2,950 $ 87,202 ----------- ======================================================================================= MONEY MARKET SECURITIES -- 1.8% SHARES VALUE --------------------------------------------------------------------------------------- First American Treasury Obligation - Class A (Cost $817,760) ..................................... 817,760 $ 817,760 ----------- TOTAL INVESTMENTS AT VALUE--100.3% (Cost $41,754,048) ... $45,362,244 LIABILITIES IN EXCESS OF OTHER ASSETS-- (0.3%) .......... ( 148,522) ----------- NET ASSETS-- 100.0% ..................................... $45,213,722 =========== (a) Non-income producing security. (b) Closed-end fund. See accompanying notes to financial statements.
18 NEW CENTURY PORTFOLIO NOTES TO FINANCIAL STATEMENTS APRIL 30, 2004 (UNAUDITED) ================================================================================ (1) SIGNIFICANT ACCOUNTING POLICIES New Century Portfolios ("New Century") is organized as a Massachusetts business trust which is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company and currently offers shares of five series: New Century Capital Portfolio, New Century Balanced Portfolio, New Century Aggressive Portfolio, New Century International Portfolio and New Century Alternative Strategies Portfolio (together, the "Portfolios"). New Century Aggressive Portfolio and New Century International Portfolio commenced operations on November 1, 2000, and New Century Alternative Strategies Portfolio commenced operations on May 1, 2002. The investment objective of New Century Capital Portfolio is to provide capital growth, with a secondary objective to provide income, while managing risk. This Portfolio seeks to achieve its objectives by investing primarily in shares of other registered investment companies that emphasize investments in equities (domestic and foreign). The investment objective of New Century Balanced Portfolio is to provide income, with a secondary objective to provide capital growth, while managing risk. This Portfolio seeks to achieve its objectives by investing primarily in shares of other registered investment companies that emphasize investments in equities (domestic and foreign), and fixed income securities (domestic and foreign). The investment objective of New Century Aggressive Portfolio is to provide capital growth, without regard to current income, while managing risk. This Portfolio seeks to achieve its objective by investing primarily in shares of registered investment companies that emphasize investments in equities (domestic and foreign). The investment objective of New Century International Portfolio is to provide capital growth, with a secondary objective to provide income, while managing risk. This Portfolio seeks to achieve its objectives by investing primarily in shares of registered investment companies that emphasize investments in equities and fixed income securities (foreign, worldwide, emerging markets and domestic). The investment objective of New Century Alternative Strategies Portfolio is to provide long-term capital appreciation, with a secondary objective to earn income, while managing risk. This Portfolio seeks to achieve its objectives by investing primarily in shares of other registered investment companies that emphasize alternative strategies. The price of shares of each Portfolio fluctuates daily and there is no assurance that the Portfolios will be successful in achieving their stated investment objectives. The following is a summary of significant accounting policies consistently followed by the Portfolios in the preparation of their financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America. 19 NEW CENTURY PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) APRIL 30, 2004 (UNAUDITED) ================================================================================ A. INVESTMENT VALUATION -------------------- Investments, representing primarily capital stock of other open-end investment companies, are valued at their net asset value as reported by such companies. Investments in securities traded on a national securities exchange are valued at the last reported sales price; securities included in the NASDAQ National Market System are valued at the NASDAQ Official Closing Price; other securities traded in the over-the-counter market and listed securities for which no sale is reported on that date are valued at the last reported bid price. In the absence of readily available market quotations, investments are valued at fair value as determined by the Board of Trustees. Short-term investments are valued at amortized cost which approximates market value. B. SHARE VALUATION --------------- The net asset value per share of each Portfolio is calculated daily by dividing the total value of each Portfolio's assets, less liabilities, by the number of shares outstanding. The offering price and redemption price per share of each Portfolio is equal to the net asset value per share. C. INVESTMENT TRANSACTIONS ----------------------- Investment transactions are recorded on a trade date basis. Realized gains and losses from investment transactions are determined using the specific identification method. D. INCOME RECOGNITION ------------------ Interest, if any, is accrued on portfolio investments daily. Dividend income is recorded on the ex-dividend date. E. DISTRIBUTIONS TO SHAREHOLDERS ----------------------------- Dividends arising from net investment income, if any, are declared and paid semi-annually to shareholders of the New Century Balanced and New Century Alternative Strategies Portfolios. Dividends from net investment income, if any, are declared and paid annually for the New Century Capital, New Century Aggressive, and New Century International Portfolios. Net realized short-term capital gains, if any, may be distributed throughout the year and net realized long-term capital gains, if any, are distributed at least once each year. Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. There were no differences between the book and tax basis of distributions for the periods ended April 30, 2004 and October 31, 2003. F. COST OF OPERATIONS ------------------ The Portfolios bear all costs of their operations other than expenses specifically assumed by Weston Financial Group, Inc. (the "Advisor"). Expenses directly attributable to a 20 NEW CENTURY PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) APRIL 30, 2004 (UNAUDITED) ================================================================================ Portfolio are charged to that Portfolio; other expenses are allocated proportionately among the Portfolios in relation to the net assets of each Portfolio. G. USE OF ESTIMATES ---------------- In preparing financial statements in accordance with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities, and revenues and expenses during the reporting period. Actual results could differ from those estimates. (2) INVESTMENT ADVISORY FEE, ADMINISTRATIVE AGREEMENT AND TRUSTEES' FEE Fees paid by the Portfolios pursuant to an Investment Advisory Agreement with the Advisor are computed daily and paid monthly at an annualized rate of 1% on the first $100 million of average daily net assets and .75% of average daily net assets exceeding that amount, except the fees for the New Century Alternative Strategies Portfolio which are computed at an annualized rate of .75% of net assets. The advisory fees are based on the average daily net assets of each of the Portfolios separately, and not on the total net assets of New Century. The Advisor has agreed to limit the total expenses (excluding interest, taxes, brokerage and extraordinary expenses) to an annual rate of 1.50% of average net assets for each of the New Century Balanced, New Century Aggressive, New Century International and New Century Alternative Strategies Portfolios. Accordingly, for the six months ended April 30, 2004, the Advisor waived its entire advisory fee of $26,266 and reimbursed $4,757 of other operating expenses for the New Century Aggressive Portfolio and waived investment advisory fees of $24,316 for the New Century International Portfolio. No waiver was necessary for the New Century Balanced or New Century Alternative Strategies Portfolios. Any advisory fees waived and/or any other operating expenses absorbed by the Advisor pursuant to an agreed upon expense cap shall be reimbursed by the Portfolio to the Advisor, if so requested by the Advisor, provided the aggregate amount of the Portfolio's current total operating expenses for such fiscal year does not exceed the applicable existing limitation on Portfolio expenses, and the reimbursement is made within three years after the year in which the Advisor incurred the expense. For the six months ended April 30, 2004, the Advisor received $1,967 in recouped fees from the New Century Balanced Portfolio. During the period, the Advisor did not recoup any other fees waived or other operating expenses absorbed from the New Century Aggressive Portfolio and New Century International Portfolio. The Advisor has recouped all fees waived and expenses reimbursed for the New Century Balanced Portfolio and New Century Alternative Strategies Portfolio as of April 30, 2004. 21 NEW CENTURY PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) APRIL 30, 2004 (UNAUDITED) ================================================================================ As of April 30, 2004, the amounts available for reimbursement that have been paid and/or waived by the Advisor on behalf of the following Portfolios are as follows: -------------------------------------------------------------------------------- New Century Aggressive Portfolio ............................... $ 226,339 New Century International Portfolio ............................ $ 212,747 -------------------------------------------------------------------------------- The Advisor has recouped all fees waived and expenses reimbursed for the Balanced Portfolio and Alternative Strategies Portfolio as of April 30, 2004. As of April 30, 2004, the Advisor may recapture a portion of the above amounts no later than the dates as stated below:
------------------------------------------------------------------------------------------------------- OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, 2004 2005 2006 2007 ------------------------------------------------------------------------------------------------------- New Century Aggressive Portfolio ......... $ 62,008 $ 64,472 $ 68,836 $ 31,023 New Century International Portfolio ...... $ 62,619 $ 63,079 $ 62,733 $ 24,316
