N-CSR 1 ncsr-1008.txt NEW CENTURY PORTFOLIOS - N-CSR ------------------------- OMB APPROVAL ------------------------- OMB Number: 3235-0570 Expires: August 31, 2011 Estimated average burden hours per response: 18.9 ------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-05646 --------------------------------------------- New Century Portfolios -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 40 William Street, Suite 100 Wellesley, Massachusetts 02481 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Nicole M. Tremblay, Esq. Weston Financial Group, Inc. 40 William Street, Suite 100 Wellesley, MA 02481 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: (781) 235-7055 ---------------------------- Date of fiscal year end: October 31, 2008 --------------------------- Date of reporting period: October 31, 2008 --------------------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. ================================================================================ [LOGO OMITTED] NEW CENTURY PORTFOLIOS NEW CENTURY CAPITAL NEW CENTURY BALANCED NEW CENTURY OPPORTUNISTIC NEW CENTURY INTERNATIONAL NEW CENTURY ALTERNATIVE STRATEGIES ANNUAL REPORT YEAR ENDED OCTOBER 31, 2008 40 WILLIAM STREET, SUITE 100, WELLESLEY MA 02481 781-239-0445 888-639-0102 FAX 781-237-1635 ================================================================================ CONTENTS -------------------------------------------------------------------------------- PRESIDENT'S LETTER TO SHAREHOLDERS 1-2 PERFORMANCE CHARTS 3-5 PORTFOLIO INFORMATION 6-10 NEW CENTURY PORTFOLIOS Schedules of Investments 11-20 Statements of Assets and Liabilities 21 Statements of Operations 22 Statements of Changes in Net Assets 23-25 Financial Highlights 26-30 Notes to Financial Statements 31-39 Report of Independent Registered Public Accounting Firm 40 Board of Trustees and Officers 41-42 Federal Tax Information 42 About Your Portfolio's Expenses 43-45 Trustees Approval of Investment Advisory Agreements 46-48 LETTER TO SHAREHOLDERS DECEMBER 2008 ================================================================================ Dear Fellow Shareholders: I am pleased to present our 19th Annual Report. Over the past twelve months, to say that risk and volatility have returned to the investment markets is a colossal understatement. What began as a growing concern over the valuation of mortgage pools and a drop in home prices, mushroomed into a liquidity crisis that all but removed the names of household financial organizations from our investment landscape. Our financial markets ceased working. To paraphrase an anonymous trader - "a healthy market balances fear and greed, right now, there is no greed in the market." Having lost confidence in capitalism, we turned to increasing government bailouts, guarantees, and stimulus programs. The current financial crisis impacted all asset classes - equity, fixed income, alternative strategies, and even cash. The benefits that generally result from allocating a portfolio across a number of market caps, geographic locations, and asset styles disappeared. It is normal to become overwhelmed by current market conditions and to abandon long-term investment strategies. However, it is precisely during these times that we should cling to a carefully-developed long-term investment plan. As history has demonstrated, the current market, just like prior bear markets, will eventually recover. Perhaps the anonymous trader quoted above was actually recommending a long-term perspective that was suggested by the following quote from Warren Buffett - "Be fearful when others are greedy. Be greedy when others are fearful." We may find that the rise in the U.S. Dollar and the dramatic reduction in energy costs will reduce the immediate threat of inflation. Also, proactive endeavors by U.S. and Global governments may limit the duration of the current recession and ensure that our market economy does not fail. During the twelve-month period ended October 31, 2008, the U.S. equity markets, as measured by the S&P 500(R) Composite Index, declined 36.10%. During the same 12-month period, the international equity markets, which had previously outperformed the U.S. equity markets, declined 46.62%, as measured by the MSCI EAFE Index. The fixed income market, as measured by the Lehman Brothers Intermediate U.S. Government/Credit Index, actually gained 0.98% during the twelve-month period ended October 31, 2008. Investment grade corporate bonds and high yield bonds, however, declined in value as investors bid treasury bond prices to historic low yields. During this past year of continued market volatility, the New Century Capital Portfolio implemented several shifts in its sector allocations. The Portfolio reduced the foreign, large-cap, and small-cap sectors, while increasing its cash position. The Portfolio also repositioned capital into several sectors which typically perform well during recessionary times, such as consumer staples and food products. The Portfolio also added investments in the biotech and pharmaceutical sectors. Nonetheless, the New Century Capital Portfolio declined 40.06%, as compared to the S&P 500(R) Composite Index which declined 36.10%, during the twelve-month period ended October 31, 2008. Similar to New Century Capital, the New Century Balanced Portfolio reduced its allocation to the large-cap, small-cap and foreign sectors, while increasing its cash and its allocation to 1 government bonds. The Portfolio also invested in the consumer staples, food, biotech and pharmaceutical sectors. Throughout the twelve month period, the Portfolio reduced its equity allocation to 44%. For the twelve-month period ended October 31, 2008, the New Century Balanced Portfolio declined 29.46% as compared to the S&P 500(R) Composite Index which declined 36.10% and the Lehman Brothers Intermediate U.S. Government/Credit Index which gained 0.98%. The New Century Opportunistic Portfolio decreased its holdings in the large-cap and emerging markets sectors while increasing its allocation to cash. Positions in the energy, networking and global real estate sectors were reduced, while investments in the biotech, consumer staples, and pharmaceutical sectors were increased. The Portfolio also added a long position in the U.S. Dollar. During the twelve-month period ended October 31, 2008, the New Century Opportunistic Portfolio declined 37.74% while the NASDAQ Composite Index declined 39.31% and the Russell 3000 Growth Index declined 37.04%. Over the last twelve months, the New Century International Portfolio reduced its allocation to China, India and Europe. The Portfolio added positions in the global infrastructure and global materials sectors. The Portfolio also increased its cash position and added a long position in the U.S. Dollar. The New Century International Portfolio declined 47.52% over the twelve-month period ended October 31, 2008. The international equity markets, as measured by the MSCI EAFE Index, declined 46.62% during the same time period. The New Century Alternative Strategies Portfolio maintained diversified positions in ten investment strategies, reducing its exposure to the natural resources category while increasing its exposure to the asset allocation strategies. The high-yield category was expanded to include other fixed income strategies such as municipal bond funds and foreign bond funds. The New Century Alternative Strategies Portfolio declined 23.44% for the twelve-month period ended October 31, 2008, as compared to the S&P 500(R) Composite Index which declined 36.10% and the Lehman Brothers Intermediate U.S. Government/Credit Index which gained 0.98% during the same time period. Future performance is always unpredictable. At times like these, the future can be terrifying. However, we remain confident in the long-term viability of the U.S. and the global economies. We are also confident that New Century's investment philosophy - diversification, risk assessment and long-term focus - will enhance risk-adjusted returns. New Century is committed to its shareholders and appreciates your selection of New Century as part of your long-term investment strategy. Sincerely, /s/ Wayne M. Grzecki Wayne M. Grzecki President 2 PERFORMANCE CHARTS (UNAUDITED) ================================================================================ COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE NEW CENTURY CAPITAL PORTFOLIO AND THE S&P 500(R) COMPOSITE INDEX [LINE GRAPH OMITTED] New Century Capital Portfolio S&P 500(R) Composite Index -------------------------- -------------------------- Date Value Date Value -------------------------- -------------------------- 10/31/1998 $10,000 10/31/1998 $10,000 11/30/1998 10,580 11/30/1998 10,606 12/31/1998 11,413 12/31/1998 11,217 1/31/1999 11,953 1/31/1999 11,686 2/28/1999 11,506 2/28/1999 11,322 3/31/1999 12,107 3/31/1999 11,775 4/30/1999 12,431 4/30/1999 12,231 5/31/1999 12,053 5/31/1999 11,942 6/30/1999 12,648 6/30/1999 12,605 7/31/1999 12,285 7/31/1999 12,212 8/31/1999 12,239 8/31/1999 12,152 9/30/1999 12,138 9/30/1999 11,819 10/31/1999 12,894 10/31/1999 12,567 11/30/1999 13,759 11/30/1999 12,822 12/31/1999 15,376 12/31/1999 13,577 1/31/2000 14,949 1/31/2000 12,896 2/29/2000 16,507 2/29/2000 12,652 3/31/2000 16,680 3/31/2000 13,890 4/30/2000 15,441 4/30/2000 13,471 5/31/2000 14,597 5/31/2000 13,195 6/30/2000 15,515 6/30/2000 13,521 7/31/2000 15,122 7/31/2000 13,310 8/31/2000 16,360 8/31/2000 14,137 9/30/2000 15,425 9/30/2000 13,390 10/31/2000 14,818 10/31/2000 13,334 11/30/2000 13,194 11/30/2000 12,283 12/31/2000 13,450 12/31/2000 12,344 1/31/2001 13,996 1/31/2001 12,782 2/28/2001 12,547 2/28/2001 11,616 3/31/2001 11,813 3/31/2001 10,880 4/30/2001 12,752 4/30/2001 11,725 5/31/2001 12,833 5/31/2001 11,804 6/30/2001 12,600 6/30/2001 11,517 7/31/2001 12,314 7/31/2001 11,404 8/31/2001 11,715 8/31/2001 10,690 9/30/2001 10,401 9/30/2001 9,826 10/31/2001 10,705 10/31/2001 10,014 11/30/2001 11,438 11/30/2001 10,782 12/31/2001 11,653 12/31/2001 10,877 1/31/2002 11,456 1/31/2002 10,718 2/28/2002 11,232 2/28/2002 10,511 3/31/2002 11,831 3/31/2002 10,906 4/30/2002 11,438 4/30/2002 10,246 5/31/2002 11,223 5/31/2002 10,170 6/30/2002 10,427 6/30/2002 9,446 7/31/2002 9,390 7/31/2002 8,709 8/31/2002 9,426 8/31/2002 8,766 9/30/2002 8,523 9/30/2002 7,813 10/31/2002 9,023 10/31/2002 8,501 11/30/2002 9,497 11/30/2002 9,001 12/31/2002 8,979 12/31/2002 8,472 1/31/2003 8,710 1/31/2003 8,250 2/28/2003 8,549 2/28/2003 8,127 3/31/2003 8,621 3/31/2003 8,206 4/30/2003 9,283 4/30/2003 8,882 5/31/2003 9,819 5/31/2003 9,349 6/30/2003 9,936 6/30/2003 9,469 7/31/2003 10,213 7/31/2003 9,636 8/31/2003 10,508 8/31/2003 9,824 9/30/2003 10,365 9/30/2003 9,719 10/31/2003 11,053 10/31/2003 10,268 11/30/2003 11,223 11/30/2003 10,358 12/31/2003 11,617 12/31/2003 10,901 1/31/2004 11,903 1/31/2004 11,101 2/29/2004 12,100 2/29/2004 11,255 3/31/2004 12,019 3/31/2004 11,086 4/30/2004 11,670 4/30/2004 10,912 5/31/2004 11,787 5/31/2004 11,061 6/30/2004 12,073 6/30/2004 11,277 7/31/2004 11,411 7/31/2004 10,903 8/31/2004 11,375 8/31/2004 10,947 9/30/2004 11,769 9/30/2004 11,066 10/31/2004 11,966 10/31/2004 11,235 11/30/2004 12,654 11/30/2004 11,690 12/31/2004 13,101 12/31/2004 12,087 1/31/2005 12,744 1/31/2005 11,793 2/28/2005 13,083 2/28/2005 12,041 3/31/2005 12,779 3/31/2005 11,828 4/30/2005 12,305 4/30/2005 11,603 5/31/2005 12,815 5/31/2005 11,972 6/30/2005 13,083 6/30/2005 11,989 7/31/2005 13,691 7/31/2005 12,435 8/31/2005 13,638 8/31/2005 12,321 9/30/2005 13,861 9/30/2005 12,421 10/31/2005 13,450 10/31/2005 12,214 11/30/2005 13,969 11/30/2005 12,676 12/31/2005 14,112 12/31/2005 12,679 1/31/2006 14,952 1/31/2006 13,015 2/28/2006 14,774 2/28/2006 13,050 3/31/2006 15,176 3/31/2006 13,212 4/30/2006 15,435 4/30/2006 13,389 5/31/2006 14,702 5/31/2006 13,004 6/30/2006 14,666 6/30/2006 13,022 7/31/2006 14,461 7/31/2006 13,103 8/31/2006 14,657 8/31/2006 13,415 9/30/2006 14,836 9/30/2006 13,761 10/31/2006 15,409 10/31/2006 14,209 11/30/2006 15,891 11/30/2006 14,479 12/31/2006 16,017 12/31/2006 14,682 1/31/2007 16,312 1/31/2007 14,904 2/28/2007 16,142 2/28/2007 14,611 3/31/2007 16,401 3/31/2007 14,775 4/30/2007 16,982 4/30/2007 15,430 5/31/2007 17,635 5/31/2007 15,968 6/30/2007 17,474 6/30/2007 15,703 7/31/2007 16,974 7/31/2007 15,216 8/31/2007 17,045 8/31/2007 15,445 9/30/2007 17,823 9/30/2007 16,022 10/31/2007 18,494 10/31/2007 16,280 11/30/2007 17,591 11/30/2007 15,599 12/31/2007 17,513 12/31/2007 15,491 1/31/2008 16,278 1/31/2008 14,562 2/29/2008 16,005 2/29/2008 14,089 3/31/2008 15,741 3/31/2008 14,028 4/30/2008 16,693 4/30/2008 14,711 5/31/2008 17,136 5/31/2008 14,902 6/30/2008 15,958 6/30/2008 13,646 7/31/2008 15,392 7/31/2008 13,532 8/31/2008 15,301 8/31/2008 13,728 9/30/2008 13,507 9/30/2008 12,505 10/31/2008 11,085 10/31/2008 10,403 Past performance is not predictive of future performance. -------------------------------------------- NEW CENTURY CAPITAL PORTFOLIO AVERAGE ANNUAL TOTAL RETURNS(a) 1 YEAR 5 YEARS 10 YEARS -40.06% 0.06% 1.03% -------------------------------------------- COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE NEW CENTURY BALANCED PORTFOLIO, S&P 500(R) COMPOSITE INDEX AND LEHMAN BROTHERS INTERMEDIATE U.S. GOVERNMENT/CREDIT INDEX [LINE GRAPH OMITTED] Lehman Brothers New Century Balanced Intermediate U.S. S&P 500(R) Composite Index Portfolio Government/Credit Index -------------------------- ----------------------- ------------------------ Date Value Date Value Date Value ------------------------ ----------------------- ------------------------ 10/31/1998 $10,000 10/31/1998 $10,000 10/31/1998 $10,000 11/30/1998 10,606 11/30/1998 10,413 11/30/1998 9,999 12/31/1998 11,217 12/31/1998 10,859 12/31/1998 10,039 1/31/1999 11,686 1/31/1999 11,114 1/31/1999 10,094 2/28/1999 11,322 2/28/1999 10,808 2/28/1999 9,946 3/31/1999 11,775 3/31/1999 11,140 3/31/1999 10,020 4/30/1999 12,231 4/30/1999 11,395 4/30/1999 10,051 5/31/1999 11,942 5/31/1999 11,148 5/31/1999 9,974 6/30/1999 12,605 6/30/1999 11,473 6/30/1999 9,981 7/31/1999 12,212 7/31/1999 11,293 7/31/1999 9,972 8/31/1999 12,152 8/31/1999 11,208 8/31/1999 9,980 9/30/1999 11,819 9/30/1999 11,131 9/30/1999 10,073 10/31/1999 12,567 10/31/1999 11,526 10/31/1999 10,099 11/30/1999 12,822 11/30/1999 11,998 11/30/1999 10,111 12/31/1999 13,577 12/31/1999 12,850 12/31/1999 10,078 1/31/2000 12,896 1/31/2000 12,582 1/31/2000 10,041 2/29/2000 12,652 2/29/2000 13,377 2/29/2000 10,123 3/31/2000 13,890 3/31/2000 13,571 3/31/2000 10,228 4/30/2000 13,471 4/30/2000 12,895 4/30/2000 10,205 5/31/2000 13,195 5/31/2000 12,442 5/31/2000 10,221 6/30/2000 13,521 6/30/2000 12,979 6/30/2000 10,401 7/31/2000 13,310 7/31/2000 12,793 7/31/2000 10,480 8/31/2000 14,137 8/31/2000 13,471 8/31/2000 10,604 9/30/2000 13,390 9/30/2000 12,979 9/30/2000 10,700 10/31/2000 13,334 10/31/2000 12,708 10/31/2000 10,749 11/30/2000 12,283 11/30/2000 12,000 11/30/2000 10,895 12/31/2000 12,344 12/31/2000 12,246 12/31/2000 11,096 1/31/2001 12,782 1/31/2001 12,583 1/31/2001 11,278 2/28/2001 11,616 2/28/2001 11,999 2/28/2001 11,384 3/31/2001 10,880 3/31/2001 11,741 3/31/2001 11,472 4/30/2001 11,725 4/30/2001 12,098 4/30/2001 11,442 5/31/2001 11,804 5/31/2001 12,147 5/31/2001 11,506 6/30/2001 11,517 6/30/2001 12,029 6/30/2001 11,548 7/31/2001 11,404 7/31/2001 11,979 7/31/2001 11,789 8/31/2001 10,690 8/31/2001 11,731 8/31/2001 11,906 9/30/2001 9,826 9/30/2001 10,987 9/30/2001 12,080 10/31/2001 10,014 10/31/2001 11,275 10/31/2001 12,281 11/30/2001 10,782 11/30/2001 11,633 11/30/2001 12,158 12/31/2001 10,877 12/31/2001 11,706 12/31/2001 12,091 1/31/2002 10,718 1/31/2002 11,616 1/31/2002 12,154 2/28/2002 10,511 2/28/2002 11,456 2/28/2002 12,250 3/31/2002 10,906 3/31/2002 11,836 3/31/2002 12,064 4/30/2002 10,246 4/30/2002 11,656 4/30/2002 12,263 5/31/2002 10,170 5/31/2002 11,516 5/31/2002 12,386 6/30/2002 9,446 6/30/2002 10,946 6/30/2002 12,492 7/31/2002 8,709 7/31/2002 10,174 7/31/2002 12,639 8/31/2002 8,766 8/31/2002 10,224 8/31/2002 12,828 9/30/2002 7,813 9/30/2002 9,683 9/30/2002 13,057 10/31/2002 8,501 10/31/2002 9,913 10/31/2002 13,006 11/30/2002 9,001 11/30/2002 10,294 11/30/2002 12,995 12/31/2002 8,472 12/31/2002 10,057 12/31/2002 13,278 1/31/2003 8,250 1/31/2003 9,894 1/31/2003 13,277 2/28/2003 8,127 2/28/2003 9,823 2/28/2003 13,464 3/31/2003 8,206 3/31/2003 9,884 3/31/2003 13,477 4/30/2003 8,882 4/30/2003 10,413 4/30/2003 13,580 5/31/2003 9,349 5/31/2003 10,851 5/31/2003 13,853 6/30/2003 9,469 6/30/2003 10,963 6/30/2003 13,843 7/31/2003 9,636 7/31/2003 11,075 7/31/2003 13,467 8/31/2003 9,824 8/31/2003 11,300 8/31/2003 13,499 9/30/2003 9,719 9/30/2003 11,280 9/30/2003 13,840 10/31/2003 10,268 10/31/2003 11,781 10/31/2003 13,710 11/30/2003 10,358 11/30/2003 11,965 11/30/2003 13,729 12/31/2003 10,901 12/31/2003 12,364 12/31/2003 13,849 1/31/2004 11,101 1/31/2004 12,621 1/31/2004 13,940 2/29/2004 11,255 2/29/2004 12,766 2/29/2004 14,083 3/31/2004 11,086 3/31/2004 12,725 3/31/2004 14,192 4/30/2004 10,912 4/30/2004 12,405 4/30/2004 13,856 5/31/2004 11,061 5/31/2004 12,425 5/31/2004 13,794 6/30/2004 11,277 6/30/2004 12,673 6/30/2004 13,835 7/31/2004 10,903 7/31/2004 12,229 7/31/2004 13,951 8/31/2004 10,947 8/31/2004 12,229 8/31/2004 14,184 9/30/2004 11,066 9/30/2004 12,498 9/30/2004 14,208 10/31/2004 11,235 10/31/2004 12,694 10/31/2004 14,304 11/30/2004 11,690 11/30/2004 13,230 11/30/2004 14,173 12/31/2004 12,087 12/31/2004 13,575 12/31/2004 14,270 1/31/2005 11,793 1/31/2005 13,314 1/31/2005 14,297 2/28/2005 12,041 2/28/2005 13,575 2/28/2005 14,218 3/31/2005 11,828 3/31/2005 13,334 3/31/2005 14,144 4/30/2005 11,603 4/30/2005 13,042 4/30/2005 14,306 5/31/2005 11,972 5/31/2005 13,397 5/31/2005 14,434 6/30/2005 11,989 6/30/2005 13,627 6/30/2005 14,495 7/31/2005 12,435 7/31/2005 14,036 7/31/2005 14,375 8/31/2005 12,321 8/31/2005 14,036 8/31/2005 14,543 9/30/2005 12,421 9/30/2005 14,109 9/30/2005 14,419 10/31/2005 12,214 10/31/2005 13,774 10/31/2005 14,340 11/30/2005 12,676 11/30/2005 14,109 11/30/2005 14,403 12/31/2005 12,679 12/31/2005 14,245 12/31/2005 14,494 1/31/2006 13,015 1/31/2006 14,777 1/31/2006 14,492 2/28/2006 13,050 2/28/2006 14,723 2/28/2006 14,502 3/31/2006 13,212 3/31/2006 14,957 3/31/2006 14,439 4/30/2006 13,389 4/30/2006 15,138 4/30/2006 14,446 5/31/2006 13,004 5/31/2006 14,723 5/31/2006 14,447 6/30/2006 13,022 6/30/2006 14,692 6/30/2006 14,469 7/31/2006 13,103 7/31/2006 14,670 7/31/2006 14,631 8/31/2006 13,415 8/31/2006 14,872 8/31/2006 14,814 9/30/2006 13,761 9/30/2006 15,042 9/30/2006 14,931 10/31/2006 14,209 10/31/2006 15,478 10/31/2006 15,010 11/30/2006 14,479 11/30/2006 15,849 11/30/2006 15,147 12/31/2006 14,682 12/31/2006 15,972 12/31/2006 15,085 1/31/2007 14,904 1/31/2007 16,176 1/31/2007 15,091 2/28/2007 14,611 2/28/2007 16,154 2/28/2007 15,299 3/31/2007 14,775 3/31/2007 16,327 3/31/2007 15,325 4/30/2007 15,430 4/30/2007 16,800 4/30/2007 15,398 5/31/2007 15,968 5/31/2007 17,198 5/31/2007 15,300 6/30/2007 15,703 6/30/2007 16,940 6/30/2007 15,303 7/31/2007 15,216 7/31/2007 16,488 7/31/2007 15,448 8/31/2007 15,445 8/31/2007 16,531 8/31/2007 15,635 9/30/2007 16,022 9/30/2007 16,983 9/30/2007 15,743 10/31/2007 16,280 10/31/2007 17,348 10/31/2007 15,858 11/30/2007 15,599 11/30/2007 16,886 11/30/2007 16,159 12/31/2007 15,491 12/31/2007 16,835 12/31/2007 16,201 1/31/2008 14,562 1/31/2008 16,150 1/31/2008 16,546 2/29/2008 14,089 2/29/2008 16,022 2/29/2008 16,690 3/31/2008 14,028 3/31/2008 15,859 3/31/2008 16,689 4/30/2008 14,711 4/30/2008 16,486 4/30/2008 16,565 5/31/2008 14,902 5/31/2008 16,672 5/31/2008 16,433 6/30/2008 13,646 6/30/2008 15,883 6/30/2008 16,434 7/31/2008 13,532 7/31/2008 15,488 7/31/2008 16,466 8/31/2008 13,728 8/31/2008 15,453 8/31/2008 16,584 9/30/2008 12,505 9/30/2008 14,118 9/30/2008 16,239 10/31/2008 10,403 10/31/2008 12,237 10/31/2008 16,017 Past performance is not predictive of future performance. -------------------------------------------- NEW CENTURY BALANCED PORTFOLIO AVERAGE ANNUAL TOTAL RETURNS(a) 1 YEAR 5 YEARS 10 YEARS -29.46% 0.76% 2.04% -------------------------------------------- (a) The total returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. 