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Filed On 4/30/01 10:56am ET · SEC Files 2-98326, 811-04323 · Accession Number 927016-1-500437
As Of Filer Filing As/For/On Docs:Pgs Issuer Agent
4/30/01 IXIS Advisor Funds Trust I 485BPOS 4/30/01 58:946 Donnelley R R & S..07/FA
Subsequent Filings That Reference This Filing:
8/22/01 IXIS Advisor Funds Trust I N-14AE 9:261 Allied Printi..Incorp/FA
8/22/01 IXIS Advisor Funds Trust III N-14AE 7:250 Allied Printi..Incorp/FA
12/03/01 IXIS Advisor Funds Trust I 485BPOS 12/03/01 14:109 IXIS AS..Advisors/L/P/FA
CDC Nvest Funds Trust I
12/14/01 IXIS Advisor Funds Trust I 485BPOS 12/14/01 3:26 IXIS AS..Advisors/L/P/FA
CDC Nvest Funds Trust I
12/19/01 IXIS Advisor Funds Trust III 485BPOS 12/19/01 2:14 IXIS AS..Advisors/L/P/FA
CDC Nvest Funds Trust III
Document/Exhibit Description Pages Size
1: 485BPOS Trust I 485BPOS 606 2,956K
2: EX-99.(A)(14) Amendment 13 to Agreement and Declaration 2± 21K
3: EX-99.(D)(3)(II) Form of Subadvisory Agreement Balanced 8 46K
Loomis
4: EX-99.(D)(3)(III) Form of Subadvisory Agreement Balanced J&V 8 45K
5: EX-99.(D)(3)(VI) Form of Subadvisory Agreement Star Advisers 8 47K
Loomis
6: EX-99.(E)(13) Dealer Agreement 5 45K
7: EX-99.(H)(2) Amend to Fee Schedule of Ta and Service 2 24K
Agreement
8: EX-99.(H)(11) Fee Waiver/Reimbursement Agreement 2 22K
9: EX-99.(H)(12) Administrative Services Agreement Dated 12 56K
10/30/00
10: EX-99.(H)(13) Amendment to Admin Services Agreement 12/1/00 12 56K
11: EX-99.(H)(14) Amendment to Admin Services Agreement 1/2/01 3 25K
12: EX-99.(J) Consent of Pricewaterhousecoopers 1 18K
13: EX-99.(M)(1)(A) 12b-1 Class A Growth 2 23K
14: EX-99.(M)(1)(B) 12b-1 Class B Growth 3 27K
15: EX-99.(M)(1)(C) 12b-1 Class C Growth 3 27K
16: EX-99.(M)(2)(A) 12b-1 Class A Capital Growth 2 23K
17: EX-99.(M)(2)(B) 12b-1 Class B Capital Growth 3 27K
18: EX-99.(M)(2)(C) 12b-1 Class C Capital Growth 3 27K
19: EX-99.(M)(3)(A) 12b-1 Class A Balanced 2 23K
20: EX-99.(M)(3)(B) 12b-1 Class B Balanced 3 27K
21: EX-99.(M)(3)(C) 12b-1 Class C Balanced 3 27K
22: EX-99.(M)(4)(A) 12b-1 Class A International Equity 2 23K
23: EX-99.(M)(4)(B) 12b-1 Class B International Equity 3 27K
24: EX-99.(M)(4)(C) 12b-1 Class C International Equity 3 27K
25: EX-99.(M)(5)(A) 12b-1 Class A Star Advisers 2 23K
26: EX-99.(M)(5)(B) 12b-1 Class B Star Advisers 3 27K
27: EX-99.(M)(5)(C) 12b-1 Class C Star Advisers 3 27K
28: EX-99.(M)(6)(A) 12b-1 Class A Star Value 2 23K
29: EX-99.(M)(6)(B) 12b-1 Class B Star Value 3 27K
30: EX-99.(M)(6)(C) 12b-1 Class C Star Value 3 27K
31: EX-99.(M)(7)(A) 12b-1 Class A Star Worldwide 2 23K
32: EX-99.(M)(7)(B) 12b-1 Class B Star Worldwide 3 27K
33: EX-99.(M)(7)(C) 12b-1 Class C Star Worldwide 3 27K
34: EX-99.(M)(8)(A) 12b-1 Class A Government Securities 2 23K
35: EX-99.(M)(8)(B) 12b-1 Class B Government Securities 3 27K
36: EX-99.(M)(8)(C) 12b-1 Class C Government Securities 3 27K
37: EX-99.(M)(9)(A) 12b-1 Class A Strategic Income 2 23K
38: EX-99.(M)(9)(B) 12b-1 Class B Strategic Income 3 27K
39: EX-99.(M)(9)(C) 12b-1 Class C Strategic Income 3 27K
40: EX-99.(M)(10)A 12b-1 Class A Bond Income 2 23K
41: EX-99.(M)(10)B 12b-1 Class B Bond Income 3 27K
42: EX-99.(M)(10)C 12b-1 Class C Bond Income 3 27K
43: EX-99.(M)(11)A 12b-1 Class A Municipal 2 23K
44: EX-99.(M)(11)B 12b-1 Class B Municipal 3 27K
45: EX-99.(M)(12)A 12b-1 Star Small 2 23K
46: EX-99.(M)(12)B 12b-1 Class B Star Small 3 27K
47: EX-99.(M)(12)C 12b-1 Class C Star Small 3 27K
48: EX-99.(N) 18f3 Plan 3 30K
49: EX-99.(P)(1) Code of Ethics of Registrant 4 33K
50: EX-99.(P)(2) Code of Ethics for Nfm and Nfd 19 73K
51: EX-99.(P)(4) Code of Ethics for Westpeak 23 77K
52: EX-99.(P)(5)(I) Code of Ethics for Loomis January 14, 2000 26 99K
53: EX-99.(P)(5)(II) Code of Ethics for Loomis 1/14/00 Amended 27 100K
1/2/01
54: EX-99.(P)(8) Code of Ethics for Kobrick 12 61K
55: EX-99.(P)(9) Code of Ethics for Vnsm 25 78K
56: EX-99.(P)(10)II Code of Ethics for Montgomery Revised 27 101K
57: EX-99.(P)(12) Code of Ethics for Rsim 8 51K
58: EX-99.(P)(13) Code of Ethics for Jurika and Voyles 10 57K
| Page | (sequential) | | | | (alphabetic) | Top |
|---|
| | |
- Alternative Formats (RTF, XML, et al.)
- Aaa
- A CDSC will not be charged on:
- Additional Investor Services
- AEW Real Estate Fund
- A notary public cannot provide a signature guarantee. A signature guarantee can be obtained from one of the following sources:
- Appendix A
- A signature guarantee protects you against fraudulent orders and is necessary if:
- As long as the Distributor is notified at the time you sell, the CDSC for any share class will generally be eliminated in the following cases:
- Automatic Investing Through Investment Builder
- Back Bay Advisors
- Balanced Fund
- Bond Income Fund
- Bullseye Fund
- Business and Other Connections of Investment Adviser
- Buying Shares
- By Exchange
- By Mail
- By Systematic Withdrawal Plan
- By Telephone
- By Wire
- California Fund
- Capital Growth Fund
- CDC IXIS Asset Management
- CDC IXIS Asset Management Advisers
- CDC Nvest
- CDC Nvest Funds
- CDC Nvest Star Advisers Fund
- CDC Nvest Star Small Cap Fund
- CDC Nvest Star Value Fund
- CDC Nvest Star Worldwide Fund
- CDSC is a sales charge you pay when you redeem certain Fund shares. The CDSC:, The
- Class A shares may be offered without front-end sales charges or a CDSC, and Class C shares may be offered without a front-end sales charge, to the following individuals and institutions:
- Earnings growth. The market capitalization of these companies will generally be within the range of the Russell 2500 Index
- Exchanging Shares
- Exhibits
- Fund Fees & Expenses
- Fund may also:, The
- Fund Services
- Futures, Options and Swap Contracts
- Glossary of Terms
- Government Securities Fund
- Growth and Income Fund
- Growth Fund
- Harris Associates
- High Income Fund
- How Sales Charges Are Calculated
- How Sales Charges Are Calculated Class A Shares
- Income Dividends, Capital Gain Distributions and Tax Status
- Indemnification
- In making investment decisions for its segment of the Fund, Harris Associates generally employs the following methods:
- In making investment decisions, Harris Associates generally employs the following methods:
- In making investment decisions, Kobrick Adviser employs the following four-part investment approach:
- In making investment decisions, Loomis Sayles employs the following methods:
- In making investment decisions, Loomis Sayles generally employs the following methods:
- In making investment decisions, Montgomery employs the following methods:
- In making investment decisions, Montgomery generally employs the following methods:
- In making investment decisions, RS Investment Management generally employs the following methods:
- In selecting investments for the Fund, Westpeak employs the following process:
- International Equity Fund
- Investment Grade
- Investment Restrictions
- It's Easy to Open an Account
- Janus Capital
- Jurika & Voyles
- Kobrick Adviser
- Kobrick Funds
- Large Cap Value Fund
- Limited Term U.S. Government Fund
- Location of Accounts and Records
- Loomis Sayles
- Management of the Trusts
- Management Services
- Massachusetts Fund
- MetLife Securities
- Miscellaneous Investment Practices
- Money Market Funds
- Montgomery
- More About Risk
- Municipal Income Fund
- Nathan & Lewis
- Net Asset Value and Public Offering Price
- New England Securities
- Nvest Funds Trust I
- Other Arrangements
- Performance
- Persons Controlled by or Under Common Control with the Registrant
- Portfolio Transactions and Brokerage
- Principal Underwriter
- Prospectus
- Redemptions
- REITs
- Restrictions on Buying, Selling and Exchanging Shares
- RS Investment Management
- Selling Shares
- Selling Shares in Writing
- Shareholder Services
- Short Term Corporate Income Fund
- Small-cap companies
- Star Advisers Fund
- Star Small Cap Fund
- Star Value Fund
- Star Worldwide Fund
- Strategic Income Fund
- Table of Contents
- The CDSC is a sales charge you pay when you redeem certain Fund shares. The CDSC:
- The Fund may also:
- There are several ways you can lower your sales charge for Class A shares utilizing the chart on the previous page, including:
- Through Automated Clearing House
- Through Automated Clearing House ("ACH")
- Through Your Investment Dealer
- Trustee Fees
- Undertakings
- Vnsm
- Ways to Reduce or Eliminate Sales Charges
- Westpeak
- [Wire Icon]
- You have access to your account 24 hours a day by calling the Personal Access Line(R) from a touch-tone telephone or by visiting us online. Using these customer service options, you may:
|
| 1 | 1st Page
|
| " | Nvest Funds Trust I
|
| 2 | CDC Nvest
|
| " | Prospectus
|
| " | Fund Fees & Expenses
|
| " | Fund Services
|
| " | CDC Nvest Funds
|
| 3 | Table of Contents
|
| " | More About Risk
|
| " | Glossary of Terms
|
| 22 | How Sales Charges Are Calculated
|
| " | How Sales Charges Are Calculated Class A Shares
|
| " | The CDSC is a sales charge you pay when you redeem certain Fund shares. The CDSC:
|
| " | A CDSC will not be charged on:
|
| 23 | Ways to Reduce or Eliminate Sales Charges
|
| " | There are several ways you can lower your sales charge for Class A shares utilizing the chart on the previous page, including:
|
| " | Class A shares may be offered without front-end sales charges or a CDSC, and Class C shares may be offered without a front-end sales charge, to the following individuals and institutions:
|
| " | As long as the Distributor is notified at the time you sell, the CDSC for any share class will generally be eliminated in the following cases:
|
| 24 | It's Easy to Open an Account
|
| " | You have access to your account 24 hours a day by calling the Personal Access Line(R) from a touch-tone telephone or by visiting us online. Using these customer service options, you may:
|
| 25 | Buying Shares
|
| " | Through Your Investment Dealer
|
| " | By Mail
|
| " | By Exchange
|
| " | By Wire
|
| " | Automatic Investing Through Investment Builder
|
| " | Through Automated Clearing House ("ACH")
|
| 26 | Selling Shares
|
| " | Through Automated Clearing House
|
| " | By Systematic Withdrawal Plan
|
| " | By Telephone
|
| 27 | Selling Shares in Writing
|
| " | A signature guarantee protects you against fraudulent orders and is necessary if:
|
| " | A notary public cannot provide a signature guarantee. A signature guarantee can be obtained from one of the following sources:
|
| 29 | Exchanging Shares
|
| " | Restrictions on Buying, Selling and Exchanging Shares
|
| 35 | Additional Investor Services
|
| 92 | The Fund may also:
|
| 95 | REITs
|
| 97 | In selecting investments for the Fund, Westpeak employs the following process:
|
| 107 | Performance
|
| 111 | Small-cap companies
|
| 169 | CDC IXIS Asset Management
|
| 217 | CDC Nvest Star Value Fund
|
| " | CDC Nvest Star Small Cap Fund
|
| " | CDC Nvest Star Advisers Fund
|
| " | CDC Nvest Star Worldwide Fund
|
| 222 | Harris Associates
|
| " | Loomis Sayles
|
| 223 | Westpeak
|
| 228 | In making investment decisions for its segment of the Fund, Harris Associates generally employs the following methods:
|
| 229 | In making investment decisions, Loomis Sayles generally employs the following methods:
|
| " | Montgomery
|
| " | In making investment decisions, Montgomery generally employs the following methods:
|
| 230 | RS Investment Management
|
| " | In making investment decisions, RS Investment Management generally employs the following methods:
|
| 235 | In making investment decisions, Harris Associates generally employs the following methods:
|
| " | Kobrick Adviser
|
| 236 | In making investment decisions, Kobrick Adviser employs the following four-part investment approach:
|
| 237 | Earnings growth. The market capitalization of these companies will generally be within the range of the Russell 2500 Index
|
| " | In making investment decisions, Loomis Sayles employs the following methods:
|
| 242 | In making investment decisions, Montgomery employs the following methods:
|
| 264 | [Wire Icon]
|
| 387 | Investment Restrictions
|
| 395 | Government Securities Fund
|
| " | CDC IXIS Asset Management Advisers
|
| " | Back Bay Advisors
|
| 396 | Limited Term U.S. Government Fund
|
| " | Short Term Corporate Income Fund
|
| " | Strategic Income Fund
|
| " | Bond Income Fund
|
| 397 | High Income Fund
|
| 400 | New England Securities
|
| " | MetLife Securities
|
| " | Nathan & Lewis
|
| 429 | Growth and Income Fund
|
| " | Balanced Fund
|
| 430 | Bullseye Fund
|
| " | Jurika & Voyles
|
| 432 | AEW Real Estate Fund
|
| 436 | Capital Growth Fund
|
| 437 | Large Cap Value Fund
|
| 438 | International Equity Fund
|
| 440 | Growth Fund
|
| 463 | Star Advisers Fund
|
| " | Janus Capital
|
| 464 | Star Worldwide Fund
|
| " | Star Small Cap Fund
|
| 465 | Star Value Fund
|
| " | Vnsm
|
| 478 | Municipal Income Fund
|
| " | Massachusetts Fund
|
| 488 | Miscellaneous Investment Practices
|
| 505 | Futures, Options and Swap Contracts
|
| 514 | Management of the Trusts
|
| 516 | Trustee Fees
|
| 531 | California Fund
|
| 534 | Other Arrangements
|
| 536 | Portfolio Transactions and Brokerage
|
| 550 | Net Asset Value and Public Offering Price
|
| 553 | Shareholder Services
|
| 557 | Kobrick Funds
|
| 558 | Money Market Funds
|
| 560 | Redemptions
|
| 569 | Income Dividends, Capital Gain Distributions and Tax Status
|
| 573 | Appendix A
|
| " | Aaa
|
| 575 | Investment Grade
|
| 585 | Item 23. Exhibits
|
| 597 | Item 24. Persons Controlled by or Under Common Control with the Registrant
|
| " | Item 25. Indemnification
|
| 598 | Item 26. Business and Other Connections of Investment Adviser
|
| 599 | Item 27. Principal Underwriter
|
| 601 | Item 28. Location of Accounts and Records
|
| 602 | Item 29. Management Services
|
| " | Item 30. Undertakings
|
Registration Nos. 2-98326
811-4323
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [_]
Pre-Effective Amendment No. ____ [_]
Pre-Effective Amendment No. 44 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [_]
Amendment No 45 [X]
(Check appropriate box or boxes.)
NVEST FUNDS TRUST I
-------------------
(Exact Name of Registrant as Specified in Charter)
399 Boylston Street, Boston, Massachusetts 02116
------------------------------------------------
(Address of Principal Executive Offices, including Zip Code)
(617) 449-2801
-------------
(Registrant's Telephone Number, including Area Code)
John E. Pelletier, Esq
Nvest Funds Distributor, L.P.
399 Boylston Street
Boston, Massachusetts 02116
(Names and address of agent for service)
Copy to:
John M. Loder, Esq
Ropes & Gray
One International Place
Boston, Massachusetts 02110
It is proposed that this filing will become effective (check appropriate box)
[_] immediately upon filing pursuant to paragraph (b)
[X] on May 1, 2001 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
[_] this post-effective amendment designates a new effective date for
previously filed post-effective amendment.
--------------------------------------------------------------------------------
[LOGO OF CDC Nvest Funds]
--------------------------------------------------------------------------------
CDC Nvest
Income Funds
CDC Nvest Short Term Corporate Income Fund
Loomis, Sayles & Company, L.P.
CDC Nvest Bond Income Fund
Loomis, Sayles & Company, L.P.
CDC Nvest High Income Fund
Loomis, Sayles & Company, L.P.
CDC Nvest Strategic Income Fund
Loomis, Sayles & Company, L.P.
CDC Nvest Limited Term U.S. Government Fund
Loomis, Sayles & Company, L.P.
CDC Nvest Government Securities Fund
Loomis, Sayles & Company, L.P.
* [photo]
Prospectus
May 1, 2001
What's Inside
Goals, Strategies & Risks
Page X
Fund Fees & Expenses
Page X
Management Team
Page X
Fund Services
Page X
Fund Performance
Page X
The Securities and Exchange Commission has not approved any Fund's shares or
determined whether this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.
For general information on the Funds or any of their services and for
assistance in opening an account, contact your financial representative or
call CDC Nvest Funds.
CDC Nvest Funds
399 Boylston Street, Boston, Massachusetts 02116
800-225-5478
www.cdcnvestfunds.com
Table of Contents
GOALS, STRATEGIES & RISKS
CDC Nvest Short Term Corporate Income Fund
CDC Nvest Bond Income Fund
CDC Nvest High Income Fund
CDC Nvest Strategic Income Fund
CDC Nvest Limited Term U.S. Government Fund
CDC Nvest Government Securities Fund
FUND FEES & EXPENSES
Fund Fees & Expenses
MORE ABOUT RISK
More About Risk
MANAGEMENT TEAM
Meet the Funds' Investment Adviser and Subadvisers
Meet the Funds' Portfolio Managers
FUND SERVICES
Investing in the Funds
How Sales Charges Are Calculated
Ways to Reduce or Eliminate Sales Charges
It's Easy to Open an Account
Buying Shares
Selling Shares
Selling Shares in Writing
Exchanging Shares
Restrictions on Buying, Selling and Exchanging Shares
How Fund Shares Are Priced
Dividends and Distributions
Tax Consequences
Compensation to Securities Dealers
Additional Investor Services
FUND PERFORMANCE
CDC Nvest Short Term Corporate Income Fund
CDC Nvest Bond Income Fund
CDC Nvest High Income Fund
CDC Nvest Strategic Income Fund
CDC Nvest Limited Term U.S. Government Fund
CDC Nvest Government Securities Fund
GLOSSARY OF TERMS
If you have questions about any of the terms used in this Prospectus, please
refer to the "Glossary of Terms."
To learn more about the possible risks of investing in the Funds, please refer
to the section entitled "More About Risk." This section details the risks of
practices in which the Funds may engage. Please read this section carefully
before you invest.
Fund shares are not bank deposits and are not guaranteed, endorsed or insured by
the Federal Deposit Insurance Corporation or any other government agency, and
are subject to investment risks, including possible loss of the principal
invested.
Please see the back cover of this Prospectus for important privacy
policy information.
Goals, Strategies & Risks
-------------------------
CDC Nvest Short Term Corporate
[Download Table]
Income Fund
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Fund Focus
------------------------------------------------------------
--------------- -------------- -------------- --------------
Stability Income Growth
--------------- -------------- -------------- --------------
High X
--------------- -------------- -------------- --------------
--------------- -------------- -------------- --------------
Mod. X
--------------- -------------- -------------- --------------
--------------- -------------- -------------- --------------
Low X
--------------- -------------- -------------- --------------
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Duration
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Short Int. Long
--------------- -------------- -------------- --------------
High X
--------------- -------------- -------------- --------------
Mod.
--------------- -------------- -------------- --------------
Low
--------------- -------------- -------------- --------------
Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Craig Smith, Richard G. Raczkowski and John Hyll
Category: Corporate Income
Ticker Symbol: Class A Class B Class C
NEFAX NEABX NECSX
Investment Goal
The Fund seeks a high level of current income consistent with preservation of
capital.
The Fund's investment goal may be changed without shareholder approval.
Principal Investment Strategies
Under normal market conditions, the Fund intends to invest primarily in
corporate bonds, but will invest at least 10% of its assets in securities issued
by the U.S. Treasury or other U.S. government agencies. The Fund may invest up
to 25% of its assets in U.S. dollar-denominated foreign securities and up to 10%
of its assets in securities denominated in foreign currencies (and related
currency hedging transactions). It may also invest up to 10% of its assets in
lower-rated bonds, which may include emerging market bonds (those rated BB or
lower by Standard & Poor's Ratings Group ("S&P") and Ba or lower by Moody's
Investors Service, Inc. ("Moody's")). Loomis Sayles follows a total return
oriented investment approach in selecting securities for the Fund. It seeks
corporate, mortgage-related or U.S. government securities that give the Fund's
portfolio the following characteristics, although not all of the securities
selected will have these characteristics and Loomis Sayles may look for other
characteristics if market conditions change:
|X| average credit rating of "A" by S&P or Moody's
|X| average maturity of 3 years or less
In selecting investments for the Fund, Loomis Sayles employs the following
strategies:
. Its research analysts work closely with the Fund's portfolio managers to
develop an outlook on the economy from research produced by various Wall
Street firms and specific forecasting services or from economic data
released by U.S. and foreign governments as well as the Federal Reserve
Bank.
. Next, the analysts conduct a thorough review of individual securities to
identify what they consider attractive values in the corporate and mortgage
marketplace. This value analysis uses quantitative tools such as internal
and external computer systems and software.
. Loomis Sayles continuously monitors an issuer's creditworthiness to assess
whether the obligation remains an appropriate investment for the Fund.
. Loomis Sayles seeks to balance opportunities for yield and price
performance by combining macroeconomic analysis with individual security
selection. The short-term maturity of the Fund's investments creates the
opportunity for greater price stability in addition to the conservative
income-producing capabilities of higher quality fixed-income
securities.
The Fund may:
. Invest in Rule 144A securities, collateralized mortgage obligations, asset-
backed securities and zero-coupon bonds.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise. Lower-quality
fixed-income securities may be subject to these risks to a greater extent than
other fixed-income securities.
Foreign securities: May be affected by foreign currency fluctuations, higher
volatility than U.S. securities and limited liquidity. Political, economic and
information risks are also associated with foreign securities. These investments
may also be affected by the conversion of the currency of several European
countries to the "euro." Investments in emerging markets may be subject to these
risks to a greater extent than those in more developed markets."
Mortgage-related and asset-backed securities: Subject to prepayment risk. With
prepayment, the Fund may reinvest the prepaid amounts in securities with lower
yields than the prepaid obligations. The Fund may also incur a realized loss
when there is a prepayment of securities that were purchased at a premium.
1
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
since-inception periods compare with those of a broad measure of market
performance and those of indices of funds with similar objectives. The Fund,
formerly known as Adjustable Rate U.S. Government Fund, changed its name and
investment policies on December 1, 1998. The bar chart and table reflect results
achieved under different investment policies prior to December 1, 1998. The
Fund's past performance does not necessarily indicate how the Fund will perform
in the future.
The bar chart shows the Fund's total returns for Class A shares for each
calendar year since its first full year of operations. The returns for the Class
B and C shares differ from the Class A returns shown in the bar chart to the
extent their respective expenses differ. The chart does not reflect any sales
charge that you may be required to pay when you buy or redeem the Fund's shares.
A sales charge will reduce your return.
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------
Total Return
1992 1993 1994 1995 1996 1997 1998 1999 2000
4.93% 4.10% 0.82% 8.60% 5.83% 6.21% 4.07% 1.87% 6.68%
------------ ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------
Highest Quarterly Return: First Quarter 1995, up 3.35%
. Lowest Quarterly Return: Second Quarter 1999, down 0.07%
The table below shows the Fund's average annual total returns for the one-year,
five-year and since-inception periods compared to those of the Lehman Mutual
Fund Short (1-5) Investment Grade Debt Index (the "Lehman Short Index"), an
unmanaged index of corporate bonds with maturities between one and five years.
They are also compared to the returns, as calculated by Morningstar, Inc. and
Lipper, Inc., of Morningstar Short Term Bond Average and the Lipper Short Term
Investment Grade Average, each an average of the total return of mutual funds
with similar investment objectives as the Fund. You may not invest directly in
an index. The Fund's total returns reflect its expenses and the maximum sales
charge you may be required to pay when you buy or redeem the Fund's shares. The
Lehman Short Index percentages have not been adjusted for ongoing management,
distribution and operating expenses and sales charges applicable to mutual fund
investments. The Morningstar Short Term Bond Average and Lipper Short Term
Investment Grade Average percentages have been adjusted for these expenses but
do not reflect any sales charges.
[Enlarge/Download Table]
---------------------------------------------------------------------------------------------------------
Average Annual Total Returns Since Since Since
----------------------------
(for the periods ended December 31, 2000) Past Past Class A Class B Class C
1 Year 5 Years Inception Inception Inception
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
CDC Nvest Short Term Corporate Income Fund
------------------------------------------
Class A (inception 10/18/91) 3.43% 4.26% 4.44%
Class B (inception 9/13/93) 0.90% 3.79% 3.88%
Class C (inception 12/7/98) 3.86% 3.07%
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Lehman Mutual Fund Short (1-5) Investment 8.48% 6.16% 6.92% 6.24% 5.44%
Grade Index
---------------------------------------------------------------------------------------------------------
Morningstar Short Term Bond Average 8.14% 5.43% 5.86% 5.26% 5.11%
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Lipper Short Term Investment Grade 7.36% 5.38% 5.77% 5.22% 5.12%
Average
---------------------------------------------------------------------------------------------------------
Each Index is calculated from 10/31/91 for Class A shares, 9/30/93 for Class
B shares and 12/31/98 for Class C shares.
For actual past expenses of Classes A, B and C shares, see the section
entitled "Fund Fees & Expenses."
2
Goals, Strategies & Risks
CDC Nvest Bond Income Fund
[Download Table]
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Fund Focus
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--------------- -------------- -------------- --------------
Stability Income Growth
--------------- -------------- -------------- --------------
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High X
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Mod. X
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Low X
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Duration
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Short Int. Long
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High X
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Mod.
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Low
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Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Peter W. Palfrey, Curt A. Mitchell and Richard G. Raczkowski
Category: Corporate Income
[Download Table]
Ticker Symbol: Class A Class B Class C
NEFRX NERBX NECRX
Investment Goal
The Fund seeks a high level of current income consistent with what the Fund
considers reasonable risk. It invests primarily in corporate and U.S. government
bonds.
