Document/Exhibit Description Pages Size
1: 485BPOS The Hartford Mutual Funds, Inc. 215 961K
2: EX-99.A(XXII) Articles Supplementary Dated September 14, 2007 8 40K
4: EX-99.D(XLIV) Amendment No. 11 Investment Services Agreement 1 8K
With Hartford Investment Management
Company
3: EX-99.D(XXI) Amendment No. 20 to Investment Management 1 8K
Agreement
5: EX-99.E(XIX) Amendment No. 16 to Principal Underwriting 1 7K
Agreement
6: EX-99.H(XIV) Ninth Amendment to the Fund Accounting 3 11K
Agreement, November 30, 2007
7: EX-99.I Opinion and Consent of Counsel 1 9K
8: EX-99.M Amended and Restated Rule 12B-1 Distribution Plan 8 47K
9: EX-99.N Multiple Class Plan Pursuant to Rule 18F-3 5 25K
10: EX-99.P(I) Code of Ethics 20 58K
As filed with the Securities and Exchange Commission on November 29, 2007
File No. 333-02381/811-07589
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 63 [X]
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 65 [X]
THE HARTFORD MUTUAL FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
P. O. Box 2999, Hartford, Connecticut 06104-2999
(Address of Principal Executive Offices)
Registrant's Telephone Number including Area Code: (860) 843-9934
Edward P. Macdonald, Esquire
The Hartford Financial Services Group, Inc.
Life Law - Mutual Funds Unit
200 Hopmeadow Street
Simsbury, Connecticut 06089
(Name and Address of Agent for Service)
Copy to:
John V. O'Hanlon, Esquire
Dechert LLP
200 Clarendon Street, 27th Floor
Boston, Massachusetts 02116-5021
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[X] on November 30, 2007 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (Date) pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[ ] 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 a
previously filed post-effective amendment.
THE HARTFORD MUTUAL FUNDS
CLASS A, CLASS B AND CLASS C SHARES
PROSPECTUS
NOVEMBER 30, 2007
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND IS CURRENTLY CLOSED TO NEW
INVESTORS.
THE HARTFORD MUTUAL FUNDS
P.O. BOX 64387
ST. PAUL, MN 55164-0387
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
CONTENTS
[Enlarge/Download Table]
Introduction Introduction
A summary of the fund's goals, The Hartford Global Enhanced Dividend
principal strategies, main risks, Fund
performance and expenses
Description of other investment Investment strategies and investment
strategies and investment risks matters
Investment manager and management fee Management of the fund
information
Information on your account About your account
Choosing a share class
How sales charges are calculated
Sales charge reductions and waivers
Opening an account
Buying shares
Selling shares
Transaction policies
Dividends and account policies
Additional investor services
Further information on the fund Financial highlights
Fund code and CUSIP number
For more information
back cover
THE HARTFORD MUTUAL FUNDS 1
INTRODUCTION
This prospectus relates to the Class A, Class B and Class C shares of the fund.
The fund also offers Class Y, Class I and Class R3, Class R4 and Class R5 shares
to certain qualified investors pursuant to separate prospectuses describing
those classes.
The fund is a series of The Hartford Mutual Funds, Inc. and is a diversified
open-end management investment company. Information on the fund, including risk
factors, can be found on the pages following this introduction.
The fund is currently closed to new investors.
The investment manager to the fund is Hartford Investment Financial Services,
LLC ("HIFSCO"). As the investment manager, HIFSCO is responsible for the
management of the fund and supervision of the fund's investment sub-adviser. The
day-to-day portfolio management of the fund is provided by an investment
sub-adviser: Hartford Investment Management Company ("Hartford Investment
Management"). Information regarding HIFSCO and the Hartford Investment
Management is included under the section entitled "Management of the Fund" in
this prospectus.
THE HARTFORD MUTUAL FUNDS, INC. HAS RECEIVED AN ORDER FROM THE SEC THAT PERMITS
ITS INVESTMENT MANAGER, SUBJECT TO APPROVAL BY ITS BOARD OF DIRECTORS, TO CHANGE
SUB-ADVISERS ENGAGED BY THE INVESTMENT MANAGER TO CONDUCT THE INVESTMENT PROGRAM
OF THE FUND WITHOUT SHAREHOLDER APPROVAL. FOR MORE INFORMATION, PLEASE SEE THIS
PROSPECTUS UNDER "THE INVESTMENT MANAGER."
MUTUAL FUNDS ARE NOT BANK DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. BECAUSE
YOU COULD LOSE MONEY BY INVESTING IN THE FUND, BE SURE TO READ ALL RISK
DISCLOSURES CAREFULLY BEFORE INVESTING.
THE HARTFORD MUTUAL FUNDS 2
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
INVESTMENT GOAL. The Hartford Global Enhanced Dividend Fund seeks a high level
of current income. Capital appreciation is a secondary objective.
PRINCIPAL INVESTMENT STRATEGY. The fund seeks to achieve its goal by taking long
and short positions in domestic equity securities and foreign equity securities
listed on U.S. exchanges, which can include American Depositary Receipts or
"ADRs". Under normal circumstances, the fund invests at least 80% of its assets
in dividend paying equity securities. The fund will take long positions in
equity securities that Hartford Investment Management believes offer the
potential for above average dividend yields and for attractive returns. The fund
will sell short equity securities that Hartford Investment Management believes
offer the potential for a below average dividend yield and which are likely to
underperform. The fund seeks to enhance yield by using the proceeds from short
sales to purchase additional equity securities that provide an above average
dividend yield.
When the fund takes a long position, it purchases an equity security outright.
When the fund takes a short position, it sells at the current market price an
equity security that it does not own but has borrowed in anticipation that the
market price of the equity security will decline. To complete, or close out, the
short sale transaction, the fund purchases the same equity security in the
market and returns it to the lender. The fund makes money when the market price
of the borrowed equity security goes down and the fund is able to replace it for
less than the fund earned by selling the equity security short. Conversely, if
the price of the equity security goes up after the sale, the fund will lose
money because it will have to pay more to replace the borrowed equity security
than the fund received when it sold the equity security short.
The fund will generally hold long positions equal to approximately 140% of the
fund's net assets and short positions equal to approximately 40% of the fund's
net assets. However, the long and short positions held by the fund may change as
market conditions change. The fund's long positions may range from 100% to 150%
of the fund's net assets and its short positions may range from 0% to 50% of its
net assets.
The fund will focus its investments on companies with market capitalizations
similar to the Russell 3000 Index and a diverse selection of ADRs available
across countries and sectors. As of May 31, 2007, the market capitalization of
companies within the Russell 3000 Index ranged from approximately $15 million to
$476 billion. The fund may take long and short positions in domestic equity
securities and foreign equity securities listed on U.S. exchanges, which can
include American Depositary Receipts or "ADRs". ADRs are certificates issued by
a U.S. bank or trust company and represent the right to receive securities of a
foreign issuer deposited in a domestic bank or non-U.S. branch of a U.S. bank.
ADRs are traded on a U.S. securities exchange, or on an over-the-counter market,
and are denominated in U.S. dollars. Under normal market conditions, the fund's
investments in ADRs will range from 40% to 70% of the fund's net assets
(including investments in emerging markets countries).
The fund may engage in frequent and active trading of equity securities to
achieve its investment objective.
Dividend yield is a primary consideration in selecting stocks. In addition to
yield, Hartford Investment Management also uses a quantitative multifactor
approach to bottom-up stock selection, utilizing a broad set of individual
fundamental stock characteristics to model each stock's relative attractiveness,
with a focus on those factors that have been demonstrated historically to drive
market returns. These characteristics include factors designed to describe a
company's business, its valuation, investors' response to the company and the
company's management behavior and earnings quality. The fundamentals used may
vary by industry sector. Hartford Investment Management frequently and
consistently measures the characteristics of every stock in the eligible
universe and incorporates these measurements in a rigorous, repeatable process
that considers both volatility and correlations.
MAIN RISKS. As with most equity funds, the value of your investment in the fund
may go down in response to overall stock market movements and trends. You could
lose money as a result of your investment.
ADRs are subject to various risks of loss that are different from the risks of
investing in securities of U.S.-based companies. Investments in ADRs may be
affected by fluctuations in currency exchange rates, less liquid trading
markets, greater price volatility, less publicly available information about
issuers, social upheavals and political actions ranging from tax code changes to
governmental collapse. The foregoing risks are even greater with respect to
securities of issuers in countries with emerging economies or emerging
securities markets. Also, if there is a rise in demand for the underlying
security and it becomes less available to the market, the price of the ADR may
rise, causing the fund to pay a premium in order to obtain the desired ADR.
Conversely, changes in foreign market conditions or access to the underlying
securities could result in a decline in the value of the ADR.
THE HARTFORD MUTUAL FUNDS 3
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
The fund's investment strategy may involve more risk than other funds that do
not engage in short selling. In a short sale, the fund sells a borrowed
security. The fund may not always be able to borrow the security at a particular
time or at an acceptable price. Thus, there is risk that the fund may be unable
to implement its investment strategy due to the lack of available stocks or for
other reasons.
After selling the borrowed security, the fund is obligated to "cover" the short
sale by purchasing and returning the security to the lender. If a security sold
short increases in price, the seller may have to cover its short position at a
higher price than the short sale price, resulting in a loss. Because the fund's
loss on a short sale arises from increases in the value of the security sold
short, such loss is theoretically unlimited. In certain cases, purchasing a
security to cover a short position can itself cause the price of the security to
rise further, thereby exacerbating the loss.
Short sales also involve other costs. The fund must normally repay to the lender
an amount equal to any dividends or interest that accrues while the loan is
outstanding. In addition, to borrow the security, the fund may be required to
pay a premium. The fund also will incur transaction costs in effecting short
sales. The amount of any ultimate gain for the fund resulting from a short sale
will be decreased, and the amount of any ultimate loss will be increased, by the
amount of premiums, dividends, interest or expenses a Fund may be required to
pay in connection with the short sale.
Until the fund replaces a borrowed security, it is required to maintain a
segregated account of cash or liquid assets to cover the fund's short position.
Securities held in a segregated account cannot be sold while the position they
are covering is outstanding, unless they are replaced with similar securities.
Additionally, the fund must maintain sufficient liquid assets (less any
additional collateral held by the broker) to cover the short sale obligation.
This may limit the fund's investment flexibility, as well as its ability to meet
redemption requests or other current obligations.
By investing the proceeds received from selling securities short, the fund is
employing a form of leverage. The use of leverage may increase the fund's
exposure to long equity positions and make any change in the fund's NAV greater
than without the use of leverage. This could result in increased volatility of
returns. There is no guarantee that the fund will leverage its portfolio, or if
it does, that the fund's leveraging strategy will be successful. The fund cannot
guarantee that the use of leverage will produce a higher return on an
investment.
The fund trades securities very actively, which could increase its transaction
costs (thus affecting performance) and may increase your taxable distributions.
The fund's focus on dividend yielding investments significantly influences its
performance. High dividend yielding investments as a group can fall out of favor
with the market, causing the fund to underperform funds that do not focus on
dividends. The fund's strategy of using the proceeds from short sales to
purchase additional equity securities that provide an above average dividend
yield will amplify the fund's underperformance when high dividend yielding
investments are out of favor with the market. The fund's focus on dividend
yielding investments and use of short sales may cause the fund's share price and
total return to fluctuate more than the share price and total return of funds
that do not focus on dividend yielding investments using a short selling
strategy. The fund's focus on dividend yielding investments and use of short
sales may result in the underperformance of the fund relative to broad market
indices.
Hartford Investment Management's investment strategy will significantly
influence performance. If Hartford Investment Management's stock selection
strategy does not perform as expected, the fund could underperform its peers or
lose money. In particular, the fund's success in achieving its goal is highly
dependent on Hartford Investment Management's successful use of quantitative
analysis of the prospects of particular companies.
The fund may take a short position in a security at the same time that other
accounts managed by Hartford Investment Management take a long position in the
same security, or take a long position in a security at the same time that other
accounts managed by Hartford Investment Management take a short position in the
same security. In addition, the fund may from time to time take a long or short
position in a particular equity security while simultaneously taking the
opposite position with respect to an exchange traded fund ("ETF") which includes
such particular equity security as a constituent. ETFs are baskets of securities
that, like stocks, trade on exchanges such as the American Stock Exchange and
the New York Stock Exchange. These and other transactions undertaken on behalf
of other accounts managed by Hartford Investment Management may adversely impact
the fund. Transactions on behalf of other accounts managed by Hartford
Investment Management may have the effect of diluting or otherwise
disadvantaging the values, prices or investment strategies of the fund.
THE HARTFORD MUTUAL FUNDS 4
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
PAST PERFORMANCE. Because the fund has been in operation for less than one full
calendar year, no performance history has been provided.
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
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CLASS A CLASS B CLASS C
------- ------- -------
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) imposed on purchases as a percentage of
offering price 5.50% None None
Maximum deferred sales charge (load) (as a percentage of purchase
price or redemption proceeds, whichever is less) None(1) 5.00% 1.00%
Exchange fees None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees (2) 1.00% 1.00% 1.00%
Distribution and service (12b-1) fees(3) 0.25% 1.00% 1.00%
Other expenses
Short sales program expenses(4) 0.40% 0.40% 0.40%
All other expenses(5) 0.35% 0.35% 0.35%
Total other expenses 0.75% 0.75% 0.75%
Total annual operating expenses (2)(4)(6) 2.00% 2.75% 2.75%
(1) A contingent deferred sales charge of 1.00% may apply on certain
redemptions of Class A shares that were purchased without a front-end sales
charge. See "About Your Account: How Sales Charges are Calculated."
(2) HIFSCO has agreed to waive 100% of the management fee for the fund's first
year of operation.
(3) The Rule 12b-1 plan applicable to Class A shares of the fund provides for
payment of a Rule 12b-1 fee of up to 0.35%; however, the Board of Directors
of the fund has currently authorized Rule 12b-1 payments of only up to
0.25%.
(4) The fund's prime broker charges certain service fees in connection with the
administration of the fund's short positions. This amount also includes
payments to lenders as substitute dividends on securities borrowed
("dividend expense"). Dividend expenses will vary based on dividends paid
by the securities the fund sells short. This amount is estimated for the
fund's current fiscal year.
(5) "All other expenses" are estimated and include transfer agent fees,
custodial fees, accounting, legal and other expenses that the fund pays.
Hartford Administrative Services Company, the fund's transfer agent, has
agreed under a voluntary undertaking to waive any portion of the transfer
agency fees over 0.30% of average daily net assets per fiscal year for all
classes. This undertaking may be amended or withdrawn at any time.
(6) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class A, Class B and Class C shares of the fund, exclusive of taxes,
interest expense, dividend expense, short sales program expenses, brokerage
commissions, acquired fund fees and extraordinary expenses, to 1.60%, 2.35%
and 2.35% respectively. This policy may be discontinued at any time.
EXAMPLE. These examples are intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds. The examples
assume that you invest $10,000 in the fund for the time periods indicated. The
examples also assume that your investment has a 5% return each year, that the
fund's operating expenses remain the same, and that you reinvest all dividends
and distributions. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
You would pay the following expenses if you redeemed your shares at the end of
each period:
[Download Table]
EXPENSES (WITH REDEMPTION) CLASS A CLASS B CLASS C
-------------------------- ------- ------- -------
Year 1 $ 742 $ 778 $378
Year 3 $1,143 $1,153 $853
THE HARTFORD MUTUAL FUNDS 5
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
You would pay the following expenses if you did not redeem your shares:
[Download Table]
EXPENSES (WITHOUT REDEMPTION) CLASS A CLASS B CLASS C
----------------------------- ------- ------- -------
Year 1 $ 742 $278 $278
Year 3 $1,143 $853 $853
THE HARTFORD MUTUAL FUNDS 6
INVESTMENT STRATEGIES AND INVESTMENT MATTERS
INVESTMENT RISKS GENERALLY
Many factors affect the fund's performance. There is no assurance that the fund
will achieve its investment goal (investment objective), and investors should
not consider any one fund alone to be a complete investment program. As with all
mutual funds, there is a risk that an investor could lose money by investing in
the fund.
The different types of securities, investments, and investment techniques used
by the fund all have attendant risks of varying degrees. For example, with
respect to equity securities, there can be no assurance of capital appreciation
or dividend yield and an investment in any stock is subject to, among other
risks, the risk that the stock market as a whole may decline, thereby depressing
the stock's price (market risk), or the risk that the price of a particular
issuer's stock may decline due to its financial results (financial risk). With
respect to debt securities, there exists, among other risks, the risk that the
issuer of a security may not be able to meet its obligations on interest or
principal payments at the time required by the instrument (credit risk, a type
of financial risk). In addition, the value of debt instruments and other
income-bearing securities generally rises and falls inversely with prevailing
current interest rates (interest rate risk, a type of market risk). Securities
issued by U.S. Government agencies or government-sponsored enterprises may not
be guaranteed by the U.S. Treasury. As described below, an investment in the
fund entails special additional risks.
USE OF MONEY MARKET INVESTMENTS FOR TEMPORARY DEFENSIVE PURPOSES
From time to time, as part of its principal investment strategy, the fund may
invest some or all of its assets in cash or high quality money market securities
for temporary defensive purposes in response to adverse market, economic or
political conditions. To the extent the fund is in a defensive position, the
fund may lose the benefit of market upswings and limit its ability to meet its
investment objective.
FOREIGN INVESTMENTS
As part of its principal investment strategy, the fund may invest in foreign
equity securities listed on U.S. exchanges, which can include American
Depositary Receipts or "ADRs".
ADRs are securities traded on a U.S. securities exchange, or on an
over-the-counter market, that represent interests in securities issued by a
foreign publicly-listed company. ADRs have the same currency and economic risks
as the underlying shares they represent.
Investments in the securities of foreign issuers involve significant risks that
are not typically associated with investing in the securities of domestic
issuers. Such investments may be affected by changes in currency rates, changes
in foreign or U.S. laws or restrictions applicable to such investments and in
exchange control regulations. Securities of some foreign issuers may be less
liquid than securities of comparable domestic issuers. In addition, clearance
and settlement procedures may be different in foreign countries and, in certain
markets, on certain occasions, such procedures have been unable to keep pace
with the volume of securities or loan transactions, thus making it difficult to
execute such transactions. Foreign issuers are not generally subject to uniform
accounting, auditing and financial reporting standards comparable to those
applicable to domestic companies, and there may be less publicly available
information about a foreign issuer than a domestic issuer. Furthermore, with
respect to certain foreign countries, there is a possibility of expropriation or
confiscatory taxation, imposition of withholding taxes on dividend or interest
payments, limitations on the removal of cash or other assets of a fund, or
political or social instability or diplomatic developments which could affect
investments in those countries. Individual foreign economies also may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.
USE OF SHORT SALES
As part of its principal investment strategy, the fund will enter into short
sales. In a short sale, the fund sells a borrowed security (typically from a
broker or other institution). The fund may not always be able to borrow the
security at a particular time or at an acceptable price. Thus, there is risk
that the fund may be unable to implement its investment strategy due to the lack
of available stocks or for other reasons. After selling the borrowed security,
the fund is obligated to "cover" the short sale by purchasing the security and
returning the security to the lender. If a security sold short increases in
price, the fund may have to cover its short position at a higher price than the
short sale price, resulting in a loss. Because the fund's loss on a short sale
arises from increases in the value of the security sold short, such loss is
theoretically unlimited. In certain cases, purchasing a security to cover a
short position can itself cause the price of the security to rise further,
thereby exacerbating the loss.
THE HARTFORD MUTUAL FUNDS 7
INVESTMENT STRATEGIES AND INVESTMENT MATTERS
Short sales also involve other costs. The fund must normally repay to the lender
an amount equal to any dividends or interest that accrues while the loan is
outstanding. In addition, to borrow the security, the fund may be required to
pay a premium. The fund also will incur transaction costs in effecting short
sales. The amount of any ultimate gain for the fund resulting from a short sale
will be decreased, and the amount of any ultimate loss will be increased, by the
amount of premiums, dividends, interest or expenses the fund may be required to
pay in connection with the short sale. Until the fund replaces a borrowed
security, it is required to maintain a segregated account of cash or liquid
assets to cover the fund's short position. Securities held in a segregated
account cannot be sold while the position they are covering is outstanding,
unless they are replaced with similar securities. Additionally, the fund must
maintain sufficient liquid assets (less any additional collateral held by the
broker) to cover the short sale obligation. This may limit the fund's investment
flexibility, as well as its ability to meet redemption requests or other current
obligations.
USE OF OPTIONS, FUTURES AND OTHER DERIVATIVES
The fund may purchase and sell options, enter into futures contracts and/or
utilize other derivative contracts and securities with respect to stocks, bonds,
groups of securities (such as financial indices), foreign currencies, interest
rates, inflation and other indices. These techniques permit the fund to gain
exposure to a particular security, group of securities, interest rate or index,
and thereby have the potential for the fund to earn returns that are similar to
those which would be earned by direct investments in those securities or
instruments.
These techniques are also used to manage risk by hedging the fund's portfolio
investments. Hedging techniques may not always be available to the fund, and it
may not always be feasible for the fund to use hedging techniques even when they
are available.
Derivatives have risks, however. If the issuer of the derivative instrument does
not pay the amount due, the fund could lose money on the instrument. In
addition, the underlying security or investment on which the derivative is
based, or the derivative itself, may not perform the way the fund's manager
expected. As a result, the use of these techniques may result in losses to the
fund or increase volatility in the fund's performance. Some derivatives are
sophisticated instruments that typically involve a small investment of cash
relative to the magnitude of risks assumed. Derivative securities are subject to
market risk, which could be significant for those that have a leveraging effect.
INVESTMENTS IN EMERGING MARKETS
The fund may invest in emerging markets (through investments in foreign equity
securities listed on U.S. exchanges, which can include ADRs) as part of its
principal investment strategy.
The securities markets of Asian, Latin American, Eastern European, Middle
Eastern, African and other emerging countries are less liquid, are especially
subject to greater price volatility, have smaller market capitalizations, have
less government regulation and are not subject to as extensive and frequent
accounting, financial and other reporting requirements as the securities markets
of more developed countries. Further, investment in equity securities of issuers
located in Russia and certain other emerging countries involves risk of loss
resulting from problems in share registration and custody and substantial
economic and political disruptions. These risks are not normally associated with
investments in more developed countries.
SMALL CAPITALIZATION COMPANIES
The fund may invest in securities of small capitalization companies as a part of
its principal investment strategy.
Historically, small market capitalization stocks and stocks of recently
organized companies have been more volatile in price than the larger market
capitalization stocks often included in the S&P 500 Index. As a result,
investing in the securities of such companies involves greater risk and the
possibility of greater portfolio price volatility. Among the reasons for the
greater price volatility of these small company and unseasoned stocks are the
less certain growth prospects of smaller firms and the lower degree of liquidity
in the markets for such stocks. Small company stocks are frequently thinly
traded and may have to be sold at a discount from current market prices or sold
in small lots over an extended period of time. Small companies also often have
limited product lines, markets or financial resources, may depend on or use a
few key personnel for management, and may be susceptible to losses and risks of
bankruptcy. The transaction costs associated with small company stocks are often
higher than those of larger capitalization companies.
OTHER INVESTMENT COMPANIES
THE HARTFORD MUTUAL FUNDS 8
INVESTMENT STRATEGIES AND INVESTMENT MATTERS
The fund is permitted to invest in other investment companies, including
investment companies which may not be registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), such as holding company depository
receipts ("HOLDRs"), but not as part of its principal investment strategy. The
investment in other investment companies is limited in amount by the 1940 Act,
and will involve the indirect payment of a portion of the expenses, including
advisory fees, of such other investment companies.
The fund's investments in investment companies may include various
exchange-traded funds ("ETFs"), subject to the fund's investment objective,
policies, and strategies as described in this prospectus. ETFs are baskets of
securities that, like stocks, trade on exchanges such as the American Stock
Exchange and the New York Stock Exchange. ETFs are priced continuously and trade
throughout the day. ETFs may track a securities index, a particular market
sector, or a particular segment of a securities index or market sector. Some
types of equity ETFs are:
- "SPDRs" (S&P's Depositary Receipts), which are securities that represent
ownership in a long-term unit investment trust that holds a portfolio of
common stocks designed to track the performance of an S&P Index. Holders of
SPDRs are entitled to receive proportionate quarterly cash distributions
corresponding to the dividends that accrue to the stocks in the S&P Index's
underlying investment portfolio, less any trust expenses.
- "Qubes" (QQQQ), which invest in the stocks of the Nasdaq 100 Index, a
modified capitalization weighted index that includes the stocks of 100 of
the largest and most actively traded non-financial companies listed on the
Nasdaq Stock Market. Qubes use a unit investment trust structure that
allows immediate reinvestment of dividends.
- "iShares," which are securities that represent ownership in a long-term
unit investment trust that holds a portfolio of common stocks designed to
track the performance of specific indexes.
- "HOLDRs" (Holding Company Depositary Receipts), which are trust-issued
receipts that represent beneficial ownership in a specified group of 20 or
more stocks. Unlike other ETFs, the fund can hold the group of stocks as
one asset or unbundle the stocks and trade them separately, according to
the fund's investment strategies.
ETFs can experience many of the same risks associated with individual stocks.
ETFs are subject to market risk where the market as a whole, or that specific
sector, may decline. ETFs that invest in volatile stock sectors, such as foreign
issuers, smaller companies, or technology, are subject to the additional risks
to which those sectors are subject. ETFs may trade at a discount to the
aggregate value of the underlying securities. The underlying securities in an
ETF may not follow the price movements of an entire industry or sector. Trading
in an ETF may be halted if the trading in one or more of the ETF's underlying
securities is halted. Although expense ratios for ETFs are generally low,
frequent trading of ETFs by the fund can generate brokerage expenses.
Generally, the fund will not purchase securities of an investment company if, as
a result: (1) more than 10% of the fund's total assets would be invested in
securities of other investment companies, (2) such purchase would result in more
than 3% of the total outstanding voting securities of any such investment
company being held by the fund, or (3) more than 5% of the fund's total assets
would be invested in any one such investment company.
ABOUT THE FUND'S INVESTMENT GOAL
The fund's investment goal (or objective) may be changed without approval of the
shareholders of the fund. The fund may not be able to achieve its goal.
CONSEQUENCES OF PORTFOLIO TRADING PRACTICES
The fund may have a relatively high portfolio turnover.
The fund may at times engage in short-term trading. Short-term trading could
produce higher brokerage expenses for the fund and higher taxable distributions
to the fund's shareholders and therefore could adversely affect the fund's
performance. The fund is not managed to achieve a particular tax result for
shareholders. Shareholders should consult their own tax adviser for individual
tax advice.
TERMS USED IN THIS PROSPECTUS
THE HARTFORD MUTUAL FUNDS 9
INVESTMENT STRATEGIES AND INVESTMENT MATTERS
EQUITY SECURITIES: Equity securities include common stock, preferred stock,
securities convertible into common or preferred stock and warrants or rights to
acquire common stock, including options.
FOREIGN ISSUERS: Foreign issuers include (1) companies organized outside the
United States; (2) foreign governments and agencies or instrumentalities of
foreign governments; and (3) issuers whose economic fortunes and risks are
primarily linked with markets outside the United States. Certain companies
organized outside the United States may not be deemed to be foreign issuers if
the issuer's economic fortunes and risks are primarily linked with U.S. markets.
INVESTMENT POLICIES
The Global Enhanced Dividend Fund has a name which suggests a focus on a
particular type of investment. In accordance with Rule 35d-1 under the
Investment Company Act of 1940 (the "1940 Act"), the fund has adopted a policy
that it will, under normal circumstances, invest at least 80% of the value of
its assets in investments of the type suggested by its name, as set forth in the
fund's Principal Investment Strategy section. This requirement is applied at the
time the fund invests its assets. If, subsequent to an investment by the fund,
this requirement is no longer met due to changes in value or capitalization of
portfolio assets, the fund's future investments will be made in a manner that
will bring the fund into compliance with this requirement. For purposes of this
policy, "assets" means net assets plus the amount of any borrowings for
investment purposes. In addition, in appropriate circumstances, synthetic
investments may be included in the 80% basket if they have economic
characteristics similar to the other investments included in the basket. The
fund's policy to invest at least 80% of its assets in such a manner is not a
"fundamental" one, which means that it may be changed without the vote of a
majority of the fund's outstanding shares as defined in the 1940 Act. The name
of the fund may be changed without a majority vote of the fund's outstanding
shares as defined in the 1940 Act. The name of the fund may be changed at any
time by a vote of the fund's Board of Directors. However, Rule 35d-1 also
requires that shareholders be given written notice at least 60 days prior to any
change by a fund of its 80% investment policy covered by Rule 35d-1.
ADDITIONAL INVESTMENT STRATEGIES AND RISKS
The fund may invest in various securities and engage in various investment
techniques which are not the principal focus of the fund and therefore are not
described in this prospectus. These securities and techniques, together with
their risks, are discussed in the fund's Statement of Additional Information
("SAI") which may be obtained free of charge by contacting the fund (see back
cover for address phone number and website address).
DISCLOSURE OF PORTFOLIO HOLDINGS
The fund will disclose its complete month-end portfolio holdings on the fund's
website at www.hartfordinvestor.com no earlier than 30 calendar days after the
end of each month. The fund also will disclose on the fund's website the fund's
largest ten holdings no earlier than 15 days after the end of each month. A
description of the fund's policies and procedures with respect to the disclosure
of the fund's portfolio securities is available (i) in the fund's SAI; and (ii)
on the fund's website.
THE HARTFORD MUTUAL FUNDS 10
MANAGEMENT OF THE FUND
THE INVESTMENT MANAGER
Hartford Investment Financial Services, LLC ("HIFSCO") is the investment manager
to the fund. HIFSCO is a wholly-owned, indirect subsidiary of The Hartford
Financial Services Group, Inc. ("The Hartford"), a Connecticut financial
services company with over $419.5 billion in assets under management as of
September 30, 2007. At the same time, HIFSCO had over $52.2 billion in assets
under management. HIFSCO is responsible for the management of the fund and
supervises the activities of the investment sub-adviser described below. HIFSCO
is principally located at 200 Hopmeadow Street, Simsbury, Connecticut 06089.
The fund relies on an exemptive order from the Securities and Exchange
Commission under which it uses a "Manager of Managers" structure. HIFSCO has
responsibility, subject to oversight by the Board of Directors, to oversee the
sub-adviser and recommend its hiring, termination and replacement. The exemptive
order permits HIFSCO to appoint a new sub-adviser not affiliated with HIFSCO,
with the approval of the Board of Directors and without obtaining approval from
those shareholders that participate in the fund. Within 90 days after hiring any
new sub-adviser, affected shareholders will receive information about the new
sub-advisory relationship.
LITIGATION AND REGULATORY ACTIONS
Five putative multi-state class actions were filed in October 2004 and
consolidated into one case, In re Hartford Mutual Funds Fee Litigation, pending
before the United States District Court for the District of Connecticut, in
which the plaintiffs made a wide range of allegations against The Hartford and
other defendants relating, among other things, to fees charged to investors in
certain of The Hartford Retail Mutual Funds. Following a motion by the
defendants to dismiss the case, but before the court had yet ruled on the
motion, the plaintiffs sought the court's permission to file a second amended
complaint. In February 2007, the court granted the plaintiffs leave to amend. In
the second amended complaint, the plaintiffs allege, among other things, that
investors in the Hartford Advisers Fund, Hartford Capital Appreciation Fund,
Hartford Dividend and Growth Fund, Hartford MidCap Fund, and Hartford Stock Fund
were charged excessive fees during the period from February 27, 2003 through
February 27, 2004. The defendants, which include The Hartford Financial Services
Group, Inc., Hartford Investment Financial Services, LLC, Wellington Management
Company, LLC, Hartford Investment Management Company, Hartford Securities
Distribution Company, Inc., and PLANCO Financial Services Inc., intend to move
to dismiss the second amended complaint. This litigation is not expected to
result in a material adverse effect on the funds.
THE INVESTMENT SUB-ADVISER
Hartford Investment Management is a professional money management firm that
provides services to investment companies, employee benefit plans, affiliated
insurance companies and other institutional accounts. Hartford Investment
Management is a wholly-owned subsidiary of The Hartford. As of September 30,
2007, Hartford Investment Management had investment management authority over
approximately $143.1 billion in assets. Hartford Investment Management is
principally located at 55 Farmington Avenue, Hartford, Connecticut 06105.
SOFT DOLLAR PRACTICES
The sub-adviser is responsible for the day-to-day portfolio management
activities of the fund, including effecting securities transactions. To the
extent consistent with Section 28(e) of the Securities Exchange Act of 1934 (the
"1934 Act"), the sub-adviser may obtain "soft dollar" benefits in connection
with the execution of transactions for the fund. The sub-adviser may cause the
fund to pay a broker-dealer an amount in excess of the amount that another
broker-dealer would have charged for the same transaction, in exchange for
"brokerage and research services" (as defined in the 1934 Act). Neither the
management fees nor the sub-advisory fees are reduced because the sub-adviser
receives these products and services. These products and services may be of
value to the sub-adviser in advising its clients (including the fund), although
not all of these products and services are necessarily useful and of value in
managing the fund. These products and services may include research reports,
access to management personnel, financial newsletters and trade journals,
seminar and conference fees, quantitative analytical software, data services,
communication services relating to (or incidental to) the execution, clearing
and settlement of securities transactions, post-trade services relating to
functions incidental to trade execution, and other products and services that
are permitted under Section 28(e), as interpreted by the SEC from time to time.
In certain instances, these products and services may have additional uses that
are not related to brokerage or research. For such "mixed use" items, in
accordance with SEC guidance, the sub-adviser will make a reasonable allocation
of the cost of the item according to its
THE HARTFORD MUTUAL FUNDS 11
MANAGEMENT OF THE FUND
expected use, and will pay for that portion of the item that does not have a
brokerage or research-related component out of its own resources.
MANAGEMENT FEES
The fund pays a monthly management fee to HIFSCO based on a stated percentage of
the fund's average daily net asset value as follows:
[Download Table]
GLOBAL ENHANCED DIVIDEND FUND
AVERAGE DAILY NET ASSETS ANNUAL RATE
----------------------------- -----------
First $500 million 1.00%
Next $500 million 0.95%
Over $1 billion 0.90%
(1) HIFSCO has voluntarily agreed to waive 100% of the management fee for the
fund's first year of operation.
Because the fund has not commenced operations, information is not available
regarding fees paid by the fund to HIFSCO.
A discussion regarding the basis for the Board of Directors' approval of the
investment management and investment sub-advisory agreements of the fund will be
available in the fund's report to shareholders.
PORTFOLIO MANAGER OF THE FUND
The following person has primary responsibility for the day-to-day management of
the fund's portfolio since inception. The fund's SAI provides additional
information about the portfolio manager's compensation, other accounts managed
by the portfolio manager and the portfolio manager's ownership of securities in
the fund.
GLOBAL ENHANCED DIVIDEND FUND The fund is managed by Paul Bukowski.
Paul Bukowski, Vice President of Hartford Investment Management, has served as
portfolio manager of the fund since its inception. Mr. Bukowski, who has 12
years of investment management experience, joined Hartford Investment Management
in 2005. Before joining Hartford Investment Management, he was a senior
quantitative portfolio analyst for ING's large-cap growth strategy from 2004.
Prior to 2004, Mr. Bukowski was with Callard & Ogden Investment Management where
he was responsible for quantitative analysis, fund research, and managed several
core and growth portfolios. He also created investment systems, including
databases and front-end user interfaces, and was responsible for managing
several core and growth portfolios. Mr. Bukowski earned a BA in Statistics and
Computer Science from the University of Wisconsin and an MBA in Finance and
Policy from the University of Chicago. He holds the Chartered Financial Analyst
designation and is a fellow of the Casualty Actuarial Society.
THE HARTFORD MUTUAL FUNDS 12
ABOUT YOUR ACCOUNT
CHOOSING A SHARE CLASS
Each share class has its own cost structure, allowing you to choose the one that
best meets your needs. Your financial representative can help you decide.
Each class has adopted a Rule 12b-1 plan which allows the class to pay
distribution fees for the sale and distribution of its shares and for providing
services to shareholders. Because these fees are paid out of the fund's assets
on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
Generally, it is more advantageous for an investor that is considering an
investment in Class B shares of more than $100,000 or an investment in Class C
shares of more than $1,000,000 to invest in Class A shares instead.
CLASS A
- Front-end sales charges, as described under the subheading "How Sales
Charges are Calculated".
- Distribution and service (12b-1) fees of 0.25%.(1)
(1) The Rule 12b-1 plan applicable to Class A shares of the fund provides for
payment of a Rule 12b-1 fee of up to 0.35%; however, the board of the fund
has currently authorized Rule 12b-1 payments of only up to 0.25%.
CLASS B
- No front-end sales charge; all your money goes to work for you right away.
- Distribution and service (12b-1) fees of 1.00%.
- A deferred sales charge, as described on the following page.
- Automatic conversion to Class A shares after eight years, thus reducing
future annual expenses.
CLASS C
- No front-end sales charge; all your money goes to work for you right away.
- Distribution and service (12b-1) fees of 1.00%.
- A 1.00% contingent deferred sales charge on shares sold within one year of
purchase.
- No automatic conversion to Class A shares, so annual expenses continue at
the Class C level throughout the life of your investment.
DISTRIBUTION ARRANGEMENTS
Hartford Investment Financial Services, LLC ("HIFSCO") serves as the principal
underwriter for the fund pursuant to Underwriting Agreements initially approved
by the Board of Directors of The Hartford Mutual Funds, Inc. (the "Company").
HIFSCO is a registered broker-dealer and member of the Financial Industry
Regulatory Authority ("FINRA"). Shares of the fund are continuously offered and
sold by selected broker-dealers who have selling agreements with HIFSCO. Such
selected broker-dealers may designate and authorize other financial
intermediaries to offer and sell shares of the fund. Except as discussed below,
HIFSCO bears all the expenses of providing services pursuant to the Underwriting
Agreements including the payment of the expenses relating to the distribution of
prospectuses for sales purposes as well as any advertising or sales literature.
HIFSCO is not obligated to sell any specific amount of shares of the fund.
THE HARTFORD MUTUAL FUNDS 13
ABOUT YOUR ACCOUNT
DISTRIBUTION PLANS
The Company, on behalf of the fund, has adopted a separate distribution plan
(the "Plan") for each of the Class A, Class B and Class C shares of the fund
pursuant to appropriate resolutions of the Company's Board of Directors in
accordance with the requirements of Rule 12b-1 under the 1940 Act and the
requirements of the applicable FINRA market conduct rules concerning asset-based
sales charges.
CLASS A PLAN Pursuant to the Class A Plan, the fund may compensate HIFSCO for
its expenditures in financing any activity primarily intended to result in the
sale of fund shares and for maintenance and personal service provided to
existing Class A shareholders. The expenses of the fund pursuant to the Class A
Plan are accrued on a fiscal year basis and may not exceed, with respect to the
Class A shares of the fund, the annual rate of 0.35% of the fund's average daily
net assets attributable to Class A shares. However, the Company's Board of
Directors has currently authorized Rule 12b-1 payments of only up to 0.25% of
the fund's average daily net assets attributable to Class A shares. The entire
amount of the fee may be used for shareholder servicing expenses with the
remainder, if any, used for distribution expenses. HIFSCO or its affiliates are
entitled to retain all service fees payable under the Class A Plan for which
there is no dealer of record or for which qualification standards have not been
met as partial consideration for personal services and/or account maintenance
services performed by HIFSCO or its affiliates for shareholder accounts.
CLASS B PLAN Pursuant to the Class B Plan, the fund may pay HIFSCO a fee of up
to 1.00% of the average daily net assets attributable to Class B shares, 0.75%
of which is a fee for distribution financing activities and 0.25% of which is
for shareholder account services. HIFSCO will advance to dealers the first-year
service fee at a rate equal to 0.25% of the amount invested. As compensation for
such advance, HIFSCO may retain the service fee paid by the fund with respect to
such shares for the first year after purchase. Dealers will become eligible for
additional service fees with respect to such shares commencing in the thirteenth
month following purchase. Brokers may from time to time be required to meet
certain other criteria in order to receive service fees. HIFSCO or its
affiliates are entitled to retain all service fees payable under the Class B
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by HIFSCO or its affiliates for shareholder
accounts. The Class B Plan also provides that HIFSCO will receive all contingent
deferred sales charges attributable to Class B shares.
CLASS C PLAN Pursuant to the Class C Plan, the fund may pay HIFSCO a fee of up
to 1.00% of the average daily net assets attributable to Class C shares, 0.75%
of which is a fee for distribution financing activities and 0.25% of which is
for shareholder account services. HIFSCO will advance to dealers the first-year
service fee at a rate equal to 0.25% of the amount invested. As compensation for
such advance, HIFSCO may retain the service fee paid by the fund with respect to
such shares for the first year after purchase. Dealers will become eligible for
additional service fees with respect to such shares commencing in the thirteenth
month following purchase. Brokers may from time to time be required to meet
certain other criteria in order to receive service fees. HIFSCO or its
affiliates are entitled to retain all service fees payable under the Class C
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by HIFSCO or its affiliates for shareholder
accounts. The Class C Plan also provides that HIFSCO will receive all contingent
deferred sales charges attributable to Class C shares.
GENERAL Distribution fees paid to HIFSCO may be spent on any activities or
expenses primarily intended to result in the sale of the Company's shares
including: (a) payment of initial and ongoing commissions and other compensation
payments to brokers, dealers, financial institutions or others who sell the
fund's shares, (b) compensation to employees of HIFSCO, (c) compensation to and
expenses, including overhead such as communications and telephone, training,
supplies, photocopying and similar types of expenses, of HIFSCO incurred in the
printing and mailing or other dissemination of all prospectuses and statements
of additional information, (d) the costs of preparation, printing and mailing of
reports used for sales literature and related expenses, i.e., advertisements and
sales literature, and (e) other distribution-related expenses and for the
provision of personal service and/or the maintenance of shareholder accounts.
These Plans are considered compensation type plans which means that the fund
pays HIFSCO the entire fee regardless of HIFSCO's expenditures. Even if HIFSCO's
actual expenditures exceed the fee payable to HIFSCO at any given time, the fund
will not be obligated to pay more than that fee.
The Plans were adopted by a majority vote of the Board of Directors of the
Company, including at least a majority of directors who are not interested
persons of the fund as defined in the 1940 Act. A Plan may be terminated at any
time by vote of the majority of the directors of the board who are not
interested persons of the fund. A Plan will automatically terminate in the event
of its assignment.
THE HARTFORD MUTUAL FUNDS 14
ABOUT YOUR ACCOUNT
HOW SALES CHARGES ARE CALCULATED
CLASS A sales charges and commissions paid to dealers for the fund are listed
below. The offering price includes the front-end sales load.
Global Enhanced Dividend Fund
[Download Table]
DEALER
AS A % OF AS A % COMMISSION AS
OFFERING OF NET PERCENTAGE OF
YOUR INVESTMENT PRICE INVESTMENT OFFERING PRICE
--------------- --------- ---------- --------------
Less than $50,000 5.50% 5.82% 4.75%
$ 50,000 -- $99,999 4.50% 4.71% 4.00%
$100,000 -- $249,999 3.50% 3.63% 3.00%
$250,000 -- $499,999 2.50% 2.56% 2.00%
$500,000 -- $999,999 2.00% 2.04% 1.75%
$1 million or more(1) 0% 0% 0%
(1) Investments of $1 million or more in Class A shares may be made with no
front-end sales charge. However, there is a contingent deferred sales
charge (CDSC) of 1% on any shares sold within 18 months of purchase. For
purposes of this CDSC, all purchases made during a calendar month are
counted as having been made on the first day of that month. The CDSC is
based on the lesser of the original purchase cost or the current market
value of the shares being sold and is not charged on shares you acquired by
reinvesting your dividends and capital gain distributions. To keep your
CDSC as low as possible, each time you place a request to sell shares we
will first sell any shares in your account that are not subject to a CDSC.
The distributor may pay up to the entire amount of the sales commission to
particular broker-dealers. The distributor may pay dealers of record commissions
on purchases over $1 million an amount of up to 1.00% of the first $4 million,
plus 0.50% of the next $6 million, plus 0.25% of share purchases over $10
million. This commission schedule may also apply to certain sales of Class A
shares made to investors which qualify under any of the last four categories
listed under "Waivers for Certain Investors".
The commission schedule and 1% CDSC indicated above will not apply to retirement
plans.
CLASS B shares are offered at their net asset value per share, without a
front-end sales charge. However, you may be charged a contingent deferred sales
charge (CDSC) on shares you sell within a certain time after you bought them, as
described in the tables below. There is no CDSC on shares acquired through
reinvestment of dividends and capital gains distributions. The CDSC is based on
the original purchase cost or the current market value of the shares being sold,
whichever is less. The CDSCs are as follows:
[Download Table]
YEARS AFTER
PURCHASE CDSC
----------- ----
1st year 5.00%
2nd year 4.00%
3rd year 3.00%
4th year 3.00%
5th year 2.00%
6th year 1.00%
CLASS C sales charges are listed below. There is no CDSC on shares acquired
through reinvestment of dividends and capital gains distributions. The CDSC is
based on the original purchase cost or the current market value of the shares
being sold, whichever is less. A front-end sales charge is not assessed on Class
C shares:
[Download Table]
YEARS AFTER
PURCHASE CDSC
----------- ----
1st year 1.00%
After 1 year None
For purposes of Class B and Class C CDSCs, all purchases made during a calendar
month are counted as having been made on the first day of that month. To
determine whether a CDSC applies, a fund redeems shares in the following order:
(1) shares representing
THE HARTFORD MUTUAL FUNDS 15
ABOUT YOUR ACCOUNT
an increase over the original purchase cost, (2) shares acquired through
reinvestment of dividends and capital gains distributions, (3) Class B shares
held for over 6 years or Class C shares held over 1 year, and (4) Class B shares
held the longest during the six-year period.
When requesting a redemption the specified dollar amount will be redeemed from
your account plus any applicable CDSC. If you do not want any additional amount
withdrawn from your account please indicate that the applicable CDSC should be
withdrawn from the total distribution amount requested.
Proceeds from the CDSC are paid to the distributor and are used in whole or in
part by the distributor to defray its expenses related to providing
distribution-related services to the fund in connection with the sale of the
Class A, Class B and Class C shares, such as the payment of compensation to
select selling brokers for selling these classes of shares. The combination of
the CDSC and the distribution and service fees facilitates the ability of the
fund to sell the Class B and Class C shares without a sales charge being
deducted, and to sell Class A shares with a 4.50% maximum sales charge at the
time of the purchase.
Although the funds do not charge a transaction fee, you may be charged a fee by
brokers or financial intermediaries for the purchase or sale of the funds'
shares through that broker or financial intermediary. This transaction fee is
separate from any sales charge that the fund may apply.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCING YOUR CLASS A SALES CHARGES There are several ways you can combine
multiple purchases of Class A shares of the fund to take advantage of the
breakpoints in the sales charge schedule. Please note that you or your broker
must notify Hartford Administrative Services Company ("HASCO"), the fund's
transfer agent, that you are eligible for these breakpoints every time you have
a qualifying transaction.
The first three ways can be combined in any manner:
- ACCUMULATION PRIVILEGE -- lets you add the value of any shares of The
Hartford Mutual Funds (including The Hartford Money Market Fund, which,
like the other Hartford Mutual Funds not discussed herein, is offered
pursuant to a separate prospectus) you or members of your family already
own to the amount of your next Class A investment for purposes of
calculating the sales charge. Each fund offers to all qualifying investors
rights of accumulation under which investors are permitted to purchase
Class A and Class L shares of any funds of The Hartford Mutual Funds, Inc.,
The Hartford Mutual Funds II, Inc. and SMART529 Accounts at the price
applicable to the total of (a) the dollar amount then being purchased plus
(b) an amount equal to the then current net asset value of the purchaser's
holdings of all shares of any funds of The Hartford Mutual Funds, Inc., The
Hartford Mutual Funds II, Inc. and SMART529 Accounts. For purposes of the
rights of accumulation program, the purchaser may include all shares owned
by family members. For Class A shares, the definition of family member
varies depending upon when the purchaser opened the account. For accounts
opened on or after August 16, 2004, a family member is the owner's spouse
(or legal equivalent recognized under state law) and any minor children
living in the owner's household. For accounts opened before August 16, 2004
for Class A shares and for all Class L shares, a family member is an
owner's spouse (or legal equivalent recognized under state law), parent,
grandparent, child, grandchild, brother, sister, step-family members and
in-laws. As of August 16, 2004, account values invested in fixed annuity,
variable annuity and variable life insurance products will no longer be
considered towards the accumulation privilege for Class A and Class L
shares. Participants in retirement plans receive breakpoints at the plan
level. Acceptance of the purchase order is subject to confirmation of
qualification. The rights of accumulation may be amended or terminated at
any time as to subsequent purchases.