3 PERFORMANCE CHARTS (UNAUDITED) (CONTINUED) ================================================================================ COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE NEW CENTURY OPPORTUNISTIC PORTFOLIO AND THE NASDAQ COMPOSITE INDEX [LINE GRAPH OMITTED] New Century Opportunistic Portfolio NASDAQ Composite Index -------------------------- -------------------------- Date Value Date Value -------------------------- -------------------------- 11/1/2000 $10,000 11/1/2000 $10,000 11/30/2000 9,040 11/30/2000 7,710 12/31/2000 9,310 12/31/2000 7,332 1/31/2001 9,480 1/31/2001 8,229 2/28/2001 8,410 2/28/2001 6,386 3/31/2001 7,930 3/31/2001 5,462 4/30/2001 8,770 4/30/2001 6,281 5/31/2001 8,790 5/31/2001 6,264 6/30/2001 8,820 6/30/2001 6,412 7/31/2001 8,440 7/31/2001 6,017 8/31/2001 7,990 8/31/2001 5,359 9/30/2001 6,980 9/30/2001 4,449 10/31/2001 7,370 10/31/2001 5,017 11/30/2001 8,010 11/30/2001 5,730 12/31/2001 7,930 12/31/2001 5,789 1/31/2002 7,690 1/31/2002 5,741 2/28/2002 7,220 2/28/2002 5,140 3/31/2002 7,690 3/31/2002 5,478 4/30/2002 7,260 4/30/2002 5,012 5/31/2002 6,960 5/31/2002 4,797 6/30/2002 6,400 6/30/2002 4,344 7/31/2002 5,660 7/31/2002 3,943 8/31/2002 5,640 8/31/2002 3,903 9/30/2002 5,110 9/30/2002 3,480 10/31/2002 5,470 10/31/2002 3,948 11/30/2002 5,820 11/30/2002 4,390 12/31/2002 5,420 12/31/2002 3,965 1/31/2003 5,300 1/31/2003 3,921 2/28/2003 5,220 2/28/2003 3,971 3/31/2003 5,280 3/31/2003 3,982 4/30/2003 5,710 4/30/2003 4,347 5/31/2003 6,180 5/31/2003 4,738 6/30/2003 6,240 6/30/2003 4,817 7/31/2003 6,510 7/31/2003 5,151 8/31/2003 6,660 8/31/2003 5,375 9/30/2003 6,540 9/30/2003 5,305 10/31/2003 6,950 10/31/2003 5,736 11/30/2003 7,080 11/30/2003 5,820 12/31/2003 7,240 12/31/2003 5,948 1/31/2004 7,600 1/31/2004 6,134 2/29/2004 7,650 2/29/2004 6,026 3/31/2004 7,480 3/31/2004 5,920 4/30/2004 7,130 4/30/2004 5,701 5/31/2004 7,260 5/31/2004 5,898 6/30/2004 7,400 6/30/2004 6,080 7/31/2004 6,950 7/31/2004 5,604 8/31/2004 6,860 8/31/2004 5,457 9/30/2004 7,210 9/30/2004 5,632 10/31/2004 7,300 10/31/2004 5,864 11/30/2004 7,810 11/30/2004 6,226 12/31/2004 7,970 12/31/2004 6,459 1/31/2005 7,800 1/31/2005 6,123 2/28/2005 8,240 2/28/2005 6,091 3/31/2005 8,010 3/31/2005 5,936 4/30/2005 7,660 4/30/2005 5,705 5/31/2005 8,040 5/31/2005 6,141 6/30/2005 8,290 6/30/2005 6,107 7/31/2005 8,790 7/31/2005 6,487 8/31/2005 8,890 8/31/2005 6,390 9/30/2005 9,170 9/30/2005 6,389 10/31/2005 8,720 10/31/2005 6,295 11/30/2005 9,080 11/30/2005 6,630 12/31/2005 9,150 12/31/2005 6,548 1/31/2006 9,840 1/31/2006 6,847 2/28/2006 9,610 2/28/2006 6,774 3/31/2006 9,820 3/31/2006 6,948 4/30/2006 9,860 4/30/2006 6,896 5/31/2006 9,230 5/31/2006 6,469 6/30/2006 9,150 6/30/2006 6,449 7/31/2006 8,950 7/31/2006 6,210 8/31/2006 9,060 8/31/2006 6,484 9/30/2006 9,090 9/30/2006 6,706 10/31/2006 9,450 10/31/2006 7,027 11/30/2006 9,830 11/30/2006 7,220 12/31/2006 9,850 12/31/2006 7,171 1/31/2007 10,000 1/31/2007 7,315 2/28/2007 9,870 2/28/2007 7,173 3/31/2007 10,020 3/31/2007 7,190 4/30/2007 10,430 4/30/2007 7,497 5/31/2007 10,900 5/31/2007 7,733 6/30/2007 10,860 6/30/2007 7,729 7/31/2007 10,730 7/31/2007 7,560 8/31/2007 10,760 8/31/2007 7,709 9/30/2007 11,330 9/30/2007 8,021 10/31/2007 11,780 10/31/2007 8,488 11/30/2007 11,150 11/30/2007 7,900 12/31/2007 11,313 12/31/2007 7,874 1/31/2008 10,339 1/31/2008 7,095 2/29/2008 10,412 2/29/2008 6,744 3/31/2008 10,194 3/31/2008 6,767 4/30/2008 10,857 4/30/2008 7,164 5/31/2008 11,282 5/31/2008 7,490 6/30/2008 10,691 6/30/2008 6,809 7/31/2008 10,101 7/31/2008 6,905 8/31/2008 10,039 8/31/2008 7,030 9/30/2008 8,795 9/30/2008 6,209 10/31/2008 7,335 10/31/2008 5,108 Past performance is not predictive of future performance. -------------------------------------------- NEW CENTURY OPPORTUNISTIC PORTFOLIO AVERAGE ANNUAL TOTAL RETURNS(a) SINCE 1 YEAR 5 YEARS INCEPTION* -37.74% 1.08% -3.80% -------------------------------------------- COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE NEW CENTURY INTERNATIONAL PORTFOLIO AND THE MSCI EAFE INDEX [LINE GRAPH OMITTED] New Century International Portfolio MSCI EAFE Index -------------------------- -------------------------- Date Value Date Value -------------------------- -------------------------- 11/1/2000 $10,000 11/1/2000 $10,000 11/30/2000 9,460 11/30/2000 9,620 12/31/2000 9,540 12/31/2000 9,957 1/31/2001 9,570 1/31/2001 9,952 2/28/2001 9,020 2/28/2001 9,205 3/31/2001 8,320 3/31/2001 8,591 4/30/2001 8,840 4/30/2001 9,188 5/31/2001 8,710 5/31/2001 8,864 6/30/2001 8,520 6/30/2001 8,502 7/31/2001 8,300 7/31/2001 8,347 8/31/2001 8,220 8/31/2001 8,136 9/30/2001 7,170 9/30/2001 7,312 10/31/2001 7,410 10/31/2001 7,499 11/30/2001 7,640 11/30/2001 7,775 12/31/2001 7,795 12/31/2001 7,821 1/31/2002 7,675 1/31/2002 7,406 2/28/2002 7,765 2/28/2002 7,458 3/31/2002 8,206 3/31/2002 7,897 4/30/2002 8,256 4/30/2002 7,913 5/31/2002 8,326 5/31/2002 8,013 6/30/2002 7,865 6/30/2002 7,694 7/31/2002 7,094 7/31/2002 6,935 8/31/2002 7,044 8/31/2002 6,919 9/30/2002 6,282 9/30/2002 6,176 10/31/2002 6,533 10/31/2002 6,508 11/30/2002 6,893 11/30/2002 6,803 12/31/2002 6,653 12/31/2002 6,574 1/31/2003 6,573 1/31/2003 6,300 2/28/2003 6,432 2/28/2003 6,155 3/31/2003 6,292 3/31/2003 6,035 4/30/2003 6,923 4/30/2003 6,626 5/31/2003 7,414 5/31/2003 7,028 6/30/2003 7,585 6/30/2003 7,198 7/31/2003 7,695 7/31/2003 7,372 8/31/2003 7,975 8/31/2003 7,550 9/30/2003 8,106 9/30/2003 7,782 10/31/2003 8,697 10/31/2003 8,267 11/30/2003 8,797 11/30/2003 8,450 12/31/2003 9,468 12/31/2003 9,110 1/31/2004 9,578 1/31/2004 9,239 2/29/2004 9,809 2/29/2004 9,452 3/31/2004 9,929 3/31/2004 9,505 4/30/2004 9,458 4/30/2004 9,290 5/31/2004 9,408 5/31/2004 9,310 6/30/2004 9,739 6/30/2004 9,526 7/31/2004 9,338 7/31/2004 9,216 8/31/2004 9,418 8/31/2004 9,257 9/30/2004 9,759 9/30/2004 9,499 10/31/2004 10,089 10/31/2004 9,822 11/30/2004 10,831 11/30/2004 10,493 12/31/2004 11,307 12/31/2004 10,954 1/31/2005 11,163 1/31/2005 10,753 2/28/2005 11,801 2/28/2005 11,218 3/31/2005 11,369 3/31/2005 10,936 4/30/2005 11,111 4/30/2005 10,679 5/31/2005 11,214 5/31/2005 10,685 6/30/2005 11,544 6/30/2005 10,827 7/31/2005 12,069 7/31/2005 11,159 8/31/2005 12,439 8/31/2005 11,442 9/30/2005 13,037 9/30/2005 11,951 10/31/2005 12,481 10/31/2005 11,602 11/30/2005 12,913 11/30/2005 11,886 12/31/2005 13,577 12/31/2005 12,439 1/31/2006 14,730 1/31/2006 13,202 2/28/2006 14,460 2/28/2006 13,173 3/31/2006 14,938 3/31/2006 13,608 4/30/2006 15,676 4/30/2006 14,259 5/31/2006 14,471 5/31/2006 13,705 6/30/2006 14,346 6/30/2006 13,704 7/31/2006 14,429 7/31/2006 13,840 8/31/2006 14,845 8/31/2006 14,220 9/30/2006 14,917 9/30/2006 14,242 10/31/2006 15,645 10/31/2006 14,796 11/30/2006 16,320 11/30/2006 15,238 12/31/2006 17,016 12/31/2006 15,716 1/31/2007 17,081 1/31/2007 15,823 2/28/2007 16,886 2/28/2007 15,952 3/31/2007 17,502 3/31/2007 16,358 4/30/2007 18,248 4/30/2007 17,085 5/31/2007 19,059 5/31/2007 17,384 6/30/2007 19,167 6/30/2007 17,404 7/31/2007 18,973 7/31/2007 17,149 8/31/2007 18,756 8/31/2007 16,881 9/30/2007 20,183 9/30/2007 17,784 10/31/2007 21,686 10/31/2007 18,483 11/30/2007 20,335 11/30/2007 17,875 12/31/2007 20,098 12/31/2007 17,473 1/31/2008 18,348 1/31/2008 15,858 2/29/2008 18,551 2/29/2008 16,085 3/31/2008 18,156 3/31/2008 15,916 4/30/2008 19,330 4/30/2008 16,780 5/31/2008 19,714 5/31/2008 16,943 6/30/2008 17,952 6/30/2008 15,557 7/31/2008 17,151 7/31/2008 15,058 8/31/2008 16,417 8/31/2008 14,448 9/30/2008 14,215 9/30/2008 12,359 10/31/2008 11,381 10/31/2008 9,865 Past performance is not predictive of future performance. -------------------------------------------- NEW CENTURY INTERNATIONAL PORTFOLIO AVERAGE ANNUAL TOTAL RETURNS(a) SINCE 1 YEAR 5 YEARS INCEPTION* -47.52% 5.53% 1.63% -------------------------------------------- * Initial public offering of shares was November 1, 2000. (a) The total returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. 4 PERFORMANCE CHARTS (UNAUDITED) (CONTINUED) ================================================================================ COMPARISON OF THE CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO, S&P 500(R) COMPOSITE INDEX AND LEHMAN BROTHERS INTERMEDIATE U.S. GOVERNMENT/CREDIT INDEX [LINE GRAPH OMITTED] Lehman Brothers New Century Alternative Intermediate U.S. S&P 500(R) Composite Index Strategies Portfolio Government/Credit Index -------------------------- ---------------------- ----------------------- Date Value Date Value Date Value ----------------------- ---------------------- ----------------------- 5/1/2002 $10,000 5/1/2002 $10,000 5/1/2002 $10,000 5/31/2002 9,926 5/31/2002 10,000 5/31/2002 10,100 6/30/2002 9,219 6/30/2002 9,720 6/30/2002 10,187 7/31/2002 8,500 7/31/2002 9,290 7/31/2002 10,307 8/31/2002 8,556 8/31/2002 9,340 8/31/2002 10,461 9/30/2002 7,626 9/30/2002 9,110 9/30/2002 10,648 10/31/2002 8,297 10/31/2002 9,120 10/31/2002 10,606 11/30/2002 8,786 11/30/2002 9,330 11/30/2002 10,597 12/31/2002 8,269 12/31/2002 9,325 12/31/2002 10,828 1/31/2003 8,053 1/31/2003 9,285 1/31/2003 10,827 2/28/2003 7,932 2/28/2003 9,264 2/28/2003 10,979 3/31/2003 8,009 3/31/2003 9,295 3/31/2003 10,990 4/30/2003 8,669 4/30/2003 9,618 4/30/2003 11,074 5/31/2003 9,125 5/31/2003 9,982 5/31/2003 11,296 6/30/2003 9,242 6/30/2003 10,083 6/30/2003 11,289 7/31/2003 9,405 7/31/2003 10,194 7/31/2003 10,982 8/31/2003 9,588 8/31/2003 10,376 8/31/2003 11,008 9/30/2003 9,486 9/30/2003 10,477 9/30/2003 11,286 10/31/2003 9,935 10/31/2003 10,780 10/31/2003 11,180 11/30/2003 10,022 11/30/2003 11,002 11/30/2003 11,196 12/31/2003 10,548 12/31/2003 11,270 12/31/2003 11,293 1/31/2004 10,741 1/31/2004 11,383 1/31/2004 11,368 2/29/2004 10,891 2/29/2004 11,557 2/29/2004 11,484 3/31/2004 10,726 3/31/2004 11,629 3/31/2004 11,573 4/30/2004 10,558 4/30/2004 11,260 4/30/2004 11,299 5/31/2004 10,703 5/31/2004 11,342 5/31/2004 11,248 6/30/2004 10,911 6/30/2004 11,455 6/30/2004 11,282 7/31/2004 10,550 7/31/2004 11,342 7/31/2004 11,377 8/31/2004 10,593 8/31/2004 11,414 8/31/2004 11,567 9/30/2004 10,707 9/30/2004 11,639 9/30/2004 11,586 10/31/2004 10,871 10/31/2004 11,762 10/31/2004 11,664 11/30/2004 11,311 11/30/2004 12,111 11/30/2004 11,558 12/31/2004 11,696 12/31/2004 12,290 12/31/2004 11,637 1/31/2005 11,411 1/31/2005 12,119 1/31/2005 11,659 2/28/2005 11,651 2/28/2005 12,429 2/28/2005 11,595 3/31/2005 11,444 3/31/2005 12,322 3/31/2005 11,534 4/30/2005 11,227 4/30/2005 12,130 4/30/2005 11,666 5/31/2005 11,584 5/31/2005 12,290 5/31/2005 11,771 6/30/2005 11,600 6/30/2005 12,482 6/30/2005 11,820 7/31/2005 12,032 7/31/2005 12,793 7/31/2005 11,722 8/31/2005 11,922 8/31/2005 12,889 8/31/2005 11,859 9/30/2005 12,019 9/30/2005 13,114 9/30/2005 11,758 10/31/2005 11,818 10/31/2005 12,836 10/31/2005 11,694 11/30/2005 12,265 11/30/2005 12,996 11/30/2005 11,745 12/31/2005 12,268 12/31/2005 13,189 12/31/2005 11,819 1/31/2006 12,594 1/31/2006 13,632 1/31/2006 11,817 2/28/2006 12,628 2/28/2006 13,587 2/28/2006 11,825 3/31/2006 12,784 3/31/2006 13,798 3/31/2006 11,773 4/30/2006 12,955 4/30/2006 14,030 4/30/2006 11,779 5/31/2006 12,582 5/31/2006 13,831 5/31/2006 11,780 6/30/2006 12,600 6/30/2006 13,875 6/30/2006 11,798 7/31/2006 12,678 7/31/2006 13,986 7/31/2006 11,930 8/31/2006 12,980 8/31/2006 14,107 8/31/2006 12,079 9/30/2006 13,315 9/30/2006 14,096 9/30/2006 12,174 10/31/2006 13,749 10/31/2006 14,417 10/31/2006 12,239 11/30/2006 14,010 11/30/2006 14,705 11/30/2006 12,350 12/31/2006 14,206 12/31/2006 14,779 12/31/2006 12,300 1/31/2007 14,421 1/31/2007 14,965 1/31/2007 12,305 2/28/2007 14,138 2/28/2007 14,988 2/28/2007 12,474 3/31/2007 14,296 3/31/2007 15,139 3/31/2007 12,496 4/30/2007 14,930 4/30/2007 15,406 4/30/2007 12,556 5/31/2007 15,451 5/31/2007 15,684 5/31/2007 12,475 6/30/2007 15,194 6/30/2007 15,568 6/30/2007 12,478 7/31/2007 14,723 7/31/2007 15,336 7/31/2007 12,596 8/31/2007 14,944 8/31/2007 15,371 8/31/2007 12,749 9/30/2007 15,503 9/30/2007 15,812 9/30/2007 12,837 10/31/2007 15,752 10/31/2007 16,160 10/31/2007 12,930 11/30/2007 15,094 11/30/2007 15,789 11/30/2007 13,176 12/31/2007 14,989 12/31/2007 15,789 12/31/2007 13,210 1/31/2008 14,090 1/31/2008 15,447 1/31/2008 13,492 2/29/2008 13,632 2/29/2008 15,618 2/29/2008 13,609 3/31/2008 13,573 3/31/2008 15,374 3/31/2008 13,608 4/30/2008 14,235 4/30/2008 15,776 4/30/2008 13,507 5/31/2008 14,420 5/31/2008 16,033 5/31/2008 13,399 6/30/2008 13,204 6/30/2008 15,471 6/30/2008 13,400 7/31/2008 13,093 7/31/2008 15,179 7/31/2008 13,426 8/31/2008 13,283 8/31/2008 15,118 8/31/2008 13,522 9/30/2008 12,099 9/30/2008 14,056 9/30/2008 13,241 10/31/2008 10,066 10/31/2008 12,372 10/31/2008 13,060 Past performance is not predictive of future performance. -------------------------------------------- NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO AVERAGE ANNUAL TOTAL RETURNS(a) SINCE 1 YEAR 5 YEARS INCEPTION* -23.44% 2.79% 3.33% -------------------------------------------- * Initial public offering of shares was May 1, 2002. (a) The total returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or the redemption of Portfolio shares. 5 NEW CENTURY CAPITAL PORTFOLIO PORTFOLIO INFORMATION OCTOBER 31, 2008 (UNAUDITED) ================================================================================ ASSET ALLOCATION (% OF NET ASSETS) -------------------------------------------------------------------------------- [PIE CHART OMITTED] Large-Cap Funds 37.5% Sector Funds 16.9% International Funds 14.7% Mid-Cap Funds 10.8% Small-Cap Funds 7.6% Cash Equivalents 12.5% TOP TEN LONG-TERM HOLDINGS -------------------------------------------------------------------------------- SECURITY DESCRIPTION % OF NET ASSETS ----------------------------------------------- --------------- American Funds Growth Fund of America - Class A 7.8% iShares Dow Jones U.S. Energy Sector Index 5.4% Marsico 21st Century 5.1% iShares S&P MidCap 400 Value Index 4.6% Amana Trust Income 4.1% Fidelity Capital Appreciation 4.0% iShares MSCI Emerging Markets Index 3.8% iShares S&P 500 Growth Index 3.7% Vanguard 500 Index - Investor Shares 3.6% iShares S&P SmallCap 600 Value Index 3.3% 6 NEW CENTURY BALANCED PORTFOLIO PORTFOLIO INFORMATION OCTOBER 31, 2008 (UNAUDITED) ================================================================================ ASSET ALLOCATION (% OF NET ASSETS) -------------------------------------------------------------------------------- [PIE CHART OMITTED] Sector Funds 16.9% Government Bond Funds 16.0% Large-Cap Funds 14.3% International Funds 9.7% Worldwide Bond Funds 7.7% Corporate Bond Funds 6.5% High Quality Bond Funds 5.4% Mid-Cap Funds 4.7% Small-Cap Funds 4.2% High Yield Bond Funds 2.6% Convertible Bond Funds 2.0% Cash Equivalents 10.0% TOP TEN LONG-TERM HOLDINGS -------------------------------------------------------------------------------- SECURITY DESCRIPTION % OF NET ASSETS ----------------------------------------------- --------------- American Century Target Maturites Trust Series 2015 - Investor Class 12.6% Loomis Sayles Bond - Institutional Class 6.5% Templeton Global Bond - Class A 6.0% First Eagle Global - Class A 5.9% iShares S&P 500 Index 5.2% iShares Dow Jones U.S. Energy Sector Index 4.4% Dodge & Cox Income 3.9% S&P MidCap 400 Depositary Receipts 3.9% American Funds AMCAP - Class A 3.5% Fidelity Select Utilities Growth 3.5% 7 NEW CENTURY OPPORTUNISTIC PORTFOLIO PORTFOLIO INFORMATION OCTOBER 31, 2008 (UNAUDITED) ================================================================================ ASSET ALLOCATION (% OF NET ASSETS) -------------------------------------------------------------------------------- [PIE CHART OMITTED] Sector Funds 44.5% Large-Cap Funds 28.6% Mid-Cap Funds 9.2% Small-Cap Funds 7.6% Cash Equivalents 10.1% TOP TEN LONG-TERM HOLDINGS -------------------------------------------------------------------------------- SECURITY DESCRIPTION % OF NET ASSETS ----------------------------------------------- --------------- iShares S&P 500 Growth Index 17.6% S&P MidCap 400 Depositary Receipts 9.2% iShares S&P 500 Value Index 7.7% Technology Select Sector SPDR 6.7% iShares S&P GSSI Natural Resources Index 6.3% iShares S&P SmallCap 600 Growth Index 5.5% Biotech HOLDRs Trust 5.2% iShares MSCI Emerging Markets Index 5.2% iShares Lehman 7-10 Year Treasury Bond 3.7% iShares Dow Jones U.S. Energy Sector Index 3.3% 8 NEW CENTURY INTERNATIONAL PORTFOLIO PORTFOLIO INFORMATION OCTOBER 31, 2008 (UNAUDITED) ================================================================================ ASSET ALLOCATION (% OF NET ASSETS) -------------------------------------------------------------------------------- [PIE CHART OMITTED] Europe Funds 25.8% Diversified Funds 21.8% Americas Funds 21.4% Asia/Pacific Funds 14.3% Emerging Markets Funds 4.4% Cash Equivalents 12.3% TOP TEN LONG-TERM HOLDINGS -------------------------------------------------------------------------------- SECURITY DESCRIPTION % OF NET ASSETS ----------------------------------------------- --------------- Fidelity Canada 6.0% PowerShares DB U.S. Dollar Index Bullish 5.6% iShares MSCI Germany Index 5.5% iShares MSCI United Kingdom Index 4.3% iShares S&P Latin America 40 Index 4.2% Vanguard European ETF 4.1% iShares MSCI EAFE Index 4.0% iShares S&P Global Energy Sector Index 3.8% iShares FTSE/Xinhua China 25 Index 3.7% iShares MSCI Switzerland Index 3.5% 9 NEWCENTURY ALTERNATIVE STRATEGIES PORTFOLIO PORTFOLIO INFORMATION OCTOBER 31, 2008 (UNAUDITED) ================================================================================ ASSET ALLOCATION (% OF NET ASSETS) -------------------------------------------------------------------------------- [PIE CHART OMITTED] Long/Short Equity Funds 17.2% Merger Arbitrage Funds 14.8% Global Macro Funds 13.7% Asset Allocation Funds 12.4% Natural Resources Funds 7.6% High Yield/Fixed Income Funds 7.1% Option Hedged Funds 6.0% Real Estate Funds 5.0% Deep Value/Distressed Securities Funds 4.7% Convertible Arbitrage Funds 4.1% Structured Notes 1.7% Cash Equivalents 5.7% TOP TEN LONG-TERM HOLDINGS -------------------------------------------------------------------------------- SECURITY DESCRIPTION % OF NET ASSETS ----------------------------------------------- --------------- First Eagle Global - Class A 5.1% Hussman Strategic Growth 4.7% Merger 4.7% Gateway - Class A 4.5% Calamos Market Neutral - A Shares 4.1% Diamond Hill Long-Short - Class I 3.6% Gabelli ABC 3.6% Arbitrage - Class R 3.4% FPA Crescent 3.3% Ivy Asset Strategy - Class A 3.2% 10