Principal Investment Strategies
Under normal market conditions, the Fund will invest primarily in U.S. corporate
and U.S. government bonds. It will adjust to changes in the relative strengths
of the U.S. corporate or U.S. government bond markets by shifting the relative
balance between the two. The Fund will invest at least 80% of its assets in
investment-grade bonds (those rated BBB or higher by Standard & Poor's Ratings
Group ("S&P") or Baa or higher by Moody's Investors Service, Inc. ("Moody's"))
and will generally maintain an average effective maturity of ten years or less.
The Fund may also purchase lower-quality bonds (those rated below BBB by S&P and
below Baa by Moody's).
Loomis Sayles follows a total return oriented investment approach in selecting
securities for the Fund. It takes into account economic and market conditions as
well as issuer-specific data, such as:
|X| fixed charge coverage
|X| the relationship between cash flows and dividend obligations
|X| the experience and perceived strength of management
|X| price responsiveness of the security to interest rate changes
|X| earnings prospects
|X| debt as a percentage of assets
|X| borrowing requirements, debt maturity schedules and liquidation value
In selecting investments for the Fund, Loomis Sayles employs the following
strategies:
. Its research analysts work closely with the Fund's portfolio managers to
develop an outlook for the economy from research produced by various Wall
Street firms and specific forecasting services or from economic data
released by U.S. and foreign governments as well as the Federal Reserve
Bank.
. Next, the analysts conduct a thorough review of individual securities to
identify what they consider attractive values in the high quality bond
market. This value analysis uses quantitative tools such as internal and
external computer systems and software.
. Loomis Sayles continuously monitors an issuer's creditworthiness to assess
whether the obligation remains an appropriate investment for the Fund. It
may relax its emphasis on quality with respect to a given security if it
believes that the issuer's financial outlook is solid. This may create an
opportunity for higher return.
. Loomis Sayles seeks to balance opportunities for yield and price
performance by combining macroeconomic analysis with individual security
selection. Fund holdings are diversified across industry groups such as
utilities or telecommunications, which tend to move independently of the
ebbs and flows in economic growth.
The Fund may:
. Invest in foreign securities, including those of emerging markets, and
related currency hedging transactions.
. Invest in Rule 144A and mortgage-backed securities.
. Invest substantially all of its assets in U.S. government securities for
temporary defensive purposes in response to adverse market, economic or
political conditions. These investments may prevent the Fund from achieving
its investment goal.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise. Lower-quality
fixed-income securities may be subject to these risks to a greater extent than
other fixed-income securities.
Foreign securities: May be affected by foreign currency fluctuations, higher
volatility than U.S. securities and limited liquidity. Political, economic and
information risks are also associated with foreign securities. These investments
may also be affected by the conversion of the currency of several European
countries to the "euro." Investments in emerging markets may be subject to these
risks to a greater extent than those in more developed markets.
Mortgage-related securities: Subject to prepayment risk. With prepayment, the
Fund may reinvest the prepaid amounts in securities with lower yields than the
prepaid obligations. The Fund may also incur a realized loss when there is a
prepayment of securities that were purchased at a premium.
3
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
ten-year periods (since inception if shorter) compare with those of a broad
measure of market performance and those of indices of funds with similar
objectives. The Fund's past performance does not necessarily indicate how the
Fund will perform in the future.
The bar chart shows the Fund's total returns for Class A shares for each of the
last ten calendar years. The returns for the Class B and C shares differ from
the Class A returns shown in the bar chart to the extent their respective
expenses differ. The chart does not reflect any sales charge that you may be
required to pay when you buy or redeem the Fund's shares. A sales charge will
reduce your return.
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------
Total Return
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
18.13% 7.66% 11.83% -4.17% 20.75% 4.61% 11.05% 8.04% -0.34% 7.39%
-----------------------------------------------------------------------------------------------------------------------
(DELTA) Highest Quarterly Return: Second Quarter 1995, up 7.41%
Lowest Quarterly Return: First Quarter 1994, down 3.32%
The table below shows the Fund's average annual total returns for the one-year,
five-year and ten-year periods (or since the class' inception if shorter)
compared to those of the Lehman Aggregate Bond Index, an unmanaged index of
investment-grade bonds with one- to ten-year maturities issued by the U.S.
government and U.S. corporations. They are also compared to returns, as
calculated by Morningstar, Inc. and Lipper, Inc., of the Morningstar
Intermediate Term Bond Average ("Morningstar Int. Bond Average") and Lipper
Intermediate Investment Grade Debt Average ("Lipper Int. Invest. Grade Debt
Average"), each an average of the total return of mutual funds with similar
investment objectives as the Fund. You may not invest directly in an index. The
Fund's total returns reflect its expenses and the maximum sales charge that you
may be required to pay when you buy or redeem the Fund's shares. The Lehman
Aggregate Bond Index returns have not been adjusted for ongoing management,
distribution and operating expenses and sales charges applicable to mutual fund
investments. The Morningstar Int. Bond Average and Lipper Int. Invest. Grade
Debt Average returns have been adjusted for these expenses but do not reflect
any sales charges.
[Enlarge/Download Table]
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Average Annual Total Returns
(for the periods ended Since Class Since Class
December 31, 2000) Past 1 Year Past 5 Years Past 10 Years B Inception C Inception
---------------------------------------------------------------------------------------------------
CDC Nvest Bond Income Fund:
Class A (inception 11/7/73) 2.58% 5.10% 7.76%
Class B (inception 9/13/93) 1.51% 4.96% 5.34%
Class C (inception 12/30/94) 4.42% 5.08% 7.15%
---------------------------------------------------------------------------------------------------
Lehman Aggregate Bond Index 11.63% 6.46% 7.96% 6.45% 8.37%
---------------------------------------------------------------------------------------------------
Lipper Int. Invest. Grade Debt 9.78% 5.47% 7.58% 5.53% 7.35%
Avg.
---------------------------------------------------------------------------------------------------
Morningstar Int. Bond Avg. 9.45% 5.43% 7.62% 5.51% 7.38%
---------------------------------------------------------------------------------------------------
Each Index is calculated from 12/31/90 for Class A shares, 9/30/93 for Class
B shares and 12/30/94 for Class C shares.
For actual past expenses of Classes A, B and C shares, see the section
entitled "Fund Fees & Expenses."
4
Goals, Strategies & Risks
-------------------------
CDC Nvest High Income Fund
---------------------------------------------------
Fund Focus
---------------------------------------------------
Stability Income Growth
---------------------------------------------------
High X
---------------------------------------------------
Mod. X
---------------------------------------------------
Low X
---------------------------------------------------
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Duration
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* Short Int. Long
---------------------------------------------------
High
---------------------------------------------------
Mod.
---------------------------------------------------
Low X
---------------------------------------------------
Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC INIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Michael Millhouse and Curt Mitchell
Category: Corporate Income
Ticker Symbol: Class A Class B Class C
NEFHX NEHBX NEHCX
Investment Goal
The Fund seeks high current income plus the opportunity for capital appreciation
to produce a high total return.
The Fund's investment goal may be changed without shareholder approval.
Principal Investment Strategies
Under normal market conditions, the Fund will invest at least 65% of its assets
in lower-quality fixed-income securities, commonly known as "junk bonds." Junk
bonds are generally rated below BBB by Standard & Poor's Ratings Group ("S&P")
and below Baa by Moody's Investors Service, Inc. ("Moody's"). The Fund will
normally invest at least 80% of its assets in U.S. corporate or U.S. dollar-
denominated foreign fixed-income securities. The Fund may also invest up to 20%
of its assets in foreign currency-denominated fixed-income securities, including
those in emerging markets.
Loomis Sayles performs its own extensive credit analyses to determine the
creditworthiness and potential for capital appreciation of a security. The
Fund's management minimizes both market timing and interest rate forecasting.
Instead, it uses a strategy based on gaining a thorough understanding of
industry and company dynamics as well as individual security characteristics
such as the following, although not all securities selected will have these
characteristics:
X issuer debt and debt maturity schedules
X earnings prospects
X responsiveness to changes in interest rates
X experience and perceived strength of management
X borrowing requirements and liquidation value
X market price in relation to cash flow, interest and dividends
In selecting investments for the Fund, Loomis Sayles employs the following
strategies:
. Loomis Sayles utilizes the skills of its in-house team of more than 40
research analysts to cover a broad universe of industries, companies and
markets. The Fund's portfolio managers take advantage of these extensive
resources to identify securities that meet the Fund's investment
criteria.
. Loomis Sayles employs a selection strategy that focuses on a value-driven,
bottom-up approach to identify securities that provide an opportunity for
both generous yields and capital appreciation. Loomis Sayles analyzes an
individual company's potential for positive financial news to determine if
it has growth potential. Examples of positive financial news include an
upward turn in the business cycle, improvement in cash flows, rising
profits or the awarding of new contracts.
. Loomis Sayles emphasizes in-depth credit analysis, appreciation potential
and diversification in its bond selection. Each bond is evaluated to assess
the ability of its issuer to pay interest and, ultimately, principal (which
helps the Fund generate an ongoing flow of income). Loomis Sayles also
assesses a bond's relation to market conditions within its industry and
favors bonds whose prices may benefit from positive business developments.
. Loomis Sayles seeks to diversify the Fund's holdings to reduce the inherent
risk in lower-quality fixed-income securities. The Fund's portfolio will
generally include 45 to 50 holdings across many industries.
The Fund may:
. Invest in zero-coupon, pay-in-kind and Rule 144A securities.
. Purchase higher quality debt securities (such as U.S. government securities
and obligations of U.S. banks with at least $2 billion of deposits) for
temporary defensive purposes in response to adverse market, economic or
political conditions, such as a rising trend in interest rates. These
investments may prevent the Fund from achieving its investment goal.
A "snapshot' of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise. Lower-quality
fixed-income securities may be subject to these risks to a greater extent than
other fixed-income securities. "Junk Bonds" are considered predominantly
speculative with respect to the issuer's continuing ability to make principal
and interest payments.
Foreign securities: May be affected by foreign currency fluctuations, higher
volatility than U.S. securities and limited liquidity. Political, economic and
information risks are also associated with foreign securities. These investments
may also be affected by the conversion of the currency of several European
countries to the "euro." Investments in emerging markets may be subject to these
risks to a greater extent than those in more developed markets.
5
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
ten-year periods (since inception if shorter) compare with those of a broad
measure of market performance and those of indices of funds with similar
objectives. The Fund's past performance does not necessarily indicate how the
Fund will perform in the future. The Fund's current subadviser assumed that
function on July 1, 1996. This chart and table reflect results achieved by the
previous subadviser using different investment principles for periods prior to
July 1, 1996.
The bar chart shows the Fund's total returns for Class A shares for each of the
last ten calendar years. The returns for the Class B and C shares differ from
the Class A returns shown in the bar chart to the extent their respective
expenses differ. The chart does not reflect any sales charge that you may be
required to pay when you buy or redeem the Fund's shares. A sales charge will
reduce your return.
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------
Total Return
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
36.42% 15.73% 16.57% -3.22% 11.75% 14.88% 15.37% -1.66% 4.00% -16.09%
-----------------------------------------------------------------------------------------------------------------------
(DELTA) Highest Quarterly Return: First Quarter 1991, up 11.99%
Lowest Quarterly Return: Fourth Quarter 2000, down 11.32%
The table below shows the Fund's average annual total returns for the one-year,
five-year and ten-year periods (or since the class' inception if shorter)
compared to those of the Lehman High Yield Composite Index, a market-weighted
unmanaged index of fixed-rate, non-investment grade debt. They are also compared
to returns, as calculated by Morningstar, Inc. and Lipper, Inc., of the
Morningstar High Yield Bond and Lipper High Current Yield Averages each an
average of the total return of mutual funds with similar investment objectives
as the Fund. You may not invest directly in an index. The Fund's total returns
reflect its expenses and the maximum sales charge that you may be required to
pay when you buy or redeem the Fund's shares. The Lehman High Yield Composite
Index returns have not been adjusted for ongoing management, distribution and
operating expenses and sales charges applicable to mutual fund investments. The
Morningstar High Yield Bond Average and Lipper High Current Yield Average
returns have been adjusted for these expenses but do not reflect any sales
charges.
[Enlarge/Download Table]
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Average Annual Total Returns
(for the periods ended December 31, Since Class Since Class
2000) Past 1 Year Past 5 Years Past 10 Years B Inception C Inception
------------------------------------------------------------------------------------------------------
CDC Nvest High Income Fund:
Class A (inception 2/22/84) -19.85% 8.01%
Class B (inception 9/20/93) -20.34% 2.79%
Class C (inception 3/2/98) -18.13% -6.77%
------------------------------------------------------------------------------------------------------
Lehman High Yield Composite Index -5.86% 4.28% 11.16% 5.84% -1.47%
------------------------------------------------------------------------------------------------------
Morningstar High Yield Bond Average -9.12% 3.25% 9.88% 5.12% -2.96%
------------------------------------------------------------------------------------------------------
Lipper High Current Yield Average -8.38% 3.36% 9.99% 4.57% -3.33%
------------------------------------------------------------------------------------------------------
Each Index is calculated from 12/31/90 for Class A shares, 9/30/93 for Class B
shares and 2/28/98 for Class C shares.
For actual past expenses of Classes A, B and C shares, see the section entitled
"Fund Fees & Expenses."
6
Goals, Strategies & Risks
-------------------------
CDC Nvest Strategic Income Fund
------------------------------------------------
Fund Focus
------------------------------------------------
Stability Income Growth
------------------------------------------------
High X
------------------------------------------------
------------------------------------------------
Mod. X
------------------------------------------------
------------------------------------------------
Low X
------------------------------------------------
------------------------------------------------
Duration
------------------------------------------------
Short Int. Long
------------------------------------------------
High
------------------------------------------------
Mod. X
------------------------------------------------
Low
---------- -------------- ----------------------
Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Daniel J. Fuss and Kathleen C. Gaffney
Category: Corporate Income
Ticker Symbol: Class A Class B Class C
NEFZX NEZBX NECZX
Investment Goal
The Fund seeks high current income with a secondary objective of capital growth.
The Fund's investment goal may be changed without shareholder approval.
Principal Investment Strategies
Under normal market conditions, the Fund will invest substantially all of its
assets in debt instruments (including lower-quality securities) with a focus on
U.S. corporate bonds, convertible securities, foreign debt instruments,
including those in emerging markets and U.S. government securities. The Fund may
invest up to 35% of its assets in preferred stocks and dividend-paying common
stocks. The portfolio managers shift the Fund's assets among various bond
segments based upon changing market conditions.
Loomis Sayles performs its own extensive credit analyses to determine the
creditworthiness and potential for capital appreciation of a security. The
Fund's management refrains from market timing or interest rate forecasting.
Instead, it uses a flexible approach to identify securities in the global
marketplace with the following characteristics, although not all of the
securities selected will have these attributes:
X discounted share price compared to economic value
X undervalued credit ratings with strong or improving credit profiles
X yield premium relative to its benchmark
In selecting investments for the Fund, Loomis Sayles generally employs the
following strategies:
. Loomis Sayles utilizes the skills of its in-house team of more than 40
research analysts to cover a broad universe of industries, companies and
markets. The Fund's portfolio managers take advantage of these extensive
resources to identify securities that meet the Fund's investment criteria.
. Loomis Sayles seeks to buy bonds at a discount -- bonds that offer a
positive yield advantage over the market and, in its view, have room to go
up in price. It may also invest to take advantage of what the portfolio
managers believe are temporary disparities in the yield of different
segments of the market for U.S. government securities.
. Loomis Sayles provides the portfolio managers with maximum flexibility to
find investment opportunities in a wide range of markets, both domestic and
foreign. This flexible approach offers investors one-stop access to a wide
array of investment opportunities. The three key sectors that the portfolio
managers focus upon are U.S. corporate issues, foreign bonds and U.S.
government securities.
. The Fund's portfolio managers maintain a core of the Fund's investments in
corporate bond issues and shift its assets among other bond segments as
opportunities develop. The Fund maintains a high level of diversification
as a form of risk management.
The Fund may:
. Invest in mortgage-backed securities, zero-coupon or pay-in-kind bonds, and
stripped securities.
. Invest substantially all of its assets in U.S. government securities for
temporary defensive purposes in response to adverse market, economic or
political conditions. These investments may prevent the Fund from achieving
its investment goal.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise. Lower-quality
fixed-income securities may be subject to these risks to a greater extent than
other fixed-income securities. "Junk Bonds' are considered predominantly
speculative with respect to the issuer's continuing ability to make principal
and interest payments.
Equity securities: Because the Fund may invest a significant portion of its
assets in equity securities, it is subject to the risks commonly associated with
investing in stocks. This means that you may lose money on your investment due
to unpredictable drops in a stock's value or periods of below-average
performance in a given stock or in the stock market as a whole.
Foreign securities: May be affected by foreign currency fluctuations, higher
volatility than U.S. securities and limited liquidity. Political, economic and
information risks are also associated with foreign securities. These investments
may also be affected by the conversion of the currency of several European
countries to the "euro." Investments in emerging markets may be subject to these
risks to a greater extent than those in more developed markets.
Mortgage-related securities: Subject to prepayment risk. With prepayment, the
Fund may reinvest the prepaid amounts in securities with lower yields than the
prepaid obligations. The Fund may also incur a realized loss when there is a
prepayment of securities that were purchased at a premium. Stripped securities
are more sensitive to changes in the prevailing interest rates and the rate of
principal payments on the underlying assets than regular mortgage-backed
securities.
7
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
since-inception periods compare with those of a broad measure of market
performance and those of indices of funds with similar objectives. The Fund's
past performance does not necessarily indicate how the Fund will perform in the
future.
The bar chart shows the Fund's total returns for Class A shares for each
calendar year since its first full year of operations. The returns for the Class
B and C shares differ from the Class A returns shown in the bar chart, to the
extent their respective expenses differ. The chart does not reflect any sales
charge that you may be required to pay when you buy or redeem the Fund's shares.
A sales charge will reduce your return.
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------
Total Return
1996 1997 1998 1999 2000
14.49% 9.33% -1.69% 12.17% 0.68%
-----------------------------------------------------------------------------------------------------------------------
(DELTA) Highest Quarterly Return: Fourth Quarter 1998, up 7.36%
Lowest Quarterly Return: Third Quarter 1998, down 10.57%
The table below shows the Fund's average annual total returns for the one-year,
five-year and since-inception periods compared to those of the Lehman Aggregate
Bond Index, a market-weighted aggregate index that includes nearly all debt
issued by the U.S. Treasury, U.S. government agencies and U.S. corporations
rated investment grade, and U.S. agency debt backed by mortgage pools. They are
also compared to the Lehman Universal Bond Index, an unmanaged index
representing 85% of the return of the Lehman Brothers Aggregate Bond Index, 5%
of the Lehman Brothers High Yield Corporate Bond Index, 4% of the Lehman
Brothers Emerging Market Index, 5% of Eurodollar instruments and 1% of 144A
Commercial Paper. They are also compared to returns, as calculated by
Morningstar, Inc. and Lipper, Inc., of the Morningstar Multi-Sector Bond Average
and Lipper Multi-Sector Income Average, each an average of the total return of
mutual funds with similar investment objectives as the Fund. You may not invest
directly in an index. The Fund's total returns reflect its expenses and the
maximum sales charges that you may be required to pay when you buy or redeem the
Fund's shares. The Lehman Aggregate Bond Index and the Lehman Universal Bond
Index returns have not been adjusted for ongoing management, distribution and
operating expenses and sales charges applicable to mutual fund investments. The
Morningstar Multi-Sector Bond Average and Lipper Multi-Sector Income Average
returns have been adjusted for these expenses but do not reflect any sales
charges.
[Enlarge/Download Table]
------------------------------------------------------------------------------------------
Since
Average Annual Total Returns Class Inception
(for the periods ended December 31, Past 1 Year Past 5 Years (Class A,
2000) B and C)
------------------------------------------------------------------------------------------
CDC Nvest Strategic Income Fund:
Class A (inception 5/1/95) -3.86% 5.82% 6.96%
Class B (inception 5/1/95) -4.79% 5.72% 6.88%
Class C (inception 5/1/95) -2.09% 5.76% 6.75%
------------------------------------------------------------------------------------------
Lehman Aggregate Bond Index 11.63% 6.46% 7.68%
------------------------------------------------------------------------------------------
Lehman Universal Bond Index 10.82% 6.43% 7.69%
------------------------------------------------------------------------------------------
Morningstar Multi-Sector Bond Average 1.27% 4.91% 6.41%
------------------------------------------------------------------------------------------
Lipper Multi-Sector Income Average 0.01% 4.84% 6.01%
------------------------------------------------------------------------------------------
Each Index is calculated from 4/30/95 for Classes A, B and C shares.
For actual past expenses of Classes A, B and C shares, see the section entitled
"Fund Fees & Expenses."
8
Goals, Strategies & Risks
-------------------------
CDC Nvest Limited Term U.S. Government Fund
---
[Download Table]
------------------------------------------------------------
Fund Focus
------------------------------------------------------------
Stability Income Growth
------------------------------------------------------------
High X X
------------------------------------------------------------
Mod.
------------------------------------------------------------
Low X
------------------------------------------------------------
------------------------------------------------------------
Duration
------------------------------------------------------------
Short Int. Long
------------------------------------------------------------
High X
------------------------------------------------------------
Mod.
------------------------------------------------------------
Low
------------------------------------------------------------
Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Michael F. Harris and Cliff Rowe
Category: Government Income
Ticker Symbol: Class A Class B Class C
NEFLX NELBX NECLX
Investment Goal
The Fund seeks a high current return consistent with preservation of capital.
The Fund's investment goal may be changed without shareholder approval.
Principal Investment Strategies
Under normal market conditions, the Fund will invest primarily in U.S.
government securities, including bills, notes and bonds (including zero-coupon
bonds) and pass through mortgage securities issued or guaranteed by the U.S.
Treasury and other government agencies.
Loomis Sayles follows a total return oriented investment approach in selecting
securities for the Fund. It seeks securities that give the Fund's portfolio the
following characteristics, although not all securities selected will have these
characteristics and Loomis Sayles may look for other characteristics if market
conditions change:
X average credit rating of "AAA" by Standard & Poor's Ratings Group ("S&P") or
"Aaa" by Moody's Investors Service, Inc., ("Moody's")
X effective duration range of 2 to 4 years
In selecting investments for the Fund, Loomis Sayles employs the following
strategies:
. Its research analysts work closely with the Fund's portfolio managers to
develop an outlook on the economy from research produced by various Wall
Street firms and specific forecasting services or from economic data released
by the U.S. and foreign governments as well as the Federal Reserve Bank.
. Next, the analysts conduct a thorough review of individual securities to
identify what they consider attractive values in the U.S. government security
marketplace. This value analysis uses quantitative tools such as internal and
external computer systems and software.
. Loomis Sayles continuously monitors an issuer's creditworthiness to assess
whether the obligation remains an appropriate investment to the Fund.
. It seeks to balance opportunities for yield and price performance by
combining macroeconomic analysis with individual security selection. It
emphasizes securities that tend to perform particularly well in response to
interest rate changes, such as U.S. Treasury securities in a declining
interest rate environment and mortgage-backed or U.S. government agency
securities in a steady or rising interest rate environment.
. Loomis Sayles seeks to increase the opportunity for higher yields while
maintaining the greater price stability that intermediate-term bonds have
compared to bonds with longer maturities.
The Fund may:
. Invest in investment-grade corporate notes and bonds (those rated BBB or
higher by S&P and Baa or higher by Moody's).
. Invest in asset-backed securities (those rated AAA by S&P or Aaa by
Moody's).
. Invest in foreign bonds denominated in U.S. dollars.
. Engage in active and frequent trading of securities. Frequent trading may
produce higher transaction costs and a higher level of taxable capital gains,
which may lower the Fund's return.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise. Zero-
coupon bonds may be subject to these risks to a greater extent than other
fixed-income securities.
Mortgage-related and asset-backed securities: Subject to prepayment risk. With
prepayment, the Fund may reinvest the prepaid amounts in securities with
lower yields than the prepaid obligations. The Fund may also incur a realized
loss when there is a prepayment of securities that were purchased at a
premium.
Foreign securities: Foreign bonds denominated in U.S. dollars may be more
volatile than U.S. securities and carry political, economic and information
risks that are associated with foreign securities.
9
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
ten-year periods (since inception if shorter) compare with those of a broad
measure of market performance and those of indices of funds with similar
objectives. The Fund's past performance does not necessarily indicate how the
Fund will perform in the future.
The bar chart shows the Fund's total returns for Class A shares for each of the
last ten calendar years. The returns for the Class B and C shares differ from
the Class A returns shown in the bar chart, to the extent their respective
expanese differ. The chart does not reflect any sales charge that you may be
required to pay when you buy or redeem the Fund's shares. A sales charge will
reduce your return.
[Enlarge/Download Table]
-----------------------------------------------------------------------------------------------------------------------
Total Return
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
13.82% 5.62% 7.47% -2.22% 13.00% 2.37% 7.27% 6.49% -0.67% 8.34%
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(DELTA) Highest Quarterly Return: Third Quarter 1991, up 5.01%
Lowest Quarterly Return: First Quarter 1994, down 1.62%
The table below shows the Fund's average annual total returns for the one-year,
five-year and ten-year periods (or since the class inception if shorter)
compared to those of the Lehman Intermediate Government Bond Index ("Lehman Int.
Gov't Bond Index"), an unmanaged index of bonds issued by the U.S. Government
and its agencies having maturities between one and ten years. They are also
compared to returns, as calculated by Morningstar, Inc. and Lipper, Inc, of the
Morningstar Short Government Average and the Lipper Short Intermediate U.S.
Government Average ("Lipper Short Int. U.S. Gov't Average"), each an average of
the total return of mutual funds with similar investment objectives as the Fund.
You may not invest directly in an index. The Fund's total returns reflect its
expenses and the maximum sales charges that you may be required to pay when you
buy or redeem the Fund's shares. The Lehman Int. Gov't Bond Index returns have
not been adjusted for ongoing management, distribution and operating expenses
and sales charges applicable to mutual fund investments. The Morningstar Short
Government Average and Lipper Short Int. U.S. Gov't Average returns have been
adjusted for these expenses but do not reflect any sales charges.
[Enlarge/Download Table]
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Average Annual Total Returns Since Since
(for the periods ended December 31, Past 1 Past 5 Past 10 Class B Class C
2000) Year Years Years Inception Inception
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CDC Nvest Limited Term U.S.
Government Fund:
Class A (inception 1/3/89) 5.08% 4.07% 5.71%
Class B (inception 9/27/93) 2.66% 3.69% 3.87%
Class C (inception 12/30/94) 5.59% 3.80% 5.02%
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Lehman Int. Gov't Bond Index 10.47% 6.19% 7.19% 5.94% 7.51%
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Morningstar Short Government 7.93% 5.22% 6.23% 4.97% 6.32%
Average
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Lipper Short Int. U.S. Gov't 8.56% 5.16% 6.44% 4.98% 6.45%
Average
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Each Index is calculated from 12/31/90 for Class A shares, 9/30/93 for Class B
shares and 12/30/94 for Class C shares.
For actual past expenses of Classes A, B and C shares, see the section
entitled "Fund Fees & Expenses."
10
Goals, Strategies & Risks
CDC Nvest Government Securities Fund
[Download Table]
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Fund Focus
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Stability Income Growth
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High X
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Mod. X
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Low X
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Duration
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Short Int. Long
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High X
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Mod.