- LETTER OF INTENT -- lets you purchase Class A and Class L shares of a
Hartford Mutual Fund over a 13-month period and receive the same sales
charge as if all shares had been purchased at once. Any person may qualify
for a reduced sales charge on purchases of Class A and Class L shares made
within a thirteen-month period pursuant to a Letter of Intent ("LOI").
Class A and Class L shares acquired through the reinvestment of
distributions do not constitute purchases for purposes of the LOI. A Class
A or Class L shareholder may include, as an accumulation credit towards the
completion of such LOI, the value of all shares of all funds of The
Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and
SMART529 Accounts owned by the shareholder as described above under
"Accumulation Privilege." Such value is determined based on the public
offering price on the date of the LOI. During the term of a LOI, HASCO will
hold shares in escrow to secure payment of the higher sales charge
applicable for shares actually purchased if the indicated amount on the LOI
is not purchased. Dividends and capital gains will be paid on all escrowed
shares and these shares will be released when the amount indicated on the
LOI has been purchased. A LOI does not obligate the investor to buy or the
fund to sell the indicated amount of the LOI. If a Class A or Class L
shareholder exceeds the
THE HARTFORD MUTUAL FUNDS 16
ABOUT YOUR ACCOUNT
specified amount of the LOI and reaches an amount which would qualify for a
further quantity discount, a retroactive price adjustment will be made at
the time of the expiration of the LOI. The resulting difference in offering
price will purchase additional Class A or Class L shares for the
shareholder's account at the applicable offering price. If the specified
amount of the LOI is not purchased, the shareholder shall remit to HASCO an
amount equal to the difference between the sales charge paid and the sales
charge that would have been paid had the aggregate purchases been made at a
single time. If the Class A or Class L shareholder does not within twenty
days after a written request by HASCO pay such difference in sales charge,
HASCO will redeem an appropriate number of escrowed shares in order to
realize such difference. Purchases based on a LOI may include holdings as
described above under "Accumulation Privilege." Additional information
about the terms of the LOI are available from your registered
representative or from HASCO at 1-888-843-7824.
CDSC WAIVERS As long as the transfer agent is notified at the time you sell, the
CDSC for each share class will generally be waived in the following cases:
- to make Systematic Withdrawal Plan payments that are limited annually to no
more than 12% of the value of the account at the time the plan is
initiated,
- because of shareholder death or disability in the case of a transfer or
rollover to an affiliated Hartford company only,
- under reorganization, liquidation, merger or acquisition transactions
involving other investment companies,
- for retirement plans under the following circumstances:
(1) to return excess contributions,
(2) hardship withdrawals as defined by the IRS as applicable to 403(b)
plans,
(3) under a Qualified Domestic Relations Order as defined in the Internal
Revenue Code,
(4) to meet minimum distribution requirements under the Internal Revenue
Code,
(5) to make "substantially equal payments" as described in Section 72(t)
of the Internal Revenue Code, and
(6) after separation from service for employer sponsored retirement plans.
REINSTATEMENT PRIVILEGE If you sell shares of a fund, you may reinvest some or
all of the proceeds in the same share class of any fund within 180 days without
a sales charge, as long as the transfer agent is notified before you invest. If
you paid a CDSC when you sold your shares, you will be credited with the amount
of the CDSC. All accounts involved must have the same registration.
WAIVERS FOR CERTAIN INVESTORS Class A shares may be offered without front-end
sales charges to the following individuals and institutions:
- selling broker dealers and their employees and sales representatives (and
their families, as defined above under the "ACCUMULATION PRIVILEGE"
section),
- financial representatives utilizing fund shares in fee-based investment
products under a signed agreement with the funds,
- present or former officers, directors and employees (and their families, as
defined above under the "ACCUMULATION PRIVILEGE" section) of the funds, The
Hartford, the sub-adviser, the transfer agent, and their affiliates,
- welfare benefit plans investing in fund shares through group variable
funding agreements issued by Hartford Life Insurance Company,
THE HARTFORD MUTUAL FUNDS 17
ABOUT YOUR ACCOUNT
- college savings program that is a qualified state tuition program under
section 529 of the Internal Revenue Code ("529 Plan"),
- one or more members of a group (and their families, as defined above under
the "ACCUMULATION PRIVILEGE" section) of at least 100 persons engaged, or
previously engaged in a common business, profession, civic or charitable
endeavor or other activity (1% CDSC applies if redeemed within 18 months).
In order to receive the sales charge reductions or waivers, you must notify the
transfer agent of the reduction or waiver request when you place your purchase
order. The transfer agent may require evidence of your qualification for such
reductions or waivers. Additional information about the sales charge reductions
or waiver can be obtained from the transfer agent.
The fund makes available free of charge, on the fund's website at
www.hartfordinvestor.com, information about sales charges and sales charge
waivers. The fund's website includes links that facilitate access to this
information.
ADDITIONAL COMPENSATION TO BROKER-DEALERS, FINANCIAL INSTITUTIONS AND OTHER
PERSONS ("FINANCIAL INTERMEDIARIES")
In addition to the commissions (which may be paid or reallowed to Financial
Intermediaries from an applicable sales charge and/or advanced to Financial
Intermediaries) and Rule 12b-1 fees that are described above and in the SAI, the
distributor and its affiliates pay, out of their own assets, significant
additional compensation to Financial Intermediaries (who may or may not be
affiliates of the distributor) in connection with the sale and distribution of
the fund's shares ("Additional Payments") based on a number of factors that are
described below and in the fund's SAI.
These Additional Payments are generally based on average net assets (or on aged
assets, i.e., assets held over one year) of the fund attributable to a
particular Financial Intermediary, on sales of the fund's shares attributable to
a particular Financial Intermediary, and/or on reimbursement of ticket charges,
and may, but are normally not expected to, exceed, in the aggregate, 0.44% of
the average net assets of the fund attributable to a particular Financial
Intermediary.
Such Additional Payments are generally made for the placement of the fund on a
Financial Intermediary's list of mutual funds available for purchase by its
customers and/or for including the fund within a group of mutual funds that
receive special marketing focus. Certain additional compensation arrangements
are discussed below.
Apart from the Additional Payments, additional compensation arrangements may
take the form of, among others: (1) "due diligence" payments for a Financial
Intermediary's examination of the fund and payments for providing extra employee
training and information relating to the fund and (2) "marketing support" fees
for providing assistance in promoting the sale of the fund's shares ("Other
Compensation"). Subject to FINRA regulations, HIFSCO and its affiliates may
contribute Other Amounts to various non-cash and cash incentive arrangements to
promote the sale of shares, as well as sponsor various educational programs,
sales contests and/or promotions in which participants may receive prizes such
as travel awards, merchandise and cash and/or investment research pertaining to
particular securities and other financial instruments or to the securities and
financial markets generally, educational information and related support
materials and hardware and/or software. HIFSCO and its affiliates may also pay
for the travel expenses, meals, lodging and entertainment of Financial
Intermediaries and their salespersons and guests in connection with education,
sales and promotional programs, subject to applicable FINRA regulations. These
programs, which may vary for different Financial Intermediaries, will not change
the price an investor will pay for shares or the amount that the fund will
receive from such sale. Incurred payments of Other Compensation did not exceed
$1.1 million per Financial Intermediary for the calendar year ended December 31,
2006.
Additional Payments, including Other Compensation, may also pertain to the sale
and distribution of other investment products distributed by affiliates of the
distributor, and may, in some cases, act as a financial incentive for a
Financial Intermediary to recommend the purchase of one fund over another fund.
Additional Payments to Financial Intermediaries in connection with the sale and
distribution of the fund's shares are negotiated based on a range of factors,
including, but not limited to, reputation in the industry,
THE HARTFORD MUTUAL FUNDS 18
ABOUT YOUR ACCOUNT
ability to attract and retain assets (including distribution of particular
classes of the fund's shares), target markets, customer relationships and
quality of service. No one factor is determinative of the type or amount of
Additional Payments to be provided and factors are weighed in the assessment of
such determination.
For the calendar year ended December 31, 2006, HIFSCO or its affiliates incurred
approximately $32.6 million in total Additional Payments, including Other
Compensation (excluding travel expenses, meals, lodging and entertainment of
Financial Intermediaries and their salespersons) to Financial Intermediaries, of
which approximately $13.7 million was incurred with respect to Edward D. Jones &
Co., L.P. For the calendar year ended December 31, 2006, total travel expenses,
meals, lodging and entertainment of Financial Intermediaries and their
salespersons did not in the aggregate exceed approximately $3.6 million.
As of January 1, 2007, HIFSCO has entered into arrangements to make Additional
Payments, including Other Compensation (excluding travel expenses, meals,
lodging and entertainment of Financial Intermediaries and their salespersons),
to: A.G. Edwards & Sons, Inc., AIG Advisors Group, Inc., (Advantage Capital
Corp., AIG Financial Advisors, American General, FSC Securities Corp., Royal
Alliance Associates, Inc.), Allen & Company of FL, Inc., American General
Securities, Inc., American Independent Securities Group, LLC, AmSouth Investment
Services, Anchor Investment Services, Inc., Associated Investment Services,
Inc., Associated Securities Corporation, Banc of America Investment Services,
Inc., BancorpSouth Services, Banc West Investment Services, B.C. Ziegler &
Company, BNY Investment Center, Inc., BOSC, Inc., Brookstreet Securities Corp.,
Cadaret Grant & Co., Inc., Cambridge Investment Research, Cantella & Company,
Inc., Capital Analysts, Inc., Capital Investment Group, Inc., Centaurus
Financial Inc., Charles Schwab & Co., Inc., Chase Investment Services
Corporation, Citicorp Investment Services, Citigroup Global Markets, Inc.,
Colonial Brokerage, Inc., Comerica Securities, Commerce Brokerage Services,
Inc., Commerce Capital Markets, Inc., Commonwealth Financial Network,
Commonwealth Financial Services, Crown Capital Securities, LP, Cuna Brokerage
Services, CUSO Financial Services, L.P., Dominion Investor Services, Duerr
Financial Corp, Eagle One Investments, Edward D. Jones & Co., Empire Securities
Corp, Equity Securities Corp, Equity Services, Inc., Essex National Securities,
Inc., Ferris Baker Watts, Inc., FFP Securities, Inc., Fidelity Investments,
Fifth Third Securities, Financial Planning Consultants, Inc., Fintegra, LLC,
First Allied Securities, Inc., First Citizens Investor Services, Inc., First
Heartland Capital Inc., First Tennessee Brokerage, Inc., Fiserv Brokerage
Services, Inc., Frost Brokerage Services, Inc., Geneos Wealth Management, Inc.,
Girard Securities Inc., Grant Bettingen, Great American Advisors, Inc., H. Beck,
Inc., H&R Block, Harbour Investments, Harvest Capital, LLC, HBW Securities, LLC,
Hefren-Tillotson Inc., Hilliard Lyons, HSBC Brokerage USA, Huntington Investment
Co., IFMG Securities, Inc., ING Advisor Network (Financial Network Investment
Corporation, Inc., ING Financial Partners, Inc., Keybanc Capital Markets, Inc.,
Multi-Financial Securities Corporation, Inc., PrimeVest Financial Services,
Inc.), Independent Financial Group, LLC, Investment Professionals, Inc.,
Investors Capital Corp., Investors Security Company, Inc., Janney Montgomery
Scott, J.J.B. Hilliard, Jefferson Pilot Securities Corp, KMS Financial Services,
Inc., KNBT Securities Inc., Kovack Securities, Inc., LaSalle Financial Services,
LaSalle Street Securities, LLC, Lincoln Financial Advisors Group, Linsco/Private
Ledger Corp., M&T Securities Inc., Merrill Lynch Pierce Fenner & Smith, Mid
Atlantic Capital Corp, Money Concepts Capital Corp, Morgan Keegan & Company,
Inc., Morgan Stanley DW Inc., Mutual Service Corporation, National Advisors
Trust, National Planning Holdings, Inc. (Invest Financial Corporation,
Investment Centers of America, National Planning Corporation, SII Investments
Inc.), New England Securities, Newbridge Securities, NEXT Financial Group, Inc.,
North Ridge Securities Corp, Oppenheimer & Co, Inc., Pacific West Securities,
Inc., Prime Capital Services, Inc., ProEquities, Inc., Prospera Financial
Securities, Inc., QA3 Financial Corp., Raymond James & Associates Inc., Raymond
James Financial Services (IM&R), RBC Dain Rauscher, RDM Investment Services,
Robert W. Baird, Scott & Stringfellow Inc., Securian, Securities America, Inc.,
Securities Service Network, Inc., Sigma Financial Corp, Sorrento Pacific
Financial, Spectrum Capital, Inc., Stifel, Nicolaus & Company, Inc., Summit
Brokerage Services, SunAmerica Securities, Inc., Suntrust Investment Services,
TD Waterhouse, Inc., The Huntington Investment Company, TFS Securities, Inc.,
Transamerica Financial Advisors Inc., Triad Advisors, Inc., UBS Financial
Services Inc., UnionBanc Investment Services LLC, United Heritage Financial
Services, U.S. Bancorp Investments Inc., Uvest Financial Services Group, Inc.,
Vision Investment Services, Inc, Vorpahl Wing Securities, Wachovia Securities,
LLC, Wall Street Financial Group, Webster Investment Services, Inc, Wells Fargo
Investments, WM Financial Services, Inc., Workman Securities Corp, WRP
Investments, Inc., XCU Capital Corp., and Woodbury Financial Services, Inc. (an
indirect wholly-owned subsidiary of The Hartford). HIFSCO may enter into
arrangements with other Financial Intermediaries to make such Additional
Payments and Other Compensation.
In addition to the above payments, HIFSCO and its affiliates, out of their own
assets, may pay compensation for subaccounting, administrative and/or
shareholder processing services as described below.
ADDITIONAL COMPENSATION TO SERVICING INSTITUTIONS AND OTHER PERSONS ("SERVICING
INTERMEDIARIES") FOR SUBACCOUNTING, ADMINISTRATIVE AND/OR SHAREHOLDER PROCESSING
SERVICES.
THE HARTFORD MUTUAL FUNDS 19
ABOUT YOUR ACCOUNT
In addition to payments made in connection with the sale and distribution of the
fund's shares (described above) and administration and Rule 12b-1 fees paid by
the fund, the distributor and its affiliates pay, out of their own assets,
significant additional compensation to Servicing Intermediaries (who may or may
not be affiliates of the distributor) in connection with subaccounting,
administrative and/or shareholder processing services ("Servicing Compensation")
based on a number of factors described below.
Servicing Compensation is generally based on average net assets of the funds
attributable to a particular Servicing Intermediary, and may, but is normally
not expected to, exceed, in the aggregate, 0.20% of the average net assets of
the funds attributable to a particular Servicing Intermediary. Such Servicing
Compensation is generally made for subaccounting, administrative and/or
shareholder processing services. These programs, which may vary for different
Servicing Intermediaries, will not change the price an investor will pay for
shares. This Servicing Compensation may act as a financial incentive for a
Servicing Intermediary in choosing to provide services to one fund over another
fund.
The Servicing Compensation to Servicing Intermediaries is negotiated based on a
range of factors, including, but not limited to, reputation in the industry,
customer relationships and quality of service. No one factor is determinative of
the amount of Servicing Compensation to be provided and factors are weighed in
the assessment of such determination. For the year ended December 31, 2006,
HIFSCO incurred approximately $250,000 in total Servicing Compensation to
Servicing Intermediaries and an incurred payment of such Servicing Compensation
did not exceed $210,000 for any Servicing Intermediary.
As of January 1, 2007, HIFSCO has entered into arrangements to pay Servicing
Compensation to: The 401(k) Company, American Century Investment Management,
Inc.; AmeriMutual Funds Distributor, Inc.; Ameriprise Financial Services, Inc.;
BenefitStreet, Inc.; Diversified Investment Advisors, Inc.; Fidelity Investments
Institutional Operations Company, Inc. & Fidelity Investments Institutional
Services Company, Inc. ("Fidelity"); Gold Trust Company GWFS Equities, Inc.;
Invesmart, Inc. & Invesmart Securities, LLC; J.P. Morgan Retirement Plan
Services, LLC; Lincoln Retirement Services Company, LLC & AMG Service Corp;
Mercer HR Services, LLC; Mid Atlantic Capital Corporation; Reliance Trust
Company; T. Rowe Price Retirement Plan Services, Inc. & T. Rowe Price Investment
Services, Inc, and Upromise Investments, Inc. HIFSCO may enter into arrangements
with other Servicing Intermediaries to pay such Servicing Compensation.
Servicing Compensation is also paid to certain Servicing Intermediaries by HASCO
out of the transfer agency fees it receives from the fund. Although some
arrangements are based on average net assets attributable to the Servicing
Intermediary, such Servicing Intermediaries are generally paid a per account fee
ranging to no more than $16 per account. As of January 1, 2007, such Servicing
Intermediaries paid by HASCO are: ADP Broker-Dealer, Inc.; A.G. Edwards;
American Stock Transfer and Trust Company; CPI Qualified Plan Consultants, Inc;
SunGard InstitutionalBrokerage Inc.; Expert Plan, Inc.; Fiserv Trust Company;
Gail Weiss & Associates, Inc.; Gem Group L.P.; Hewitt Associates LLC; Legette
Actuaries, Inc.; Mid Atlantic Capital Corporation; MSCS Financial Services, LLC;
Ceridian Retirement Plan Services, Inc.; Northeast Retirement Services, Inc.;
Prudential Investment Management Services LLC & Prudential Investments LLC; QBC,
Inc.; Swerdlin & Company; and Stanton Trust Company N.A. Other Servicing
Intermediaries may be paid by HASCO in the future.
OPENING AN ACCOUNT
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens a new account. What this means
for you: When you open a new account, you will be asked to provide your name,
residential address, date of birth, social security number and other information
that identifies you. You may also be asked to show your driver's license or
other identifying documents.
For non-persons wishing to open an account or establish a relationship, Federal
law requires us to obtain, verify and record information that identifies each
business or entity. What this means for you: when you open an account or
establish a relationship, we will ask for your business name, a street address
and a tax identification number, that Federal law requires us to obtain. We
appreciate your cooperation.
If a fund is not able to adequately identify you within the time frames set for
in the law, your shares may be automatically redeemed. If the net asset value
per share has decreased since your purchase, you will lose money as a result of
this redemption. you may also incur any applicable sales charge.
NOTE FOR RETIREMENT PLAN PARTICIPANTS AND INVESTORS WHOSE SHARES ARE HELD BY
FINANCIAL REPRESENTATIVES: If you hold your shares through a retirement plan or
if your shares are held with a financial representative you will need to make
transactions through the retirement plan administrator or your financial
representative. Some of the services and programs described in this prospectus
may not be available or may differ in such circumstances. In addition, the fund
offered in this prospectus may not be available in your retirement plan. You
should check with your retirement plan administrator or financial representative
for further details.
1 Read this prospectus carefully.
THE HARTFORD MUTUAL FUNDS 20
ABOUT YOUR ACCOUNT
2 Determine how much you want to invest. The minimum initial investment for
the fund is as follows:
- non-retirement accounts: $1,000
- retirement accounts: $1,000
- Automatic Investment Plans: $50 to open; you must invest at least $50
per month in the fund
- subsequent investments: $50
- 529 Plans: Not subject to minimums.
Minimum investment amounts may be waived for certain retirement accounts and
present or former officers, directors and employees and their families of The
Hartford, Wellington Management Company, LLP, and their affiliates, as well as
for certain broker sponsored wrap-fee programs or at the transfer agent's
discretion.
3 Complete the appropriate parts of the account application including any
privileges desired. By applying for privileges now, you can avoid the delay
and inconvenience of having to file an additional application if you want
to add privileges later. If you have questions and you hold the shares
through a financial representative or retirement plan, please contact your
financial representative or plan administrator. If you hold the shares
directly with the fund, please call the transfer agent at the number shown
below.
4 Make your initial investment selection. You or your financial
representative can initiate any purchase, exchange or sale of shares.
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS 1-888-THE-STAG (843-7824)
P.O. BOX 9140
MINNEAPOLIS, MN 55480-9140 OR CONTACT YOUR FINANCIAL REPRESENTATIVE
OR PLAN ADMINISTRATOR FOR INSTRUCTIONS
AND ASSISTANCE.
THE HARTFORD MUTUAL FUNDS 21
BUYING SHARES
[Download Table]
ON THE WEB TO ACCESS YOUR ACCOUNT(S)
[INTERNET GRAPHIC]
- Visit www.hartfordinvestor.com
- Login by selecting Hartford Mutual Funds
from the login section, enter your User ID
and password, and select Login. First time
users will need to create a password by
selecting the "Create User Name" link.
TO PURCHASE MUTUAL FUND SHARES DIRECTLY FROM
YOUR BANK ACCOUNT
- To purchase shares directly from your bank
account, you must first add your banking
information online, by selecting the Add
Bank Instructions function.
- Once bank instructions have been
established, click on "View Account
Detail" for the appropriate account.
Select "Purchase Shares" from the "Select
Action" menu, next to the fund you want to
purchase into.
- Follow the instructions on the Purchase
Shares Request pages to complete and
submit the request.
TO PURCHASE SHARES VIA AN EXCHANGE FROM AN
EXISTING HARTFORD MUTUAL FUND
- Click on "View Account Detail" for the
appropriate account. Select "Exchange
Shares" from the "Select Action" menu,
next to the fund you want to exchange
from.
- Follow the instructions on the Exchange
Shares Request pages to complete and
submit the request.
Note: The minimum amount when exchanging into a
new fund is $1,000 per fund.
ON THE PHONE
[PHONE GRAPHIC] TO PURCHASE MUTUAL FUND SHARES DIRECTLY FROM
YOUR BANK ACCOUNT
- Verify that your bank/credit union is a
member of the Automated Clearing House
(ACH) system.
- To place your order with a representative,
call the transfer agent at the number
below between 8 A.M. and 7 P.M. Eastern
Time (between 7 A.M. and 6 P.M. Central
Time) Monday through Thursday and between
9:15 A.M. and 6 P.M. Eastern Time (between
8:15 A.M. and 5 P.M. Central Time) on
Friday.
- Complete transaction instructions on a
specific account must be received in good
order and confirmed by The Hartford Mutual
Funds prior to 4 P.M. Eastern Time (3 P.M.
Central Time) or the close of the NYSE,
whichever comes first. Any transaction on
an account received after the close of the
NYSE will receive the next business day's
offering price.
- Tell The Hartford the fund name, your
share class, account and the name(s) in
which the account is registered and the
amount of your investment.
TO PURCHASE MUTUAL FUND SHARES VIA AN EXCHANGE
FROM AN EXISTING HARTFORD MUTUAL FUND
THE HARTFORD MUTUAL FUNDS 22
BUYING SHARES
[Download Table]
- Call your financial representative, plan
administrator, or the transfer agent, at
the number below to request an exchange.
Note: The minimum amount when exchanging into a
new fund is $1,000 per fund.
IN WRITING:
WITH CHECK
[CHECK GRAPHIC] - Make out a check for the investment
amount, payable to "The Hartford Mutual
Funds."
- Complete the detachable investment slip
from an account statement, or write a note
specifying the fund name and share class,
account number and the name(s) in which
the account is registered.
- Deliver the check and your investment
slip, or note, to the address listed
below.
The Hartford Mutual Funds
P.O. Box 9140
Minneapolis, MN 55480-9140
BY EXCHANGE
[ARROW GRAPHIC] - Write a letter of instruction indicating
the fund names, share class, account
number, the name(s) in which the accounts
are registered, and your signature.
- Deliver these instructions to your
financial representative or plan
administrator, or mail to the address
listed below.
The Hartford Mutual Funds
P.O. Box 64387
St. Paul, MN 55164-0387
Note: The minimum amount when exchanging into a
new fund is $1,000 per fund.
BY WIRE
[WIRE GRAPHIC] - Instruct your bank to wire the amount of
your investment to:
US Bank National Association
9633 Lyndale Ave S
Bloomington, MN 55420-4270
ABA #091000022, credit account no:
1-702-2514-1341
The Hartford Mutual Funds Purchase
Account
For further credit to: (Your name)
Hartford Mutual Funds Account Number:
(Your account number)
Specify the fund name, share class, your
account number and the name(s) in which the
account is registered. Your bank may charge a
fee to wire funds.
PHONE NUMBER:
1-888-THE-STAG (843-7824)
OR CONTACT YOUR FINANCIAL REPRESENTATIVE
OR PLAN ADMINISTRATOR FOR
INSTRUCTIONS AND ASSISTANCE.
THE HARTFORD MUTUAL FUNDS 23
SELLING SHARES
[Download Table]
SELLING SHARES
ON THE WEB
[INTERNET GRAPHIC] To access your accounts
- Visit www.hartfordinvestor.com
- Select Mutual Funds on the menu bar
- Login by entering your User ID and
password, and select Login. First time
users will need to create a password by
selecting the "Create User Name" link.
Note: Because of legal and tax restrictions on
withdrawals from retirement accounts, you will
not be allowed to enter a redemption request
for these types of accounts online.
To redeem shares directly to your bank account
or as a check mailed to your address of record
- Click on "View Account Detail" for the
appropriate account. Select "Redeem
Shares" from the "Select Action" menu,
next to the fund you want to redeem from.
- To redeem to your bank account, bank
instructions must be submitted to the
transfer agent in writing. Bank
instructions added online are only
available for purchases.
- Follow the instructions on the Redeem
Shares Request pages to complete and
submit the request.
To redeem shares as an exchange from an
existing Hartford Mutual Fund
- Click on "View Account Detail" for the
appropriate account. Select "Exchange
Shares" from the "Select Action" menu,
next to the fund you want to exchange
from.
- Follow the instructions on the Exchange
Shares Request pages to complete and
submit the request.
Note: The minimum amount when exchanging into a
new fund is $1,000 per fund.
BY LETTER In certain circumstances, you will need to make
your request to sell shares in writing.
Requirements for the written requests are shown
below. A check will be mailed to the name(s)
and address in which the account is registered
or otherwise according to your letter of
instruction. Overnight delivery may be
requested for a nominal fee.
- Write a letter of instruction or
complete a power of attorney
indicating:
- Fund name
- Account number
- Share class
- The name(s) in which the account
is registered
- Date of birth
- Residential address
THE HARTFORD MUTUAL FUNDS 24
SELLING SHARES
[Download Table]
- Social Security number
- Dollar value or the number of
shares you wish to sell
- Include all authorized signatures and
any additional documents that may be
required (see below).
- Obtain a Medallion signature
guarantee if*:
- You are requesting payment by
check to an address of record
that has changed within the past
30 days
- You are selling more than
$50,000 worth of shares
- You are requesting payment by
check of more than $1,000 to an
address of record that has
changed within the past 30 days
----------
* Please note that a notary public CANNOT provide a Medallion signature
guarantee. Please check with a representative of your bank or other
financial institution about obtaining a Medallion signature guarantee.
- Mail the materials to the address
below or to your plan administrator.
ADDITIONAL DOCUMENT REQUIREMENTS FOR WRITTEN
REQUESTS:
IRAS (SAR-SEP, ROTH, SEP, SIMPLE, TRADITIONAL)
- Signatures and titles of all persons
authorized to sign for the account,
exactly as the account is registered
- Indicate the amount of income tax
withholding to be applied to your
distribution.
OWNERS OF CORPORATE OR ASSOCIATION ACCOUNTS:
- Corporate resolution, certified
within the past twelve months,
including signature of authorized
signer(s) for the account
OWNERS OR TRUSTEES OF TRUST ACCOUNTS:
- Signatures of the trustee(s)
- Copies of the trust document pages,
certified within the past twelve
months, which display the name and
date of trust, along with the
signature page.
ADMINISTRATORS, CONSERVATORS, GUARDIANS, AND
OTHER SELLERS OR IN SITUATIONS OF DIVORCE OR
DEATH
- Call 1-888-843-7824 for instructions
BY PHONE
(PHONE GRAPHIC) - Certain types of accounts may be redeemed
by telephone. This is limited to
non-retirement accounts or IRA plans where
the shareowner is age 59 1/2 or older. For
circumstances in which you need to request
to sell shares in writing, see "Selling
Shares by Letter."
- Restricted to sales of up to $50,000 per
shareowner any 7-day period.
- Call the transfer agent to verify that the
telephone redemption privilege is in place
on an account, or to request the forms to
add it to an existing account.
THE HARTFORD MUTUAL FUNDS 25
SELLING SHARES
[Download Table]
- To place your order with a representative,
call the transfer agent at the number
below between 8 A.M. and 7 P.M. Eastern
Time (between 7 A.M. and 6 P.M. Central
Time) Monday through Thursday and between
9:15 A.M. and 6 P.M. Eastern Time (between
8:15 A.M. and 5 P.M. Central Time) on
Friday.
- Complete transaction instructions on a
specific account must be received in good
order and confirmed by The Hartford Mutual
Funds prior to 4 P.M. Eastern Time (3 P.M.
Central Time) or the close of the NYSE,
whichever comes first. Any transaction on
an account received after the close of the
NYSE will receive the next business day's
offering price.
- For automated service 24 hours a day using
your touch-tone phone, call the number
below.
BY ELECTRONIC FUNDS TRANSFER
(EFT) OR WIRE
(WIRE GRAPHIC) - Fill out the "Bank Account or Credit Union
Information" section of your new account
application or the "Bank or Credit Union
Information Form" to add bank instructions
to your account.
- EFT transactions may be sent for amounts
of $50 - $50,000. Funds from EFT
transactions are generally available by
the third to fifth business day. Your bank
may charge a fee for this service.
- Wire transfers of amounts of $500 or more
are available upon request. Generally, the
wire will be sent on the next business
day. Your bank may charge a fee for this
service.
BY EXCHANGE
(ARROW GRAPHIC) - Obtain a current prospectus for the fund
into which you are exchanging by calling
your financial representative or the
transfer agent at the number below.
- Call your financial representative or the
transfer agent to request an exchange.
Note: The minimum amount when exchanging into a
new fund is $1,000 per fund.
CHECKWRITING - APPLIES TO MONEY MARKET FUND CLASS A SHARES ONLY
- Fill out the "Class A Money Fund
Checkwriting Signature Card" section of
your new account application.
- Verify that the shares to be sold were
purchased more than 10 days earlier or
were purchased by wire. Checks written on
your account prior to the end of this
period may result in those checks being
returned to you for insufficient funds.
- Write a check for any amount over $100 and
sign each check as designated on the
signature card.
- You are entitled to distributions paid on
your shares up to the time your check is
presented to our bank for payment.
- You may not write a check for the entire
value of your account or close your
account by writing a check.
- If the amount of your check is greater
than the value of your Money Market Fund
account, the fund will return your check
for insufficient funds and your account
will be charged a $25 service fee.
- Checks cleared and/or verified
electronically will not be accepted.
To sell shares through a systematic withdrawal plan, see "Additional Investor
Services" under Transaction Policies.
THE HARTFORD MUTUAL FUNDS 26
SELLING SHARES
[Download Table]
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS 1-888-THE-STAG (843-7824)
P.O. BOX 64387
ST. PAUL, MN 55164-0387 OR CONTACT YOUR FINANCIAL REPRESENTATIVE OR PLAN
ADMINISTRATOR FOR INSTRUCTIONS AND ASSISTANCE.
THE HARTFORD MUTUAL FUNDS
THE HARTFORD MUTUAL FUNDS 27
TRANSACTION POLICIES
VALUATION OF SHARES
The net asset value per share (NAV) is determined for the fund and each class as
of the close of regular trading on the New York Stock Exchange ("NYSE")
(typically 4:00 p.m. Eastern Time) on each business day that the NYSE is open.
The net asset value for the fund is determined by dividing the value of the
fund's net assets attributable to a class of shares by the number of shares
outstanding for that class.
The fund generally uses market prices in valuing portfolio securities. If market
quotations are not readily available or are deemed unreliable, the fund will use
the fair value of the security as determined in good faith under policies and
procedures established by and under the supervision of the fund's Board of
Directors. Market prices may be deemed unreliable, for example, if a security is
thinly traded or if an event has occurred after the close of the exchange on
which a portfolio security is principally traded but before the close of the
NYSE that is expected to affect the value of the portfolio security. The
circumstances in which the fund may use fair value pricing include, among
others: (i) the occurrence of events that are significant to a particular
issuer, such as mergers, restructuring or defaults; (ii) the occurrence of
events that are significant to an entire market, such as natural disasters in a
particular region or governmental actions; (iii) trading restrictions on
securities; (iv) thinly traded securities; and (v) market events such as trading
halts and early market closings. In addition, with respect to the valuation of
securities principally traded on foreign markets, the fund uses a fair value
pricing service approved by the fund's Board, which employs quantitative models
to adjust for "stale" prices caused by the movement of other markets and other
factors occurring after the close of the foreign exchanges but before the close
of the NYSE. Securities that are principally traded on foreign markets may trade
on days that are not business days of the fund. Because the NAV of the fund's
shares is determined only on business days of the fund, the value of foreign
securities may change on days when a shareholder will not be able to purchase or
redeem shares of the fund. Fair value pricing is subjective in nature and the
use of fair value pricing by the fund may cause the net asset value of its
shares to differ significantly from the net asset value that would be calculated
using prevailing market values. There can be no assurance that the fund could
obtain the fair value assigned to a security if it were to sell the security at
approximately the time at which the fund determines its NAV per share.
BUY AND SELL PRICES
When you buy shares, you pay the NAV plus any applicable sales charges. When you
sell shares, you receive the NAV less any applicable sales charges.
EXECUTION OF REQUESTS
The fund is open on those days when the New York Stock Exchange is open,
typically Monday through Friday. Buy and sell requests are executed at the next
NAV calculated after your request is received, if your order is in "good order"
(has all required information), by the transfer agent, authorized broker-dealers
or their authorized designee, or third-party administrators.
At times of peak activity, it may be difficult to place requests by phone.
During these times, visit www.hartfordinvestor.com or consider sending your
request in writing.
In unusual circumstances, the fund may temporarily suspend the processing of
sell requests, or may postpone payment of redemption proceeds for up to three
business days or longer, as allowed by federal securities laws.
REQUESTS IN "GOOD ORDER"
All purchase and redemption requests must be received by the fund in "good
order". This means that your request must include:
- Name, date of birth, residential address, and social security number.
- The fund name, share class and account number.
- The amount of the transaction (in dollars or shares).
- Signatures of all owners exactly as registered on the account (for mail
requests).
- Medallion Signature guarantees (if required).
THE HARTFORD MUTUAL FUNDS 28
TRANSACTION POLICIES
- Any supporting legal documentation that may be required.
TELEPHONE TRANSACTIONS
For your protection, telephone requests may be recorded in order to verify their
accuracy. Proceeds from telephone transactions may be either mailed to the
address of record, or sent electronically to a bank account on file. Also, for
your protection, telephone redemptions are limited on accounts whose addresses
have changed within the past 30 days.
EXCHANGES
You may exchange shares of the fund for shares of the same class of any Hartford
Mutual Fund. The registration for both accounts involved must be identical. You
may be subject to tax liability or sales charges as a result of your exchange.
The fund reserves the right to amend or terminate the exchange privilege at any
time, for any reason.
FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES
The fund is intended to be a long-term investment vehicle and is not designed to
provide investors with a means of speculating on short-term market movements
(market timing). Frequent purchases and redemptions of the fund by a fund
shareholder can disrupt the management of the fund, negatively affect the fund's
performance, and increase expenses for all fund shareholders. In particular,
frequent trading (i) can force the fund's portfolio manager to hold larger cash
positions than desired instead of fully investing the funds, which can result in
lost investment opportunities; (ii) can cause unplanned and inopportune
portfolio turnover in order to meet redemption requests; (iii) can increase
broker-dealer commissions and other transaction costs as well as administrative
costs for the fund; and (iv) can trigger taxable gains for other shareholders.
Also, some frequent traders engage in arbitrage strategies, by which these
traders seek to exploit pricing anomalies that can occur when the fund invests
in securities that are thinly traded (for example some small capitalization
stocks) or are traded primarily in markets outside of the United States.
Frequent traders, and in particular those using arbitrage strategies can dilute
the fund's NAV for long-term shareholders.
If you intend to trade frequently or use market timing investment strategies,
you should not purchase the fund.
The Board of Directors of the fund has adopted policies and procedures with
respect to frequent purchases and redemptions of fund shares by fund
shareholders. The fund's policy is to discourage investors from trading in the
fund's shares in an excessive manner that would be harmful to long-term
investors and to make reasonable efforts to detect and deter excessive trading.
The fund reserves the right to reject any purchase order at any time and for any
reason, without prior written notice. The fund also reserves the right to revoke
the exchange privileges of any person at any time and for any reason. In making
determinations concerning the revocation of exchange privileges, the fund may
consider an investor's trading history in any Hartford Mutual Fund, including
the person's trading history in any accounts under a person's common ownership
or control.
It is the policy of the fund to permit only two "substantive round trips" by an
investor within any single fund within a 90-day period.
A substantive round trip is a purchase of or an exchange into the same fund and
a redemption of or an exchange out of the same fund in a dollar amount that the
fund's transfer agent determines, in the reasonable exercise of its discretion,
could adversely affect the management of the fund. When an additional
transaction request for the fund is received within the 90-day period, the
requested transaction will be rejected and the person requesting such
transaction will be deemed an "Excessive Trader." All exchange and purchase
privileges of an Excessive Trader shall be suspended within the fund for the
first violation of the policy for a period of 90 days. For a second violation of
the
THE HARTFORD MUTUAL FUNDS 29
TRANSACTION POLICIES
policy, the exchange and purchase privileges of the Excessive Trader will be
suspended indefinitely. If an Excessive Trader makes exchanges through a
registered representative, in appropriate circumstances the fund's transfer
agent may terminate the registered representative's exchange and purchase
privileges in the fund. Automatic programs offered by the fund such as dollar
cost averaging and dividend diversification are exempt from the policy described
above. In addition, the Money Market Fund is excluded from the policy.
The fund's policies for deterring frequent purchases and redemptions of fund
shares by the fund shareholder are intended to be applied uniformly to all fund
shareholders to the extent practicable. Some financial intermediaries, such as
broker-dealers, investment advisors, plan administrators, and third-party
transfer agents, however, maintain omnibus accounts in which they aggregate
orders of multiple investors and forward the aggregated orders to the fund.
Because the fund receives these orders on an aggregated basis and because these
omnibus accounts may trade with numerous fund families with differing market
timing policies, the fund is substantially limited in its ability to identify or
deter Excessive Traders or other abusive traders. The fund's procedures with
respect to omnibus accounts will be as follows: (1) Where Hartford
Administrative Service Company ("HASCO") is provided individual shareholder
level transaction detail on a daily basis, HASCO shall monitor the daily trade
activity of individual shareholders and apply the Policy. (2) Where an
intermediary will implement the Policy on behalf of HASCO, HASCO shall obtain an
appropriate annual certification from such intermediary. (3) Where an
intermediary has established reasonable internal controls and procedures for
limiting exchange activity in a manner that serves the purposes of the Policy as
determined by the Frequent Trading Review Committee (comprised of the funds'
Chief Compliance Officer, Chief Legal Officer and a senior business leader of
The Hartford), HASCO shall permit such intermediary to apply its policy in lieu
of this Policy and obtain an appropriate annual certification. Finally, (4)
where none of the foregoing occurs, HASCO shall monitor the accounts at an
omnibus level and apply detection tools designed to determine whether
shareholder transactions violating the Policy may be occurring. In such cases,
HASCO shall request and evaluate individual shareholder level transaction detail
and seek to impose restrictions in accordance with the Policy. In addition, the
fund's transfer agent will seek to obtain annual certifications from financial
intermediaries that such intermediaries have established reasonable internal
controls and procedures for limiting exchange activities in a manner that is
consistent with the fund's policies concerning frequent purchases and
redemptions of fund shares and are reasonably designed to obtain compliance with
applicable rules relating to customer-order handling and abusive trading
practices. Nonetheless, the fund's ability to identify and deter frequent
purchases and redemptions of the fund's shares through omnibus accounts is
limited, and the fund's success in accomplishing the objectives of the policies
concerning frequent purchases and redemptions of fund shares in this context
depends significantly upon the cooperation of the financial intermediaries.
In October 2007, new SEC rules became effective which require the fund and
intermediaries to enter into written agreements intended to promote transparency
in omnibus accounts. As the fund and intermediaries implement the requirements
of the new rules, it is expected that the fund will be better able to apply its
frequent trading policies to omnibus accounts.
The use of fair value pricing can serve both to make the fund less attractive to
market timers and to reduce the potential adverse consequences of market timing
or abusive trading to other investors. Certain market timers seek to take
advantage of pricing anomalies that can occur in fund shares resulting from the
manner in which the NAV of the fund's shares is determined each day. Frequent
trading in fund shares can dilute the value of long-term shareholders' interests
in the fund if the fund calculates its NAV using closing prices that are no
longer accurate. This can happen particularly in funds that invest in overseas
markets or that invest in securities of smaller issuers or thinly traded
securities. The fund's pricing procedures, particularly those procedures
governing the determination of the "fair value" of securities for which market
prices are not readily available (or are unreliable) for foreign securities may
serve as a deterrent against harmful excessive trading in fund shares. For
additional information concerning the fund's fair value procedures, please refer
to "Valuation of Shares."
CERTIFICATED SHARES
Shares are electronically recorded and therefore share certificates are not
issued.
SMALL ACCOUNTS
(NON-RETIREMENT ONLY)
THE HARTFORD MUTUAL FUNDS 30
TRANSACTION POLICIES
If the total value of the fund in your account is less than $1,000 (for any
reason), you may be asked to purchase more shares within 30 days. If you do not
take action within this time, your fund may close out your account and mail you
the proceeds. You will not be charged a CDSC if your account is closed for this
reason.
SALES IN ADVANCE OF PURCHASE PAYMENTS
When you place a request to sell shares for which the purchase money has not yet
been collected, the request will be executed in a timely fashion, but the fund
will not release the proceeds to you until your purchase payment clears. This
may take up to 10 calendar days after the purchase.
SPECIAL REDEMPTIONS
Although it would not normally do so, the fund has the right to pay the
redemption price of shares of the fund in whole or in part in portfolio
securities. When the shareholder sells portfolio securities received in this
fashion, a brokerage charge would be incurred. Any such securities would be
valued for the purposes of making such payment at the same value as used in
determining net asset value. The fund, however, always redeems shares solely in
cash up to the lesser of $250,000 or 1% of the net asset value of the fund
during any 90 day period for any one account.
PAYMENT REQUIREMENTS
All of your purchases must be made in U.S. dollars and checks must be drawn on
U.S. banks and made payable to The Hartford Mutual Funds. You may not purchase
shares with a starter or third party check.
If your check does not clear, your purchase will be canceled and you will be
liable for any losses or fees that the fund or HIFSCO has incurred.
Certain broker-dealers and financial institutions may enter confirmed purchase
orders with the fund on behalf of customers, by phone or other electronic means,
with payment to follow within the customary settlement period. If payment is not
received by that time, the order will be canceled and the broker-dealer or
financial institution will be held liable for the resulting fees or losses.
DIVIDENDS AND ACCOUNT POLICIES
ACCOUNT STATEMENTS In general, you will receive account statements as follows:
- after every transaction (except certain automatic payment and redemption
arrangements and dividend or distribution reinvestment) that affects your
account balances
- after any changes of name or address of the registered owner(s)
- in all other circumstances, every quarter during which there is activity in
your account, and at least annually
Every year you will also receive the appropriate tax reporting forms for the
type of account you choose and the activity in your account.
If, however, you are a participant in an employer-sponsored retirement plan or
you hold your shares in the name of your broker, you will receive statements
from your plan administrator or broker pursuant to their policies.
DIVIDENDS AND DISTRIBUTIONS The fund intends to distribute substantially all of
its net income to shareholders at least quarterly and capital gains will be
distributed at least annually. Dividends from net investment income of the fund
are normally declared and paid quarterly. Unless shareholders specify otherwise,
all dividends and distributions received from the fund are automatically
reinvested in additional full or fractional shares of the fund.
If you elect to receive dividends in cash, you will only receive a check if the
dividend amount exceeds $10. If the dividend is $10 or less, the amount will
automatically be reinvested in the fund. If you would like to receive cash
dividends, regardless of the amount,
THE HARTFORD MUTUAL FUNDS 31
TRANSACTION POLICIES
you can establish an electronic funds transfer to your bank. Please call the
fund for assistance in establishing electronic funds transfer transactions at
1-888-843-7824.
The fund seeks to maintain a target rate of distribution for each period. In
order to do so, the fund may distribute less or more investment income than it
earns on its investments each period. The fund may use accrued undistributed
investment income to fulfill distributions made during periods in which the fund
distributes more than the fund earns. The target rate of distribution is
evaluated regularly and can change at any time. The target rate of distribution
is not equivalent to the 30-day SEC yield of the fund.
TAXABILITY OF DIVIDENDS Dividends and distributions you receive from the fund,
whether reinvested or taken as cash, are generally considered taxable.
Distributions from the fund's long-term capital gains are taxable as long-term
capital gains, regardless of how long you held your shares. Distributions from
short-term capital gains and from ordinary income (other than certain qualified
dividend income) are generally taxable as ordinary income. A portion of
dividends from ordinary income may qualify for the dividends-received deduction
for corporations. Distributions from certain qualified dividend income generally
are taxable to individuals at the same rates that apply to long-term capital
gains, if certain holding period and other requirements are met. The lower tax
rates on qualified dividend income and long-term capital gains are currently
scheduled to expire after 2010.
Some dividends paid in January may be taxable as if they had been paid the
previous December.
TAXABILITY OF TRANSACTIONS Unless your shares are held in a qualified retirement
account, any time you sell or exchange shares, it is considered a taxable event
for you. You may have a capital gain or a loss on the transaction which will be
long-term or short-term, depending upon how long you held your shares. You are
responsible for any tax liabilities generated by your transactions. See your tax
advisor if you sell shares held for less than six months at loss within 60 days
of receiving a long-term capital gain distribution from the fund.
The fund may be required to withhold U.S. federal income tax at the rate of 28%
of all taxable distributions payable to you if you fail to provide the fund with
your correct taxpayer identification number or to make required certifications,
or if you have been notified by the IRS that you are subject to backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
may be credited against your U.S. federal income tax liability.
A fund may be required to withhold U.S. Federal income tax at the rate of 30% of
all taxable distributions to you if you are a non-resident alien and you are
claiming reduced withholding under a tax treaty and there is no applicable tax
treaty, if you have not properly completed and signed the appropriate IRS Form
W-8, or you do not provide us with your Individual Taxpayer Identification
Number (ITIN). If you are a non-resident alien and you are requesting a reduced
tax withholding rate, you must give us your ITIN. You also must complete and
send to us the appropriate IRS Form W-8 to certify your foreign status.
Distributions from the fund may also be subject to state, local and foreign
taxes. You should consult your own tax adviser regarding the particular tax
consequences of an investment in the fund.
ADDITIONAL INVESTOR SERVICES
ELECTRONIC TRANSFERS THROUGH AUTOMATED CLEARING HOUSE (ACH) allow you to
initiate a purchase or redemption for as little as $50 or as much as $50,000
between your bank account and fund account using the ACH network. Sales charges
and initial purchase minimums apply.
THE HARTFORD MUTUAL FUNDS 32
TRANSACTION POLICIES
AUTOMATIC INVESTMENT PLAN (AIP) lets you set up regular investments from your
bank account to the fund. You determine the frequency and amount of your
investments, and you can terminate your program at any time. To establish:
- Complete the appropriate parts of your account application, or if this is
an IRA account, complete the Mutual Funds Automatic Investment form.
- If you are using an AIP to open an account, you must invest a minimum of
$50 per month into the fund. Once a fund is closed the automatic investment
into it is stopped.
SYSTEMATIC WITHDRAWAL PLAN may be used for routine bill payments or periodic
withdrawals from your account. To establish:
- Make sure you have at least $5,000 worth of shares in your account and that
the amount per transaction is $50 or more.
- Make sure you are not planning to invest more money in this account (buying
shares during a period when you are also selling shares of the fund is not
advantageous to you, because of sales charges).
- Specify the payee(s). The payee may be yourself or any other party and
there is no limit to the number of payees you may have. A Medallion
signature guarantee is required if the payee is someone other than the
registered owner.
- Determine the schedule: monthly, quarterly, semi-annually, annually or in
certain selected months.
- Fill out the relevant part of the account application. To add a systematic
withdrawal plan to an existing account, contact your financial
representative or the transfer agent.