NEW CENTURY CAPITAL PORTFOLIO SCHEDULE OF INVESTMENTS OCTOBER 31, 2008 ======================================================================================= INVESTMENT COMPANIES -- 87.5% SHARES VALUE --------------------------------------------------------------------------------------- LARGE-CAP FUNDS -- 37.5% Amana Trust Income .................................... 143,906 $ 3,458,072 American Funds AMCAP - Class A ........................ 154,520 1,987,132 American Funds Growth Fund of America - Class A ....... 294,589 6,548,715 Fidelity Capital Appreciation ......................... 200,094 3,337,563 iShares Russell 1000 Growth Index (a) ................. 235 9,412 iShares Russell 1000 Value Index (a) .................. 28,800 1,527,552 iShares S&P 500 Growth Index (a) ...................... 64,900 3,076,909 iShares S&P 500 Index (a) ............................. 17,350 1,689,716 iShares S&P 500 Value Index (a) ....................... 51,500 2,558,005 Marsico 21st Century (b) .............................. 404,207 4,320,968 Vanguard 500 Index - Investor Shares .................. 33,703 3,011,035 ------------ 31,525,079 ------------ SECTOR FUNDS -- 16.9% Biotech HOLDRs Trust (a) .............................. 11,700 2,022,930 Consumer Staples Select Sector SPDR (a) ............... 62,200 1,502,752 Fidelity Select Utilities Growth ...................... 69,352 2,794,886 iShares Dow Jones U.S. Energy Sector Index (a) ........ 148,200 4,502,316 iShares Dow Jones U.S. Transportation Average Index (a) 7,500 523,350 iShares S&P GSSI Natural Resources Index (a) .......... 31,800 852,240 PowerShares Dynamic Biotechnology & Genome (a)(b) ..... 36,600 519,720 PowerShares Dynamic Food & Beverage (a) ............... 77,200 1,029,076 PowerShares Dynamic Pharmaceuticals (a) ............... 33,300 515,151 ------------ 14,262,421 ------------ INTERNATIONAL FUNDS -- 14.7% Dodge & Cox International Stock ....................... 89,411 2,239,755 First Eagle Global - Class A .......................... 58,958 2,031,110 iShares MSCI EAFE Growth Index (a) .................... 34,600 1,583,296 iShares MSCI EAFE Index (a) ........................... 40,200 1,793,724 iShares MSCI EAFE Value Index (a) ..................... 39,000 1,577,160 iShares MSCI Emerging Markets Index (a) ............... 124,200 3,165,858 ------------ 12,390,903 ------------ MID-CAP FUNDS -- 10.8% Goldman Sachs Growth Opportunities - Class A (b). ..... 170,764 2,552,918 iShares S&P MidCap 400 Growth Index (a) ............... 18,000 1,056,600 iShares S&P MidCap 400 Value Index (a) ................ 73,000 3,901,120 Janus Orion ........................................... 116,467 830,407 S&P MidCap 400 Depositary Receipts (a) ................ 7,200 742,680 ------------ 9,083,725 ------------ SMALL-CAP FUNDS -- 7.6% Buffalo Small Cap (b) ................................. 58,258 952,526 iShares S&P SmallCap 600 Growth Index (a) ............. 54,600 2,633,358 iShares S&P SmallCap 600 Value Index (a) .............. 53,700 2,799,381 ------------ 6,385,265 ------------ TOTAL INVESTMENT COMPANIES (Cost $73,349,391) ............ $ 73,647,393 ------------
See accompanying notes to financial statements. 11
NEW CENTURY CAPITAL PORTFOLIO SCHEDULE OF INVESTMENTS (CONTINUED) OCTOBER 31, 2008 ======================================================================================= MONEY MARKET FUNDS -- 27.8% SHARES VALUE --------------------------------------------------------------------------------------- The AIM STIT-STIC Portfolio - Institutional Class, 2.49% (c) (Cost $23,352,361) ........................ 23,352,361 $ 23,352,361 ------------ TOTAL INVESTMENTS AT VALUE -- 115.3% (Cost $96,701,752) .. $ 96,999,754 LIABILITIES IN EXCESS OF OTHER ASSETS -- (15.3%) ......... (12,881,195) ------------ TOTAL NET ASSETS -- 100.0% ............................... $ 84,118,559 ============
(a) Exchange-traded fund. (b) Non-income producing security. (c) Variable rate security. The rate shown is the effective 7-day yield as of October 31, 2008. See accompanying notes to financial statements. 12
NEW CENTURY BALANCED PORTFOLIO SCHEDULE OF INVESTMENTS OCTOBER 31, 2008 ======================================================================================= INVESTMENT COMPANIES -- 90.0% SHARES VALUE --------------------------------------------------------------------------------------- SECTOR FUNDS -- 16.9% Biotech HOLDRs Trust (a) .............................. 7,600 $ 1,314,040 Consumer Staples Select Sector SPDR (a) ............... 54,000 1,304,640 Fidelity Select Utilities Growth ...................... 53,826 2,169,208 iShares Dow Jones U.S. Energy Sector Index (a) ........ 89,400 2,715,972 iShares S&P GSSI Natural Resources Index (a) .......... 31,800 852,240 PowerShares Dynamic Biotechnology & Genome (a)(b) ..... 36,900 523,980 PowerShares Dynamic Food & Beverage (a) ............... 78,000 1,039,740 PowerShares Dynamic Pharmaceuticals (a) ............... 40,100 620,347 ------------ 10,540,167 ------------ GOVERNMENT BOND FUNDS -- 16.0% American Century Target Maturities Trust Series 2015 - Investor Class ..................................... 90,573 7,874,448 iShares Lehman 3-7 Year Treasury Bond (a) ............. 5,000 550,850 iShares Lehman 7-10 Year Treasury Bond (a) ............ 6,700 588,863 iShares Lehman Aggregate Bond Fund (a) ................ 10,000 961,800 ------------ 9,975,961 ------------ LARGE-CAP FUNDS -- 14.3% American Funds AMCAP - Class A ........................ 169,502 2,179,790 iShares Russell 1000 Growth Index (a) ................. 19,600 784,980 iShares Russell 1000 Value Index (a) .................. 20,300 1,076,712 iShares S&P 500 Growth Index (a) ...................... 17,400 824,934 iShares S&P 500 Index (a) ............................. 33,400 3,252,826 iShares S&P 500 Value Index (a) ....................... 16,600 824,522 ------------ 8,943,764 ------------ INTERNATIONAL FUNDS -- 9.7% First Eagle Global - Class A .......................... 106,356 3,663,957 iShares MSCI EAFE Growth Index (a) .................... 8,000 366,080 iShares MSCI EAFE Index (a) ........................... 36,800 1,642,016 iShares MSCI EAFE Value Index (a) ..................... 9,000 363,960 ------------ 6,036,013 ------------ WORLDWIDE BOND FUNDS -- 7.7% Loomis Sayles Global Bond - Institutional Class ....... 81,384 1,053,922 Templeton Global Bond - Class A ....................... 342,262 3,775,147 ------------ 4,829,069 ------------ CORPORATE BOND FUNDS -- 6.5% Loomis Sayles Bond - Institutional Class .............. 402,389 4,048,037 ------------ HIGH QUALITY BOND FUNDS -- 5.4% Calvert Social Investment - Class I ................... 67,719 971,088 Dodge & Cox Income .................................... 216,687 2,433,393 ------------ 3,404,481 ------------ MID-CAP FUNDS -- 4.7% iShares S&P MidCap 400 Value Index (a) ................ 9,000 480,960 S&P MidCap 400 Depositary Receipts (a) ................ 23,580 2,432,277 ------------ 2,913,237 ------------
See accompanying notes to financial statements. 13
NEW CENTURY BALANCED PORTFOLIO SCHEDULE OF INVESTMENTS (CONTINUED) OCTOBER 31, 2008 ======================================================================================= INVESTMENT COMPANIES -- 90.0% (CONTINUED) SHARES VALUE --------------------------------------------------------------------------------------- SMALL-CAP FUNDS -- 4.2% iShares S&P SmallCap 600 Growth Index (a) ............. 30,800 $ 1,485,484 iShares S&P SmallCap 600 Value Index (a) .............. 21,300 1,110,369 ------------ 2,595,853 ------------ HIGH YIELD BOND FUNDS -- 2.6% Loomis Sayles Institutional High Income ............... 276,807 1,602,714 ------------ CONVERTIBLE BOND FUNDS -- 2.0% Davis Appreciation & Income - Class A ................. 74,008 1,269,976 ------------ TOTAL INVESTMENT COMPANIES (Cost $60,297,751) ............ $ 56,159,272 ------------ ======================================================================================= MONEY MARKET FUNDS -- 23.2% SHARES VALUE --------------------------------------------------------------------------------------- The AIM STIT-STIC Portfolio - Institutional Class, 2.49% (c) (Cost $14,480,535) ........................ 14,480,535 $ 14,480,535 ------------ TOTAL INVESTMENTS AT VALUE -- 113.2% (Cost $74,778,286) .. $ 70,639,807 LIABILITIES IN EXCESS OF OTHER ASSETS -- (13.2%) ......... (8,216,366) ------------ TOTAL NET ASSETS -- 100.0% ............................... $ 62,423,441 ============
(a) Exchange-traded fund. (b) Non-income producing security. (c) Variable rate security. The rate shown is the effective 7-day yield as of October 31, 2008. See accompanying notes to financial statements. 14
NEW CENTURY OPPORTUNISTIC PORTFOLIO SCHEDULE OF INVESTMENTS OCTOBER 31, 2008 ======================================================================================= INVESTMENT COMPANIES -- 89.9% SHARES VALUE --------------------------------------------------------------------------------------- SECTOR FUNDS -- 44.5% Biotech HOLDRs Trust (a) .............................. 3,200 $ 553,280 Consumer Staples Select Sector SPDR (a) ............... 12,300 297,168 iShares Dow Jones U.S. Energy Sector Index (a) ........ 11,500 349,370 iShares Lehman 7-10 Year Treasury Bond (a) ............ 4,500 395,505 iShares MSCI Emerging Markets Index (a) ............... 21,600 550,584 iShares S&P GSSI Natural Resources Index (a) .......... 24,900 667,320 PowerShares DB U.S. Dollar Index Bullish (a)(b).. ..... 10,000 264,500 PowerShares Dynamic Biotechnology & Genome (a)(b) ..... 21,800 309,560 PowerShares Dynamic Food & Beverage (a) ............... 23,100 307,923 PowerShares Dynamic Pharmaceuticals (a) ............... 20,000 309,400 Technology Select Sector SPDR (a) ..................... 42,800 706,200 ------------ 4,710,810 ------------ LARGE-CAP FUNDS -- 28.6% iShares S&P 500 Growth Index (a) ...................... 39,400 1,867,954 iShares S&P 500 Value Index (a) ....................... 16,500 819,555 Vanguard Growth ETF (a) ............................... 8,000 343,280 ------------ 3,030,789 ------------ MID-CAP FUNDS -- 9.2% S&P MidCap 400 Depositary Receipts (a) ................ 9,402 969,816 ------------ SMALL-CAP FUNDS -- 7.6% iShares S&P SmallCap 600 Growth Index (a) ............. 12,000 578,760 iShares S&P SmallCap 600 Value Index (a) .............. 4,400 229,372 ------------ 808,132 ------------ TOTAL INVESTMENT COMPANIES (Cost $10,390,400) ............ $ 9,519,547 ------------ ======================================================================================= MONEY MARKET FUNDS -- 55.5% SHARES VALUE --------------------------------------------------------------------------------------- The AIM STIT-STIC Portfolio - Institutional Class, 2.49% (c) (Cost $5,874,669) ......................... 5,874,669 $ 5,874,669 ------------ TOTAL INVESTMENTS AT VALUE -- 145.4% (Cost $16,265,069) .. $ 15,394,216 LIABILITIES IN EXCESS OF OTHER ASSETS -- (45.4%) ......... (4,807,643) ------------ TOTAL NET ASSETS -- 100.0% ............................... $ 10,586,573 ============
(a) Exchange-traded fund. (b) Non-income producing security. (c) Variable rate security. The rate shown is the effective 7-day yield as of October 31, 2008. See accompanying notes to financial statements. 15
NEW CENTURY INTERNATIONAL PORTFOLIO SCHEDULE OF INVESTMENTS OCTOBER 31, 2008 ======================================================================================= INVESTMENT COMPANIES -- 87.7% SHARES VALUE --------------------------------------------------------------------------------------- EUROPE FUNDS -- 25.8% Franklin Mutual European - Class A .................... 46,829 $ 816,236 iShares MSCI Austria Index (a) ........................ 84,200 1,178,800 iShares MSCI France Index (a) ......................... 10,000 205,000 iShares MSCI Germany Index (a) ........................ 227,200 4,198,656 iShares MSCI Spain Index (a) .......................... 37,200 1,312,416 iShares MSCI Sweden Index (a) ......................... 58,000 882,760 iShares MSCI Switzerland Index (a) .................... 147,300 2,705,901 iShares MSCI United Kingdom Index (a) ................. 244,146 3,261,791 Ivy European Opportunities - Class A .................. 99,793 2,039,776 Vanguard European ETF (a) ............................. 74,200 3,095,624 ------------ 19,696,960 ------------ DIVERSIFIED FUNDS -- 21.8% Dodge & Cox International Stock ....................... 53,034 1,328,499 iShares MSCI EAFE Growth Index (a) .................... 45,500 2,082,080 iShares MSCI EAFE Index (a) ........................... 67,800 3,025,236 iShares MSCI EAFE Value Index (a) ..................... 51,000 2,062,440 iShares S&P Global Energy Sector Index Fund (a).. ..... 92,400 2,863,476 iShares S&P Global Infrastructure Index (a) ........... 36,600 1,090,680 iShares S&P Global Materials Index (a) ................ 26,700 1,063,194 Janus Overseas ........................................ 73,156 1,983,989 Oppenheimer International Small Company - Class A ..... 43,726 407,961 PowerShares International Dividend Achievers (a). ..... 63,800 733,700 ------------ 16,641,255 ------------ AMERICAS FUNDS -- 21.4% Fidelity Canada ....................................... 120,129 4,609,344 iShares MSCI Canada Index (a) ......................... 126,000 2,416,680 iShares MSCI Mexico Index (a) ......................... 59,800 1,847,820 iShares S&P Latin America 40 Index (a) ................ 119,000 3,165,400 PowerShares DB U.S. Dollar Index Bullish (a)(b).. ..... 161,300 4,266,385 ------------ 16,305,629 ------------ ASIA/PACIFIC FUNDS -- 14.3% Fidelity Japan ........................................ 194,152 1,755,138 iShares FTSE/Xinhua China 25 Index (a) ................ 111,300 2,800,308 iShares MSCI Australia Index (a) ...................... 138,100 2,070,119 iShares MSCI Japan Index (a) .......................... 143,800 1,292,762 iShares MSCI Pacific ex-Japan Index (a) ............... 64,800 1,709,424 Matthews Pacific Tiger - Class I ...................... 87,814 1,258,381 ------------ 10,886,132 ------------ EMERGING MARKETS FUNDS -- 4.4% iShares MSCI Emerging Markets Index (a) ............... 52,000 1,325,480 T. Rowe Price Emerging Europe & Mediterranean (b) ..... 39,542 489,526 Vanguard Emerging Markets Stock Index (a) ............. 61,000 1,537,810 ------------ 3,352,816 ------------ TOTAL INVESTMENT COMPANIEs (Cost $72,003,847) ............ $ 66,882,792 ------------
See accompanying notes to financial statements. 16
NEW CENTURY INTERNATIONAL PORTFOLIO SCHEDULE OF INVESTMENTS (CONTINUED) OCTOBER 31, 2008 ======================================================================================= MONEY MARKET FUNDS -- 28.1% SHARES VALUE --------------------------------------------------------------------------------------- The AIM STIT-STIC Portfolio - Institutional Class, 2.49% (c) (Cost $21,407,188) ........................ 21,407,188 $ 21,407,188 ------------ TOTAL INVESTMENTS AT VALUE -- 115.8% (Cost $93,411,035) .. $ 88,289,980 LIABILITIES IN EXCESS OF OTHER ASSETS -- (15.8%) ......... (12,055,632) ------------ TOTAL NET ASSETS -- 100.0% ............................... $ 76,234,348 ============
(a) Exchange-traded fund. (b) Non-income producing security. (c) Variable rate security. The rate shown is the effective 7-day yield as of October 31, 2008. See accompanying notes to financial statements. 17