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Low
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Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Kent P. Newmark and Cliff Rowe
Category: Government Income
Ticker Symbol: Class A Class B
NEFUX NEUBX
Investment Goal
The Fund seeks a high level of current income consistent with safety of
principal by investing in U.S. government securities.
Principal Investment Strategies
Under normal market conditions, the Fund will invest its assets in U.S.
government securities, including U.S. Treasury bills, notes and bonds, and
mortgage-backed securities issued or guaranteed by U.S. government agencies.
Loomis Sayles follows a total return oriented investment approach in selecting
securities for the Fund. It seeks securities that give the Fund's portfolio the
following characteristics, although these characteristics may change depending
on market conditions:
X average credit quality of "AAA" by Standard & Poor's Ratings Group or "Aaa"
by Moody's Investors Service, Inc.
X average maturity of 10 years or more
In selecting investments for the Fund's portfolio, Loomis Sayles employs the
following strategies:
. Its research analysts work closely with the Fund's portfolio managers to
develop an outlook on the economy from research produced by various Wall
Street firms and specific forecasting services or from economic data
released by U.S. and foreign governments as well as the Federal Reserve
Bank.
. Next, the analysts conduct a thorough review of individual securities to
identify what they consider attractive values in the U.S. government
security marketplace. This value analysis uses quantitative tools such as
internal and external computer systems and software.
. Loomis Sayles seeks to balance opportunities for yield and price performance
by combining macroeconomic analysis with individual security selection. They
will emphasize securities that tend to perform particularly well in response
to interest rate changes, such as U.S. Treasury securities in a declining
interest rate environment and mortgage-backed or U.S. government agency
securities in a steady or rising interest rate environment.
. Loomis Sayles seeks to maximize the opportunity for high yields while taking
into account the price volatility inherent in bonds with longer
maturities.
The Fund may:
. Invest in zero-coupon bonds.
. Invest in mortgage-related securities, including collateralized mortgage
obligations and stripped securities.
. Engage in active and frequent trading of securities. Frequent trading may
produce higher transaction costs and a higher level of taxable capital
gains, which may lower the Fund's return.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise. Zero-
coupon bonds may be subject to these risks to a greater extent than other
fixed-income securities.
Mortgage-related securities: Subject to prepayment risk. With prepayment, the
Fund may reinvest the prepaid amounts in securities with lower yields than
the prepaid obligations. The Fund may also incur a realized loss when there
is a prepayment of securities that were purchased at a premium.
11
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
ten-year periods (since inception if shorter) compare with those of a broad
measure of market performance and those of indices of funds with similar
objectives. The Fund's past performance does not necessarily indicate how the
Fund will perform in the future.
The bar chart shows the Fund's total returns for Class A shares for each of the
last ten calendar years. The returns for the Class B shares differ from the
Class A returns shown in the bar chart, to the extent their respective expenses
differ. The chart does not reflect any sales charge that you may be required to
pay when you buy or redeem the Fund's shares. A sales charge will reduce your
return.
[Enlarge/Download Table]
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Total Return
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
14.86% 6.77% 9.04% -5.44% 20.01% 0.77% 10.32% 9.05% -6.42% 12.89%
-----------------------------------------------------------------------------------------------------------------------
(DELTA) Highest Quarterly Return: Third Quarter 1991, up 8.04%
Lowest Quarterly Return: First Quarter 1994, down 3.18%
The table below shows the Fund's average annual total returns for the one-year,
five-year and ten-year periods (or since the class' inception if shorter)
compared to those of the Lehman Government Bond Index ("Lehman Gov't Bond
Index"), an unmanaged index of public debt of the U.S. Treasury, government
agencies and their obligations. The Fund's returns are also compared to returns,
as calculated by Morningstar, Inc. and Lipper, Inc., of the Morningstar Long
Government Average and Lipper General Government Average ("Lipper General Gov't.
Average"), each an average of the total return of mutual funds with similar
investment objectives as the Fund. You may not invest directly in an index. The
Fund's total returns reflect its expenses and the maximum sales charges that you
may be required to pay when you buy or redeem the Fund's shares. The Lehman
Gov't Bond Index returns have not been adjusted for ongoing management,
distribution and operating expenses and sales charges applicable to mutual fund
investments. The Morningstar Long Government Average and Lipper General Gov't.
Average returns have been adjusted for these expenses but do not reflect any
sales charges.
[Enlarge/Download Table]
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Average Annual Total Returns Since
(for the periods ended December 31, Past 1 Past 5 Past 10 Class B
2000) Year Years Years Inception
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CDC Nvest Government Securities Fund:
Class A (inception 9/16/85) 7.85% 4.11% 6.38%
Class B (inception 9/23/93) 7.07% 3.95% 4.37%
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Lehman Gov't Bond Index 13.24% 6.49% 7.92% 6.33%
-----------------------------------------------------------------------------------------------
Morningstar Long Government Average 15.04% 5.72% 8.38% 5.76%
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Lipper General Gov't Average 11.77% 5.40% 6.99% 5.35%
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Each Index is calculated from 12/31/90 for Class A shares and 9/30/93
for Class B shares.
For actual past expenses of Classes A and B shares, see the section
entitled "Fund Fees & Expenses."
12
Fund Fees & Expenses
The following tables describe the fees and expenses that you may pay if you buy
and hold shares of each Fund.
Shareholder Fees
(fees paid directly from your investment)
[Enlarge/Download Table]
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All Funds except
Short Term Corporate Income Fund and Short Term Corporate Income Fund and
Limited Term U.S. Government Fund Limited Term U.S. Government Fund
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Class A Class B Class C Class A Class B Class C
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Maximum sales charge (load)
imposed on purchases (as 4.50% None 1.00% (4) 3.00% None 1.00% (4)
a percentage of offering
price)(1)(2)
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Maximum deferred sales charge
(load) (as a percentage
of original purchase (3) 5.00% 1.00% (3) 5.00% 1.00%
price or redemption
proceeds, as
applicable)(2)
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Redemption fees None* None* None* None* None* None*
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(1) A reduced sales charge on Class A shares applies in some cases. See the
section entitled "Ways to Reduce or Eliminate Sales Charges" within the
section entitled "Fund Services."
(2) Does not apply to reinvested distributions.
(3) A 1.00% contingent deferred sales charge ("CDSC") applies with respect to
certain purchases of Class A shares greater than $1,000,000 redeemed
within 1 year after purchase, but not to any other purchases or
redemptions of Class A shares. See the section entitled "How Sales Charges
Are Calculated" within the section entitled "Fund Services."
(4) Accounts established prior to December 1, 2000 will not be subject to the
1.00% front-end sales charge for exchanges or additional purchases of
Class C shares.
. Generally, a transaction fee will be charged for expedited payment of
redemption proceeds such as by wire or overnight delivery.
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets, as a percentage of average daily
net assets)
[Enlarge/Download Table]
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CDC Nvest Short Term Corporate CDC Nvest Bond Income Fund CDC Nvest High Income Fund
Income Fund*
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Class A Class B Class C Class A Class B Class C Class A Class B Class C
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Management fees 0.55% 0.55% 0.55% 0.42% 0.42% 0.42% 0.70% 0.70% 0.70%
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Distribution and/or 0.25% 1.00%** 1.00%** 0.25% 1.00%** 1.00%** 0.25% 1.00%** 1.00%**
service (12b-1) fees
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Other expenses 0.46% 0.46% 0.46% 0.37% 0.37% 0.37% 0.41% 0.41% 0.41%
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Total annual fund 1.26% 2.01% 2.01% 1.04% 1.79% 1.79% 1.36% 2.11% 2.11%
operating expenses
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Fee waiver and/or 0.36%*** 0.36%*** 0.36%*** 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
expense reimbursement
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Net Expenses 0.90% 1.65% 1.65% 1.04% 1.79% 1.79% 1.36% 2.11% 2.11%
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[Enlarge/Download Table]
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CDC Nvest Strategic Income Fund CDC Nvest Limited Term U.S. CDC Nvest Government Securities
Government Fund Fund
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Class A Class B Class C Class A Class B Class C Class A Class B
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Management fees 0.63% 0.63% 0.63% 0.65% 0.65% 0.65% 0.65% 0.65%
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Distribution and/or 0.25% 1.00%** 1.00%** 0.35% 1.00%** 1.00%** 0.25% 1.00%**
service (12b-1) fees
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Other expenses 0.36% 0.36% 0.36% 0.40% 0.40% 0.40% 0.51% 0.51%
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Total annual fund 1.24% 1.99% 1.99% 1.40% 2.05% 2.05% 1.41% 2.16%
operating expenses
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Net Expenses 1.24% 1.99% 1.99% 1.40% 2.05% 2.05% 1.41% 2.16%
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* Expense information in this table has been restated to reflect current fees
and expenses.
** Because of the higher 12b-1 fees, long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charge permitted by
the rules of the National Association of Securities Dealers, Inc.
*** CDC IXIS Asset Management Advisers has given a binding undertaking to this
Fund to limit the amount of the Fund's total annual fund operating expenses
to 0.90%, 1.65% and 1.65% of the Fund's average daily net assets for
Classes A, B and C shares, respectively. This undertaking is in effect
until May 1, 2002 and will be reevaluated on an annual basis.
13
Example
This example, which is based upon the expenses* shown above, is intended to help
you compare the cost of investing in the Funds with the cost of investing in
other mutual funds.
The example assumes that:
. You invest $10,000 in the Fund for the time periods indicated;
. Your investment has a 5% return each year; and
. A Fund's operating expenses remain the same.
Although your actual costs and returns may be higher or lower, based on these
assumptions your costs would be:
[Enlarge/Download Table]
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CDC Nvest Short Term CDC Nvest Bond Income Fund CDC Nvest High Income Fund
Corporate Income Fund
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Class Class Class Class Class Class Class Class Class
A B C A B C A B C
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(1) (2) (1) (2) (1) (2) (1) (2) (1) (2) (1) (2)
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1 year $ 389 $ 668 $ 168 $ 366 $ 266 $ 551 $ 682 $ 182 $ 380 $ 280 $ 582 $ 714 $ 214 $ 412 $ 312
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3 years $ 653 $ 896 $ 596 $ 690 $ 690 $ 766 $ 863 $ 563 $ 658 $ 658 $ 861 $ 961 $ 661 $ 754 $ 754
---------------------------------------------------------------------------------------------------------------------------------
5 years $ 937 $1,250 $1,050 $1,139 $1,139 $ 998 $1,170 $ 970 $1,060 $1,060 $1,161 $1,334 $1,134 $1,223 $1,223
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10 years** $1,746 $2,115 $2,115 $2,386 $2,386 $1,664 $1,908 $1,908 $2,184 $2,184 $2,011 $2,250 $2,250 $2,517 $2,517
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CDC Nvest Strategic Income CDC Nvest Limited Term CDC Nvest Government
Fund U.S. Government Fund Securities Fund
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Class Class Class Class Class Class Class Class
A B C A B C A B
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(1) (2) (1) (2) (1) (2) (1) (2) (1) (2)
----------------------------------------------------------------------------------------------------------------------------
1 year $ 571 $ 702 $ 202 $ 400 $ 300 $ 438 $ 708 $ 208 $ 406 $ 306 $ 587 $ 719 $ 219
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3 years $ 826 $ 924 $ 624 $ 718 $ 718 $ 730 $ 943 $ 643 $ 736 $ 736 $ 876 $ 976 $ 676
----------------------------------------------------------------------------------------------------------------------------
5 years $1,100 $1,273 $1,073 $1,162 $1,162 $1,043 $1,303 $1,103 $1,192 $1,192 $1,186 $1,359 $1,159
----------------------------------------------------------------------------------------------------------------------------
10 years** $1,882 $2,123 $2,123 $2,394 $2,394 $1,929 $2,213 $2,213 $2,455 $2,455 $2,065 $2,303 $2,303
----------------------------------------------------------------------------------------------------------------------------
(1) Assumes redemption at end of period.
(2) Assumes no redemption at end of period.
. The examples are based on the Net Expenses shown above for the 1-year
period illustrated in the Example and on the Total Annual Fund
Operating Expenses for the remaining years.
** Class B shares automatically convert to Class A shares after 8 years;
therefore, in years 9 and 10 Class B amounts are calculated using Class A
expenses.
14
More About Risk
The Funds have principal investment strategies that come with inherent risks.
The following is a list of risks to which each Fund may be subject by investing
in various types of securities or engaging in various practices.
Correlation Risk (All Funds) The risk that changes in the value of a hedging
instrument will not match those of the asset being hedged.
Credit Risk (All Funds) The risk that the issuer of a security, or the
counterparty to a contract, will default or otherwise become unable to honor a
financial obligation.
Currency Risk (High Income, Strategic Income, Bond Income, Short Term Corporate
Income Funds) The risk that fluctuations in the exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment.
Emerging Markets Risk (Short Term Corporate Income, Bond Income, High Income,
Strategic Income Funds) The risk associated with investing in securities traded
in developing securities markets, which may be smaller and have shorter
operating histories than developed markets. Emerging markets involve risks in
addition to and greater than those generally associated with investing in
developed foreign markets. The extent of economic development, political
stability, market depth, infrastructure and capitalization, and regulatory
oversight in emerging market economies is generally less than in more developed
markets.
Euro Conversion Risk (High Income, Strategic Income, Bond Income, Short Term
Corporate Income Funds) Many European countries have adopted a single European
currency, the "euro." The consequences of this conversion for foreign exchange
rates, interest rates and the value of European securities are unclear
presently. Such consequences may decrease the value and/or increase the
volatility of securities held by a Fund.
Extension Risk (All Funds) The risk that an unexpected rise in interest rates
will extend the life of a mortgage- or asset-backed security beyond the expected
prepayment time, typically reducing the security's value.
Information Risk (All Funds) The risk that key information about a security is
inaccurate or unavailable.
Interest Rate Risk (All Funds) The risk of market losses attributable to changes
in interest rates. In general, the prices of fixed-income securities rise when
interest rates fall, and prices fall when interest rates rise.
Leverage Risk (All Funds) The risk associated with securities or practices (e.g.
borrowing) that multiply small index or market movements into large changes in
value. When a derivative security (a security whose value is based on another
security or index) is used as a hedge against an offsetting position that a Fund
also holds, any loss generated by the derivative security should be
substantially offset by gains on the hedged instrument, and vice versa. To the
extent that a Fund uses a derivative security for purposes other than as a
hedge, that Fund is directly exposed to the risks of that derivative security
and any loss generated by the derivative security will not be offset by a gain.
Liquidity Risk (All Funds) The risk that certain securities may be difficult or
impossible to sell at the time and at the price that the seller would like. This
may result in a loss or may otherwise be costly to a Fund. These types of risks
may also apply to restricted securities, Section 4(2) Commercial Paper, or Rule
144A Securities.
Management Risk (All Funds) The risk that a strategy used by a Fund's portfolio
management may fail to produce the intended result.
Market Risk (All Funds) The risk that the market value of a security may move up
and down, sometimes rapidly and unpredictably, based upon a change in an
issuer's financial condition as well as overall market and economic
conditions.
Opportunity Risk (All Funds) The risk of missing out on an investment
opportunity because the assets necessary to take advantage of it are invested in
less profitable investments.
Options, Futures and Swap Contracts Risks (Strategic Income, Short Term
Corporate Income, Limited Term U.S. Government, Government Securities Funds)
These transactions are subject to changes in the underlying security on which
such transactions are based. It is important to note that even a small
investment in these types of derivative securities may give rise to leverage
risk, and can have a significant impact on a Fund's exposure to stock market
values, interest rates or the currency exchange rate. These types of
transactions will be used primarily for hedging purposes.
Political Risk (All Funds) The risk of losses directly attributable to
government or political actions.
Prepayment Risk (All Funds) The risk that unanticipated prepayments may occur,
reducing the return from mortgage- or asset-backed securities, or real estate
investment trusts.
Small Capitalization Companies Risk (Strategic Income Fund) These companies
carry special risks, including narrower markets, more limited financial and
management resources, less liquidity and greater volatility than large company
stocks.
Valuation Risk (All Funds) The risk that the Fund has valued certain securities
at a higher price than it can sell them for.
15
Management Team
Meet the Funds' Investment Adviser and Subadvisers
The CDC Nvest Funds family currently includes 28 mutual funds with a total of
over $6 billion in assets under management as of December 31, 2000. CDC Nvest
Funds are distributed through CDC IXIS Asset Management Distributors, L.P. (the
"Distributor"). This Prospectus covers CDC Nvest Income Funds (the "Funds" or
each a "Fund"), which along with the CDC Nvest Equity Funds, CDC Nvest Star
Funds, Kobrick Funds and CDC Nvest Tax Free Income Funds, constitute the "CDC
Nvest Funds." CDC Nvest Cash Management Trust Money Market Series and CDC Nvest
Tax Exempt Money Market Trust constitute the "Money Market Funds."
CDC IXIS Asset Management Advisers, L.P.
CDC IXIS Asset Management Advisers (formerly Nvest Funds Management, L.P.),
located at 399 Boylston Street, Boston, Massachusetts 02116, serves as the
adviser to each of the Funds. CDC IXIS Asset Management Advisers is a subsidiary
of CDC IXIS Asset Management - North America, L.P. ("CDC IXIS Asset Management "
North America") (formerly Nvest Companies, L.P.), which is a subsidiary of CDC
IXIS Asset Management. CDC IXIS Asset Management is the investment management
arm of France's Caisse des Depots et Consignations ("CDC"), a major diversified
financial institution. As of December 31, 2000 CDC IXIS Asset Management - North
America's 17 principal subsidiary or affiliated asset management firms
collectively had $135 billion in assets under management. CDC IXIS Asset
Management Advisers oversees, evaluates and monitors the subadvisory services
provided to each Fund. It also provides general business management and
administration to each Fund. CDC IXIS Asset Management Advisers does not
determine what investments will be purchased by the Fund. The subadvisers listed
below make the investment decisions for their respective Funds.
The combined advisory and subadvisory fees paid by the Funds in 2000 as a
percentage of each Fund's average daily net assets were 0.12% for CDC Nvest
Short Term Corporate Income Fund (after waiver or reimbursement), 0.42% for CDC
Nvest Bond Income Fund, 0.70% for CDC Nvest High Income Fund, 0.63% for CDC
Nvest Strategic Income Fund, 0.65% for CDC Nvest Limited Term U.S. Government
Fund, and 0.65% for CDC Nvest Government Securities Fund.
Subadvisers
Loomis Sayles, located at One Financial Center, Boston, Massachusetts 02111,
serves as subadviser to the Funds. Loomis Sayles is a subsidiary of CDC IXIS
Asset Management - North America. Founded in 1926, Loomis Sayles is one of
America's oldest investment advisory firms with over $66 billion in assets under
management as of December 31, 2000. Loomis Sayles is well known for its
professional research staff, which is one of the largest in the industry.
Subadvisory Agreements
Each Fund has received an exemptive order from the Securities and Exchange
Commission (the "SEC"), which permits CDC IXIS Asset Management Advisers to
amend or continue existing subadvisory agreements when approved by the Board of
Trustees, without shareholder approval. The exemption also permits CDC IXIS
Asset Management Advisers to enter into new subadvisory agreements with
subadvisers that are not affiliated with CDC IXIS Asset Management Advisers, if
approved by the Board of Trustees. Shareholders will be notified of any
subadviser changes.
Portfolio Trades
In placing portfolio trades, each Fund's adviser or subadviser may use brokerage
firms that market the Fund's shares or are affiliated with CDC IXIS Asset
Management - North America, CDC IXIS Asset Management Advisers and Loomis
Sayles. In placing trades, Loomis Sayles will seek to obtain the best
combination of price and execution, which involves a number of judgmental
factors. Such portfolio trades are subject to applicable regulatory restrictions
and related procedures adopted by the Board of Trustees.
16
Meet the Funds' Portfolio Managers
Michael F. Harris
Michael Harris has served as co-portfolio manager of Limited Term U.S.
Government Fund since June 2001. Mr. Harris is Vice President, Core Bond Group
Associate Managing Partner and Director of Loomis Sayles. He began his
investment career in 1979 and has been at Loomis Sayles since 1991. Mr. Harris
received a B.B.A. from Michigan State University and an M.B.A from Saginaw
Valley State College. He is also a Chartered Financial Analyst and Chartered
Investment Counselor. He has over 22 years of investment experience.
Craig Smith
Craig Smith has served a co-portfolio manager of Short Term Corporate Income
Fund since June 2001. Mr. Smith, Portfolio Manager and Vice President of Loomis
Sayles, joined the company in 1997. Prior to that he was an Investment
Consultant with Donaldson, Lufkin & Jenrette from 1994 until 1997. Mr. Smith has
a B.S. and an M.B.A. from Cornell University and over 7 years of investment
experience.
Clifton V. Rowe
Clifton Rowe has served as co-portfolio manager of Government Securities Fund
and Limited Term U.S. Government Fund since June 2001. Mr. Rowe became Portfolio
Manager and Vice President of Loomis Sayles in 2001. Prior to that, he served
Loomis Sayles as a Trader from 1992 until 2001. He is also a Chartered Financial
Analyst. Mr. Rowe has a B.B.A. from James Madison University and over 9 years of
investment experience.
Kent P. Newmark
Kent Newmark has served as co-portfolio manager of Government Securities Fund
since June 2001. Mr. Newmark is Vice President and Core Bond Group Senior
Partner of Loomis Sayles. He began his investment career in 1963 and has been at
Loomis Sayles since 1976. Mr. Newmark received a B.S. and an M.B.A. from the
University of California. He is also a Chartered Investment Counselor. He has
over 38 years of investment experience.
John Hyll
John Hyll has served as co-portfolio manager of the Short Term Corporate Income
Fund since June 2001. Mr. Hyll, Vice President of Loomis Sayles, joined the
company in 1989. He received his B.A. and his M.B.A. from Baldwin-Wallace
college and has over 17 years of investment experience.
Richard G. Raczkowski
Richard Raczkowski has served as a co-portfolio manager of Short Term Corporate
Income Fund and Bond Income Fund since May 1999 (including service until May
2001 with Back Bay Advisors) and June 2001, respectively. Mr. Raczkowski,
Portfolio Manager and Vice President of Loomis Sayles, joined the company in
2001. Prior to that he was Vice President of Back Bay Advisors from 1998 until
2001. Mr. Raczkowski was also a senior consultant at Hagler Bailly Consulting
from mid 1996 until December 1997. He received a B.A. from the University of
Massachusetts and an M.B.A. from Northeastern University and has over 16 years
of investment experience.
Peter W. Palfrey
Peter Palfrey has served as co-portfolio manager of Bond Income Fund May 1999,
including service until May 2001 with Back Bay Advisors. Mr. Palfrey, Portfolio
Manager and Vice President of Loomis Sayles, joined the company in 2001. Prior
to that he was Senior Vice President of Back Bay Advisors from 1993 until 2001.
Mr. Palfrey is also a Chartered Financial Analyst. He received his B.A. from
Colgate University and has over 18 years of investment experience.
Michael J. Millhouse
Michael Millhouse has co-managed High Income Fund since May 2000. Mr. Millhouse
is Executive Vice President, Chief Investment Officer and Director of Loomis
Sayles. He began his investment career in 1978 and has been at Loomis Sayles
since 1992. Mr. Millhouse is also a Chartered Financial Analyst and Chartered
Investment Counselor. He received a B.S. and an M.B.A. from Indiana University
and has over 23 years of investment experience.
Curt A. Mitchell
Curt Mitchell has served as co-portfolio manager of Bond Income Fund since June
2001. He has also served as co-portfolio manager of High Income Fund since May
2000. Mr. Mitchell is Vice President, Portfolio Manager and Manager of Fixed
Income Trading of Loomis Sayles. He began his investment career in 1986 and has
been at Loomis Sayles since 1995. Prior to joining Loomis Sayles, he was a Fixed
Income Portfolio Manager with Firststar Investment Research & Management
Company. Mr. Mitchell is also a Chartered Financial Analyst and Chartered
Investment Counselor. He has an M.B.A. from the University of Illinois, a B.S.
from Illinois Wesleyan University and over 14 years of investment
experience.
Daniel J. Fuss
Daniel Fuss has managed Strategic Income Fund since May 1995. Mr. Fuss is Vice
Chairman, Director and Managing Partner of Loomis Sayles. He began his
investment career in 1968 and has been at Loomis Sayles since 1976. Mr. Fuss is
also a Chartered Financial Analyst. He received a B.S. and an M.B.A. from
Marquette University and has over 33 years of investment experience.
Kathleen C. Gaffney
Kathleen Gaffney has been assisting Daniel Fuss as a portfolio manager of
Strategic Income Fund since April 1996. Ms. Gaffney, a Chartered Financial
Analyst, joined Loomis Sayles in 1984 and is now a Vice President of the
company. She holds a B.A. from the University of Massachusetts at Amherst and
has over 16 years of investment experience.
17
Fund Services
Investing in the Funds
Choosing a Share Class
Each Fund offers Classes A, B and C shares to the public, except Government
Securities Fund which offers only Class A and Class B shares. Each class has
different costs associated with buying, selling and holding Fund shares, which
allows you to choose the class that best meets your needs. Which class is best
for you depends upon the size of your investment and how long you intend to hold
your shares. Class B shares, Class C shares and certain shareholder features may
not be available to you if you hold your shares in a street name account. Your
financial representative can help you decide which class of shares is most
appropriate for you.
Class A Shares
. You pay a sales charge when you buy Fund shares. There are several ways to
reduce this charge. See the section entitled "Ways to Reduce or Eliminate
Sales Charges."
. You pay lower annual expenses than Class B and Class C shares, giving you
the potential for higher returns per share.
. You do not pay a sales charge on orders of $1 million or more, but you may
pay a charge on redemption if you redeem these shares within 1 year of
purchase.
Class B Shares
. You do not pay a sales charge when you buy Fund shares. All of your money
goes to work for you right away.
. You pay higher annual expenses than Class A shares.
. You will pay a charge on redemptions if you sell your shares within 6 years
of purchase, as described in the section "How Sales Charges Are
Calculated."
. Your Class B shares will automatically convert into Class A shares after 8
years, which reduces your annual expenses.
. Investors purchasing $1 million or more of Class B shares may want to
consider the lower operating expense of Class A shares. You may pay a
charge on redemption if you redeem these shares within 1 year of purchase.
Class C Shares
. You pay a sales charge when you buy Fund shares. There are several ways to
reduce this charge. See the section entitled "Ways to Reduce or Eliminate
Sales Charges."
. You pay higher annual expenses than Class A shares.
. You will pay a charge on redemptions if you sell your shares within 1 year
of purchase.
. Your Class C shares will not automatically convert into Class A shares. If
you hold your shares for longer than 8 years, you'll pay higher expenses
than shareholders of other classes.
. Investors purchasing $1 million or more of Class C shares may want to
consider the lower operating expense of Class A shares. You may pay a
charge on redemption if you redeem these shares within 1 year of purchase.
For actual past expenses of Classes A, B and C shares, see the section entitled
"Fund Fees & Expenses" in this Prospectus.
Certificates
Certificates will not be issued automatically for any class of shares. Upon
written request, you may receive certificates for Class A shares only.
18
Fund Services
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How Sales Charges Are Calculated
Class A Shares
The price that you pay when you buy Class A shares ("offering price") is their
net asset value plus a sales charge (sometimes called a "front-end sales
charge") which varies depending upon the size of your purchase.