DOLLAR COST AVERAGING PROGRAMS (DCA) let you set up monthly or quarterly
exchanges from the fund to the same class of shares of another of The Hartford
Mutual Funds. To establish:
- Complete the appropriate parts of your account application, or if this is
an IRA account, complete the Mutual Fund Dollar Cost Averaging form.
- Be sure that the amount is for $50 or more.
- Be sure that the accounts involved have identical registrations.
AUTOMATIC DIVIDEND DIVERSIFICATION (ADD) lets you automatically reinvest
dividends and capital gains distributions paid by the fund into the same class
of another of The Hartford Mutual Funds. To establish:
- Fill out the relevant portion of the account application.
- Be sure that the accounts involved have identical registrations.
RETIREMENT PLANS The Hartford Mutual Funds offer a range of retirement plans,
including traditional and Roth IRAs, SIMPLE plans, SEPs and 401(k) plans. Using
these plans, you can invest in any fund offered by The Hartford Mutual Funds.
Minimum investment amounts may apply. To find out more, call 1-888-843-7824.
DUPLICATE ACCOUNT STATEMENTS You may request copies of annual account summaries
by calling 1-888-843-7824. A $20 fee may be charged for account summaries older
than the preceding year.
DUPLICATE COPIES OF MATERIALS TO HOUSEHOLDS. Generally the fund will mail only
one copy of each prospectus, annual and semi-annual report to shareholders
having the same last name and address on the fund's records. The consolidation
of these mailings, called householding, benefits the fund through reduced
mailing expenses.
THE HARTFORD MUTUAL FUNDS 33
TRANSACTION POLICIES
If you want to receive multiple copies of these materials, you may call us at
1-888-843-7824. You may also notify us in writing. Individual copies of
prospectuses and reports will be sent to you commencing within 30 days after we
receive your request to stop householding.
THE HARTFORD MUTUAL FUNDS 34
FINANCIAL HIGHLIGHTS
Because the fund has not commenced operations, no financial highlight
information is available for the fund.
THE HARTFORD MUTUAL FUNDS 35
FUND CODE AND CUSIP NUMBER
[Download Table]
CLASS FUND CUSIP
NAME SHARES CODE NUMBER
---- ------ ---- ---------
The Hartford Global Enhanced Dividend Fund A 1582 41664L575
The Hartford Global Enhanced Dividend Fund B 1583 41664L567
The Hartford Global Enhanced Dividend Fund C 1584 41664L559
THE HARTFORD MUTUAL FUNDS 36
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[THIS PAGE IS INTENTIONALLY LEFT BLANK]
FOR MORE INFORMATION
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS
Additional information about the fund will be contained in the financial
statements and portfolio holdings in the fund's annual and semi-annual reports.
In the fund's annual report you will also find a discussion of the market
conditions and investment strategies that will have significantly affected the
fund's performance during the last fiscal year, as well as the independent
registered public accounting firm's report. Because the fund has not commenced
operations, the fund has not yet delivered an annual or semi-annual report.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains more detailed information on the fund.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference into (which means it is legally a part of) this
prospectus.
The fund makes available this prospectus and its SAI free of charge, on the
fund's website at www.hartfordinvestor.com. The fund will make available its
annual/semi-annual reports free of charge on the fund's website when such
reports become available.
To request a free copy of the current SAI or annual/semi-annual reports when
they become available, or for shareholder inquiries or other information about
the fund, please contact the fund at:
BY MAIL:
The Hartford Mutual Funds
P.O. Box 64387
St. Paul, MN 55164-0387
(For overnight mail)
The Hartford Mutual Funds
500 Bielenberg Drive
Woodbury, MN 55125-1400
BY PHONE:
1-888-843-7824
ON THE INTERNET:
www.hartfordinvestor.com
Or you may view or obtain these documents from the SEC:
IN PERSON:
at the SEC's Public Reference Room in Washington, DC
Information on the operation of the SEC's public reference room may be obtained
by calling 1-202-942-8090.
BY MAIL:
Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-0102
Requests which are made by mail require the payment of a duplicating fee to the
SEC to obtain a document.
ON THE INTERNET OR BY E-MAIL:
Internet: (on the EDGAR Database on the SEC's internet site) www.sec.gov
E-Mail: publicinfo@sec.gov
Requests which are made by e-mail require the payment of a duplicating fee to
the SEC to obtain a document.
SEC FILE NUMBER:
The Hartford Mutual Funds, Inc. 333-02381/811-07589
THE HARTFORD MUTUAL FUNDS
CLASS Y SHARES
PROSPECTUS
November 30, 2007
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Hartford Global Enhanced Dividend Fund is currently closed to new
investors.
THE HARTFORD MUTUAL FUNDS
P.O. BOX 64387
ST. PAUL, MN 55164-0387
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
2
CONTENTS
[Enlarge/Download Table]
INTRODUCTION INTRODUCTION
A summary of the fund's goals, The Hartford Global Enhanced Dividend
principal strategies, main risks, Fund 5
performance and expenses
Description of other investment Investment strategies and investment
strategies and investment risks matters Terms used in this Prospectus 8
Investment manager and management fee Management of the fund 12
information
Information on your account About your account 15
Class Y share investor requirements 15
Compensation to Broker-Dealers,
Financial Institutions and Other Persons 15
Opening an account 17
Buying shares 19
Selling shares 21
Transaction policies 23
Dividends and account policies 26
Additional investor services 27
Further information on the fund Financial highlights 28
Fund code and CUSIP number 30
For more information back cover
3
INTRODUCTION
The fund has its own investment strategy and risk/reward profile. This
prospectus relates to Class Y shares of the fund. The fund also offers Class A,
Class B and Class C shares pursuant to a prospectus describing those classes.
The fund also offers Class R3, Class R4, and Class R5 shares to certain
qualified investors pursuant to separate prospectuses describing those classes.
The fund also offers Class I shares only through advisory fee-based wrap
programs sponsored by financial intermediaries having a selling, administration
or similar agreement with the fund, pursuant to a separate prospectus describing
that class. The fund is a part of the Hartford Funds ("Hartford Funds"). which
is a family of mutual funds.
The fund is a series of The Hartford Mutual Funds, Inc. and is a diversified
open-end management investment company. Information on the fund, including risk
factors, can be found on the pages following this introduction.
The fund is currently closed to new investors.
The investment manager to the fund is Hartford Investment Financial Services,
LLC ("HIFSCO"). The day-to-day portfolio management of the fund is provided by
Hartford Investment Management Company. Information regarding HIFSCO and the
sub-adviser is included under the section entitled "Management of the Funds" in
this prospectus.
THE HARTFORD MUTUAL FUNDS, INC. HAS RECEIVED AN ORDER FROM THE SECURITIES AND
EXCHANGE COMMISSION THAT PERMITS ITS INVESTMENT MANAGER, SUBJECT TO APPROVAL BY
ITS BOARD OF DIRECTORS, TO CHANGE SUB-ADVISERS ENGAGED BY THE INVESTMENT MANAGER
TO CONDUCT THE INVESTMENT PROGRAMS OF THE FUND WITHOUT SHAREHOLDER APPROVAL. FOR
MORE INFORMATION, PLEASE SEE THIS PROSPECTUS UNDER "THE INVESTMENT MANAGER."
MUTUAL FUNDS ARE NOT BANK DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. BECAUSE
YOU COULD LOSE MONEY BY INVESTING IN THE FUND, BE SURE TO READ ALL RISK
DISCLOSURES CAREFULLY BEFORE INVESTING.
THE HARTFORD MUTUAL FUNDS
4
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
INVESTMENT GOAL. The Hartford Global Enhanced Dividend Fund seeks a high level
of current income. Capital appreciation is a secondary objective.
PRINCIPAL INVESTMENT STRATEGY. The fund seeks to achieve its goal by taking long
and short positions in domestic equity securities and foreign equity securities
listed on U.S. exchanges, which can include American Depositary Receipts or
"ADRs". Under normal circumstances, the fund invests at least 80% of its assets
in dividend paying equity securities. The fund will take long positions in
equity securities that Hartford Investment Management believes offer the
potential for above average dividend yields and for attractive returns. The fund
will sell short equity securities that Hartford Investment Management believes
offer the potential for a below average dividend yield and which are likely to
underperform. The fund seeks to enhance yield by using the proceeds from short
sales to purchase additional equity securities that provide an above average
dividend yield.
When the fund takes a long position, it purchases an equity security outright.
When the fund takes a short position, it sells at the current market price an
equity security that it does not own but has borrowed in anticipation that the
market price of the equity security will decline. To complete, or close out, the
short sale transaction, the fund purchases the same equity security in the
market and returns it to the lender. The fund makes money when the market price
of the borrowed equity security goes down and the fund is able to replace it for
less than the fund earned by selling the equity security short. Conversely, if
the price of the equity security goes up after the sale, the fund will lose
money because it will have to pay more to replace the borrowed equity security
than the fund received when it sold the equity security short.
The fund will generally hold long positions equal to approximately 140% of the
fund's net assets and short positions equal to approximately 40% of the fund's
net assets. However, the long and short positions held by the fund may change as
market conditions change. The fund's long positions may range from 100% to 150%
of the fund's net assets and its short positions may range from 0% to 50% of its
net assets.
The fund will focus its investments on companies with market capitalizations
similar to the Russell 3000 Index and a diverse selection of ADRs available
across countries and sectors. As of May 31, 2007, the market capitalization of
companies within the Russell 3000 Index ranged from approximately $15 million to
$476 billion. The fund may take long and short positions in domestic equity
securities and foreign equity securities listed on U.S. exchanges, which can
include American Depositary Receipts or "ADRs". ADRs are certificates issued by
a U.S. bank or trust company and represent the right to receive securities of a
foreign issuer deposited in a domestic bank or non-U.S. branch of a U.S. bank.
ADRs are traded on a U.S. securities exchange, or on an over-the-counter market,
and are denominated in U.S. dollars. Under normal market conditions, the fund's
investments in ADRs will range from 40% to 70% of the fund's net assets
(including investments in emerging markets countries).
The fund may engage in frequent and active trading of equity securities to
achieve its investment objective.
Dividend yield is a primary consideration in selecting stocks. In addition to
yield, Hartford Investment Management also uses a quantitative multifactor
approach to bottom-up stock selection, utilizing a broad set of individual
fundamental stock characteristics to model each stock's relative attractiveness,
with a focus on those factors that have been demonstrated historically to drive
market returns. These characteristics include factors designed to describe a
company's business, its valuation, investors' response to the company and the
company's management behavior and earnings quality. The fundamentals used may
vary by industry sector. Hartford Investment Management frequently and
consistently measures the characteristics of every stock in the eligible
universe and incorporates these measurements in a rigorous, repeatable process
that considers both volatility and correlations.
MAIN RISKS. As with most equity funds, the value of your investment in the fund
may go down in response to overall stock market movements and trends. You could
lose money as a result of your investment.
ADRs are subject to various risks of loss that are different from the risks of
investing in securities of U.S.-based companies. Investments in ADRs may be
affected by fluctuations in currency exchange rates, less liquid trading
markets, greater price volatility, less publicly available information about
issuers, social upheavals and political actions ranging from tax code changes to
governmental collapse. The foregoing risks are even greater with respect to
securities of issuers in countries with emerging economies or emerging
securities markets. Also, if there is a rise in demand for the underlying
security and it becomes less available to the market, the price of the ADR may
rise, causing the fund to pay a premium in order to obtain the desired ADR.
Conversely, changes in foreign market conditions or access to the underlying
securities could result in a decline in the value of the ADR.
5
The fund's investment strategy may involve more risk than other funds that do
not engage in short selling. In a short sale, the fund sells a borrowed
security. The fund may not always be able to borrow the security at a particular
time or at an acceptable price. Thus, there is risk that the fund may be unable
to implement its investment strategy due to the lack of available stocks or for
other reasons.
After selling the borrowed security, the fund is obligated to "cover" the short
sale by purchasing and returning the security to the lender. If a security sold
short increases in price, the seller may have to cover its short position at a
higher price than the short sale price, resulting in a loss. Because the fund's
loss on a short sale arises from increases in the value of the security sold
short, such loss is theoretically unlimited. In certain cases, purchasing a
security to cover a short position can itself cause the price of the security to
rise further, thereby exacerbating the loss.
Short sales also involve other costs. The fund must normally repay to the lender
an amount equal to any dividends or interest that accrues while the loan is
outstanding. In addition, to borrow the security, the fund may be required to
pay a premium. The fund also will incur transaction costs in effecting short
sales. The amount of any ultimate gain for the fund resulting from a short sale
will be decreased, and the amount of any ultimate loss will be increased, by the
amount of premiums, dividends, interest or expenses a Fund may be required to
pay in connection with the short sale.
Until the fund replaces a borrowed security, it is required to maintain a
segregated account of cash or liquid assets to cover the fund's short position.
Securities held in a segregated account cannot be sold while the position they
are covering is outstanding, unless they are replaced with similar securities.
Additionally, the fund must maintain sufficient liquid assets (less any
additional collateral held by the broker) to cover the short sale obligation.
This may limit the fund's investment flexibility, as well as its ability to meet
redemption requests or other current obligations.
By investing the proceeds received from selling securities short, the fund is
employing a form of leverage. The use of leverage may increase the fund's
exposure to long equity positions and make any change in the fund's NAV greater
than without the use of leverage. This could result in increased volatility of
returns. There is no guarantee that the fund will leverage its portfolio, or if
it does, that the fund's leveraging strategy will be successful. The fund cannot
guarantee that the use of leverage will produce a higher return on an
investment.
The fund trades securities very actively, which could increase its transaction
costs (thus affecting performance) and may increase your taxable distributions.
The fund's focus on dividend yielding investments significantly influences its
performance. High dividend yielding investments as a group can fall out of favor
with the market, causing the fund to underperform funds that do not focus on
dividends. The fund's strategy of using the proceeds from short sales to
purchase additional equity securities that provide an above average dividend
yield will amplify the fund's underperformance when high dividend yielding
investments are out of favor with the market. The fund's focus on dividend
yielding investments and use of short sales may cause the fund's share price and
total return to fluctuate more than the share price and total return of funds
that do not focus on dividend yielding investments using a short selling
strategy. The fund's focus on dividend yielding investments and use of short
sales may result in the underperformance of the fund relative to broad market
indices.
Hartford Investment Management's investment strategy will significantly
influence performance. If Hartford Investment Management's stock selection
strategy does not perform as expected, the fund could underperform its peers or
lose money. In particular, the fund's success in achieving its goal is highly
dependent on Hartford Investment Management's successful use of quantitative
analysis of the prospects of particular companies.
The fund may take a short position in a security at the same time that other
accounts managed by Hartford Investment Management take a long position in the
same security, or take a long position in a security at the same time that other
accounts managed by Hartford Investment Management take a short position in the
same security. In addition, the fund may from time to time take a long or short
position in a particular equity security while simultaneously taking the
opposite position with respect to an exchange traded fund ("ETF") which includes
such particular equity security as a constituent. ETFs are baskets of securities
that, like stocks, trade on exchanges such as the American Stock Exchange and
the New York Stock Exchange. These and other transactions undertaken on behalf
of other accounts managed by Hartford Investment Management may adversely impact
the fund. Transactions on behalf of other accounts managed by Hartford
Investment Management may have the effect of diluting or otherwise
disadvantaging the values, prices or investment strategies of the fund.
6
PAST PERFORMANCE. Because the fund has been in operation for less than one full
calendar year, no performance history has been provided.
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
[Download Table]
CLASS Y
-------
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) imposed on purchases as a percentage of
offering price None
Maximum deferred sales charge (load) (as a percentage of purchase
price or redemption proceeds, whichever is less) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees (1) 1.00%
Distribution and service (12b-1) fees None
Other expenses
Short sales program expenses(2) 0.40%
All other expenses 0.15%
Total other expenses 0.55%
Total annual operating expenses (1)(2)(3) 1.55%
(1) HIFSCO has agreed to waive 100% of the management fee for the fund's first
year of operation.
(2) The fund's prime broker charges certain service fees in connection with the
administration of the fund's short positions. This amount also includes
payments to lenders as substitute dividends on securities borrowed
("dividend expense"). Dividend expenses will vary based on dividends paid
by the securities the fund sells short. This amount is estimated for the
fund's current fiscal year.
(3) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class Y shares of the fund, exclusive of taxes, interest expense, dividend
expense, short sales program expenses, brokerage commissions, acquired fund
fees and extraordinary expenses, to 1.25%. This policy may be discontinued
at any time.
EXAMPLE. These examples are intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds. The examples
assume that you invest $10,000 in the fund for the time periods indicated. The
examples also assume that your investment has a 5% return each year, that the
fund's operating expenses remain the same, and that you reinvest all dividends
and distributions. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
[Download Table]
EXPENSES (WITH OR WITHOUT REDEMPTION) CLASS Y
------------------------------------- -------
Year 1 $158
Year 3 $490
THE HARTFORD MUTUAL FUNDS
7
INVESTMENT STRATEGIES AND INVESTMENT MATTERS
INVESTMENT RISKS GENERALLY
Many factors affect the fund's performance. There is no assurance that the fund
will achieve its investment goal (investment objective), and investors should
not consider any one fund alone to be a complete investment program. As with all
mutual funds, there is a risk that an investor could lose money by investing in
the fund.
The different types of securities, investments, and investment techniques used
by the fund all have attendant risks of varying degrees. For example, with
respect to equity securities, there can be no assurance of capital appreciation
or dividend yield and an investment in any stock is subject to, among other
risks, the risk that the stock market as a whole may decline, thereby depressing
the stock's price (market risk), or the risk that the price of a particular
issuer's stock may decline due to its financial results (financial risk). With
respect to debt securities, there exists, among other risks, the risk that the
issuer of a security may not be able to meet its obligations on interest or
principal payments at the time required by the instrument (credit risk, a type
of financial risk). In addition, the value of debt instruments and other
income-bearing securities generally rises and falls inversely with prevailing
current interest rates (interest rate risk, a type of market risk). Securities
issued by U.S. Government agencies or government-sponsored enterprises may not
be guaranteed by the U.S. Treasury. As described below, an investment in the
fund entails special additional risks.
USE OF MONEY MARKET INVESTMENTS FOR TEMPORARY DEFENSIVE PURPOSES
From time to time, as part of its principal investment strategy, the fund may
invest some or all of its assets in cash or high quality money market securities
for temporary defensive purposes in response to adverse market, economic or
political conditions. To the extent the fund is in a defensive position, the
fund may lose the benefit of market upswings and limit its ability to meet its
investment objective.
USE OF SHORT SALES
As part of its principal investment strategy, the fund will enter into short
sales. In a short sale, the fund sells a borrowed security (typically from a
broker or other institution). The fund may not always be able to borrow the
security at a particular time or at an acceptable price. Thus, there is risk
that the fund may be unable to implement its investment strategy due to the lack
of available stocks or for other reasons. After selling the borrowed security,
the fund is obligated to "cover" the short sale by purchasing the security and
returning the security to the lender. If a security sold short increases in
price, the fund may have to cover its short position at a higher price than the
short sale price, resulting in a loss. Because the fund's loss on a short sale
arises from increases in the value of the security sold short, such loss is
theoretically unlimited. In certain cases, purchasing a security to cover a
short position can itself cause the price of the security to rise further,
thereby exacerbating the loss.
Short sales also involve other costs. The fund must normally repay to the lender
an amount equal to any dividends or interest that accrues while the loan is
outstanding. In addition, to borrow the security, the fund may be required to
pay a premium. The fund also will incur transaction costs in effecting short
sales. The amount of any ultimate gain for the fund resulting from a short sale
will be decreased, and the amount of any ultimate loss will be increased, by the
amount of premiums, dividends, interest or expenses the fund may be required to
pay in connection with the short sale. Until the fund replaces a borrowed
security, it is required to maintain a segregated account of cash or liquid
assets to cover the fund's short position. Securities held in a segregated
account cannot be sold while the position they are covering is outstanding,
unless they are replaced with similar securities. Additionally, the fund must
maintain sufficient liquid assets (less any additional collateral held by the
broker) to cover the short sale obligation. This may limit the fund's investment
flexibility, as well as its ability to meet redemption requests or other current
obligations.
USE OF OPTIONS, FUTURES AND OTHER DERIVATIVES
The fund may purchase and sell options, enter into futures contracts and/or
utilize other derivative contracts and securities with respect to stocks, bonds,
groups of securities (such as financial indices), foreign currencies, interest
rates, inflation and other indices. These techniques permit the fund to gain
exposure to a particular security, group of securities, interest rate or index,
and thereby have the potential for the fund to earn returns that are similar to
those which would be earned by direct investments in those securities or
instruments.
These techniques are also used to manage risk by hedging the fund's portfolio
investments. Hedging techniques may not always be available to the fund, and it
may not always be feasible for the fund to use hedging techniques even when they
are available.
8
Derivatives have risks, however. If the issuer of the derivative instrument does
not pay the amount due, the fund could lose money on the instrument. In
addition, the underlying security or investment on which the derivative is
based, or the derivative itself, may not perform the way the fund's manager
expected. As a result, the use of these techniques may result in losses to the
fund or increase volatility in the fund's performance. Some derivatives are
sophisticated instruments that typically involve a small investment of cash
relative to the magnitude of risks assumed. Derivative securities are subject to
market risk, which could be significant for those that have a leveraging effect.
FOREIGN INVESTMENTS
As part of its principal investment strategy, the fund may invest in foreign
equity securities listed on U.S. exchanges, which can include American
Depositary Receipts or "ADRs".
ADRs are securities traded on a U.S. securities exchange, or on an
over-the-counter market, that represent interests in securities issued by a
foreign publicly-listed company. ADRs have the same currency and economic risks
as the underlying shares they represent.
Investments in the securities of foreign issuers involve significant risks that
are not typically associated with investing in the securities of domestic
issuers. Such investments may be affected by changes in currency rates, changes
in foreign or U.S. laws or restrictions applicable to such investments and in
exchange control regulations. Securities of some foreign issuers may be less
liquid than securities of comparable domestic issuers. In addition, clearance
and settlement procedures may be different in foreign countries and, in certain
markets, on certain occasions, such procedures have been unable to keep pace
with the volume of securities or loan transactions, thus making it difficult to
execute such transactions. Foreign issuers are not generally subject to uniform
accounting, auditing and financial reporting standards comparable to those
applicable to domestic companies, and there may be less publicly available
information about a foreign issuer than a domestic issuer. Furthermore, with
respect to certain foreign countries, there is a possibility of expropriation or
confiscatory taxation, imposition of withholding taxes on dividend or interest
payments, limitations on the removal of cash or other assets of a fund, or
political or social instability or diplomatic developments which could affect
investments in those countries. Individual foreign economies also may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.
INVESTMENTS IN EMERGING MARKETS
The fund may invest in emerging markets (through investments in foreign equity
securities listed on U.S. exchanges, which can include ADRs) as part of its
principal investment strategy.
The securities markets of Asian, Latin American, Eastern European, Middle
Eastern, African and other emerging countries are less liquid, are especially
subject to greater price volatility, have smaller market capitalizations, have
less government regulation and are not subject to as extensive and frequent
accounting, financial and other reporting requirements as the securities markets
of more developed countries. Further, investment in equity securities of issuers
located in Russia and certain other emerging countries involves risk of loss
resulting from problems in share registration and custody and substantial
economic and political disruptions. These risks are not normally associated with
investments in more developed countries.
SMALL CAPITALIZATION COMPANIES
The fund may invest in securities of small capitalization companies as a part of
its principal investment strategy.
Historically, small market capitalization stocks and stocks of recently
organized companies have been more volatile in price than the larger market
capitalization stocks often included in the S&P 500 Index. As a result,
investing in the securities of such companies involves greater risk and the
possibility of greater portfolio price volatility. Among the reasons for the
greater price volatility of these small company and unseasoned stocks are the
less certain growth prospects of smaller firms and the lower degree of liquidity
in the markets for such stocks. Small company stocks are frequently thinly
traded and may have to be sold at a discount from current market prices or sold
in small lots over an extended period of time. Small companies also often have
limited product lines, markets or financial resources, may depend on or use a
few key personnel for management, and may be susceptible to losses and risks of
bankruptcy. The transaction costs associated with small company stocks are often
higher than those of larger capitalization companies.
OTHER INVESTMENT COMPANIES
9
The fund is permitted to invest in other investment companies, including
investment companies which may not be registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), such as holding company depository
receipts ("HOLDRs"), but not as part of its principal investment strategy. The
investment in other investment companies is limited in amount by the 1940 Act,
and will involve the indirect payment of a portion of the expenses, including
advisory fees, of such other investment companies.
The fund's investments in investment companies may include various
exchange-traded funds ("ETFs"), subject to the fund's investment objective,
policies, and strategies as described in this prospectus. ETFs are baskets of
securities that, like stocks, trade on exchanges such as the American Stock
Exchange and the New York Stock Exchange. ETFs are priced continuously and trade
throughout the day. ETFs may track a securities index, a particular market
sector, or a particular segment of a securities index or market sector. Some
types of equity ETFs are:
- "SPDRs" (S&P's Depositary Receipts), which are securities that represent
ownership in a long-term unit investment trust that holds a portfolio of
common stocks designed to track the performance of an S&P Index. Holders of
SPDRs are entitled to receive proportionate quarterly cash distributions
corresponding to the dividends that accrue to the stocks in the S&P Index's
underlying investment portfolio, less any trust expenses.
- "Qubes" (QQQQ), which invest in the stocks of the Nasdaq 100 Index, a
modified capitalization weighted index that includes the stocks of 100 of
the largest and most actively traded non-financial companies listed on the
Nasdaq Stock Market. Qubes use a unit investment trust structure that
allows immediate reinvestment of dividends.
- "iShares," which are securities that represent ownership in a long-term
unit investment trust that holds a portfolio of common stocks designed to
track the performance of specific indexes.
- "HOLDRs" (Holding Company Depositary Receipts), which are trust-issued
receipts that represent beneficial ownership in a specified group of 20 or
more stocks. Unlike other ETFs, the fund can hold the group of stocks as
one asset or unbundle the stocks and trade them separately, according to
the fund's investment strategies.
ETFs can experience many of the same risks associated with individual stocks.
ETFs are subject to market risk where the market as a whole, or that specific
sector, may decline. ETFs that invest in volatile stock sectors, such as foreign
issuers, smaller companies, or technology, are subject to the additional risks
to which those sectors are subject. ETFs may trade at a discount to the
aggregate value of the underlying securities. The underlying securities in an
ETF may not follow the price movements of an entire industry or sector. Trading
in an ETF may be halted if the trading in one or more of the ETF's underlying
securities is halted. Although expense ratios for ETFs are generally low,
frequent trading of ETFs by the fund can generate brokerage expenses.
Generally, the fund will not purchase securities of an investment company if, as
a result: (1) more than 10% of the fund's total assets would be invested in
securities of other investment companies, (2) such purchase would result in more
than 3% of the total outstanding voting securities of any such investment
company being held by the fund, or (3) more than 5% of the fund's total assets
would be invested in any one such investment company.
10
ABOUT THE FUND'S INVESTMENT GOAL
The fund's investment goal (or objective) may be changed without approval of the
shareholders of the fund. The fund may not be able to achieve its goal.
CONSEQUENCES OF PORTFOLIO TRADING PRACTICES
The fund may have a relatively high portfolio turnover.
The fund may, at times, engage in short-term trading. Short-term trading could
produce higher brokerage expenses for the fund and higher taxable distributions
to the fund's shareholders and therefore could adversely affect the fund's
performance. The fund is not managed to achieve a particular tax result for
shareholders. Shareholders should consult their own tax adviser for individual
tax advice.
TERMS USED IN THIS PROSPECTUS
Equity securities: Equity securities include common stock, preferred stock,
securities convertible into common or preferred stock and warrants or rights to
acquire common stock, including options.
Foreign issuers: Foreign issuers include (1) companies organized outside the
United States; (2) foreign governments and agencies or instrumentalities of
foreign governments; and (3) issuers whose economic fortunes and risks are
primarily linked with markets outside the United States. Certain companies
organized outside the United States may not be deemed to be foreign issuers if
the issuer's economic fortunes and risks are primarily linked with U.S. markets.
INVESTMENT POLICIES
The Global Enhanced Dividend Fund has a name which suggests a focus on a
particular type of investment. In accordance with Rule 35d-1 under the
Investment Company Act of 1940 (the "1940 Act"), the fund has adopted a policy
that it will, under normal circumstances, invest at least 80% of the value of
its assets in investments of the type suggested by its name, as set forth in the
fund's Principal Investment Strategy section. This requirement is applied at the
time the fund invests its assets. If, subsequent to an investment by the fund,
this requirement is no longer met due to changes in value or capitalization of
portfolio assets, the fund's future investments will be made in a manner that
will bring the fund into compliance with this requirement. For purposes of this
policy, "assets" means net assets plus the amount of any borrowings for
investment purposes. In addition, in appropriate circumstances, synthetic
investments may be included in the 80% basket if they have economic
characteristics similar to the other investments included in the basket. The
fund's policy to invest at least 80% of its assets in such a manner is not a
"fundamental" one, which means that it may be changed without the vote of a
majority of the fund's outstanding shares as defined in the 1940 Act. The name
of the fund may be changed without a majority vote of the fund's outstanding
shares as defined in the 1940 Act. The name of the fund may be changed at any
time by a vote of the fund's Board of Directors. However, Rule 35d-1 also
requires that shareholders be given written notice at least 60 days prior to any
change by a fund of its 80% investment policy covered by Rule 35d-1.
ADDITIONAL INVESTMENT STRATEGIES AND RISKS
The fund may invest in various securities and engage in various investment
techniques which are not the principal focus of the fund and therefore are not
described in this prospectus. These securities and techniques, together with
their risks, are discussed in the fund's Statement of Additional Information
("SAI") which may be obtained free of charge by contacting the fund (see back
cover for address phone number and website address).
DISCLOSURE OF PORTFOLIO HOLDINGS
The fund will disclose its complete month-end portfolio holdings on the fund's
website at www.hartfordinvestor.com no earlier than 30 calendar days after the
end of each month. The fund also will disclose on the fund's website the fund's
largest ten holdings no earlier than 15 days after the end of each month. A
description of the fund's policies and procedures with respect to the disclosure
of the fund's portfolio securities is available (i) in the fund's SAI; and (ii)
on the fund's website.
THE HARTFORD MUTUAL FUNDS
11
MANAGEMENT OF THE FUND
THE INVESTMENT MANAGER
Hartford Investment Financial Services, LLC ("HIFSCO") is the investment manager
to the fund. HIFSCO is a wholly-owned, indirect subsidiary of The Hartford
Financial Services Group, Inc. ("The Hartford"), a Connecticut financial
services company with over $419.5 billion in assets under management as of
September 30, 2007. At the same time, HIFSCO had over $52.2 billion in assets
under management. HIFSCO is responsible for the management of the fund and
supervises the activities of the investment sub-adviser described below. HIFSCO
is principally located at 200 Hopmeadow Street, Simsbury, Connecticut 06089.
The fund relies on an exemptive order from the Securities and Exchange
Commission under which it uses a "Manager of Managers" structure. HIFSCO has
responsibility, subject to oversight by the Board of Directors, to oversee the
sub-adviser and recommend its hiring, termination and replacement. The exemptive
order permits HIFSCO to appoint a new sub-adviser not affiliated with HIFSCO,
with the approval of the Board of Directors and without obtaining approval from
those shareholders that participate in the fund. Within 90 days after hiring any
new sub-adviser, affected shareholders will receive information about the new
sub-advisory relationship.
LITIGATION AND REGULATORY ACTIONS
Five putative multi-state class actions were filed in October 2004 and
consolidated into one case, In re Hartford Mutual Funds Fee Litigation, pending
before the United States District Court for the District of Connecticut, in
which the plaintiffs made a wide range of allegations against The Hartford and
other defendants relating, among other things, to fees charged to investors in
certain of The Hartford Retail Mutual Funds. Following a motion by the
defendants to dismiss the case, but before the court had yet ruled on the
motion, the plaintiffs sought the court's permission to file a second amended
complaint. In February 2007, the court granted the plaintiffs leave to amend. In
the second amended complaint, the plaintiffs allege, among other things, that
investors in the Hartford Advisers Fund, Hartford Capital Appreciation Fund,
Hartford Dividend and Growth Fund, Hartford MidCap Fund, and Hartford Stock Fund
were charged excessive fees during the period from February 27, 2003 through
February 27, 2004. The defendants, which include The Hartford Financial Services
Group, Inc., Hartford Investment Financial Services, LLC, Wellington Management
Company, LLC, Hartford Investment Management Company, Hartford Securities
Distribution Company, Inc., and PLANCO Financial Services Inc., intend to move
to dismiss the second amended complaint. This litigation is not expected to
result in a material adverse effect on the funds.
THE INVESTMENT SUB-ADVISER
Hartford Investment Management is a professional money management firm that
provides services to investment companies, employee benefit plans, affiliated
insurance companies and other institutional accounts. Hartford Investment
Management is a wholly-owned subsidiary of The Hartford. As of September 30,
2007, Hartford Investment Management had investment management authority over
approximately $143.1 billion in assets. Hartford Investment Management is
principally located at 55 Farmington Avenue, Hartford, Connecticut 06105.
SOFT DOLLAR PRACTICES
The sub-adviser is responsible for the day-to-day portfolio management
activities of the fund, including effecting securities transactions. To the
extent consistent with Section 28(e) of the Securities Exchange Act of 1934 (the
"1934 Act"), the sub-adviser may obtain "soft dollar" benefits in connection
with the execution of transactions for the fund. The sub-adviser may cause the
fund to pay a broker-dealer an amount in excess of the amount that another
broker-dealer would have charged for the same transaction, in exchange for
"brokerage and research services" (as defined in the 1934 Act). Neither the
management fees nor the sub-advisory fees are reduced because the sub-adviser
receives these products and services. These products and services may be of
value to the sub-adviser in advising its clients (including the fund), although
not all of these products and services are necessarily useful and of value in
managing the fund. These products and services may include research reports,
access to management personnel, financial newsletters and trade journals,
seminar and conference fees, quantitative analytical software, data services,
communication services relating to (or incidental to) the execution, clearing
and settlement of securities transactions, post-trade services relating to
functions incidental to trade execution, and other products and services that
are permitted under Section 28(e), as interpreted by the SEC from time to time.
In certain instances, these products and services may have additional uses that
are not related to brokerage or research. For such "mixed use" items, in
accordance with SEC guidance, the sub-adviser will make a reasonable allocation
of the cost of the item according to its
12
expected use, and will pay for that portion of the item that does not have a
brokerage or research-related component out of its own resources.
MANAGEMENT FEES
The fund pays a monthly management fee to HIFSCO based on a stated percentage of
the fund's average daily net asset value as follows:
[Download Table]
GLOBAL ENHANCED DIVIDEND FUND
AVERAGE DAILY NET ASSETS ANNUAL RATE
----------------------------- -----------
First $500 million 1.00%
Next $500 million 0.95%
Over $1 billion 0.90%
(1) HIFSCO has voluntarily agreed to waive 100% of the management fee for the
fund's first year of operation.
Because the fund has not commenced operations, information is not available
regarding fees paid by the fund to HIFSCO.
A discussion regarding the basis for the Board of Directors' approval of the
investment management and investment sub-advisory agreements of the fund will be
available in the fund's report to shareholders.
PORTFOLIO MANAGERS OF THE FUND
The following person has primary responsibility for the day-to-day management of
the fund's portfolio since inception. The fund's SAI provides additional
information about the portfolio manager's compensation, other accounts managed
by the portfolio manager and the portfolio manager's ownership of securities in
the fund.
GLOBAL ENHANCED DIVIDEND FUND The fund is managed by Paul Bukowski.
Paul Bukowski, Vice President of Hartford Investment Management, has served as
portfolio manager of the fund since its inception. Mr. Bukowski, who has 12
years of investment management experience, joined Hartford Investment Management
in 2005. Before joining Hartford Investment Management, he was a senior
quantitative portfolio analyst for ING's large-cap growth strategy from 2004.
Prior to 2004, Mr. Bukowski was with Callard & Ogden Investment Management where
he was responsible for quantitative analysis, fund research, and managed several
core and growth portfolios. He also created investment systems, including
databases and front-end user interfaces, and was responsible for managing
several core and growth portfolios. Mr. Bukowski earned a BA in Statistics and
Computer Science from the University of Wisconsin and an MBA in Finance and
Policy from the University of Chicago. He holds the Chartered Financial Analyst
designation and is a fellow of the Casualty Actuarial Society.
THE HARTFORD MUTUAL FUNDS
13
ABOUT YOUR ACCOUNT
CLASS Y SHARE INVESTOR REQUIREMENTS
Except as described below, Class Y shares offered through this prospectus are
available to the following investors. Individual investors must invest at least
$10 million in Class Y shares of a fund. The following types of institutional
investors must invest at least $1 million in Class Y shares of the fund: (1)
employee benefit or retirement plans which have (a) at least $10 million in plan
assets, or (b) 750 or more employees eligible to participate at the time of
purchase; (2) banks and insurance companies or other large institutional
investors; (3) investment companies; (4) employee benefit or retirement plans of
The Hartford, Wellington Management or broker-dealer wholesalers and their
affiliates; (5) non-profit organizations, charitable trusts, foundations and
endowments; and (6) trust companies with assets held in a fiduciary, advisory,
custodial or similar capacity over which the trust company has full or shared
investment discretion. Retirement and/or employee benefit plans purchasing
shares through (i) a record-keeper or a trust company that performs participant
level record-keeping or other administrative services on behalf of such plans or
(ii) a trading platform, may purchase Class Y shares of the fund provided that
such record-keeper or trust company and, if applicable, the trading platform,
has entered into an agreement for such purposes with the distributor and/or its
affiliates. Retirement and/or employee benefit plans purchasing Class Y shares
through such a record-keeper, trust company or trading platform are not subject
to a minimum investment amount.
Class Y shares are also offered through Hartford's Retirement Plans Prospectus,
which offers Class R3, Class R4, Class R5 and Class Y shares of certain other
series of The Hartford Mutual Funds, Inc. Retirement Plans Prospectus is
available to employee benefit or retirement plans which have (a) at least $10
million in plan assets, or (b) 750 or more employees eligible to participate at
the time of purchase; and employee benefit or retirement plans of The Hartford,
Wellington Management or broker-dealer wholesalers and their affiliates.
However, employee benefit plans and/or retirement plans purchasing shares
through (i) a record-keeper or a trust company that performs participant level
record-keeping or other administrative services on behalf of such plans or (ii)
a trading platform may purchase Class Y shares of the fund provided that such
record-keeper or trust company and, if applicable, the trading platform, has
entered into an agreement for such purposes with the distributor and/or its
affiliates. If you are a retirement plan administrator or fiduciary, or meet the
definition of these other institutional investors, you should consult Hartford's
Retirement Plans Prospectus. Hartford, in its sole discretion, may accept
purchases of Class Y shares from other purchasers not listed above.
ADDITIONAL COMPENSATION TO BROKER-DEALERS, FINANCIAL INSTITUTIONS AND OTHER
PERSONS ("FINANCIAL INTERMEDIARIES") In addition to the commissions (which may
be paid or reallowed to Financial Intermediaries from an applicable sales charge
and/or advanced to Financial Intermediaries) and Rule 12b-1 fees that are
described above and in the SAI, the distributor and its affiliates pay, out of
their own assets, significant additional compensation to Financial
Intermediaries (who may or may not be affiliates of the distributor) in
connection with the sale and distribution of the fund's shares ("Additional
Payments") based on a number of factors that are described below and in the
fund's SAI.
These Additional Payments are generally based on average net assets (or on aged
assets, i.e., assets held over one year) of the fund attributable to a
particular Financial Intermediary, on sales of the fund's shares attributable to
a particular Financial Intermediary, and/or on reimbursement of ticket charges,
and may, but are normally not expected to, exceed, in the aggregate, 0.44% of
the average net assets of the fund attributable to a particular Financial
Intermediary.
Such Additional Payments are generally made for the placement of the fund on a
Financial Intermediary's list of mutual funds available for purchase by its
customers and/or for including the fund within a group of mutual funds that
receive special marketing focus. Certain additional compensation arrangements
are discussed below.
Apart from the Additional Payments, additional compensation arrangements may
take the form of, among others: (1) "due diligence" payments for a Financial
Intermediary's examination of the fund and payments for providing extra employee
training and information relating to the fund and (2) "marketing support" fees
for providing assistance in promoting the sale of the fund's shares ("Other
Compensation"). Subject to FINRA regulations, HIFSCO and its affiliates may
contribute Other Amounts to various non-cash and cash incentive arrangements to
promote the sale of shares, as well as sponsor various educational programs,
sales contests and/or promotions in which participants may receive prizes such
as travel awards, merchandise and cash and/or investment research pertaining to
particular securities and other financial instruments or to the securities and
financial markets generally, educational information and related support
materials and hardware and/or software. HIFSCO and its affiliates may also pay
for the travel expenses, meals, lodging and entertainment of Financial
Intermediaries and their salespersons and guests in connection with education,
sales and promotional programs, subject to applicable FINRA regulations. These
programs, which may vary for different Financial Intermediaries, will not change
the price an investor will pay for shares or the amount that the fund will
receive from such
14
sale. Incurred payments of Other Compensation did not exceed $1.1 million per
Financial Intermediary for the calendar year ended December 31, 2006.
Additional Payments, including Other Compensation, may also pertain to the sale
and distribution of other investment products distributed by affiliates of the
distributor, and may, in some cases, act as a financial incentive for a
Financial Intermediary to recommend the purchase of one fund over another fund.
Additional Payments to Financial Intermediaries in connection with the sale and
distribution of the fund's shares are negotiated based on a range of factors,
including, but not limited to, reputation in the industry, ability to attract
and retain assets (including distribution of particular classes of the fund's
shares), target markets, customer relationships and quality of service. No one
factor is determinative of the type or amount of Additional Payments to be
provided and factors are weighed in the assessment of such determination.
For the calendar year ended December 31, 2006, HIFSCO or its affiliates incurred
approximately $32.6 million in total Additional Payments, including Other
Compensation (excluding travel expenses, meals, lodging and entertainment of
Financial Intermediaries and their salespersons) to Financial Intermediaries, of
which approximately $13.7 million was incurred with respect to Edward D. Jones &
Co., L.P. For the calendar year ended December 31, 2006, total travel expenses,
meals, lodging and entertainment of Financial Intermediaries and their
salespersons did not in the aggregate exceed approximately $3.6 million.
As of January 1, 2007, HIFSCO has entered into arrangements to make Additional
Payments, including Other Compensation (excluding travel expenses, meals,
lodging and entertainment of Financial Intermediaries and their salespersons),
to: A.G. Edwards & Sons, Inc., AIG Advisors Group, Inc., (Advantage Capital
Corp., AIG Financial Advisors, American General, FSC Securities Corp., Royal
Alliance Associates, Inc.), Allen & Company of FL, Inc., American General
Securities, Inc., American Independent Securities Group, LLC, AmSouth Investment
Services, Anchor Investment Services, Inc., Associated Investment Services,
Inc., Associated Securities Corporation, Banc of America Investment Services,
Inc., BancorpSouth Services, Banc West Investment Services, B.C. Ziegler &
Company, BNY Investment Center, Inc., BOSC, Inc., Brookstreet Securities Corp.,
Cadaret Grant & Co., Inc., Cambridge Investment Research, Cantella & Company,
Inc., Capital Analysts, Inc., Capital Investment Group, Inc., Centaurus
Financial Inc., Charles Schwab & Co., Inc., Chase Investment Services
Corporation, Citicorp Investment Services, Citigroup Global Markets, Inc.,
Colonial Brokerage, Inc., Comerica Securities, Commerce Brokerage Services,
Inc., Commerce Capital Markets, Inc., Commonwealth Financial Network,
Commonwealth Financial Services, Crown Capital Securities, LP, Cuna Brokerage
Services, CUSO Financial Services, L.P., Dominion Investor Services, Duerr
Financial Corp, Eagle One Investments, Edward D. Jones & Co., Empire Securities
Corp, Equity Securities Corp, Equity Services, Inc., Essex National Securities,
Inc., Ferris Baker Watts, Inc., FFP Securities, Inc., Fidelity Investments,
Fifth Third Securities, Financial Planning Consultants, Inc., Fintegra, LLC,
First Allied Securities, Inc., First Citizens Investor Services, Inc., First
Heartland Capital Inc., First Tennessee Brokerage, Inc., Fiserv Brokerage
Services, Inc., Frost Brokerage Services, Inc., Geneos Wealth Management, Inc.,
Girard Securities Inc., Grant Bettingen, Great American Advisors, Inc., H. Beck,
Inc., H&R Block, Harbour Investments, Harvest Capital, LLC, HBW Securities, LLC,
Hefren-Tillotson Inc., Hilliard Lyons, HSBC Brokerage USA, Huntington Investment
Co., IFMG Securities, Inc., ING Advisor Network (Financial Network Investment
Corporation, Inc., ING Financial Partners, Inc., Keybanc Capital Markets, Inc.,
Multi-Financial Securities Corporation, Inc., PrimeVest Financial Services,
Inc.), Independent Financial Group, LLC, Investment Professionals, Inc.,
Investors Capital Corp., Investors Security Company, Inc., Janney Montgomery
Scott, J.J.B. Hilliard, Jefferson Pilot Securities Corp, KMS Financial Services,
Inc., KNBT Securities Inc., Kovack Securities, Inc., LaSalle Financial Services,
LaSalle Street Securities, LLC, Lincoln Financial Advisors Group, Linsco/Private
Ledger Corp., M&T Securities Inc., Merrill Lynch Pierce Fenner & Smith, Mid
Atlantic Capital Corp, Money Concepts Capital Corp, Morgan Keegan & Company,
Inc., Morgan Stanley DW Inc., Mutual Service Corporation, National Advisors
Trust, National Planning Holdings, Inc. (Invest Financial Corporation,
Investment Centers of America, National Planning Corporation, SII Investments
Inc.), New England Securities, Newbridge Securities, NEXT Financial Group, Inc.,
North Ridge Securities Corp, Oppenheimer & Co, Inc., Pacific West Securities,
Inc., Prime Capital Services, Inc., ProEquities, Inc., Prospera Financial
Securities, Inc., QA3 Financial Corp., Raymond James & Associates Inc., Raymond
James Financial Services (IM&R), RBC Dain Rauscher, RDM Investment Services,
Robert W. Baird, Scott & Stringfellow Inc., Securian, Securities America, Inc.,
Securities Service Network, Inc., Sigma Financial Corp, Sorrento Pacific
Financial, Spectrum Capital, Inc., Stifel, Nicolaus & Company, Inc., Summit
Brokerage Services, SunAmerica Securities, Inc., Suntrust Investment Services,
TD Waterhouse, Inc., The Huntington Investment Company, TFS Securities, Inc.,
Transamerica Financial Advisors Inc., Triad Advisors, Inc., UBS Financial
Services Inc., UnionBanc Investment Services LLC, United Heritage Financial
Services, U.S. Bancorp Investments Inc., Uvest Financial Services Group, Inc.,
Vision Investment Services, Inc, Vorpahl Wing Securities, Wachovia Securities,
LLC, Wall Street Financial Group, Webster Investment Services, Inc, Wells Fargo
Investments, WM Financial Services, Inc., Workman Securities Corp, WRP
Investments, Inc., XCU Capital Corp., and Woodbury Financial Services, Inc. (an
indirect wholly-owned subsidiary of The Hartford). HIFSCO may enter into
arrangements with other Financial Intermediaries to make such Additional
Payments and Other Compensation.
15
In addition to the above payments, HIFSCO and its affiliates, out of their own
assets, may pay compensation for subaccounting, administrative and/or
shareholder processing services as described below.
ADDITIONAL COMPENSATION TO SERVICING INSTITUTIONS AND OTHER PERSONS ("SERVICING
INTERMEDIARIES") FOR SUBACCOUNTING, ADMINISTRATIVE AND/OR SHAREHOLDER PROCESSING
SERVICES. In addition to payments made in connection with the sale and
distribution of the fund's shares (described above) and administration and Rule
12b-1 fees paid by the fund, the distributor and its affiliates pay, out of
their own assets, significant additional compensation to Servicing
Intermediaries (who may or may not be affiliates of the distributor) in
connection with subaccounting, administrative and/or shareholder processing
services ("Servicing Compensation") based on a number of factors described
below.
Servicing Compensation is generally based on average net assets of the funds
attributable to a particular Servicing Intermediary, and may, but is normally
not expected to, exceed, in the aggregate, 0.20% of the average net assets of
the funds attributable to a particular Servicing Intermediary. Such Servicing
Compensation is generally made for subaccounting, administrative and/or
shareholder processing services. These programs, which may vary for different
Servicing Intermediaries, will not change the price an investor will pay for
shares. This Servicing Compensation may act as a financial incentive for a
Servicing Intermediary in choosing to provide services to one fund over another
fund.