Fees paid by the Portfolios pursuant to an Administration Agreement with the Advisor to administer the ordinary course of the Portfolios' business are paid monthly from a detail of actual expenses incurred in the overseeing of the Portfolios' affairs. All expenses incurred overseeing the Portfolios' affairs are reimbursed monthly. The Portfolios pay each Trustee who is not affiliated with the Advisor $8,000 annually. (3) DISTRIBUTION PLAN AND OTHER TRANSACTIONS WITH AFFILIATES The Portfolios have adopted a Distribution Plan (the "Plan") under Section 12(b) of the Investment Company Act of 1940 and Rule 12b-1 thereunder. Under the Plan, each Portfolio may pay up to .25% of its average daily net assets to Weston Securities Corporation (the "Distributor") for activities primarily intended to result in the sale of shares. Under its terms, the Plan shall remain in effect from year to year, provided such continuance is approved annually by a vote of a majority of the Trustees and a majority of those Trustees who are not "interested persons" of the Portfolios and who have no direct or indirect financial interest in the operation of the Plan or in any agreement related to the Plan. During the six months ended April 30, 2004, the Distributor received $105,940, $57,555, $5,667, $20,551 and $26,318 from the New Century Capital, Balanced, Aggressive, International and Alternative Strategies Portfolios, respectively, pursuant to the 12b-1 plans. Also during this time, the Distributor received sales commissions and other compensation of $18,511, $34,795, $908, $2,799 and $54,486 in connection with the purchase of investment company shares by the New Century Capital, Balanced, Aggressive, International and Alternative Strategies Portfolios, respectively. The Distributor has voluntarily agreed to waive payments made by each Portfolio pursuant 22 NEW CENTURY PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) APRIL 30, 2004 (UNAUDITED) ================================================================================ to the distribution plans in amounts equal to the sales commissions and other compensation. Certain officers and trustees are also officers and/or directors of the Advisor and the Distributor. (4) INVESTMENT TRANSACTIONS For the six months ended April 30, 2004, the cost of purchases and the proceeds from sales of securities other than short-term investments and U.S. government securities were as follows:
--------------------------------------------------------------------------------------------------------------------------------- NEW NEW NEW NEW NEW CENTURY CENTURY CENTURY CENTURY CENTURY ALTERNATIVE CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------------------------------------------------------------------------------------------------------------------------------- Purchases of investment securities ............ $ 25,037,117 $ 11,053,377 $ 2,254,633 $ 7,505,427 $ 12,842,462 ============ ============ =========== ============ ============= Proceeds from sales of investment securities .. $ 24,148,673 $ 10,715,439 $ 2,064,790 $ 3,179,664 $ 2,170,098 ============ ============ =========== ============ ============= ---------------------------------------------------------------------------------------------------------------------------------
(5) TAX MATTERS It is each Portfolio's policy to comply with the special provisions of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. As provided therein, in any fiscal year in which a Portfolio so qualifies and distributes at least 90% of its taxable net income, the Portfolio (but not the shareholders) will be relieved of federal income tax on the income distributed. Accordingly, no provision for income taxes has been made. In order to avoid imposition of the excise tax applicable to regulated investment companies, it is also the Portfolio's intention to declare as dividends in each calendar year at least 98% of its net investment income (earned during the calendar year) and 98% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts from prior years. 23
NEW CENTURY PORTFOLIO NOTES TO FINANCIAL STATEMENTS (CONTINUED) APRIL 30, 2004 (UNAUDITED) ============================================================================================================================= The tax character of distributable earnings (deficit) at April 30, 2004 was as follows: ----------------------------------------------------------------------------------------------------------------------------- NEW NEW NEW NEW NEW CENTURY CENTURY CENTURY CENTURY CENTURY ALTERNATIVE CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ----------------------------------------------------------------------------------------------------------------------------- Accumulated ordinary income ............. $ 1,105,788 $ 607,702 $ 19,378 $ 315,437 $ 57,797 Unrealized appreciation ................. 12,856,637 7,439,193 473,158 2,686,579 3,582,941 Capital loss carryforwards .............. (19,250,602) (7,548,121) (1,833,058) (345,097) (210,041) Other gains ............................. 2,207,371 685,546 270,410 366,238 430,229 ------------ ------------ ------------ ------------ ------------ Total distributable earnings (deficit) .. $ (3,080,806) $ 1,184,320 $ (1,070,112) $ 3,023,157 $ 3,860,926 ============ ============ ============ ============ ============ ----------------------------------------------------------------------------------------------------------------------------- The following information is based upon the federal income tax cost of investment securities as of April 30, 2004: ----------------------------------------------------------------------------------------------------------------------------- NEW NEW NEW NEW NEW CENTURY CENTURY CENTURY CENTURY CENTURY ALTERNATIVE CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ----------------------------------------------------------------------------------------------------------------------------- Gross