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO SCHEDULE OF INVESTMENTS OCTOBER 31, 2008 ======================================================================================= INVESTMENT COMPANIES -- 92.6% SHARES VALUE --------------------------------------------------------------------------------------- LONG/SHORT EQUITY FUNDS -- 17.2% CGM Focus ............................................. 72,682 $ 2,211,712 Diamond Hill Long-Short - Class I ..................... 327,163 4,877,999 Federated Prudent Bear - Class A ...................... 324,596 2,544,830 Hussman Strategic Growth .............................. 421,241 6,482,893 Schwab Hedged Equity - Select Shares .................. 264,620 3,320,980 TFS Market Neutral .................................... 139,254 1,845,113 Vanguard Market Neutral - Investor Shares ............. 191,235 2,264,223 ------------ 23,547,750 ------------ MERGER ARBITRAGE FUNDS -- 14.8% Arbitrage - Class R (b) ............................... 381,932 4,690,121 Gabelli Enterprises Mergers & Acquisitions - Class A .. 311,991 2,701,845 Gabelli ABC ........................................... 523,340 4,872,294 Gabelli Global Deal (c) ............................... 121,774 1,601,328 Merger ................................................ 437,008 6,389,064 ------------ 20,254,652 ------------ GLOBAL MACRO FUNDS -- 13.7% BlackRock Global Allocation - Class A ................. 276,890 4,189,338 First Eagle Global - Class A .......................... 204,589 7,048,077 Franklin Mutual Discovery - Class Z ................... 129,465 3,122,694 Ivy Asset Strategy - Class A .......................... 213,344 4,339,417 ------------ 18,699,526 ------------ ASSET ALLOCATION FUNDS -- 12.4% Berwyn Income ......................................... 174,412 1,808,655 FPA Crescent - Class I ................................ 224,440 4,549,398 Greenspring ........................................... 104,183 2,059,696 Leuthold Asset Allocation - Class I ................... 331,712 2,640,425 Leuthold Core Investment .............................. 186,807 2,409,809 Oakmark Equity & Income - Class I ..................... 153,778 3,566,119 ------------ 17,034,102 ------------ NATURAL RESOURCES FUNDS -- 7.6% BlackRock Real Asset Equity (c) ....................... 105,000 812,700 Permanent Portfolio ................................... 20,030 617,117 PIMCO Commodity Real Return Strategy - Class A .. ..... 375,399 3,607,580 PowerShares Water Resources Portfolio (a) ............. 153,000 2,128,230 RS Global Natural Resources - Class A ................. 38,551 818,821 SPDR Gold Trust (a)(b) ................................ 18,000 1,284,120 T. Rowe Price New Era ................................. 9,337 319,710 Vanguard Precious Metals & Minerals - Investor Shares . 59,766 801,467 ------------ 10,389,745 ------------ HIGH YIELD/FIXED INCOME FUNDS -- 7.1% Eaton Vance National Municipal - Class I .............. 274,922 2,339,584 Fidelity Capital & Income ............................. 407,405 2,493,319 Nuveen Multi-Strategy Income & Growth 2 (c) ........... 230,000 1,150,000 Oppenheimer International Bond - Class A .............. 246,541 1,365,839 Principal High Yield - Class A ........................ 131,225 797,848 Western Asset Emerging Markets Debt (c) ............... 143,600 1,619,808 ------------ 9,766,398 ------------
See accompanying notes to financial statements. 18
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO SCHEDULE OF INVESTMENTS (CONTINUED) OCTOBER 31, 2008 ======================================================================================= INVESTMENT COMPANIES -- 92.6% (CONTINUED) SHARES VALUE --------------------------------------------------------------------------------------- OPTION HEDGED FUNDS -- 6.0% Eaton Vance Tax-Managed Diversified Equity Income (c) . 80,000 $ 952,000 Gateway - Class A ..................................... 249,770 6,211,769 Nuveen Equity Premium Income (c) ...................... 88,000 1,073,600 ------------ 8,237,369 ------------ REAL ESTATE FUNDS -- 5.0% Cohen & Steers International Realty - Class I ......... 74,665 665,264 DWS RREEF World Real Estate & Tactical Strategies (c) . 57,051 341,736 ING Global Real Estate - Class I ...................... 111,508 1,401,650 JPMorgan U.S. Real Estate - Class A ................... 170,348 1,984,551 Third Avenue Real Estate Value ........................ 150,465 2,439,043 ------------ 6,832,244 ------------ DEEP VALUE/DISTRESSED SECURITIES FUNDS -- 4.7% Fairholme ............................................. 135,727 3,300,870 Franklin Mutual Beacon - Class Z ...................... 170,558 1,644,183 Third Avenue Value .................................... 43,667 1,534,883 ------------ 6,479,936 ------------ CONVERTIBLE ARBITRAGE FUNDS -- 4.1% Calamos Market Neutral Income - A Shares .............. 511,604 5,612,294 ------------ TOTAL INVESTMENT COMPANIES (Cost $148,124,415) ........... $126,854,016 ------------ ======================================================================================= STRUCTURED NOTES -- 1.7% PAR VALUE/UNITS VALUE --------------------------------------------------------------------------------------- Credit Suisse, Callable Yield Note, 14%, due 04/30/2009 $ 1,500,000 $ 963,300 Deutsche Bank, Buffered Underlying Security Linked Note, due 09/28/2009 ...................................... 700,000 486,990 Morgan Stanley & Co., Inc., Bear Market Plus Note, due 11/20/2008 (d)................................... 60,000 796,800 ----------- TOTAL STRUCTURED NOTES (Cost $2,800,000) ................. $ 2,247,090 ------------
See accompanying notes to financial statements. 19
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO SCHEDULE OF INVESTMENTS (CONTINUED) OCTOBER 31, 2008 ======================================================================================= MONEY MARKET FUNDS -- 5.9% SHARES VALUE --------------------------------------------------------------------------------------- The AIM STIT-STIC Portfolio - Institutional Class, 2.49% (e) (Cost $8,133,570) ......................... 8,133,570 $ 8,133,570 ------------ TOTAL INVESTMENTS AT VALUE -- 100.2% (Cost $159,057,985) . $137,234,676 LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.2%) .......... (236,100) ------------ TOTAL NET ASSETS -- 100.0% ............................... $136,998,576 ============
(a) Exchange-traded fund. (b) Non-income producing security. (c) Closed-end fund. (d) $10.00 face value per unit. (e) Variable rate security. The rate shown is the effective 7-day yield as of October 31, 2008. See accompanying notes to financial statements. 20
NEW CENTURY PORTFOLIOS STATEMENTS OF ASSETS AND LIABILITIES OCTOBER 31, 2008 ================================================================================================================================ NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY ALTERNATIVE CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO -------------------------------------------------------------------------------------------------------------------------------- ASSETS Investments in securities: At acquisition cost .................... $ 96,701,752 $ 74,778,286 $ 16,265,069 $ 93,411,035 $ 159,057,985 ============= ============= ============= ============= ============= At value (Note 1A) ..................... $ 96,999,754 $ 70,639,807 $ 15,394,216 $ 88,289,980 $ 137,234,676 Dividends and interest receivable ........ 22,204 14,491 5,051 28,883 59,991 Receivable for investment securities sold 5,509,167 2,603,431 -- 2,560,809 -- Receivable for capital shares sold ....... 1,492 2,225 6 17,326 57,143 Other assets ............................. 5,792 4,266 740 6,000 7,547 ------------- ------------- ------------- ------------- ------------- TOTAL ASSETS ........................... 102,538,409 73,264,220 15,400,013 90,902,998 137,359,357 ------------- ------------- ------------- ------------- ------------- LIABILITIES Payable to Advisor (Note 2) .............. 74,156 56,023 4,606 70,947 92,160 Payable to Distributor (Note 3) .......... 14,441 12,928 1,513 12,857 12,718 Payable for investment securities purchased ................... 18,316,065 10,761,315 4,773,837 14,531,699 189,927 Payable for capital shares redeemed ...... 2,000 1,350 26,530 19,940 49,041 Other accrued expenses and liabilities ... 13,188 9,163 6,954 33,207 16,935 ------------- ------------- ------------- ------------- ------------- TOTAL LIABILITIES ...................... 18,419,850 10,840,779 4,813,440 14,668,650 360,781 ------------- ------------- ------------- ------------- ------------- NET ASSETS ................................. $ 84,118,559 $ 62,423,441 $ 10,586,573 $ 76,234,348 $ 136,998,576 ============= ============= ============= ============= ============= Net assets consist of: Paid-in capital .......................... $ 93,792,689 $ 70,493,595 $ 13,846,337 $ 88,972,054 $ 158,948,027 Undistributed net investment income ...... 191,871 281,588 325 289,020 1,308,842 Accumulated net realized losses on investments ......................... (10,164,003) (4,213,263) (2,389,236) (7,905,671) (1,434,984) Net unrealized appreciation (depreciation) on investments ......................... 298,002 (4,138,479) (870,853) (5,121,055) (21,823,309) ------------- ------------- ------------- ------------- ------------- Net assets ................................. $ 84,118,559 $ 62,423,441 $ 10,586,573 $ 76,234,348 $ 136,998,576 ============= ============= ============= ============= ============= Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) ............................ 7,154,795 5,921,666 1,495,649 7,561,263 13,510,231 ============= ============= ============= ============= ============= Net asset value, offering price and redemption price per share (a) ........... $ 11.76 $ 10.54 $ 7.08 $ 10.08 $ 10.14 ============= ============= ============= ============= =============
(a) Redemption price may differ from the net asset value per share depending upon the length of time held (Note 1B). See accompanying notes to financial statements. 21
NEW CENTURY PORTFOLIOS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2008 ========================================================================================================================== NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY NEW CENTURY ALTERNATIVE CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO -------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Dividends ............................... $ 1,667,532 $ 2,570,444 $ 131,559 $ 3,669,623 $ 3,417,568 Interest ................................ -- -- -- -- 106,129 ------------ ------------ ------------ ------------ ------------ Total income .......................... 1,667,532 2,570,444 131,559 3,669,623 3,523,697 ------------ ------------ ------------ ------------ ------------ EXPENSES Investment advisory fees (Note 2) ....... 1,163,448 834,819 146,200 1,179,953 1,073,937 Distribution costs (Note 3) ............. 211,564 161,708 32,483 213,137 144,634 Accounting fees ......................... 42,216 38,313 31,497 42,495 44,342 Administration fees (Note 2).. .......... 33,187 24,730 9,436 33,573 38,215 Legal and audit fees .................... 26,857 18,995 4,421 28,091 31,338 Transfer agent fees ..................... 21,071 21,000 21,000 21,000 21,726 Custody and bank service fees. .......... 22,911 15,169 4,662 21,634 28,293 Trustees' fees and expenses (Note 2) .... 19,383 13,302 2,372 19,715 23,832 Insurance expense ....................... 10,141 6,853 1,068 9,665 10,040 Postage and supplies .................... 8,207 4,901 2,734 6,462 6,887 Other expenses .......................... 8,983 7,554 5,022 10,059 12,940 ------------ ------------ ------------ ------------ ------------ Total expenses ........................ 1,567,968 1,147,344 260,895 1,585,784 1,436,184 Less fees waived by the Advisor (Note 2) -- -- (41,595) -- -- Plus previously waived investment advisory fees and expense reimbursements recouped by the Advisor (Note 2) ............... -- -- -- 18,797 -- ------------ ------------ ------------ ------------ ------------ Net expenses .......................... 1,567,968 1,147,344 219,300 1,604,581 1,436,184 ------------ ------------ ------------ ------------ ------------ NET INVESTMENT INCOME (LOSS) .............. 99,564 1,423,100 (87,741) 2,065,042 2,087,513 ------------ ------------ ------------ ------------ ------------ REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS Net realized losses on investments ...... (13,968,157) (5,827,215) (2,629,023) (12,761,412) (4,079,115) Capital gain distributions from regulated investment companies .................. 4,895,351 1,970,480 409,448 5,535,179 5,212,537 Net change in unrealized appreciation (depreciation) on investments ......... (47,999,307) (24,432,963) (4,068,236) (66,231,378) (43,649,109) ------------ ------------ ------------ ------------ ------------ NET REALIZED AND UNREALIZED LOSSES ON INVESTMENTS ................... (57,072,113) (28,289,698) (6,287,811) (73,457,611) (42,515,687) ------------ ------------ ------------ ------------ ------------ NET DECREASE IN NET ASSETS FROM OPERATIONS .................. $(56,972,549) $(26,866,598) $ (6,375,552) $(71,392,569) $(40,428,174) ============ ============ ============ ============ ============
See accompanying notes to financial statements. 22
NEW CENTURY PORTFOLIOS STATEMENTS OF CHANGES IN NET ASSETS ===================================================================================================================== NEW CENTURY NEW CENTURY CAPITAL PORTFOLIO BALANCED PORTFOLIO ------------------------------ ------------------------------ YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, 2008 2007 2008 2007 --------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net investment income (loss) ................... $ 99,564 $ (429,610) $ 1,423,100 $ 1,101,913 Net realized gains (losses) from security transactions ........................ (13,968,157) 6,828,808 (5,827,215) 3,862,192 Capital gain distributions from regulated investment companies ......................... 4,895,351 3,213,012 1,970,480 1,512,727 Net change in unrealized appreciation (depreciation) on investments ................ (47,999,307) 14,826,015 (24,432,963) 3,805,605 ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from operations ................................ (56,972,549) 24,438,225 (26,866,598) 10,282,437 ------------- ------------- ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income (Note 1E) ........... (998,890) -- (1,727,951) (1,085,845) From net realized gains on security transactions (Note 1E) ....................... (5,981,681) -- (4,963,213) -- ------------- ------------- ------------- ------------- Decrease in net assets from distributions to shareholders .................. (6,980,571) -- (6,691,164) (1,085,845) ------------- ------------- ------------- ------------- FROM CAPITAL SHARE TRANSACTIONS Proceeds from shares sold ...................... 5,466,809 5,930,937 1,980,783 2,918,012 Proceeds from redemption fees collected (Note 1B) ..................... 93 29 43 56 Net asset value of shares issued in reinvestment of distributions to shareholders ............. 6,680,167 -- 6,441,127 1,045,536 Payments for shares redeemed ................... (8,303,148) (10,029,342) (7,492,684) (3,907,332) ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from capital share transactions ..................... 3,843,921 (4,098,376) 929,269 56,272 ------------- ------------- ------------- ------------- TOTAL INCREASE (DECREASE) IN NET ASSETS .................................. (60,109,199) 20,339,849 (32,628,493) 9,252,864 NET ASSETS Beginning of year .............................. 144,227,758 123,887,909 95,051,934 85,799,070 ------------- ------------- ------------- ------------- End of year .................................... $ 84,118,559 $ 144,227,758 $ 62,423,441 $ 95,051,934 ============= ============= ============= ============= UNDISTRIBUTED NET INVESTMENT INCOME .............................. $ 191,871 $ -- $ 281,588 $ 334,483 ============= ============= ============= ============= CAPITAL SHARE ACTIVITY Sold ........................................... 345,411 313,592 144,570 189,069 Reinvested ..................................... 359,535 -- 444,216 70,406 Redeemed ....................................... (525,669) (527,053) (561,016) (253,201) ------------- ------------- ------------- ------------- Net increase (decrease) in shares outstanding .. 179,277 (213,461) 27,770 6,274 Shares outstanding, beginning of year .......... 6,975,518 7,188,979 5,893,896 5,887,622 ------------- ------------- ------------- ------------- Shares outstanding, end of year ................ 7,154,795 6,975,518 5,921,666 5,893,896 ============= ============= ============= =============
See accompanying notes to financial statements. 23
NEW CENTURY PORTFOLIOS STATEMENTS OF CHANGES IN NET ASSETS ===================================================================================================================== NEW CENTURY NEW CENTURY OPPORTUNISTIC PORTFOLIO INTERNATIONAL PORTFOLIO ------------------------------ ------------------------------ YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, 2008 2007 2008 2007 --------------------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net investment income (loss) ................... $ (87,741) $ (64,268) $ 2,065,042 $ 134,961 Net realized gains (losses) from security transactions ........................ (2,629,023) 766,321 (12,761,412) 2,068,729 Capital gain distributions from regulated investment companies ......................... 409,448 38,924 5,535,179 2,227,454 Net change in unrealized appreciation (depreciation) on investments ................ (4,068,236) 2,126,149 (66,231,378) 35,884,958 ------------- ------------- ------------- ------------- Net increase (decrease) in net assets from operations ................................ (6,375,552) 2,867,126 (71,392,569) 40,316,102 ------------- ------------- ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income (Note 1E) ........... (65,157) -- (2,455,459) (383,067) From net realized gains on security transactions (Note 1E) ....................... (464,131) -- (3,446,048) (4,023,814) ------------- ------------- ------------- ------------- Decrease in net assets from distributions to shareholders .................. (529,288) -- (5,901,507) (4,406,881) ------------- ------------- ------------- ------------- FROM CAPITAL SHARE TRANSACTIONS Proceeds from shares sold ...................... 2,921,340 1,357,331 15,672,710 13,917,872 Proceeds from redemption fees collected (Note 1B) ..................... 29 -- 1,655 201 Net asset value of shares issued in reinvestment of distributions to shareholders ............. 529,288 -- 4,112,509 3,515,727 Payments for shares redeemed ................... (894,407) (1,238,154) (13,674,851) (8,871,897) ------------- ------------- ------------- ------------- Net increase in net assets from capital share transactions ............................. 2,556,250 119,177 6,112,023 8,561,903 ------------- ------------- ------------- ------------- TOTAL INCREASE (DECREASE) IN NET ASSETS .................................. (4,348,590) 2,986,303 (71,182,053) 44,471,124 NET ASSETS Beginning of year .............................. 14,935,163 11,948,860 147,416,401 102,945,277 ------------- ------------- ------------- ------------- End of year .................................... $ 10,586,573 $ 14,935,163 $ 76,234,348 $ 147,416,401 ============= ============= ============= ============= UNDISTRIBUTED NET INVESTMENT INCOME .............................. $ 325 $ -- $ 289,020 $ -- ============= ============= ============= ============= CAPITAL SHARE ACTIVITY Sold ........................................... 281,392 125,648 968,648 822,999 Reinvested ..................................... 48,470 -- 231,040 223,363 Redeemed ....................................... (102,198) (122,107) (985,571) (537,029) ------------- ------------- ------------- ------------- Net increase in shares outstanding ............. 227,664 3,541 214,117 509,333 Shares outstanding, beginning of year .......... 1,267,985 1,264,444 7,347,146 6,837,813 ------------- ------------- ------------- ------------- Shares outstanding, end of year ................ 1,495,649 1,267,985 7,561,263 7,347,146 ============= ============= ============= =============