[Enlarge/Download Table]
------------------------------------------------------------------------------------------------------------------------------
Class A Sales Charges
------------------------------------------------------------------------------------------------------------------------------
Bond Income High Income Short Term Corporate Income
Government Securities Strategic Income Limited Term U.S. Government
------------------------------------------------------------------------------------------------------------------------------
Your Investment As a % of offering As a % of your As a % of offering As a % of your
price investment price investment
------------------------------------------------------------------------------------------------------------------------------
Less than 4.50% 4.71% 3.00% 3.09%
$ 100,000
------------------------------------------------------------------------------------------------------------------------------
$ 100,000 3.50% 3.63% 2.50% 2.56%
$ 249,999
------------------------------------------------------------------------------------------------------------------------------
$ 250,000 2.50% 2.56% 2.00% 2.04%
$ 499,999
------------------------------------------------------------------------------------------------------------------------------
$ 500,000 2.00% 2.04% 1.25% 1.27%
$ 999,999
------------------------------------------------------------------------------------------------------------------------------
$1,000,000 or 0% 0% 0% 0%
more*
------------------------------------------------------------------------------------------------------------------------------
* For purchases of Class A shares of the Funds of $1 million or more or
purchases by Retirement Plans (Plans under Sections 401(a) or 401(k) of
the Internal Revenue Code with investments of $1 million or more or
that have 100 or more eligible employees), there is no front-end sales
charge, but a CDSC of 1.00% may apply to redemptions of your shares
within one year of the date of purchase. See the section entitled "Ways
to Reduce or Eliminate Sales Charges."
Class B Shares
The offering price of Class B shares is their net asset value, without a front-
end sales charge. However, there is a CDSC on shares that you sell within 6
years of buying them. The amount of the CDSC, if any, declines each year that
you own your shares. The holding period for purposes of timing the conversion to
Class A shares and determining the CDSC will continue to run after an exchange
to Class B shares of another CDC Nvest Fund. The CDSC equals the following
percentages of the dollar amounts subject to the charge:
----------------------------------------------------------
Class B Contingent Deferred Sales Charges
----------------------------------------------------------
Year Since Purchase CDSC on Shares Being Sold
----------------------------------------------------------
1/st/ 5.00%
----------------------------------------------------------
2/nd/ 4.00%
----------------------------------------------------------
3/rd/ 3.00%
----------------------------------------------------------
4/th/ 3.00%
----------------------------------------------------------
5/th/ 2.00%
----------------------------------------------------------
6/th/ 1.00%
----------------------------------------------------------
Thereafter 0.00%
----------------------------------------------------------
Class C Shares
The offering price of Class C shares is their net asset value, plus a front-end
sales charge of 1.00% (1.01% of your investment). Class C shares are also
subject to a CDSC of 1.00% on redemptions made within one year of the date of
purchase. The holding period for determining the CDSC will continue to run after
an exchange to Class C shares of another CDC Nvest Fund.
-----------------------------------------------------------
Class C Contingent Deferred Sales Charges
-----------------------------------------------------------
Year Since Purchase CDSC on Shares Being Sold
-----------------------------------------------------------
1st 1.00%
-----------------------------------------------------------
Thereafter 0.00%
-----------------------------------------------------------
Accounts established in other CDC Nvest Funds prior to December 1, 2000 will not
be subject to the 1.00% front-end sales charge for exchange or additional
purchases of Class C shares.
How the CDSC Is Applied to Your Shares
The CDSC is a sales charge you pay when you redeem certain Fund shares. The
CDSC:
. is calculated based on the number of shares you are selling;
. is based on either your original purchase price or the current net asset
value of the shares being sold, whichever is lower;
. is deducted from the proceeds of the redemption, not from the amount
remaining in your account; and
. for year one applies to redemptions through the day one year after the date
on which your purchase was accepted, and so on for subsequent years.
A CDSC will not be charged on:
. increases in net asset value above the purchase price; or
. shares you acquired by reinvesting your dividends or capital gains
distributions.
To keep your CDSC as low as possible, each time that you place a request to sell
shares we will first sell any shares in your account that carry no CDSC. If
there are not enough of these shares available to meet your request, we will
sell the shares with the lowest CDSC.
Exchanges into Shares of the Money Market Funds
If you exchange shares of a Fund into shares of a Money Market Fund, the holding
period for purposes of determining the CDSC and conversion to Class A shares
stops until you exchange back into shares of another CDC Nvest Fund. If you
choose to redeem those Money Market Fund shares, a CDSC may apply.
19
Fund Services
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Ways to Reduce or Eliminate Sales Charges
Class A or C Shares
Reducing Sales Charges
There are several ways you can lower your sales charge for Class A shares
utilizing the chart on the previous page, including:
. Letter of Intent -- allows you to purchase Class A shares of any CDC Nvest
Fund over a 13-month period but pay sales charges as if you had purchased
all shares at once. This program can save you money if you plan to invest
$50,000 or more over 13 months. Purchases of Class B and Class C shares may
be used toward meeting the letter of intent.
. Combining Accounts -- allows you to combine shares of multiple CDC Nvest
Funds and classes for purposes of calculating your sales charge. You may
combine your purchases with those of qualified accounts of a spouse,
parents, children, siblings, grandparents, grandchildren, in-laws,
individual fiduciary accounts, sole proprietorships, single trust estates
and any other group of individuals acceptable to the Distributor.
These privileges do not apply to the Money Market Funds unless shares are
purchased through an exchange from another CDC Nvest Fund.
Eliminating Sales Charges and CDSC
Class A shares may be offered without front-end sales charges or a CDSC, and
Class C shares may be offered without a front-end sales charge, to the following
individuals and institutions:
. Any government entity that is prohibited from paying a sales charge or
commission to purchase mutual fund shares;
. Selling brokers, sales representatives or other intermediaries under
arrangements with the Distributor;
. Fund Trustees and other individuals who are affiliated with any CDC Nvest
Fund or Money Market Fund (this also applies to any spouse, parents,
children, siblings, grandparents, grandchildren and in-laws of those
mentioned);
. Participants in certain Retirement Plans with at least 100 eligible
employees (one-year CDSC may apply);
. Non-discretionary and non-retirement accounts of bank trust departments or
trust companies only if they principally engage in banking or trust
activities;
. Investments of $250,000 or more in Short Term Corporate Income Fund or $5
million or more in Limited Term U.S. Government Fund by corporations
purchasing shares for their own account, credit unions, or bank trust
departments and trust companies with discretionary accounts which they hold
in a fiduciary capacity; and
. Investments of $25,000 or more in CDC Nvest Funds or Money Market Funds by
clients of an adviser or subadviser to any CDC Nvest Fund or Money Market
Fund.
Repurchasing Fund Shares
You may apply proceeds from redeeming Class A or Class C shares of the Funds
(WITHOUT PAYING A FRONT-END SALES CHARGE) to repurchase Class A or Class C
shares, respectively, of any CDC Nvest Fund. To qualify, you must reinvest some
or all of the proceeds within 120 days after your redemption and notify CDC
Nvest Funds or your financial representative at the time of reinvestment that
you are taking advantage of this privilege. You may reinvest your proceeds
either by returning the redemption check or by sending a new check for some or
all of the redemption amount.
Please note: for federal income tax purposes, A REDEMPTION IS A SALE THAT
INVOLVES TAX CONSEQUENCES, EVEN IF THE PROCEEDS ARE LATER REINVESTED. Please
consult your tax adviser for how a redemption would affect you.
If you repurchase Class A shares of $1 million or more within 30 days after you
redeem such shares, the Distributor will rebate the amount of the CDSC charged
on the redemption.
Classes A, B or C Shares
Eliminating the CDSC
As long as the Distributor is notified at the time you sell, the CDSC for any
share class will generally be eliminated in the following cases:
. to make distributions from a retirement plan (a plan termination or total
plan redemption may incur a CDSC);
. to make payments through a systematic withdrawal plan; or
. due to shareholder death or disability.
If you think you may be eligible for a sales charge elimination or reduction,
contact your financial representative or CDC Nvest Funds. Check the Statement of
Additional Information (the "SAI") for details.
20
Fund Services
-------------
It's Easy to Open an Account
To Open an Account with CDC Nvest Funds:
1. Read this Prospectus carefully.
2. Determine how much you wish to invest. The following chart shows the
investment minimums for various types of accounts:
[Enlarge/Download Table]
Minimum to Open an
Minimum to Open an Account Using Minimum for Existing
Type of Account Account Investment Builder Accounts
Any account other than those listed below $2,500 $100 $100
Accounts registered under the Uniform Gifts to
Minors Act ("UGMA") or the Uniform Transfers
to Minors Act ("UTMA") $2,500 $100 $100
Individual Retirement Accounts ("IRAs") $ 500 $100 $100
Retirement plans with tax benefits such as
corporate pension, profit sharing and Keogh
plans $ 250 $100 $100
Payroll Deduction Investment Programs for
SARSEP*, SEP, SIMPLE IRA, 403(b)(7) and
certain other retirement plans $ 25 N/A $ 25
. Effective January 1, 1997, the Savings Incentive Match Plan for Employees
of Small Employers (SIMPLE) IRA became available replacing SARSEP plans.
SARSEP plans established prior to January 1, 1997 may remain active and
continue to add new employees.
3. Complete the appropriate parts of the account application, carefully
following the instructions. If you have any questions, please call your
financial representative or CDC Nvest Funds at 800-225-5478. For more
information on CDC Nvest Funds' investment programs, refer to the section
entitled "Additional Investor Services" in this Prospectus.
4. Use the following sections as your guide for purchasing shares.
Self-Servicing Your Account
Buying or selling shares is easy with the services described below:
CDC Nvest Funds Personal Access Line(R)
800-225-5478, press 1
CDC Nvest Funds Web Site
www.cdcnvestfunds.com
You have access to your account 24 hours a day by calling the Personal Access
Line(R) from a touch-tone telephone or by visiting us online. Using these
customer service options, you may:
. purchase, exchange or redeem shares in your existing accounts (certain
restrictions may apply);
. review your account balance, recent transactions, Fund prices and recent
performance;
. order duplicate account statements; and
. obtain tax information.
Please see the following pages for other ways to buy, exchange or sell your
shares.
21
Fund Services
-------------
Buying Shares
[Enlarge/Download Table]
Opening an Account Adding to an Account
Through Your Investment Dealer
. Call your investment dealer . Call your investment dealer
for information. for information.
By Mail
. Make out a check in U.S. . Make out a check in U.S.
dollars for the investment dollars for the investment
amount, payable to "CDC Nvest amount, payable to "CDC Nvest
Funds." Third party checks and Funds." Third party checks and
"starter" checks will not be "starter" checks will not be
accepted. accepted.
. Mail the check with your . Fill out the detachable
[envelope icon] completed application to CDC investment slip from an account
Nvest Funds, P.O. Box 8551, statement. If no slip is
Boston, MA 02266-8551. available, include with the
check a letter specifying the
Fund name, your class of
shares, your account number and
the registered account
name(s). To make investing
even easier, you can order more
investment slips by calling
800-225-5478.
By Exchange
. The exchange must be for a . The exchange must be for a
minimum of $1,000 or for all of minimum of $1,000 or for all of
your shares. your shares.
[exchange icon] . Obtain a current prospectus . Call your investment dealer
for the Fund into which you are or CDC Nvest Funds at
exchanging by calling your 800-225-5478 or visit
investment dealer or CDC Nvest www.cdcnvestfunds.com to
Funds at 800-225-5478. request an exchange.
. Call your investment dealer . See the section entitled
or CDC Nvest Funds to request an "Exchanging Shares" for more
exchange. details.
. See the section entitled
"Exchanging Shares" for more
details.
By Wire
. Call CDC Nvest Funds at . Visit www.cdcnvestfunds.com
800-225-5478 to obtain an to add shares to your account
account number and wire transfer by wire.
instructions. Your bank may . Instruct your bank to
charge you for such a transfer. transfer funds to State Street
[wire icon] Bank & Trust Company, ABA#
011000028, and DDA # 99011538.
. Specify the Fund name, your
class of shares, your account
number and the registered
account name(s). Your bank may
charge you for such a transfer.
Automatic Investing Through Investment Builder
. Indicate on your application . Please call CDC Nvest Funds
that you would like to begin an at 800-225-5478 for a Service
automatic investment plan Options Form. A signature
through Investment Builder and guarantee may be required to
[builder icon] the amount of the monthly add this privilege.
investment ($100 minimum). . See the section entitled
"Additional Investor Services".
. Send a check marked "Void"
or a deposit slip from your bank
account along with your
application.
Through Automated Clearing House ("ACH")
. Ask your bank or credit . Call CDC Nvest Funds at
union whether it is a member of 800-225-5478 or visit
the ACH system. www.cdcnvestfunds.com to add
. Complete the "Bank Information" shares to your account through
section on your account ACH.
application. . If you have not signed up
. Mail your completed for the ACH system, please call
application to CDC Nvest Funds, CDC Nvest Funds for a Service
[ACH icon] P.O. Box 8551, Boston, MA Options Form. A signature
02266-8551. guarantee may be required to
add this privilege.
22
Fund Services
-------------
Selling Shares
To Sell Some or All of Your Shares
Certain restrictions may apply. See section entitled "Restrictions on Buying,
Selling and Exchanging Shares."
Through Your Investment Dealer
. Call your investment dealer for information.
By Mail
. Write a letter to request a redemption
specifying the name of your Fund, your class
of shares, your account number, the exact
registered account name(s), the number of
shares or the dollar amount to be redeemed and
the method by which you wish to receive your
proceeds. Additional materials may be
required. See the section entitled "Selling
Shares in Writing."
[envelope icon] . The request must be signed by all of the
owners of the shares and must include the
capacity in which they are signing, if
appropriate.
. Mail your request by regular mail to CDC Nvest
Funds, P.O. Box 8551, Boston, MA 02266-8551 or
by registered, express or certified mail to
CDC Nvest Funds, 66 Brooks Drive, Braintree,
MA 02184.
. Your proceeds (less any applicable CDSC) will
be delivered by the method chosen in your
letter. If you choose to have your proceeds
delivered by mail, they will generally be
mailed to you on the business day after the
request is received in good order. You may
also choose to redeem by wire or through ACH
(see below).
By Exchange
. Obtain a current prospectus for the Fund into
which you are exchanging by calling your
investment dealer or CDC Nvest Funds at 800-
225-5478.
[exchange icon] . Call CDC Nvest Funds or visit
www.cdcnvestfunds.com to request an exchange.
. See the section entitled "Exchanging Shares"
for more details.
By Wire
. Fill out the "Bank Information" section on
your account application.
[wire icon] . Call CDC Nvest Funds at 800-225-5478, visit
www.cdcnvestfunds.com or indicate in your
redemption request letter (see above) that you
wish to have your proceeds wired to your bank.
. Proceeds (less any applicable CDSC) will
generally be wired on the next business day. A
wire fee (currently $5.00) will be deducted
from the proceeds.
Through Automated Clearing House
. Ask your bank or credit union whether it is a
member of the ACH system.
. Complete the "Bank Information" sections on
your account application.
[ ACH icon] . If you have not signed up for the ACH system
on your application, please call CDC Nvest
Funds at 800-225-5478 for a Service Options
Form.
. Call CDC Nvest Funds or visit
www.cdcnvestfunds.com to request a redemption
through this system.
. Proceeds (less any applicable CDSC) will
generally arrive at your bank within three
business days.
By Systematic Withdrawal Plan
. Please refer to the section entitled
"Additional Investor Services" or call CDC
Nvest Funds at 800-225-5478 or your financial
representative for information.
[systematic icon] . Because withdrawal payments may have tax
consequences, you should consult your tax
adviser before establishing such a plan.
By Telephone
. You may receive your proceeds by mail, by wire
or through ACH (see above).
[telephone icon] . Call CDC Nvest Funds at 800-225-5478 to choose
the method you wish to use to redeem your
shares.
By Check (for Class A shares of Short Term Corporate Income Fund and Limited
Term U.S. Government Fund only)
. Select the check writing option on your
account application and complete the attached
signature card.
[check icon] . To add this privilege to an existing account,
call CDC Nvest Funds at 800-225-5478 for a
Service Options Form.
. Each check must be written for $500 or more.
. You may not close your account by withdrawal
check. Please call your financial
representative or CDC Nvest Funds to close an
account.
23
Selling Shares in Writing
If you wish to redeem your shares in writing, all owners of the shares must sign
the redemption request in the exact names in which the shares are registered and
indicate any special capacity in which they are signing. In certain situations,
you will be required to make your request to sell shares in writing. In these
instances, a letter of instruction signed by the authorized owner is necessary.
In certain situations, we also may require a signature guarantee or additional
documentation.
A signature guarantee protects you against fraudulent orders and is necessary
if:
. your address of record has been changed within the past 30 days;
. you are selling more than $100,000 worth of shares and you are requesting the
proceeds by check; or
. a proceeds check for any amount is either mailed to an address other than the
address of record or not payable to the registered owner(s).
A notary public cannot provide a signature guarantee. A signature guarantee can
be obtained from one of the following sources:
. a financial representative or securities dealer;
. a federal savings bank, cooperative, or other type of bank;
. a savings and loan or other thrift institution;
. a credit union; or
. a securities exchange or clearing agency.
The table below shows some situations in which additional documentation may be
necessary. Please call your financial representative or CDC Nvest Funds
regarding requirements for other account types.
Seller (Account Type) Requirements for Written Requests
Individual, joint, sole proprietorship, . The request must include the
UGMA/UTMA (minor accounts) signatures of all persons
authorized to sign, including
title, if applicable.
. Signature guarantee, if
applicable (see above).
Corporate or association accounts . The request must include the
signatures of all persons
authorized to sign, including
title.
Owners or trustees of trust accounts . The request must include the
signatures of all trustees
authorized to sign, including
title.
. If the names of the trustees are
not registered on the account,
please provide a copy of the
trust document certified within
the past 60 days.
. Signature guarantee, if
applicable (see above).
Joint tenancy whose co-tenants are deceased . The request must include the
signatures of all surviving
tenants of the account.
. Copy of the death certificate.
. Signature guarantee if proceeds
check is issued to other than
the surviving tenants.
Power of Attorney (POA) . The request must include the
signatures of the attorney-in-
fact, indicating such title.
. A signature guarantee.
. Certified copy of the POA
document stating it is still in
full force and effect,
specifying the exact Fund and
account number, and certified
within 30 days of receipt of
instructions.*
Qualified retirement benefit plans
(except CDC Nvest . The request must include the
Funds prototype documents) signatures of all those
authorized to sign, including
title.
. Signature guarantee, if
applicable (see above).
Executors of estates, administrators, . The request must include the
guardians, conservators signatures of all those
authorized to sign, including
capacity.
. A signature guarantee.
. Certified copy of court document
where signer derives authority,
e.g.: Letters of Administration,
Conservatorship and Letters
Testamentary.*
Individual Retirement Accounts . Additional documentation and
distribution forms are required.
. Certification may be made on court documents by the court, usually
certified by the clerk of the court. Power of Attorney certification
may be made by a commercial bank, broker/member of a domestic stock
exchange or a practicing attorney.
24
Fund Services
-------------
Exchanging Shares
In general, you may exchange shares of your Fund for shares of the same class of
another CDC Nvest Fund without paying a sales charge or a CDSC (see the sections
entitled "Buying Shares" and "Selling Shares"). The exchange must be for a
minimum of $1,000 (or the total net asset value of your account, whichever is
less), or $100 if made under the Automatic Exchange Plan (see the section
entitled "Additional Investor Services"). All exchanges are subject to the
eligibility requirements of the CDC Nvest Fund or Money Market Fund into which
you are exchanging. The exchange privilege may be exercised only in those states
where shares of the Funds may be legally sold. For federal income tax purposes,
an exchange of Fund shares for shares of another CDC Nvest Fund or Money Market
Fund is generally treated as a sale on which gain or loss may be recognized.
Please refer to the SAI for more detailed information on exchanging Fund shares.
Restrictions on Buying, Selling and Exchanging Shares
Purchase and Exchange Restrictions
Although the Funds do not anticipate doing so, they reserve the right to suspend
or change the terms of purchasing or exchanging shares. Each Fund and the
Distributor reserve the right to refuse or limit any purchase or exchange order
by a particular purchaser (or group of related purchasers) if the transaction is
deemed harmful to the best interests of the Fund's other shareholders or would
disrupt the management of the Fund. The Funds and the Distributor reserve the
right to restrict purchases and exchanges for the accounts of "market timers" by
limiting the transaction to a maximum dollar amount. An account will be deemed
to be one of a market timer if: (i) more than two exchange purchases of a given
Fund are made for the account in a calendar quarter or (ii) the account makes
one or more exchange purchases of a given Fund in a calendar quarter in an
aggregate amount in excess of 1% of the Fund's total net assets.
Selling Restrictions
The table below describes restrictions placed on selling shares of any Fund
described in this Prospectus:
Restriction Situation
The Fund may suspend the right of . When the New York Stock Exchange (the
redemption or postpone payment "Exchange") is closed (other than a
for more than 7 days: weekend/holiday)
. During an emergency
. Any other period permitted by the SEC
The Fund reserves the right to . With a notice of a dispute between
suspend account services or refuse registered owners
transaction requests: . With suspicion/evidence of a
fraudulent act
The Fund may pay the redemption . When it is detrimental for the Fund to
price in whole or in part by a make cash payments as determined in
distribution in kind of readily the sole discretion of the Adviser or
marketable securities in lieu of subadviser
cash or may take up to 7 days to
pay a redemption request in order
to raise capital:
The Fund may withhold redemption . When redemptions are made within 10
proceeds until the check or funds calendar days of purchase by check or
have cleared: ACH of the shares
55
being redeemed
Telephone redemptions are not accepted for tax-qualified retirement accounts.
If you hold certificates representing your shares, they must be sent with your
request for it to be honored.
The Fund recommends that certificates be sent by registered mail.
Small Account Redemption
When the Fund account falls below a set minimum (currently $1,000 as set by the
Board of Trustees), the Fund may close your account and send you the proceeds.
You will have 60 days after being notified of the Fund's intention to close your
account to increase its amount to the set minimum. This does not apply to
certain qualified retirement plans or accounts that have fallen below the
minimum solely because of fluctuations in the Fund's net asset value per share.
25
Fund Services
-------------
How Fund Shares Are Priced
"Net asset value" is the price of one share of a Fund without a sales charge,
and is calculated each business day using this formula:
Net Asset Value = Total market value of securities + Cash and
other assets - Liabilities
----------------------------------------------
Number of outstanding shares
The net asset value of Fund shares is determined according to this schedule:
. A share's net asset value is determined at the close of regular trading on
the Exchange on the days the Exchange is open for trading. This is normally
4:00 p.m. Eastern time. Fund shares will not be priced on the days on which
the Exchange is closed for trading.
. The price you pay for purchasing, redeeming or exchanging a share will be
based upon the net asset value next calculated after your order is received
"in good order" by State Street Bank and Trust Company, each Fund's custodian
(plus or minus applicable sales charges as described earlier in this
Prospectus).
. Requests received by the Distributor after the Exchange closes will be
processed based upon the net asset value determined at the close of regular
trading on the next day that the Exchange is open, with the exception that
those orders received by your investment dealer before the close of the
Exchange and received by the Distributor before 5:00 p.m. Eastern time* on
the same day will be based on the net asset value determined on that day.
. A Fund heavily invested in foreign securities may have net asset value
changes on days when you cannot buy or sell its shares.
. Under limited circumstances, the Distributor may enter into a
contractual agreement pursuant to which it may accept orders after
5:00 p.m., but not later than 8:00 p.m.
Generally, during times of substantial economic or market change, it may be
difficult to place your order by phone. During these times, you may deliver your
order in person to the Distributor or send your order by mail as described in
"Buying Shares" and "Selling Shares."
Generally, Fund securities are valued as follows:
Equity securities--most recent sales or quoted bid price or as provided by a
pricing service if a sales or quoted bid price is unavailable.
Debt securities (other than short-term obligations)--based upon pricing service
valuations, which determines valuations for normal, institutional-size
trading units of such securities using market information, transactions for
comparable securities and various relationships between securities which are
generally recognized by institutional traders.
Short-term obligations (remaining maturity of less than 60 days)--amortized cost
(which approximates market value).
Securities traded on foreign exchanges--most recent sale/bid price on the non-
U.S. exchange, unless an occurrence after the close of the exchange will
materially affect its value. In that case, it is given fair value as
determined by or under the direction of the Board of Trustees at the close of
regular trading on the Exchange.
Options--last sale price, or if not available, last offering price.
Futures--unrealized gain or loss on the contract using current settlement price.
When a settlement price is not used, futures contracts will be valued at
their fair value as determined by or under the direction of the Board of
Trustees.
All other securities--fair market value as determined by the adviser or
subadviser of the Fund under the direction of the Board of Trustees.
The effect of fair value pricing as described above for "Securities traded on
foreign exchanges" and "All other securities" is that securities may not be
priced on the basis of quotations from the primary market in which they are
traded but rather may be priced by another method that the Board of Trustees
believes actually reflects fair value. In unusual circumstances, instead of
valuing securities in the usual manner, the Funds may value securities at fair
value or estimate their value as determined in good faith by the Board of
Trustees or persons acting at their direction pursuant to procedures approved by
the Board of Trustees. Fair valuation may also be used by the Board of Trustees
if extraordinary events occur after the close of the relevant market but prior
to the close of the Exchange.
26
Fund Services
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Dividends and Distributions
The Funds generally distribute most or all of their net investment income (other
than capital gains) in the form of dividends. Each Fund declares dividends for
each class daily and pays them monthly. Each Fund expects to distribute all net
realized long- and short-term capital gains annually, after applying any
available capital loss carryovers. The Board of Trustees may adopt a different
schedule as long as payments are made at least annually.
Distributions will automatically be reinvested in shares of the same class of
the distributing Fund at net asset value, unless you select one of the following
alternatives:
. Participate in the Dividend Diversification Program, which allows you to have
all dividends and distributions automatically invested at net asset value in
shares of the same class of another CDC Nvest Fund registered in your name.
Certain investment minimums and restrictions may apply. For more information
about this program, see the section entitled "Additional Investor Services."
. Receive distributions from dividends and interest in cash while reinvesting
distributions from capital gains in additional shares of the same class of
the Fund, or in the same class of another CDC Nvest Fund.
. Receive all distributions in cash.
For more information or to change your distribution option, contact CDC Nvest
Funds in writing or call 800-225-5478.
If you earn more than $10 annually in taxable income from a non-retirement plan
CDC Nvest Fund, you will receive a Form 1099 to help you report the prior
calendar year's distributions on your federal income tax return. Be sure to keep
this Form 1099 as a permanent record. A fee may be charged for any duplicate
information requested.
Tax Consequences
Each Fund intends to meet all requirements under Subchapter M of the Internal
Revenue Code necessary to qualify as a "regulated investment company" and thus
does not expect to pay any federal income tax on income and capital gains
distributed to shareholders.
Fund distributions paid to you are taxable whether you receive them in cash or
reinvest them in additional shares. Distributions derived from short-term
capital gains or investment income are taxable at ordinary income rates.
Distributions of gains from investments that the Funds owned for more than one
year that are designated by the Funds as capital gain dividends will generally
be taxable to a shareholder receiving such distributions as long-term capital
gain, regardless of how long the shareholder has held the Funds' shares.
Distributions are taxable to you even if they are paid from income or gains
earned by the Funds before your investment (and thus were included in the price
you paid).