The Servicing Compensation to Servicing Intermediaries is negotiated based on a
range of factors, including, but not limited to, reputation in the industry,
customer relationships and quality of service. No one factor is determinative of
the amount of Servicing Compensation to be provided and factors are weighed in
the assessment of such determination. For the year ended December 31, 2006,
HIFSCO incurred approximately $250,000 in total Servicing Compensation to
Servicing Intermediaries and an incurred payment of such Servicing Compensation
did not exceed $210,000 for any Servicing Intermediary.
As of January 1, 2007, HIFSCO has entered into arrangements to pay Servicing
Compensation to: The 401(k) Company, American Century Investment Management,
Inc.; AmeriMutual Funds Distributor, Inc.; Ameriprise Financial Services, Inc.;
BenefitStreet, Inc.; Diversified Investment Advisors, Inc.; Fidelity Investments
Institutional Operations Company, Inc. & Fidelity Investments Institutional
Services Company, Inc. ("Fidelity"); Gold Trust Company GWFS Equities, Inc.;
Invesmart, Inc. & Invesmart Securities, LLC; J.P. Morgan Retirement Plan
Services, LLC; Lincoln Retirement Services Company, LLC & AMG Service Corp;
Mercer HR Services, LLC; Mid Atlantic Capital Corporation; Reliance Trust
Company; T. Rowe Price Retirement Plan Services, Inc. & T. Rowe Price Investment
Services, Inc, and Upromise Investments, Inc. HIFSCO may enter into arrangements
with other Servicing Intermediaries to pay such Servicing Compensation.
Servicing Compensation is also paid to certain Servicing Intermediaries by HASCO
out of the transfer agency fees it receives from the fund. Although some
arrangements are based on average net assets attributable to the Servicing
Intermediary, such Servicing Intermediaries are generally paid a per account fee
ranging to no more than $16 per account. As of January 1, 2007, such Servicing
Intermediaries paid by HASCO are: ADP Broker-Dealer, Inc.; A.G. Edwards;
American Stock Transfer and Trust Company; CPI Qualified Plan Consultants, Inc;
SunGard InstitutionalBrokerage Inc.; Expert Plan, Inc.; Fiserv Trust Company;
Gail Weiss & Associates, Inc.; Gem Group L.P.; Hewitt Associates LLC; Legette
Actuaries, Inc.; Mid Atlantic Capital Corporation; MSCS Financial Services, LLC;
Ceridian Retirement Plan Services, Inc.; Northeast Retirement Services, Inc.;
Prudential Investment Management Services LLC & Prudential Investments LLC; QBC,
Inc.; Swerdlin & Company; and Stanton Trust Company N.A. Other Servicing
Intermediaries may be paid by HASCO in the future.
OPENING AN ACCOUNT
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens a new account. What this means
for you: When you open a new account, you will be asked to provide your name,
residential address, date of birth, social security number and other information
that identifies you. You may also be asked to show your driver's license or
other identifying documents.
For non-persons wishing to open an account or establish a relationship, Federal
law requires us to obtain, verify and record information that identifies each
business or entity. What this means for you: when you open an account or
establish a relationship, we will ask for your business name, a street address
and a tax identification number, that Federal law requires us to obtain. We
appreciate your cooperation.
If a fund is not able to adequately identify you within the time frames set for
in the law, your shares may be automatically redeemed. If the net asset value
per share has decreased since your purchase, you will lose money as a result of
this redemption. you may also incur any applicable sales charge.
Please note that if you are purchasing shares through your employer's tax
qualified retirement plan, you may need to call the administrator of the plan
for details on purchases, redemptions and other account activity. Although
brokers may be compensated for
16
the sale of Class Y shares in certain cases, there will be no cost to you.
1 Read this prospectus carefully.
2 Determine how much you want to invest. The minimum initial investment for
each fund is $1 million ($10 million if you do not qualify as one of the
types of institutional investors listed above), although this minimum may
be waived at the discretion of the fund's officers or may not apply under
certain circumstances (see page 15, "Class Y Share Investor Requirements"
for further information).
3 Complete the appropriate parts of the account application including any
privileges desired. By applying for privileges now, you can avoid the delay
and inconvenience of having to file an additional form if you want to add
privileges later. If you have questions, please contact your financial
representative or call the transfer agent at the number shown below.
- Make your initial investment selection.
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS 1-888-THE-STAG (843-7824)
P.O. BOX 64387
ST. PAUL, MN 55164-0387 OR CONTACT YOUR FINANCIAL REPRESENTATIVE
OR PLAN ADMINISTRATOR FOR INSTRUCTIONS
AND ASSISTANCE.
THE HARTFORD MUTUAL FUNDS
17
BUYING SHARES
[Download Table]
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
------------------------------ ---------------------------------
BY CHECK - Make out a check for the - Make out a check for the
[CHECK investment amount, investment amount, payable
GRAPHIC] payable to "The Hartford to "The Hartford Mutual
Mutual Funds." Funds."
- Deliver the check and - Fill out the detachable
your completed investment slip from an
application to your account statement. If no
financial representative, slip is available, include a
plan administrator or note specifying the fund
mail to the address name, your share class, your
listed below. account number and the
name(s) in which the account
is registered.
- Deliver the check and your
investment slip or note to
your financial
representative, plan
administrator or mail to the
address listed below.
BY EXCHANGE - Call your financial - Call your financial
[ARROW representative, plan representative, plan
GRAPHIC] administrator or the administrator or the
transfer agent at the transfer agent at the number
number below to request below to request an
an exchange. exchange.
BY WIRE - Deliver your completed - Instruct your bank to wire
[WIRE application to your the amount of your
GRAPHIC] financial representative, investment to:
or mail it to the address
below. U.S. Bank National
Association
- Obtain your account ABA #091000022, credit
number by calling your account no. 1-702-2514-1341
financial representative The Hartford Mutual Funds
or the phone number Purchase Account
below. For further credit to:
(your name)
- Instruct your bank to Hartford Mutual Funds
wire the amount of your Account Number:
investment to: (your account number)
U.S. Bank National Specify the fund name, your share
Association class, your account number and
9633 Lyndale Ave S. the name(s) in which the account
Bloomington MN 55420-4270 is registered. Your bank may
ABA #091000022, credit charge a fee to wire funds.
account no.
1-702-2514-1341
The Hartford Mutual Funds
Purchase Account For
further credit to:
(your name)
Hartford Mutual Funds
Account Number:
(your account number)
Specify the fund name, your
choice of share class, the new
account number and the name(s)
in which the account is
registered. Your bank may
charge a fee to wire funds.
BY PHONE - See "By Wire" and "By - Verify that your bank or
[PHONE Exchange" credit union is a member of
GRAPHIC] the Automated Clearing House
(ACH) system.
- Complete the 'Telephone
Exchanges and Telephone
Redemption' and 'Bank
Account or Credit Union
Information' sections on
18
[Download Table]
your account application.
- Call the transfer agent at
the number below to verify
that these features are in
place on your account.
- Tell the transfer agent
representative the fund
name, your share class, your
account number, the name(s)
in which the account is
registered and the amount of
your investment.
To open or add to an account using the Automatic Investment Plan, see
"Additional Investor Services" on page 27.
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS 1-888-THE-STAG (843-7824)
P.O. BOX 64387
ST. PAUL, MN 55164-0387 OR CONTACT YOUR FINANCIAL REPRESENTATIVE
OR PLAN ADMINISTRATOR FOR INSTRUCTIONS
AND ASSISTANCE.
THE HARTFORD MUTUAL FUNDS
19
SELLING SHARES IN WRITING
[Download Table]
BY LETTER
[LETTER GRAPHIC] - Write a letter of instruction or complete a power
of attorney indicating the fund name, your share
class, your account number, the name(s) in which
the account is registered and the dollar value or
number of shares you wish to sell.
- Include all signatures and any additional documents
that may be required (see "Selling Shares in
Writing").
- Mail the materials to the address below.
- A check will be mailed to the name(s) and address
in which the account is registered, or otherwise
according to your letter of instruction. Overnight
delivery may be requested for a nominal fee.
BY PHONE
[PHONE GRAPHIC] - Restricted to sales of up to $50,000 in any 7-day
period.
- To place your order with a representative, call the
transfer agent at the number below between 8 A.M.
and 7 P.M. Eastern Time (between 7 A.M. and 6 P.M.
Central Time) Monday through Thursday and between
9:15 A.M. and 6 P.M. Eastern Time (between 8:15
A.M. and 5 P.M. Central Time) on Friday. Complete
transaction instructions on a specific account must
be received in good order and confirmed by the
Hartford Mutual Funds prior to 4 P.M. Eastern Time
(3 P.M. Central Time) or the close of the NYSE,
whichever comes first. Any transaction on an
account received after the close of the NYSE will
receive the next business day's offering price.
- For automated service 24 hours a day using your
touch-tone phone, call the number shown below.
BY WIRE OR ELECTRONIC
FUNDS TRANSFER (EFT)
[WIRE GRAPHIC] - Fill out the "Telephone Exchanges and Telephone
Redemption" and "Bank Account or Credit Union
Information" sections of your new account
application.
- Call the transfer agent to verify that the
telephone redemption privilege is in place on an
account, or to request the forms to add it to an
existing account.
- Amounts of $500 or more will be wired on the next
business day. Your bank may charge a fee for this
service.
- Amounts of less than $500 may be sent by EFT or by
check. Funds from EFT transactions are generally
available by the second business day. Your bank may
charge a fee for this service. Wire transfers are
available upon request.
- Phone requests are limited to amounts up to $50,000
in a 7-day period.
BY EXCHANGE
[ARROW GRAPHIC] - Obtain a current prospectus for the fund into which
you are exchanging by calling your financial
representative or the transfer agent at the number
below.
- Call your financial representative or the transfer
agent to request an exchange.
20
[Download Table]
BY LETTER
In certain circumstances, you will need to make your request to sell shares in
writing. You may need to include additional items with your request, as shown in
the table below. You may also need to include a Medallion signature guarantee,
which protects you against fraudulent orders. You will need a Medallion
signature guarantee if:
[LETTER GRAPHIC] - your address of record has changed within the past
30 days
- you are selling more than $50,000 worth of shares
- you are requesting payment other by a check of more
than $1,000 to an address of record that has
changed within the past 30 days
Please note that a notary public CANNOT provide a Medallion signature guarantee.
Please check with a representative of your bank or other financial institution
about obtaining a Medallion signature guarantee.
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS 1-888-THE-STAG (843-7824)
P.O. BOX 64387
ST. PAUL, MN 55164-0387 OR CONTACT YOUR FINANCIAL REPRESENTATIVE
OR PLAN ADMINISTRATOR FOR INSTRUCTIONS
AND ASSISTANCE.
THE HARTFORD MUTUAL FUNDS
21
TRANSACTION POLICIES
VALUATION OF SHARES
The net asset value per share (NAV) is determined for the fund and each class as
of the close of regular trading on the New York Stock Exchange ("NYSE")
(typically 4:00 p.m. Eastern Time) on each business day that the NYSE is open.
The net asset value for the fund is determined by dividing the value of the
fund's net assets attributable to a class of shares by the number of shares
outstanding for that class.
The fund generally uses market prices in valuing portfolio securities. If market
quotations are not readily available or are deemed unreliable, the fund will use
the fair value of the security as determined in good faith under policies and
procedures established by and under the supervision of the fund's Board of
Directors. Market prices may be deemed unreliable, for example, if a security is
thinly traded or if an event has occurred after the close of the exchange on
which a portfolio security is principally traded but before the close of the
NYSE that is expected to affect the value of the portfolio security. The
circumstances in which the fund may use fair value pricing include, among
others: (i) the occurrence of events that are significant to a particular
issuer, such as mergers, restructuring or defaults; (ii) the occurrence of
events that are significant to an entire market, such as natural disasters in a
particular region or governmental actions; (iii) trading restrictions on
securities; (iv) thinly traded securities; and (v) market events such as trading
halts and early market closings. In addition, with respect to the valuation of
securities principally traded on foreign markets, the fund uses a fair value
pricing service approved by the fund's Board, which employs quantitative models
to adjust for "stale" prices caused by the movement of other markets and other
factors occurring after the close of the foreign exchanges but before the close
of the NYSE. Securities that are principally traded on foreign markets may trade
on days that are not business days of the fund. Because the NAV of the fund's
shares is determined only on business days of the fund, the value of foreign
securities may change on days when a shareholder will not be able to purchase or
redeem shares of the fund. Fair value pricing is subjective in nature and the
use of fair value pricing by the fund may cause the net asset value of its
shares to differ significantly from the net asset value that would be calculated
using prevailing market values. There can be no assurance that the fund could
obtain the fair value assigned to a security if it were to sell the security at
approximately the time at which the fund determines its NAV per share.
BUY AND SELL PRICES
When you buy shares, you pay the NAV. When you sell shares, you receive the NAV.
EXECUTION OF REQUESTS
The fund is open on those days when the New York Stock Exchange is open,
typically Monday through Friday. Buy and sell requests are executed at the next
NAV calculated after your request is received, if your order is in "good order"
(has all required information), by the transfer agent, authorized broker-dealers
or their authorized designee, or third-party administrators.
At times of peak activity, it may be difficult to place requests by phone.
During these times, visit www.hartfordinvestor.com or consider sending your
request in writing.
Although the fund does not charge a transaction fee, you may be charged a fee by
brokers for the purchase or sale of the fund's shares. This transaction fee is
separate from any sales charge that the fund may apply.
In unusual circumstances, the fund may temporarily suspend the processing of
sell requests, or may postpone payment of redemption proceeds for up to three
business days or longer, as allowed by federal securities laws.
REQUESTS IN "GOOD ORDER"
All purchase and redemption requests must be received by the fund in "good
order". This means that your request must include:
- Name, date of birth, residential address, and social security number.
- The fund name, share class and account number.
- The amount of the transaction (in dollars or shares).
22
- Signatures of all owners exactly as registered on the account (for mail
requests).
- Medallion signature guarantees (if required).
- Any supporting legal documentation that may be required.
TELEPHONE TRANSACTIONS
For your protection, telephone requests may be recorded in order to verify their
accuracy. Proceeds from telephone transactions may be either mailed to the
address of record, or sent electronically to a bank account on file. Also, for
your protection, telephone redemptions are limited on accounts whose addresses
have changed within the past 30 days.
EXCHANGES
You may exchange shares of the fund for shares of the same class of any other
Hartford Fund. The registration for both accounts involved must be identical.
You may be subject to tax liability as a result of your exchange. The fund
reserves the right to amend or terminate the exchange privilege at any time, for
any reason.
FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES
The fund is intended to be a long-term investment vehicle and is not designed to
provide investors with a means of speculating on short-term market movements
(market timing). Frequent purchases and redemptions of the fund by a fund
shareholder can disrupt the management of the fund, negatively affect the fund's
performance, and increase expenses for all fund shareholders. In particular,
frequent trading (i) can force the fund's portfolio manager to hold larger cash
positions than desired instead of fully investing the funds, which can result in
lost investment opportunities; (ii) can cause unplanned and inopportune
portfolio turnover in order to meet redemption requests; (iii) can increase
broker-dealer commissions and other transaction costs as well as administrative
costs for the fund; and (iv) can trigger taxable gains for other shareholders.
Also, some frequent traders engage in arbitrage strategies, by which these
traders seek to exploit pricing anomalies that can occur when the fund invests
in securities that are thinly traded (for example some small capitalization
stocks) or are traded primarily in markets outside of the United States.
Frequent traders, and in particular those using arbitrage strategies can dilute
the fund's NAV for long-term shareholders.
If you intend to trade frequently or use market timing investment strategies,
you should not purchase the fund.
The Board of Directors of the fund has adopted policies and procedures with
respect to frequent purchases and redemptions of fund shares by fund
shareholders. The fund's policy is to discourage investors from trading in the
fund's shares in an excessive manner that would be harmful to long-term
investors and to make reasonable efforts to detect and deter excessive trading.
The fund reserves the right to reject any purchase order at any time and for any
reason, without prior written notice. The fund also reserves the right to revoke
the exchange privileges of any person at any time and for any reason. In making
determinations concerning the revocation of exchange privileges, the fund may
consider an investor's trading history in any Hartford Mutual Fund, including
the person's trading history in any accounts under a person's common ownership
or control.
It is the policy of the fund to permit only two "substantive round trips" by an
investor within any single fund within a 90-day period.
A substantive round trip is a purchase of or an exchange into the same fund and
a redemption of or an exchange out of the same fund in a dollar amount that the
fund's transfer agent determines, in the reasonable exercise of its discretion,
could adversely affect the management of the fund. When an additional
transaction request for the fund is received within the 90-day period, the
requested transaction will be rejected and
23
the person requesting such transaction will be deemed an "Excessive Trader." All
exchange and purchase privileges of an Excessive Trader shall be suspended
within the fund for the first violation of the policy for a period of 90 days.
For a second violation of the policy, the exchange and purchase privileges of
the Excessive Trader will be suspended indefinitely. If an Excessive Trader
makes exchanges through a registered representative, in appropriate
circumstances the fund's transfer agent may terminate the registered
representative's exchange and purchase privileges in the fund. Automatic
programs offered by the fund such as dollar cost averaging and dividend
diversification are exempt from the policy described above. In addition, the
Money Market Fund is excluded from this policy.
The fund's policies for deterring frequent purchases and redemptions of fund
shares by the fund shareholder are intended to be applied uniformly to all fund
shareholders to the extent practicable. Some financial intermediaries, such as
broker-dealers, investment advisors, plan administrators, and third-party
transfer agents, however, maintain omnibus accounts in which they aggregate
orders of multiple investors and forward the aggregated orders to the fund.
Because the fund receives these orders on an aggregated basis and because these
omnibus accounts may trade with numerous fund families with differing market
timing policies, the fund is substantially limited in its ability to identify or
deter Excessive Traders or other abusive traders. The fund's procedures with
respect to omnibus accounts will be as follows: (1) Where Hartford
Administrative Service Company ("HASCO") is provided individual shareholder
level transaction detail on a daily basis, HASCO shall monitor the daily trade
activity of individual shareholders and apply the Policy. (2) Where an
intermediary will implement the Policy on behalf of HASCO, HASCO shall obtain an
appropriate annual certification from such intermediary. (3) Where an
intermediary has established reasonable internal controls and procedures for
limiting exchange activity in a manner that serves the purposes of the Policy as
determined by the Frequent Trading Review Committee (comprised of the funds'
Chief Compliance Officer, Chief Legal Officer and a senior business leader of
The Hartford), HASCO shall permit such intermediary to apply its policy in lieu
of this Policy and obtain an appropriate annual certification. Finally, (4)
where none of the foregoing occurs, HASCO shall monitor the accounts at an
omnibus level and apply detection tools designed to determine whether
shareholder transactions violating the Policy may be occurring. In such cases,
HASCO shall request and evaluate individual shareholder level transaction detail
and seek to impose restrictions in accordance with the Policy. In addition, the
fund's transfer agent will seek to obtain annual certifications from financial
intermediaries that such intermediaries have established reasonable internal
controls and procedures for limiting exchange activities in a manner that is
consistent with the fund's policies concerning frequent purchases and
redemptions of fund shares and are reasonably designed to obtain compliance with
applicable rules relating to customer-order handling and abusive trading
practices. Nonetheless, the fund's ability to identify and deter frequent
purchases and redemptions of the fund's shares through omnibus accounts is
limited, and the fund's success in accomplishing the objectives of the policies
concerning frequent purchases and redemptions of fund shares in this context
depends significantly upon the cooperation of the financial intermediaries.
In October 2007, new SEC rules became effective which require the fund and
intermediaries to enter into written agreements intended to promote transparency
in omnibus accounts. As the fund and intermediaries implement the requirements
of the new rules, it is expected that the fund will be better able to apply its
frequent trading policies to omnibus accounts.
The use of fair value pricing can serve both to make the fund less attractive to
market timers and to reduce the potential adverse consequences of market timing
or abusive trading to other investors. Certain market timers seek to take
advantage of pricing anomalies that can occur in fund shares resulting from the
manner in which the NAV of the fund's shares is determined each day. Frequent
trading in fund shares can dilute the value of long-term shareholders' interests
in the fund if the fund calculates its NAV using closing prices that are no
longer accurate. This can happen particularly in funds that invest in overseas
markets or that invest in securities of smaller issuers or thinly traded
securities. The fund's pricing procedures, particularly those procedures
governing the determination of the "fair value" of securities for which market
prices are not readily available (or are unreliable) for foreign securities may
serve as a deterrent against harmful excessive trading in fund shares. For
additional information concerning the fund's fair value procedures, please refer
to "Valuation of Shares."
CERTIFICATED SHARES
Shares are electronically recorded and therefore share certificates are not
issued.
SALES IN ADVANCE OF PURCHASE PAYMENTS
When you place a request to sell shares for which the purchase money has not yet
been collected, the request will be executed in a timely fashion, but the fund
will not release the proceeds to you until your purchase payment clears. This
may take up to 10 calendar
24
days after the purchase.
SPECIAL REDEMPTIONS
Although it would not normally do so, the fund has the right to pay the
redemption price of shares of the fund in whole or in part in portfolio
securities. When the shareholder sells portfolio securities received in this
fashion, a brokerage charge would be incurred. Any such securities would be
valued for the purposes of making such payment at the same value as used in
determining net asset value. The fund, however, always redeems shares solely in
cash up to the lesser of $250,000 or 1% of the net asset value of the applicable
fund during any 90 day period for any one account.
PAYMENT REQUIREMENTS
All of your purchases must be made in U.S. dollars and checks must be drawn on
U.S. banks and made payable to The Hartford Mutual Funds, or in the case of a
retirement account, to the custodian or trustee. You may not purchase shares
with a starter or third party check.
If your check does not clear, your purchase will be canceled and you will be
liable for any losses or fees that the fund or HIFSCO has incurred.
Certain broker-dealers and financial institutions may enter confirmed purchase
orders with the fund on behalf of customers, by phone or other electronic means,
with payment to follow within the customary settlement period (generally within
three business days). If payment is not received by that time, the order will be
canceled and the broker-dealer or financial institution will be held liable for
the resulting fees or losses.
DIVIDENDS AND ACCOUNT POLICIES
ACCOUNT STATEMENTS In general, you will receive account statements as follows:
- after every transaction (except certain automatic payment and redemption
arrangements and dividend or distribution reinvestment) that affects your
account balances
- after any changes of name or address of the registered owner(s)
- in all other circumstances, every quarter during which there is activity in
your account, and at least annually
Every year you will also receive the appropriate tax reporting forms for the
type of account you choose and the activity in your account.
If, however, you are a participant in an employer-sponsored retirement plan or
you hold your shares in the name of your broker, you will receive statements
from your plan administrator or broker pursuant to their policies.
DIVIDENDS AND DISTRIBUTIONS The fund intends to distribute substantially all of
its net income to shareholders at least quarterly and capital gains will be
distributed at least annually. Dividends from net investment income of the fund
are normally declared and paid quarterly. Unless shareholders specify otherwise,
all dividends and distributions received from the fund are automatically
reinvested in additional full or fractional shares of the fund.
If you elect to receive monthly dividends in cash, you will only receive a check
if the dividend amount exceeds $10. If the dividend is $10 or less, the amount
will automatically be reinvested in the fund. If you would like to receive cash
dividends, regardless of the amount, you can establish an electronic funds
transfer to your bank. Please call the fund for assistance in establishing
electronic funds transfer transactions at 1-888-843-7824.
The fund seeks to maintain a target rate of distribution for each period. In
order to do so, the fund may distribute less or more investment income than it
earns on its investments each period. The fund may use accrued undistributed
investment income to fulfill distributions made during periods in which the fund
distributes more than the fund earns. The target rate of distribution is
evaluated regularly and can change at any time. The target rate of distribution
is not equivalent to the 30-day SEC yield of the fund.
25
TAXABILITY OF DIVIDENDS Dividends and distributions you receive from the fund,
whether reinvested or taken as cash, are generally considered taxable.
Distributions from the fund's long-term capital gains are taxable as long-term
capital gains, regardless of how long you held your shares. Distributions from
short-term capital gains and from ordinary income (other than certain qualified
dividend income) are generally taxable as ordinary income. A portion of
dividends from ordinary income may qualify for the dividends-received deduction
for corporations. Distributions from certain qualified dividend income generally
are taxable to individuals at the same rates that apply to long-term capital
gains, if certain holding period and other requirements are met. The lower tax
rates on qualified dividend income and long-term capital gains are currently
scheduled to expire after 2010.
Some dividends paid in January may be taxable as if they had been paid the
previous December.
TAXABILITY OF TRANSACTIONS Unless your shares are held in a qualified retirement
account, any time you sell or exchange shares, it is considered a taxable event
for you. You may have a capital gain or a loss on the transaction which will be
long-term or short-term, depending upon how long you held your shares. You are
responsible for any tax liabilities generated by your transactions. See your tax
advisor if you sell shares held for less than six months at loss within 60 days
of receiving a long-term capital gain distribution from the fund.
The fund may be required to withhold U.S. federal income tax at the rate of 28%
of all taxable distributions payable to you if you fail to provide the fund with
your correct taxpayer identification number or to make required certifications,
or if you have been notified by the IRS that you are subject to backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
may be credited against your U.S. federal income tax liability.
Distributions from the fund may also be subject to state, local and foreign
taxes. You should consult your own tax adviser regarding the particular tax
consequences of an investment in the fund.
ADDITIONAL INVESTOR SERVICES
ELECTRONIC TRANSFERS THROUGH AUTOMATED CLEARING HOUSE ("ACH") allow you to
initiate a purchase or redemption for as little as $50 per fund or as much as
$50,000 per fund between your bank account and fund account using the ACH
network.
If you are a participant in a tax qualified retirement plan, check with your
plan administrator for additional investor services.
26
FINANCIAL HIGHLIGHTS
Because the fund has not commenced operations, no financial highlight
information is available for the fund.
27
FUND CODE AND CUSIP NUMBER
[Download Table]
CLASS FUND CUSIP
NAME SHARES CODE NUMBER
---- ------ ---- ---------
The Hartford Global Enhanced Dividend Fund Y 1585 41664L492
THE HARTFORD MUTUAL FUNDS
28
FOR MORE INFORMATION
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Additional information about the fund will be contained in the financial
statements and portfolio holdings in the fund's annual and semi-annual reports.
In the fund's annual report you will also find a discussion of the market
conditions and investment strategies that will have significantly affected the
fund's performance during the last fiscal year, as well as the independent
registered public accounting firm's report. Because the fund did not commence
operations until November 30, 2007, the fund has not yet delivered an annual or
semi-annual report.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains more detailed information on the fund.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference into (which means it is legally a part of) this
prospectus.
The fund makes available this prospectus and its SAI free of charge, on the
fund's website at www.hartfordinvestor.com. The fund will make available its
annual/semi-annual reports free of charge on the fund's website when such
reports become available.
To request a free copy of the current SAI or annual/semi-annual reports when
they become available, or for shareholder inquiries or other information about
the fund, please contact the fund at:
BY MAIL:
The Hartford Mutual Funds
P.O. Box 64387
St. Paul, MN 55164-0387
(For overnight mail)
The Hartford Mutual Funds
500 Bielenberg Drive
Woodbury, MN 55125-1400
BY PHONE:
1-888-843-7824
ON THE INTERNET:
www.hartfordinvestor.com
Or you may view or obtain these documents from the SEC:
IN PERSON:
at the SEC's Public Reference Room in Washington, DC
Information on the operation of the SEC's public reference room may be obtained
by calling 1-202-942-8090.
BY MAIL:
Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-0102
Requests which are made by mail require the payment of a duplicating fee to the
SEC to obtain a document.
29
ON THE INTERNET OR BY E-MAIL:
Internet: (on the EDGAR Database on the SEC's internet site) www.sec.gov E-Mail:
publicinfo@sec.gov
Requests which are made by e-mail require the payment of a duplicating fee to
the SEC to obtain a document.
SEC FILE NUMBER:
The Hartford Mutual Funds, Inc. 811-07589
30
THE HARTFORD MUTUAL FUNDS
CLASS I SHARES
PROSPECTUS
November 30, 2007
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Hartford Global Enhanced Dividend Fund is currently closed to new
investors.
THE HARTFORD MUTUAL FUNDS
P.O. BOX 64387
ST. PAUL, MN 55164-0387
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
2
CONTENTS
[Enlarge/Download Table]
INTRODUCTION INTRODUCTION
A summary of the fund's The Hartford Global Enhanced Dividend Fund
goals, principal strategies,
main risks, performance and
expenses
Description of other Investment strategies and investment matters
investment strategies and Terms used in this Prospectus
investment risks
Investment manager and Management of the fund
management fee information
Information on your account About your account
Class I share investor requirements
Choosing a share class
Compensation to Broker-Dealers, Financial
Institutions and Other Persons
Opening an account
Buying shares
Selling shares
Transaction policies
Dividends and account policies
Further information on the fund Financial highlights
Fees Paid Indirectly
Payments From Affiliate
Fund code and CUSIP number
For more information back cover
THE HARTFORD MUTUAL FUNDS
3
INTRODUCTION
This prospectus relates to the Class I shares of the fund. The fund also offers
Class A, Class B and Class C pursuant to a prospectus describing these classes.
The fund also offers Class R3, Class R4, Class R5 and Class Y shares to certain
qualified investors pursuant to separate prospectuses describing those classes.
The fund is a series of The Hartford Mutual Funds, Inc. and is a diversified
open-end management investment company. Information on the fund, including risk
factors, can be found on the pages following this introduction.
The fund is currently closed to new investors.
The investment manager to the fund is Hartford Investment Financial Services,
LLC ("HIFSCO"). As the investment manager, HIFSCO is responsible for the
management of the fund and supervision of the fund's investment sub-adviser. The
day-to-day portfolio management of the fund is provided by an investment
sub-adviser: Hartford Investment Management Company ("Hartford Investment
Management"). Information regarding HIFSCO and the Hartford Investment
Management is included under the section entitled "Management of the Fund" in
this prospectus.
THE HARTFORD MUTUAL FUNDS, INC. HAS RECEIVED AN ORDER FROM THE SEC THAT PERMITS
ITS INVESTMENT MANAGER, SUBJECT TO APPROVAL BY ITS BOARD OF DIRECTORS, TO CHANGE
SUB-ADVISERS ENGAGED BY THE INVESTMENT MANAGER TO CONDUCT THE INVESTMENT PROGRAM
OF THE FUND WITHOUT SHAREHOLDER APPROVAL. FOR MORE INFORMATION, PLEASE SEE THIS
PROSPECTUS UNDER "THE INVESTMENT MANAGER."
MUTUAL FUNDS ARE NOT BANK DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. BECAUSE
YOU COULD LOSE MONEY BY INVESTING IN THE FUND, BE SURE TO READ ALL RISK
DISCLOSURES CAREFULLY BEFORE INVESTING.
4
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
INVESTMENT GOAL. The Hartford Global Enhanced Dividend Fund seeks a high level
of current income. Capital appreciation is a secondary objective.
PRINCIPAL INVESTMENT STRATEGY. The fund seeks to achieve its goal by taking long
and short positions in domestic equity securities and foreign equity securities
listed on U.S. exchanges, which can include American Depositary Receipts or
"ADRs". Under normal circumstances, the fund invests at least 80% of its assets
in dividend paying equity securities. The fund will take long positions in
equity securities that Hartford Investment Management believes offer the
potential for above average dividend yields and for attractive returns. The fund
will sell short equity securities that Hartford Investment Management believes
offer the potential for a below average dividend yield and which are likely to
underperform. The fund seeks to enhance yield by using the proceeds from short
sales to purchase additional equity securities that provide an above average
dividend yield.
When the fund takes a long position, it purchases an equity security outright.
When the fund takes a short position, it sells at the current market price an
equity security that it does not own but has borrowed in anticipation that the
market price of the equity security will decline. To complete, or close out, the
short sale transaction, the fund purchases the same equity security in the
market and returns it to the lender. The fund makes money when the market price
of the borrowed equity security goes down and the fund is able to replace it for
less than the fund earned by selling the equity security short. Conversely, if
the price of the equity security goes up after the sale, the fund will lose
money because it will have to pay more to replace the borrowed equity security
than the fund received when it sold the equity security short.
The fund will generally hold long positions equal to approximately 140% of the
fund's net assets and short positions equal to approximately 40% of the fund's
net assets. However, the long and short positions held by the fund may change as
market conditions change. The fund's long positions may range from 100% to 150%
of the fund's net assets and its short positions may range from 0% to 50% of its
net assets.
The fund will focus its investments on companies with market capitalizations
similar to the Russell 3000 Index and a diverse selection of ADRs available
across countries and sectors. As of May 31, 2007, the market capitalization of
companies within the Russell 3000 Index ranged from approximately $15 million to
$476 billion. The fund may take long and short positions in domestic equity
securities and foreign equity securities listed on U.S. exchanges, which can
include American Depositary Receipts or "ADRs". ADRs are certificates issued by
a U.S. bank or trust company and represent the right to receive securities of a
foreign issuer deposited in a domestic bank or non-U.S. branch of a U.S. bank.
ADRs are traded on a U.S. securities exchange, or on an over-the-counter market,
and are denominated in U.S. dollars. Under normal market conditions, the fund's
investments in ADRs will range from 40% to 70% of the fund's net assets
(including investments in emerging markets countries).
The fund may engage in frequent and active trading of equity securities to
achieve its investment objective.
Dividend yield is a primary consideration in selecting stocks. In addition to
yield, Hartford Investment Management also uses a quantitative multifactor
approach to bottom-up stock selection, utilizing a broad set of individual
fundamental stock characteristics to model each stock's relative attractiveness,
with a focus on those factors that have been demonstrated historically to drive
market returns. These characteristics include factors designed to describe a
company's business, its valuation, investors' response to the company and the
company's management behavior and earnings quality. The fundamentals used may
vary by industry sector. Hartford Investment Management frequently and
consistently measures the characteristics of every stock in the eligible
universe and incorporates these measurements in a rigorous, repeatable process
that considers both volatility and correlations.
MAIN RISKS. As with most equity funds, the value of your investment in the fund
may go down in response to overall stock market movements and trends. You could
lose money as a result of your investment.
ADRs are subject to various risks of loss that are different from the risks of
investing in securities of U.S.-based companies. Investments in ADRs may be
affected by fluctuations in currency exchange rates, less liquid trading
markets, greater price volatility, less publicly available information about
issuers, social upheavals and political actions ranging from tax code changes to
governmental collapse. The foregoing risks are even greater with respect to
securities of issuers in countries with emerging economies or emerging
securities markets. Also, if there is a rise in demand for the underlying
security and it becomes less available to the market, the price of the ADR may
rise, causing the fund to pay a premium in order to obtain the desired ADR.
Conversely, changes in foreign market conditions or access to the underlying
securities could result in a decline in the value of the ADR.
5
The fund's investment strategy may involve more risk than other funds that do
not engage in short selling. In a short sale, the fund sells a borrowed
security. The fund may not always be able to borrow the security at a particular
time or at an acceptable price. Thus, there is risk that the fund may be unable
to implement its investment strategy due to the lack of available stocks or for
other reasons.
After selling the borrowed security, the fund is obligated to "cover" the short
sale by purchasing and returning the security to the lender. If a security sold
short increases in price, the seller may have to cover its short position at a
higher price than the short sale price, resulting in a loss. Because the fund's
loss on a short sale arises from increases in the value of the security sold
short, such loss is theoretically unlimited. In certain cases, purchasing a
security to cover a short position can itself cause the price of the security to
rise further, thereby exacerbating the loss.
Short sales also involve other costs. The fund must normally repay to the lender
an amount equal to any dividends or interest that accrues while the loan is
outstanding. In addition, to borrow the security, the fund may be required to
pay a premium. The fund also will incur transaction costs in effecting short
sales. The amount of any ultimate gain for the fund resulting from a short sale
will be decreased, and the amount of any ultimate loss will be increased, by the
amount of premiums, dividends, interest or expenses a Fund may be required to
pay in connection with the short sale.
Until the fund replaces a borrowed security, it is required to maintain a
segregated account of cash or liquid assets to cover the fund's short position.
Securities held in a segregated account cannot be sold while the position they
are covering is outstanding, unless they are replaced with similar securities.
Additionally, the fund must maintain sufficient liquid assets (less any
additional collateral held by the broker) to cover the short sale obligation.
This may limit the fund's investment flexibility, as well as its ability to meet
redemption requests or other current obligations.
By investing the proceeds received from selling securities short, the fund is
employing a form of leverage. The use of leverage may increase the fund's
exposure to long equity positions and make any change in the fund's NAV greater
than without the use of leverage. This could result in increased volatility of
returns. There is no guarantee that the fund will leverage its portfolio, or if
it does, that the fund's leveraging strategy will be successful. The fund cannot
guarantee that the use of leverage will produce a higher return on an
investment.
The fund trades securities very actively, which could increase its transaction
costs (thus affecting performance) and may increase your taxable distributions.
The fund's focus on dividend yielding investments significantly influences its
performance. High dividend yielding investments as a group can fall out of favor
with the market, causing the fund to underperform funds that do not focus on
dividends. The fund's strategy of using the proceeds from short sales to
purchase additional equity securities that provide an above average dividend
yield will amplify the fund's underperformance when high dividend yielding
investments are out of favor with the market. The fund's focus on dividend
yielding investments and use of short sales may cause the fund's share price and
total return to fluctuate more than the share price and total return of funds
that do not focus on dividend yielding investments using a short selling
strategy. The fund's focus on dividend yielding investments and use of short
sales may result in the underperformance of the fund relative to broad market
indices.
Hartford Investment Management's investment strategy will significantly
influence performance. If Hartford Investment Management's stock selection
strategy does not perform as expected, the fund could underperform its peers or
lose money. In particular, the fund's success in achieving its goal is highly
dependent on Hartford Investment Management's successful use of quantitative
analysis of the prospects of particular companies.
The fund may take a short position in a security at the same time that other
accounts managed by Hartford Investment Management take a long position in the
same security, or take a long position in a security at the same time that other
accounts managed by Hartford Investment Management take a short position in the
same security. In addition, the fund may from time to time take a long or short
position in a particular equity security while simultaneously taking the
opposite position with respect to an exchange traded fund ("ETF") which includes
such particular equity security as a constituent. ETFs are baskets of securities
that, like stocks, trade on exchanges such as the American Stock Exchange and
the New York Stock Exchange. These and other transactions undertaken on behalf
of other accounts managed by Hartford Investment Management may adversely impact
the fund. Transactions on behalf of other accounts managed by Hartford
Investment Management may have the effect of diluting or otherwise
disadvantaging the values, prices or investment strategies of the fund.
6
PAST PERFORMANCE. Because the fund has been in operation for less than one full
calendar year, no performance history has been provided.
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
[Download Table]
CLASS I
-------
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) imposed on purchases as a percentage of
offering price None
Maximum deferred sales charge (load) (as a percentage of purchase
price or redemption proceeds, whichever is less) None
Exchange fees None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees (1) 1.00%
Distribution and service (12b-1) fees None
Other expenses
Short sales program expenses(2) 0.40%
All other expenses(3) 0.35%
Total other expenses 0.75%
Total annual operating expenses (1)(2)(4) 1.75%
(1) HIFSCO has agreed to waive 100% of the management fee for the fund's first
year of operation.
(2) The fund's prime broker charges certain service fees in connection with the
administration of the fund's short positions. This amount also includes
payments to lenders as substitute dividends on securities borrowed
("dividend expense"). Dividend expenses will vary based on dividends paid
by the securities the fund sells short. This amount is estimated for the
fund's current fiscal year.
(3) "All other expenses" are estimated and include transfer agent fees,
custodial fees, accounting, legal and other expenses that the fund pays.
Hartford Administrative Services Company, the fund's transfer agent, has
agreed under a voluntary undertaking to waive any portion of the transfer
agency fees over 0.30% of average daily net assets per fiscal year for all
classes. This undertaking may be amended or withdrawn at any time.
(4) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class I shares of the fund, exclusive of taxes, interest expense, dividend
expense, short sales program expenses, brokerage commissions, acquired fund
fees and extraordinary expenses, to 1.35%. This policy may be discontinued
at any time.
EXAMPLE. These examples are intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds. The examples
assume that you invest $10,000 in the fund for the time periods indicated. The
examples also assume that your investment has a 5% return each year, that the
fund's operating expenses remain the same, and that you reinvest all dividends
and distributions. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
You would pay the following expenses whether or not you redeemed your shares at
the end of each period:
[Download Table]
EXPENSES (WITH OR WITH OUT REDEMPTION) CLASS I
-------------------------------------- -------
Year 1 $178
Year 3 $551
THE HARTFORD MUTUAL FUNDS
7
INVESTMENT STRATEGIES AND INVESTMENT MATTERS
INVESTMENT RISKS GENERALLY
Many factors affect the fund's performance. There is no assurance that the fund
will achieve its investment goal (investment objective), and investors should
not consider any one fund alone to be a complete investment program. As with all
mutual funds, there is a risk that an investor could lose money by investing in
the fund.
The different types of securities, investments, and investment techniques used
by the fund all have attendant risks of varying degrees. For example, with
respect to equity securities, there can be no assurance of capital appreciation
or dividend yield and an investment in any stock is subject to, among other
risks, the risk that the stock market as a whole may decline, thereby depressing
the stock's price (market risk), or the risk that the price of a particular
issuer's stock may decline due to its financial results (financial risk). With
respect to debt securities, there exists, among other risks, the risk that the
issuer of a security may not be able to meet its obligations on interest or
principal payments at the time required by the instrument (credit risk, a type
of financial risk). In addition, the value of debt instruments and other
income-bearing securities generally rises and falls inversely with prevailing
current interest rates (interest rate risk, a type of market risk). Securities
issued by U.S. Government agencies or government-sponsored enterprises may not
be guaranteed by the U.S. Treasury. As described below, an investment in the
fund entails special additional risks.
USE OF MONEY MARKET INVESTMENTS FOR TEMPORARY DEFENSIVE PURPOSES
From time to time, as part of its principal investment strategy, the fund may
invest some or all of its assets in cash or high quality money market securities
for temporary defensive purposes in response to adverse market, economic or
political conditions. To the extent the fund is in a defensive position, the
fund may lose the benefit of market upswings and limit its ability to meet its
investment objective.
USE OF SHORT SALES
As part of its principal investment strategy, the fund will enter into short
sales. In a short sale, the fund sells a borrowed security (typically from a
broker or other institution). The fund may not always be able to borrow the
security at a particular time or at an acceptable price. Thus, there is risk
that the fund may be unable to implement its investment strategy due to the lack
of available stocks or for other reasons. After selling the borrowed security,
the fund is obligated to "cover" the short sale by purchasing the security and
returning the security to the lender. If a security sold short increases in
price, the fund may have to cover its short position at a higher price than the
short sale price, resulting in a loss. Because the fund's loss on a short sale
arises from increases in the value of the security sold short, such loss is
theoretically unlimited. In certain cases, purchasing a security to cover a
short position can itself cause the price of the security to rise further,
thereby exacerbating the loss.
Short sales also involve other costs. The fund must normally repay to the lender
an amount equal to any dividends or interest that accrues while the loan is
outstanding. In addition, to borrow the security, the fund may be required to
pay a premium. The fund also will incur transaction costs in effecting short
sales. The amount of any ultimate gain for the fund resulting from a short sale
will be decreased, and the amount of any ultimate loss will be increased, by the
amount of premiums, dividends, interest or expenses the fund may be required to
pay in connection with the short sale. Until the fund replaces a borrowed
security, it is required to maintain a segregated account of cash or liquid
assets to cover the fund's short position. Securities held in a segregated
account cannot be sold while the position they are covering is outstanding,
unless they are replaced with similar securities. Additionally, the fund must
maintain sufficient liquid assets (less any additional collateral held by the
broker) to cover the short sale obligation. This may limit the fund's investment
flexibility, as well as its ability to meet redemption requests or other current
obligations.
USE OF OPTIONS, FUTURES AND OTHER DERIVATIVES
The fund may purchase and sell options, enter into futures contracts and/or
utilize other derivative contracts and securities with respect to stocks, bonds,
groups of securities (such as financial indices), foreign currencies, interest
rates, inflation and other indices. These techniques permit the fund to gain
exposure to a particular security, group of securities, interest rate or index,
and thereby have the potential for the fund to earn returns that are similar to
those which would be earned by direct investments in those securities or
instruments.
These techniques are also used to manage risk by hedging the fund's portfolio
investments. Hedging techniques may not always be available to the fund, and it
may not always be feasible for the fund to use hedging techniques even when they
are available.
8
Derivatives have risks, however. If the issuer of the derivative instrument does
not pay the amount due, the fund could lose money on the instrument. In
addition, the underlying security or investment on which the derivative is
based, or the derivative itself, may not perform the way the fund's manager
expected. As a result, the use of these techniques may result in losses to the
fund or increase volatility in the fund's performance. Some derivatives are
sophisticated instruments that typically involve a small investment of cash
relative to the magnitude of risks assumed. Derivative securities are subject to
market risk, which could be significant for those that have a leveraging effect.
FOREIGN INVESTMENTS
As part of its principal investment strategy, the fund may invest in foreign
equity securities listed on U.S. exchanges, which can include American
Depositary Receipts or "ADRs".
ADRs are securities traded on a U.S. securities exchange, or on an
over-the-counter market, that represent interests in securities issued by a
foreign publicly-listed company. ADRs have the same currency and economic risks
as the underlying shares they represent.
Investments in the securities of foreign issuers involve significant risks that
are not typically associated with investing in the securities of domestic
issuers. Such investments may be affected by changes in currency rates, changes
in foreign or U.S. laws or restrictions applicable to such investments and in
exchange control regulations. Securities of some foreign issuers may be less
liquid than securities of comparable domestic issuers. In addition, clearance
and settlement procedures may be different in foreign countries and, in certain
markets, on certain occasions, such procedures have been unable to keep pace
with the volume of securities or loan transactions, thus making it difficult to
execute such transactions. Foreign issuers are not generally subject to uniform
accounting, auditing and financial reporting standards comparable to those
applicable to domestic companies, and there may be less publicly available
information about a foreign issuer than a domestic issuer. Furthermore, with
respect to certain foreign countries, there is a possibility of expropriation or
confiscatory taxation, imposition of withholding taxes on dividend or interest
payments, limitations on the removal of cash or other assets of a fund, or
political or social instability or diplomatic developments which could affect
investments in those countries. Individual foreign economies also may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.
INVESTMENTS IN EMERGING MARKETS
The fund may invest in emerging markets (through investments in foreign equity
securities listed on U.S. exchanges, which can include ADRs) as part of its
principal investment strategy.
The securities markets of Asian, Latin American, Eastern European, Middle
Eastern, African and other emerging countries are less liquid, are especially
subject to greater price volatility, have smaller market capitalizations, have
less government regulation and are not subject to as extensive and frequent
accounting, financial and other reporting requirements as the securities markets
of more developed countries. Further, investment in equity securities of issuers
located in Russia and certain other emerging countries involves risk of loss
resulting from problems in share registration and custody and substantial
economic and political disruptions. These risks are not normally associated with
investments in more developed countries.
SMALL CAPITALIZATION COMPANIES
The fund may invest in securities of small capitalization companies as a part of
its principal investment strategy.
Historically, small market capitalization stocks and stocks of recently
organized companies have been more volatile in price than the larger market
capitalization stocks often included in the S&P 500 Index. As a result,
investing in the securities of such companies involves greater risk and the
possibility of greater portfolio price volatility. Among the reasons for the
greater price volatility of these small company and unseasoned stocks are the
less certain growth prospects of smaller firms and the lower degree of liquidity
in the markets for such stocks. Small company stocks are frequently thinly
traded and may have to be sold at a discount from current market prices or sold
in small lots over an extended period of time. Small companies also often have
limited product lines, markets or financial resources, may depend on or use a
few key personnel for management, and may be susceptible to losses and risks of
bankruptcy. The transaction costs associated with small company stocks are often
higher than those of larger capitalization companies.
OTHER INVESTMENT COMPANIES
9
The fund is permitted to invest in other investment companies, including
investment companies which may not be registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), such as holding company depository
receipts ("HOLDRs"), but not as part of its principal investment strategy. The
investment in other investment companies is limited in amount by the 1940 Act,
and will involve the indirect payment of a portion of the expenses, including
advisory fees, of such other investment companies.