See accompanying notes to financial statements. 24
NEW CENTURY PORTFOLIOS STATEMENTS OF CHANGES IN NET ASSETS ======================================================================================================= NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO ------------------------------ YEAR YEAR ENDED ENDED OCTOBER 31, OCTOBER 31, 2008 2007 ------------------------------------------------------------------------------------------------------- FROM OPERATIONS Net investment income ............................................. $ 2,087,513 $ 1,200,031 Net realized gains (losses) from security transactions ............ (4,079,115) 744,343 Capital gain distributions from regulated investment companies .... 5,212,537 3,137,271 Net change in unrealized appreciation (depreciation) on investments (43,649,109) 7,720,895 ------------- ------------- Net increase (decrease) in net assets from operations ................ (40,428,174) 12,802,540 ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income (Note 1E) .............................. (3,290,139) (2,420,775) From net realized gains on security transactions (Note 1E) ........ (2,850,232) (2,247,380) ------------- ------------- Decrease in net assets from distributions to shareholders ............ (6,140,371) (4,668,155) ------------- ------------- FROM CAPITAL SHARE TRANSACTIONS Proceeds from shares sold ......................................... 66,371,741 25,078,251 Proceeds from redemption fees collected (Note 1B) ................. 20,136 29 Net asset value of shares issued in reinvestment of distributions to shareholders .................................. 6,072,156 4,619,812 Payments for shares redeemed ...................................... (17,013,854) (7,526,721) ------------- ------------- Net increase in net assets from capital share transactions.. ......... 55,450,179 22,171,371 ------------- ------------- TOTAL INCREASE IN NET ASSETS ......................................... 8,881,634 30,305,756 NET ASSETS Beginning of year ................................................. 128,116,942 97,811,186 ------------- ------------- End of year ....................................................... $ 136,998,576 $ 128,116,942 ============= ============= UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) ........................... $ 1,308,842 $ (45,582) ============= ============= CAPITAL SHARE ACTIVITY Sold .............................................................. 5,294,506 1,895,144 Reinvested ........................................................ 469,255 362,623 Redeemed .......................................................... (1,450,613) (568,214) ------------- ------------- Net increase in shares outstanding ................................ 4,313,148 1,689,553 Shares outstanding, beginning of year ............................. 9,197,083 7,507,530 ------------- ------------- Shares outstanding, end of year ................................... 13,510,231 9,197,083 ============= =============
See accompanying notes to financial statements. 25
NEW CENTURY CAPITAL PORTFOLIO FINANCIAL HIGHLIGHTS ========================================================================================================================== SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR -------------------------------------------------------------------------------------------------------------------------- YEARS ENDED OCTOBER 31, -------------------------------------------------------------------------- 2008 2007 2006 2005 2004 -------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of year ........ $ 20.68 $ 17.23 $ 15.04 $ 13.38 $ 12.36 ---------- ---------- ---------- ---------- ---------- Income (loss) from investment operations: Net investment income (loss) ............ 0.02 (0.06) (0.08) (0.09) (0.12) Net realized and unrealized gains (losses) on investments ............... (7.94) 3.51 2.27 1.75 1.14 ---------- ---------- ---------- ---------- ---------- Total from investment operations .......... (7.92) 3.45 2.19 1.66 1.02 ---------- ---------- ---------- ---------- ---------- Less distributions: Distributions from net investment income ..................... (0.14) -- -- -- -- Distributions from net realized gains ... (0.86) -- -- -- -- ---------- ---------- ---------- ---------- ---------- Total distributions ....................... (1.00) -- -- -- -- ---------- ---------- ---------- ---------- ---------- Proceeds from redemption fees collected ... 0.00(a) 0.00(a) -- -- -- ---------- ---------- ---------- ---------- ---------- Net asset value, end of year .............. $ 11.76 $ 20.68 $ 17.23 $ 15.04 $ 13.38 ========== ========== ========== ========== ========== TOTAL RETURN (b) ............................ (40.06%) 20.02% 14.56% 12.41% 8.25% ========== ========== ========== ========== ========== RATIOS/SUPPLEMENTAL DATA Net assets, end of year (000's) ........... $ 84,119 $ 144,228 $ 123,888 $ 110,578 $ 103,260 ========== ========== ========== ========== ========== Ratio of expenses to average net assets (c) 1.29% 1.25% 1.27% 1.35% 1.41% Ratio of net investment income (loss) to average net assets (d) ............... 0.08% (0.32%) (0.47%) (0.57%) (0.91%) Portfolio turnover ........................ 27% 21% 12% 13% 48%
(a) Amount rounds to less than $0.01 per share. (b) Total return is a measure of the change in the value of an investment in the Portfolio over the years covered, which assumes dividends or capital gains distributions, if any, are reinvested in shares of the Portfolio. Returns shown do not reflect the taxes a shareholder would pay on Portfolio distributions, if any, or the redemption of Portfolio shares. (c) The ratios of expenses to average net assets do not reflect the Portfolio's proportionate share of expenses of the underlying investment companies in which the Portfolio invests. (d) Recognition of net investment income (loss) by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. See accompanying notes to financial statements. 26
NEW CENTURY BALANCED PORTFOLIO FINANCIAL HIGHLIGHTS ========================================================================================================================== SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR -------------------------------------------------------------------------------------------------------------------------- YEARS ENDED OCTOBER 31, -------------------------------------------------------------------------- 2008 2007 2006 2005 2004 -------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of year ........ $ 16.13 $ 14.57 $ 13.15 $ 12.30 $ 11.52 ---------- ---------- ---------- ---------- ---------- Income (loss) from investment operations: Net investment income ................... 0.25 0.19 0.17 0.15 0.11 Net realized and unrealized gains (losses) on investments ............... (4.69) 1.56 1.44 0.89 0.78 ---------- ---------- ---------- ---------- ---------- Total from investment operations .......... (4.44) 1.75 1.61 1.04 0.89 ---------- ---------- ---------- ---------- ---------- Less distributions: Distributions from net investment income ..................... (0.30) (0.19) (0.19) (0.19) (0.11) Distributions from net realized gains ... (0.85) -- -- -- -- ---------- ---------- ---------- ---------- ---------- Total distributions ....................... (1.15) (0.19) (0.19) (0.19) (0.11) ---------- ---------- ---------- ---------- ---------- Proceeds from redemption fees collected ... 0.00(a) 0.00(a) -- -- -- ---------- ---------- ---------- ---------- ---------- Net asset value, end of year .............. $ 10.54 $ 16.13 $ 14.57 $ 13.15 $ 12.30 ========== ========== ========== ========== ========== TOTAL RETURN (b) ............................ (29.46%) 12.09% 12.37% 8.51% 7.75% ========== ========== ========== ========== ========== RATIOS/SUPPLEMENTAL DATA Net assets, end of year (000's) ........... $ 62,423 $ 95,052 $ 85,799 $ 77,128 $ 74,327 ========== ========== ========== ========== ========== Ratio of expenses to average net assets (d) 1.38% 1.35% 1.38% 1.38% 1.42%(c) Ratio of net investment income to average net assets (e) ............... 1.71% 1.21% 1.20% 1.12% 0.88%(c) Portfolio turnover ........................ 22% 28% 22% 21% 44%
(a) Amount rounds to less than $0.01 per share. (b) Total return is a measure of the change in the value of an investment in the Portfolio over the years covered, which assumes dividends or capital gains distributions, if any, are reinvested in shares of the Portfolio. Returns shown do not reflect the taxes a shareholder would pay on Portfolio distributions, if any, or the redemption of Portfolio shares. (c) Absent the recoupment of fees previously waived and reimbursed by the Advisor, the ratio of expenses to average net assets would have been 1.41% and the ratio of net investment income to average net assets would have been 0.89% for the year ended October 31, 2004 (Note 2). (d) The ratios of expenses to average net assets do not reflect the Portfolio's proportionate share of expenses of the underlying investment companies in which the Portfolio invests. (e) Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. See accompanying notes to financial statements. 27
NEW CENTURY OPPORTUNISTIC PORTFOLIO FINANCIAL HIGHLIGHTS ========================================================================================================================== SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR -------------------------------------------------------------------------------------------------------------------------- YEARS ENDED OCTOBER 31, -------------------------------------------------------------------------- 2008 2007 2006 2005 2004 -------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of year ........ $ 11.78 $ 9.45 $ 8.72 $ 7.30 $ 6.95 ---------- ---------- ---------- ---------- ---------- Income (loss) from investment operations: Net investment loss ..................... (0.05) (0.05) (0.08) (0.06) (0.07) Net realized and unrealized gains (losses) on investments ............... (4.26) 2.38 0.81 1.48 0.42 ---------- ---------- ---------- ---------- ---------- Total from investment operations .......... (4.31) 2.33 0.73 1.42 0.35 ---------- ---------- ---------- ---------- ---------- Less distributions: Distributions from net investment income ..................... (0.05) -- -- -- -- Distributions from net realized gains ... (0.34) -- -- -- -- ---------- ---------- ---------- ---------- ---------- Total distributions ....................... (0.39) -- -- -- -- ---------- ---------- ---------- ---------- ---------- Proceeds from redemption fees collected ... 0.00(a) -- -- -- -- ---------- ---------- ---------- ---------- ---------- Net asset value, end of year .............. $ 7.08 $ 11.78 $ 9.45 $ 8.72 $ 7.30 ========== ========== ========== ========== ========== TOTAL RETURN (b) ............................ (37.74%) 24.66% 8.37% 19.45% 5.04% ========== ========== ========== ========== ========== RATIOS/SUPPLEMENTAL DATA Net assets, end of year (000's) ........... $ 10,587 $ 14,935 $ 11,949 $ 6,891 $ 5,512 ========== ========== ========== ========== ========== Ratios of expenses to average net assets: Before expense reimbursement and waived fees (c) ................... 1.79% 1.88% 2.00% 2.56% 2.71% After expense reimbursement and waived fees (c) ................... 1.50% 1.50% 1.50% 1.50% 1.50% Ratios of net investment loss to average net assets: Before expense reimbursement and waived fees (d) ................... (0.89%) (0.88%) (1.39%) (1.80%) (2.27%) After expense reimbursement and waived fees (d) ................... (0.60%) (0.50%) (0.89%) (0.74%) (1.06%) Portfolio turnover ........................ 56% 47% 49% 19% 68%
(a) Amount rounds to less than $0.01 per share. (b) Total return is a measure of the change in the value of an investment in the Portfolio over the years covered, which assumes dividends or capital gains distributions, if any, are reinvested in shares of the Portfolio. Returns shown do not reflect the taxes a shareholder would pay on Portfolio distributions, if any, or the redemption of Portfolio shares. (c) The ratios of expenses to average net assets do not reflect the Portfolio's proportionate share of expenses of the underlying investment companies in which the Portfolio invests. (d) Recognition of net investment loss by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. See accompanying notes to financial statements. 28
NEW CENTURY INTERNATIONAL PORTFOLIO FINANCIAL HIGHLIGHTS ========================================================================================================================== SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR -------------------------------------------------------------------------------------------------------------------------- YEARS ENDED OCTOBER 31, -------------------------------------------------------------------------- 2008 2007 2006 2005 2004 -------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of year ........ $ 20.06 $ 15.06 $ 12.12 $ 10.07 $ 8.68 ---------- ---------- ---------- ---------- ---------- Income (loss) from investment operations: Net investment income (loss) ............ 0.28 0.03 (0.06) (0.06) (0.05) Net realized and unrealized gains (losses) on investments .............. (9.47) 5.61 3.12 2.42 1.44 ---------- ---------- ---------- ---------- ---------- Total from investment operations .......... (9.19) 5.64 3.06 2.36 1.39 ---------- ---------- ---------- ---------- ---------- Less distributions: Distributions from net investment income ..................... (0.33) (0.06) -- -- -- Distributions from net realized gains ... (0.46) (0.58) (0.12) (0.31) -- ---------- ---------- ---------- ---------- ---------- Total distributions ....................... (0.79) (0.64) (0.12) (0.31) -- ---------- ---------- ---------- ---------- ---------- Proceeds from redemption fees collected ... 0.00(a) 0.00(a) 0.00(a) 0.00(a) -- ---------- ---------- ---------- ---------- ---------- Net asset value, end of year .............. $ 10.08 $ 20.06 $ 15.06 $ 12.12 $ 10.07 ========== ========== ========== ========== ========== TOTAL RETURN (b) ............................ (47.52%) 38.62% 25.35% 23.70% 16.01% ========== ========== ========== ========== ========== RATIOS/SUPPLEMENTAL DATA Net assets, end of year (000's) ........... $ 76,234 $ 147,416 $ 102,945 $ 45,014 $ 24,449 ========== ========== ========== ========== ========== Ratios of expenses to average net assets: Before expense reimbursement and waived fees (c) ................... 1.29% 1.35% 1.50% 1.55% 1.74% After expense reimbursement and waived fees (c) ................... 1.29%(e) 1.35%(e) 1.50% (e) 1.50% 1.50% Ratios of net investment income (loss) to average net assets: Before expense reimbursement and waived fees (d) ................... 1.66% 0.11% (0.46%) (0.72%) (0.88%) After expense reimbursement and waived fees (d) ................... 1.66%(e) 0.11%(e) (0.46%)(e) (0.67%) (0.64%) Portfolio turnover ........................ 34% 10% 22% 3% 45%
(a) Amount rounds to less than $0.01 per share. (b) Total return is a measure of the change in the value of an investment in the Portfolio over the years covered, which assumes dividends or capital gains distributions, if any, are reinvested in shares of the Portfolio. Returns shown do not reflect the taxes a shareholder would pay on Portfolio distributions, if any, or the redemption of Portfolio shares. (c) The ratios of expenses to average net assets do not reflect the Portfolio's proportionate share of expenses of the underlying investment companies in which the Portfolio invests. (d) Recognition of net investment income (loss) by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. (e) Absent the recoupment of fees previously waived and reimbursed by the Advisor, the ratios of expenses to average net assets would have been 1.28%, 1.32% and 1.41% and the ratios of net investment income (loss) to average net assets would have been 1.68%, 0.14% and (0.37%) for the years ended October 31, 2008, 2007 and 2006, respectively (Note 2). See accompanying notes to financial statements. 29
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO FINANCIAL HIGHLIGHTS ========================================================================================================================== SELECTED PER SHARE DATA AND RATIOS FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR -------------------------------------------------------------------------------------------------------------------------- YEARS ENDED OCTOBER 31, -------------------------------------------------------------------------- 2008 2007 2006 2005 2004 -------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of year ........ $ 13.93 $ 13.03 $ 11.99 $ 11.46 $ 10.67 ---------- ---------- ---------- ---------- ---------- Income (loss) from investment operations: Net investment income ................... 0.27 0.18 0.21 0.15 0.14 Net realized and unrealized gains (losses) on investments ............... (3.39) 1.34 1.23 0.87 0.83 ---------- ---------- ---------- ---------- ---------- Total from investment operations .......... (3.12) 1.52 1.44 1.02 0.97 ---------- ---------- ---------- ---------- ---------- Less distributions: Distributions from net investment income ..................... (0.36) (0.32) (0.33) (0.24) (0.18) Distributions from net realized gains ... (0.31) (0.30) (0.07) (0.25) -- ---------- ---------- ---------- ---------- ---------- Total distributions ....................... (0.67) (0.62) (0.40) (0.49) (0.18) ---------- ---------- ---------- ---------- ---------- Proceeds from redemption fees collected ... 0.00(a) 0.00(a) -- 0.00(a) -- ---------- ---------- ---------- ---------- ---------- Net asset value, end of year .............. $ 10.14 $ 13.93 $ 13.03 $ 11.99 $ 11.46 ========== ========== ========== ========== ========== TOTAL RETURN (b) ............................ (23.44%) 12.09% 12.32% 9.12% 9.12% ========== ========== ========== ========== ========== RATIOS/SUPPLEMENTAL DATA Net assets, end of year (000's) ........... $ 136,999 $ 128,117 $ 97,811 $ 76,560 $ 51,635 ========== ========== ========== ========== ========== Ratios of expenses to average net assets (c) 1.00% 1.06% 1.08% 1.06% 1.12% Ratios of net investment income to average net assets (d) ............... 1.46% 1.07% 1.43% 1.06% 1.04% Portfolio turnover ........................ 17% 8% 12% 11% 11%