The Funds' investments in foreign securities may be subject to foreign
withholding taxes. In that case, the Funds' yield on those securities would be
decreased. Shareholders may be entitled to claim a credit or deduction with
respect to foreign taxes. In addition, the Funds' investments in foreign
securities or foreign currencies may increase or accelerate the Funds'
recognition of ordinary income and may affect the timing or amount of the Funds'
distributions.
Any gain resulting from the sale of your Fund shares (or an exchange of Fund
shares for shares of another CDC Nvest Fund or Money Market Fund) will generally
be subject to federal income tax.
Dividends derived from interest on U.S. government securities may be exempt from
state and local income taxes. The Funds advise shareholders of the proportion of
each Fund's dividends that are derived from such interest.
You should consult your tax adviser for more information on your own situation,
including possible foreign, state or local taxes.
27
Compensation to Securities Dealers
As part of their business strategies, the Funds pay securities dealers that sell
their shares. This compensation originates from two sources: sales charges
(front-end or deferred) and 12b-1 fees (comprising the annual service and/or
distribution fees of a plan adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940). The sales charges are detailed in the section entitled
"How Sales Charges Are Calculated." Each class of Fund shares pays an annual
service fee of 0.25% of its average daily net assets. Class A shares of the
Limited Term U.S. Government Fund pay a distribution fee of 0.10% of its average
daily net assets. In addition to this service fee, Class B shares pay an annual
distribution fee of 0.75% of their average daily net assets for 8 years (at
which time they automatically convert into Class A shares). Class C shares are
subject to a distribution fee of 0.75% of their average daily net assets.
Generally, the 12b-1 fees are paid to securities dealers on a quarterly basis.
The Distributor retains the first year of such fees for Class C shares. Because
these distribution fees are paid out of the Fund's assets on an ongoing basis,
over time these fees for Class B and Class C shares will increase the cost of
your investment and may cost you more than paying the front-end sales charge on
Class A shares.
The Distributor may, at its expense, pay concessions in addition to the payments
described above to dealers which satisfy certain criteria established from time
to time by the Distributor relating to increasing net sales of shares of the CDC
Nvest Funds over prior periods, and certain other factors. See the SAI for more
details.
28
Fund Services
-------------
Additional Investor Services
Retirement Plans
CDC Nvest Funds offer a range of retirement plans, including IRAs, SEPs,
SARSEPs*, SIMPLE IRAs, 403(b) plans and other pension and profit sharing plans.
Refer to the section entitled "It's Easy to Open an Account" for investment
minimums. For more information about our Retirement Plans, call us at 800-225-
5478.
Investment Builder Program
This is CDC Nvest Funds' automatic investment plan. You may authorize automatic
monthly transfers of $100 or more from your bank checking or savings account to
purchase shares of one or more CDC Nvest Funds. To join the Investment Builder
Program, please refer to the section entitled "Buying Shares."
Dividend Diversification Program
This program allows you to have all dividends and any other distributions
automatically invested in shares of the same class of another CDC Nvest Fund or
Money Market Fund, subject to the eligibility requirements of that other fund
and to state securities law requirements. Shares will be purchased at the
selected Fund's net asset value without a front-end sales charge or CDSC on the
dividend record date. Before establishing a Dividend Diversification Program
into any other CDC Nvest Fund or Money Market Fund, please read its prospectus
carefully.
Automatic Exchange Plan
CDC Nvest Funds have an automatic exchange plan under which shares of a class of
a CDC Nvest Fund are automatically exchanged each month for shares of the same
class of another CDC Nvest Fund or Money Market Fund. There is no fee for
exchanges made under this plan, but there may be a sales charge in certain
circumstances. Please refer to the SAI for more information on the Automatic
Exchange Plan.
Systematic Withdrawal Plan
This plan allows you to redeem shares and receive payments from your Fund on a
regular schedule. Redemption of shares that are part of the Systematic
Withdrawal Plan are not subject to a CDSC. However, the amount or percentage you
specify in the plan may not exceed, on an annualized basis, 10% of the value of
your Fund account based upon the value of your Fund account on the day you
establish your plan. To establish a Systematic Withdrawal Plan, please refer to
the section entitled "Selling Shares."
CDC Nvest Funds Personal Access Line(R)
This automated customer service system allows you to have access to your account
24 hours a day by calling 800-225-5478, press 1. With a touch-tone telephone,
you can obtain information about your current account balance, recent
transactions, Fund prices and recent performance. You may also use Personal
Access Line(R) to purchase, exchange or redeem shares in any of your existing
accounts. Certain restrictions may apply.
CDC Nvest Funds Web Site
Visit us at www.cdcnvestfunds.com to review your account balance and recent
transactions, to view daily prices and performance information or to order
duplicate account statements and tax information. You may also go online to
purchase, exchange or redeem shares in your existing accounts. Certain
restrictions may apply.
Electronic Mail Delivery
This delivery option allows you to receive important fund documents via the
Internet instead of in paper form through regular U.S. mail. Eligible documents
include confirmation statements, quarterly statements, prospectuses, annual and
semiannual reports and proxies. Electronic Delivery will cut down on the amount
of paper mail you receive; speed up the availability of your documents; and
lower expenses to your fund. To establish this option on your account(s),
complete the appropriate section of your new account application or visit us at
www.cdcnvestfunds.com.
. Effective January 1, 1997, the Savings Incentive Match Plan for Employees
of Small Employers (SIMPLE) IRA became available, replacing SARSEP plans.
SARSEP plans established prior to January 1, 1997 may remain active and
continue to add new employees.
29
Fund Performance
The financial highlights table is intended to help you understand each Fund's
financial performance for the past 5 years (or, if shorter, the period of the
Fund's operations). Certain information reflects financial results for a single
Fund share. The total returns in the table represent the return that an investor
would have earned (or lost) on an investment in each Fund (assuming reinvestment
of all dividends and distributions). This information has been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report, along with
each Fund's financial statements, are incorporated by reference in the Statement
of Additional Information, which is available upon request.
CDC Nvest Short Term Corporate Income Fund
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Class A Class B
Year Ended December 31, Year Ended December 31,
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000
Net Asset Value,
Beginning of The Period $ 7.37 $ 7.37 $ 7.39 $ 7.30 $ 7.01 $ 7.37 $ 7.36 $ 7.38 $ 7.29 $ 7.00
-------- -------- ------- ------- ------- ------ ------ ------ ------ ------
Income from investment operations
Net Investment Income 0.43 0.47(d) 0.38 0.41 0.44 0.37 0.41(d) 0.33 0.36 0.39
Net Realized and Unrealized
Gain (Loss) on Investments (0.01) (0.02) (0.09) (0.28) 0.01(f) (0.02) (0.02) (0.09) (0.28) 0.01(f)
-------- -------- ------- ------- ------- ------ ------ ------ ------ ------
Total From Investment Operations 0.42 0.45 0.29 0.13 0.45 0.35 0.39 0.24 0.08 0.40
-------- -------- ------- ------- ------- ------ ------ ------ ------ ------
Less Distributions
Distributions From Net
Investment Income (0.42) (0.43) (0.38) (0.42) (0.44) (0.36) (0.37) (0.33) (0.37) (0.39)
-------- -------- ------- ------- ------- ------ ------ ------ ------ ------
Total Distributions (0.42) (0.43) (0.38) (0.42) (0.44) (0.36) (0.37) (0.33) (0.37) (0.39)
-------- -------- ------- ------- ------- ------ ------ ------ ------ ------
Net Asset Value, End of the Period $ 7.37 $ 7.39 $ 7.30 $ 7.01 $ 7.02 $ 7.36 $ 7.38 $ 7.29 $ 7.00 $ 7.01
======== ======== ======= ======= ======= ====-= ====== ====== ====== ======
Total Return (%) (c) 5.8 6.2 4.0 1.9 6.7 4.9 5.4 3.4 1.1 5.9
Ratios/Supplemental Data
Ratio of Operating Expenses
to Average Net Assets (%) (b) 0.70 0.70 0.70 0.70 0.83 1.45 1.45 1.45 1.45 1.58
Ratio of Net Investment Income
to Average Net Assets (%) 6.39 6.27 5.93 5.88 6.43 5.64 5.52 5.18 5.13 5.68
Portfolio Turnover Rate (%) 54 49 105 139 108 54 49 105 139 108
Net Assets, End of Period (000) $222,809 $196,928 $92,669 $72,680 $58,540 $2,821 $2,961 $3,761 $3,796 $3,553
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Class C
December 7, 1998(a) Year Ended
through December 31,
December 31, 1998 1999 2000
Net Asset Value,
Beginning of The Period $7.28 $ 7.29 $ 7.00
----- ------ ------
Income from investment operations
Net Investment Income 0.01 0.36 0.39
Net Realized and Unrealized
Gain (Loss) on Investments 0.01(f) (0.28) 0.01(f)
----- ------ ------
Total From Investment Operations 0.02 0.08 0.40
----- ------ ------
Less Distributions
Distributions From Net
Investment Income (0.01) (0.37) (0.39)
----- ------ ------
Total Distributions (0.01) (0.37) (0.39)
----- ------ ------
Net Asset Value, End of the Period $7.29 $ 7.00 $ 7.01
===== ====== ======
Total Return (%) (c) 0.3 1.2 5.9
Ratios/Supplemental Data
Ratio of Operating Expenses
to Average Net Assets (%) (b) 1.45(e) 1.4 1.58
Ratio of Net Investment Income
to Average Net Assets (%) 5.18(e) 5.13 5.68
Portfolio Turnover Rate (%) 105 139 108
Net Assets, End of Period (000) $ 233 $ 489 $ 461
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(a) Commencement of operations.
(b) The adviser and subadviser agreed to reimburse a portion of the Funds
expenses d uring the period. Without these reimbursements, expense ratios
would have been higher.
(c) A sales charge for Class A and C shares and a contingent deferred sales
charge for Class B and C shares are not reflected in total return
calculations. Periods less than one year are not annualized.
(d) Per share net investment income does not reflect the periods
reclassification of permanent differences between book and tax basis net
investment income.
(e) Computed on an annualized basis.
(f) The amount shown fo r a share outstanding does not correspond with the
aggregate net gain/(loss) on investments for the period due to the timing
of purchases and redemption of Fund shares in relation to fluctuating
market values of the investments of the Fund.
Portfolio Turnover Rate (%)
Net Assets, End of Year (000)
-------------------------------------------------------------------------------
(a) Commencement of Operations.
(b) The ratio of operating expenses to average net assets without giving
effect to the expense limitation in effect would have been (%):
(c) A sales charge for Class A shares or a CDSC for Class B and Class C
shares is not reflected in total return calculations.
(d) Per share net investment income (loss) does not reflect the period's
reclassification of permanent differences between book and tax basis
net investment income (loss).
(e) Computed on an annualized basis.
(f) The amount shown for a share outstanding does not correspond with the
aggregate net gain/loss on investments for the period ended December
31, 1998, due to the timing of purchases and redemptions of Fund
shares in relation to fluctuating market values of the investments of
the Fund.
30
Fund Performance
----------------
CDC Nvest Bond Income Fund
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Class A Class B
Year Ended December 31, Year Ended December 31,
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000
Net Asset Value,
Beginning of the Year $ 12.36 $ 12.05 $ 12.39 $ 12.36 $ 11.51 $ 12.36 $ 12.04 $ 12.39 $ 12.36 $ 11.51
-------- -------- -------- -------- -------- ------- ------- ------- ------- --------
Income from investment operations
Net Investment Income 0.84 0.83 0.81 0.81 0.78 0.75 0.74 0.71 0.72 0.70
Net Realized and Unrealized
Gain (Loss) on Investments (0.31) 0.45 0.15 (0.86) 0.03 (0.32) 0.46 0.15 (0.86) 0.02
-------- -------- -------- -------- -------- ------- ------- ------- ------- --------
Total From Investment Operations 0.53 1.28 0.96 (0.05) 0.81 0.43 1.20 0.86 (0.14) 0.72
-------- -------- -------- -------- -------- ------- ------- ------- ------- --------
Less Distributions
Dividends From
Net Investment Income (0.84) (0.81) (0.78) (0.79) (0.80) (0.75) (0.72) (0.69) (0.70) (0.72)
Distributions in Excess of
Net Investment Income 0.00 (0.01) (0.03) 0.00 0.00 0.00 (0.01) (0.02) 0.00 0.00
Distributions From Net Realized
Capital Gains 0.00 (0.12) (0.17) (0.01) 0.00 0.00 (0.12) (0.17) (0.01) 0.00
Distributions in Excess of
Net Realized Gains 0.00 0.00 (0.01) 0.00(b) 0.00 0.00 0.00 (0.01) 0.00(b) 0.00
-------- -------- -------- -------- -------- ------- ------- ------- ------- --------
Total Distributions (0.84) (0.94) (0.99) (0.80) (0.80) (0.75) (0.85) (0.89) (0.71) (0.72)
-------- -------- -------- -------- -------- ------- ------- ------- ------- --------
Net Asset Value, End of the Year $ 12.05 $ 12.39 $ 12.36 $ 11.51 $ 11.52 $ 12.04 $ 12.39 $ 12.36 $ 11.51 $ 11.51
======== ======== ======== ======== ======== ======= ======= ======= ======= ========
Total Return (%) (a) 4.6 11.0 8.0 (0.3) 7.4 3.7 10.3 7.2 (1.1) 6.5
Ratios/Supplemental Data
Ratio of Operating Expenses
to Average Net Assets (%) 1.05 1.05 1.01 0.97 1.04 1.80 1.80 1.76 1.72 1.79
Ratio of Net Investment Income
to Average Net Assets (%) 7.00 6.73 6.44 6.87 7.03 6.25 5.98 5.69 6.12 6.28
Portfolio Turnover Rate (%) 104 54 65 63 83 104 54 65 63 83
Net Assets, End of the Year (000) $189,685 $193,513 $221,799 $213,769 $174,969 $31,191 $37,559 $64,240 $89,213 $100,353
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Class C
Year Ended December 31,
1996 1997 1998 1999 2000
Net Asset Value,
Beginning of the Year $12.36 $12.06 $12.40 $ 12.37 $ 11.52
------ ------ ------ ------- -------
Income from investment operations
Net Investment Income 0.75 0.74 0.71 0.72 0.70
Net Realized and Unrealized
Gain (Loss) on Investments (0.30) 0.45 0.15 (0.86) 0.02
------ ------ ------ ------- -------
Total From Investment Operations 0.45 1.19 0.86 (0.14) 0.72
------ ------ ------ ------- -------
Less Distributions
Dividends From
Net Investment Income (0.75) (0.72) (0.69) (0.70) (0.72)
Distributions in Excess of
Net Investment Income 0.00 (0.01) (0.02) 0.00 0.00
Distributions From Net Realized
Capital Gains 0.00 (0.12) (0.17) (0.01) 0.00
Distributions in Excess of
Net Realized Gains 0.00 0.00 (0.01) 0.00(b) 0.00
------ ------ ------ ------- -------
Total Distributions (0.75) (0.85) (0.89) (0.71) (0.72)
------ ------ ------ ------- -------
Net Asset Value, End of the Year $12.06 $12.40 $12.37 $ 11.52 $ 11.52
====== ====== ====== ======= =======
Total Return (%) (a) 3.9 10.2 7.2 (1.1) 6.5
Ratios/Supplemental Data
Ratio of Operating Expenses
to Average Net Assets (%) 1.80 1.80 1.76 1.72 1.79
Ratio of Net Investment Income
to Average Net Assets (%) 6.25 5.98 5.69 6.12 6.28
Portfolio Turnover Rate (%) 104 54 65 63 83
Net Assets, End of the Year (000) $2,391 $5,276 $8,969 $14,872 $12,541
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(a) A sales charge for Class A and C shares and a contingent deferred sales
charge for Class B and C shares are not reflected in total return
calculations.
(b) Amount is less than $0.01.
CDC NVEST HIGH INCOME FUND
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Class A Class B
Year Ended December 31, Year Ended December 31,
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000
Net Asset Value,
Beginning of the Period $ 8.98 $ 9.42 $ 9.94 $ 8.86 $ 8.30 $ 8.98 $ 9.42 $ 9.93 $ 8.85 $ 8.30
------- ------- ------- ------- ------- ------ ------- ------- ------- -------
Income From Investment Operations
Net Investment Income 0.84 0.87 0.92 0.89 0.86 0.79 0.80 0.85 0.82 0.81
Net Realized and Unrealized
Gain (Loss) on Investments 0.44 0.52 (1.08) (0.54) (2.11) 0.42 0.51 (1.08) (0.53) (2.11)
------- ------- ------- ------- ------- ------ ------- ------- ------- -------
Total From Investment Operations 1.28 1.39 (0.16) 0.35 (1.25) 1.21 1.31 (0.23) 0.29 (1.30)
------- ------- ------- ------- ------- ------ ------- ------- ------- -------
Less Distributions
Distributions From Net
Investment Income (0.83) (0.87) (0.92) (0.90) (0.84) (0.76) (0.80) (0.85) (0.83) (0.78)
Distributions in Excess of
Net Investment Income (0.01) 0.00 0.00 (0.01) 0.00 (0.01) 0.00 0.00 (0.01) 0.00
------- ------- ------- ------- ------- ------ ------- ------- ------- -------
Total Distributions (0.84) (0.87) (0.92) (0.91) (0.84) (0.77) (0.80) (0.85) (0.84) (0.78)
------- ------- ------- ------- ------- ------ ------- ------- ------- -------
Net Asset Value, End of the Period $ 9.42 $ 9.94 $ 8.86 $ 8.30 $ 6.21 $ 9.42 $ 9.93 $ 8.85 $ 8.30 $ 6.22
======= ======= ======= ======= ======= ====== ======= ======= ======= =======
Total Return (%) (c) 14.9 15.4 (1.8) 4.0 (16.1) 14.1 14.4 (2.5) 3.3 (16.6)
Ratios/Supplemental Data
Ratio of Operating Expenses
to Average Net Assets (%) 1.53(b) 1.36 1.32 1.28 1.36 2.19(b) 2.11 2.07 2.03 2.11
Ratio of Net Investment Income
to Average Net Assets (%) 9.32 9.03 9.81 10.22 11.47 8.33 8.28 9.06 9.47 10.72
Portfolio Turnover Rate (%) 134 99 75 89 60 134 99 75 89 60
Net Assets, End of the Period (000) $42,992 $62,739 $73,023 $74,589 $46,960 $17,767 $42,401 $60,322 $70,218 $47,793
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Class C
March 2, 1998(a) Year Ended
through December 31,
December 31, 1998 1999 2000
Net Asset Value,
Beginning of the Period $ 9.96 $ 8.85 $ 8.30
------ ------ ------
Income From Investment Operations
Net Investment Income 0.69 0.82 0.81
Net Realized and Unrealized
Gain (Loss) on Investments (1.08) (0.53) (2.11)
------ ------ ------
Total From Investment Operations (0.39) 0.29 (1.30)
------ ------ ------
Less Distributions
Distributions From Net
Investment Income (0.72) (0.83) (0.78)
Distributions in Excess of
Net Investment Income 0.00 (0.01) 0.00
------ ------ ------
Total Distributions (0.72) (0.84) (0.78)
------ ------ ------
Net Asset Value, End of the Period $ 8.85 $ 8.30 $ 6.22
====== ====== ======
Total Return (%) (c) (4.1) 3.3 (16.6)
Ratios/Supplemental Data
Ratio of Operating Expenses
to Average Net Assets (%) 2.07(d) 2.03 2.11
Ratio of Net Investment Income
to Average Net Assets (%) 9.06(d) 9.47 10.72
Portfolio Turnover Rate (%) 75 89 60
Net Assets, End of the Period (000) $7,732 $9,138 $5,369
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The subadviser to the Fund prior to July 1, 1996 was Back Bay Advisors, L.P.
Effective July 1, 1996, Loomis, Sayles & Company, L.P. became the subadviser to
the Fund.
(a) Commencement of operations.
(b) The adviser and subadviser agreed to reimburse a portion of the Funds
expenses during the period. Without these reimbursements, the expense ratio
would have been higher.
(c) A sales charge for Class A and C shares and a contingent deferred sales
charge for Class B and C shares are not reflected in total return
calculations. Periods of less than one year are not annualized.
(d) Computed on an annualized basis.
. A sales charge for Class A shares or a CDSC for Class B and Class
C shares is not reflected in total return calculations.
. Computed on an annualized basis.
*
*
*
Fund Performance
----------------
CDC Nvest Strategic Income Fund
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Class A Class B
Year Ended December 31, Year Ended December 31,
1996 1997 1998 1999 2000 1996 1997 1998 1999
Net Asset Value,
Beginning of the Period $ 12.99 $ 13.36 $ 13.42 $ 11.37 $ 11.65 $ 12.99 $ 13.36 $ 13.42 $ 11.37
------- ------- -------- -------- -------- ------- -------- -------- --------
Income From Investment Operations
Net Investment Income 1.05 1.01 1.05 1.03 0.99(d) 0.95 0.91 0.95 0.94
Net Realized and Unrealized
Gain (Loss) on Investments 0.73 0.21 (1.30) 0.31 (0.91) 0.73 0.21 (1.30) 0.31
------- ------- -------- -------- -------- ------- -------- -------- --------
Total From Investment Operations 1.78 1.22 (0.25) 1.34 0.08 1.68 1.12 (0.35) 1.25
------- ------- -------- -------- -------- ------- -------- -------- --------
Less Distributions
Dividends From
Net Investment Income (1.05) (1.01) (1.05) (1.02) (0.93) (0.95) (0.91) (0.95) (0.93)
Distributions in Excess of
Net Investment Income 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Distributions From Net Realized
Capital Gains (0.36) (0.15) (0.70) (0.04) 0.00 (0.36) (0.15) (0.70) (0.04)
Distributions in Excess of
Net Realized Capital Gains 0.00 0.00 (0.05) 0.00(b) 0.00 0.00 0.00 (0.05) 0.00(a)
------- ------- -------- -------- -------- ------- -------- -------- --------
Total Distributions (1.41) (1.16) (1.80) (1.06) (0.93) (1.31) (1.06) (1.70) (0.97)
------- ------- -------- -------- -------- ------- -------- -------- --------
Net Asset Value, End of the Period $ 13.36 $ 13.42 $ 11.37 $ 11.65 $ 10.80 $ 13.36 $ 13.42 $ 11.37 $ 11.65
======= ======== ======== ======== ======== ======= ======== ======== ========
Total Return (%) (a) 14.5 9.3 (1.7) 12.2 0.7 13.7 8.5 (2.5) 11.3
Ratios/Supplemental Data
Ratio of Operating Expenses
to Average Net Assets (%) 0.96(b) 1.18 1.19 1.21 1.24 1.71(b) 1.93 1.94 1.96
Ratio of Net Investment Income
to Average Net Assets (%) 8.23 7.36 8.33 9.09 8.73 7.48 6.61 7.58 8.34
Portfolio Turnover Rate (%) 52 37 33 19 13 52 37 33 19
Net Assets, End of the Period (000) $90,729 $144,706 $127,306 $124,869 $116,986 $93,408 $146,083 $134,049 $127,723
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Class C
Year Ended December 31,
2000 1996 1997 1998 1999 2000
Net Asset Value,
Beginning of the Period $ 11.65 $ 12.99 $ 13.35 $ 13.41 $ 11.36 $ 11.64
-------- ------- ------- ------- ------- -------
Income From Investment Operations
Net Investment Income 0.90(d) 0.95 0.91 0.95 0.94 0.90(d)
Net Realized and Unrealized
Gain (Loss) on Investments (0.91) 0.72 0.21 (1.30) 0.31 (0.91)
-------- ------- ------- ------- ------- -------
Total From Investment Operations (0.01) 1.67 1.12 (0.35) 1.25 (0.01)
-------- ------- ------- ------- ------- -------
Less Distributions
Dividends From
Net Investment Income (0.85) (0.95) (0.91) (0.95) (0.93) (0.85)
Distributions in Excess of
Net Investment Income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions From Net Realized
Capital Gains 0.00 (0.36) (0.15) (0.70) (0.04) 0.00
Distributions in Excess of
Net Realized Capital Gains 0.00 0.00 0.00 (0.05) 0.00(c) 0.00
-------- ------- ------- ------- ------- -------
Total Distributions (0.85) (1.31) (1.06) (1.70) (0.97) (0.85)
-------- ------- ------- ------- ------- -------
Net Asset Value, End of the Period $ 10.79 $ 13.35 $ 13.41 $ 11.36 $ 11.64 $ 10.78
======== ======= ======= ======= ======= =======
Total Return (%) (a) (0.2) 13.6 8.5 (2.5) 11.3 (0.2)
Ratios/Supplemental Data
Ratio of Operating Expenses
to Average Net Assets (%) 1.99 1.71(b) 1.93 1.94 1.96 1.99
Ratio of Net Investment Income
to Average Net Assets (%) 7.98 7.48 6.61 7.58 8.34 7.98
Portfolio Turnover Rate (%) 13 52 37 33 19 13
Net Assets, End of the Period (000) $120,200 $31,746 $56,515 $45,457 $40,265 $37,208
--------------------------------------------------------------------------------------------------------
(a) A sales charge for Class A and C shares and a contingent deferred sales
charge for Class B and C shares are not reflected in total return
calculations.
(b) The adviser and subadviser agreed to reimburse a portion of the Funds
expenses during the period. Wiithout these reimbursements, the expense
ratio would have been higher.
(c) Amount is less than $0.01.
(d) Per share net investment income has been calculated using the average
shares outstanding during the year.
[Enlarge/Download Table]
Net Assets, End of Year (000)
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*
(c) Commencement of Operations.
. Computed on an annualized basis.
. A sales charge for Class A shares or a CDSC for Class B and Class C
shares is not reflected in total return calculations.
. The ratio of operating expenses to average net assets without giving
effect to the expense limitation in effect would have been (%):
. Amount rounds to less than $0.01.