The fund's investments in investment companies may include various
exchange-traded funds ("ETFs"), subject to the fund's investment objective,
policies, and strategies as described in this prospectus. ETFs are baskets of
securities that, like stocks, trade on exchanges such as the American Stock
Exchange and the New York Stock Exchange. ETFs are priced continuously and trade
throughout the day. ETFs may track a securities index, a particular market
sector, or a particular segment of a securities index or market sector. Some
types of equity ETFs are:
- "SPDRs" (S&P's Depositary Receipts), which are securities that represent
ownership in a long-term unit investment trust that holds a portfolio of
common stocks designed to track the performance of an S&P Index. Holders of
SPDRs are entitled to receive proportionate quarterly cash distributions
corresponding to the dividends that accrue to the stocks in the S&P Index's
underlying investment portfolio, less any trust expenses.
- "Qubes" (QQQQ), which invest in the stocks of the Nasdaq 100 Index, a
modified capitalization weighted index that includes the stocks of 100 of
the largest and most actively traded non-financial companies listed on the
Nasdaq Stock Market. Qubes use a unit investment trust structure that
allows immediate reinvestment of dividends.
- "iShares," which are securities that represent ownership in a long-term
unit investment trust that holds a portfolio of common stocks designed to
track the performance of specific indexes.
- "HOLDRs" (Holding Company Depositary Receipts), which are trust-issued
receipts that represent beneficial ownership in a specified group of 20 or
more stocks. Unlike other ETFs, the fund can hold the group of stocks as
one asset or unbundle the stocks and trade them separately, according to
the fund's investment strategies.
ETFs can experience many of the same risks associated with individual stocks.
ETFs are subject to market risk where the market as a whole, or that specific
sector, may decline. ETFs that invest in volatile stock sectors, such as foreign
issuers, smaller companies, or technology, are subject to the additional risks
to which those sectors are subject. ETFs may trade at a discount to the
aggregate value of the underlying securities. The underlying securities in an
ETF may not follow the price movements of an entire industry or sector. Trading
in an ETF may be halted if the trading in one or more of the ETF's underlying
securities is halted. Although expense ratios for ETFs are generally low,
frequent trading of ETFs by the fund can generate brokerage expenses.
Generally, the fund will not purchase securities of an investment company if, as
a result: (1) more than 10% of the fund's total assets would be invested in
securities of other investment companies, (2) such purchase would result in more
than 3% of the total outstanding voting securities of any such investment
company being held by the fund, or (3) more than 5% of the fund's total assets
would be invested in any one such investment company.
ABOUT THE FUND'S INVESTMENT GOAL
The fund's investment goal (or objective) may be changed without approval of the
shareholders of the fund. The fund may not be able to achieve its goal.
CONSEQUENCES OF PORTFOLIO TRADING PRACTICES
The fund may have a relatively high portfolio turnover.
The fund may, at times, engage in short-term trading. Short-term trading could
produce higher brokerage expenses for the fund and higher taxable distributions
to the fund's shareholders and therefore could adversely affect the fund's
performance. The fund is not managed to achieve a particular tax result for
shareholders. Shareholders should consult their own tax adviser for individual
tax advice.
TERMS USED IN THIS PROSPECTUS
10
Equity securities: Equity securities include common stock, preferred stock,
securities convertible into common or preferred stock and warrants or rights to
acquire common stock, including options.
Foreign issuers: Foreign issuers include (1) companies organized outside the
United States; (2) foreign governments and agencies or instrumentalities of
foreign governments; and (3) issuers whose economic fortunes and risks are
primarily linked with markets outside the United States. Certain companies
organized outside the United States may not be deemed to be foreign issuers if
the issuer's economic fortunes and risks are primarily linked with U.S. markets.
INVESTMENT POLICIES
The Global Enhanced Dividend Fund has a name which suggests a focus on a
particular type of investment. In accordance with Rule 35d-1 under the
Investment Company Act of 1940 (the "1940 Act"), the fund has adopted a policy
that it will, under normal circumstances, invest at least 80% of the value of
its assets in investments of the type suggested by its name, as set forth in the
fund's Principal Investment Strategy section. This requirement is applied at the
time the fund invests its assets. If, subsequent to an investment by the fund,
this requirement is no longer met due to changes in value or capitalization of
portfolio assets, the fund's future investments will be made in a manner that
will bring the fund into compliance with this requirement. For purposes of this
policy, "assets" means net assets plus the amount of any borrowings for
investment purposes. In addition, in appropriate circumstances, synthetic
investments may be included in the 80% basket if they have economic
characteristics similar to the other investments included in the basket. The
fund's policy to invest at least 80% of its assets in such a manner is not a
"fundamental" one, which means that it may be changed without the vote of a
majority of the fund's outstanding shares as defined in the 1940 Act. The name
of the fund may be changed without a majority vote of the fund's outstanding
shares as defined in the 1940 Act. The name of the fund may be changed at any
time by a vote of the fund's Board of Directors. However, Rule 35d-1 also
requires that shareholders be given written notice at least 60 days prior to any
change by a fund of its 80% investment policy covered by Rule 35d-1.
ADDITIONAL INVESTMENT STRATEGIES AND RISKS
The fund may invest in various securities and engage in various investment
techniques which are not the principal focus of the fund and therefore are not
described in this prospectus. These securities and techniques, together with
their risks, are discussed in the fund's Statement of Additional Information
("SAI") which may be obtained free of charge by contacting the fund (see back
cover for address phone number and website address).
DISCLOSURE OF PORTFOLIO HOLDINGS
The fund will disclose its complete month-end portfolio holdings on the fund's
website at www.hartfordinvestor.com no earlier than 30 calendar days after the
end of each month. The fund also will disclose on the fund's website the fund's
largest ten holdings no earlier than 15 days after the end of each month. A
description of the fund's policies and procedures with respect to the disclosure
of the fund's portfolio securities is available (i) in the fund's SAI; and (ii)
on the fund's website.
THE HARTFORD MUTUAL FUNDS
11
MANAGEMENT OF THE FUND
THE INVESTMENT MANAGER
Hartford Investment Financial Services, LLC ("HIFSCO") is the investment manager
to the fund. HIFSCO is a wholly-owned, indirect subsidiary of The Hartford
Financial Services Group, Inc. ("The Hartford"), a Connecticut financial
services company with over $419.5 billion in assets under management as of
September 30, 2007. At the same time, HIFSCO had over $52.2 billion in assets
under management. HIFSCO is responsible for the management of the fund and
supervises the activities of the investment sub-adviser described below. HIFSCO
is principally located at 200 Hopmeadow Street, Simsbury, Connecticut 06089.
The fund relies on an exemptive order from the Securities and Exchange
Commission under which it uses a "Manager of Managers" structure. HIFSCO has
responsibility, subject to oversight by the Board of Directors, to oversee the
sub-adviser and recommend its hiring, termination and replacement. The exemptive
order permits HIFSCO to appoint a new sub-adviser not affiliated with HIFSCO,
with the approval of the Board of Directors and without obtaining approval from
those shareholders that participate in the fund. Within 90 days after hiring any
new sub-adviser, affected shareholders will receive information about the new
sub-advisory relationship.
LITIGATION AND REGULATORY ACTIONS
Five putative multi-state class actions were filed in October 2004 and
consolidated into one case, In re Hartford Mutual Funds Fee Litigation, pending
before the United States District Court for the District of Connecticut, in
which the plaintiffs made a wide range of allegations against The Hartford and
other defendants relating, among other things, to fees charged to investors in
certain of The Hartford Retail Mutual Funds. Following a motion by the
defendants to dismiss the case, but before the court had yet ruled on the
motion, the plaintiffs sought the court's permission to file a second amended
complaint. In February 2007, the court granted the plaintiffs leave to amend. In
the second amended complaint, the plaintiffs allege, among other things, that
investors in the Hartford Advisers Fund, Hartford Capital Appreciation Fund,
Hartford Dividend and Growth Fund, Hartford MidCap Fund, and Hartford Stock Fund
were charged excessive fees during the period from February 27, 2003 through
February 27, 2004. The defendants, which include The Hartford Financial Services
Group, Inc., Hartford Investment Financial Services, LLC, Wellington Management
Company, LLC, Hartford Investment Management Company, Hartford Securities
Distribution Company, Inc., and PLANCO Financial Services Inc., intend to move
to dismiss the second amended complaint. This litigation is not expected to
result in a material adverse effect on the funds.
THE INVESTMENT SUB-ADVISER
Hartford Investment Management is a professional money management firm that
provides services to investment companies, employee benefit plans, affiliated
insurance companies and other institutional accounts. Hartford Investment
Management is a wholly-owned subsidiary of The Hartford. As of September 30,
2007, Hartford Investment Management had investment management authority over
approximately $143.1 billion in assets. Hartford Investment Management is
principally located at 55 Farmington Avenue, Hartford, Connecticut 06105.
SOFT DOLLAR PRACTICES
The sub-adviser is responsible for the day-to-day portfolio management
activities of the fund, including effecting securities transactions. To the
extent consistent with Section 28(e) of the Securities Exchange Act of 1934 (the
"1934 Act"), the sub-adviser may obtain "soft dollar" benefits in connection
with the execution of transactions for the fund. The sub-adviser may cause the
fund to pay a broker-dealer an amount in excess of the amount that another
broker-dealer would have charged for the same transaction, in exchange for
"brokerage and research services" (as defined in the 1934 Act). Neither the
management fees nor the sub-advisory fees are reduced because the sub-adviser
receives these products and services. These products and services may be of
value to the sub-adviser in advising its clients (including the fund), although
not all of these products and services are necessarily useful and of value in
managing the fund. These products and services may include research reports,
access to management personnel, financial newsletters and trade journals,
seminar and conference fees, quantitative analytical software, data services,
communication services relating to (or incidental to) the execution, clearing
and settlement of securities transactions, post-trade services relating to
functions incidental to trade execution, and other products and services that
are permitted under Section 28(e), as interpreted by the SEC from time to time.
In certain instances, these products and services may have additional uses that
are not related to brokerage or research. For such "mixed use" items, in
accordance with SEC guidance, the sub-adviser will make a reasonable allocation
of the cost of the item according to its
12
expected use, and will pay for that portion of the item that does not have a
brokerage or research-related component out of its own resources.
MANAGEMENT FEES
The fund pays a monthly management fee to HIFSCO based on a stated percentage of
the fund's average daily net asset value as follows:
[Download Table]
GLOBAL ENHANCED DIVIDEND FUND
AVERAGE DAILY NET ASSETS ANNUAL RATE
----------------------------- -----------
First $500 million 1.00%
Next $500 million 0.95%
Over $1 billion 0.90%
(1) HIFSCO has voluntarily agreed to waive 100% of the management fee for the
fund's first year of operation.
Because the fund has not commenced operations, information is not available
regarding fees paid by the fund to HIFSCO.
A discussion regarding the basis for the Board of Directors' approval of the
investment management and investment sub-advisory agreements of the fund will be
available in the fund's report to shareholders.
PORTFOLIO MANAGERS OF THE FUND
The following person has primary responsibility for the day-to-day management of
the fund's portfolio since inception. The fund's SAI provides additional
information about the portfolio manager's compensation, other accounts managed
by the portfolio manager and the portfolio manager's ownership of securities in
the fund.
GLOBAL ENHANCED DIVIDEND FUND The fund is managed by Paul Bukowski.
Paul Bukowski, Vice President of Hartford Investment Management, has served as
portfolio manager of the fund since its inception. Mr. Bukowski, who has 12
years of investment management experience, joined Hartford Investment Management
in 2005. Before joining Hartford Investment Management, he was a senior
quantitative portfolio analyst for ING's large-cap growth strategy from 2004.
Prior to 2004, Mr. Bukowski was with Callard & Ogden Investment Management where
he was responsible for quantitative analysis, fund research, and managed several
core and growth portfolios. He also created investment systems, including
databases and front-end user interfaces, and was responsible for managing
several core and growth portfolios. Mr. Bukowski earned a BA in Statistics and
Computer Science from the University of Wisconsin and an MBA in Finance and
Policy from the University of Chicago. He holds the Chartered Financial Analyst
designation and is a fellow of the Casualty Actuarial Society.
THE HARTFORD MUTUAL FUNDS
13
ABOUT YOUR ACCOUNT
CLASS I SHARE INVESTOR REQUIREMENTS
Investors may purchase Class I shares only through advisory fee-based wrap
programs sponsored by financial intermediaries, such as brokerage firms,
investment advisers, financial planners, third-party administrators, insurance
companies, and any other institutions having a selling, administration or any
similar agreement with the Fund, whose use of Class I shares will depend on the
structure of the particular advisory fee-based wrap program. These financial
intermediaries may purchase Class I shares at net asset value without an annual
distribution fee.
Ineligible investors who select Class I shares will be issued Class A shares.
Class A shares are subject to a front-end sales charge and distribution fee.
CHOOSING A SHARE CLASS
The I share class has its own cost structure. The fund also offers Class A,
Class B and Class C shares and Class R3, Class R4, Class R5 and Class Y shares.
Your financial representative can help you decide. For actual past expenses of
Class I shares, see the fund-by-fund information earlier in this prospectus.
DISTRIBUTION ARRANGEMENTS
Hartford Investment Financial Services, LLC ("HIFSCO") serves as the principal
underwriter for the fund pursuant to Underwriting Agreements initially approved
by the Board of Directors of The Hartford Mutual Funds, Inc. (the "Company").
HIFSCO is a registered broker-dealer and member of the Financial Industry
Regulatory Authority. Shares of the fund are continuously offered and sold by
selected broker-dealers who have selling agreements with HIFSCO. Such selected
broker-dealers may designate and authorize other financial intermediaries to
offer and sell shares of the fund. Except as discussed below, HIFSCO bears all
the expenses of providing services pursuant to the Underwriting Agreements
including the payment of the expenses relating to the distribution of
prospectuses for sales purposes as well as any advertising or sales literature.
HIFSCO is not obligated to sell any specific amount of shares of the fund.
ADDITIONAL COMPENSATION TO BROKER-DEALERS, FINANCIAL INSTITUTIONS AND OTHER
PERSONS ("FINANCIAL INTERMEDIARIES") In addition to the commissions (which may
be paid or reallowed to Financial Intermediaries from an applicable sales charge
and/or advanced to Financial Intermediaries) and Rule 12b-1 fees that are
described above and in the SAI, the distributor and its affiliates pay, out of
their own assets, significant additional compensation to Financial
Intermediaries (who may or may not be affiliates of the distributor) in
connection with the sale and distribution of the fund's shares ("Additional
Payments") based on a number of factors that are described below and in the
fund's SAI.
These Additional Payments are generally based on average net assets (or on aged
assets, i.e., assets held over one year) of the fund attributable to a
particular Financial Intermediary, on sales of the fund's shares attributable to
a particular Financial Intermediary, and/or on reimbursement of ticket charges,
and may, but are normally not expected to, exceed, in the aggregate, 0.44% of
the average net assets of the fund attributable to a particular Financial
Intermediary.
Such Additional Payments are generally made for the placement of the fund on a
Financial Intermediary's list of mutual funds available for purchase by its
customers and/or for including the fund within a group of mutual funds that
receive special marketing focus. Certain additional compensation arrangements
are discussed below.
Apart from the Additional Payments, additional compensation arrangements may
take the form of, among others: (1) "due diligence" payments for a Financial
Intermediary's examination of the fund and payments for providing extra employee
training and information relating to the fund and (2) "marketing support" fees
for providing assistance in promoting the sale of the fund's shares ("Other
Compensation"). Subject to FINRA regulations, HIFSCO and its affiliates may
contribute Other Amounts to various non-cash and cash incentive arrangements to
promote the sale of shares, as well as sponsor various educational programs,
sales contests and/or promotions in which participants may receive prizes such
as travel awards, merchandise and cash and/or investment research pertaining to
particular securities and other financial instruments or to the securities and
financial markets generally, educational information and related support
materials and hardware and/or software. HIFSCO and its affiliates may also pay
for the travel expenses, meals, lodging and entertainment of Financial
Intermediaries and their salespersons and guests in connection with
14
education, sales and promotional programs, subject to applicable FINRA
regulations. These programs, which may vary for different Financial
Intermediaries, will not change the price an investor will pay for shares or the
amount that the fund will receive from such sale. Incurred payments of Other
Compensation did not exceed $1.1 million per Financial Intermediary for the
calendar year ended December 31, 2006.
Additional Payments, including Other Compensation, may also pertain to the sale
and distribution of other investment products distributed by affiliates of the
distributor, and may, in some cases, act as a financial incentive for a
Financial Intermediary to recommend the purchase of one fund over another fund.
Additional Payments to Financial Intermediaries in connection with the sale and
distribution of the fund's shares are negotiated based on a range of factors,
including, but not limited to, reputation in the industry, ability to attract
and retain assets (including distribution of particular classes of the fund's
shares), target markets, customer relationships and quality of service. No one
factor is determinative of the type or amount of Additional Payments to be
provided and factors are weighed in the assessment of such determination.
For the calendar year ended December 31, 2006, HIFSCO or its affiliates incurred
approximately $32.6 million in total Additional Payments, including Other
Compensation (excluding travel expenses, meals, lodging and entertainment of
Financial Intermediaries and their salespersons) to Financial Intermediaries, of
which approximately $13.7 million was incurred with respect to Edward D. Jones &
Co., L.P. For the calendar year ended December 31, 2006, total travel expenses,
meals, lodging and entertainment of Financial Intermediaries and their
salespersons did not in the aggregate exceed approximately $3.6 million.
As of January 1, 2007, HIFSCO has entered into arrangements to make Additional
Payments, including Other Compensation (excluding travel expenses, meals,
lodging and entertainment of Financial Intermediaries and their salespersons),
to: A.G. Edwards & Sons, Inc., AIG Advisors Group, Inc., (Advantage Capital
Corp., AIG Financial Advisors, American General, FSC Securities Corp., Royal
Alliance Associates, Inc.), Allen & Company of FL, Inc., American General
Securities, Inc., American Independent Securities Group, LLC, AmSouth Investment
Services, Anchor Investment Services, Inc., Associated Investment Services,
Inc., Associated Securities Corporation, Banc of America Investment Services,
Inc., BancorpSouth Services, Banc West Investment Services, B.C. Ziegler &
Company, BNY Investment Center, Inc., BOSC, Inc., Brookstreet Securities Corp.,
Cadaret Grant & Co., Inc., Cambridge Investment Research, Cantella & Company,
Inc., Capital Analysts, Inc., Capital Investment Group, Inc., Centaurus
Financial Inc., Charles Schwab & Co., Inc., Chase Investment Services
Corporation, Citicorp Investment Services, Citigroup Global Markets, Inc.,
Colonial Brokerage, Inc., Comerica Securities, Commerce Brokerage Services,
Inc., Commerce Capital Markets, Inc., Commonwealth Financial Network,
Commonwealth Financial Services, Crown Capital Securities, LP, Cuna Brokerage
Services, CUSO Financial Services, L.P., Dominion Investor Services, Duerr
Financial Corp, Eagle One Investments, Edward D. Jones & Co., Empire Securities
Corp, Equity Securities Corp, Equity Services, Inc., Essex National Securities,
Inc., Ferris Baker Watts, Inc., FFP Securities, Inc., Fidelity Investments,
Fifth Third Securities, Financial Planning Consultants, Inc., Fintegra, LLC,
First Allied Securities, Inc., First Citizens Investor Services, Inc., First
Heartland Capital Inc., First Tennessee Brokerage, Inc., Fiserv Brokerage
Services, Inc., Frost Brokerage Services, Inc., Geneos Wealth Management, Inc.,
Girard Securities Inc., Grant Bettingen, Great American Advisors, Inc., H. Beck,
Inc., H&R Block, Harbour Investments, Harvest Capital, LLC, HBW Securities, LLC,
Hefren-Tillotson Inc., Hilliard Lyons, HSBC Brokerage USA, Huntington Investment
Co., IFMG Securities, Inc., ING Advisor Network (Financial Network Investment
Corporation, Inc., ING Financial Partners, Inc., Keybanc Capital Markets, Inc.,
Multi-Financial Securities Corporation, Inc., PrimeVest Financial Services,
Inc.), Independent Financial Group, LLC, Investment Professionals, Inc.,
Investors Capital Corp., Investors Security Company, Inc., Janney Montgomery
Scott, J.J.B. Hilliard, Jefferson Pilot Securities Corp, KMS Financial Services,
Inc., KNBT Securities Inc., Kovack Securities, Inc., LaSalle Financial Services,
LaSalle Street Securities, LLC, Lincoln Financial Advisors Group, Linsco/Private
Ledger Corp., M&T Securities Inc., Merrill Lynch Pierce Fenner & Smith, Mid
Atlantic Capital Corp, Money Concepts Capital Corp, Morgan Keegan & Company,
Inc., Morgan Stanley DW Inc., Mutual Service Corporation, National Advisors
Trust, National Planning Holdings, Inc. (Invest Financial Corporation,
Investment Centers of America, National Planning Corporation, SII Investments
Inc.), New England Securities, Newbridge Securities, NEXT Financial Group, Inc.,
North Ridge Securities Corp, Oppenheimer & Co, Inc., Pacific West Securities,
Inc., Prime Capital Services, Inc., ProEquities, Inc., Prospera Financial
Securities, Inc., QA3 Financial Corp., Raymond James & Associates Inc., Raymond
James Financial Services (IM&R), RBC Dain Rauscher, RDM Investment Services,
Robert W. Baird, Scott & Stringfellow Inc., Securian, Securities America, Inc.,
Securities Service Network, Inc., Sigma Financial Corp, Sorrento Pacific
Financial, Spectrum Capital, Inc., Stifel, Nicolaus & Company, Inc., Summit
Brokerage Services, SunAmerica Securities, Inc., Suntrust Investment Services,
TD Waterhouse, Inc., The Huntington Investment Company, TFS Securities, Inc.,
Transamerica Financial Advisors Inc., Triad Advisors, Inc., UBS Financial
Services Inc., UnionBanc Investment Services LLC, United Heritage Financial
Services, U.S. Bancorp Investments Inc., Uvest Financial Services Group, Inc.,
Vision Investment Services, Inc, Vorpahl Wing Securities, Wachovia Securities,
LLC, Wall Street Financial Group, Webster Investment Services, Inc, Wells Fargo
Investments, WM Financial Services, Inc., Workman Securities Corp, WRP
Investments, Inc., XCU Capital Corp., and Woodbury Financial Services, Inc. (an
indirect wholly-owned subsidiary of
15
The Hartford). HIFSCO may enter into arrangements with other Financial
Intermediaries to make such Additional Payments and Other Compensation.
In addition to the above payments, HIFSCO and its affiliates, out of their own
assets, may pay compensation for subaccounting, administrative and/or
shareholder processing services as described below.
ADDITIONAL COMPENSATION TO SERVICING INSTITUTIONS AND OTHER PERSONS ("SERVICING
INTERMEDIARIES") FOR SUBACCOUNTING, ADMINISTRATIVE AND/OR SHAREHOLDER PROCESSING
SERVICES. In addition to payments made in connection with the sale and
distribution of the fund's shares (described above) and administration and Rule
12b-1 fees paid by the fund, the distributor and its affiliates pay, out of
their own assets, significant additional compensation to Servicing
Intermediaries (who may or may not be affiliates of the distributor) in
connection with subaccounting, administrative and/or shareholder processing
services ("Servicing Compensation") based on a number of factors described
below.
Servicing Compensation is generally based on average net assets of the funds
attributable to a particular Servicing Intermediary, and may, but is normally
not expected to, exceed, in the aggregate, 0.20% of the average net assets of
the funds attributable to a particular Servicing Intermediary. Such Servicing
Compensation is generally made for subaccounting, administrative and/or
shareholder processing services. These programs, which may vary for different
Servicing Intermediaries, will not change the price an investor will pay for
shares. This Servicing Compensation may act as a financial incentive for a
Servicing Intermediary in choosing to provide services to one fund over another
fund.
The Servicing Compensation to Servicing Intermediaries is negotiated based on a
range of factors, including, but not limited to, reputation in the industry,
customer relationships and quality of service. No one factor is determinative of
the amount of Servicing Compensation to be provided and factors are weighed in
the assessment of such determination. For the year ended December 31, 2006,
HIFSCO incurred approximately $250,000 in total Servicing Compensation to
Servicing Intermediaries and an incurred payment of such Servicing Compensation
did not exceed $210,000 for any Servicing Intermediary.
As of January 1, 2007, HIFSCO has entered into arrangements to pay Servicing
Compensation to: The 401(k) Company, American Century Investment Management,
Inc.; AmeriMutual Funds Distributor, Inc.; Ameriprise Financial Services, Inc.;
BenefitStreet, Inc.; Diversified Investment Advisors, Inc.; Fidelity Investments
Institutional Operations Company, Inc. & Fidelity Investments Institutional
Services Company, Inc. ("Fidelity"); Gold Trust Company GWFS Equities, Inc.;
Invesmart, Inc. & Invesmart Securities, LLC; J.P. Morgan Retirement Plan
Services, LLC; Lincoln Retirement Services Company, LLC & AMG Service Corp;
Mercer HR Services, LLC; Mid Atlantic Capital Corporation; Reliance Trust
Company; T. Rowe Price Retirement Plan Services, Inc. & T. Rowe Price Investment
Services, Inc, and Upromise Investments, Inc. HIFSCO may enter into arrangements
with other Servicing Intermediaries to pay such Servicing Compensation.
Servicing Compensation is also paid to certain Servicing Intermediaries by HASCO
out of the transfer agency fees it receives from the fund. Although some
arrangements are based on average net assets attributable to the Servicing
Intermediary, such Servicing Intermediaries are generally paid a per account fee
ranging to no more than $16 per account. As of January 1, 2007, such Servicing
Intermediaries paid by HASCO are: ADP Broker-Dealer, Inc.; A.G. Edwards;
American Stock Transfer and Trust Company; CPI Qualified Plan Consultants, Inc;
SunGard InstitutionalBrokerage Inc.; Expert Plan, Inc.; Fiserv Trust Company;
Gail Weiss & Associates, Inc.; Gem Group L.P.; Hewitt Associates LLC; Legette
Actuaries, Inc.; Mid Atlantic Capital Corporation; MSCS Financial Services, LLC;
Ceridian Retirement Plan Services, Inc.; Northeast Retirement Services, Inc.;
Prudential Investment Management Services LLC & Prudential Investments LLC; QBC,
Inc.; Swerdlin & Company; and Stanton Trust Company N.A. Other Servicing
Intermediaries may be paid by HASCO in the future.
OPENING AN ACCOUNT
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens a new account. What this means
for you: When you open a new account, you will be asked to provide your name,
residential address, date of birth, social security number and other information
that identifies you. You may also be asked to show your driver's license or
other identifying documents.
For non-persons wishing to open an account or establish a relationship, Federal
law requires us to obtain, verify and record information that identifies each
business or entity. What this means for you: when you open an account or
establish a relationship, we will ask for your business name, a street address
and a tax identification number, that Federal law requires us to obtain. We
appreciate your cooperation.
If a fund is not able to adequately identify you within the time frames set for
in the law, your shares may be automatically redeemed. If the net asset value
per share has decreased since your purchase, you will lose money as a result of
this redemption. you may also incur any applicable sales charge.
16
1 Read this prospectus carefully.
2 Determine how much you want to invest. The minimum initial investment for
the fund is as follows:
- $1,000 per fund.
- subsequent investments: $50 per fund.
Minimum investment amounts may be waived for certain present or former officers,
directors and employees and their families of The Hartford, Wellington
Management and their affiliates, as well as certain broker sponsored wrap-fee
programs or at the transfer agent's discretion.
3 Complete the appropriate parts of the account application including any
privileges desired. By applying for privileges now, you can avoid the delay
and inconvenience of having to file an additional application if you want
to add privileges later. If you have questions, please contact your
financial representative.
4 Make your initial investment selection. Your financial representative can
initiate any purchase, exchange or sale of shares.
ADDRESS: PHONE NUMBER:
THE HARTFORD MUTUAL FUNDS 1-888-THE-STAG (843-7824)
P.O. BOX 64387
MINNEAPOLIS, MN 55164-0387 CONTACT YOUR FINANCIAL REPRESENTATIVE
FOR INSTRUCTIONS AND ASSISTANCE.
17
BUYING, EXCHANGING & SELLING SHARES
BUYING SHARES
As previously indicated, you may purchase Class I shares only through advisory
fee-based wrap programs sponsored by financial intermediaries and any other
institutions having agreements with the Fund, whose use of Class I shares will
depend on the structure of the particular advisory fee-based wrap program. Your
initial investment must meet the minimum requirement of $1,000. See your
financial representative for any questions regarding buying shares through the
advisory fee-based wrap program.
In exchange for the services it offers, your financial intermediary may charge
fees which are in addition to those described in this prospectus.
EXCHANGING SHARES
Class I shares may only be exchanged for Class I shares of any other fund by
having your financial representative process your exchange request. Class I
shares may not be exchanged for any other class. The registration for both
accounts involved must be identical. You may be subject to tax liability as a
result of your exchange. The fund reserves the right to amend or terminate the
exchange privilege at any time, for any reason.
If you own Class A, B, C, L, R3, R4, R5 or Y shares of certain funds, please
refer to the prospectus for these class share offerings for further information
on the exchange privileges available to you.
SELLING SHARES
You may redeem your shares by having your financial representative process your
redemption. Your financial representative will be responsible for furnishing all
necessary documents to the fund and may charge you for this service.
THE HARTFORD MUTUAL FUNDS
18
TRANSACTION POLICIES
VALUATION OF SHARES
The net asset value per share (NAV) is determined for the fund and each class as
of the close of regular trading on the New York Stock Exchange ("NYSE")
(typically 4:00 p.m. Eastern Time) on each business day that the NYSE is open.
The net asset value for the fund is determined by dividing the value of the
fund's net assets attributable to a class of shares by the number of shares
outstanding for that class.
The fund generally uses market prices in valuing portfolio securities. If market
quotations are not readily available or are deemed unreliable, the fund will use
the fair value of the security as determined in good faith under policies and
procedures established by and under the supervision of the fund's Board of
Directors. Market prices may be deemed unreliable, for example, if a security is
thinly traded or if an event has occurred after the close of the exchange on
which a portfolio security is principally traded but before the close of the
NYSE that is expected to affect the value of the portfolio security. The
circumstances in which the fund may use fair value pricing include, among
others: (i) the occurrence of events that are significant to a particular
issuer, such as mergers, restructuring or defaults; (ii) the occurrence of
events that are significant to an entire market, such as natural disasters in a
particular region or governmental actions; (iii) trading restrictions on
securities; (iv) thinly traded securities; and (v) market events such as trading
halts and early market closings. In addition, with respect to the valuation of
securities principally traded on foreign markets, the fund uses a fair value
pricing service approved by the fund's Board, which employs quantitative models
to adjust for "stale" prices caused by the movement of other markets and other
factors occurring after the close of the foreign exchanges but before the close
of the NYSE. Securities that are principally traded on foreign markets may trade
on days that are not business days of the fund. Because the NAV of the fund's
shares is determined only on business days of the fund, the value of foreign
securities may change on days when a shareholder will not be able to purchase or
redeem shares of the fund. Fair value pricing is subjective in nature and the
use of fair value pricing by the fund may cause the net asset value of its
shares to differ significantly from the net asset value that would be calculated
using prevailing market values. There can be no assurance that the fund could
obtain the fair value assigned to a security if it were to sell the security at
approximately the time at which the fund determines its NAV per share.
BUY AND SELL PRICES
When you buy shares, you pay the NAV. When you sell shares, you receive the NAV.
19
TRANSACTION POLICIES
EXECUTION OF REQUESTS
The fund is open on those days when the New York Stock Exchange is open,
typically Monday through Friday. Buy and sell requests are executed at the next
NAV calculated after the request is received from your financial representative,
if the order is in "good order" (has all required information).
In unusual circumstances, the fund may temporarily suspend the processing of
sell requests, or may postpone payment of redemption proceeds for up to three
business days or longer, as allowed by federal securities laws.
FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES
The fund is intended to be a long-term investment vehicle and is not designed to
provide investors with a means of speculating on short-term market movements
(market timing). Frequent purchases and redemptions of the fund by a fund
shareholder can disrupt the management of the fund, negatively affect the fund's
performance, and increase expenses for all fund shareholders. In particular,
frequent trading (i) can force the fund's portfolio manager to hold larger cash
positions than desired instead of fully investing the funds, which can result in
lost investment opportunities; (ii) can cause unplanned and inopportune
portfolio turnover in order to meet redemption requests; (iii) can increase
broker-dealer commissions and other transaction costs as well as administrative
costs for the fund; and (iv) can trigger taxable gains for other shareholders.
Also, some frequent traders engage in arbitrage strategies, by which these
traders seek to exploit pricing anomalies that can occur when the fund invests
in securities that are thinly traded (for example some small capitalization
stocks) or are traded primarily in markets outside of the United States.
Frequent traders, and in particular those using arbitrage strategies can dilute
the fund's NAV for long-term shareholders.
If you intend to trade frequently or use market timing investment strategies,
you should not purchase the fund.
The Board of Directors of the fund has adopted policies and procedures with
respect to frequent purchases and redemptions of fund shares by fund
shareholders. The fund's policy is to discourage investors from trading in the
fund's shares in an excessive manner that would be harmful to long-term
investors and to make reasonable efforts to detect and deter excessive trading.
The fund reserves the right to reject any purchase order at any time and for any
reason, without prior written notice. The fund also reserves the right to revoke
the exchange privileges of any person at any time and for any reason. In making
determinations concerning the revocation of exchange privileges, the fund may
consider an investor's trading history in any Hartford Mutual Fund, including
the person's trading history in any accounts under a person's common ownership
or control.
It is the policy of the fund to permit only two "substantive round trips" by an
investor within any single fund within a 90-day period.
A substantive round trip is a purchase of or an exchange into the same fund and
a redemption of or an exchange out of the same fund in a dollar amount that the
fund's transfer agent determines, in the reasonable exercise of its discretion,
could adversely affect the management of the fund. When an additional
transaction request for the fund is received within the 90-day period, the
requested transaction will be rejected and the person requesting such
transaction will be deemed an "Excessive Trader." All exchange and purchase
privileges of an Excessive Trader shall be suspended within the fund for the
first violation of the policy for a period of 90 days. For a second violation of
the policy, the exchange and purchase privileges of the Excessive Trader will be
suspended indefinitely. If an Excessive Trader makes exchanges through a
registered representative, in appropriate circumstances the fund's transfer
agent may terminate the registered representative's exchange and purchase
privileges in the fund. Automatic programs offered by the fund such as dollar
cost averaging and dividend diversification are exempt from the policy described
above.
20
In addition, the Money Market Fund is excluded from the policy.
The fund's policies for deterring frequent purchases and redemptions of fund
shares by the fund shareholder are intended to be applied uniformly to all fund
shareholders to the extent practicable. Some financial intermediaries, such as
broker-dealers, investment advisors, plan administrators, and third-party
transfer agents, however, maintain omnibus accounts in which they aggregate
orders of multiple investors and forward the aggregated orders to the fund.
Because the fund receives these orders on an aggregated basis and because these
omnibus accounts may trade with numerous fund families with differing market
timing policies, the fund is substantially limited in its ability to identify or
deter Excessive Traders or other abusive traders. The fund's procedures with
respect to omnibus accounts will be as follows: (1) Where Hartford
Administrative Service Company ("HASCO") is provided individual shareholder
level transaction detail on a daily basis, HASCO shall monitor the daily trade
activity of individual shareholders and apply the Policy. (2) Where an
intermediary will implement the Policy on behalf of HASCO, HASCO shall obtain an
appropriate annual certification from such intermediary. (3) Where an
intermediary has established reasonable internal controls and procedures for
limiting exchange activity in a manner that serves the purposes of the Policy as
determined by the Frequent Trading Review Committee (comprised of the funds'
Chief Compliance Officer, Chief Legal Officer and a senior business leader of
The Hartford), HASCO shall permit such intermediary to apply its policy in lieu
of this Policy and obtain an appropriate annual certification. Finally, (4)
where none of the foregoing occurs, HASCO shall monitor the accounts at an
omnibus level and apply detection tools designed to determine whether
shareholder transactions violating the Policy may be occurring. In such cases,
HASCO shall request and evaluate individual shareholder level transaction detail
and seek to impose restrictions in accordance with the Policy. In addition, the
fund's transfer agent will seek to obtain annual certifications from financial
intermediaries that such intermediaries have established reasonable internal
controls and procedures for limiting exchange activities in a manner that is
consistent with the fund's policies concerning frequent purchases and
redemptions of fund shares and are reasonably designed to obtain compliance with
applicable rules relating to customer-order handling and abusive trading
practices. Nonetheless, the fund's ability to identify and deter frequent
purchases and redemptions of the fund's shares through omnibus accounts is
limited, and the fund's success in accomplishing the objectives of the policies
concerning frequent purchases and redemptions of fund shares in this context
depends significantly upon the cooperation of the financial intermediaries.
In October 2007, new SEC rules became effective which require the fund and
intermediaries to enter into written agreements intended to promote transparency
in omnibus accounts. As the fund and intermediaries implement the requirements
of the new rules, it is expected that the fund will be better able to apply its
frequent trading policies to omnibus accounts.
The use of fair value pricing can serve both to make the fund less attractive to
market timers and to reduce the potential adverse consequences of market timing
or abusive trading to other investors. Certain market timers seek to take
advantage of pricing anomalies that can occur in fund shares resulting from the
manner in which the NAV of the fund's shares is determined each day. Frequent
trading in fund shares can dilute the value of long-term shareholders' interests
in the fund if the fund calculates its NAV using closing prices that are no
longer accurate. This can happen particularly in funds that invest in overseas
markets or that invest in securities of smaller issuers or thinly traded
securities. The fund's pricing procedures, particularly those procedures
governing the determination of the "fair value" of securities for which market
prices are not readily available (or are unreliable) for foreign securities may
serve as a deterrent against harmful excessive trading in fund shares. For
additional information concerning the fund's fair value procedures, please refer
to "Valuation of Shares."
CERTIFICATED SHARES
Shares are electronically recorded and therefore share certificates are not
issued.
21
TRANSACTION POLICIES
SMALL ACCOUNTS
If the total value of a fund in your account is less than $1,000 (for any
reason), you may be asked to purchase more shares within 30 days. If you do not
take action within this time, your fund may close out your account and mail you
the proceeds.
SALES IN ADVANCE OF PURCHASE PAYMENTS
When a request is placed to sell shares for which the purchase money has not yet
been collected, the request will be executed in a timely fashion, but the fund
will not release the proceeds to you (or your financial representative) until
the purchase payment clears. This may take up to 10 calendar days after the
purchase.
SPECIAL REDEMPTIONS
Although it would not normally do so, the fund has the right to pay the
redemption price of shares of the fund in whole or in part in portfolio
securities. When the shareholder sells portfolio securities received in this
fashion, a brokerage charge would be incurred. Any such securities would be
valued for the purposes of making such payment at the same value as used in
determining net asset value. The fund, however, always redeems shares solely in
cash up to the lesser of $250,000 or 1% of the net asset value of the fund
during any 90 day period for any one account.
DIVIDENDS AND ACCOUNT POLICIES
You will receive account and tax information statements, if applicable, from
your financial intermediary pursuant to their policies.
DIVIDENDS AND DISTRIBUTIONS The fund intends to distribute substantially all of
its net income to shareholders at least quarterly and capital gains will be
distributed at least annually. Dividends from net investment income of the fund
are normally declared and paid quarterly. Unless shareholders specify otherwise,
all dividends and distributions received from the fund are automatically
reinvested in additional full or fractional shares of the fund.
Your financial representative will decide whether to elect to receive quarterly
dividends in cash as part of the advisory fee-based wrap program. If you would
like to receive cash dividends, you should speak with your financial
representative.
The fund seeks to maintain a target rate of distribution for each period. In
order to do so, the fund may distribute less or more investment income than it
earns on its investments each period. The fund may use accrued undistributed
investment income to fulfill distributions made during periods in which the fund
distributes more than the fund earns. The target rate of distribution is
evaluated regularly and can change at any time. The target rate of distribution
is not equivalent to the 30-day SEC yield of the fund.
TAXABILITY OF DIVIDENDS Dividends and distributions you receive from a fund,
whether reinvested or taken as cash, are generally considered taxable.
Distributions from a fund's long-term capital gains are taxable as long-term
capital gains, regardless of how long you held your shares. Distributions from
short-term capital gains and from ordinary income (other than certain qualified
dividend income) are generally taxable as ordinary income. A portion of
dividends from ordinary income may qualify for the dividends-received deduction
for corporations. Distributions from certain qualified dividend income generally
are taxable to individuals at the same rates that apply to long-term capital
gains, if certain holding period and other requirements are met. The lower tax
rates on qualified dividend income and long-term capital gains are currently
scheduled to expire after 2010.
Some dividends paid in January may be taxable as if they had been paid the
previous December.
TAXABILITY OF TRANSACTIONS Unless your shares are held in a qualified retirement
account, any time you sell or exchange shares, it is considered a taxable event
for you. You may have a capital gain or a loss on the transaction which will be
long-term or short-term, depending upon how long you held your shares. You are
responsible for any tax liabilities generated by your transactions.
The fund may be required to withhold U.S. federal income tax at the rate of 28%
of all taxable distributions payable to you if you fail to provide the fund with
your correct taxpayer identification number or to make required certifications,
or if you have been notified by
22
the IRS that you are subject to backup withholding. Backup withholding is not an
additional tax. Any amounts withheld may be credited against your U.S. federal
income tax liability.
Distributions from the fund may also be subject to state, local and foreign
taxes. You should consult your own tax adviser regarding the particular tax
consequences of an investment in the fund.
THE HARTFORD MUTUAL FUNDS
23
FINANCIAL HIGHLIGHTS
Because the fund has not commenced operations, no financial highlights
information is available for the fund.
24
FUND CODE AND CUSIP NUMBER
CLASS I SHARES
[Download Table]
FUND CUSIP
NAME CODE NUMBER
---- ---- ---------
The Hartford Global Enhanced Dividend Fund 1586 41664L542
25
FOR MORE INFORMATION
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Additional information about the fund will be contained in the financial
statements and portfolio holdings in the fund's annual and semi-annual reports.
In the fund's annual report you will also find a discussion of the market
conditions and investment strategies that will have significantly affected the
fund's performance during the last fiscal year, as well as the independent
registered public accounting firm's report. Because the fund did not commence
operations until November 30, 2007, the fund has not yet delivered an annual or
semi-annual report.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains more detailed information on the fund.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference into (which means it is legally a part of) this
prospectus.
The fund makes available this prospectus and its SAI free of charge, on the
fund's website at www.hartfordinvestor.com. The fund will make available its
annual/semi-annual reports free of charge on the fund's website when such
reports become available.
To request a free copy of the current SAI or annual/semi-annual reports when
they become available, or for shareholder inquiries or other information about
the fund, please contact the fund at:
BY MAIL:
The Hartford Mutual Funds
P.O. Box 64387
St. Paul, MN 55164-0387
26
(For overnight mail)
The Hartford Mutual Funds
500 Bielenberg Drive
Woodbury, MN 55125-1400
BY PHONE:
1-888-843-7824
ON THE INTERNET:
www.hartfordinvestor.com
Or you may view or obtain these documents from the SEC:
IN PERSON:
at the SEC's Public Reference Room in Washington, DC
Information on the operation of the SEC's public reference room may be obtained
by calling 1-202-942-8090.
BY MAIL:
Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-0102
Requests which are made by mail require the payment of a duplicating fee to the
SEC to obtain a document.
ON THE INTERNET OR BY E-MAIL:
Internet: (on the EDGAR Database on the SEC's internet site) www.sec.gov
E-Mail: publicinfo@sec.gov
Requests which are made by e-mail require the payment of a duplicating fee to
the SEC to obtain a document.
SEC FILE NUMBERS:
The Hartford Mutual Funds, Inc. 811-07589
THE HARTFORD MUTUAL FUNDS
27
THE HARTFORD MUTUAL FUNDS
CLASS R3, CLASS R4, CLASS R5 AND CLASS Y SHARES
RETIREMENT PLAN PROSPECTUS
November 30, 2007
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Hartford Global Enhanced Dividend Fund is currently closed to new
investors.
THE HARTFORD MUTUAL FUNDS
P.O. BOX 64387
ST. PAUL, MN 55164-0387
THIS PAGE IS INTENTIONALLY LEFT BLANK
2
CONTENTS
[Enlarge/Download Table]
INTRODUCTION INTRODUCTION
A summary of the fund's goals, The Hartford Global Enhanced Dividend Fund
principal strategies, main
risks, performance and
expenses
Description of other investment Investment strategies and investment matters
strategies and investment Terms used in this Prospectus
risks
Investment manager and Management of the fund
management fee information
Information on your account About your account Choosing a share class How
sales charges are calculated Sales charge
reductions and waivers Investor Requirements
Opening an account Buying shares Selling
shares Transaction policies Dividends and
account policies Additional investor services
Further information on the fund Financial highlights
Fund code and CUSIP number back cover
For more information back cover
THE HARTFORD MUTUAL FUNDS
3
INTRODUCTION
This prospectus relates to the Class R3, Class R4, Class R5 and Class Y shares
of the fund. The fund also offers Class A, Class B and Class C shares pursuant
to a separate prospectus describing these classes. The funds also offer Class I
shares only through advisory fee-based wrap programs sponsored by financial
intermediaries having a selling, administration or any similar agreement with
the Funds, pursuant to a separate prospectus describing that class.
Below is a summary table briefly describing certain differences between the
different share classes offered in this retirement plan prospectus. You should
refer to the summary of the fund's goals, principal strategies, main risks,
performance and expenses for more details. The fund offers several classes of
shares to retirement plans. Each class has its own expense structure and may
provide for different levels of service and different amounts of compensation to
financial intermediaries. It is the responsibility of a plan fiduciary to choose
the share class (and pricing) that best suits the needs of plan participants.
[Enlarge/Download Table]
CLASS R3 CLASS R4 CLASS R5 CLASS Y
------------------- ------------------- ------------------- -------------------
INVESTMENT MINIMUMS None None None $1 million
MAXIMUM SALES CHARGE (LOAD)* None None None None
MAXIMUM DEFERRED SALES CHARGE (LOAD) * None None None None
MANAGEMENT FEES** 1.00% 1.00% 1.00% 1.00%
DISTRIBUTION AND SERVICE (12B-1) FEES** 0.50% 0.25% None None
ADMINISTRATIVE FEE** 0.20% 0.15% 0.10% None
ELIGIBLE INVESTORS 401(k) plans, 457 401(k) plans, 457 401(k) plans, 457 Employee benefit or
plans, plans, plans, retirement plans
employer-sponsored employer-sponsored employer-sponsored with at least $10
403(b) plans, 403(b) plans, 403(b) plans, million in plan
profit-sharing and profit-sharing and profit-sharing and assets, or 750 or
money purchase money purchase money purchase more eligible
pension plans, pension plans, pension plans, employees; and
defined benefit defined benefit defined benefit certain employee
plans, and plans, and plans, and benefit or
nonqualified nonqualified nonqualified retirement plans.
deferred deferred deferred
compensation plans. compensation plans. compensation plans.
* Imposed on purchases as a percentage of the offering price
** As a percentage of a fund's average net assets
+ See "Investor Requirements" for additional institutional eligible
investors.
The fund is a series of The Hartford Mutual Funds, Inc. and is a diversified
open-end management investment company. Information on the fund, including risk
factors, can be found on the pages following this introduction.
The fund is currently closed to new investors.
The investment manager to the fund is Hartford Investment Financial Services,
LLC ("HIFSCO"). As the investment manager, HIFSCO is responsible for the
management of the fund and supervision of the fund's investment sub-adviser. The
day-to-day portfolio management of the fund is provided by an investment
sub-adviser: Hartford Investment Management Company ("Hartford Investment
Management"). Information regarding HIFSCO and the Hartford Investment
Management is included under the section entitled "Management of the Fund" in
this prospectus.
THE HARTFORD MUTUAL FUNDS, INC. HAS RECEIVED AN ORDER FROM THE SEC THAT PERMITS
ITS INVESTMENT MANAGER, SUBJECT TO APPROVAL BY ITS BOARD OF DIRECTORS, TO CHANGE
SUB-ADVISERS ENGAGED BY THE INVESTMENT MANAGER TO CONDUCT THE INVESTMENT PROGRAM
OF THE FUND WITHOUT SHAREHOLDER APPROVAL. FOR MORE INFORMATION, PLEASE SEE THIS
PROSPECTUS UNDER "THE INVESTMENT MANAGER."
4
MUTUAL FUNDS ARE NOT BANK DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. BECAUSE
YOU COULD LOSE MONEY BY INVESTING IN THE FUND, BE SURE TO READ ALL RISK
DISCLOSURES CAREFULLY BEFORE INVESTING.