(a) Amount rounds to less than $0.01 per share. (b) Total return is a measure of the change in the value of an investment in the Portfolio over the years covered, which assumes dividends or capital gains distributions, if any, are reinvested in shares of the Portfolio. Returns shown do not reflect the taxes a shareholder would pay on Portfolio distributions, if any, or the redemption of Portfolio shares. (c) The ratios of expenses to average net assets do not reflect the Portfolio's proportionate share of expenses of the underlying investment companies in which the Portfolio invests. (d) Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests. See accompanying notes to financial statements. 30 NEW CENTURY PORTFOLIOS NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2008 ================================================================================ (1) SIGNIFICANT ACCOUNTING POLICIES New Century Portfolios ("New Century") is organized as a Massachusetts business trust which is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company and currently offers shares of five series: New Century Capital Portfolio, New Century Balanced Portfolio, New Century Opportunistic Portfolio, New Century International Portfolio and New Century Alternative Strategies Portfolio (together, the "Portfolios"). New Century Capital Portfolio and New Century Balanced Portfolio commenced operations on January 31, 1989. New Century Opportunistic Portfolio and New Century International Portfolio commenced operations on November 1, 2000, and New Century Alternative Strategies Portfolio commenced operations on May 1, 2002. Weston Financial Group, Inc. (the "Advisor"), a wholly-owned subsidiary of The Washington Trust Company, serves as the investment advisor to each Portfolio. Weston Securities Corporation (the "Distributor"), a wholly-owned subsidiary of Washington Trust Bancorp, Inc., serves as the distributor and principal underwriter to each Portfolio. The investment objective of New Century Capital Portfolio is to provide capital growth, with a secondary objective to provide income, while managing risk. This Portfolio seeks to achieve its objectives by investing primarily in shares of other registered investment companies that emphasize investments in equities (domestic and foreign). The investment objective of New Century Balanced Portfolio is to provide income, with a secondary objective to provide capital growth, while managing risk. This Portfolio seeks to achieve its objectives by investing primarily in shares of other registered investment companies that emphasize investments in equities (domestic and foreign), fixed income securities (domestic and foreign), or in a composite of such securities. This Portfolio maintains at least 25% of its assets in fixed income securities by selecting registered investment companies that invest in such securities. The investment objective of New Century Opportunistic Portfolio is to provide capital growth, without regard to current income, while managing risk. This Portfolio seeks to achieve its objective by investing primarily in shares of registered investment companies that emphasize investments in equities (domestic and foreign), fixed income securities that seek appreciation such as high-yield, lower rated debt securities (domestic or foreign), or other securities that are selected by those investment companies to achieve growth. 31 NEW CENTURY PORTFOLIOS NOTES TO FINANCIAL STATEMENTS (CONTINUED) OCTOBER 31, 2008 ================================================================================ The investment objective of New Century International Portfolio is to provide capital growth, with a secondary objective to provide income, while managing risk. This Portfolio seeks to achieve its objectives by investing primarily in shares of registered investment companies that emphasize investments in equities and fixed income securities (foreign, worldwide, emerging markets and domestic). The investment objective of New Century Alternative Strategies Portfolio is to provide long-term capital appreciation, with a secondary objective to earn income, while managing risk. This Portfolio seeks to achieve its objectives by investing primarily in shares of other registered investment companies that emphasize alternative strategies. The price of shares of each Portfolio fluctuates daily and there is no assurance that the Portfolios will be successful in achieving their stated investment objectives. The following is a summary of significant accounting policies consistently followed by the Portfolios in the preparation of their financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America. A. INVESTMENT VALUATION -------------------- Investments in shares of other open-end investment companies are valued at their net asset value as reported by such companies. The Portfolios may also invest in closed-end investment companies, exchange traded funds, and to a certain extent, directly in securities. Investments in closed-end investment companies, exchange traded funds and direct investments in securities are valued at market prices, as described in the paragraph below. The net asset value as reported by open-end investment companies may be based on fair value pricing; to understand the fair value pricing process used by such companies, consult their most current prospectus. Investments in securities traded on a national securities exchange or included in NASDAQ are generally valued at the last reported sales price, the closing price or the official closing price; and securities traded in the over-the-counter market and listed securities for which no sale is reported on that date are valued at the last reported bid price. It is expected that fixed income securities will ordinarily be traded in the over-the-counter market. When market quotations are not readily available, fixed income securities may be valued on the basis of prices provided by an independent pricing service. Other assets and securities for which no quotations are readily available or for which quotations the Advisor believes do not reflect market value are valued at their fair value as determined in good faith by the Advisor under the procedures established by the Board of Trustees. Short-term investments are valued at amortized cost which approximates market value. 32 NEW CENTURY PORTFOLIOS NOTES TO FINANCIAL STATEMENTS (CONTINUED) OCTOBER 31, 2008 ================================================================================ B. SHARE VALUATION --------------- The net asset value per share of each Portfolio is calculated daily by dividing the total value of each Portfolio's assets, less liabilities, by the number of shares outstanding. The offering price and redemption price per share of each Portfolio is equal to the net asset value per share, except that shares of each Portfolio are subject to a redemption fee of 2% if redeemed within 30 days of the date of purchase. No redemption fee is imposed on the exchange of shares among the various Portfolios of the Trust, the redemption of shares representing reinvested dividends or capital gain distributions, or on amounts representing capital appreciation of shares. During the years ended October 31, 2008 and 2007, proceeds from redemption fees totaled $93 and $29, respectively, for New Century Capital Portfolio, $43 and $56, respectively, for New Century Balanced Portfolio, $29 and $0, respectively, for New Century Opportunistic Portfolio, $1,655 and $201, respectively, for New Century International Portfolio and $20,136 and $29, respectively, for New Century Alternative Strategies Portfolio. Any redemption fees are credited to paid-in capital of the applicable Portfolio. C. INVESTMENT TRANSACTIONS ----------------------- Investment transactions are recorded on a trade date basis. Gains and losses on securities sold are determined on a specific identification method. D. INCOME RECOGNITION ------------------ Interest, if any, is accrued on portfolio investments daily. Dividend income and capital gain distributions are recorded on the ex-dividend date or as soon as the information is available if after the ex-date. E. DISTRIBUTIONS TO SHAREHOLDERS ----------------------------- Dividends arising from net investment income, if any, are declared and paid semi-annually to shareholders of New Century Balanced and New Century Alternative Strategies Portfolios. Dividends from net investment income, if any, are declared and paid annually to shareholders of New Century Capital, New Century Opportunistic and New Century International Portfolios. Net realized short-term capital gains, if any, may be distributed throughout the year and net realized long-term capital gains, if any, are distributed at least once each year. Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. The tax character of distributions paid during the years ended October 31, 2008 and 2007 was as follows: 33 NEW CENTURY PORTFOLIOS NOTES TO FINANCIAL STATEMENTS (CONTINUED) OCTOBER 31, 2008 ================================================================================
-------------------------------------------------------------------------------------------- ORDINARY LONG-TERM TOTAL YEAR ENDED INCOME CAPITAL GAINS DISTRIBUTIONS -------------------------------------------------------------------------------------------- NEW CENTURY CAPITAL PORTFOLIO October 31, 2008 ......................... $ 998,890 $ 5,981,681 $ 6,980,571 October 31, 2007 ......................... $ -- $ -- $ -- NEW CENTURY BALANCED PORTFOLIO October 31, 2008 ......................... $ 1,727,951 $ 4,963,213 $ 6,691,164 October 31, 2007 ......................... $ 1,085,845 $ -- $ 1,085,845 NEW CENTURY OPPORTUNISTIC PORTFOLIO October 31, 2008 ......................... $ 65,157 $ 464,131 $ 529,288 October 31, 2007 ......................... $ -- $ -- $ -- NEW CENTURY INTERNATIONAL PORTFOLIO October 31, 2008 ......................... $ 2,455,459 $ 3,446,048 $ 5,901,507 October 31, 2007 ......................... $ 383,067 $ 4,023,814 $ 4,406,881 NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO October 31, 2008 ......................... $ 3,290,139 $ 2,850,232 $ 6,140,371 October 31, 2007 ......................... $ 2,646,336 $ 2,021,819 $ 4,668,155 --------------------------------------------------------------------------------------------
The differences between the book and tax basis of distributions for the years ended October 31, 2008 and 2007 are permanent in nature and are primarily due to differing treatments of net short-term gains. F. COST OF OPERATIONS ------------------ The Portfolios bear all costs of their operations other than expenses specifically assumed by the Advisor. Expenses directly attributable to a Portfolio are charged to that Portfolio; other expenses are allocated proportionately among the Portfolios in relation to the net assets of each Portfolio. G. USE OF ESTIMATES ---------------- In preparing financial statements in accordance with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities, and revenues and expenses during the reporting period. Actual results could differ from those estimates. (2) INVESTMENT ADVISORY FEES, ADMINISTRATIVE AGREEMENT AND TRUSTEES' FEES Each Portfolio has a separate Investment Advisory Agreement with the Advisor. Investment advisory fees for each Portfolio are computed daily and paid monthly. The investment advisory fees for each Portfolio, except for New Century Alternative Strategies Portfolio, are computed at an annualized rate of 1% on the first $100 million of average daily net assets and .75% of average daily net assets exceeding that amount. 34 NEW CENTURY PORTFOLIOS NOTES TO FINANCIAL STATEMENTS (CONTINUED) OCTOBER 31, 2008 ================================================================================ The investment advisory fees for New Century Alternative Strategies Portfolio, however, are computed at an annualized rate of .75% of average daily net assets. The advisory fees are based on the net assets of each of the Portfolios separately, and not on the total net assets of the Portfolios combined. The Advisor has contractually agreed to limit the total expenses (excluding interest, taxes, brokerage and extraordinary expenses) to an annual rate of 1.50% of average net assets for each of the Portfolios. The total expenses do not include a Portfolio's proportionate share of expenses of the underlying investment companies in which such Portfolio invests. This contractual fee waiver is in place until October 31, 2009. Accordingly, for the year ended October 31, 2008, the Advisor waived $41,595 of advisory fees for New Century Opportunistic Portfolio. No waiver was necessary for New Century Capital, New Century Balanced, New Century International or New Century Alternative Strategies Portfolios. Any advisory fees waived and/or any other operating expenses absorbed by the Advisor pursuant to an agreed upon expense cap shall be reimbursed by the Portfolio to the Advisor, if so requested by the Advisor, provided the aggregate amount of the Portfolio's current total operating expenses for such fiscal year does not exceed the applicable existing limitation on Portfolio expenses, and the reimbursement is made within three years after the year in which the Advisor incurred the expense. During the year ended October 31, 2008, the Advisor received $18,797 in recouped fees from New Century International Portfolio. During the year ended October 31, 2008, the Advisor did not recoup any fees waived or other operating expenses absorbed from New Century Opportunistic Portfolio. The Advisor has recouped all fees waived and expenses reimbursed for New Century Balanced Portfolio and New Century Alternative Strategies Portfolio. No fees have been waived or reimbursed for New Century Capital Portfolio. As of October 31, 2008, the amounts available for reimbursement that have been paid and/or waived by the Advisor on behalf of New Century Opportunistic Portfolio are $146,312. As of October 31, 2008, the Advisor may recapture a portion of such amounts no later than the dates as stated below: -------------------------------------------------------------------------------- OCTOBER 31, OCTOBER 31, OCTOBER 31, 2009 2010 2011 -------------------------------------------------------------------------------- New Century Opportunistic Portfolio... $ 56,057 $ 48,660 $ 41,595 -------------------------------------------------------------------------------- 35 NEW CENTURY PORTFOLIOS NOTES TO FINANCIAL STATEMENTS (CONTINUED) OCTOBER 31, 2008 ================================================================================ Fees paid by the Portfolios pursuant to an Administration Agreement with the Advisor to administer the ordinary course of the Portfolios' business are paid monthly based on actual expenses incurred in the overseeing of the Portfolios' affairs. All expenses incurred overseeing the Portfolios' affairs are reimbursed monthly. The Portfolios pay each Trustee who is not affiliated with the Advisor a $15,000 annual retainer, paid quarterly, and a per meeting fee of $2,500. The Portfolios will also pay each Trustee who is not affiliated with the Advisor a $2,500 special meeting fee if held independent of a regularly scheduled board meeting. Trustees who are affiliated with the Advisor do not receive compensation. (3) DISTRIBUTION PLAN AND OTHER TRANSACTIONS WITH AFFILIATES The Portfolios have adopted a Distribution Plan (the "Plan") under Section 12(b) of the Investment Company Act of 1940 and Rule 12b-1 thereunder. Under the Plan, each Portfolio may pay up to .25% of its average daily net assets to the Distributor for activities primarily intended to result in the sale of shares. Under its terms, the Plan shall remain in effect from year to year, provided such continuance is approved annually by a vote of a majority of the Trustees and a majority of those Trustees who are not "interested persons" of the Portfolios and who have no direct or indirect financial interest in the operation of the Plan or in any agreement related to the Plan. During the year ended October 31, 2008, the Distributor received $211,564, $161,708, $32,483, $213,137 and $144,634 from New Century Capital, Balanced, Opportunistic, International and Alternative Strategies Portfolios, respectively, pursuant to the Plan. As described below, these net amounts were offset by the sales commissions and other compensation received by the Distributor. During the year ended October 31, 2008, the Distributor also received sales commissions and other compensation of $96,259, $50,430, $3,410, $102,624 and $219,912 in connection with the purchase of investment company shares by New Century Capital, Balanced, Opportunistic, International and Alternative Strategies Portfolios, respectively. The Distributor has voluntarily agreed to reduce payments made by each Portfolio pursuant to the Plan in amounts equal to the sales commissions and other compensation. Certain officers and Trustees of New Century are also officers and/or directors of the Advisor and the Distributor. 36 NEW CENTURY PORTFOLIOS NOTES TO FINANCIAL STATEMENTS (CONTINUED) OCTOBER 31, 2008 ================================================================================ (4) INVESTMENT TRANSACTIONS For the year ended October 31, 2008, the cost of purchases and the proceeds from sales of securities other than short-term investments and U.S. government securities were as follows:
---------------------------------------------------------------------------------------------------------------------------- NEW NEW NEW NEW NEW CENTURY CENTURY CENTURY CENTURY CENTURY ALTERNATIVE CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ---------------------------------------------------------------------------------------------------------------------------- Purchase of investment securities .......... $ 31,729,732 $ 18,310,928 $ 9,121,512 $ 41,917,439 $ 74,276,421 Proceeds from sales of investment securities $ 38,967,256 $ 24,588,654 $ 7,557,165 $ 40,075,504 $ 22,951,712 ----------------------------------------------------------------------------------------------------------------------------
(5) TAX MATTERS It is each Portfolio's policy to comply with the special provisions of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. As provided therein, in any fiscal year in which a Portfolio so qualifies and distributes at least 90% of its taxable net income, the Portfolio (but not the shareholders) will be relieved of federal income tax on the income distributed. Accordingly, no provision for income taxes has been made. In order to avoid imposition of the excise tax applicable to regulated investment companies, it is also each Portfolio's intention to declare as dividends in each calendar year at least 98% of its net investment income (earned during the calendar year) and 98% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts from prior years. For the year ended October 31, 2008, the following reclassifications were made as a result of permanent differences between the financial statement and income tax reporting requirements: -------------------------------------------------------------------------------- DECREASE IN INCREASE IN ACCUMULATED UNDISTRIBUTED NET REALIZED NET INVESTMENT LOSSES ON INCOME INVESTMENTS -------------------------------------------------------------------------------- New Century Capital Portfolio .................. $ 1,091,197 $(1,091,197) New Century Balanced Portfolio ................. 251,956 (251,956) New Century Opportunistic Portfolio ............ 153,223 (153,223) New Century International Portfolio ............ 679,437 (679,437) New Century Alternative Strategies Portfolio ... 2,557,050 (2,557,050) -------------------------------------------------------------------------------- These reclassifications did not change the net assets of the Portfolios. 37 NEW CENTURY PORTFOLIOS NOTES TO FINANCIAL STATEMENTS (CONTINUED) OCTOBER 31, 2008 ================================================================================ The tax character of distributable earnings at October 31, 2008 was as follows:
--------------------------------------------------------------------------------------------------------------------------- NEW NEW NEW NEW NEW CENTURY CENTURY CENTURY CENTURY CENTURY ALTERNATIVE CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------------------------------------------------------------------------------------------------------------------------- Undistributed ordinary income ........ $ 191,871 $ 281,588 $ 325 $ 289,020 $ 1,239,164 Unrealized appreciation (depreciation) 298,002 (4,280,605) (887,296) (5,121,055) (21,778,914) Capital loss carryforwards.. ......... (10,164,003) (4,071,137) (2,372,793) (7,905,671) (1,409,701) ------------ ------------ ------------ ------------ ------------ Total accumulated deficit ............ $ (9,674,130) $ (8,070,154) $ (3,259,764) $(12,737,706) $(21,949,451) ============ ============ ============ ============ ============ ---------------------------------------------------------------------------------------------------------------------------
The following information is based upon the federal income tax cost of investment securities as of October 31, 2008:
------------------------------------------------------------------------------------------------------------------------------------ NEW NEW NEW NEW NEW CENTURY CENTURY CENTURY CENTURY CENTURY ALTERNATIVE CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------------------------------------------------------------------------------------------------------------------------------ Tax cost of portfolio investments ........ $ 96,701,752 $ 74,920,412 $ 16,281,512 $ 93,411,035 $ 159,013,590 ============= ============= ============= ============= ============= Gross unrealized appreciation ............ $ 6,159,527 $ 1,975,261 $ 348,429 $ 4,638,779 $ 3,757,312 Gross unrealized depreciation ............ (5,861,525) (6,255,866) (1,235,725) (9,759,834) (25,536,226) ------------- ------------- ------------- ------------- ------------- Net unrealized appreciation (depreciation) $ 298,002 $ (4,280,605) $ (887,296) $ (5,121,055) $ (21,778,914) ============= ============= ============= ============= ============= ------------------------------------------------------------------------------------------------------------------------------------
The difference between the federal income tax cost of portfolio investments and the financial statement cost for New Century Balanced, Opportunistic and Alternative Strategies Portfolios is due to certain timing differences in the recognition of capital losses under income tax regulations and accounting principles generally accepted in the United States of America. These "book/tax" differences are temporary in nature and are primarily due to the tax deferral of losses on wash sales. For New Century Alternative Strategies Portfolio, the difference between tax basis undistributed ordinary income and undistributed net investment income is due to the requirement to accrue income on certain structured notes for tax purposes. As of October 31, 2008, the Portfolios had the following capital loss carryforwards for federal income tax purposes. These capital loss carryforwards may be utilized in future years to offset net realized capital gains, if any, prior to distributing such gains to shareholders.
-------------------------------------------------------------------------------------------------- NEW NEW NEW NEW NEW CENTURY CENTURY CENTURY CENTURY CENTURY ALTERNATIVE CAPITAL BALANCED OPPORTUNISTIC INTERNATIONAL STRATEGIES EXPIRES OCTOBER 31, PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO -------------------------------------------------------------------------------------------------- 2016 .................. $10,164,003 $4,071,137 $2,372,793 $7,905,671 $1,409,701 --------------------------------------------------------------------------------------------------
38 NEW CENTURY PORTFOLIOS NOTES TO FINANCIAL STATEMENTS (CONTINUED) OCTOBER 31, 2008 ================================================================================ The Financial Accounting Standards Board's ("FASB") Interpretation No. 48 ("FIN 48") "Accounting for Uncertainty in Income Taxes" provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken in the course of preparing each Portfolio's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the "more-likely-than-not" threshold would be recorded as a tax benefit or expense in the current year. As required by FIN?48, management has analyzed the Funds' tax positions taken on Federal income tax returns for all open tax years (tax years ended October 31, 2005 through October 31, 2008) and has concluded that no provision for income tax is required in these financial statements. (6) CONTINGENCIES AND COMMITMENTS New Century indemnifies its officers and Trustees for certain liabilities that might arise from the performance of their duties to the Portfolios. Additionally, in the normal course of business, New Century, on behalf of its Portfolios, enters into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Portfolios' maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Portfolios that have not yet occurred. However, based on experience, New Century expects the risk of loss to be remote. (7) NEW ACCOUNTING PRONOUNCEMENT FASB's Statement of Financial Accounting Standards ("SFAS") No. 157 "Fair Value Measurements" establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of SFAS No. 157 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of October 31, 2008, each Portfolio does not believe the adoption of SFAS No. 157 will impact the amounts reported in the financial statements; however, additional disclosures will be required about the inputs used to develop the measurements and the effect of certain of the measurements reported on the Statements of Changes in Net Assets for a fiscal period. 39 NEW CENTURY PORTFOLIOS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ================================================================================ To the Shareholders and Board of Trustees of New Century Portfolios We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of New Century Capital Portfolio, New Century Balanced Portfolio, New Century Opportunistic Portfolio, New Century International Portfolio and New Century Alternative Strategies Portfolio, each a series of shares of beneficial interest of New Century Portfolios, as of October 31, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2008 by correspondence with the custodian and broker. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of New Century Capital Portfolio, New Century Balanced Portfolio, New Century Opportunistic Portfolio, New Century International Portfolio and New Century Alternative Strategies Portfolio as of October 31, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ BRIGGS, BUNTING & DOUGHERTY, LLP BRIGGS, BUNTING & DOUGHERTY, LLP Philadelphia, Pennsylvania December 23, 2008 40 NEW CENTURY PORTFOLIOS BOARD OF TRUSTEES AND OFFICERS (UNAUDITED) ================================================================================ Overall responsibility for management of New Century rests with the Board of Trustees. The Trustees serve during the lifetime of New Century and until its termination, or until death, resignation, retirement or removal. The Trustees, in turn, elect the officers of New Century to actively supervise its day-to-day operations. The officers have been elected for an annual term. The following table provides information regarding each Trustee and officer of New Century:
NUMBER OF PORTFOLIOS IN OTHER NAME, POSITION(S) FUND COMPLEX DIRECTORSHIPS ADDRESS LENGTH OF HELD WITH PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY AND AGE TIME SERVED NEW CENTURY DURING PAST 5 YEARSBY TRUSTEE TRUSTEE ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED TRUSTEES: ------------------------------------------------------------------------------------------------------------------------------------ *Douglas A. Biggar Since 1988 Trustee Managing Director, 5 None 40 William Street, Weston Financial Group, Inc.; Suite 100 Vice President of Weston Wellesley, MA 02481 Securities Corporation. (age 61) ------------------------------------------------------------------------------------------------------------------------------------ NON-INTERESTED TRUSTEES: ------------------------------------------------------------------------------------------------------------------------------------ Stanley H. Cooper, Esq. Since 2008 Chairman Attorney in private practice. 5 None One Ashford Lane Since 1988 Trustee Andover, MA 01810 (age 61) ------------------------------------------------------------------------------------------------------------------------------------ Roger Eastman, CPA Since 1989 Trustee Retired; Formerly, the Executive 5 None 10682 Gulfshore Drive C-103 Vice President and Chief Operating Naples, FL 34108 Officer, Danvers Savings Bank (age 78) (from 3/97 to 12/03). ------------------------------------------------------------------------------------------------------------------------------------ Michael A. Diorio, CPA Since 1988 Trustee Executive Director, Milford 5 Director, 11 Calvin Drive Housing Authority (since 10/04); Milford Milford, MA 01757 Town Accountant, Town of National (age 63) Canton, MA (from 3/01 to 10/04). Bank & Trust since 1996 ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS: ------------------------------------------------------------------------------------------------------------------------------------ Wayne M. Grzecki Since 1996 President President and Director Weston 40 William Street, Financial Group, Inc.; President Suite 100 and Director of Weston Securities Wellesley, MA 02481 Corporation. (age 57) ------------------------------------------------------------------------------------------------------------------------------------ Ronald A. Sugameli Since 1997 Vice Managing Director, 40 William Street, President Weston Financial Group, Inc.; Suite 100 Vice President of Wellesley, MA 02481 Weston Securities Corporation. (age 56) ------------------------------------------------------------------------------------------------------------------------------------
41 NEW CENTURY PORTFOLIOS BOARD OF TRUSTEES AND OFFICERS (UNAUDITED) (CONTINUED) ================================================================================
NAME, POSITION(S) ADDRESS LENGTH OF HELD WITH PRINCIPAL OCCUPATION(S) AND AGE TIME SERVED NEW CENTURY DURING PAST 5 YEARS ------------------------------------------------------------------------------------------------------------ Nicole M. Tremblay, Esq. Since 2002 CFO, Treasurer, Vice President, Chief Compliance 40 William Street, Chief Officer, Weston Financial Group, Suite 100 Compliance Inc.; Vice President, Chief Compliance Wellesley, MA 02481 Officer and Officer, and General Securities Principal (age 34) Secretary of Weston Securities Corporation. ------------------------------------------------------------------------------------------------------------
* Douglas A. Biggar is considered to be an "interested person" of the Trust within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended. Mr. Biggar is an interested person because he is an officer of the Advisor and Distributor. Additional information about members of the Board of Trustees and executive officers is available in the Statement of Additional Information ("SAI"). To obtain a free copy of the SAI, please call 1-888-639-0102. FEDERAL TAX INFORMATION (UNAUDITED) ================================================================================ In accordance with federal tax requirements, the following provides shareholders with information concerning distributions from ordinary income and net realized gains made by the Portfolios during the year ended October 31, 2008. During the year ended October 31, 2008, New Century Capital Portfolio, New Century Balanced Portfolio, New Century Opportunistic Portfolio, New Century International Portfolio and New Century Alternative Strategies Portfolio paid long-term capital gains distributions of $5,981,681, $4,963,213, $464,131, $3,446,048 and $2,850,232, respectively. For the year ended October 31, 2008, certain dividends paid by the Portfolios may be subject to a maximum tax rate of 15%, as provided by the Jobs and Growth Tax Relief Reconciliation Act of 2003. New Century Capital Portfolio, New Century Balanced Portfolio, New Century Opportunistic Portfolio, New Century International Portfolio and New Century Alternative Strategies Portfolio intend to designate up to a maximum of $998,890, $1,727,951, $65,157, $2,455,459 and $3,290,139, respectively, as taxed at a maximum rate of 15%. As required by federal regulations, complete information will be computed and reported in conjunction with your 2008 Form 1099-DIV. 42 NEW CENTURY PORTFOLIOS ABOUT YOUR PORTFOLIO'S EXPENSES (UNAUDITED) ================================================================================ We believe it is important for you to understand the impact of costs on your investment. As a shareholder of the Portfolios, you may incur two types of costs: (1) transaction costs, including redemption fees; and (2) ongoing costs, including management fees, distribution (12b-1) fees and other expenses. The following examples are intended to help you understand ongoing costs (in dollars) of investing in the Portfolios and to compare these costs with the ongoing costs of investing in other mutual funds. A mutual fund's ongoing costs are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The examples in the tables below are based on an investment of $1,000 made at the beginning of the period shown (May 1, 2008) and held for the entire period (October 31, 2008). The table below illustrates each Portfolio's costs in two ways: ACTUAL FUND RETURN - This section helps you to estimate the actual expenses that you paid over the period. The "Ending Account Value" shown is derived from each Portfolio's actual return, and the third column shows the dollar amount of operating expenses that would have been paid by an investor who started with $1,000 in the Portfolios. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for the Portfolios under the heading "Expenses Paid During Period." HYPOTHETICAL 5% RETURN - This section is intended to help you compare the Portfolios' costs with those of other mutual funds. It assumes that each Portfolio had an annual return of 5% before expenses during the period shown, but that the expense ratio is unchanged. In this case, because the return used is not the Portfolios' actual returns, the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess each Portfolio's costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other mutual funds. Note that expenses shown in the table are meant to highlight and help you compare ongoing costs only. The Portfolios do not charge sales loads. However, a redemption fee of 2% is applied on the sale of shares of the Portfolios held for less than 30 days. The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. In addition, the calculations do not reflect the Portfolios' proportionate shares of expenses of the underlying investment companies in which the Portfolios invest. 43 NEW CENTURY PORTFOLIOS ABOUT YOUR PORTFOLIO'S EXPENSES (UNAUDITED) (CONTINUED) ================================================================================ More information about the Portfolios' expenses, including recent annual expense ratios, can be found in this report. For additional information on operating expenses and other shareholder costs, please refer to the Portfolios' prospectus.