*
Fund Performance
----------------
CDC Nvest Limited Term U.S. Government Fund
[Enlarge/Download Table]
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Class A Class B
Year Ended December 31, Year Ended December 31,
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000
Net Asset Value,
Beginning of Year $ 12.10 $ 11.55 $ 11.64 $ 11.70 $ 10.97 $ 12.09 $ 11.54 $ 11.62 $ 11.69 $ 10.95
-------- -------- -------- -------- -------- ------- ------- ------- ------- -------
Income from investment operations
Net Investment Income 0.81 0.72 0.67 0.66 0.69 0.73 0.65 0.60 0.59 0.62
Net Realized and Unrealized
Gain (Loss) on Investments (0.54) 0.09 0.06 (0.74) 0.20 (0.54) 0.08 0.07 (0.75) 0.20
-------- -------- -------- -------- -------- ------- ------- ------- ------- -------
Total From Investment Operations 0.27 0.81 0.73 (0.08) 0.89 0.19 0.73 0.67 (0.16) 0.82
-------- -------- -------- -------- -------- ------- ------- ------- ------- -------
Less Distributions
Distributions From
Net Investment Income (0.82) (0.72) (0.67) (0.65) (0.70) (0.74) (0.65) (0.60) (0.58) (0.63)
Total Distributions (0.82) (0.72) (0.67) (0.65) (0.70) (0.74) (0.65) (0.60) (0.58) (0.63)
-------- -------- -------- -------- -------- ------- ------- ------- ------- -------
Net Asset Value, End of the Year $ 11.55 $ 11.64 $ 11.70 $ 10.97 $ 11.16 $ 11.54 $ 11.62 $ 11.69 $ 10.95 $ 11.14
======== ======== ======== ======== ======== ======= ======= ======= ======= =======
Total Return (%) (a) 2.4 7.3 6.5 (0.7) 8.3 1.7 6.5 5.9 (1.4) 7.7
Ratios/Supplemental Data
Ratio of Operating Expenses
to Average Net Assets (%) 1.25 1.28 1.31 1.33 1.40 1.90 1.93 1.96 1.98 2.05
Ratio of Net Investment Income
to Average Net Assets (%) 7.13 6.40 5.81 5.91 6.18 6.48 5.75 5.16 5.26 5.53
Portfolio Turnover Rate (%) 327 533 1,376 400 384 327 533 1,376 400 384
Net Assets, End of Year (000) $276,178 $222,185 $194,032 $149,756 $118,833 $18,503 $16,060 $18,116 $14,601 $11,884
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Class C
Year Ended December 31,
1996 1997 1998 1999 2000
Net Asset Value,
Beginning of Year $ 12.10 $ 11.54 $ 11.63 $11.70 $10.96
------- ------- ------- ------ ------
Income from investment operations
Net Investment Income 0.75 0.65 0.60 0.59 0.62
Net Realized and Unrealized
Gain (Loss) on Investments (0.57) 0.09 0.07 (0.75) 0.20
------- ------- ------- ------ ------
Total From Investment Operations 0.18 0.74 0.67 (0.16) 0.82
------- ------- ------- ------ ------
Less Distributions
Distributions From
Net Investment Income (0.74) (0.65) (0.60) (0.58) (0.63)
Total Distributions (0.74) (0.65) (0.60) (0.58) (0.63)
------- ------- ------- ------ ------
Net Asset Value, End of the Year $ 11.54 $ 11.63 $ 11.70 $10.96 $11.15
======= ======= ======= ====== ======
Total Return (%) (a) 1.6 6.6 5.9 (1.4) 7.7
Ratios/Supplemental Data
Ratio of Operating Expenses
to Average Net Assets (%) 1.90 1.93 1.96 1.98 2.05
Ratio of Net Investment Income
to Average Net Assets (%) 6.48 5.75 5.16 5.26 5.53
Portfolio Turnover Rate (%) 327 533 1,376 400 384
Net Assets, End of Year (000) $14,903 $15,699 $13,962 $9,054 $6,617
-------------------------------------------------------------------------------
(a) A sales charge for Class A and C shares and a contingent deferred sales
charges for Class B and C shares are not reflected in total return
calculations.
Fund Performance
----------------
CDC Nvest Government Securities Fund
[Enlarge/Download Table]
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Class A Class B
Year Ended December 31, Year Ended December 31,
1996 1997 1998 1999 2000 1996 1997 1998 1999 2000
Net Asset Value, Beginning of the Year $ 11.73 $ 11.08 $ 11.56 $ 11.90 $ 10.47 $11.74 $11.08 $11.56 $11.90 $ 10.47
-------- -------- -------- ------- ------- ------ ------ ------ ------ -------
Income From Investment Operations
Net Investment Income 0.71 0.62 0.68 0.67 0.62 0.63 0.54 0.58 0.59 0.54
Net Realized and Unrealized Gain (Loss) on
Investments (0.64) 0.48 0.33 (1.42) 0.69 (0.65) 0.48 0.34 (1.42) 0.69
-------- -------- -------- ------- ------- ------ ------ ------ ------ -------
Total From Investment Operations 0.07 1.10 1.01 (0.75) 1.31 (0.02) 1.02 0.92 (0.83) 1.23
-------- -------- -------- ------- ------- ------ ------ ------ ------ -------
Less Distributions
Distributions From Net Investment Income (0.72) (0.62) (0.67) (0.68) (0.60) (0.64) (0.54) (0.58) (0.60) (0.52)
Total Distributions (0.72) (0.62) (0.67) (0.68) (0.60) (0.64) (0.54) (0.58) (0.60) (0.52)
-------- -------- -------- ------- ------- ------ ------ ------ ------ -------
Net Asset Value, End of the Year $ 11.08 $ 11.56 $ 11.90 $ 10.47 $ 11.18 $11.08 $11.56 $11.90 $10.47 $ 11.18
======== ======== ======== ======= ======= ====== ====== ====== ====== =======
Total Return (%) (a) 0.8 10.3 9.0 (6.4) 12.9 (0.1) 9.5 8.2 (7.1) 12.1
Ratios/Supplemental Data
Ratio of Operating Expenses to Average Net
Assets (%) 1.32 1.36 1.38 1.36 1.41 2.07 2.11 2.13 2.11 2.16
Ratio of Net Investment Income to Average Net
Assets (%) 6.45 5.63 5.80 6.00 5.69 5.70 4.88 5.05 5.25 4.94
Portfolio Turnover Rate (%) 462 391 106 313 622 462 391 106 313 622
Net Assets, End of the Year (000) $120,607 $103,583 $103,032 $84,904 $70,909 $5,385 $5,654 $9,657 $9,430 $10,343
----------------------------------------------------------------------------------------------------------------------------------
(a) A sales charge for Class A shares and a contingent deferred sales charge
for Class B shares are not reflected in total return calculations.
Glossary of Terms
Bid price -- The price a prospective buyer is ready to pay. This term is used by
traders who maintain firm bid and offer prices in a given security by standing
ready to buy or sell security units at publicly quoted prices.
Bottom-up analysis -- The search for outstanding performance of individual
stocks before considering the impact of economic trends. Such companies may be
identified from research reports, stock screens or personal knowledge of the
products and services.
Capital gain distributions -- Payments to a Fund's shareholders of profits
earned from selling securities in a Fund's portfolio. Capital gain distributions
are usually paid once a year.
Credit rating -- Independent evaluation of a bond's creditworthiness. This
measurement is usually calculated through an index compiled by companies such as
Standard & Poor's Rating Service, Inc. (S&P), Moody's Investors Service, Inc.
(Moody's), or Fitch Investors Services, Inc (Fitch). Bonds with a credit
rating of BBB or higher by S&P or Fitch, or Baa or higher by Moody's are
generally considered investment grade.
Derivative -- A financial instrument whose value and performance are based on
the value and performance of another security or financial instrument.
Discounted price -- The difference between a bond's current market price and its
face or redemption value.
Diversification -- The strategy of investing in a wide range of securities
representing different market sectors to reduce the risk if an individual
company or one sector suffers losses.
Dividend yield -- The current or estimated annual dividend divided by the market
price per share of a security.
Duration -- An estimate of how much a bond's price fluctuates with changes in
comparable interest rates.
Earnings growth -- A pattern of increasing rate of growth in earnings per share
from one period to another, which usually causes a stock's price to rise.
Fundamental analysis -- An analysis of the balance sheet and income statements
of a company in order to forecast its future stock price movements. Fundamental
analysis considers records of assets, earnings, sales, products, management and
markets in predicting future trends in these indicators of a company's success
or failure. By appraising a company's prospects, analysts using such an approach
assess whether a particular stock or group of stocks is undervalued or
overvalued at its current market price.
Growth investing -- An investment style that emphasizes companies with strong
earnings growth. Growth investing is generally considered more aggressive than
"value" investing.
Income distributions -- Payments to a Funds shareholders resulting from the net
interest or dividend income earned by a Fund's portfolio.
Inflation -- A general increase in prices coinciding with a fall in the real
value of money, as measured by the Consumer Price Index.
Interest rate -- Rate of interest charged for the use of money, usually
expressed at an annual rate.
Market capitalization -- Market price multiplied by number of shares
outstanding. Large capitalization companies generally have over $5 billion in
market capitalization; medium cap companies between $1.5 billion and $5 billion;
and small cap companies less than $1.5 billion. These capitalization figures may
vary depending upon the index being used and/or the guidelines used by the
portfolio manager.
Maturity -- The final date on which the payment of a debt instrument (e.g.
bonds, notes, repurchase agreements) becomes due and payable. Short-term bonds
generally have maturities of up to 5 years; intermediate-term bonds between 5
and 15 years; and long-term bonds over 15 years.
36
Net asset value (NAV) -- The market value of one share of a Fund on any given
day without taking into account any front-end sales charge or CDSC. It is
determined by dividing a Fund's total net assets by the number of shares
outstanding.
Price-to-book value ratio -- Current market price of a stock divided by its book
value, or net asset value. Price-to-earnings ratio Current market price of a
stock divided by its earnings per share. Also known as the multiple, the price-
to-earnings ratio gives investors an idea of how much they are paying for a
company's earning power and is a useful tool for evaluating the costs of
different securities. Some firms use the inverse ratio for this calculation
(i.e. earnings-to-price ratio).
Qualitative analysis -- An analysis of the qualities possessed by a company,
including its management, products and competitive positions, to help determine
if the company can execute its strategies.
Return on equity -- The amount, expressed as a percentage, earned on a companys
common stock investment for a given period. It is calculated by dividing common
stock equity (net worth) at the beginning of the accounting period into net
income for the period after preferred stock dividends but before common stock
dividends. This tells common shareholders how effectively their money is being
employed.
Rule 144A securities -- Rule 144A securities are privately offered securities
that can be resold only to certain qualified institutional buyers. Rule 144A
securities are treated as illiquid, unless a manager has determined, under
guidelines established by a Funds trustees, that a particular issue of Rule
144A securities is liquid.
Target price -- Price that an investor is hoping a stock he or she has just
bought will rise to within a specified period of time. An investor may buy XYZ
at $20, with a target price of $40 in one years time, for instance.
Technical analysis -- The research into the demand and supply for securities,
options, mutual funds and commodities based on trading volume and price studies.
Technical analysis uses charts or computer programs to identify and project
price trends in a market, security, mutual fund or futures contract.
Top-down approach -- The method in which an investor first looks at trends in
the general economy, and next selects attractive industries and then companies
that should benefit from those trends.
Total return -- The change in value of an investment in a Fund over a specific
time period expressed as a percentage. Total returns assume all earnings are
reinvested in additional shares of a Fund.
Value investing -- A relatively conservative investment approach that focuses on
companies that may be temporarily out of favor or whose earnings or assets are
not fully reflected in their stock prices. Value stocks will tend to have a
lower price-to-earnings ratio than growth stocks.
Volatility -- The general variability of a portfolio's value resulting from
price fluctuations of its investments. In most cases, the more diversified a
portfolio is, the less volatile it will be.
Yield -- The rate at which a Fund earns income, expressed as a percentage.
Mutual fund yield calculations are standardized, based upon a formula developed
by the SEC.
Yield-to-maturity -- The concept used to determine the rate of return an
investor will receive if a long-term, interest-bearing investment, such as a
bond, is held to its maturity date. It takes into account purchase price,
redemption value, time to maturity, coupon yield (the interest rate on a debt
security the issuer promises to pay to the holder until maturity, expressed as
an annual percentage of face value) and the time between interest payments.
37
Notes
Notes
Notes
If you would like more information about the Funds, the
following documents are available free upon request:
Annual and Semiannual Reports - Provide additional information
about each Fund's investments. Each report includes a
discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during its last fiscal year.
To reduce costs, we mail one copy per household. For more copies call
CDC IXIS Asset Management Distributors, L.P. at the number below.
Statement of Additional Information (SAI)--Provides
more detailed information about the Funds has been filed
with the SEC and is incorporated into this Prospectus by reference.
To order a free copy of the Fund's annual or
semiannual report or its SAI, contact your financial
representative, or the Funds at:
CDC IXIS Asset Management Distributors, L.P.
399 Boylston Street, Boston, MA 02116
Telephone: 800-225-5478
Internet: www.cdcnvestfunds.com
Your financial representative or CDC Nvest Funds
will also be happy to answer your questions or to provide any
additional information that you may require.
You can review and copy a Funds reports and SAIs at the
Public Reference Room of the SEC in Washington, D.C. Text-only copies are
available free from the Commission's Web site at: www.sec.gov.
Copies of these publications are also available for a fee and information on the
operation of the Public Reference Room may be obtained by electronic request
at the following e-mail address: publicinfo@sec.gov, or by
writing or calling the Public Reference Room of the SEC,
Washington, D.C. 20549-0102
Telephone: 1-202-942-8090
CDC IXIS Asset Management Distributors, L.P., and other firms selling
shares of CDC Nvest Funds are members of the
National Association of Securities Dealers, Inc. (NASD). As
a service to investors, the NASD has asked that
we inform you of the availability of a brochure on its
Public Disclosure Program. The program provides
access to information about securities firms and their
representatives. Investors may obtain a copy by contacting the
NASD at 800-289-9999 or by visiting their Web site
at www.NASDR.com.
(Investment Company Act File No. 811-4323)
(Investment Company Act File No. 811-242)
[GRAPHIC OMITTED][GRAPHIC OMITTED]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CDC Nvest
Income Funds - Class Y Shares
CDC Nvest Short Term Corporate Income Fund
Loomis, Sayles & Company, L.P.
CDC Nvest Bond Income Fund
Loomis, Sayles & Company, L.P.
CDC Nvest High Income Fund
Loomis, Sayles & Company, L.P.
CDC Nvest Strategic Income Fund
Loomis, Sayles & Company, L.P.
CDC Nvest Limited Term U.S. Government Fund
Loomis, Sayles & Company, L.P.
CDC Nvest Government Securities Fund
Loomis, Sayles & Company, L.P.
[photo]
Prospectus
May 1, 2001
What's Inside
Goals, Strategies & Risks
Page X
Fund Fees & Expenses
Page X
Management Team
Page X
Fund Services
Page X
Fund Performance
Page X
The Securities and Exchange Commission has not approved any
Fund's shares or determined whether this Prospectus is
accurate or complete. Anyone who tells you otherwise is
committing a crime.
For general information on the Funds or any of
their services and for assistance in opening
an account, contact your financial
representative or call CDC Nvest Funds.
CDC Nvest Funds
399 Boylston Street, Boston, Massachusetts 02116
800-225-5478
www.cdcnvestfunds.com
Table of Contents
[Download Table]
GOALS, STRATEGIES & RISKS
CDC Nvest Short Term Corporate Income Fund
CDC Nvest Bond Income Fund
CDC Nvest High Income Fund
CDC Nvest Strategic Income Fund
CDC Nvest Limited Term U.S. Government Fund
CDC Nvest Government Securities Fund
FUND FEES & EXPENSES
Fund Fees & Expenses
MORE ABOUT RISK
More About Risk
MANAGEMENT TEAM
Meet the Funds' Investment Adviser and Subadvisers
Meet the Funds' Portfolio Managers
FUND SERVICES
It's Easy to Open an Account
Buying Shares
Selling Shares
Selling Shares in Writing
Exchanging Shares
Restrictions on Buying, Selling and Exchanging Shares
How Fund Shares Are Priced
Dividends and Distributions
Tax Consequences
Compensation to Securities Dealers
FUND PERFORMANCE
CDC Nvest Short Term Corporate Income Fund
CDC Nvest Bond Income Fund
CDC Nvest High Income Fund
CDC Nvest Strategic Income Fund
CDC Nvest Limited Term U.S. government fund
CDC Nvest Government Securities Fund
GLOSSARY OF TERMS
If you have questions about any of the terms used in this Prospectus, please
refer to the "Glossary of Terms."
To learn more about the possible risks of investing in the Funds, please refer
to the section entitled "More About Risk." This section details the risks of
practices in which the Funds may engage. Please read this section carefully
before you invest.
Fund shares are not bank deposits and are not guaranteed, endorsed or insured by
the Federal Deposit Insurance Corporation or any other government agency, and
are subject to investment risks, including possible loss of the principal
invested.
Please see the back cover of this Prospectus for important
privacy policy information.
Goals, Strategies & Risks
CDC Nvest Short Term Corporate Income Fund
[Download Table]
------------------------------------------------------------
Fund Focus
------------------------------------------------------------
Stability Income Growth
------------------------------------------------------------
High X
------------------------------------------------------------
Mod. X
------------------------------------------------------------
Low X
------------------------------------------------------------
------------------------------------------------------------
Duration
------------------------------------------------------------
Short Int. Long
------------------------------------------------------------
High X
------------------------------------------------------------
Mod.
------------------------------------------------------------
Low
------------------------------------------------------------
Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Craig Smith, Richard G. Raczkowski and John Hyll
Category: Corporate Income
Investment Goal
The Fund seeks a high level of current income consistent with preservation of
capital.
The Fund's investment goal may be changed without shareholder approval.
Principal Investment Strategies
Under normal market conditions, the Fund intends to invest primarily in
corporate bonds, but will invest at least 10% of its assets in securities issued
by the U.S. Treasury or other U.S. government agencies. The Fund may invest up
to 25% of its assets in U.S. dollar-denominated foreign securities and up to 10%
of its assets in securities denominated in foreign currencies (and related
currency hedging transactions). It may also invest up to 10% of its assets in
lower-rated bonds, which may include emerging market bonds (those rated BB or
lower by Standard & Poor's Ratings Group ("S&P") and Ba or lower by Moody's
Investors Service, Inc. ("Moody's")). Loomis Sayles follows a total return
oriented investment approach in selecting securities for the Fund. It seeks
corporate, mortgage-related or U.S. government securities that give the Fund's
portfolio the following characteristics, although not all of the securities
selected will have these characteristics and Loomis Sayles may look for other
characteristics if market conditions change:
[X] average credit rating of "A" by S&P or Moody's
[X] average maturity of 3 years or less
In selecting investments for the Fund, Loomis Sayles employs the following
strategies:
. Its research analysts work closely with the Fund's portfolio managers to
develop an outlook on the economy from research produced by various Wall
Street firms and specific forecasting services or from economic data released
by U.S. and foreign governments as well as the Federal Reserve Bank.
. Next,the analysts conduct a thorough review of individual securities to
identify what they consider attractive values in the corporate and mortgage
marketplace. This value analysis uses quantitative tools such as internal and
external computer systems and software.
. Loomis Sayles continuously monitors an issuer's creditworthiness to assess
whether the obligation remains an appropriate investment for the Fund.
. Loomis Sayles seeks to balance opportunities for yield and price performance
by combining macroeconomic analysis with individual security selection. The
short-term maturity of the Fund's investments creates the opportunity for
greater price stability in addition to the conservative income-producing
capabilities of higher quality fixed-income securities.
The Fund may:
. Invest in Rule 144A securities, collateralized mortgage obligations, asset-
backed securities and zero-coupon bonds.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise.
Lower-quality fixed-income securities and zero-coupon bonds may be subject to
these risks to a greater extent than other fixed-income securities.
Foreign securities: May be affected by foreign currency fluctuations, higher
volatility than U.S. securities and limited liquidity. Political, economic
and information risks are also associated with foreign securities. These
investments may also be affected by the conversion of the currency of several
European countries to the "euro." Investments in emerging markets may be
subject to these risks to a greater extent than those in more developed
markets.
Mortgage-related and asset-backed securities: Subject to prepayment risk. With
prepayment, the Fund may reinvest the prepaid amounts in securities with
lower yields than the prepaid obligations. The Fund may also incur a realized
loss when there is a prepayment of securities that were purchased at a
premium.
1
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
since-inception periods compare with those of a broad measure of market
performance and those of indices of funds with similar objectives. The returns
shown are those of the Fund's Classes A, B and C shares which are not offered in
this Prospectus. Class Y shares would have substantially similar annual returns
because they would be invested in the same portfolio of securities as the
Classes A, B and C shares and would only differ to the extent that the classes
do not have the same expenses. The Class Y returns may be higher than the
returns of Class A shares because Class A shares are subject to sales charges
and higher expenses. The Fund, formerly known as Adjustable Rate U.S. Government
Fund, changed its name and investment policies on December 1, 1998. The bar
chart and table reflect results achieved under different investment policies
prior to December 1, 1998. The Fund's past performance does not necessarily
indicate how the Fund will perform in the future.
The bar chart shows the Fund's total returns for Class A shares for each
calendar year since its first full year of operations. The returns for the Class
B and C shares differ from the Class A returns shown in the bar chart, depending
upon the respective expenses of each class. The chart does not reflect any sales
charge that you may be required to pay when you buy or redeem the Fund's shares.
A sales charge will reduce your return.
[Enlarge/Download Table]
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Total Return
1992 1993 1994 1995 1996 1997 1998 1999 2000
-----------------------------------------------------------------------------------------------------------------------
4.93% 4.10% 0.82% 8.60% 5.83% 6.21% 4.07% 1.87% 6.68%
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Highest Quarterly Return: First Quarter 1995, up 3.35%
Lowest Quarterly Return: Second Quarter 1999, down 0.07%
The table below shows the Fund's average annual total returns for the one-year,
five-year and since-inception periods compared to those of the Lehman 1-5 Year
U.S. Credit Index (the "Lehman U.S. Credit Index"), an unmanaged index of
corporate bonds with maturities between one and five years. They are also
compared to the returns, as calculated by Morningstar, Inc. and Lipper, Inc., of
Morningstar Short Term Bond Average and the Lipper Short Term Investment Grade
Average, each an average of the total return of mutual funds with similar
investment objectives as the Fund. You may not invest directly in an index. The
Fund's total returns reflect its expenses and the maximum sales charge you may
be required to pay when you buy or redeem the Fund's shares. The Lehman Short
Index percentages have not been adjusted for ongoing management, distribution
and operating expenses and sales charges applicable to mutual fund investments.
The Morningstar Short Term Bond Average and Lipper Short Term Investment Grade
Average percentages have been adjusted for these expenses but do not reflect any
sales charges.
[Enlarge/Download Table]
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Since Since Since
Average Annual Total Returns Past 1 Past 5 Class A Class B Class C
(for the periods ended December 31, 2000) Year Years Inception Inception Inception
---------------------------------------------------------------------------------------------------
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CDC Nvest Short Term Corporate Income Fund
Class A (inception 10/18/91) 3.43% 4.26% 4.44%
Class B (inception 9/13/93) 0.90% 3.79% 3.88%
Class C (inception 12/7/98) 3.86% 3.07%
---------------------------------------------------------------------------------------------------
Lehman U.S. Credit Index 8.48% 6.16% 6.92% 6.24% 5.44%
---------------------------------------------------------------------------------------------------
Morningstar Short Term Bond Average 8.14% 5.43% 5.86% 5.26% 5.11%
---------------------------------------------------------------------------------------------------
Lipper Short Term Investment Grade Average 7.36% 5.38% 5.77% 5.22% 5.12%
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Each Index is calculated from 10/31/91 for Class A shares, 9/30/93 for Class B
shares and 12/31/98 for Class C shares.
For estimated expenses of Class Y shares, see the section entitled "Fund Fees &
Expenses."
2
Goals, Strategies & Risks
CDC Nvest Bond Income Fund
[Download Table]
------------------------------------------------------------
Fund Focus
------------------------------------------------------------
Stability Income Growth
------------------------------------------------------------
High X
------------------------------------------------------------
Mod. X
------------------------------------------------------------
Low X
------------------------------------------------------------
------------------------------------------------------------
Duration
------------------------------------------------------------
Short Int. Long
------------------------------------------------------------
High X
------------------------------------------------------------
Mod.
------------------------------------------------------------
Low
------------------------------------------------------------
Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Peter W. Palfrey, Curt A. Mitchell and Richard G.
Raczkowski
Category: Corporate Income
Ticker Symbol: Class Y
NERYX
Investment Goal
The Fund seeks a high level of current income consistent with what the Fund
considers reasonable risk. It invests primarily in corporate and U.S. government
bonds.
Principal Investment Strategies
Under normal market conditions, the Fund will invest primarily in U.S. corporate
and U.S. government bonds. It will adjust to changes in the relative strengths
of the U.S. corporate or U.S. government bond markets by shifting the relative
balance between the two. The Fund will invest at least 80% of its assets in
investment-grade bonds (those rated BBB or higher by Standard & Poor's Ratings
Group ("S&P") or Baa or higher by Moody's Investors Service, Inc. ("Moody's"))
and will generally maintain an average effective maturity of ten years or less.
The Fund may also purchase lower-quality bonds (those rated below BBB by S&P and
below Baa by Moody's).
Loomis Sayles follows a total return oriented investment approach in selecting
securities for the Fund. It takes into account economic and market conditions as
well as issuer-specific data, such as:
[X] fixed charge coverage
[X] the relationship between cash flows and dividend obligations
[X] the experience and perceived strength of management
[X] price responsiveness of the security to interest rate changes
[X] earnings prospects
[X] debt as a percentage of assets
[X] borrowing requirements, debt maturity schedules and liquidation value
In selecting investments for the Fund, Loomis Sayles employs the following
strategies:
. Its research analysts work closely with the Fund's portfolio managers to
develop an outlook for the economy from research produced by various Wall
Street firms and specific forecasting services or from economic data released
by U.S. and foreign governments as well as the Federal Reserve Bank.
. Next, the analysts conduct a thorough review of individual securities to
identify what they consider attractive values in the high quality bond
market. This value analysis uses quantitative tools such as internal and
external computer systems and software.
. Loomis Sayles continuously monitors an issuer's creditworthiness to assess
whether the obligation remains an appropriate investment for the Fund. It may
relax its emphasis on quality with respect to a given security if it believes
that the issuer's financial outlook is solid. This may create an opportunity
for higher return.
. Loomis Sayles seeks to balance opportunities for yield and price performance
by combining macroeconomic analysis with individual security selection. Fund
holdings are diversified across industry groups such as utilities or
telecommunications, which tend to move independently of the ebbs and flows in
economic growth.
The Fund may:
. Invest in foreign securities, including those of emerging markets, and
related currency hedging transactions.
. Invest in Rule 144A and mortgage-backed securities.
. Invest substantially all of its assets in U.S. government securities for
temporary defensive purposes in response to adverse market, economic or
political conditions. These investments may prevent the Fund from achieving
its investment goal.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise. Lower-quality
fixed-income securities and zero-coupon bonds may be subject to these risks to a
greater extent than other fixed-income securities.
Foreign securities: May be affected by foreign currency fluctuations, higher
volatility than U.S. securities and limited liquidity. Political, economic and
information risks are also associated with foreign securities. These investments
may also be affected by the conversion of the currency of several European
countries to the "euro." Investments in emerging markets may be subject to these
risks to a greater extent than those in more developed markets.
Mortgage-related securities: Subject to prepayment risk. With prepayment, the
Fund may reinvest the prepaid amounts in securities with lower yields than the
prepaid obligations. The Fund may also incur a realized loss when there is a
prepayment of securities that were purchased at a premium.
3
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
since-inception periods compare with those of a broad measure of market
performance and those of indices of funds with similar objectives. The Fund's
past performance does not necessarily indicate how the Fund will perform in the
future.
The bar chart shows the Fund's total returns for Class Y shares for each
calendar year since it first offered Class Y shares.
--------------------------------------------------------------------------------
Total Return
1995 1996 1997 1998 1999 2000
20.72% 4.59% 11.40% 8.29% -0.01% 7.60%
--------------------------------------------------------------------------------
* Highest Quarterly Return: Second Quarter 1995, up 7.47%
. Lowest Quarterly Return: First Quarter 1996, down 2.19%
The table below shows the Fund's average annual total returns for the one-year,
five-year and since-inception periods compared to those of the Lehman Aggregate
Bond Index, an unmanaged index of investment-grade bonds with one-to ten-year
maturities issued by the U.S. government and U.S. corporations. The returns are
also compared to returns, as calculated by Morningstar, Inc. and Lipper, Inc.,
of the Morningstar Intermediate Term Bond Average ("Morningstar Int. Bond
Average") and Lipper Intermediate Investment Grade Debt Average ("Lipper Int.