unrealized appreciation ........... $ 13,785,257 $ 7,867,944 $ 535,411 $ 2,897,272 $ 3,919,574 Gross unrealized depreciation ........... (928,620) (428,751) (62,253) (210,693) (336,633) ------------ ------------ ------------ ------------ ------------ Net unrealized appreciation ............. $ 12,856,637 $ 7,439,193 $ 473,158 $ 2,686,579 $ 3,582,941 ============ ============ ============ ============ ============ Federal income tax cost ................. $ 89,118,591 $ 66,410,301 $ 4,709,852 $ 18,321,395 $ 41,779,303 ============ ============ ============ ============ ============ ---------------------------------------------------------------------------------------------------------------------------- The difference between the federal income tax cost of portfolio investments and the financial statement cost for the Portfolios is due to certain timing differences in the recognition of capital losses under income tax regulations and accounting principles generally accepted in the United States of America. As of October 31, 2003, the Portfolios had the following capital loss carryforwards for federal income tax purposes. These capital loss carryforwards may be utilized in the current and future years to offset net realized capital gains, if any, prior to distributing such gains to shareholders. ---------------------------------------------------------------------------------------------------------------------------- NEW NEW NEW NEW NEW CENTURY CENTURY CENTURY CENTURY CENTURY ALTERNATIVE CAPITAL BALANCED AGGRESSIVE INTERNATIONAL STRATEGIES EXPIRES OCTOBER 31, PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ---------------------------------------------------------------------------------------------------------------------------- 2009 .................................... $ 6,713,738 $ 2,667,080 $ 258,107 $ 108,350 $ -- 2010 .................................... 9,405,834 4,737,511 1,458,293 115,296 128,604 2011 .................................... 3,131,030 143,530 116,658 121,451 81,437 ------------ ------------ ------------ ------------ ------------ $ 19,250,602 $ 7,548,121 $ 1,833,058 $ 345,097 $ 210,041 ============ ============ ============ ============ ============ ----------------------------------------------------------------------------------------------------------------------------
24 This page intentionally left blank. =============================================================================== INVESTMENT ADVISOR AND ADMINISTRATOR Weston Financial Group, Inc. Wellesley, MA DISTRIBUTOR Weston Securities Corporation Wellesley, MA COUNSEL Greenburg Traurig, LLP Philadelphia, PA INDEPENDENT ACCOUNTANTS Briggs, Bunting and Dougherty, LLP Philadelphia, PA TRANSFER AGENT Ultimus Fund Solutions, LLC Cincinnati, OH CUSTODIAN U.S. Bank, N.A. Cincinnati, OH This report and the financial statements contained herein are submitted for the general information of the shareholders of the Portfolios. This report is authorized for distribution to prospective investors in the Portfolios only if preceded or accompanied by an effective Prospectus which contains details concerning the management fee expense and other pertinent information. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge upon request by calling toll-free 1-888-639-0102. =============================================================================== ITEM 2. CODE OF ETHICS. Not required ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not required ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not required ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not required ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The registrant has no procedures by which shareholders may recommend nominees to the registrant's board of trustees. ITEM 10. CONTROLS AND PROCEDURES. (a) Based on their evaluation (as of a date within 90 days of the filing of this report) of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940), the registrant's principal executive officer and principal financial officer have concluded that such disclosure controls and procedures are reasonably designed and are operating effectively to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this report is being prepared, and that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported on a timely basis. (b) There were no significant changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not required (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)): Attached hereto (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons: Not applicable (b) Certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)): Attached hereto Exhibit 99.CERT Certifications pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 Exhibit 99.906CERT Certifications pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) New Century Portfolios ------------------------------------------- By (Signature and Title)* /s/ Wayne M. Grzecki ---------------------------- Wayne M. Grzecki, President Date July 8, 2004 -------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Wayne M. Grzecki ---------------------------- Wayne M. Grzecki, President Date July 8, 2004 -------------------------------------------------- By (Signature and Title)* /s/ Nicole M. Tremblay ---------------------------- Nicole M. Tremblay, Treasurer Date July 8, 2004 -------------------------------------------------- * Print the name and title of each signing officer under his or her signature.