5
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
INVESTMENT GOAL. The Hartford Global Enhanced Dividend Fund seeks a high level
of current income. Capital appreciation is a secondary objective.
PRINCIPAL INVESTMENT STRATEGY. The fund seeks to achieve its goal by taking long
and short positions in domestic equity securities and foreign equity securities
listed on U.S. exchanges, which can include American Depositary Receipts or
"ADRs". Under normal circumstances, the fund invests at least 80% of its assets
in dividend paying equity securities. The fund will take long positions in
equity securities that Hartford Investment Management believes offer the
potential for above average dividend yields and for attractive returns. The fund
will sell short equity securities that Hartford Investment Management believes
offer the potential for a below average dividend yield and which are likely to
underperform. The fund seeks to enhance yield by using the proceeds from short
sales to purchase additional equity securities that provide an above average
dividend yield.
When the fund takes a long position, it purchases an equity security outright.
When the fund takes a short position, it sells at the current market price an
equity security that it does not own but has borrowed in anticipation that the
market price of the equity security will decline. To complete, or close out, the
short sale transaction, the fund purchases the same equity security in the
market and returns it to the lender. The fund makes money when the market price
of the borrowed equity security goes down and the fund is able to replace it for
less than the fund earned by selling the equity security short. Conversely, if
the price of the equity security goes up after the sale, the fund will lose
money because it will have to pay more to replace the borrowed equity security
than the fund received when it sold the equity security short.
The fund will generally hold long positions equal to approximately 140% of the
fund's net assets and short positions equal to approximately 40% of the fund's
net assets. However, the long and short positions held by the fund may change as
market conditions change. The fund's long positions may range from 100% to 150%
of the fund's net assets and its short positions may range from 0% to 50% of its
net assets.
The fund will focus its investments on companies with market capitalizations
similar to the Russell 3000 Index and a diverse selection of ADRs available
across countries and sectors. As of May 31, 2007, the market capitalization of
companies within the Russell 3000 Index ranged from approximately $15 million to
$476 billion. The fund may take long and short positions in domestic equity
securities and foreign equity securities listed on U.S. exchanges, which can
include American Depositary Receipts or "ADRs". ADRs are certificates issued by
a U.S. bank or trust company and represent the right to receive securities of a
foreign issuer deposited in a domestic bank or non-U.S. branch of a U.S. bank.
ADRs are traded on a U.S. securities exchange, or on an over-the-counter market,
and are denominated in U.S. dollars. Under normal market conditions, the fund's
investments in ADRs will range from 40% to 70% of the fund's net assets
(including investments in emerging markets countries).
The fund may engage in frequent and active trading of equity securities to
achieve its investment objective.
Dividend yield is a primary consideration in selecting stocks. In addition to
yield, Hartford Investment Management also uses a quantitative multifactor
approach to bottom-up stock selection, utilizing a broad set of individual
fundamental stock characteristics to model each stock's relative attractiveness,
with a focus on those factors that have been demonstrated historically to drive
market returns. These characteristics include factors designed to describe a
company's business, its valuation, investors' response to the company and the
company's management behavior and earnings quality. The fundamentals used may
vary by industry sector. Hartford Investment Management frequently and
consistently measures the characteristics of every stock in the eligible
universe and incorporates these measurements in a rigorous, repeatable process
that considers both volatility and correlations.
MAIN RISKS. As with most equity funds, the value of your investment in the fund
may go down in response to overall stock market movements and trends. You could
lose money as a result of your investment.
ADRs are subject to various risks of loss that are different from the risks of
investing in securities of U.S.-based companies. Investments in ADRs may be
affected by fluctuations in currency exchange rates, less liquid trading
markets, greater price volatility, less publicly available information about
issuers, social upheavals and political actions ranging from tax code changes to
governmental collapse. The foregoing risks are even greater with respect to
securities of issuers in countries with emerging economies or emerging
securities markets. Also, if there is a rise in demand for the underlying
security and it becomes less available to the market, the price of the ADR may
rise, causing the fund to pay a premium in order to obtain the desired ADR.
Conversely, changes in foreign market conditions or access to the underlying
securities could result in a decline in the value of the ADR.
6
The fund's investment strategy may involve more risk than other funds that do
not engage in short selling. In a short sale, the fund sells a borrowed
security. The fund may not always be able to borrow the security at a particular
time or at an acceptable price. Thus, there is risk that the fund may be unable
to implement its investment strategy due to the lack of available stocks or for
other reasons.
After selling the borrowed security, the fund is obligated to "cover" the short
sale by purchasing and returning the security to the lender. If a security sold
short increases in price, the seller may have to cover its short position at a
higher price than the short sale price, resulting in a loss. Because the fund's
loss on a short sale arises from increases in the value of the security sold
short, such loss is theoretically unlimited. In certain cases, purchasing a
security to cover a short position can itself cause the price of the security to
rise further, thereby exacerbating the loss.
Short sales also involve other costs. The fund must normally repay to the lender
an amount equal to any dividends or interest that accrues while the loan is
outstanding. In addition, to borrow the security, the fund may be required to
pay a premium. The fund also will incur transaction costs in effecting short
sales. The amount of any ultimate gain for the fund resulting from a short sale
will be decreased, and the amount of any ultimate loss will be increased, by the
amount of premiums, dividends, interest or expenses a Fund may be required to
pay in connection with the short sale.
Until the fund replaces a borrowed security, it is required to maintain a
segregated account of cash or liquid assets to cover the fund's short position.
Securities held in a segregated account cannot be sold while the position they
are covering is outstanding, unless they are replaced with similar securities.
Additionally, the fund must maintain sufficient liquid assets (less any
additional collateral held by the broker) to cover the short sale obligation.
This may limit the fund's investment flexibility, as well as its ability to meet
redemption requests or other current obligations.
By investing the proceeds received from selling securities short, the fund is
employing a form of leverage. The use of leverage may increase the fund's
exposure to long equity positions and make any change in the fund's NAV greater
than without the use of leverage. This could result in increased volatility of
returns. There is no guarantee that the fund will leverage its portfolio, or if
it does, that the fund's leveraging strategy will be successful. The fund cannot
guarantee that the use of leverage will produce a higher return on an
investment.
The fund trades securities very actively, which could increase its transaction
costs (thus affecting performance) and may increase your taxable distributions.
The fund's focus on dividend yielding investments significantly influences its
performance. High dividend yielding investments as a group can fall out of favor
with the market, causing the fund to underperform funds that do not focus on
dividends. The fund's strategy of using the proceeds from short sales to
purchase additional equity securities that provide an above average dividend
yield will amplify the fund's underperformance when high dividend yielding
investments are out of favor with the market. The fund's focus on dividend
yielding investments and use of short sales may cause the fund's share price and
total return to fluctuate more than the share price and total return of funds
that do not focus on dividend yielding investments using a short selling
strategy. The fund's focus on dividend yielding investments and use of short
sales may result in the underperformance of the fund relative to broad market
indices.
Hartford Investment Management's investment strategy will significantly
influence performance. If Hartford Investment Management's stock selection
strategy does not perform as expected, the fund could underperform its peers or
lose money. In particular, the fund's success in achieving its goal is highly
dependent on Hartford Investment Management's successful use of quantitative
analysis of the prospects of particular companies.
The fund may take a short position in a security at the same time that other
accounts managed by Hartford Investment Management take a long position in the
same security, or take a long position in a security at the same time that other
accounts managed by Hartford Investment Management take a short position in the
same security. In addition, the fund may from time to time take a long or short
position in a particular equity security while simultaneously taking the
opposite position with respect to an exchange traded fund ("ETF") which includes
such particular equity security as a constituent. ETFs are baskets of securities
that, like stocks, trade on exchanges such as the American Stock Exchange and
the New York Stock Exchange. These and other transactions undertaken on behalf
of other accounts managed by Hartford Investment Management may adversely impact
the fund. Transactions on behalf of other accounts managed by Hartford
Investment Management may have the effect of diluting or otherwise
disadvantaging the values, prices or investment strategies of the fund.
7
PAST PERFORMANCE. Because the fund has been in operation for less than one full
calendar year, no performance history has been provided.
YOUR EXPENSES. This table describes the fees and expenses that you may pay if
you buy and hold shares of the fund.
[Enlarge/Download Table]
CLASS R3 CLASS R4 CLASS R5 CLASS Y
-------- -------- -------- -------
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) imposed on purchases as a percentage of
offering price None None None None
Maximum deferred sales charge (load) (as a percentage of purchase
price or redemption proceeds, whichever is less) None None None None
Exchange fees None None None None
ANNUAL OPERATING EXPENSES
(expenses that are deducted from the fund's assets)
Management fees (1) 1.00% 1.00% 1.00% 1.00%
Distribution and service (12b-1) fees 0.50% 0.25% None None
Other expenses
Short sales program expenses(2) 0.40% 0.40% 0.40% 0.40%
All other expenses(3) 0.35% 0.30% 0.25% 0.15%
Total other expenses 0.75% 0.70% 0.65% 0.55%
Total annual operating expenses (1)(2)(4) 2.25% 1.95% 1.65% 1.55%
(1) HIFSCO has agreed to waive 100% of the management fee for the fund's first
year of operation.
(2) The fund's prime broker charges certain service fees in connection with the
administration of the fund's short positions. This amount also includes
payments to lenders as substitute dividends on securities borrowed
("dividend expense"). Dividend expenses will vary based on dividends paid
by the securities the fund sells short. This amount is estimated for the
fund's current fiscal year.
(3) "All other expenses" are estimated and include transfer agent fees,
custodial fees, accounting, legal and other expenses that the fund pays.
"Other expenses" also include an administrative services fee for
third-party record keeping services that is payable as a percentage of net
assets in the amount of up to 0.20%, 0.15% and 0.10% for Classes R3, R4 and
R5, respectively. Hartford Administrative Services Company, the fund's
transfer agent, has agreed under a voluntary undertaking to waive any
portion of the transfer agency fees over 0.30% of average daily net assets
per fiscal year for all classes. This undertaking may be amended or
withdrawn at any time.
(4) HIFSCO has voluntarily agreed to limit the total operating expenses of the
Class R3, Class R4, Class R5 and Class Y shares of the fund, exclusive of
taxes, interest expense, dividend expense, short sales program expenses,
brokerage commissions, acquired fund fees and extraordinary expenses, to
respectively, 1.85%, 1.60% 1.35% and 1.25%. This policy may be discontinued
at any time.
EXAMPLE. These examples are intended to help you compare the cost of investing
in the fund with the cost of investing in other mutual funds. The examples
assume that you invest $10,000 in the fund for the time periods indicated. The
examples also assume that your investment has a 5% return each year, that the
fund's operating expenses remain the same, and that you reinvest all dividends
and distributions. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
You would pay the following expenses if you redeemed your shares at the end of
each period:
[Download Table]
EXPENSES (WITH REDEMPTION) CLASS R3 CLASS R4 CLASS R5 CLASS Y
-------------------------- -------- -------- -------- -------
Year 1 $228 $198 $168 $158
Year 3 $703 $612 $520 $490
8
You would pay the following expenses if you did not redeem your shares:
[Download Table]
EXPENSES (WITHOUT REDEMPTION) CLASS R3 CLASS R4 CLASS R5 CLASS Y
----------------------------- -------- -------- -------- -------
Year 1 $228 $198 $168 $158
Year 3 $703 $612 $520 $490
9
INVESTMENT STRATEGIES AND INVESTMENT MATTERS
INVESTMENT RISKS GENERALLY
Many factors affect the fund's performance. There is no assurance that the fund
will achieve its investment goal (investment objective), and investors should
not consider any one fund alone to be a complete investment program. As with all
mutual funds, there is a risk that an investor could lose money by investing in
the fund.
The different types of securities, investments, and investment techniques used
by the fund all have attendant risks of varying degrees. For example, with
respect to equity securities, there can be no assurance of capital appreciation
or dividend yield and an investment in any stock is subject to, among other
risks, the risk that the stock market as a whole may decline, thereby depressing
the stock's price (market risk), or the risk that the price of a particular
issuer's stock may decline due to its financial results (financial risk). With
respect to debt securities, there exists, among other risks, the risk that the
issuer of a security may not be able to meet its obligations on interest or
principal payments at the time required by the instrument (credit risk, a type
of financial risk). In addition, the value of debt instruments and other
income-bearing securities generally rises and falls inversely with prevailing
current interest rates (interest rate risk, a type of market risk). Securities
issued by U.S. Government agencies or government-sponsored enterprises may not
be guaranteed by the U.S. Treasury. As described below, an investment in the
fund entails special additional risks.
USE OF MONEY MARKET INVESTMENTS FOR TEMPORARY DEFENSIVE PURPOSES
From time to time, as part of its principal investment strategy, the fund may
invest some or all of its assets in cash or high quality money market securities
for temporary defensive purposes in response to adverse market, economic or
political conditions. To the extent the fund is in a defensive position, the
fund may lose the benefit of market upswings and limit its ability to meet its
investment objective.
USE OF SHORT SALES
As part of its principal investment strategy, the fund will enter into short
sales. In a short sale, the fund sells a borrowed security (typically from a
broker or other institution). The fund may not always be able to borrow the
security at a particular time or at an acceptable price. Thus, there is risk
that the fund may be unable to implement its investment strategy due to the lack
of available stocks or for other reasons. After selling the borrowed security,
the fund is obligated to "cover" the short sale by purchasing the security and
returning the security to the lender. If a security sold short increases in
price, the fund may have to cover its short position at a higher price than the
short sale price, resulting in a loss. Because the fund's loss on a short sale
arises from increases in the value of the security sold short, such loss is
theoretically unlimited. In certain cases, purchasing a security to cover a
short position can itself cause the price of the security to rise further,
thereby exacerbating the loss.
Short sales also involve other costs. The fund must normally repay to the lender
an amount equal to any dividends or interest that accrues while the loan is
outstanding. In addition, to borrow the security, the fund may be required to
pay a premium. The fund also will incur transaction costs in effecting short
sales. The amount of any ultimate gain for the fund resulting from a short sale
will be decreased, and the amount of any ultimate loss will be increased, by the
amount of premiums, dividends, interest or expenses the fund may be required to
pay in connection with the short sale. Until the fund replaces a borrowed
security, it is required to maintain a segregated account of cash or liquid
assets to cover the fund's short position. Securities held in a segregated
account cannot be sold while the position they are covering is outstanding,
unless they are replaced with similar securities. Additionally, the fund must
maintain sufficient liquid assets (less any additional collateral held by the
broker) to cover the short sale obligation. This may limit the fund's investment
flexibility, as well as its ability to meet redemption requests or other current
obligations.
USE OF OPTIONS, FUTURES AND OTHER DERIVATIVES
The fund may purchase and sell options, enter into futures contracts and/or
utilize other derivative contracts and securities with respect to stocks, bonds,
groups of securities (such as financial indices), foreign currencies, interest
rates, inflation and other indices. These techniques permit the fund to gain
exposure to a particular security, group of securities, interest rate or index,
and thereby have the potential for the fund to earn returns that are similar to
those which would be earned by direct investments in those securities or
instruments.
These techniques are also used to manage risk by hedging the fund's portfolio
investments. Hedging techniques may not always be available to the fund, and it
may not always be feasible for the fund to use hedging techniques even when they
are available.
10
Derivatives have risks, however. If the issuer of the derivative instrument does
not pay the amount due, the fund could lose money on the instrument. In
addition, the underlying security or investment on which the derivative is
based, or the derivative itself, may not perform the way the fund's manager
expected. As a result, the use of these techniques may result in losses to the
fund or increase volatility in the fund's performance. Some derivatives are
sophisticated instruments that typically involve a small investment of cash
relative to the magnitude of risks assumed. Derivative securities are subject to
market risk, which could be significant for those that have a leveraging effect.
FOREIGN INVESTMENTS
As part of its principal investment strategy, the fund may invest in foreign
equity securities listed on U.S. exchanges, which can include American
Depositary Receipts or "ADRs".
ADRs are securities traded on a U.S. securities exchange, or on an
over-the-counter market, that represent interests in securities issued by a
foreign publicly-listed company. ADRs have the same currency and economic risks
as the underlying shares they represent.
Investments in the securities of foreign issuers involve significant risks that
are not typically associated with investing in the securities of domestic
issuers. Such investments may be affected by changes in currency rates, changes
in foreign or U.S. laws or restrictions applicable to such investments and in
exchange control regulations. Securities of some foreign issuers may be less
liquid than securities of comparable domestic issuers. In addition, clearance
and settlement procedures may be different in foreign countries and, in certain
markets, on certain occasions, such procedures have been unable to keep pace
with the volume of securities or loan transactions, thus making it difficult to
execute such transactions. Foreign issuers are not generally subject to uniform
accounting, auditing and financial reporting standards comparable to those
applicable to domestic companies, and there may be less publicly available
information about a foreign issuer than a domestic issuer. Furthermore, with
respect to certain foreign countries, there is a possibility of expropriation or
confiscatory taxation, imposition of withholding taxes on dividend or interest
payments, limitations on the removal of cash or other assets of a fund, or
political or social instability or diplomatic developments which could affect
investments in those countries. Individual foreign economies also may differ
favorably or unfavorably from the U.S. economy in such respects as growth of
gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.
INVESTMENTS IN EMERGING MARKETS
The fund may invest in emerging markets (through investments in foreign equity
securities listed on U.S. exchanges, which can include ADRs) as part of its
principal investment strategy.
The securities markets of Asian, Latin American, Eastern European, Middle
Eastern, African and other emerging countries are less liquid, are especially
subject to greater price volatility, have smaller market capitalizations, have
less government regulation and are not subject to as extensive and frequent
accounting, financial and other reporting requirements as the securities markets
of more developed countries. Further, investment in equity securities of issuers
located in Russia and certain other emerging countries involves risk of loss
resulting from problems in share registration and custody and substantial
economic and political disruptions. These risks are not normally associated with
investments in more developed countries.
SMALL CAPITALIZATION COMPANIES
The fund may invest in securities of small capitalization companies as a part of
its principal investment strategy.
Historically, small market capitalization stocks and stocks of recently
organized companies have been more volatile in price than the larger market
capitalization stocks often included in the S&P 500 Index. As a result,
investing in the securities of such companies involves greater risk and the
possibility of greater portfolio price volatility. Among the reasons for the
greater price volatility of these small company and unseasoned stocks are the
less certain growth prospects of smaller firms and the lower degree of liquidity
in the markets for such stocks. Small company stocks are frequently thinly
traded and may have to be sold at a discount from current market prices or sold
in small lots over an extended period of time. Small companies also often have
limited product lines, markets or financial resources, may depend on or use a
few key personnel for management, and may be susceptible to losses and risks of
bankruptcy. The transaction costs associated with small company stocks are often
higher than those of larger capitalization companies.
OTHER INVESTMENT COMPANIES
11
The fund is permitted to invest in other investment companies, including
investment companies which may not be registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), such as holding company depository
receipts ("HOLDRs"), but not as part of its principal investment strategy. The
investment in other investment companies is limited in amount by the 1940 Act,
and will involve the indirect payment of a portion of the expenses, including
advisory fees, of such other investment companies.
The fund's investments in investment companies may include various
exchange-traded funds ("ETFs"), subject to the fund's investment objective,
policies, and strategies as described in this prospectus. ETFs are baskets of
securities that, like stocks, trade on exchanges such as the American Stock
Exchange and the New York Stock Exchange. ETFs are priced continuously and trade
throughout the day. ETFs may track a securities index, a particular market
sector, or a particular segment of a securities index or market sector. Some
types of equity ETFs are:
- "SPDRs" (S&P's Depositary Receipts), which are securities that represent
ownership in a long-term unit investment trust that holds a portfolio of
common stocks designed to track the performance of an S&P Index. Holders of
SPDRs are entitled to receive proportionate quarterly cash distributions
corresponding to the dividends that accrue to the stocks in the S&P Index's
underlying investment portfolio, less any trust expenses.
- "Qubes" (QQQQ), which invest in the stocks of the Nasdaq 100 Index, a
modified capitalization weighted index that includes the stocks of 100 of
the largest and most actively traded non-financial companies listed on the
Nasdaq Stock Market. Qubes use a unit investment trust structure that
allows immediate reinvestment of dividends.
- "iShares," which are securities that represent ownership in a long-term
unit investment trust that holds a portfolio of common stocks designed to
track the performance of specific indexes.
- "HOLDRs" (Holding Company Depositary Receipts), which are trust-issued
receipts that represent beneficial ownership in a specified group of 20 or
more stocks. Unlike other ETFs, the fund can hold the group of stocks as
one asset or unbundle the stocks and trade them separately, according to
the fund's investment strategies.
ETFs can experience many of the same risks associated with individual stocks.
ETFs are subject to market risk where the market as a whole, or that specific
sector, may decline. ETFs that invest in volatile stock sectors, such as foreign
issuers, smaller companies, or technology, are subject to the additional risks
to which those sectors are subject. ETFs may trade at a discount to the
aggregate value of the underlying securities. The underlying securities in an
ETF may not follow the price movements of an entire industry or sector. Trading
in an ETF may be halted if the trading in one or more of the ETF's underlying
securities is halted. Although expense ratios for ETFs are generally low,
frequent trading of ETFs by the fund can generate brokerage expenses.
Generally, the fund will not purchase securities of an investment company if, as
a result: (1) more than 10% of the fund's total assets would be invested in
securities of other investment companies, (2) such purchase would result in more
than 3% of the total outstanding voting securities of any such investment
company being held by the fund, or (3) more than 5% of the fund's total assets
would be invested in any one such investment company.
12
ABOUT THE FUND'S INVESTMENT GOAL
The fund's investment goal (or objective) may be changed without approval of the
shareholders of the fund. The fund may not be able to achieve its goal.
CONSEQUENCES OF PORTFOLIO TRADING PRACTICES
The fund may have a relatively high portfolio turnover.
The fund may, at times, engage in short-term trading. Short-term trading could
produce higher brokerage expenses for the fund and higher taxable distributions
to the fund's shareholders and therefore could adversely affect the fund's
performance. The fund is not managed to achieve a particular tax result for
shareholders. Shareholders should consult their own tax adviser for individual
tax advice.
TERMS USED IN THIS PROSPECTUS
Equity securities: Equity securities include common stock, preferred stock,
securities convertible into common or preferred stock and warrants or rights to
acquire common stock, including options.
Foreign issuers: Foreign issuers include (1) companies organized outside the
United States; (2) foreign governments and agencies or instrumentalities of
foreign governments; and (3) issuers whose economic fortunes and risks are
primarily linked with markets outside the United States. Certain companies
organized outside the United States may not be deemed to be foreign issuers if
the issuer's economic fortunes and risks are primarily linked with U.S. markets.
INVESTMENT POLICIES
The Global Enhanced Dividend Fund has a name which suggests a focus on a
particular type of investment. In accordance with Rule 35d-1 under the
Investment Company Act of 1940 (the "1940 Act"), the fund has adopted a policy
that it will, under normal circumstances, invest at least 80% of the value of
its assets in investments of the type suggested by its name, as set forth in the
fund's Principal Investment Strategy section. This requirement is applied at the
time the fund invests its assets. If, subsequent to an investment by the fund,
this requirement is no longer met due to changes in value or capitalization of
portfolio assets, the fund's future investments will be made in a manner that
will bring the fund into compliance with this requirement. For purposes of this
policy, "assets" means net assets plus the amount of any borrowings for
investment purposes. In addition, in appropriate circumstances, synthetic
investments may be included in the 80% basket if they have economic
characteristics similar to the other investments included in the basket. The
fund's policy to invest at least 80% of its assets in such a manner is not a
"fundamental" one, which means that it may be changed without the vote of a
majority of the fund's outstanding shares as defined in the 1940 Act. The name
of the fund may be changed without a majority vote of the fund's outstanding
shares as defined in the 1940 Act. The name of the fund may be changed at any
time by a vote of the fund's Board of Directors. However, Rule 35d-1 also
requires that shareholders be given written notice at least 60 days prior to any
change by a fund of its 80% investment policy covered by Rule 35d-1.
ADDITIONAL INVESTMENT STRATEGIES AND RISKS
The fund may invest in various securities and engage in various investment
techniques which are not the principal focus of the fund and therefore are not
described in this prospectus. These securities and techniques, together with
their risks, are discussed in the fund's Statement of Additional Information
("SAI") which may be obtained free of charge by contacting the fund (see back
cover for address phone number and website address).
DISCLOSURE OF PORTFOLIO HOLDINGS
The fund will disclose its complete month-end portfolio holdings on the fund's
website at www.hartfordinvestor.com no earlier than 30 calendar days after the
end of each month. The fund also will disclose on the fund's website the fund's
largest ten holdings no earlier than 15 days after the end of each month. A
description of the fund's policies and procedures with respect to the disclosure
of the fund's portfolio securities is available (i) in the fund's SAI; and (ii)
on the fund's website.
13
MANAGEMENT OF THE FUNDS
THE INVESTMENT MANAGER
Hartford Investment Financial Services, LLC ("HIFSCO") is the investment manager
to the fund. HIFSCO is a wholly-owned, indirect subsidiary of The Hartford
Financial Services Group, Inc. ("The Hartford"), a Connecticut financial
services company with over $419.5 billion in assets under management as of
September 30, 2007. At the same time, HIFSCO had over $52.2 billion in assets
under management. HIFSCO is responsible for the management of the fund and
supervises the activities of the investment sub-adviser described below. HIFSCO
is principally located at 200 Hopmeadow Street, Simsbury, Connecticut 06089.
The fund relies on an exemptive order from the Securities and Exchange
Commission under which it uses a "Manager of Managers" structure. HIFSCO has
responsibility, subject to oversight by the Board of Directors, to oversee the
sub-adviser and recommend its hiring, termination and replacement. The exemptive
order permits HIFSCO to appoint a new sub-adviser not affiliated with HIFSCO,
with the approval of the Board of Directors and without obtaining approval from
those shareholders that participate in the fund. Within 90 days after hiring any
new sub-adviser, affected shareholders will receive information about the new
sub-advisory relationship.
LITIGATION AND REGULATORY ACTIONS
Five putative multi-state class actions were filed in October 2004 and
consolidated into one case, In re Hartford Mutual Funds Fee Litigation, pending
before the United States District Court for the District of Connecticut, in
which the plaintiffs made a wide range of allegations against The Hartford and
other defendants relating, among other things, to fees charged to investors in
certain of The Hartford Retail Mutual Funds. Following a motion by the
defendants to dismiss the case, but before the court had yet ruled on the
motion, the plaintiffs sought the court's permission to file a second amended
complaint. In February 2007, the court granted the plaintiffs leave to amend. In
the second amended complaint, the plaintiffs allege, among other things, that
investors in the Hartford Advisers Fund, Hartford Capital Appreciation Fund,
Hartford Dividend and Growth Fund, Hartford MidCap Fund, and Hartford Stock Fund
were charged excessive fees during the period from February 27, 2003 through
February 27, 2004. The defendants, which include The Hartford Financial Services
Group, Inc., Hartford Investment Financial Services, LLC, Wellington Management
Company, LLC, Hartford Investment Management Company, Hartford Securities
Distribution Company, Inc., and PLANCO Financial Services Inc., intend to move
to dismiss the second amended complaint. This litigation is not expected to
result in a material adverse effect on the funds.
THE INVESTMENT SUB-ADVISER
Hartford Investment Management is a professional money management firm that
provides services to investment companies, employee benefit plans, affiliated
insurance companies and other institutional accounts. Hartford Investment
Management is a wholly-owned subsidiary of The Hartford. As of September 30,
2007, Hartford Investment Management had investment management authority over
approximately $143.1 billion in assets. Hartford Investment Management is
principally located at 55 Farmington Avenue, Hartford, Connecticut 06105.
SOFT DOLLAR PRACTICES
The sub-adviser is responsible for the day-to-day portfolio management
activities of the fund, including effecting securities transactions. To the
extent consistent with Section 28(e) of the Securities Exchange Act of 1934 (the
"1934 Act"), the sub-adviser may obtain "soft dollar" benefits in connection
with the execution of transactions for the fund. The sub-adviser may cause the
fund to pay a broker-dealer an amount in excess of the amount that another
broker-dealer would have charged for the same transaction, in exchange for
"brokerage and research services" (as defined in the 1934 Act). Neither the
management fees nor the sub-advisory fees are reduced because the sub-adviser
receives these products and services. These products and services may be of
value to the sub-adviser in advising its clients (including the fund), although
not all of these products and services are necessarily useful and of value in
managing the fund. These products and services may include research reports,
access to management personnel, financial newsletters and trade journals,
seminar and conference fees, quantitative analytical software, data services,
communication services relating to (or incidental to) the execution, clearing
and settlement of securities transactions, post-trade services relating to
functions incidental to trade execution, and other products and services that
are permitted under Section 28(e), as interpreted by the SEC from time to time.
In certain instances, these products and services may have additional uses that
are not related to brokerage or research. For such "mixed use" items, in
accordance with SEC guidance, the sub-adviser will make a reasonable allocation
of the cost of the item according to its
14
expected use, and will pay for that portion of the item that does not have a
brokerage or research-related component out of its own resources.
MANAGEMENT FEES
The fund pays a monthly management fee to HIFSCO based on a stated percentage of
the fund's average daily net asset value as follows:
GLOBAL ENHANCED DIVIDEND FUND
[Download Table]
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $500 million 1.00%
Next $500 million 0.95%
Over $1 billion 0.90%
(1) HIFSCO has voluntarily agreed to waive 100% of the management fee for the
fund's first year of operation.
Because the fund has not commenced operations, information is not available
regarding fees paid by the fund to HIFSCO.
A discussion regarding the basis for the Board of Directors' approval of the
investment management and investment sub-advisory agreements of the fund will be
available in the fund's report to shareholders.
PORTFOLIO MANAGERS OF THE FUNDS
The following person has primary responsibility for the day-to-day management of
the fund's portfolio since inception. The fund's SAI provides additional
information about the portfolio manager's compensation, other accounts managed
by the portfolio manager and the portfolio manager's ownership of securities in
the fund.
GLOBAL ENHANCED DIVIDEND FUND The fund is managed by Paul Bukowski.
Paul Bukowski, Vice President of Hartford Investment Management, has served as
portfolio manager of the fund since its inception. Mr. Bukowski, who has 12
years of investment management experience, joined Hartford Investment Management
in 2005. Before joining Hartford Investment Management, he was a senior
quantitative portfolio analyst for ING's large-cap growth strategy from 2004.
Prior to 2004, Mr. Bukowski was with Callard & Ogden Investment Management where
he was responsible for quantitative analysis, fund research, and managed several
core and growth portfolios. He also created investment systems, including
databases and front-end user interfaces, and was responsible for managing
several core and growth portfolios. Mr. Bukowski earned a BA in Statistics and
Computer Science from the University of Wisconsin and an MBA in Finance and
Policy from the University of Chicago. He holds the Chartered Financial Analyst
designation and is a fellow of the Casualty Actuarial Society.
15
ABOUT YOUR ACCOUNT
CHOOSING A SHARE CLASS
CLASS R3
- No front-end sales charge; all your money goes to work for you right away.
- Distribution and service (12b-1) fees of 0.50%.
- Administrative Fee of 0.20%
CLASS R4
- No front-end sales charge; all your money goes to work for you right away.
- Distribution and service (12b-1) fees of 0.25%.
- Administrative Fee of 0.15%
CLASS R5
- No front-end sales charge; all your money goes to work for you right away.
- No distribution and service (12b-1) fees.
- Administrative Fee of 0.10%
CLASS Y
- No front-end sales charge; all your money goes to work for you right away.
- No distribution and service (12b-1) fees.
- No Administrative Fee
Each class of shares of the fund has its own expense structure, which enables
you to choose the share class (and pricing) that best meets your specific needs
and circumstances. For actual past expenses of each share class, see the fund
information earlier in this prospectus. In making your decision regarding which
share class may be best for you to invest in, please keep in mind that your
financial representative or plan administrator may receive different
compensation depending on the share class that you invest in and you may receive
different services in connection with investments in different classes of
shares. Investors should consult with their financial intermediary about the
comparative pricing and features of each share class, the services available for
shareholders in each share class, the compensation that will be received by
their financial intermediary in connection with each share class and other
factors that may be relevant to the investor's decision as to the best share
class in which to invest.
Class R3 and Class R4, have each adopted a Rule 12b-1 plan which allows the
class to pay distribution fees for the sale and distribution of its shares and
for providing services to shareholders. Because these fees are paid out of a
fund's assets on an ongoing basis, over time these fees will increase the cost
of your investment and may cost you more than paying other types of sales
charges.
Other classes of shares of the fund may be offered from time to time through one
or more separate prospectuses of the fund. Each class of shares of a fund
represents an interest in the same portfolio of investments of a fund and
generally has the same rights, except for the differing sales charges,
distribution fees, service fees and any other expenses associated with each
particular class of shares. In addition, each share class has exclusive voting
rights with respect to any distribution plan and/or service plan for that class
of shares. Further, some share classes may have different conversion rights or
shareholder servicing options.
16
DISTRIBUTION ARRANGEMENTS
Hartford Investment Financial Services, LLC ("HIFSCO") serves as the principal
underwriter for the fund pursuant to Underwriting Agreements initially approved
by the Board of Directors of The Hartford Mutual Funds, Inc. (the "Company").
HIFSCO is a registered broker-dealer and member of the Financial Industry
Regulatory Authority ("FINRA"). Shares of the fund are continuously offered and
sold by selected broker-dealers who have selling agreements with HIFSCO. Such
selected broker-dealers may designate and authorize other financial
intermediaries to offer and sell shares of the fund. Except as discussed below,
HIFSCO bears all the expenses of providing services pursuant to the Underwriting
Agreements including the payment of the expenses relating to the distribution of
prospectuses for sales purposes as well as any advertising or sales literature.
HIFSCO is not obligated to sell any specific amount of shares of the fund.
DISTRIBUTION PLANS
The Company, on behalf of the fund, has adopted a separate distribution plan
(the "Plan") for each of the Class R3 and Class R4 shares of the fund.
CLASS R3 PLAN Pursuant to the Class R3 Plan, a fund may pay HIFSCO a fee of up
to 0.50% of the average daily net assets attributable to Class R3 shares for
distribution financing activities and up to 0.25% may be used for shareholder
account services. HIFSCO will pay to dealers the service fee at a rate equal to
0.50% of the amount invested. Brokers may from time to time be required to meet
certain other criteria in order to receive such service fees. HIFSCO or its
affiliates are entitled to retain all service fees payable under the Class R3
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by HIFSCO or its affiliates for shareholder
accounts.
CLASS R4 PLAN Pursuant to the Class R4 Plan, a fund may pay HIFSCO a fee of up
to 0.25% of the average daily net assets attributable to Class R4 shares for
distribution financing activities and up to 0.25% may be used for shareholder
account services. HIFSCO will pay to dealers the service fee at a rate equal to
0.25% of the amount invested. Brokers may from time to time be required to meet
certain other criteria in order to receive such service fees. HIFSCO or its
affiliates are entitled to retain all service fees payable under the Class R4
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by HIFSCO or its affiliates for shareholder
accounts.
GENERAL Distribution fees paid to HIFSCO may be spent on any activities or
expenses primarily intended to result in the sale of the Company's shares
including: (a) payment of initial and ongoing commissions and other compensation
payments to brokers, dealers, financial institutions or others who sell the
fund's shares, (b) compensation to employees of HIFSCO, (c) compensation to and
expenses, including overhead such as communications and telephone, training,
supplies, photocopying and similar types of expenses, of HIFSCO incurred in the
printing and mailing or other dissemination of all prospectuses and statements
of additional information, (d) the costs of preparation, printing and mailing of
reports used for sales literature and related expenses, i.e., advertisements and
sales literature, and (e) other distribution-related expenses and for the
provision of personal service and/or the maintenance of shareholder accounts.
These Plans are considered compensation type plans which means that the fund
pays HIFSCO the entire fee regardless of HIFSCO's expenditures. Even if HIFSCO's
actual expenditures exceed the fee payable to HIFSCO at any given time, the fund
will not be obligated to pay more than that fee.
The Plans were adopted by a majority vote of the Board of Directors of the
Company, including at least a majority of directors who are not interested
persons of the fund as defined in the 1940 Act. A Plan may be terminated at any
time by vote of the majority of the directors of the board who are not
interested persons of the fund. A Plan will automatically terminate in the event
of its assignment.
ADDITIONAL COMPENSATION TO BROKER-DEALERS, FINANCIAL INSTITUTIONS AND OTHER
PERSONS ("FINANCIAL INTERMEDIARIES") In addition to the commissions (which may
be paid or reallowed to Financial Intermediaries from an applicable sales charge
and/or advanced to Financial Intermediaries) and Rule 12b-1 fees that are
described above and in the SAI, the distributor and its affiliates pay, out of
their own assets, significant additional compensation to Financial
Intermediaries (who may or may not be affiliates of the distributor) in
connection with the sale and distribution of the fund's shares ("Additional
Payments") based on a number of factors that are described below and in the
fund's SAI.
These Additional Payments are generally based on average net assets (or on aged
assets, i.e., assets held over one year) of the fund attributable to a
particular Financial Intermediary, on sales of the fund's shares attributable to
a particular Financial Intermediary,
17
and/or on reimbursement of ticket charges, and may, but are normally not
expected to, exceed, in the aggregate, 0.44% of the average net assets of the
fund attributable to a particular Financial Intermediary.
Such Additional Payments are generally made for the placement of the fund on a
Financial Intermediary's list of mutual funds available for purchase by its
customers and/or for including the fund within a group of mutual funds that
receive special marketing focus. Certain additional compensation arrangements
are discussed below.
Apart from the Additional Payments, additional compensation arrangements may
take the form of, among others: (1) "due diligence" payments for a Financial
Intermediary's examination of the fund and payments for providing extra employee
training and information relating to the fund and (2) "marketing support" fees
for providing assistance in promoting the sale of the fund's shares ("Other
Compensation"). Subject to FINRA regulations, HIFSCO and its affiliates may
contribute Other Amounts to various non-cash and cash incentive arrangements to
promote the sale of shares, as well as sponsor various educational programs,
sales contests and/or promotions in which participants may receive prizes such
as travel awards, merchandise and cash and/or investment research pertaining to
particular securities and other financial instruments or to the securities and
financial markets generally, educational information and related support
materials and hardware and/or software. HIFSCO and its affiliates may also pay
for the travel expenses, meals, lodging and entertainment of Financial
Intermediaries and their salespersons and guests in connection with education,
sales and promotional programs, subject to applicable FINRA regulations. These
programs, which may vary for different Financial Intermediaries, will not change
the price an investor will pay for shares or the amount that the fund will
receive from such sale. Incurred payments of Other Compensation did not exceed
$1.1 million per Financial Intermediary for the calendar year ended December 31,
2006.
Additional Payments, including Other Compensation, may also pertain to the sale
and distribution of other investment products distributed by affiliates of the
distributor, and may, in some cases, act as a financial incentive for a
Financial Intermediary to recommend the purchase of one fund over another fund.
Additional Payments to Financial Intermediaries in connection with the sale and
distribution of the fund's shares are negotiated based on a range of factors,
including, but not limited to, reputation in the industry, ability to attract
and retain assets (including distribution of particular classes of the fund's
shares), target markets, customer relationships and quality of service. No one
factor is determinative of the type or amount of Additional Payments to be
provided and factors are weighed in the assessment of such determination.
For the calendar year ended December 31, 2006, HIFSCO or its affiliates incurred
approximately $32.6 million in total Additional Payments, including Other
Compensation (excluding travel expenses, meals, lodging and entertainment of
Financial Intermediaries and their salespersons) to Financial Intermediaries, of
which approximately $13.7 million was incurred with respect to Edward D. Jones &
Co., L.P. For the calendar year ended December 31, 2006, total travel expenses,
meals, lodging and entertainment of Financial Intermediaries and their
salespersons did not in the aggregate exceed approximately $3.6 million.
As of January 1, 2007, HIFSCO has entered into arrangements to make Additional
Payments, including Other Compensation (excluding travel expenses, meals,
lodging and entertainment of Financial Intermediaries and their salespersons),
to: A.G. Edwards & Sons, Inc., AIG Advisors Group, Inc., (Advantage Capital
Corp., AIG Financial Advisors, American General, FSC Securities Corp., Royal
Alliance Associates, Inc.), Allen & Company of FL, Inc., American General
Securities, Inc., American Independent Securities Group, LLC, AmSouth Investment
Services, Anchor Investment Services, Inc., Associated Investment Services,
Inc., Associated Securities Corporation, Banc of America Investment Services,
Inc., BancorpSouth Services, Banc West Investment Services, B.C. Ziegler &
Company, BNY Investment Center, Inc., BOSC, Inc., Brookstreet Securities Corp.,
Cadaret Grant & Co., Inc., Cambridge Investment Research, Cantella & Company,
Inc., Capital Analysts, Inc., Capital Investment Group, Inc., Centaurus
Financial Inc., Charles Schwab & Co., Inc., Chase Investment Services
Corporation, Citicorp Investment Services, Citigroup Global Markets, Inc.,
Colonial Brokerage, Inc., Comerica Securities, Commerce Brokerage Services,
Inc., Commerce Capital Markets, Inc., Commonwealth Financial Network,
Commonwealth Financial Services, Crown Capital Securities, LP, Cuna Brokerage
Services, CUSO Financial Services, L.P., Dominion Investor Services, Duerr
Financial Corp, Eagle One Investments, Edward D. Jones & Co., Empire Securities
Corp, Equity Securities Corp, Equity Services, Inc., Essex National Securities,
Inc., Ferris Baker Watts, Inc., FFP Securities, Inc., Fidelity Investments,
Fifth Third Securities, Financial Planning Consultants, Inc., Fintegra, LLC,
First Allied Securities, Inc., First Citizens Investor Services, Inc., First
Heartland Capital Inc., First Tennessee Brokerage, Inc., Fiserv Brokerage
Services, Inc., Frost Brokerage Services, Inc., Geneos Wealth Management, Inc.,
Girard Securities Inc., Grant Bettingen, Great American Advisors, Inc., H. Beck,
Inc., H&R Block, Harbour Investments, Harvest Capital, LLC, HBW Securities, LLC,
Hefren-Tillotson Inc., Hilliard Lyons, HSBC Brokerage USA, Huntington Investment
Co., IFMG Securities, Inc., ING Advisor Network (Financial Network Investment
Corporation, Inc., ING Financial Partners, Inc., Keybanc Capital Markets, Inc.,
Multi-Financial Securities Corporation, Inc., PrimeVest Financial Services,
Inc.), Independent Financial Group, LLC, Investment Professionals, Inc.,
Investors Capital Corp., Investors Security Company, Inc., Janney Montgomery
Scott, J.J.B. Hilliard, Jefferson Pilot Securities Corp, KMS Financial Services,
18
Inc., KNBT Securities Inc., Kovack Securities, Inc., LaSalle Financial Services,
LaSalle Street Securities, LLC, Lincoln Financial Advisors Group, Linsco/Private
Ledger Corp., M&T Securities Inc., Merrill Lynch Pierce Fenner & Smith, Mid
Atlantic Capital Corp, Money Concepts Capital Corp, Morgan Keegan & Company,
Inc., Morgan Stanley DW Inc., Mutual Service Corporation, National Advisors
Trust, National Planning Holdings, Inc. (Invest Financial Corporation,
Investment Centers of America, National Planning Corporation, SII Investments
Inc.), New England Securities, Newbridge Securities, NEXT Financial Group, Inc.,
North Ridge Securities Corp, Oppenheimer & Co, Inc., Pacific West Securities,
Inc., Prime Capital Services, Inc., ProEquities, Inc., Prospera Financial
Securities, Inc., QA3 Financial Corp., Raymond James & Associates Inc., Raymond
James Financial Services (IM&R), RBC Dain Rauscher, RDM Investment Services,
Robert W. Baird, Scott & Stringfellow Inc., Securian, Securities America, Inc.,
Securities Service Network, Inc., Sigma Financial Corp, Sorrento Pacific
Financial, Spectrum Capital, Inc., Stifel, Nicolaus & Company, Inc., Summit
Brokerage Services, SunAmerica Securities, Inc., Suntrust Investment Services,
TD Waterhouse, Inc., The Huntington Investment Company, TFS Securities, Inc.,
Transamerica Financial Advisors Inc., Triad Advisors, Inc., UBS Financial
Services Inc., UnionBanc Investment Services LLC, United Heritage Financial
Services, U.S. Bancorp Investments Inc., Uvest Financial Services Group, Inc.,
Vision Investment Services, Inc, Vorpahl Wing Securities, Wachovia Securities,
LLC, Wall Street Financial Group, Webster Investment Services, Inc, Wells Fargo
Investments, WM Financial Services, Inc., Workman Securities Corp, WRP
Investments, Inc., XCU Capital Corp., and Woodbury Financial Services, Inc. (an
indirect wholly-owned subsidiary of The Hartford). HIFSCO may enter into
arrangements with other Financial Intermediaries to make such Additional
Payments and Other Compensation.
In addition to the above payments, HIFSCO and its affiliates, out of their own
assets, may pay compensation for subaccounting, administrative and/or
shareholder processing services as described below.
ADDITIONAL COMPENSATION TO SERVICING INSTITUTIONS AND OTHER PERSONS ("SERVICING
INTERMEDIARIES") FOR SUBACCOUNTING, ADMINISTRATIVE AND/OR SHAREHOLDER PROCESSING
SERVICES. In addition to payments made in connection with the sale and
distribution of the fund's shares (described above) and administration and Rule
12b-1 fees paid by the fund, the distributor and its affiliates pay, out of
their own assets, significant additional compensation to Servicing
Intermediaries (who may or may not be affiliates of the distributor) in
connection with subaccounting, administrative and/or shareholder processing
services ("Servicing Compensation") based on a number of factors described
below.
Servicing Compensation is generally based on average net assets of the funds
attributable to a particular Servicing Intermediary, and may, but is normally
not expected to, exceed, in the aggregate, 0.20% of the average net assets of
the funds attributable to a particular Servicing Intermediary. Such Servicing
Compensation is generally made for subaccounting, administrative and/or
shareholder processing services. These programs, which may vary for different
Servicing Intermediaries, will not change the price an investor will pay for
shares. This Servicing Compensation may act as a financial incentive for a
Servicing Intermediary in choosing to provide services to one fund over another
fund.
The Servicing Compensation to Servicing Intermediaries is negotiated based on a
range of factors, including, but not limited to, reputation in the industry,
customer relationships and quality of service. No one factor is determinative of
the amount of Servicing Compensation to be provided and factors are weighed in
the assessment of such determination. For the year ended December 31, 2006,
HIFSCO incurred approximately $250,000 in total Servicing Compensation to
Servicing Intermediaries and an incurred payment of such Servicing Compensation
did not exceed $210,000 for any Servicing Intermediary.
As of January 1, 2007, HIFSCO has entered into arrangements to pay Servicing
Compensation to: The 401(k) Company, American Century Investment Management,
Inc.; AmeriMutual Funds Distributor, Inc.; Ameriprise Financial Services, Inc.;
BenefitStreet, Inc.; Diversified Investment Advisors, Inc.; Fidelity Investments
Institutional Operations Company, Inc. & Fidelity Investments Institutional
Services Company, Inc. ("Fidelity"); Gold Trust Company GWFS Equities, Inc.;
Invesmart, Inc. & Invesmart Securities, LLC; J.P. Morgan Retirement Plan
Services, LLC; Lincoln Retirement Services Company, LLC & AMG Service Corp;
Mercer HR Services, LLC; Mid Atlantic Capital Corporation; Reliance Trust
Company; T. Rowe Price Retirement Plan Services, Inc. & T. Rowe Price Investment
Services, Inc, and Upromise Investments, Inc. HIFSCO may enter into arrangements
with other Servicing Intermediaries to pay such Servicing Compensation.
Servicing Compensation is also paid to certain Servicing Intermediaries by HASCO
out of the transfer agency fees it receives from the fund. Although some
arrangements are based on average net assets attributable to the Servicing
Intermediary, such Servicing Intermediaries are generally paid a per account fee
ranging to no more than $16 per account. As of January 1, 2007, such Servicing
Intermediaries paid by HASCO are: ADP Broker-Dealer, Inc.; A.G. Edwards;
American Stock Transfer and Trust Company; CPI Qualified Plan Consultants, Inc;
SunGard InstitutionalBrokerage Inc.; Expert Plan, Inc.; Fiserv Trust Company;
Gail Weiss & Associates, Inc.; Gem Group L.P.; Hewitt Associates LLC; Legette
Actuaries, Inc.; Mid Atlantic Capital Corporation; MSCS
19
Financial Services, LLC; Ceridian Retirement Plan Services, Inc.; Northeast
Retirement Services, Inc.; Prudential Investment Management Services LLC &
Prudential Investments LLC; QBC, Inc.; Swerdlin & Company; and Stanton Trust
Company N.A. Other Servicing Intermediaries may be paid by HASCO in the future.