Invest. Grade Debt Average"), each an average of the total return of mutual
funds with similar investment objectives as the Fund. You may not invest
directly in an index. The Fund's total returns reflect the expenses of the
Fund's Class Y shares. The Lehman Aggregate Bond Index returns have not been
adjusted for ongoing management, distribution and operating expenses applicable
to mutual fund investments. The Morningstar Int. Bond Average and Lipper Int.
Invest. Grade Debt Average returns have been adjusted for these expenses.
[Enlarge/Download Table]
------------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Since Class
(for the periods ended December 31, 2000) Past 1 Year Past 5 Years Inception
------------------------------------------------------------------------------------------------------------------------
CDC Nvest Bond Income Fund:
Class Y (inception 12/30/94) 7.60% 6.30% 8.57%
------------------------------------------------------------------------------------------------------------------------
Lehman Aggregate Bond Index 11.63% 6.46% 8.37%
------------------------------------------------------------------------------------------------------------------------
Morningstar Int. Bond Avg. 9.45% 5.43% 7.38%
------------------------------------------------------------------------------------------------------------------------
Lipper Int. Invest. Grade Debt Avg. 9.78% 5.47% 7.35%
------------------------------------------------------------------------------------------------------------------------
Each Index is calculated from 12/31/94 for Class Y shares.
For actual past expenses of Class Y shares, see the section entitled "Fund Fees
& Expenses."
4
Goals, Strategies & Risks
CDC Nvest High Income Fund
[Download Table]
------------------------------------------------------------
Fund Focus
------------------------------------------------------------
Stability Income Growth
------------------------------------------------------------
High X
------------------------------------------------------------
Mod. X
------------------------------------------------------------
Low X
------------------------------------------------------------
------------------------------------------------------------
Duration
------------------------------------------------------------
Short Int. Long
------------------------------------------------------------
High X
------------------------------------------------------------
Mod.
------------------------------------------------------------
Low
------------------------------------------------------------
Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Michael Millhouse and Curt Mitchell
Category: Corporate Income
Investment Goal
The Fund seeks high current income plus the opportunity for capital appreciation
to produce a high total return.
The Fund's investment goal may be changed without shareholder approval.
Principal Investment Strategies
Under normal market conditions, the Fund will invest at least 65% of its assets
in lower-quality fixed-income securities, commonly known as "junk bonds." Junk
bonds are generally rated below BBB by Standard & Poor's Ratings Group ("S&P")
and below Baa by Moody's Investors Service, Inc. ("Moody's"). The Fund will
normally invest at least 80% of its assets in U.S. corporate or U.S. dollar-
denominated foreign fixed-income securities. The Fund may also invest up to 20%
of its assets in foreign currency-denominated fixed-income securities, including
those in emerging markets.
Loomis Sayles performs its own extensive credit analyses to determine the
creditworthiness and potential for capital appreciation of a security. The
Fund's management minimizes both market timing and interest rate forecasting.
Instead, it uses a strategy based on gaining a thorough understanding of
industry and company dynamics as well as individual security characteristics
such as the following, although not all securities selected will have these
characteristics:
[X] issuer debt and debt maturity schedules
[X] earnings prospects
[X] responsiveness to changes in interest rates
[X] experience and perceived strength of management
[X] borrowing requirements and liquidation value
[X] market price in relation to cash flow, interest and dividends
In selecting investments for the Fund, Loomis Sayles employs the following
strategies:
. Loomis Sayles utilizes the skills of its in-house team of more than 40
research analysts to cover a broad universe of industries, companies and
markets. The Fund's portfolio managers take advantage of these extensive
resources to identify securities that meet the Fund's investment
criteria.
. Loomis Sayles employs a selection strategy that focuses on a value-driven,
bottom-up approach to identify securities that provide an opportunity for
both generous yields and capital appreciation. Loomis Sayles analyzes an
individual company's potential for positive financial news to determine if it
has growth potential. Examples of positive financial news include an upward
turn in the business cycle, improvement in cash flows, rising profits or the
awarding of new contracts.
. Loomis Sayles emphasizes in-depth credit analysis, appreciation potential and
diversification in its bond selection. Each bond is evaluated to assess the
ability of its issuer to pay interest and, ultimately, principal (which helps
the Fund generate an ongoing flow of income). Loomis Sayles also assesses a
bond's relation to market conditions within its industry and favors bonds
whose prices may benefit from positive business developments.
. Loomis Sayles seeks to diversify the Fund's holdings to reduce the inherent
risk in lower-quality fixed-income securities. The Fund's portfolio will
generally include 45 to 50 holdings across many industries.
The Fund may:
. Invest in zero-coupon, pay-in-kind and Rule 144A securities.
. Purchase higher quality debt securities (such as U.S. government securities
and obligations of U.S. banks with at least $2 billion of deposits) for
temporary defensive purposes in response to adverse market, economic or
political conditions, such as a rising trend in interest rates. These
investments may prevent the Fund from achieving its investment goal.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise. Lower-
quality fixed-income securities and zero-coupon bonds may be subject to these
risks to a greater extent than other fixed-income securities. "Junk Bonds"
are considered predominantly speculative with respect to the issuer's
continuing ability to make principal and interest payments.
Foreign securities: May be affected by foreign currency fluctuations, higher
volatility than U.S. securities and limited liquidity. Political, economic
and information risks are also associated with foreign securities. These
investments may also be affected by the conversion of the currency of several
European countries to the "euro." Investments in emerging markets may be
subject to these risks to a greater extent than those in more developed
markets.
5
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
ten-year periods (since inception if shorter) compare with those of a broad
measure of market performance and those of indices of funds with similar
objectives. The returns shown are those of the Fund's Classes A, B and C shares
which are not offered in this Prospectus. Class Y shares would have
substantially similar annual returns because they would be invested in the same
portfolio of securities as the Classes A, B and C shares and would only differ
to the extent that the classes do not have the same expenses. The Class Y
returns may be higher than the returns of Class A shares because Class A shares
are subject to sales charges and higher expenses. The Fund's past performance
does not necessarily indicate how the Fund will perform in the future. The
Fund's current subadviser assumed that function on July 1, 1996. This chart and
table reflect results achieved by the previous subadviser using different
investment principles for periods prior to July 1, 1996.
The bar chart shows the Fund's total returns for Class A shares for each of the
last ten calendar years. The returns for the Class B and C shares differ from
the Class A returns shown in the bar chart, depending upon the respective
expenses of each class. The chart does not reflect any sales charge that you may
be required to pay when you buy or redeem the Fund's shares. A sales charge will
reduce your return.
[Enlarge/Download Table]
---------------------------------------------------------------------------------------------------------------------
Total Return
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
---------------------------------------------------------------------------------------------------------------------
36.42% 15.73% 16.57% -3.22% 11.75% 14.88% 15.37% -1.66% 4.00% -16.09%
---------------------------------------------------------------------------------------------------------------------
Highest Quarterly Return: First Quarter 1999, up 11.99%
Lowest Quarterly Return: Fourth Quarter 2000, down 11.32%
The table below shows the Fund's average annual total returns for the one-year,
five-year and ten-year periods (or since the class' inception if shorter)
compared to those of the Lehman High Yield Composite Index, a market-weighted
unmanaged index of fixed-rate, non-investment grade debt. They are also compared
to returns, as calculated by Morningstar, Inc. and Lipper, Inc., of the
Morningstar High Yield Bond and Lipper High Current Yield Averages each an
average of the total return of mutual funds with similar investment objectives
as the Fund. You may not invest directly in an index. The Fund's total returns
reflect its expenses and the maximum sales charge that you may be required to
pay when you buy or redeem the Fund's shares. The Lehman High Yield Composite
Index returns have not been adjusted for ongoing management, distribution and
operating expenses and sales charges applicable to mutual fund investments. The
Morningstar High Yield Bond Average and Lipper High Current Yield Average
returns have been adjusted for these expenses but do not reflect any sales
charges.
[Enlarge/Download Table]
------------------------------------------------------------------------------------------------------
Average Annual Total Returns Past 1 Past 5 Past 10 Since Since
(for the periods ended December 31, 2000) Year Years Years Class B Class C
Inception Inception
-----------------------------------------------------------------------------------------------------------
CDC Nvest High Income Fund:
Class A (inception 2/22/84) -19.85% 1.67% 8.01%
Class B (inception 9/20/93) -20.34% 1.62% 2.79%
Class C (inception 3/2/98) -18.13% -6.77%
-----------------------------------------------------------------------------------------------------------
Lehman High Yield Composite Index -5.86% 4.28% 11.16% 5.84% -1.47%
-----------------------------------------------------------------------------------------------------------
Morningstar High Yield Bond Average -9.12% 3.25% 9.88% 5.12% -2.96%
-----------------------------------------------------------------------------------------------------------
Average
-----------------------------------------------------------------------------------------------------------
Lipper High Current Yield Average -8.38% 3.36% 9.99% 4.57% -3.33%
-----------------------------------------------------------------------------------------------------------
Each Index is calculated from 12/28/90 for Class A shares, 9/30/93 for
Class B shares and 2/28/98 for Class C shares.
For estimated expenses of Class Y shares, see the section entitled
"Fund Fees & Expenses."
6
Goals, Strategies & Risks
-------------------------
CDC Nvest Strategic Income Fund
------------------------------------------------
Fund Focus
------------------------------------------------
Stability Income Growth
------------------------------------------------
High X
------------------------------------------------
Mod. X
------------------------------------------------
Low X
------------------------------------------------
Duration
------------------------------------------------
Short Int. Long
------------------------------------------------
High
------------------------------------------------
Mod. X
------------------------------------------------
Low
------------------------------------------------
Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Daniel J. Fuss and Kathleen C. Gaffney
Category: Corporate Income
Ticker Symbol: Class Y
NEZYX
Investment Goal
The Fund seeks high current income with a secondary objective of capital growth.
The Fund's investment goal may be changed without shareholder approval.
Principal Investment Strategies
Under normal market conditions, the Fund will invest substantially all of its
assets in debt instruments (including lower-quality securities) with a focus on
U.S. corporate bonds, foreign debt instruments, including those in emerging
markets and U.S. government securities. The Fund may invest up to 35% of its
assets in preferred stocks and dividend-paying common stocks. The portfolio
managers shift the Fund's assets among various bond segments based upon changing
market conditions.
Loomis Sayles performs its own extensive credit analyses to determine the
creditworthiness and potential for capital appreciation of a security. The
Fund's management refrains from market timing or interest rate forecasting.
Instead, it uses a flexible approach to identify securities in the global
marketplace with the following characteristics, although not all of the
securities selected will have these attributes:
X discounted share price compared to economic value
X undervalued credit ratings with strong or improving credit profiles
X yield premium relative to its benchmark
In selecting investments for the Fund, Loomis Sayles generally employs the
following strategies:
. Loomis Sayles utilizes the skills of its in-house team of more than 40
research analysts to cover a broad universe of industries, companies and
markets. The Fund's portfolio managers take advantage of these extensive
resources to identify securities that meet the Fund's investment
criteria.
. Loomis Sayles seeks to buy bonds at a discount -- bonds that offer a positive
yield advantage over the market and, in its view, have room to go up in
price. It may also invest to take advantage of what the portfolio managers
believe are temporary disparities in the yield of different segments of the
market for U.S. government securities.
. Loomis Sayles provides the portfolio managers with maximum flexibility to
find investment opportunities in a wide range of markets, both domestic and
foreign. This flexible approach offers investors one-stop access to a wide
array of investment opportunities. The three key sectors that the portfolio
managers focus upon are U.S. corporate issues, foreign bonds and U.S.
government securities.
. The Fund's portfolio managers maintain a core of the Fund's investments in
corporate bond issues and shift its assets among other bond segments as
opportunities develop. The Fund maintains a high level of diversification as
a form of risk management.
The Fund may:
. Invest in mortgage-backed securities, zero-coupon or pay-in-kind bonds, and
stripped securities.
. Invest substantially all of its assets in U.S. government securities for
temporary defensive purposes in response to adverse market, economic or
political conditions. These investments may prevent the Fund from achieving
its investment goal.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise.
Lower-quality fixed-income securities and zero-coupon bonds may be subject to
these risks to a greater extent than other fixed-income securities. "Junk
Bonds" are considered predominantly speculative with respect to the issuer's
continuing ability to make principal and interest payments.
Equity securities: Because the Fund may invest a significant portion of its
assets in equity securities, it is subject to the risks commonly associated
with investing in stocks. This means that you may lose money on your
investment due to unpredictable drops in a stock's value or periods of
below-average performance in a given stock or in the stock market as a
whole.
Foreign securities: May be affected by foreign currency fluctuations, higher
volatility than U.S. securities and limited liquidity. Political, economic
and information risks are also associated with foreign securities. These
investments may also be affected by the conversion of the currency of several
European countries to the "euro." Investments in emerging markets may be
subject to these risks to a greater extent than those in more developed
markets.
Mortgage-related securities: Subject to prepayment risk. With prepayment, the
Fund may reinvest the prepaid amounts in securities with lower yields than
the prepaid obligations. The Fund may also incur a realized loss when there
is a prepayment of securities that were purchased at a premium. Stripped
securities are more sensitive to changes in the prevailing interest rates and
the rate of principal payments on the underlying assets than regular
mortgage-backed securities.
7
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
since-inception periods compare with those of a broad measure of market
performance and those of indices of funds with similar objectives. The Fund's
past performance does not necessarily indicate how the Fund will perform in the
future.
The bar chart shows the Fund's total returns for Class Y shares for each
calendar year since it offered Class Y shares
--------------------------------------------------------------------------------
Total Return
--------------------------------------------------------------------------------
2000
1.04%
--------------------------------------------------------------------------------
Highest Quarterly Return: First Quarter 2000, up 4.07%
Lowest Quarterly Return: Second Quarter 2000, down 2.34%
The table below shows the Fund's average annual total returns for the one-year,
five-year and since-inception periods compared to those of the Lehman Aggregate
Bond Index, a market-weighted aggregate index that includes nearly all debt
issued by the U.S. Treasury, U.S. government agencies and U.S. corporations
rated investment grade, and U.S. agency debt backed by mortgage pools. They are
also compared to the Lehman Universal Bond Index, an unmanaged index
representing 85% of the return of the Lehman Brothers Aggregate Bond Index, 5%
of the Lehman Brothers High Yield Corporate Bond Index, 4% of the Lehman
Brothers Emerging Market Index, 5% of Eurodollar instruments and 1% of 144A
Commercial Paper. They are also compared to returns, as calculated by
Morningstar, Inc. and Lipper, Inc., of the Morningstar Multi-Sector Bond Average
and Lipper Multi-Sector Income Average, each an average of the total return of
mutual funds with similar investment objectives as the Fund. You may not invest
directly in an index. The Fund's total returns reflect the expenses of the
Fund's Class Y shares. The Lehman Aggregate Bond Index and the Lehman Universal
Bond Index returns have not been adjusted for ongoing management, distribution
and operating expenses and sales charges applicable to mutual fund investments.
The Morningstar Multi-Sector Bond Average and Lipper Multi-Sector Income Average
returns have been adjusted for these expenses but do not reflect any sales
charges.
------------------------------------------------------------------------
Average Annual Total Returns Since Class
(for the periods ended December 31, 2000) Past 1 Year Inception
------------------------------------------------------------------------
CDC Nvest Strategic Income Fund:
Class Y (inception 12/01/99) 1.04% 3.44%
------------------------------------------------------------------------
Lehman Aggregate Bond Index 11.63% 11.09%
------------------------------------------------------------------------
Lehman Universal Bond Index 10.82% 9.75%
------------------------------------------------------------------------
Morningstar Multi-Sector Bond Average 1.27% 2.17%
------------------------------------------------------------------------
Lipper Multi-Sector Income Average 0.01% 1.14%
------------------------------------------------------------------------
Each Index is calculated from 11/30/99 for Class Y shares, except for the
Lipper Multi Sector Income Average which is calculated from 12/01/99.
For actual past expenses of Class Y shares, see the section
entitled "Fund Fees & Expenses."
8
Goals, Strategies & Risks
-------------------------
CDC Nvest Limited Term U.S. Government Fund
------------------------------------------------
Fund Focus
------------------------------------------------
Stability Income Growth
------------------------------------------------
High X X
------------------------------------------------
Mod.
------------------------------------------------
Low X
------------------------------------------------
------------------------------------------------
Duration
------------------------------------------------
Short Int. Long
------------------------------------------------
High X
------------------------------------------------
Mod.
------------------------------------------------
Low
------------------------------------------------
Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Michael F. Harris and Cliff Rowe
Category: Government Income
Ticker Symbol: Class Y
NELYX
Investment Goal
The Fund seeks a high current return consistent with preservation of capital.
The Fund's investment goal may be changed without shareholder approval.
Principal Investment Strategies
Under normal market conditions, the Fund will invest primarily in U.S.
government securities, including bills, notes and bonds (including zero-coupon
bonds) and pass through mortgage securities issued or guaranteed by the U.S.
Treasury and other government agencies.
Loomis Sayles follows a total return oriented investment approach in selecting
securities for the Fund. It seeks securities that give the Fund's portfolio the
following characteristics, although not all securities selected will have these
characteristics and Loomis Sayles may look for other characteristics if market
conditions change:
X average credit rating of "AAA" by Standard & Poor's Ratings Group ("S&P")
or "Aaa" by Moody's Investors Service, Inc., ("Moody's")
X effective duration range of 2 to 4 years
In selecting investments for the Fund, Loomis Sayles employs the following
strategies:
. Its research analysts work closely with the Fund's portfolio managers to
develop an outlook on the economy from research produced by various Wall
Street firms and specific forecasting services or from economic data released
by the U.S. and foreign governments as well as the Federal Reserve Bank.
. Next,the analysts conduct a thorough review of individual securities to
identify what they consider attractive values in the U.S. government security
marketplace. This value analysis uses quantitative tools such as internal and
external computer systems and software.
. Loomis Sayles continuously monitors an issuer's creditworthiness to assess
whether the obligation remains an appropriate investment to the Fund.
. It seeks to balance opportunities for yield and price performance by
combining macroeconomic analysis with individual security selection. It
emphasizes securities that tend to perform particularly well in response to
interest rate changes, such as U.S. Treasury securities in a declining
interest rate environment and mortgage-backed or U.S. government agency
securities in a steady or rising interest rate environment.
. Loomis Sayles seeks to increase the opportunity for higher yields while
maintaining the greater price stability that intermediate-term bonds have
compared to bonds with longer maturities.
The Fund may:
. Invest in investment-grade corporate notes and bonds (those rated BBB or
higher by S&P and Baa or higher by Moody's).
. Invest in asset-backed securities (those rated AAA by S&P or Aaa by
Moody's).
. Invest in foreign bonds denominated in U.S. dollars.
. Engage in active and frequent trading of securities. Frequent trading may
produce higher transaction costs and a higher level of taxable capital gains,
which may lower the Fund's return.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise.
Zero-coupon bonds may be subject to these risks to a greater extent than
other fixed-income securities.
Mortgage-related and asset-backed securities: Subject to prepayment risk. With
prepayment, the Fund may reinvest the prepaid amounts in securities with
lower yields than the prepaid obligations. The Fund may also incur a realized
loss when there is a prepayment of securities that were purchased at a
premium.
Foreign securities: Foreign bonds denominated in U.S. dollars may be more
volatile than U.S. securities and carry political, economic and information
risks that are associated with foreign securities.
9
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
since-inception periods compare with those of a broad measure of market
performance and those of indices of funds with similar objectives. The Fund's
past performance does not necessarily indicate how the Fund will perform in the
future.
The bar chart shows the Fund's total returns for Class Y shares for each
calendar year since it first offered Class Y shares.
--------------------------------------------------------------------------------
Total Return
1995 1996 1997 1998 1999 2000
13.34% 2.73% 7.53% 6.94% -0.32% 8.82%
--------------------------------------------------------------------------------
Highest Quarterly Return: Third Quarter 1998, up 4.80%
Lowest Quarterly Return: First Quarter 1996, down 1.20%
The table below shows the Fund's average annual total returns for the one-year,
five year and since-inception periods compared to those of the Lehman
Intermediate Government Bond Index ("Lehman Int. Gov't Bond Index"), an
unmanaged index of bonds issued by the U.S. Government and its agencies having
maturities between one and ten years. The returns are also compared to returns,
as calculated by Morningstar, Inc. and Lipper, Inc., of the Morningstar Short
Government Average and Lipper Short Intermediate U.S. Government Average
("Lipper Short Int. U.S. Gov't Average"), each an average of the total return of
mutual funds with similar investment objectives as the Fund. You may not invest
directly in an index. The Fund's total returns reflect the expenses of the
Fund's Class Y shares. The Lehman Int. Gov't Bond Index returns have not been
adjusted for ongoing management, distribution and operating expenses applicable
to mutual fund investments. The Morningstar Short Government Average and the
Lipper Short Int. U.S. Gov't Average returns have been adjusted for these
expenses.
[Enlarge/Download Table]
--------------------------------------------------------------------------------------------------------------------
Average Annual Total Returns Since Class
(for the periods ended December 31, 2000) Past 1 Year Past 5 Years Inception
--------------------------------------------------------------------------------------------------------------------
CDC Nvest Limited Term U.S. Government Fund:
Class Y (inception 3/31/94) 8.82% 5.08% 5.65%
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Lehman Int. Gov't Bond Index 10.47% 6.19% 6.67%
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Morningstar Short Government Average 7.93% 5.22% 5.50%
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Lipper Short Int. U.S. Gov't Average 8.56% 5.16% 5.61%
--------------------------------------------------------------------------------------------------------------------
Each Index is calculated from 3/31/94 for Class Y shares.
For actual past expenses of Class Y shares, see the section
entitled "Fund Fees & Expenses."
10
Goals, Strategies & Risks
CDC Nvest Government Securities Fund
------------------------------------------------------------
Fund Focus
------------------------------------------------------------
Stability Income Growth
------------------------------------------------------------
High X
------------------------------------------------------------
Mod. X
------------------------------------------------------------
Low X
------------------------------------------------------------
------------------------------------------------------------
Duration
------------------------------------------------------------
Short Int. Long
------------------------------------------------------------
High X
------------------------------------------------------------
Mod.
------------------------------------------------------------
Low
------------------------------------------------------------
Adviser: CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Asset
Management Advisers")
Subadviser: Loomis, Sayles & Company, L.P. ("Loomis Sayles")
Managers: Kent P. Newmark and Cliff Rowe
Category: Government Income
Ticker Symbol: Class Y
NEUYX
Investment Goal
The Fund seeks a high level of current income consistent with safety of
principal by investing in U.S. government securities.
Principal Investment Strategies
Under normal market conditions, the Fund will invest its assets in U.S.
government securities, including U.S. Treasury bills, notes and bonds, and
mortgage-backed securities issued or guaranteed by U.S. government agencies.
Loomis Sayles follows a total return oriented investment approach in selecting
securities for the Fund. It seeks securities that give the Fund's portfolio the
following characteristics, although these characteristics may change depending
on market conditions:
|X| average credit quality of "AAA" by Standard & Poor's Ratings Group or "Aaa"
by Moody's Investors Service, Inc.
|X| average maturity of 10 years or more
In selecting investments for the Fund's portfolio, Loomis Sayles employs the
following strategies:
. Its research analysts work closely with the Fund's portfolio managers to
develop an outlook on the economy from research produced by various Wall
Street firms and specific forecasting services or from economic data released
by U.S. and foreign governments as well as the Federal Reserve Bank.
. Next,the analysts conduct a thorough review of individual securities to
identify what they consider attractive values in the U.S. government security
marketplace. This value analysis uses quantitative tools such as internal and
external computer systems and software.
. Loomis Sayles seeks to balance opportunities for yield and price performance
by combining macroeconomic analysis with individual security selection. They
will emphasize securities that tend to perform particularly well in response
to interest rate changes, such as U.S. Treasury securities in a declining
interest rate environment and mortgage-backed or U.S. government agency
securities in a steady or rising interest rate environment.
. Loomis Sayles seeks to maximize the opportunity for high yields while taking
into account the price volatility inherent in bonds with longer
maturities.
The Fund may:
. Invest in zero-coupon bonds.
. Invest in mortgage-related securities, including collateralized mortgage
obligations and stripped securities.
. Engage in active and frequent trading of securities. Frequent trading may
produce higher transaction costs and a higher level of taxable capital gains,
which may lower the Fund's return.
A "snapshot" of the Fund's investments may be found in the current annual or
semiannual report. (See back cover.)
Principal Investment Risks
Fixed-income securities: Subject to credit risk, interest rate risk and
liquidity risk. Generally, the value of fixed-income securities rises when
prevailing interest rates fall and falls when interest rates rise. Zero-coupon
bonds may be subject to these risks to a greater extent than other fixed-
income securities.
Mortgage-related securities: Subject to prepayment risk. With prepayment, the
Fund may reinvest the prepaid amounts in securities with lower yields than the
prepaid obligations. The Fund may also incur a realized loss when there is a
prepayment of securities that were purchased at a premium.
11
Evaluating the Fund's Past Performance
The bar chart and table shown below give an indication of the risks of investing
in the Fund by showing changes in the Fund's performance from year to year and
by showing how the Fund's average annual returns for one-year, five-year and
since-inception periods compare with those of a broad measure of market
performance and those of indices of funds with similar objectives. The Fund's
past performance does not necessarily indicate how the Fund will perform in the
future.
The bar chart shows the Fund's total returns for Class Y shares for each
calendar year since it first offered Class Y shares.
--------------------------------------------------------------------------------
Total Return
1995 1996 1997 1998 1999 2000
20.29% 1.12% 10.51% 9.34% -6.28% 13.50%
--------------------------------------------------------------------------------
. Highest Quarterly Return: Second Quarter 1995, up 7.37%
. Lowest Quarterly Return: First Quarter 1996, down 3.12%
The table below shows the Fund's average annual total returns for the one-year,
five-year and since-inception periods compared to those of the Lehman Government
Bond Index ("Lehman Gov't Bond Index"), an unmanaged index of public debt of the
U.S. Treasury, government agencies and their obligations. The returns are also
compared to returns, as calculated by Morningstar, Inc. and Lipper, Inc., of the
Morningstar Long Government Average and Lipper General Government Average
("Lipper General Gov't. Average"), each an average of the total return of mutual
funds with similar investment objectives as the Fund. You may not invest
directly in an index. The Fund's total returns reflect the expenses of the
Fund's Class Y shares. The Lehman Gov't Bond Index returns have not been
adjusted for ongoing management, distribution and operating expenses applicable
to mutual fund investments. The Morningstar Long Government Average and the
Lipper General Gov't. Average have been adjusted for these expenses.
[Download Table]
------------------------------------------------------------------------------------
Average Annual Total Returns Past 1 Past 5 Since Class
(for the periods ended December 31, 2000) Year Years Inception
------------------------------------------------------------------------------------
CDC Nvest Government Securities Fund:
Class Y (inception 3/31/94) 13.50% 5.38% 6.52%
------------------------------------------------------------------------------------
Lehman Gov't Bond Index 13.24% 6.49% 6.67%
------------------------------------------------------------------------------------
Morningstar Long Government Average 15.04% 5.72% 7.19%
------------------------------------------------------------------------------------
Lipper General Gov't Average 11.77% 5.40% 6.32%
------------------------------------------------------------------------------------
Each Index is calculated from 3/31/94 for Class Y shares.
For actual past expenses of Class Y shares, see the section entitled "Fund
Fees & Expenses."
12
Fund Fees & Expenses
The following tables describe the fees and expenses that you may pay if you buy
and hold shares of each Fund.