NEW CENTURY CAPITAL PORTFOLIO ----------------------------------------------------------------------------------- Beginning Ending Account Value Account Value Expenses Paid May 1, 2008 October 31, 2008 During Period* ----------------------------------------------------------------------------------- Based on Actual Fund Return $1,000.00 $ 664.00 $5.54 Based on Hypothetical 5% Return (before expenses) $1,000.00 $1,018.55 $6.72 -----------------------------------------------------------------------------------
* Expenses are equal to the New Century Capital Portfolio's annualized expense ratio of 1.32% for the period, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
NEW CENTURY BALANCED PORTFOLIO ----------------------------------------------------------------------------------- Beginning Ending Account Value Account Value Expenses Paid May 1, 2008 October 31, 2008 During Period* ----------------------------------------------------------------------------------- Based on Actual Fund Return $1,000.00 $ 742.30 $6.15 Based on Hypothetical 5% Return (before expenses) $1,000.00 $1,018.15 $7.12 -----------------------------------------------------------------------------------
* Expenses are equal to the New Century Balanced Portfolio's annualized expense ratio of 1.40% for the period, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
NEW CENTURY OPPORTUNISTIC PORTFOLIO ----------------------------------------------------------------------------------- Beginning Ending Account Value Account Value Expenses Paid May 1, 2008 October 31, 2008 During Period* ----------------------------------------------------------------------------------- Based on Actual Fund Return $1,000.00 $ 675.60 $6.34 Based on Hypothetical 5% Return (before expenses) $1,000.00 $1,017.64 $7.63 -----------------------------------------------------------------------------------
* Expenses are equal to the New Century Opportunistic Portfolio's annualized expense ratio of 1.50% for the period, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). 44 NEW CENTURY PORTFOLIOS ABOUT YOUR PORTFOLIO'S EXPENSES (UNAUDITED) (CONTINUED) ================================================================================
NEW CENTURY INTERNATIONAL PORTFOLIO ----------------------------------------------------------------------------------- Beginning Ending Account Value Account Value Expenses Paid May 1, 2008 October 31, 2008 During Period* ----------------------------------------------------------------------------------- Based on Actual Fund Return $1,000.00 $ 588.80 $5.01 Based on Hypothetical 5% Return (before expenses) $1,000.00 $1,018.90 $6.36 -----------------------------------------------------------------------------------
* Expenses are equal to the New Century International Portfolio's annualized expense ratio of 1.25% for the period, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
NEW CENTURY ALTERNATIVE STRATEGIES PORTFOLIO ----------------------------------------------------------------------------------- Beginning Ending Account Value Account Value Expenses Paid May 1, 2008 October 31, 2008 During Period* ----------------------------------------------------------------------------------- Based on Actual Fund Return $1,000.00 $ 784.20 $4.32 Based on Hypothetical 5% Return (before expenses) $1,000.00 $1,020.37 $4.89 -----------------------------------------------------------------------------------
* Expenses are equal to the New Century Alternative Strategies Portfolio's annualized expense ratio of 0.96% for the period, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). 45 NEW CENTURY PORTFOLIOS TRUSTEES APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (UNAUDITED) ================================================================================ Weston Financial Group, Inc. ("Weston") serves as the investment adviser to each Portfolio of the Trust. At a regularly scheduled meeting held on September 4, 2008, the Board of Trustees (the "Board") of the Trust, approved the continuance of the investment advisory agreements (collectively, the "Advisory Agreements") for an additional one-year period through October 31, 2009 on behalf of each of the Capital, Balanced, Opportunistic, International and Alternative Strategies Portfolio and Weston. These approvals by the Board were unanimous, and therefore included a majority of those trustees who are not "interested persons" of the Trust, as that term is defined in the Investment Company Act of 1940, as amended, and by a majority of the entire Board. In reaching this decision, the Board took into consideration information furnished to them throughout the year, as well as information prepared for their review of the Agreements at the September 4, 2008, including legal advice of independent counsel. The materials provided in advance of the meeting included: (i) a memorandum prepared by independent counsel setting forth the Board's fiduciary duties, responsibilities and the factors they should consider in their evaluation of the renewal of the Advisory Agreements; (ii) information on the background and experience of each Portfolio Manager; (iii) a copy of the Advisory Agreements; and (iv) performance information comparing each Portfolio to its relevant benchmark index. After considering the information reviewed at the meeting, the Board decided to approve the renewal of the Advisory Agreements for a one-year period commencing November 1, 2008 based upon their evaluation of: (i) the long-term relationship between Weston and the Trust; (ii) Weston's commitment to compliance; (iii) the nature, extent and quality of the services provided; (iv) the performance of each Portfolio; and (v) the costs of the services provided and the profitability of each entity from its relationship with the Portfolios. In evaluating the various factors noted above, the Trustees gave different weight to different items. In general, the Trustees determined it would be most significant that the proposed Advisory Agreements would assure a continuity of relationships to service each of the Portfolios. Further, the Trustees believe a long-term relationship with a capable, conscientious advisor and personnel is in the best interest of shareholders and such shareholders have benefited from such continuity and Weston's strong commitment to compliance. The Trustees noted specifically that management has been extremely responsive to any issues raised by the Board. The Trustees also expressed their pleasure with the strong relationship that has developed between the Board and the Trust's Chief Compliance Officer. In addition, in evaluating the nature, quality and extent of the services provided by Weston to the Portfolios in the past and the services that are expected to continue in the future, the Trustees considered that Weston is a quality firm with a reputation for integrity and honesty. The Board also considered biographical information about each Portfolio's manager, the administrative services performed by Weston, financial information regarding Weston, the commitment to compliance, and the financial support Weston provides to the Portfolios. 46 NEW CENTURY PORTFOLIOS TRUSTEES APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (UNAUDITED) (CONTINUED) ================================================================================ Furthermore, the Board noted this was the third year since the change in control of Weston, whereby it became a wholly-owned subsidiary of The Washington Trust Company, concluding that the change had been beneficial to the Portfolios and their shareholders. The Trustees also considered the terms and conditions of the existing Advisory Agreements that were being renewed, noting that the terms and conditions were the same, including the provision for advisory fees. The Board reviewed information on the performance of each Portfolio for various time periods along with performance information of a relevant securities index or indexes. They also reviewed information provided by Morningstar, Inc. on each Portfolio's risk-adjusted performance. In general, the Board noted that the Portfolios had been performing competitively in the industry and were pleased with their results, including their Morningstar ratings. The Board expressed their satisfaction with the experience and performance of the two portfolio managers. They also noted Weston's prudent investment management style. The Board considered the investment advisory fees paid by each Portfolio directly and in comparison to the fees paid by a peer group of funds within the industry. The peer groups consist of similar funds with the same investment style and Morningstar Category and similar asset size as each Portfolio. The Board was advised that the investment advisory fees charged by the Portfolios were within an acceptable range based on the average of the investment advisory fees charged by other, similar funds within the industry. It was noted that the Capital, Balanced, Opportunistic and International Portfolios do offer a breakpoint for assets in excess of $100 million that could lower the investment advisory fees as assets grow. The Board also discussed Weston's expense limitation agreements with each Portfolio. Pursuant to these expense limitation agreements, Weston has agreed to waive fees and/or reimburse certain other expenses so that the ratio of total operating expenses of each Portfolio was limited to 1.50% of such Portfolio's average net assets. The Board concluded the investment advisory fees charged were fair and reasonable. The Trustees also noted that the breakpoints and expense limitation agreements demonstrated Weston's commitment to the Trust and its shareholders. The Board also reviewed the average total expense ratios of similar equity mutual funds within the industry. They discussed the mutual funds' fixed expenses, such as the use of outside service providers for transfer agency and fund accounting. It was also noted that, as a fund-of-funds complex, the Trust had a different expense ratio structure than most other funds within the industry. The Board considered the extent to which economies of scale would be realized as the Portfolios grow and whether fee levels reflect these economies of scale for the benefit of investors. The Board noted Weston's representation that certain Portfolio expenses are relatively fixed and unrelated to asset size and that Weston may enjoy some economies of scale as a Portfolio's assets grow. In considering whether fee levels reflect economies of scale for the benefit of shareholders, the Board reviewed each Portfolio's asset size, breakpoints for those Portfolios, the Portfolios' total and net expense ratios and the expense caps in place, and concluded that they reasonably reflect appropriate recognition of any economies of scale. 47 NEW CENTURY PORTFOLIOS TRUSTEES APPROVAL OF INVESTMENT ADVISORY AGREEMENTS (UNAUDITED) (CONTINUED) ================================================================================ The Board noted that the total fees and expenses of the Portfolios were deemed to be fair and reasonable based on the information provided at the Board Meeting with respect to other funds in the industry. The Board reviewed and discussed other aspects of Weston, such as the profitability of the investment advisor, the benefits each party received from such a long-term relationship, and the fact that Weston and its affiliates received other compensation from the relationship such as fees as administrator and fees under a distribution (Rule 12b-1) plan. The Board also noted that one of the trustees, Mr. Biggar, was an affiliate of Weston and the Trust's Distributor and would benefit by the continuance of the investment advisory and distribution agreements. In their deliberations, the Board did not rely upon comparisons of the services to be rendered and the amounts to be paid under the contract with those under other investment advisory contracts, such as contracts of the same and other investment advisers with other registered investment companies or other types of clients (e.g., pension funds and other institutional investors). These factors were considered not to be relevant in a situation where the Board was determining whether to re-approve the agreements with an existing entity on the same terms and conditions. Such factors would be relevant to considering and approving new investment advisory agreements with other investment advisory entities. 48 This page intentionally left blank. ================================================================================ INVESTMENT ADVISOR AND ADMINISTRATOR Weston Financial Group, Inc. Wellesley, MA DISTRIBUTOR Weston Securities Corporation Wellesley, MA COUNSEL Greenberg Traurig, LLP Philadelphia, PA INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Briggs, Bunting & Dougherty, LLP Philadelphia, PA TRANSFER AGENT Ultimus Fund Solutions, LLC Cincinnati, OH CUSTODIAN U.S. Bank, N.A. Cincinnati, OH This report and the financial statements contained herein are submitted for the general information of the shareholders of the Portfolios. This report is authorized for distribution to prospective investors in the Portfolios only if preceded or accompanied by an effective Prospectus which contains details concerning the management fees, expenses and other pertinent information. A description of the policies and procedures that the Portfolios use to determine how to vote proxies relating to portfolio securities is available without charge upon request by calling toll-free 1-888-639-0102, or on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov. Information regarding how the Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge upon request by calling toll-free 1-888-639-0102, or on the SEC's website at http://www.sec.gov. The Portfolios file a complete listing of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Portfolios' Forms N-Q are available without charge upon request by calling 1-888-639-0102, or on the SEC's website at http://www.sec.gov. The Portfolios' Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC, or by calling 1-800-SEC-0330. ================================================================================ ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. Pursuant to Item 12(a)(1), a copy of registrant's code of ethics is filed as an exhibit to this Form N-CSR. During the period covered by this report, the code of ethics has not been amended, and the registrant has not granted any waivers, including implicit waivers, from the provisions of the code of ethics. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's board of trustees has determined that the registrant has at least one audit committee financial expert serving on its audit committee. The name of the audit committee financial expert is Roger Eastman. Mr. Eastman is "independent" for purposes of this Item. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) AUDIT FEES. The aggregate fees billed for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements were $53,000 and $50,000 with respect to the registrant's fiscal years ended October 31, 2008 and 2007, respectively. (b) AUDIT-RELATED FEES. No fees were billed in either of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item. (c) TAX FEES. The aggregate fees billed for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning were $10,000 and $10,000 with respect to the registrant's fiscal years ended October 31, 2008 and 2007, respectively. The services comprising these fees are the preparation of the registrant's federal income and excise tax returns. (d) ALL OTHER FEES. No fees were billed in either of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. (e)(1) The audit committee has not adopted pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. (e)(2) None of the services described in paragraph (b) through (d) of this Item were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. (f) Less than 50% of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant's full-time, permanent employees. (g) During the fiscal years ended October 31, 2008 and 2007, aggregate non-audit fees of $10,000 and $10,000, respectively, were billed by the registrant's accountant for services rendered to the registrant. No non-audit fees were billed in either of the last two fiscal years by the registrant's accountant for services rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant. (h) The principal accountant has not provided any non-audit services that were not previously approved to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable [schedule filed with Item 1] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The registrant has a standing nominating committee responsible for the selection and nomination to serve as trustees of the registrant. Although the nominating committee expects to be able to find an adequate number of qualified candidates to serve as trustees, the nominating committee is willing to consider nominations received from shareholders. Shareholders wishing to submit a nomination should do so by notifying the Secretary of the registrant, in writing, at the following address: 40 William Street, Suite 100, Wellesley, Massachusetts 02481-3902. ITEM 11. CONTROLS AND PROCEDURES. (a) Based on their evaluation of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report, the registrant's principal executive officer and principal financial officer have concluded that such disclosure controls and procedures are reasonably designed and are operating effectively to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this report is being prepared, and that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported on a timely basis. (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Attached hereto (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)): Attached hereto (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons: Not applicable (b) Certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)): Attached hereto Exhibit 99.CODE ETH Code of Ethics Exhibit 99.CERT Certifications required by Rule 30a-2(a) under the Act Exhibit 99.906CERT Certifications required by Rule 30a-2(b) under the Act SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) New Century Portfolios -------------------------------------------------------------------- By (Signature and Title)* /s/ Wayne M. Grzecki -------------------------------------------------- Wayne M. Grzecki, President Date January 6, 2009 ----------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Wayne M. Grzecki -------------------------------------------------- Wayne M. Grzecki, President Date January 6, 2009 ----------------------------- By (Signature and Title)* /s/ Nicole M. Tremblay -------------------------------------------------- Nicole M. Tremblay, Treasurer Date January 6, 2009 ----------------------------- * Print the name and title of each signing officer under his or her signature.