INVESTOR REQUIREMENTS
Class R3, R4 and R5 shares are available only to 401(k) plans, 457 plans,
employer-sponsored 403(b) plans, profit-sharing and money purchase pension
plans, defined benefit plans, and nonqualified deferred compensation plans.
Class R3, R4 and R5 shares also are available only to retirement plans where
plan level or omnibus accounts are held on the books of the fund. Class R3, R4
and R5 shares are not available to retail nonretirement accounts, Traditional
and Roth Individual Retirement accounts (IRAs), Coverdell Education Savings
Accounts, SEPs, SARSEPs, SIMPLE IRAs, individual 403(b) plans and 529 college
savings plans.
Class Y shares offered through this prospectus are available to employee benefit
or retirement plans which have (a) at least $10 million in plan assets, or (b)
750 or more employees eligible to participate at the time of purchase; and
employee benefit or retirement plans of The Hartford, Wellington Management or
broker-dealer wholesalers and their affiliates. However, employee benefit plans
and/or retirement plans purchasing shares through (i) a record-keeper or a trust
company that performs participant level record-keeping or other administrative
services on behalf of such plans or (ii) a trading platform may purchase Class Y
shares of a fund provided that such record-keeper or trust company and, if
applicable, the trading platform, has entered into an agreement for such
purposes with the distributor and/or its affiliates. Class Y shares are also
offered through a stand-alone Class Y shares prospectus to: (1) banks and
insurance companies or other large institutional investors; (2) investment
companies; (3) non-profit organizations, charitable trusts, foundations and
endowments; and (4) trust companies with assets held in a fiduciary, advisory,
custodial or similar capacity over which the trust company has full or shared
investment discretion, which are not subject to the eligibility requirements of
(a) and (b) above. If you meet the definition of these other institutional
investors, you should consult that prospectus. Hartford, in its sole discretion,
may accept purchases of Class Y shares from other purchasers not listed above.
OPENING AN ACCOUNT
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens a new account. What this means
for you: When you open a new account, you will be asked to provide your name,
residential address, date of birth, social security number and other information
that identifies you. You may also be asked to show your driver's license or
other identifying documents.
For non-persons wishing to open an account or establish a relationship, Federal
law requires us to obtain, verify and record information that identifies each
business or entity. What this means for you: when you open an account or
establish a relationship, we will ask for your business name, a street address
and a tax identification number, that Federal law requires us to obtain. We
appreciate your cooperation.
If a fund is not able to adequately identify you within the time frames set for
in the law, your shares may be automatically redeemed. If the net asset value
per share has decreased since your purchase, you will lose money as a result of
this redemption. you may also incur any applicable sales charge.
NOTE FOR RETIREMENT PLAN PARTICIPANTS AND INVESTORS WHOSE SHARES ARE HELD BY
FINANCIAL REPRESENTATIVES: Because you hold your shares through a retirement
plan or if your shares are held with a financial representative you will need to
make transactions through the retirement plan administrator or your financial
representative. Some of the services and programs described in this prospectus
may not be available or may differ in such circumstances. In addition, some of
the funds offered in this prospectus may not be available in your retirement
plan. You should check with your retirement plan administrator or financial
representative for further details.
1. Read this prospectus carefully.
2. Determine how much you want to invest.
The minimum initial investment for the fund is as follows:
- R3, R4 and R5 shares - no investment minimum
- Y shares - Employee benefit or retirement plans which have (a) at
least $10 million in plan assets, or (b) 750 or more employees
eligible to participate at the time of purchase; and employee benefit
or retirement plans of The Hartford, Wellington Management or
broker-dealer wholesalers and their affiliates must invest at least $1
million in Class Y shares of a fund. Retirement and/or employee
benefit plans purchasing shares through (i) a record-keeper or a trust
company that performs participant level record-keeping or other
administrative services on behalf of such plans or (ii) a trading
platform, are not
20
subject to a minimum investment amount. Hartford, in its sole
discretion, may accept purchases in Class Y shares that do not meet
these dollar qualification requirements.
There is no subsequent investment minimum for the fund.
3. Please contact your financial representative or plan administrator for
instructions and assistance.
21
BUYING, EXCHANGING AND SELLING SHARES
BUYING SHARES
Eligible investors may establish an account and purchase shares through a plan
administrator, record keeper or authorized financial intermediary (who may
impose transaction charges in addition to those described in this prospectus).
Some or all R share classes may not be available through certain financial
intermediaries. Additional shares may be purchased through a plan's
administrator, record keeper or other authorized financial intermediary. Your
initial investment must meet the minimum requirements, if any, as discussed
above. See your plan administrator, record keeper or financial intermediary for
any questions regarding buying Class R3, R4, R5 and Y shares.
EXCHANGES
You may exchange shares of one fund for shares of the same class of any other
fund that offers that class. See your plan administrator, record keeper or
financial intermediary for any questions regarding exchanging shares.
If you own Class A, B, C, I or L or shares of certain funds or certain Class Y
funds not offered in this prospectus, please refer to the prospectus for these
class share offerings for further information on the exchange privileges
available to you.
SELLING SHARES
You may redeem your shares by having your plan administrator or financial
intermediary process your redemption. Your plan administrator or financial
intermediary will be responsible for furnishing all necessary documents to the
funds.
22
TRANSACTION POLICIES
VALUATION OF SHARES
The net asset value per share (NAV) is determined for the fund and each class as
of the close of regular trading on the New York Stock Exchange ("NYSE")
(typically 4:00 p.m. Eastern Time) on each business day that the NYSE is open.
The net asset value for the fund is determined by dividing the value of the
fund's net assets attributable to a class of shares by the number of shares
outstanding for that class.
The fund generally uses market prices in valuing portfolio securities. If market
quotations are not readily available or are deemed unreliable, the fund will use
the fair value of the security as determined in good faith under policies and
procedures established by and under the supervision of the fund's Board of
Directors. Market prices may be deemed unreliable, for example, if a security is
thinly traded or if an event has occurred after the close of the exchange on
which a portfolio security is principally traded but before the close of the
NYSE that is expected to affect the value of the portfolio security. The
circumstances in which the fund may use fair value pricing include, among
others: (i) the occurrence of events that are significant to a particular
issuer, such as mergers, restructuring or defaults; (ii) the occurrence of
events that are significant to an entire market, such as natural disasters in a
particular region or governmental actions; (iii) trading restrictions on
securities; (iv) thinly traded securities; and (v) market events such as trading
halts and early market closings. In addition, with respect to the valuation of
securities principally traded on foreign markets, the fund uses a fair value
pricing service approved by the fund's Board, which employs quantitative models
to adjust for "stale" prices caused by the movement of other markets and other
factors occurring after the close of the foreign exchanges but before the close
of the NYSE. Securities that are principally traded on foreign markets may trade
on days that are not business days of the fund. Because the NAV of the fund's
shares is determined only on business days of the fund, the value of foreign
securities may change on days when a shareholder will not be able to purchase or
redeem shares of the fund. Fair value pricing is subjective in nature and the
use of fair value pricing by the fund may cause the net asset value of its
shares to differ significantly from the net asset value that would be calculated
using prevailing market values. There can be no assurance that the fund could
obtain the fair value assigned to a security if it were to sell the security at
approximately the time at which the fund determines its NAV per share.
BUY AND SELL PRICES
When you buy shares, you pay the NAV. When you sell shares, you receive the NAV.
23
EXECUTION OF REQUESTS
The fund is open on those days when the New York Stock Exchange is open,
typically Monday through Friday. Buy and sell requests are executed at the next
NAV calculated after your request is received, if your order is in "good order"
(has all required information) by the transfer agent, authorized broker-dealers
or their authorized designee, or third-party administrators.
In unusual circumstances, the fund may temporarily suspend the processing of
sell requests, or may postpone payment of redemption proceeds for up to three
business days or longer, as allowed by federal securities laws.
FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES
The fund is intended to be a long-term investment vehicle and is not designed to
provide investors with a means of speculating on short-term market movements
(market timing). Frequent purchases and redemptions of the fund by a fund
shareholder can disrupt the management of the fund, negatively affect the fund's
performance, and increase expenses for all fund shareholders. In particular,
frequent trading (i) can force the fund's portfolio manager to hold larger cash
positions than desired instead of fully investing the funds, which can result in
lost investment opportunities; (ii) can cause unplanned and inopportune
portfolio turnover in order to meet redemption requests; (iii) can increase
broker-dealer commissions and other transaction costs as well as administrative
costs for the fund; and (iv) can trigger taxable gains for other shareholders.
Also, some frequent traders engage in arbitrage strategies, by which these
traders seek to exploit pricing anomalies that can occur when the fund invests
in securities that are thinly traded (for example some small capitalization
stocks) or are traded primarily in markets outside of the United States.
Frequent traders, and in particular those using arbitrage strategies can dilute
the fund's NAV for long-term shareholders.
If you intend to trade frequently or use market timing investment strategies,
you should not purchase the fund.
The Board of Directors of the fund has adopted policies and procedures with
respect to frequent purchases and redemptions of fund shares by fund
shareholders. The fund's policy is to discourage investors from trading in the
fund's shares in an excessive manner that would be harmful to long-term
investors and to make reasonable efforts to detect and deter excessive trading.
The fund reserves the right to reject any purchase order at any time and for any
reason, without prior written notice. The fund also reserves the right to revoke
the exchange privileges of any person at any time and for any reason. In making
determinations concerning the revocation of exchange privileges, the fund may
consider an investor's trading history in any Hartford Mutual Fund, including
the person's trading history in any accounts under a person's common ownership
or control.
It is the policy of the fund to permit only two "substantive round trips" by an
investor within any single fund within a 90-day period.
A substantive round trip is a purchase of or an exchange into the same fund and
a redemption of or an exchange out of the same fund in a dollar amount that the
fund's transfer agent determines, in the reasonable exercise of its discretion,
could adversely affect the management of the fund. When an additional
transaction request for the fund is received within the 90-day period, the
requested transaction will be rejected and the person requesting such
transaction will be deemed an "Excessive Trader." All exchange and purchase
privileges of an Excessive Trader shall be suspended within the fund for the
first violation of the policy for a period of 90 days. For a second violation of
the policy, the exchange and purchase privileges of the Excessive Trader will be
suspended indefinitely. If an Excessive Trader makes exchanges through a
registered representative, in appropriate circumstances the fund's transfer
agent may terminate the registered representative's exchange and purchase
privileges in the fund. Automatic programs offered by the fund such as dollar
cost averaging and dividend diversification are exempt from the policy described
above. In addition, the Money Market Fund is excluded from the policy.
24
The fund's policies for deterring frequent purchases and redemptions of fund
shares by the fund shareholder are intended to be applied uniformly to all fund
shareholders to the extent practicable. Some financial intermediaries, such as
broker-dealers, investment advisors, plan administrators, and third-party
transfer agents, however, maintain omnibus accounts in which they aggregate
orders of multiple investors and forward the aggregated orders to the fund.
Because the fund receives these orders on an aggregated basis and because these
omnibus accounts may trade with numerous fund families with differing market
timing policies, the fund is substantially limited in its ability to identify or
deter Excessive Traders or other abusive traders. The fund's procedures with
respect to omnibus accounts will be as follows: (1) Where Hartford
Administrative Service Company ("HASCO") is provided individual shareholder
level transaction detail on a daily basis, HASCO shall monitor the daily trade
activity of individual shareholders and apply the Policy. (2) Where an
intermediary will implement the Policy on behalf of HASCO, HASCO shall obtain an
appropriate annual certification from such intermediary. (3) Where an
intermediary has established reasonable internal controls and procedures for
limiting exchange activity in a manner that serves the purposes of the Policy as
determined by the Frequent Trading Review Committee (comprised of the funds'
Chief Compliance Officer, Chief Legal Officer and a senior business leader of
The Hartford), HASCO shall permit such intermediary to apply its policy in lieu
of this Policy and obtain an appropriate annual certification. Finally, (4)
where none of the foregoing occurs, HASCO shall monitor the accounts at an
omnibus level and apply detection tools designed to determine whether
shareholder transactions violating the Policy may be occurring. In such cases,
HASCO shall request and evaluate individual shareholder level transaction detail
and seek to impose restrictions in accordance with the Policy. In addition, the
fund's transfer agent will seek to obtain annual certifications from financial
intermediaries that such intermediaries have established reasonable internal
controls and procedures for limiting exchange activities in a manner that is
consistent with the fund's policies concerning frequent purchases and
redemptions of fund shares and are reasonably designed to obtain compliance with
applicable rules relating to customer-order handling and abusive trading
practices. Nonetheless, the fund's ability to identify and deter frequent
purchases and redemptions of the fund's shares through omnibus accounts is
limited, and the fund's success in accomplishing the objectives of the policies
concerning frequent purchases and redemptions of fund shares in this context
depends significantly upon the cooperation of the financial intermediaries.
In October 2007, new SEC rules became effective which require the fund and
intermediaries to enter into written agreements intended to promote transparency
in omnibus accounts. As the fund and intermediaries implement the requirements
of the new rules, it is expected that the fund will be better able to apply its
frequent trading policies to omnibus accounts.
The use of fair value pricing can serve both to make the fund less attractive to
market timers and to reduce the potential adverse consequences of market timing
or abusive trading to other investors. Certain market timers seek to take
advantage of pricing anomalies that can occur in fund shares resulting from the
manner in which the NAV of the fund's shares is determined each day. Frequent
trading in fund shares can dilute the value of long-term shareholders' interests
in the fund if the fund calculates its NAV using closing prices that are no
longer accurate. This can happen particularly in funds that invest in overseas
markets or that invest in securities of smaller issuers or thinly traded
securities. The fund's pricing procedures, particularly those procedures
governing the determination of the "fair value" of securities for which market
prices are not readily available (or are unreliable) for foreign securities may
serve as a deterrent against harmful excessive trading in fund shares. For
additional information concerning the fund's fair value procedures, please refer
to "Valuation of Shares."
CERTIFICATED SHARES
Shares are electronically recorded and therefore share certificates are not
issued.
SALES IN ADVANCE OF PURCHASE PAYMENTS
When you place a request to sell shares for which the purchase money has not yet
been collected, the request will be executed in a timely fashion, but the fund
will not release the proceeds to you until your purchase payment clears. This
may take up to 10 calendar days after the purchase.
SPECIAL REDEMPTIONS
Although it would not normally do so, the fund has the right to pay the
redemption price of shares of the fund in whole or in part in portfolio
securities. When the shareholder sells portfolio securities received in this
fashion, a brokerage charge would be incurred. Any such securities would be
valued for the purposes of making such payment at the same value as used in
determining net asset value. The fund, however, always redeems shares solely in
cash up to the lesser of $250,000 or 1% of the net asset value of the fund
during any 90 day period for any one account.
25
PAYMENT REQUIREMENTS
If your check does not clear, your purchase will be canceled and you will be
liable for any losses or fees that the funds or HIFSCO has incurred.
Certain broker-dealers and financial institutions may enter confirmed purchase
orders with the fund on behalf of customers, by phone or other electronic means,
with payment to follow within the customary settlement period (generally within
three business days). If payment is not received by that time, the order will be
canceled and the broker-dealer or financial institution will be held liable for
the resulting fees or losses.
26
DIVIDENDS AND ACCOUNT POLICIES
ACCOUNT STATEMENTS You will receive statements and applicable tax forms from
your plan administrator or broker pursuant to their policies.
DIVIDENDS AND DISTRIBUTIONS The fund intends to distribute substantially all of
its net income to shareholders at least quarterly and capital gains will be
distributed at least annually. Dividends from net investment income of the fund
are normally declared and paid quarterly. Unless shareholders specify otherwise,
all dividends and distributions received from the fund are automatically
reinvested in additional full or fractional shares of the fund.
TAXABILITY OF DIVIDENDS Dividends and capital gains distributed by the fund to
tax-deferred retirement plan accounts are not taxable currently.
TAXABILITY OF TRANSACTIONS Exchanges within a tax-deferred retirement plan
account will not result in a capital gain or loss for federal or state income
tax purposes. With limited exceptions, distributions from a retirement plan
account are taxable as ordinary income.
27
FINANCIAL HIGHLIGHTS
Because the fund has not commenced operations, no financial highlight
information is available for the fund.
28
FUND CODE AND CUSIP NUMBER
[Download Table]
CLASS
NAME SHARES FUND CODE CUSIP NUMBER
---- ------ --------- ------------
The Hartford Global Enhanced Dividend Fund R3 1587 4166L534
The Hartford Global Enhanced Dividend Fund R4 1588 4166L526
The Hartford Global Enhanced Dividend Fund R5 1589 4166L518
The Hartford Global Enhanced Dividend Fund Y 1585 4166L492
29
FOR MORE INFORMATION
Two documents are available that offer further information on The Hartford
Mutual Funds:
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Additional information about the fund will be contained in the financial
statements and portfolio holdings in the fund's annual and semi-annual reports.
In the fund's annual report you will also find a discussion of the market
conditions and investment strategies that will have significantly affected the
fund's performance during the last fiscal year, as well as the independent
registered public accounting firm's report. Because the fund did not commence
operations until November 30, 2007, the fund has not yet delivered an annual or
semi-annual report.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains more detailed information on the fund.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference into (which means it is legally a part of) this
prospectus.
The fund makes available this prospectus and its SAI free of charge, on the
fund's website at www.hartfordinvestor.com. The fund will make available its
annual/semi-annual reports free of charge on the fund's website when such
reports become available.
To request a free copy of the current SAI or annual/semi-annual reports when
they become available, or for shareholder inquiries or other information about
the fund, please contact the fund at:
BY MAIL:
The Hartford Mutual Funds
P.O. Box 64387
St. Paul, MN 55164-0387
(For overnight mail)
The Hartford Mutual Funds
500 Bielenberg Drive
Woodbury, MN 55125-1400
BY PHONE:
1-888-843-7824
ON THE INTERNET:
www.hartfordinvestor.com
Or you may view or obtain these documents from the SEC:
IN PERSON:
at the SEC's Public Reference Room in Washington, DC
Information on the operation of the SEC's public reference room may be obtained
by calling 1-202-942-8090.
BY MAIL:
Public Reference Section
Securities and Exchange Commission
30
Washington, DC 20549-0102
Requests which are made by mail require the payment of a duplicating fee to the
SEC to obtain a document.
ON THE INTERNET OR BY E-MAIL:
Internet: (on the EDGAR Database on the SEC's internet site) www.sec.gov
E-Mail: publicinfo@sec.gov
Requests which are made by e-mail require the payment of a duplicating fee to
the SEC to obtain a document.
SEC FILE NUMBERS:
The Hartford Mutual Funds, Inc. 811-07589
31
STATEMENT OF ADDITIONAL INFORMATION
FOR THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
CLASS A, CLASS B, CLASS C, CLASS I, CLASS R3,
CLASS R4, CLASS R5 AND CLASS Y SHARES
THE HARTFORD MUTUAL FUNDS, INC.
THE HARTFORD GLOBAL ENHANCED DIVIDEND FUND
P.O. Box 64387
St. Paul, MN 55164-0387
This Statement of Additional Information ("SAI") is not a prospectus but should
be read in conjunction with the corresponding prospectus for the fund and class
thereof. A free copy of the prospectus is available on the fund's website at
www.hartfordinvestor.com., upon request by writing to: The Hartford Mutual
Funds, P. O. Box 64387, St. Paul, MN 55164-0387 or by calling 1-888-843-7824.
The Hartford Global Enhanced Dividend Fund is currently closed to new investors.
Date of Prospectus: November 30, 2007 Date of Statement of Additional
Information: November 30, 2007
TABLE OF CONTENTS
[Download Table]
PAGE
----
GENERAL INFORMATION...................................................... 3
INVESTMENT OBJECTIVES AND POLICIES....................................... 3
FUND MANAGEMENT.......................................................... 19
INVESTMENT MANAGEMENT ARRANGEMENTS....................................... 26
PORTFOLIO MANAGERS....................................................... 30
PORTFOLIO TRANSACTIONS AND BROKERAGE..................................... 32
FUND EXPENSES............................................................ 33
DISTRIBUTION ARRANGEMENTS................................................ 33
PURCHASE AND REDEMPTION OF SHARES........................................ 38
DETERMINATION OF NET ASSET VALUE......................................... 41
CAPITALIZATION AND VOTING RIGHTS......................................... 42
TAXES.................................................................... 43
PRINCIPAL UNDERWRITER.................................................... 48
CUSTODIAN................................................................ 48
TRANSFER AGENT........................................................... 48
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM............................ 48
OTHER INFORMATION........................................................ 48
CODE OF ETHICS........................................................... 48
FINANCIAL STATEMENTS..................................................... 49
PROXY VOTING POLICIES AND PROCEDURES..................................... 50
APPENDIX A............................................................... 56
2
GENERAL INFORMATION
The Hartford Mutual Funds, Inc. (the "Company") is an open-end management
investment company consisting of fifty-five separate investment portfolios or
mutual funds (the "Funds"). This SAI relates to The Hartford Global Enhanced
Dividend Fund (the "Fund"). The Hartford Mutual Funds, Inc. was organized as a
Maryland corporation on March 21, 1996.
The Company issues separate series of shares of stock for the Fund
representing a fractional undivided interest in the Fund. The Global Enhanced
Dividend Fund issues shares in eight different classes: Class A, Class B, Class
C, Class I Class R3, Class R4, Class R5 and Class Y.
Class R3, Class R4 and Class R5 shares (collectively, "Class R shares"),
are only available to qualified 401(k) plans, 457 plans, employer-sponsored
403(b) plans, profit-sharing and money purchase pension plans, defined benefit
plans and non-qualified deferred compensation plans.
Class A, Class B and C shares are offered through one prospectus describing
those classes. Class I shares are offered through another prospectus describing
that class, while Class R3, R4, R5 and Y shares are offered through another
prospectus describing those classes. This SAI relates to Class A, B, C, I, R3,
R4, R5 and Y shares.
Hartford Investment Financial Services, LLC ("HIFSCO") is the investment
manager and principal underwriter to the Fund. HIFSCO is an indirect
wholly-owned subsidiary of The Hartford Financial Services Group, Inc. ("The
Hartford"), a Connecticut financial services company with over $419.5 billion in
assets under management as of September 30, 2007. Hartford Investment Management
Company ("Hartford Investment Management"), is the sub-adviser to the Fund and
provides the day-to-day investment management of the Fund (the "sub-adviser").
Hartford Investment Management is a wholly-owned subsidiary of The Hartford.
The Fund commenced operations on November 30, 2007.
INVESTMENT OBJECTIVES AND POLICIES
With respect to percentage restrictions on investments described in this
SAI or in the prospectus, except with respect to the limitations on borrowing
from banks set forth below under "Fundamental Restrictions of the Fund," if such
percentage restrictions are adhered to at the time of investment, a later
increase or decrease in such percentage resulting from a change in values of
securities or loans or amount of net assets or security characteristic is not a
violation of any of such restrictions.
A. FUNDAMENTAL RESTRICTIONS OF THE FUND
The Fund has adopted the following fundamental investment restrictions
which may not be changed without approval of a majority of the Fund's
outstanding voting securities. Under the Investment Company Act of 1940, as
amended (the "1940 Act"), and as used in the prospectus and this SAI, a
"majority of the outstanding voting securities" means the approval of the lesser
of (1) the holders of 67% or more of the outstanding shares of the Fund (or a
class of the outstanding shares of the Fund) represented at a meeting if the
holders of more than 50% of the outstanding shares of the Fund (or class) are
present in person or by proxy or (2) the holders of more than 50% of the
outstanding shares of the Fund (or of the class).
The investment objective and principal investment strategies of the Fund
are set forth in the prospectus. Set forth below are the fundamental investment
restrictions and policies applicable to the Fund followed by the principal
non-fundamental restrictions and policies applicable to the Fund.
The Fund:
1. will not borrow money or issue any class of senior securities, except to
the extent consistent with the 1940 Act, and the rules and regulations
thereunder, or as may otherwise be permitted from time to time by regulatory
authority;
2. will not purchase the securities or loans of any issuer or borrower
(other than securities or loans issued or guaranteed by the U.S. government or
any of its agencies or instrumentalities) if, as a result, more than 25% of the
Fund's total assets would be invested in the securities or loans of companies
whose principal business activities are in the same industry.
3
3. will not make loans, except to the extent consistent with the 1940 Act,
as amended, and the rules and regulations thereunder, or as may otherwise be
permitted from time to time by regulatory authority;
4. will not act as an underwriter of securities of other issuers, except to
the extent that, in connection with the disposition of portfolio securities, the
Fund may be deemed an underwriter under applicable laws;
5. will not purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments, although it may purchase
securities secured by real estate or interests therein, or securities issued by
companies which invest in real estate or interests therein; and
6. will not purchase or sell commodities or commodities contracts, except
that the Fund may purchase or sell financial futures contracts, options on
financial futures contracts and futures contracts, forward contracts, and
options with respect to foreign currencies, and may enter into swap transactions
or other financial transactions of any kind.
For the Fund, and except for the limitations on borrowing from banks, if
the above percentage restrictions are adhered to at the time of investment, a
later increase or decrease in such percentage resulting from a change in values
of securities or amount of net assets is not a violation of any of the foregoing
restrictions.
B. NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND
The following restrictions are designated as non-fundamental and may be
changed by the board of directors without the approval of shareholders.
The Fund may not:
1. Pledge, mortgage or hypothecate its assets, except to the extent
required to secure permitted borrowings. This investment restriction shall not
apply to any required segregated account, securities lending arrangements,
reverse repurchase agreements or other assets in escrow and collateral
arrangements with respect to margin for futures contracts and related options,
or short sales.
2. Purchase any securities on margin (except that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of portfolio securities). The deposit or payment by the Fund of initial or
maintenance margin in connection with futures contracts or related options
transactions or short sales is not considered the purchase of a security on
margin.
3. Purchase securities while outstanding borrowings exceed 5% of the Fund's
total assets, except for temporary or emergency purposes. Short sales, reverse
repurchase agreements, dollar rolls, securities lending, or other investments or
transactions described in the Fund's registration statement are not deemed to be
borrowings for purposes of this restriction.
4. Invest more than 15% of the Fund's net assets in illiquid securities.
For the Fund, if the above percentage restrictions are adhered to at the
time of investment, a later increase or decrease in such percentage resulting
from a change in values of securities or loans or amount of net assets is not a
violation of any of the foregoing restrictions.
C. NON-FUNDAMENTAL TAX RESTRICTIONS OF THE FUND
The Fund must:
1. Maintain its assets so that, at the close of each quarter of its taxable
year,
(a) at least 50 percent of the fair market value of its total assets
is comprised of cash, cash items, U.S. Government securities,
securities of other regulated investment companies and other
securities (including bank loans) limited in respect of any one
issuer to no more than 5 percent of the fair market value of the
Fund's total assets and 10 percent of the outstanding voting
securities of such issuer,
(b) no more than 25 percent of the fair market value of its total
assets is invested in the securities (including bank loans) of
any one issuer (other than U.S. Government securities and
securities of other regulated investment companies), or of
4
two or more issuers controlled by the Fund and engaged in the
same, similar, or related trades or businesses, or of one or more
qualified publicly traded partnerships.
These tax-related limitations are subject to cure provisions under
applicable tax laws and may be changed by the board of directors to the extent
appropriate in light of changes to applicable tax law requirements.
D. CLASSIFICATION
The Fund has elected to be classified as a diversified series of an
open-end management investment company. The Fund may not change its
classification status from diversified to non-diversified without the prior
approval of shareholders.
E. MISCELLANEOUS INVESTMENT STRATEGIES AND RISKS
The investment objective and principal investment strategies for the Fund
are discussed in the Fund's prospectus. A further description of certain
investment strategies used by the Fund is set forth below. The percentage limits
described in the sections below are based on market value and are determined as
of the time securities are purchased. If the percentage limitations herein are
adhered to at the time of investment, a later increase or decrease in such
percentage resulting from a change in values of securities or amount of net
assets is not a violation of any of the limitations herein.
Certain descriptions in the prospectus of the Fund and in this SAI of a
particular investment practice or technique in which the Fund may engage or a
financial instrument which the Fund may purchase are meant to describe the
spectrum of investments that the Fund's sub-adviser, in its discretion, might,
but is not required to, use in managing the Fund's portfolio assets in
accordance with the Fund's investment objective, policies and restrictions. It
is possible that certain types of financial instruments or techniques may not be
available, permissible or effective for their intended purposes in all markets.
NEW FUND RISKS The Global Enhanced Dividend Fund is a new Fund, with no
operating history, which may result in additional risk. There can be no
assurance that this new Fund will grow to or maintain an economically viable
size, in which case the Board of Directors may determine to liquidate the Fund.
While shareholder interests will be the paramount consideration, the timing of
any liquidation may not be favorable to certain individual shareholders.
5
MONEY MARKET INSTRUMENTS AND TEMPORARY INVESTMENT STRATEGIES The Fund may
hold cash and invest in high quality money market instruments under appropriate
circumstances as determined by the sub-adviser, subject to the overall
supervision of HIFSCO. The Fund may invest up to 100% of its total assets in
cash or money market instruments only for temporary defensive purposes.
Money market instruments include, but are not limited to: (1) banker's
acceptances; (2) obligations of governments (whether U.S. or foreign) and their
agencies and instrumentalities; (3) short-term corporate obligations, including
commercial paper, notes, and bonds; (4) other short-term debt obligations; (5)
obligations of U.S. banks, foreign branches of U.S. banks (Eurodollars), U.S.
branches and agencies of foreign banks (Yankee dollars), and foreign branches of
foreign banks; (6) asset-backed securities; and (7) repurchase agreements.
REPURCHASE AGREEMENTS A repurchase agreement is an agreement by which the
seller of a security agrees to repurchase the security sold at a mutually agreed
upon time and price. It may also be viewed as the loan of money by a Fund to the
seller. The resale price by the Fund would be in excess of the purchase price,
reflecting an agreed upon market interest rate.
The Fund is permitted to enter into fully collateralized repurchase
agreements. The Company's board of directors has delegated to the sub-advisers
the responsibility of evaluating the creditworthiness of the banks and
securities dealers with which the Fund will engage in repurchase agreements.
The sub-advisers will monitor such transactions to ensure that the value of
underlying collateral will be at least equal at all times to the total amount of
the repurchase obligation, including the accrued interest. If the seller
defaults, the Fund could realize a loss on the sale of the underlying security
to the extent that the proceeds of sale including accrued interest are less than
the resale price provided in the agreement including interest. In the event the
seller commences bankruptcy proceedings, a court may characterize the
transaction as a loan. If the Fund has not perfected a security interest in the
security, the Fund may be required to return the security to the seller's estate
and be treated as an unsecured creditor. As an unsecured creditor, the Fund
could lose some or all of the principal and interest involved in the
transaction.
REVERSE REPURCHASE AGREEMENTS The Fund may also enter into reverse
repurchase agreements. Reverse repurchase agreements involve sales by the Fund
of portfolio assets concurrently with an agreement by the Fund to repurchase the
same assets at a later date at a fixed price. Reverse repurchase agreements
carry the risk that the market value of the securities which the Fund is
obligated to repurchase may decline below the repurchase price. A reverse
repurchase agreement is viewed as a collateralized borrowing by the Fund.
Borrowing magnifies the potential for gain or loss on the portfolio securities
of the Fund and, therefore, increases the possibility of fluctuation in the
Fund's net asset value.
INFLATION-PROTECTED DEBT SECURITIES The Fund may invest in
inflation-protected debt securities. Inflation-protected debt securities are
fixed income securities whose principal value is periodically adjusted according
to the rate of inflation. Two structures are common. The U.S. Treasury and some
other issuers use a structure that accrues inflation into the principal value of
the security. Most other issuers pay out the inflation accruals as part of a
semiannual coupon.
If the periodic adjustment rate measuring inflation falls, the principal
value of inflation-protected debt securities will be adjusted downward, and
consequently the interest payable on these securities (calculated with respect
to a smaller principal amount) will be reduced. Repayment of the original
security principal upon maturity (as adjusted for inflation) is guaranteed in
the case of U.S. Treasury inflation-protected debt securities, even during a
period of deflation. However, the current market value of the securities is not
guaranteed, and will fluctuate. The Fund may also invest in other inflation
related securities which may or may not provide a similar guarantee. If a
guarantee of principal is not provided, the adjusted principal value of the
security repaid at maturity may be less than the original principal.
While these securities are expected to be protected from long-term
inflationary trends, short-term increases in inflation may lead to decline in
value. If interest rates rise due to reasons other than inflation (for example,
due to changes in currency exchange rates), investors in these securities may
not be protected to the extent that the increase is not reflected in the
security's inflation measure.
The periodic adjustment of U.S. inflation-protected debt securities is tied
to the Consumer Price Index for Urban Consumers ("CPI-U"), which is calculated
monthly by the U.S. Bureau of Labor Statistics. The CPI-U is an index of changes
in the cost of living, made up of components such as housing, food,
transportation and energy. Inflation-protected debt securities issued by a
foreign government are generally adjusted to reflect a comparable inflation
index, calculated by that government. There can be no assurance that the CPI-U
or any foreign inflation index will accurately measure the real rate of
inflation in the prices of goods and services. Moreover, there can be no
assurance that the rate of inflation in a foreign country will be correlated to
the rate of inflation in the United States.
6
Any increase in the principal amount of an inflation-protected debt
security will be considered taxable ordinary income, even though investors do
not receive their principal until maturity.
DEBT SECURITIES The Fund is permitted to invest in debt securities
including, among others: (1) securities issued or guaranteed as to principal or
interest by the U.S. Government, its agencies or instrumentalities, (2)
non-convertible debt securities issued or guaranteed by U.S. corporations or
other issuers (including foreign issuers), (3) asset-backed securities, (4)
mortgage-related securities, including collateralized mortgage obligations
("CMO's"), (5) securities issued or guaranteed as to principal or interest by a
foreign issuer, including supranational entities such as development banks,
non-U.S. corporations, banks or bank holding companies, or other foreign
issuers, (6) commercial mortgage-backed securities and (7) other capital
securities issued or guaranteed by U.S. corporations or other issuers (including
foreign issuers).
INVESTMENT GRADE DEBT SECURITIES The Fund is permitted to invest in debt
securities rated within the four highest rating categories (e.g., "Aaa", "Aa",
"A" or "Baa" by Moody's Investors Service, Inc. ("Moody's") or "AAA", "AA", "A"
or "BBB" by Standard and Poor's Corporation ("S&P") (or, if unrated, securities
of comparable quality as determined by the sub-adviser). These securities are
generally referred to as "investment grade securities." Each rating category has
within it different gradations or sub-categories. If the Fund is authorized to
invest in a certain rating category, the Fund is also permitted to invest in any
of the sub-categories or gradations within that rating category. If a security
is downgraded to a rating category which does not qualify for investment, the
sub-adviser will use its discretion on whether to hold or sell based upon its
opinion on the best method to maximize value for shareholders over the long
term. Debt securities carrying the fourth highest rating (e.g., "Baa" by Moody's
and "BBB" by S&P), and unrated securities of comparable quality (as determined
by the sub-adviser) are viewed to have adequate capacity for payment of
principal and interest, but do involve a higher degree of risk than that
associated with investments in debt securities in the higher rating categories
and such securities lack outstanding investment characteristics and do have
speculative characteristics. To the extent that the Fund invests in higher-grade
securities, the Fund may not be able to avail itself of opportunities for higher
income which may be available at lower grades.
HIGH YIELD-HIGH RISK DEBT SECURITIES Any security rated "Ba" by Moody's or
"BB" by S&P or lower, or which, if unrated, is determined by the sub-adviser to
be of comparable quality, is below investment grade. The Fund is permitted to
invest up to 5% of its total assets in fixed income securities rated as low as
"C" by Moody's or "CC" by S&P or of comparable quality if not rated.
Securities rated below investment grade are commonly referred to as "high
yield-high risk debt securities," "junk bonds," or "emerging market debt" as the
case may be. Each rating category has within it different gradations or
sub-categories. For instance the "Ba" rating for Moody's includes "Ba3", "Ba2"
and "Ba1". Likewise the S&P rating category of "BB" includes "BB+", "BB" and
"BB-". In the municipal market, the term "high yield" may often refer to low
investment grade and "high yield-high risk debt securities" (as previously
defined). If the Fund is authorized to invest in a certain rating category, the
Fund is also permitted to invest in any of the sub-categories or gradations
within that rating category. Descriptions of the debt securities and ratings
system, including their speculative characteristics attributable to each ratings
category, are set forth as an appendix to this SAI. These securities generally
entail greater risk (including the possibility of default or bankruptcy of the
issuer), involve greater volatility of price and risk to principal and income,
and may be less liquid than securities in higher rating categories. Securities
in the highest category below investment grade are considered to be of poor
standing and predominantly speculative. These securities are considered
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations. Accordingly, it is
possible that these types of factors could, in certain instances, reduce the
value of securities held by the Fund with a commensurate effect on the value of
the Fund's shares. If a security is downgraded to a rating category which does
not qualify for investment, the applicable sub-adviser will use its discretion
on whether to hold or sell based upon its opinion on the best method to maximize
value for shareholders over the long term.
7
MORTGAGE-RELATED SECURITIES The mortgage-related securities in which the
Fund may invest include interests in pools of mortgage loans made by lenders
such as savings and loan institutions, mortgage bankers, commercial banks and
others. Pools of mortgage loans are assembled for sale to investors (such as the
Fund) by various governmental, government-related and private organizations. The
Fund may also invest in similar mortgage-related securities which provide funds
for multi-family residences or commercial real estate properties. When interest
rates rise, mortgage prepayment rates tend to decline, thus lengthening the life
of a mortgage-related security and increasing the price volatility of that
security, affecting the price volatility of the Fund's shares.
The value of these securities may be significantly affected by interest
rates, the market's perception of the issuers and the creditworthiness of the
parties involved. These securities may also be subject to prepayment risk and
the risk that the underlying loans may not be repaid. The yield characteristics
of the mortgage securities differ from those of traditional debt securities.
Among the major differences are that interest and principal payments are made
more frequently on mortgage securities, usually monthly, and that principal may
be prepaid at any time because the underlying mortgage loans or other assets
generally permit prepayment at any time. The risks associated with prepayment
and the rate at which prepayment may occur are influenced by a variety of
economic, geographic, demographic, social and other factors including interest
rate levels, changes in housing needs, net equity built by mortgagors in the
mortgaged properties, job transfers, and unemployment rates. If the Fund
purchases these securities at a premium, a prepayment rate that is faster than
expected will reduce yield to maturity, while a prepayment rate that is slower
than expected will have the opposite effect of increasing yield to maturity.
Conversely, if the Fund purchases these securities at a discount, faster than
expected prepayments will increase, while slower than expected prepayments will
reduce, yield to maturity. Amounts available for reinvestment are likely to be
greater during a period of declining interest rates and, as a result, are likely
to be reinvested at lower interest rates than during a period of rising interest
rates. Accelerated prepayments on securities purchased by the Fund at a premium
also impose a risk of loss of principal because the premium may not have been
fully amortized at the time the principal is repaid in full.
The mortgage securities in which the Fund invests differ from conventional
bonds in that principal is paid back over the life of the mortgage securities
rather than at maturity. As a result, the holder of the mortgage securities
(e.g., the Fund) receives monthly scheduled payments of principal and interest,
and may receive unscheduled principal payments representing prepayments on the
underlying mortgages. When the holder reinvests the payments and any unscheduled
prepayments of principal it receives, it may receive a rate of interest which is
lower than the rate on the existing mortgage securities. For this reason,
mortgage securities are less effective than other types of U.S. Government
securities as a means of "locking in" long-term interest rates.
Mortgage-related securities may be composed of one or more classes and may
be structured either as pass-through securities or collateralized debt
obligations. Multiple-class mortgage-related securities are referred to herein
as "CMOs." Some CMOs are directly supported by other CMOs, which in turn are
supported by mortgage pools. Investors typically receive payments out of the
interest and principal on the underlying mortgages. The portions of these
payments that investors receive, as well as the priority of their rights to
receive payments, are determined by the specific terms of the CMO class. CMOs
involve special risk and evaluating them requires special knowledge.
CMO classes may be specially structured in a manner that provides any of a
wide variety of investment characteristics, such as yield, effective maturity
and interest rate sensitivity. As market conditions change, however, and
particularly during periods of rapid or unanticipated changes in market interest
rates, the attractiveness of the CMO classes and the ability of the structure to
provide the anticipated investment characteristics may be significantly reduced.
These changes can result in volatility in the market value, and in some
instances reduced liquidity, of the CMO class.
Certain classes of CMOs and other mortgage-related securities are
structured in a manner that makes them extremely sensitive to changes in
prepayment rates. Interest-only ("IO") and principal-only ("PO") classes are
examples of this. IOs are entitled to receive all or a portion of the interest,
but none (or only a nominal amount) of the principal payments, from the
underlying mortgage assets. If the mortgage assets underlying an IO experience
greater than anticipated principal prepayments, then the total amount of
interest payments allocable to the IO class, and therefore the yield to
investors, generally will be reduced. In some instances, an investor in an IO
may fail to recoup all of his or her initial investment, even if the security is
government issued or guaranteed or is rated AAA or the equivalent. Conversely,
PO classes are entitled to receive all or a portion of the principal payments,
but none of the interest, from the underlying mortgage assets. PO classes are
purchased at substantial discounts from par, and the yield to investors will be
reduced if principal payments are slower than expected. Some IOs and POs, as
well as other CMO classes, are structured to have special protections, however,
normally are effective only within certain ranges of prepayment rates and thus
will not protect investors in all circumstances. Inverse floating rate CMO
classes also may be extremely volatile. These classes pay interest at a rate
that decreases when a specified index of market rates increases.
8
ASSET-BACKED SECURITIES The Fund may invest in asset-backed securities. The
securitization techniques used for asset-backed securities are similar to those
used for mortgage-related securities. The collateral for these securities has
included home equity loans, automobile and credit card receivables, boat loans,
computer leases, airplane leases, mobile home loans, recreational vehicle loans
and hospital accounts receivables. The Fund may invest in these and other types
of asset-backed securities that may be developed in the future. These securities
may be subject to the risk of prepayment or default. Not all asset-backed
securities have the benefit of a security interest in the underlying asset.
Credit card receivables are generally unsecured and the debtors are entitled to
the protection of a number of state and federal consumer credit laws, many of
which give such debtors the right to set off certain amounts owed, thereby
reducing the balance due. The ability of an issuer of asset-backed securities to
enforce its security interest in the underlying securities may be limited, and
recoveries on repossessed collateral may not, in some cases, be available to
support payments on these securities.
STRUCTURED NOTES These notes differ from other types of debt securities in
several respects. The interest rate or principal amount payable at maturity may
vary based on changes in the value of the equity security or index. A structured
note may be positively or negatively indexed; that is, its value or interest
rate may increase or decrease if the value of the reference instrument
increases. Similarly, its value may increase or decrease if the value of the
reference instrument decreases. Further, the change in the principal amount
payable with respect to, or the interest rate of, a structured note may be a
multiple of the percentage change (positive or negative) in the value of the
underlying reference instrument(s). For discussion regarding the ability of the
Fund to invest in other types of structured notes, please see Other Derivatives
and Structured Investments, below.
Investments in structured notes involve certain risks, including the credit
risk of the issuer and the normal risks of price changes in response to changes
in interest rates. Further, in the case of certain structured notes, a decline
or increase in the value of the reference instrument may cause the interest rate
to be reduced to zero, and any further declines or increases in the reference
instrument may then reduce the principal amount payable on maturity. The
percentage by which the value of the structured note decreases may be far
greater than the percentage by which the value of the reference instrument
increases or decreases. Finally, these securities may be less liquid than other
types of securities, and may be more volatile than their underlying reference
instruments.
OTHER CAPITAL SECURITIES The Fund may invest in other capital securities.
Other capital securities encompass a group of instruments referred to in capital
markets as "Hybrids," "Tier I and Tier 2" and "TRUPS." These securities give
issuers flexibility in managing their capital structure. The features associated
with these securities are predominately debt like in that they have coupons, pay
interest and in most cases have a final stated maturity. There are certain
features that give the companies flexibility not commonly found in fixed income
securities, which include, but are not limited to, deferral of interest payments
under certain conditions and subordination to debt securities in the event of
default. But it should be noted that in an event of default the securities would
typically be expected to rank senior to common equity. The deferral of interest
payments is generally not an event of default for an extended period of time and
the ability of the holders of such instruments to accelerate payment under terms
of these instruments is generally more limited than other debt securities.
EQUITY SECURITIES Equity securities include common stock, preferred stock,
securities convertible into common or preferred stock and warrants or rights to
acquire common stock, including options. The Fund may invest in all types of
equity securities and may invest in securities such as bonds, debentures and
corporate notes which are convertible into common stock at the option of the
holder. Equity securities are subject to financial and market risks and can be
expected to fluctuate in value.
INITIAL PUBLIC OFFERINGS The prices of securities purchased in initial
public offerings ("IPOs") can be very volatile. The effect of IPOs on the Fund's
performance depends on a variety of factors, including the number of IPOs the
Fund invests in relative to the size of the Fund and whether and to what extent
a security purchased in an IPO appreciates and depreciates in value. As the
Fund's asset base increases, IPOs often have a diminished effect on the Fund's
performance.
SMALL CAPITALIZATION SECURITIES The Fund may invest in equity securities
(including securities issued in initial public offerings) of companies with
smaller market capitalizations. Because the issuers of small capitalization
securities tend to be smaller or less well-established companies, they may have
limited product lines, market share or financial resources, may have less
historical data with respect to operations and management and may be more
dependent on a limited number of key employees. As a result, small
capitalization securities are often less marketable and experience a higher
level of price volatility than securities of larger or more well-established
companies. Small capitalization securities may be more likely to be offered in
initial public offerings. Because securities issued in initial public offerings
are being offered to the public for the first time, the market for such
securities may be inefficient and less liquid.
9
FOREIGN ISSUERS AND NON-DOLLAR SECURITIES Foreign issuers include (1)
companies organized outside of the United States, (2) foreign governments and
agencies or instrumentalities of foreign governments and (3) issuers and
borrowers whose economic fortunes and risks are primarily linked with markets
outside the United States. Certain companies organized outside the United States
may not be deemed to be foreign issuers if the issuer's economic fortunes and
risks are primarily linked with U.S. markets. Non-dollar securities are
securities denominated or quoted in foreign currency or paying income in foreign
currency.
The Global Enhanced Dividend Fund is permitted to invest its assets in
equity securities of foreign issuers listed on U.S. exchanges, including
American Depositary Receipts ("ADRs"). ADRs are certificates issued by a U.S.
bank or trust company and represent the right to receive securities of a foreign
issuer deposited in a domestic bank or non-U.S. branch of a U.S. bank. ADRs are
traded on a U.S. securities exchange, or in an over-the-counter market, and are
denominated in U.S. dollars. The value of an ADR will fluctuate with the value
of the underlying security, will reflect any changes in exchange rates and
otherwise will involve risks associated with investing in foreign securities.
When selecting securities of foreign issuers for the Fund, Hartford Investment
Management will primarily consider dividend yield and in addition the
proprietary ranking of Hartford Investment Management's quantitative stock
selection models. Under normal conditions, the Fund will generally invest
between 40% and 70% of its net assets in ADRs.
The Fund is permitted to invest in equity securities of foreign issuers
listed on U.S. exchanges, including ADRs, and may invest in debt exchangeable
for common stock, debt, currency or equity linked notes and similar linked
securities (e.g., zero-strike warrants) ("LNs"), which are derivative securities
typically issued by a financial institution or special purpose entity the
performance of which depends on the performance of a corresponding foreign
security or index. Upon redemption or maturity, the principal amount or
redemption amount is payable based on the price level of the linked security or
index at the time of redemption or maturity, or is exchanged for corresponding
shares of common stock. LNs are generally subject to the same risks as direct
holdings of securities of foreign issuers and non-dollar securities, including
currency risk and the risk that the amount payable at maturity or redemption
will be less than the principal amount of a note because the price of the linked
security or index has declined. Moreover, LNs are subject to counterparty risk,
which is the risk that the company issuing an LN may fail to pay the full amount
due at maturity or redemption. The Fund may also have difficulty disposing of
LNs because there may be restrictions on redemptions and there may be no market
or only a thin trading market in such securities.
Under normal market conditions, the Fund will invest in a number of
different countries throughout the world; however there are no limits on the
amount of the Fund's assets that may or must be invested in each country.