Shareholder Fees
(fees paid directly from your investment)
--------------------------------------------------------------------------------
All Funds
Class Y
--------------------------------------------------------------------------------
Maximum sales charge (load) imposed on purchases None
--------------------------------------------------------------------------------
Maximum deferred sales charge (load) None
--------------------------------------------------------------------------------
Redemption fees None*
--------------------------------------------------------------------------------
. Generally, a transaction fee will be charged for expedited payment of
redemption proceeds such as by wire or overnight delivery.
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets, as a percentage of average daily
net assets)
Expense information in this table has been restated to reflect current fees and
expenses.
[Enlarge/Download Table]
--------------------------------------------------------------------------------------------------------------------------------
CDC Nvest Short Term CDC Nvest Bond CDC Nvest High
Corporate Income Fund* Income Fund Income Fund*
--------------------------------------------------------------------------------------------------------------------------------
Class Y Class Y Class Y
--------------------------------------------------------------------------------------------------------------------------------
Management fees 0.55% 0.42% 0.70%
--------------------------------------------------------------------------------------------------------------------------------
Distribution and/or service 0.00% 0.00% 0.00%
(12b-1) fees
--------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.41% 0.25% 0.31%
--------------------------------------------------------------------------------------------------------------------------------
Total annual fund operating 0.96% 0.67% 1.01%
expenses
--------------------------------------------------------------------------------------------------------------------------------
Fee Waiver and/or expense 0.36%** 0.00% 0.00%
reimbursement
--------------------------------------------------------------------------------------------------------------------------------
Net Expenses 0.60% 0.67% 1.01%
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
CDC Nvest Strategic CDC Nvest Limited Term CDC Nvest Government
Income Fund U.S. Government Fund Securities Fund
--------------------------------------------------------------------------------------------------------------------------------
Class Y Class Y Class Y
--------------------------------------------------------------------------------------------------------------------------------
Management fees 0.63% 0.65% 0.65%
--------------------------------------------------------------------------------------------------------------------------------
Distribution and/or service 0.00% 0.00% 0.00%
(12b-1) fees
--------------------------------------------------------------------------------------------------------------------------------
Other expenses 0.27% 0.30% 0.36%
--------------------------------------------------------------------------------------------------------------------------------
Total annual fund operating 0.90% 0.95% 1.01%
expenses
--------------------------------------------------------------------------------------------------------------------------------
Fee Waiver and/or expense 0.00% 0.00% 0.00%
reimbursement
--------------------------------------------------------------------------------------------------------------------------------
Net Expenses 0.90% 0.95% 1.01%
--------------------------------------------------------------------------------------------------------------------------------
* Short Term Corporate Income Fund and High Income Fund may not
currently offer Class Y shares. Expenses for Short Term Corporate
Income Fund and High Income Fund have been estimated.
** CDC IXIS Advisers has given a binding undertaking to this Fund to
limit the amount of the Fund's total annual fund operating expenses to
0.60% of the Fund's average daily net assets for Class Y shares. This
undertaking is in effect until May 1, 2002 and will be reevaluated on
an annual basis.
13
Fund Fees & Expenses
Example
This example, which is based upon the expenses* shown above, is intended to help
you compare the cost of investing in the Funds with the cost of investing in
other mutual funds.
The example assumes that:
. You invest $10,000 in the Fund for the time periods indicated;
. Your investment has a 5% return each year; and
. A Fund's operating expenses remain the same.
Although your actual costs and returns may be higher or lower, based on these
assumptions your costs would be:
[Enlarge/Download Table]
-------------------------------------------------------------------------------------------------------------------------
CDC Nvest Short Term CDC Nvest Bond Income CDC Nvest High Income
Corporate Income Fund Fund Fund
-------------------------------------------------------------------------------------------------------------------------
Class Y Class Y Class Y
-------------------------------------------------------------------------------------------------------------------------
1 year $ 61 $68 $ 103
-------------------------------------------------------------------------------------------------------------------------
3 years $ 270 $214 $ 322
-------------------------------------------------------------------------------------------------------------------------
5 years $ 496 $373 $ 558
-------------------------------------------------------------------------------------------------------------------------
10 years $1,145 $835 $1,236
-------------------------------------------------------------------------------------------------------------------------
[Enlarge/Download Table]
-------------------------------------------------------------------------------------------------------------------------
CDC Nvest Strategic CDC Nvest Limited Term CDC Nvest Government
Income Fund U.S. Government Fund Securities Fund
-------------------------------------------------------------------------------------------------------------------------
Class Y Class Y Class Y
-------------------------------------------------------------------------------------------------------------------------
1 year $ 92 $ 97 $ 103
-------------------------------------------------------------------------------------------------------------------------
3 years $ 287 $ 303 $ 322
-------------------------------------------------------------------------------------------------------------------------
5 years $ 498 $ 525 $ 558
-------------------------------------------------------------------------------------------------------------------------
10 years $1,108 $1,166 $1,236
-------------------------------------------------------------------------------------------------------------------------
* The examples are based on the Net Expenses shown above for the 1-year
period illustrated in the Example and on the Total Annual Fund
Operating Expenses for the remaining years.
14
More About Risk
The Funds have principal investment strategies that come with inherent risks.
The following is a list of risks to which each Fund may be subject by investing
in various types of securities or engaging in various practices.
Correlation Risk (All Funds) The risk that changes in the value of a hedging
instrument will not match those of the asset being hedged.
Credit Risk (All Funds) The risk that the issuer of a security, or the
counterparty to a contract, will default or otherwise become unable to honor a
financial obligation.
Currency Risk (High Income, Strategic Income, Bond Income, Short Term Corporate
Income Funds) The risk that fluctuations in the exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment.
Emerging Markets Risk (Short Term Corporate Income, Bond Income, High Income,
Strategic Income Funds) The risk associated with investing in securities traded
in developing securities markets, which may be smaller and have shorter
operating histories than developed markets. Emerging markets involve risks in
addition to and greater than those generally associated with investing in
developed foreign markets. The extent of economic development, political
stability, market depth, infrastructure and capitalization, and regulatory
oversight in emerging market economies is generally less than in more developed
markets.
Euro Conversion Risk (High Income, Strategic Income, Bond Income, Short Term
Corporate Income Funds) Many European countries have adopted a single European
currency, the "euro." The consequences of this conversion for foreign exchange
rates, interest rates and the value of European securities are unclear
presently. Such consequences may decrease the value and/or increase the
volatility of securities held by a Fund.
Extension Risk (All Funds) The risk that an unexpected rise in interest rates
will extend the life of a mortgage- or asset-backed security beyond the expected
prepayment time, typically reducing the security's value.
Information Risk (All Funds) The risk that key information about a security is
inaccurate or unavailable.
Interest Rate Risk (All Funds) The risk of market losses attributable to changes
in interest rates. In general, the prices of fixed-income securities rise when
interest rates fall, and prices fall when interest rates rise.
Leverage Risk (All Funds) The risk associated with securities or practices (e.g.
borrowing) that multiply small index or market movements into large changes in
value. When a derivative security (a security whose value is based on another
security or index) is used as a hedge against an offsetting position that a Fund
also holds, any loss generated by the derivative security should be
substantially offset by gains on the hedged instrument, and vice versa. To the
extent that a Fund uses a derivative security for purposes other than as a
hedge, that Fund is directly exposed to the risks of that derivative security
and any loss generated by the derivative security will not be offset by a gain.
Liquidity Risk (All Funds) The risk that certain securities may be difficult or
impossible to sell at the time and at the price that the seller would like. This
may result in a loss or may otherwise be costly to a Fund. These types of risks
may also apply to restricted securities, Section 4(2) Commercial Paper, or Rule
144A Securities.
Management Risk (All Funds) The risk that a strategy used by a Fund's portfolio
management may fail to produce the intended result.
Market Risk (All Funds) The risk that the market value of a security may move up
and down, sometimes rapidly and unpredictably, based upon a change in an
issuer's financial condition as well as overall market and economic
conditions.
Opportunity Risk (All Funds) The risk of missing out on an investment
opportunity because the assets necessary to take advantage of it are invested in
less profitable investments.
Options, Futures and Swap Contracts Risks (Strategic Income, Short Term
Corporate Income, Limited Term U.S. Government, Government Securities Funds)
These transactions are subject to changes in the underlying security on which
such transactions are based. It is important to note that even a small
investment in these types of derivative securities may give rise to leverage
risk, and can have a significant impact on a Fund's exposure to stock market
values, interest rates or the currency exchange rate. These types of
transactions will be used primarily for hedging purposes.
Political Risk (All Funds) The risk of losses directly attributable to
government or political actions.
Prepayment Risk (All Funds) The risk that unanticipated prepayments may occur,
reducing the return from mortgage- or asset-backed securities, or real estate
investment trusts.
Small Capitalization Companies Risk (Strategic Income Fund) These companies
carry special risks, including narrower markets, more limited financial and
management resources, less liquidity and greater volatility than large company
stocks.
Valuation Risk (All Funds) The risk that the Fund has valued certain securities
at a higher price than it can sell them for.
15
Management Team
Meet the Funds' Investment Adviser and Subadvisers
The CDC Nvest Funds family currently includes 28 mutual funds with a total of
over $6 billion in assets under management as of December 31, 2000. CDC Nvest
Funds are distributed through CDC IXIS Asset Management Distributors, L.P. (the
"Distributor"). This Prospectus covers Class Y shares of CDC Nvest Income Funds
(the "Funds" or each a "Fund"), which along with the CDC Nvest Equity Funds, CDC
Nvest Star Funds, Kobrick Funds and CDC Nvest Tax Free Income Funds, constitute
the "CDC Nvest Funds." CDC Nvest Cash Management Trust Money Market Series and
CDC Nvest Tax Exempt Money Market Trust constitute the "Money Market Funds."
CDC IXIS Asset Management Advisers, L.P.
CDC IXIS Asset Management Advisers (formerly Nvest Funds Management, L.P.),
located at 399 Boylston Street, Boston, Massachusetts 02116, serves as the
adviser to each of the Funds. CDC IXIS Asset Management Advisers is a subsidiary
of CDC IXIS Asset Management - North America, L.P. ("CDC IXIS Asset Management -
North America") (formerly Nvest Companies, L.P.), which is a subsidiary of CDC
IXIS Asset Management. CDC IXIS Asset Management is the investment management
arm of France's Caisse des Depots et Consignations ("CDC"), a major diversified
financial institution. As of December 31, 2000 CDC IXIS Asset Management - North
America's 17 principal subsidiary or affiliated asset management firms
collectively had $135 billion in assets under management. CDC IXIS Asset
Management Advisers oversees, evaluates and monitors the subadvisory services
provided to each Fund. It also provides general business management and
administration to each Fund. CDC IXIS Asset Management Advisers does not
determine what investments will be purchased by the Fund. The subadvisers listed
below make the investment decisions for their respective Funds.
The combined advisory and subadvisory fees paid by the Funds in 2000 as a
percentage of each Fund's average daily net assets were 0.12% for CDC Nvest
Short Term Corporate Income Fund (after waiver or reimbursement), 0.42% for CDC
Nvest Bond Income Fund, 0.70% for CDC Nvest High Income Fund, 0.63% for CDC
Nvest Strategic Income Fund, 0.65% for CDC Nvest Limited Term U.S. Government
Fund, and 0.65% for CDC Nvest Government Securities Fund.
Subadvisers
Loomis Sayles, located at One Financial Center, Boston, Massachusetts 02111,
serves as subadviser to the Funds. Loomis Sayles is a subsidiary of CDC IXIS
Asset Management - North America. Founded in 1926, Loomis Sayles is one of
America's oldest investment advisory firms with over $66 billion in assets under
management as of December 31, 2000. Loomis Sayles is well known for its
professional research staff, which is one of the largest in the industry.
Subadvisory Agreements
Each Fund has received an exemptive order from the Securities and Exchange
Commission (the "SEC"), which permits CDC IXIS Asset Management Advisers to
amend or continue existing subadvisory agreements when approved by the Board of
Trustees, without shareholder approval. The exemption also permits CDC IXIS
Asset Management Advisers to enter into new subadvisory agreements with
subadvisers that are not affiliated with CDC IXIS Asset Management Advisers, if
approved by the Board of Trustees. Shareholders will be notified of any
subadviser changes.
Portfolio Trades
In placing portfolio trades, each Fund's adviser or subadviser may use brokerage
firms that market the Fund's shares or are affiliated with CDC IXIS Asset
Management - North America, CDC IXIS Asset Management Advisers and Loomis
Sayles. In placing trades, Loomis Sayles will seek to obtain the best
combination of price and execution, which involves a number of judgmental
factors. Such portfolio trades are subject to applicable regulatory restrictions
and related procedures adopted by the Board of Trustees.
16
Meet the Funds' Portfolio Managers
Michael F. Harris
Michael Harris has served as co-portfolio manager of Limited Term U.S.
Government Fund since June 2001. Mr. Harris is Vice President, Core Bond Group
Associate Managing Partner and Director of Loomis Sayles. He began his
investment career in 1979 and has been at Loomis Sayles since 1991. Mr. Harris
received a B.B.A. from Michigan State University and an M.B.A from Saginaw
Valley State College. He is also a Chartered Financial Analyst and Chartered
Investment Counselor. He has over 22 years of investment experience.
Craig Smith
Craig Smith has served a co-portfolio manager of Short Term Corporate Income
Fund since June 2001. Mr. Smith, Portfolio Manager and Vice President of Loomis
Sayles, joined the company in 1997. Prior to that he was an Investment
Consultant with Donaldson, Lufkin & Jenrette from 1994 until 1997. Mr. Smith has
a B.S. and an M.B.A. from Cornell University and over 7 years of investment
experience.
Clifton V. Rowe
Clifton Rowe has served as co-portfolio manager of Government Securities Fund
since June 2001. Mr. Rowe became Portfolio Manager and Vice President of Loomis
Sayles in 2001. Prior to that, he served Loomis Sayles as a Trader from 1992
until 2001. He is also a Chartered Financial Analyst. Mr. Rowe has a B.B.A. from
James Madison University and over 9 years of investment experience.
Kent P. Newmark
Kent Newmark has served as co-portfolio manager of Government Securities Fund
since June 2001. Mr. Newmark is Vice President and Core Bond Group Senior
Partner of Loomis Sayles. He began his investment career in 1963 and has been at
Loomis Sayles since 1976. Mr. Newmark received a B.S. and an M.B.A. from the
University of California. He is also a Chartered Investment Counselor. He has
over 38 years of investment experience.
John Hyll
John Hyll has served as co-portfolio manager of Short Term Corporate Income Fund
since June 2001. Mr. Hyll, Vice President of Loomis Sayles, joined the company
in 1989. He received his B.A. and his M.B.A. from Baldwin-Wallace College and
has over 17 years of investment experience.
Richard G. Raczkowski
Richard Raczkowski has served as a co-portfolio manager of Short Term Corporate
Income Fund and Bond Income Fund since from May 1999 (including service until
May 2001 with Back Bay Advisors) and June 2001, respectively. Mr. Raczkowski,
Portfolio Manager and Vice President of Loomis Sayles, joined the company in
2001. Prior to that he was Vice President of Back Bay Advisors from 1998 until
2001. Mr. Raczkowski was also a senior consultant at Hagler Bailly Consulting
from mid 1996 until December 1997. He received a B.A. from the University of
Massachusetts and an M.B.A. from Northeastern University and has over 16 years
of investment experience.
Peter W. Palfrey
Peter Palfrey has served as co-portfolio manager of Bond Income Fund since May
1999, including service until May 2001 with Back Bay Advisors. Mr. Palfrey,
Portfolio Manager and Vice President of Loomis Sayles, joined the company in
2001. Prior to that he was Senior Vice President of Back Bay Advisors from 1993
until 2001. Mr. Palfrey is also a Chartered Financial Analyst. He received his
B.A. from Colgate University and has over 18 years of investment experience.
Michael J. Millhouse
Michael Millhouse has co-managed High Income Fund since May 2000. Mr. Millhouse
is Executive Vice President, Chief Investment Officer and Director of Loomis
Sayles. He began his investment career in 1978 and has been at Loomis Sayles
since 1992. Mr. Millhouse is also a Chartered Financial Analyst and Chartered
Investment Counselor. He received a B.S. and an M.B.A. from Indiana University
and has over 23 years of investment experience.
----
Curt A. Mitchell
Curt Mitchell has served as co-portfolio manager of Bond Income Fund since June
2001. He has also served as co-portfolio manager of High Income Fund since May
2000. Mr. Mitchell is Vice President, Portfolio Manager and Manager of Fixed
Income Trading of Loomis Sayles. He began his investment career in 1986 and has
been at Loomis Sayles since 1995. Prior to joining Loomis Sayles, he was a Fixed
Income Portfolio Manager with Firststar Investment Research & Management
Company. Mr. Mitchell is also a Chartered Financial Analyst and Chartered
Investment Counselor. He has an M.B.A. from the University of Illinois, a B.S.
from Illinois Wesleyan University and over 14 years of investment
experience.
Daniel J. Fuss
Daniel Fuss has managed Strategic Income Fund since May 1995. Mr. Fuss is Vice
Chairman, Director and Managing Partner of Loomis Sayles. He began his
investment career in 1968 and has been at Loomis Sayles since 1976. Mr. Fuss is
also a Chartered Financial Analyst. He received a B.S. and an M.B.A. from
Marquette University and has over 33 years of investment experience.
Kathleen C. Gaffney
Kathleen Gaffney has been assisting Daniel Fuss as a portfolio manager of
Strategic Income Fund since April 1996. Ms. Gaffney, a Chartered Financial
Analyst, joined Loomis Sayles in 1984 and is now a Vice President of the
company. She holds a B.A. from the University of Massachusetts at Amherst and
has over 16 years of investment experience.
17
Fund Services
-------------
It's Easy to Open an Account
To Open an Account with CDC Nvest Funds:
1. Read this Prospectus carefully.
2. Read the following eligibility and minimum investment requirements to
determine if you may purchase Class Y shares:
Class Y shares of the Fund may be purchased by the following entities at
the following investment minimums.
A minimum initial investment is $1 million and $10,000 is the minimum
subsequent investment for:
. Other mutual funds, endowments, foundations, bank trust departments or
trust companies.
There is no initial or subsequent investment minimum for:
. Retirement Plans (401(a), 401(k), 457 or 403(b) plans) that have total
investment assets of at least $10 million. Plan sponsor accounts can
be aggregated to meet this minimum.
. Insurance Company Accounts of New England Financial, Metropolitan Life
Insurance Company ("MetLife") or their affiliates.
. Separate Accounts of New England Financial, MetLife or their
affiliates.
. Wrap Fee Programs of certain broker-dealers not being paid by the
Fund, CDC IXIS Asset Management Advisers or the Distributor. Such wrap
fee programs may be subject to additional or different conditions,
including a wrap account fee. Each broker-dealer is responsible for
transmitting to its customer a schedule of fees and other information
regarding any such conditions. If the participant who purchased Class
Y shares through a wrap fee program should terminate the wrap fee
arrangement with the broker-dealer, then the Class Y shares will, at
the discretion of the broker-dealer, automatically be converted to a
number of Class A shares of the same Fund having the same dollar value
of the shares converted, and the broker-dealer may thereafter be
entitled to receive from that Fund an annual service fee of 0.25% of
the value of Class A shares owned by that shareholder.
. Certain Individual Retirement Accounts if the amounts invested
represent rollover distributions from investments by any of the
Retirement Plans set forth above.
. Deferred Compensation Plan Accounts of New England Life Insurance
Company ("NELICO"), MetLife or their affiliates ("Deferred
Compensation Accounts").
. Service Accounts through an omnibus account by investment advisers,
financial planners, broker-dealers or other intermediaries who have
entered into a service agreement with a Fund. A fee may be charged to
shareholders purchasing through a service account if they effect
transactions through such parties and they should contact such parties
regarding information regarding such fees.
3. You should contact CDC Nvest Funds at 800-225-5478 for an application or if
you have any questions about purchasing Fund shares.
4. Use the sections of this Prospectus that follow as your guide for
purchasing shares.
Certificates
You will not receive certificates representing Class Y Shares.
CDC Nvest Funds Web Site
You may have access to your account 24 hours a day by visiting us online at
www.cdcnvestfunds.com
18
Fund Services
Buying Shares
[Enlarge/Download Table]
Opening an Account Adding to an Account
Through Your Investment Dealer
. Call your investment dealer . Call your investment dealer
for information. for information.
By Mail
. Make out a check in U.S. . Make out a check in U.S.
dollars for the dollars for
investment the investment
amount, payable amount,
to "CDC Nvest payable to
Funds." Third "CDC Nvest
party checks Funds." Third
and "starter" party checks
checks will not and "starter"
be accepted. checks will
not be
accepted.
. Mail the check with your . Fill out the detachable
[envelope icon] completed investment
application to slip from an
CDC Nvest account statement. If
Funds, P.O. Box no slip is
8551, Boston, available, include
MA 02266-8551 with the check
a letter
specifying the
Fund name,
your class of
shares, your
account number
and the
registered
account
name(s). To
make investing
even easier, you
can order more
investment slips
by calling
800-225-5478.
By Exchange
. Obtain a current prospectus . Call your investment dealer
[exchange icon] for the Fund into which you are or CDC Nvest Funds at
exchanging by calling your 800-225-5478 or visit
investment dealer or CDC Nvest www.cdcnvestfunds.com to
Funds at 800-225-5478. request an exchange.
. Call your investment dealer . See the section entitled
or CDC Nvest Funds to request an "Exchanging Shares" for more
exchange. details.
. See the section entitled
"Exchanging Shares" for more
details.
By Wire
. Call CDC Nvest Funds at . Visit www.cdcnvestfunds.com
800-225-5478 to obtain an to add shares to your account
account number and wire transfer by wire.
instructions. Your bank may . Instruct your bank to
charge you for such a transfer. transfer funds
[wire icon] to State
Street Bank &
Trust Company,
ABA# 011000028, and
DDA # 99011538.
. Specify the Fund name, your
class of shares, your
account number and the
registered account name(s).
Your bank may charge you
for such a transfer.
Through Automated Clearing House ("ACH")
. Ask your bank or credit . Call CDC Nvest Funds at
union whether it is a member of 800-225-5478 or visit
the ACH system. www.cdcnvestfunds.com to add
. Complete the "Bank Information" shares to your account through
section on your account ACH.
application. . If you have not signed up
[ACH icon] . Mail your completed for the ACH
application to system, please
CDC Nvest call CDC Nvest
Funds, P.O. Box Funds for a
8551, Boston, Service
MA 02266-8551. Options Form.
A signature
guarantee may
be required to
add this
privilege.
19
Fund Services
-------------
Selling Shares
To Sell Some or All of Your Shares
Certain restrictions may apply. See the section entitled "Restrictions on
Buying, Selling and Exchanging Shares."
[Enlarge/Download Table]
Through Your Investment Dealer
. Call your investment dealer for information.
By Mail
. Write a letter to request a redemption specifying the name of your Fund, your class
of shares, your account number, the exact registered account name(s), the number of
shares or the dollar amount to be redeemed and the method by which you wish to
receive your proceeds. Additional materials may be required. See the section
entitled "Selling Shares in Writing."
[envelope icon] . The request must be signed by all of the owners of the shares and must include the
capacity in which they are signing, if appropriate.
. Mail your request by regular mail to CDC Nvest Funds, P.O. Box 8551,
Boston, MA 02266-8551 or by registered, express or certified mail to CDC Nvest Funds,
66 Brooks Drive, Braintree, MA 02184.
. Your proceeds will be delivered by the method chosen in your letter. If you choose
to have your proceeds delivered by mail, they will generally be mailed to you on the
business day after the request is received in good order. You may also
choose to redeem by wire or throug ACH (see below).
By Exchange
. Obtain a current prospectus for the Fund into which you are exchanging
by calling your investment dealer or CDC Nvest Funds at 800-225-5478.
[exchange icon] . Call CDC Nvest Funds or visit www.cdcnvestfunds.com to request an exchange.
. See the section entitled "Exchanging Shares" for more details.
By Wire
. Fill out the "Bank Information" section on your account application.
[wire icon] . Call CDC Nvest Funds at 800-225-5478, visit www.cdcnvestfunds.com or indicate in
your redemption request letter (see above) that you wish to have your
proceeds wired to your bank.
. Proceeds will generally be wired on the next business day. A wire fee
(currently $5.00) will be deducted from the proceeds.
Through Automated Clearing House
. Ask your bank or credit union whether it is a member of the ACH system.
. Complete the "Bank Information" section on your account application.
[ACH icon] . If you have not signed up for the ACH system on your application, please call CDC Nvest
Funds at 800-225-5478 for a Service Options Form.
. Call CDC Nvest Funds or visit www.cdcnvestfunds.com to request a
redemption through this system.
. Proceeds will generally arrive at your bank within three business days.
By Telephone
. You may receive your proceeds by mail, by wire or through ACH (see above).
. Call CDC Nvest Funds at 800-225-5478 to choose the method you wish to
[telephone icon] use to redeem your shares.
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Selling Shares in Writing
If you wish to redeem your shares in writing, all owners of the shares must sign
the redemption request in the exact names in which the shares are registered and
indicate any special capacity in which they are signing. In certain situations,
you will be required to make your request to sell shares in writing. In these
instances, a letter of instruction signed by the authorized owner is necessary.
In certain situations, we also may require a signature guarantee or additional
documentation.
A signature guarantee protects you against fraudulent orders and is necessary
if:
. your address of record has been changed within the past 30 days;
. you are selling more than $100,000 worth of shares and you are requesting the
proceeds by check; or
. a proceeds check for any amount is either mailed to an address other than the
address of record or not payable to the registered owner(s).
A notary public cannot provide a signature guarantee. A signature guarantee can
be obtained from one of the following sources:
. a financial representative or securities dealer;
. a federal savings bank, cooperative, or other type of bank;
. a savings and loan or other thrift institution;
. a credit union; or
. a securities exchange or clearing agency.
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Fund Services
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Exchanging Shares
You may exchange Class Y shares of your Fund for Class Y shares of any other CDC
Nvest Fund which offers Class Y shares or for Class A shares of the Money Market
Funds. Agents, general agents, directors and senior officers of NELICO and its
insurance company subsidiaries may, at the discretion of NELICO, elect to
exchange Class Y shares of any CDC Nvest Fund in a NELICO Deferred Compensation
Account for Class A shares of any other CDC Nvest Fund which does not offer
Class Y shares. Class A shares of any CDC Nvest Fund in a NELICO Deferred
Compensation Account may also be exchanged for Class Y shares of any CDC Nvest
Fund. All exchanges are subject to the eligibility requirements of the CDC Nvest
Fund or Money Market Fund into which you are exchanging. The exchange privilege
may be exercised only in those states where shares of the Funds may be legally
sold. For federal income tax purposes, an exchange of Fund shares for shares of
another CDC Nvest Fund or Money Market Fund is treated as a sale on which gain
or loss may be recognized. Please refer to the Statement of Additional
Information (the "SAI") for more detailed information on exchanging Fund
shares.
Restrictions on Buying, Selling and Exchanging Shares
Purchase and Exchange Restrictions
Although the Funds do not anticipate doing so, they reserve the right to suspend
or change the terms of purchasing or exchanging shares. Each Fund and the
Distributor reserve the right to refuse or limit any purchase or exchange order
by a particular purchaser (or group of related purchasers) if the transaction is
deemed harmful to the best interests of the Fund's other shareholders or would
disrupt the management of the Fund. The Funds and the Distributor reserve the
right to restrict purchases and exchanges for the accounts of "market timers" by
limiting the transaction to a maximum dollar amount. An acc