Investing in securities of foreign issuers involves considerations and
potential risks not typically associated with investing in obligations issued by
U.S. issuers. Less information may be available about foreign issuers compared
with U.S. issuers. For example, foreign issuers generally are not subject to
uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements comparable to those applicable to U.S.
issuers. In addition, the values of non-dollar securities and loans are affected
by changes in currency rates or exchange control regulations, restrictions or
prohibition on the repatriation of foreign currencies, application of foreign
tax laws, including withholding taxes, changes in government administration or
economic or monetary policy (in the U.S. or outside the U.S.) or changed
circumstances in dealings between nations. Costs are also incurred in connection
with conversions between various currencies.
Investing in foreign government debt securities exposes the Fund to the
direct or indirect consequences of political, social or economic changes in the
developing and emerging countries that issue the securities. The ability and
willingness of sovereign obligors in developing and emerging countries or the
governmental authorities that control repayment of their external debt to pay
principal and interest on such debt when due may depend on general economic,
social and political conditions within the relevant country. Countries such as
those in which the Fund may invest have historically experienced, and may
continue to experience, high rates of inflation, high interest rates, exchange
rate trade difficulties and unemployment. Some of these countries are also
characterized by political uncertainty or instability. Additional factors which
may influence the ability or willingness to service debt include, but are not
limited to, a country's cash flow situation, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of its debt
service burden to the economy as a whole, and its government's policy towards
the IMF, the World Bank and other international agencies.
From time to time, the Fund may invest up to 25% of its net assets in
securities of issuers located in countries with emerging economies or securities
markets. Compared to the United States and other developed countries, developing
countries may have relatively unstable governments, economies based on only a
few industries, and securities markets that are less liquid and trade a small
number of securities. Prices in these markets tend to be volatile and, in the
past, securities in these countries have offered greater potential for gain (as
well as loss) than securities of companies located in developed countries.
10
Foreign securities are subject to other additional risks. For example,
foreign investments may be more difficult to sell than U.S. investments.
Investments in foreign loans and securities may involve currency risks,
difficulty in receiving or interpreting financial and economic information,
possible imposition of taxes, higher brokerage and custodian fees, possible
currency exchange controls or other government restrictions, including possible
seizure or nationalization of foreign deposits or assets. There may also be
difficulty in invoking legal protections across borders. In addition,
investments in emerging market countries present risks to a greater degree than
those presented by investments in developed countries with more developed
securities markets and more advanced regulatory systems. The value of foreign
loans and securities is affected by changes in foreign tax laws (including
withholding tax), government policies (in this country or abroad) and relations
between nations, and trading, settlement, custodial and other operational risks.
In addition, the costs of investing abroad are generally higher than in the
United States, and foreign loans and securities markets may be less liquid, more
volatile and less subject to governmental supervision than markets in the United
States. Foreign investments also can be affected by other factors not present in
the United States, including expropriation, armed conflict, confiscatory
taxation, lack of uniform accounting and auditing standards, less publicly
available financial and other information, and potential difficulties in
enforcing contractual obligations.
Some securities may be issued by companies organized outside the U.S. but
are traded in U.S. markets and are denominated in U.S. dollars. For example,
ADRs and shares of some large foreign-based companies are traded on principal
U.S. exchanges. Other securities are not traded in the U.S. but are denominated
in U.S. dollars. These securities are not subject to all of the risks of foreign
investing. For example, foreign trading markets or currency risks will not apply
to dollar denominated securities or loans traded in U.S. securities or loan
markets.
OPTIONS AND FUTURES CONTRACTS In seeking to protect against the effect of
changes in equity market values, currency exchange rates or interest rates that
are adverse to the present or prospective position of the Fund, for cash flow
management, and, for other investment purposes, the Fund may employ certain
hedging, return enhancement and risk management techniques, including the
purchase and sale of options contracts, futures contracts and options on futures
contracts, any of which may involve equity and debt securities and foreign
currencies, aggregates of equity and debt securities, indices of prices of
equity and debt securities and other financial indices or instruments. The Fund
may also invest in futures contracts and options thereon with respect to
interest rates and may enter into options on swap agreements. The Fund's ability
to engage in these practices may be limited by tax considerations and certain
other legal considerations.
The Fund may write covered options and purchase put and call options on
individual securities as a partial hedge against an adverse movement in the
security and in circumstances consistent with the objective and policies of the
Fund. This strategy limits potential capital appreciation in the portfolio
securities subject to the put or call option.
The Fund may also write covered put and call options and purchase put and
call options on foreign currencies to hedge against the risk of foreign exchange
rate fluctuations on non-dollar securities it holds or intends to purchase. For
example, if the Fund enters into a contract to purchase non-dollar securities,
it could effectively establish the maximum U.S. dollar cost of the securities by
purchasing call options on the appropriate currency. Similarly, if the Fund held
non-dollar securities and anticipated a decline in the value of that currency
against the U.S. dollar, the Fund could hedge against such a decline by
purchasing a put option on the foreign currency involved.
Aggregates are composites of equity or debt securities that are not tied to
a commonly known index. An index is a measure of the value of a group of
securities or other interests. An index assigns relative values to the
securities included in that index, and the index fluctuates with changes in the
market value of those securities. The Fund may purchase put and call options and
write covered put and call options on aggregates of equity and debt securities,
and may enter into futures contracts and options thereon for the purchase or
sale of aggregates of equity and debt securities, indices of equity and debt
securities and other financial indices or instruments.
The Fund may write covered straddles consisting of a combination of a call
and a put written on the same underlying security. A straddle will be covered
when sufficient assets are deposited to meet the Fund's immediate obligations.
The Fund may use the same liquid assets to cover both the call and put options
where the exercise price of the call and put are the same, or the exercise price
of the call is higher than that of the put. In such cases, the Fund will also
segregate or designate on their books liquid assets equivalent to the amount, if
any, by which the put is "in the money."
The Fund may write or purchase put and call swap options. A swap option is
a contract that gives a counterparty the right (but not the obligation) in
return for payment of a premium, to enter into a new swap agreement or to
shorten, extend, cancel or otherwise modify an existing swap agreement, at some
designated future time on specified terms.
11
The Fund may only write covered options. See "Asset Coverage" below.
A futures contract is an agreement between two parties to buy and sell a
security or financial instrument for a set price on a future date. These
contracts are traded on exchanges, so that, in most cases, either party can
close out its position on the exchange for cash, without delivering the security
or financial instrument. An option on a futures contract gives the holder of the
option the right to buy or sell a position in a futures contract to the writer
of the option, at a specified price and on or before a specified expiration
date.
The Fund may invest in futures contracts and options thereon ("futures
options") with respect to, but not limited to, equity and debt securities and
foreign currencies, aggregates of equity and debt securities, interest rates,
and indices of prices of equity and debt securities and other financial indices
or instruments.
The Fund may purchase or sell foreign currency futures contracts, and write
put and call options and purchase put and call options on such futures
contracts. For example, the Fund may use foreign currency futures contracts when
it anticipates a general weakening of the foreign currency exchange rate that
could adversely affect the market values of the Fund's non-dollar securities
holdings. In this case, the sale of futures contracts on the underlying currency
may reduce the risk of a reduction in market value caused by foreign currency
variations and, by so doing, provide an alternative to the liquidation of
securities positions in the Fund and resulting transaction costs. When the Fund
anticipates a significant foreign exchange rate increase while intending to
invest in a non-dollar security, the Fund may purchase a foreign currency
futures contract to hedge or partially hedge against a rise in foreign exchange
rates pending completion of the anticipated transaction. Such a purchase of a
futures contract would serve as a temporary measure to protect the Fund against
any rise in the foreign exchange rate that may add additional costs to acquiring
the non-dollar security.
The Fund similarly may use futures contracts on equity and debt securities
to hedge against fluctuations in the value of securities it owns or expects to
acquire. Futures contracts on individual securities are regulated as both
securities and as futures contracts, and are subject to higher margin
requirements than other kinds of futures contracts. Because these contracts
relate to the securities of a single issuer, they can be expected to be subject
to greater price volatility than futures contracts that relate to a diversified
group of securities represented in an aggregate or an index. The volume,
breadth, efficiency and other attributes may be limited. The Fund's use of these
kind of futures contracts will depend to a large degree on how this market
develops.
The Fund may purchase call or put options on foreign currency futures
contracts to obtain a fixed foreign exchange rate at limited risk. The Fund may
purchase a call option on a foreign currency futures contract to hedge against a
rise in the foreign exchange rate while intending to invest in a non-dollar
security of the same currency. The Fund may purchase put options on foreign
currency futures contracts to hedge against a decline in the foreign exchange
rate or the value of its non-dollar securities. The Fund may write a call option
on a foreign currency futures contract as a partial hedge against the effects of
declining foreign exchange rates on the value of non-dollar securities and in
circumstances consistent with the Fund's investment objectives and policies.
The Fund may write covered straddles consisting of a call and a put written
on the same underlying futures contract. A straddle will be covered when
sufficient assets are deposited to meet the Fund's immediate obligations. The
Fund may use the same liquid assets to cover both the call and put options where
the exercise price of the call and put are the same, or the exercise price of
the call is higher than that of the put. In such cases, the Fund will also
segregate or designate on their books liquid assets equivalent to the amount, if
any, by which the put is "in the money."
Options on indices are settled in cash, not in delivery of securities. The
exercising holder of an index option receives, instead of a security, cash equal
to the difference between the closing price of the securities index and the
exercise price of the option.
The Company, on behalf of the Fund, has filed with the National Futures
Association a notice claiming an exclusion from the definition of the term
"commodity pool operator" ("CPO") under the Commodity Exchange Act, as amended,
and the rules of the Commodity Futures Trading Commission promulgated
thereunder, with respect to the Fund's operation. Accordingly, the Fund is not
subject to registration or regulation as a CPO.
Although the Fund may not employ all or any of the foregoing strategies,
its use of options, futures and options thereon and forward currency contracts
(as described under "Currency Transactions") would involve certain investment
risks and transaction costs to which it might not be subject were such
strategies not employed. Such risks include: (1) dependence on the ability of a
sub-adviser to predict movements in the prices of individual securities,
fluctuations in the general securities markets or market sections and movements
in interest rates and currency markets, (2) imperfect correlation between
movements in the price of the securities or currencies hedged or used for cover,
(3) the fact that skills and techniques needed to trade options, futures
contracts and options thereon or to use forward currency contracts are different
from those needed to select the securities in which the Fund invests, (4) lack
12
of assurance that a liquid secondary market will exist for any particular
option, futures contract, option thereon or forward contract at any particular
time, which may affect the Fund's ability to establish or close out a position,
(5) possible impediments to effective portfolio management or the ability to
meet current obligations caused by the segregation of a large percentage of the
Fund's assets to cover its obligations, and (6) the possible need to defer
closing out certain options, futures contracts, options thereon and forward
contracts in order to continue to qualify as a "regulated investment company"
for tax purposes. In the event that the anticipated change in the price of the
securities or currencies that are the subject of such a strategy does not occur,
the Fund may have been in a better position had it not used such a strategy.
SWAP AGREEMENTS The Fund (except as noted below) may purchase or sell
derivative instruments (which derive their value from another instrument,
security or loan, index or currency) to enhance return, to hedge against
fluctuations in securities or loans prices, interest rates or currency exchange
rates, to change the duration of obligations held by the Fund, or as a
substitute for the purchase or sale of loans, securities or currencies. The Fund
may enter into currency swaps, interest rate swaps, swaps on specific securities
or indices, and other types of swap agreements such as caps, collars, floors and
credit derivatives and options thereon. In a typical interest rate swap, one
party agrees to make regular payments equal to a floating interest rate
multiplied by a "notional principal amount," in return for payments equal to a
fixed rate multiplied by the same amount, for a specified period of time. If a
swap agreement provides for payments in different currencies, the parties might
agree to exchange the notional principal amount as well. Swaps may also depend
on other prices or rates, such as the value of an index or mortgage prepayment
rates.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specified interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.
The Fund may enter into event linked swaps, including credit default swaps.
The credit default swap market allows the Fund to manage credit risk through
buying and selling credit protection on a specific name, an index, or a basket
of names. The transactions are documented through swap documents. A "buyer" of
credit protection agrees to pay a counterparty to assume the credit risk of an
issuer upon the occurrence of certain events. The "seller" of credit protection
receives a premium and agrees to assume the credit risk of an issuer upon the
occurrence of certain events. The Fund will generally not buy protection on
issuers that are not currently held by the Fund, however the Fund may engage in
credit default swap trades on single names, indices and baskets to manage asset
class exposure and to capitalize on spread differentials in instances where
there is not complete overlap between the Fund's holdings or exposures and the
reference entities in the credit default swap. Also see Other Derivatives and
Structured Investments, below.
Swap agreements will tend to shift the Fund's investment exposure from one
type of investment to another. For example, if the Fund agreed to exchange
floating rate payments for fixed rate payments, the swap agreement would tend to
decrease the Fund's exposure to rising interest rates. Another example would be
for the Fund to exchange interest payments for inflation-linked payments. Caps
and floors have an effect similar to buying or writing options. Depending on how
they are used, swap agreements may increase or decrease the overall volatility
of the Fund's investments and its share price and yield.
The Fund usually enters into swaps on a net basis. The net amount of the
excess, if any, of the Fund's obligations over its entitlement with respect to
each interest rate swap will be covered by an amount consisting of designated
liquid assets having an aggregate net asset value at least equal to the accrued
excess. If the Fund enters into a swap on other than a net basis, the Fund will
designate the full amount of the Fund's obligations under each such swap. The
Fund may enter into swaps, caps, collars and floors with member banks of the
Federal Reserve System, members of the New York Stock Exchange or other entities
determined by the sub-adviser to be creditworthy. If a default occurs by the
other party to such transaction, the Fund will have contractual remedies
pursuant to the agreements related to the transaction but such remedies may be
subject to bankruptcy and insolvency laws which could affect the Fund's rights
as a creditor.
The swap market has grown substantially in recent years with a large number
of banks and financial services firms acting both as principals and as agents
utilizing standardized swap documentation. As a result, the swap market has
become relatively liquid. Caps, collars and floors are more customized in nature
and accordingly, are less liquid than swaps. There can be no assurance, however,
that the Fund will be able to enter into interest rate swaps or to purchase
interest rate caps, collars or floors at prices or on terms the sub-adviser, as
appropriate, believes are advantageous to the Fund. In addition, although the
terms of swaps, caps, collars and floors may provide for termination, there can
be no assurance that the Fund will be able to terminate an interest rate swap or
to sell or offset interest rate caps, collars or floors that it has purchased.
Swaps, caps, collars and floors are considered by the SEC to be illiquid.
13
The Fund may use interest rate swaps for risk management purposes and not
as a speculative investment. The successful utilization of hedging and risk
management transactions requires skills different from those needed in the
selection of the Fund's portfolio securities and depends on the applicable
sub-adviser's ability to predict correctly the direction and degree of movements
in interest rates. Although the Fund believes that use of the hedging and risk
management techniques described above will benefit the Fund, if the
sub-adviser's judgment about the direction or extent of the movement in interest
rates is incorrect, the Fund's overall performance would be worse than if it had
not entered into any such transactions. For example, if the Fund had purchased
an interest rate swap or an interest rate floor to hedge against its expectation
that interest rates would decline but instead interest rates rose, the Fund
would lose part or all of the benefit of the increased payments it would receive
as a result of the rising interest rates because it would have to pay amounts to
its counterparties under the swap agreement or would have paid the purchase
price of the interest rate floor.
The Fund may also be subject to the risk that the counterparty in a
derivative transaction will default on its obligations. Derivative transactions
generally involve the risk of loss due to unanticipated adverse changes in
securities and loans prices, interest rates, indices or currency exchange rates,
the inability to close out a position, imperfect correlation between a position
and the desired hedge, tax constraints on closing out positions and portfolio
management constraints on securities and loans subject to such transactions. The
potential loss on derivative instruments may be substantial relative to the
initial investment therein. In addition, the Fund may lose the entire premium
paid for purchased options that expire before they can be profitably exercised.
The Fund incurs transaction costs in opening and closing positions in derivative
instruments. There can be no assurance that the use of derivative instruments
will be advantageous.
ASSET SWAPS The Fund will be permitted to purchase asset swaps where the
underlying issue would otherwise be eligible for purchase by the Fund. An asset
swap is a structure in which a security, for example a convertible bond, which
has various components is divided into those components which are sold to
different investors. With a convertible bond asset swap, the equity component of
the bond is separated from the fixed income component through the use of a swap.
The result of the transaction for the purchaser of the fixed income component is
that it obtains exposure to the issuer which is similar to the exposure it would
have received had it purchased a traditional fixed income instrument of the
issuer. Counterparty risk, as described under "Swap Agreements," is the primary
risk of asset swaps.
ILLIQUID INVESTMENTS The Fund is permitted to invest in illiquid securities
or other illiquid investments. The Fund will not, however, acquire illiquid
securities or investments if 15% of its net assets would consist of such
securities or investments. Illiquid investments are ones that may not be sold or
disposed of in the ordinary course of business within seven days at
approximately the price used to determine the Fund's net asset value. The Fund
may not be able to sell illiquid securities or other investments when the
sub-adviser considers it desirable to do so or may have to sell such securities
or other investments at a price that is lower than the price that could be
obtained if the securities or other investments were more liquid. A sale of
illiquid securities or investments may require more time and may result in
higher dealer discounts and other selling expenses than does the sale of those
that are liquid. Illiquid securities also may be more difficult to value due to
the lack of reliable market quotations for such securities or investments, and
investments in them may have an adverse impact on the Fund's net asset value. In
addition, issuers of restricted securities may not be subject to the disclosure
requirements and other investor protection requirements that would be applicable
if their securities were publicly traded. The Fund may purchase certain
restricted securities (known as Rule 144A securities) that can be resold to
institutions and which may be determined to be liquid pursuant to policies and
guidelines established by the Company's board of directors.
Under current interpretations of the SEC Staff, the following types of
investments in which the Fund may invest are considered illiquid: (1) repurchase
agreements maturing in more than seven days, (2) certain restricted securities
(securities whose public resale is subject to legal or contractual
restrictions), (3) option contracts, with respect to specific securities, not
traded on a national securities exchange that are not readily marketable, and
(4) any other securities or investments in which the Fund may invest that are
not readily marketable.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES The Fund is permitted to
purchase or sell securities on a when-issued or delayed-delivery basis.
When-issued or delayed-delivery transactions arise when securities are purchased
or sold with payment and delivery taking place in the future in order to secure
what is considered to be an advantageous price and yield at the time of entering
into the transaction. While the Fund generally purchases securities on a
when-issued basis with the intention of acquiring the securities, the Fund may
sell the securities before the settlement date if a sub-adviser deems it
advisable. Distributions attributable to any gains realized on such a sale would
be taxable to shareholders. At the time the Fund makes the commitment to
purchase securities on a when-issued basis, it records the transaction and
thereafter reflects the value, each day, of the security in determining the net
asset value of the Fund. At the time of delivery of the securities, the value
may be more or less than the purchase price.
OTHER INVESTMENT COMPANIES The Fund is permitted to invest in other investment
companies, including investment companies which may not be registered under the
1940 Act, such as holding company depository receipts ("HOLDRs"), but not as
14
part of its principal investment strategy. The investment in other investment
companies is limited in amount by the 1940 Act, and will involve the indirect
payment of a portion of the expenses, including advisory fees, of such other
investment companies.
The Fund's investments in investment companies may include various
exchange-traded funds ("ETFs"), subject to the Fund's investment objective,
policies, and strategies as described in the prospectus. ETFs are baskets of
securities that, like stocks, trade on exchanges such as the American Stock
Exchange and the New York Stock Exchange. ETFs are priced continuously and trade
throughout the day. ETFs may track a securities index, a particular market
sector, or a particular segment of a securities index or market sector.
ETFs can experience many of the same risks associated with individual
stocks. ETFs are subject to market risk where the market as a whole, or that
specific sector, may decline. ETFs that invest in volatile stock sectors, such
as foreign issuers, smaller companies, or technology, are subject to the
additional risks to which those sectors are subject. ETFs may trade at a
discount to the aggregate value of the underlying securities. The underlying
securities in an ETF may not follow the price movements of an entire industry or
sector. Trading in an ETF may be halted if the trading in one or more of the
ETF's underlying securities is halted. Although expense ratios for ETFs are
generally low, frequent trading of ETFs by the Fund can generate brokerage
expenses.
Generally, the Fund will not purchase securities of an investment company
if, as a result: (1) more than 10% of the Fund's total assets would be invested
in securities of other investment companies, (2) such purchase would result in
more than 3% of the total outstanding voting securities of any such investment
company being held by the Fund, or (3) more than 5% of the Fund's total assets
would be invested in any one such investment company.
REITS The Fund may invest in real estate investment trusts ("REITs"), which
are pooled investment vehicles that invest primarily in income-producing real
estate or real estate related loans or interests. Like regulated investment
companies such as the Fund, REITs are not taxed on income distributed to
shareholders provided they comply with several requirements of the Internal
Revenue Code of 1986, as amended (the "Code"). By investing in a REIT, the Fund
will indirectly bear its proportionate share of any expenses paid by the REIT in
addition to the expenses of the Fund.
Investing in REITs involves certain risks. A REIT may be affected by
changes in the value of the underlying property owned by such REIT or by the
quality of any credit extended by the REIT. REITs are dependent on management
skills, are not diversified (except to the extent the Code requires), and are
subject to the risks of financing projects. REITs are subject to heavy cash flow
dependency, default by borrowers, self-liquidation, the possibilities of failing
to qualify for the exemption from tax for distributed income under the Code and
failing to maintain their exemptions from the 1940 Act. REITs are also subject
to interest rate risks.
LENDING PORTFOLIO SECURITIES Subject to its investment restrictions set
forth under "Investment Objectives and Policies", the Fund may lend its
portfolio securities to broker-dealers and other institutions as a means of
earning interest income. The borrower is required to deposit as collateral and
maintain in a segregated account, liquid securities that at all times will be at
least equal to 100% of the market value of the loaned securities. Subject to
guidelines approved by the board of directors, the Fund may use or invest any
cash collateral at their own risk and for their own benefit. While the
securities are on loan, the borrower will pay the Fund any income accruing
thereon.
Delays or losses could result if a borrower of portfolio securities becomes
bankrupt or defaults on its obligation to return the loaned securities. The Fund
may lend securities only if: (1) each loan is fully secured by appropriate
collateral at all times, and (2) the value of all securities loaned by the Fund
is not more than 33.33% of the Fund's total assets taken at the time of the loan
(including collateral received in connection with any loans).
ASSET COVERAGE To the extent required by SEC guidelines, the Fund will only
engage in transactions that expose it to an obligation to another party if it
owns either (1) an offsetting position for the same type of financial asset, or
(2) cash or liquid securities, designated on the Fund's books or held in a
segregated account, with a value sufficient at all times to cover its potential
obligations not covered as provided in (1). Assets used as offsetting positions,
designated on the Fund's books, or held in a segregated account cannot be sold
while the position(s) requiring cover is open unless replaced with other
appropriate assets. As a result, the commitment of a large portion of assets to
be used as offsetting positions or to be designated or segregated in such a
manner could impede portfolio management or the ability to meet redemption
requests or other current obligations.
BORROWING The Fund may borrow money to the extent set forth under
"Investment Objectives and Policies." The Fund does not intend to borrow for
leverage purposes, except as may be set forth under "Investment Objectives and
Policies." Interest paid on borrowings will decrease the net earnings of the
Fund and will not be available for investment.
15
SHORT SALES The Fund's investment strategy may involve more risk than other
funds that do not engage in short selling. In a short sale, the Fund sells a
borrowed security (typically from a broker or other institution). The Fund may
not always be able to borrow the security at a particular time or at an
acceptable price. Thus, there is risk that the Fund may be unable to implement
its investment strategy due to the lack of available stocks or for other
reasons.
After selling the borrowed security, the Fund is obligated to "cover" the
short sale by purchasing and returning the security to the lender. If a security
sold short increases in price, the Fund may have to cover its short position at
a higher price than the short sale price, resulting in a loss. The amount of any
gain will be decreased, and the amount of any loss increased, by the amount of
the premium, dividends, interest or expenses the Fund may be required to pay to
the broker or dealer in connection with the short sale. Because the Fund's loss
on a short sale arises from increases in the value of the security sold short,
such loss is theoretically unlimited. In certain cases, purchasing a security to
cover a short position can itself cause the price of the security to rise
further, thereby exacerbating the loss.
Short sales also involve other costs. The Fund must normally repay to the
lender an amount equal to any dividends or interest that accrues while the loan
is outstanding. In addition, to borrow the security, the Fund may be required to
pay a premium. The Fund also will incur transaction costs in effecting short
sales. The amount of any ultimate gain for the Fund resulting from a short sale
will be decreased, and the amount of any ultimate loss will be increased, by the
amount of premiums, dividends, interest or expenses the Fund may be required to
pay in connection with the short sale.
Until the Fund replaces a borrowed security, it is required to maintain a
segregated account of cash or liquid assets to cover the Fund's short position.
Securities held in a segregated account cannot be sold while the position they
are covering is outstanding, unless they are replaced with similar securities.
Additionally, the Fund must maintain sufficient liquid assets (less any
additional collateral held by the broker) to cover the short sale obligation.
This may limit the Fund's investment flexibility, as well as its ability to meet
redemption requests or other current obligations.
The Fund may take a short position in a security at the same time that
other accounts managed by Hartford Investment Management take a long position in
the same security, or take a long position in a security at the same time that
other accounts managed by Hartford Investment Management take a short position
in the same security. In addition, the Fund may from time to time take a long or
short position in a particular equity security while simultaneously taking the
opposite position with respect to an exchange traded fund ("ETF") which includes
such particular equity security as a constituent. ETFs are baskets of securities
that, like stocks, trade on exchanges such as the American Stock Exchange and
the New York Stock Exchange. These and other transactions undertaken on behalf
of other accounts managed by the Fund's subadvisor may adversely impact the
Fund. Transactions on behalf of other accounts managed by the Fund's subadvisor
may have the effect of diluting or otherwise disadvantaging the values, prices
or investment strategies of the Fund.
LEVERAGE By investing the proceeds received from selling securities short,
the Fund is employing a form of leverage. The use of leverage may increase the
Fund's exposure to long equity positions and make any change in the Fund's NAV
greater than without the use of leverage. This could result in increased
volatility of returns. There is no guarantee that the Fund will leverage its
portfolio, or if it does, that the Fund's leveraging strategy will be
successful. The Fund cannot guarantee that the use of leverage will produce a
higher return on an investment.
PORTFOLIO TURNOVER The Fund's long/short approach could result in a high
level of portfolio turnover. Portfolio turnover measures the amount of trading
the Fund does during the year. Funds with high portfolio turnover accumulate
higher fund brokerage expenses and increased tax liability from the Fund's
realization of capital gains. These expenses will be born by the Fund and may
decrease the Fund's performance. Furthermore, you may be subject to short-term
capital gains taxes even if you do not sell any shares of the Fund.
16
DISCLOSURE OF PORTFOLIO HOLDINGS The Fund will disclose its complete month-end
portfolio holdings on the Fund's website at www.hartfordinvestor.com no earlier
than 30 calendar days after the end of each month. The Fund also will disclose
its largest ten holdings or largest five issuers on the Fund's website no
earlier than 15 days after the end of each month. No information concerning
portfolio holdings of the Fund that may be used to harm the Fund may be
disclosed except as provided herein. The Fund's CCO and Chief Legal Officer will
be responsible for determining whether the release of information may be harmful
to the Fund.
The Fund, the Fund's investment manager, the Fund's distributor (collectively,
"Hartford") or the Fund's investment sub-adviser also may disclose portfolio
holdings on a more frequent basis in accordance with the following requirements.
Each portfolio holdings disclosure arrangement or practice must be approved by
the Fund's CCO and at least one other Fund officer, based on a finding that the
Fund has a legitimate business purpose for the arrangement or practice, it is in
the interests of Fund shareholders, and that the arrangement or practice is
subject to an appropriate confidentiality agreement, which includes a duty on
the recipient of the information not to trade on that information.
Portfolio holdings are disclosed to the Fund's custodian, independent
registered public accounting firm, pricing service vendors and other persons who
provide systems or software support in connection with Fund operations,
including accounting, compliance support and pricing, to the extent they require
access to such information in order to fulfill their contractual obligations to
the Fund, and only in accordance with the above requirements. Portfolio holdings
may also be disclosed to persons assisting the Fund or its sub-adviser in the
voting of proxies, securities lending agents, and to the Fund's bank lenders. In
connection with managing the Fund, the Fund's investment manager or sub-adviser
may disclose the Fund's portfolio holdings to third-party vendors that provide
analytical systems services to the Fund's investment manager or sub-advisers on
behalf of the Fund, and to certain third party industry information vendors,
institutional investment consultants, and asset allocation service providers.
With respect to each of these entities, portfolio holdings information will be
released only in accordance with the above requirements. From time to time, the
Fund may disclose portfolio holdings to other parties to the extent necessary in
connection with actual or threatened litigation.
The Fund has entered into ongoing arrangements to disclose portfolio
holdings to the following entities:
Bankers Systems, Inc.
BlackRock Financial Management, Inc.
Bowne & Co., Inc. -- Financial printers
Class Action Claims Management
Confluence Technologies
Ernst & Young LLP (the Fund's Independent Registered Public
Accounting Firm)
FactSet Research Systems, Inc.
Glass Lewis
Lipper Inc.
Merrill Lynch, Pierce, Fenner & Smith
State Street Bank and Trust Company (the Fund's Custodian)
Portfolio holdings are disclosed at various times to Lipper Inc. (on a
monthly basis with a lag time of two days for certain services, and on a
quarterly basis with a lag time of five days for certain other services) in
order to fulfill its obligations to the Fund. Portfolio holdings are disclosed
on a daily basis to FactSet Research Systems, Inc., Glass Lewis, and State
Street Bank and Trust Company. Portfolio holdings are disclosed to Bankers
Systems, Inc., and Class Action Claims Management on a monthly basis, with lag
times of two days,. Portfolio holdings are disclosed to Confluence Technologies,
Merrill Lynch, Pierce, Fenner & Smith and Bowne & Co., Inc. on a quarterly
basis, with lag times of three, five and ten business days, respectively.
Portfolio holdings are disclosed to the Fund's independent registered public
accounting firm at least annually and otherwise upon request as necessary to
enable the Fund's independent registered public accounting firm to provide
services to the Fund, with no lag time. Additionally, when purchasing and
selling its portfolio securities through broker-dealers, requesting bids on
securities, or obtaining price
17
quotations on securities, the Fund may disclose one or more of its portfolio
securities to the party effecting the transaction or providing the information.
Additionally, Hartford or its sub-advisers may provide oral or written
information ("portfolio commentary") about the Fund, including, but not limited
to, how the Fund's investments are divided among various sectors, industries,
countries, value and growth stocks, small, mid and large-cap stocks, among
stocks, bonds, currencies and cash, types of bonds, bond maturities, bond
coupons and bond credit quality ratings. This portfolio commentary may also
include information on how these various weightings and factors contributed to
Fund performance. Hartford or its sub-advisers may also provide oral or written
information ("statistical information") about various financial characteristics
of the Fund or its underlying portfolio securities including, but not limited
to, beta, duration, maturity, Sharpe ratio, earnings growth, payout ratio,
price/book value, projected earnings growth, return on equity, tracking error,
weighted average quality, market capitalization, percent debt to equity,
dividend yield or growth, default rate, portfolio turnover, risk and style
characteristics or other similar information. This portfolio commentary and
statistical information about the Fund may be based on the Fund's most recent
quarter-end portfolio or on some other interim period such as month-end. The
portfolio commentary and statistical information may be provided to members of
the press, shareholders in the Fund, persons considering investing in the Fund
or representatives of such shareholders or potential shareholders, such as
financial intermediaries and fiduciaries of a 401(k) plan or a trust and their
advisers. The content and nature of the information provided to each of these
persons may differ.
Hartford and its sub-advisers have implemented procedures reasonably
designed to ensure that (1) any disclosure of the Fund's portfolio securities is
made pursuant to a practice or arrangement approved in accordance with the
policy; (2) personnel who are in a position to disclose Fund portfolio holdings
are appropriately trained to comply with the Fund's policies regarding the
disclosure of portfolio holdings and (3) each approved disclosure arrangement or
practice is documented by the Fund's chief compliance officer or his/her
designee.
In no event will the Hartford or its sub-advisers or any affiliate thereof
be permitted to receive compensation or other consideration in connection with
the disclosure of Fund portfolio holdings.
The Fund's chief compliance officer is responsible for addressing conflicts
of interest between the interests of Fund shareholders, on the one hand, and the
interests of the Fund's investment manager, investment sub-adviser, principal
underwriter, or any affiliated person of the Fund, its investment manager,
investment sub-adviser, or its principal underwriter, on the other. Every
violation of the portfolio holdings disclosure policy must be reported to the
Fund's chief compliance officer.
The Board of Directors of the Fund reviews and approves the Fund's policy on
disclosure of portfolio holdings. The Chief Compliance Officer for the Fund's
investment manager will provide summaries of all newly approved arrangements and
will report exceptions to and material violations of this policy to the Board of
Directors of the Fund. There can be no assurance, however, that the Fund's
portfolio holdings disclosure policy will prevent the misuse of such information
by individuals or firms that receive such information.
18
FUND MANAGEMENT
The Company has a board of directors, who elect officers who are
responsible for the day-to-day operations of the Fund and who execute policies
formulated by the directors.
The following tables set forth various information about the directors and
officers of the Company. The first table relates to those directors who are
deemed not to be "interested persons" of the Company, as that term is defined in
the 1940 Act (i.e., "non-interested directors"), while the second table provides
information about the Company's "interested" directors and the Company's
officers.
NON-INTERESTED DIRECTORS
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NUMBER OF
PORTFOLIOS
TERM OF IN FUND
POSITION OFFICE* AND COMPLEX
HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) DURING OVERSEEN BY OTHER DIRECTORSHIPS
NAME, AGE AND ADDRESS EACH COMPANY TIME SERVED PAST 5 YEARS DIRECTOR HELD BY DIRECTOR
-------------------------- ------------ ----------- ---------------------------------- ----------- --------------------
LYNN S. BIRDSONG (1) Director Since 2003 Since 1981, Mr. Birdsong has been 89 Mr. Birdsong is a
(age 61) a partner in Birdsong Company, an Director of The
c/o Hartford Mutual Funds advertising specialty firm. Since Japan Fund.
P.O. Box 2999 2003, Mr. Birdsong has been an
Hartford, CT 06104-2999 independent director of The Japan
Fund. From 2003 to March 2005,
Mr. Birdsong was an independent
director of the Atlantic
Whitehall Funds. From 1979 to
2002, Mr. Birdsong was a managing
director of Zurich Scudder
Investments, an investment
management firm. During his
employment with Scudder, Mr.
Birdsong was an interested
director of The Japan Fund. Mr.
Birdsong is also a Director of
The Hartford Income Shares Fund,
Inc., Hartford Series Fund, Inc.
and Hartford HLS Series Fund II,
Inc.
ROBERT M. GAVIN Director and Director Dr. Gavin is an educational 89 N/A
(age 67) Chairman of since consultant. Prior to September 1,
c/o Hartford Mutual Funds the Board 2002(2) 2001, he was President of
P.O. Box 2999 Director Cranbrook Education Community;
Hartford, CT 06104-2999 since and prior to July 1996, he was
1986(3) President of Macalester College,
Chairman of St. Paul, Minnesota. Dr. Gavin is
the Board also a Director and Chairman of
for each the Board of Directors of The
Company Hartford Income Shares Fund,
since 2004 Inc., Hartford Series Fund, Inc.
and Hartford HLS Series Fund II,
Inc.
DUANE E. HILL Director Since Mr. Hill is a Partner of TSG 89 N/A
(age 62) 2001(2) Ventures L.P., a private equity
c/o Hartford Mutual Funds Since investment company that invests
P.O. Box 2999 2002(3) primarily in minority-owned small
Hartford, CT 06104-2999 businesses. Mr. Hill is a former
partner of TSG Capital Group, a
private equity investment firm
that serves as sponsor and lead
investor in leveraged buyouts of
middle market companies. Mr. Hill
is also a Director of The
Hartford Income Shares Fund,
Inc., Hartford Series Fund, Inc.
and Hartford HLS Series Fund II,
Inc.
SANDRA S. JAFFEE Director Since 2005 Ms. Jaffee is Chief Executive 89 N/A
(age 65) Officer of Fortent (formerly
c/o Hartford Mutual Funds Searchspace Group), a leading
P.O. Box 2999 provider of compliance/regulatory
Hartford, CT 06104-2999 technology to financial
institutions. Ms. Jaffee served as
an Entrepreneur in Residence with
Warburg Pincus, a private equity
firm, from August 2004 to August
2005. From September 1995 to July
2004, Ms. Jaffee served as
Executive Vice President at
Citigroup, where she was President
and Chief Executive Officer of
Citibank's Global Securities
Services (1995-2003). Ms Jaffee is
also a Director of The Hartford
Income Shares Fund, Inc., Hartford
Series Fund, Inc. and Hartford HLS
Series Fund II, Inc.
WILLIAM P. JOHNSTON Director Since 2005 In June 2006, Mr. Johnston was 89 Mr. Johnston is
(age 63) appointed as Senior Advisor to The Chairman of the
c/o Hartford Mutual Funds Carlyle Group, a global private Board of Directors
P.O. Box 2999 equity investment firm. In May of Renal Care Group,
Hartford, CT 06104-2999 2006, Mr. Johnston was elected to Inc.
the Supervisory Board of Fresenius
Medical Care AG & Co. KGaA, after
its acquisition of Renal Care
Group, Inc. in
19
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March 2006. Mr. Johnston joined
Renal Care Group in November 2002
as a member of the Board of
Directors and served as Chairman
of the Board from March 2003
through March 2006. From September
1987 to December 2002, Mr.
Johnston was with Equitable
Securities Corporation (and its
successors, SunTrust Equitable
Securities and SunTrust Robinson
Humphrey) serving in various
investment banking and managerial
positions, including Managing
Director and Head of Investment
Banking, Chief Executive Officer
and Vice Chairman. Mr. Johnston is
also a Director of The Hartford
Mutual Funds II, Inc., The
Hartford Income Shares Fund, Inc.,
Hartford Series Fund, Inc. and
Hartford HLS Series Fund II, Inc.
PHILLIP O. PETERSON Director Since Mr. Peterson is a mutual fund 89 Mr. Peterson is a
(age 62) 2002(2) industry consultant. He was a Director of the
c/o Hartford Mutual Funds Since partner of KPMG LLP until 1999. William Blair Funds.
P.O. Box 2999 2000(3) Mr. Peterson joined William Blair
Hartford, CT 06104-2999 Funds in February 2007 as a member
of their board of directors. From
January 2004 to April 2005, Mr.
Peterson served as Independent
President of the Strong Mutual
Funds. Mr. Peterson is also a
Director of The Hartford Income
Shares Fund, Inc., Hartford Series
Fund, Inc. and Hartford HLS Series
Fund II, Inc.
LEMMA W. SENBET Director Since 2005 Dr. Senbet is the William E. Mayer 89 N/A
(age 60) Chair Professor of Finance at the
c/o Hartford Mutual Funds University of Maryland, Robert H.
P.O. Box 2999 Smith School of Business. He was
Hartford, CT 06104-2999 chair of the Finance Department
during 1998-2006. Previously he
was an endowed professor of
finance at the University of
Wisconsin-Madison. Also, Dr.
Senbet was director of the Fortis
Funds from March 2000 until July
2002. Professor Senbet served the
finance profession in various
capacities, including as director
of the American Finance
Association and President of the
Western Finance Association. Dr.
Senbet is also a Director of The
Hartford Income Shares Fund, Inc.,
Hartford Series Fund, Inc. and
Hartford HLS Series Fund II, Inc.
(1) Lynn Birdsong held a beneficial interest in the common stock of Wachovia
Corporation ("Wachovia") at the same time that an affiliate of Wachovia
served as a sub-adviser to the Select SmallCap Value Fund Fund.
Metropolitan West Capital Management, LLC ("MetWest Capital"), a
sub-adviser to the Select SmallCap Value Fund, was acquired by Wachovia
effective June 6, 2006. Mr. Birdsong had beneficial interest in the
Wachovia stock at that time, but the stock was sold on October 31, 2006.
The value of this stock (as of October 31, 2006) was $150,093. Because of
this beneficial interest, Mr. Birdsong is not considered an independent
director with respect to the Select SmallCap Value Fund for the period June
6, 2006 through October 31, 2006.
(2) For The Hartford Mutual Funds, Inc.
(3) For The Hartford Mutual Funds II, Inc.
* Term of Office: Each director may serve until his or her successor is
elected and qualifies.
20
OFFICERS AND INTERESTED DIRECTORS
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NUMBER OF
PORTFOLIOS
TERM OF IN FUND
POSITION OFFICE* AND COMPLEX
HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) DURING OVERSEEN BY OTHER DIRECTORSHIPS
NAME, AGE AND ADDRESS EACH COMPANY TIME SERVED PAST 5 YEARS DIRECTOR HELD BY DIRECTOR
-------------------------- ------------ ----------- ---------------------------------- ----------- ---------------------
THOMAS M. MARRA** Director Since 2002 Mr. Marra is President and Chief 89 Mr. Marra is a member
(age 49) Operating Officer of Hartford of the Board of
c/o Hartford Mutual Funds Life, Inc. He is also a member of Directors of The
P.O. Box 2999 the Board of Directors and a Hartford.
Hartford, CT 06104-2999 member of the Office of the
Chairman for The Hartford
Financial Services Group, Inc.
("The Hartford"), the parent
company of Hartford Life. Mr.
Marra was named President of
Hartford Life in 2001 and COO in
2000, and served as Director of
Hartford Life's Investment
Products Division from 1998 to
2000. Mr. Marra is also a
Managing Member and President of
Hartford Investment Financial
Services, LLC ("HIFSCO") and HL
Investment Advisors, LLC ("HL
Advisors"). Mr. Marra served as
Chairman of the Board of the
Companies from 2002 to 2004. He
currently also serves as a
Director of The Hartford Income
Shares Fund, Inc., Hartford
Series Fund, Inc. and Hartford
HLS Series Fund II, Inc. and
served as Chairman of the Board
of these companies from 2002 to
2004.
LOWNDES A. SMITH** Director Since Mr. Smith served as Vice Chairman 89 Mr. Smith is a
(age 68) 1996(1) of The Hartford from February Director of White
c/o Hartford Mutual Funds Since 1997 to January 2002, as Mountains Insurance
P.O. Box 2999 2002(2) President and Chief Executive Group, Ltd.
Hartford, CT 06104-2999 Officer of Hartford Life, Inc.
from February 1997 to January
2002, and as President and Chief
Operating Officer of The Hartford
Life Insurance Companies from
January 1989 to January 2002. Mr.
Smith is also a Director of The
Hartford Income Shares Fund,
Inc., Hartford Series Fund, Inc.
and Hartford HLS Series Fund II,
Inc.
DAVID M. ZNAMIEROWSKI** Director Mr. Znamierowski currently serves 89 N/A
(age 47) Since as Director and President of
c/o Hartford Mutual Funds 1999(1) Hartford Investment Management
P.O. Box 2999 Director Company ("Hartford Investment
Hartford, CT 06104-2999 Director(3) Since Management"), as Chief Investment
2005(2) Officer and Executive Vice
President for The Hartford and
Hartford Life, Inc. and as
Director, Chief Investment
Officer and Executive Vice
President of Hartford Life
Insurance Company. In addition,
Mr. Znamierowski serves as a
Director of The Hartford Mutual
Funds II, Inc., The Hartford
Series Fund, Inc., The Hartford
HLS Series Fund II, Inc. and The
Hartford Income Shares Fund,
Inc. He previously served as
President and Chief Executive
Officer of these companies and
the Company until November 2007.
JOHN C. WALTERS President Since Mr. Walters serves as President N/A N/A
(age 45) and Chief 2007(3) of the U.S.. Wealth Management
c/o Hartford Mutual Funds Executive Division of Hartford Life
P.O. Box 2999 Officer Insurance Company. Mr. Walters is
Hartford, CT 06104-2999 also a Managing Member and
Executive Vice President of
HIFSCO and HL Advisors. In
addition, Mr. Walters is Vice
President of The Hartford Income
Shares Fund, Inc., Hartford
Series Fund, Inc. and Hartford
HLS Series Fund II, Inc.
Previously, Mr. Walters was with
First Union Securities.
21
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ROBERT M. ARENA, JR. Vice Since 2006 Mr. Arena serves as Senior Vice N/A N/A
(age 39) President President of Hartford Life and
c/o Hartford Mutual Funds heads its Retail Product
P.O. Box 2999 Management Group in the U.S.
Hartford, CT 06104-2999 Wealth Management Division. Prior
to joining The Hartford in 2004,
he was Senior Vice President in
charge of Product Management for
American Skandia/Prudential in
the individual annuities
division. Mr. Arena had joined
American Skandia in 1996.
Previously, he was with Paul
Revere Insurance Group in its
group insurance division. In
addition, Mr. Arena is Vice
President of The Hartford Income
Shares Fund, Inc., Hartford
Series Fund, Inc. and Hartford
HLS Series Fund II, Inc.
TAMARA L. FAGELY Vice Since Ms. Fagely has been Vice N/A N/A
(age 49) President, 2002(1) President of HASCO since 1998 and
c/o Hartford Mutual Funds Controller Since Chief Financial Officer since
500 Bielenberg Drive and 1993(2) 2006. Currently, Ms. Fagely is a
Woodbury, MN 55125 Treasurer Vice President of Hartford Life.
She served as Assistant Vice
President of Hartford Life from
December 2001 through May 2005.
In addition, Ms. Fagely is
Controller of HIFSCO and Vice
President, Controller and
Treasurer of The Hartford Income
Shares Fund, Inc., Hartford
Series Fund, Inc. and Hartford
HLS Series Fund II, Inc.
SUSAN FLEEGE AML Since 2005 Ms. Fleege has served as Chief N/A N/A
(age 47) Compliance Compliance Officer for Hartford
c/o Hartford Mutual Funds Officer Administrative Services Company
P.O. Box 2999 since 2005 and Hartford Investor
Hartford, CT 06104-2999 Company, LLC since 2006. Prior
to joining Hartford Life in 2005,
Ms. Fleege was Counsel for
Ameriprise Financial Corporation
from 2000 to 2005. In addition,
Ms. Fleege serves as AML
Compliance Officer for The
Hartford Income Shares Fund,
Inc., Hartford Series Fund, Inc.
and Hartford HLS Series Fund II,
Inc.
THOMAS D. JONES III Vice Since 2006 Mr. Jones joined Hartford Life as N/A N/A
(age 42) President Vice President and Director of
c/o Hartford Mutual Funds and Chief Securities Compliance in 2006
P.O. Box 2999 Compliance from SEI Investments ("SEI"),
Hartford, CT 06104-2999 Officer where he served as Chief
Compliance Officer for its mutual
funds and investment advisers.
Prior to joining SEI, Mr. Jones
was First Vice President and
Compliance Director for Merrill
Lynch Investment Managers
(Americas), where he worked from
1992 through 2004. In addition,
Mr. Jones is Vice President and
Chief Compliance Officer of The
Hartford Income Shares Fund,
Inc., Hartford Series Fund, Inc.
and Hartford HLS Series Fund II,
Inc.
EDWARD P. MACDONALD Vice Since 2005 Mr. Macdonald serves as Assistant N/A N/A
(age 40) President, General Counsel of The Hartford.
c/o Hartford Mutual Funds Secretary Prior to joining The Hartford in
P.O. Box 2999 and Chief 2005, Mr. Macdonald was Chief
Hartford, CT 06104-2999 Legal Counsel, Investment Management,
Officer for Prudential Financial
(formerly American Skandia
Investment Services, Inc.). He
joined Prudential in April 1999.
Additionally, Mr. Macdonald
serves as Vice President,
Secretary and Chief Legal Officer
for The Hartford Income Shares
Fund, Inc., Hartford Series Fund,
Inc. and Hartford HLS Series Fund
II, Inc.
VERNON J. MEYER Vice Since 2006 Mr. Meyer serves as Vice N/A N/A
(age 43) President President of Hartford Life and
c/o Hartford Mutual Funds Director of its Investment
P.O. Box 2999 Advisory Group in the U.S. Wealth
Hartford, CT 06104-2999 Management Division. Prior to
joining The Hartford in 2004, Mr.
Meyer served as Vice President
and managing director of
MassMutual, which he joined in
1987. Also, Mr. Meyer is Vice
President of The Hartford Income
Shares Fund, Inc., Hartford
Series Fund, Inc. and Hartford
HLS Series Fund II, Inc.
DENISE A. SETTIMI Vice Since 2005 Ms. Settimi currently serves as N/A N/A
(age 47) President Operations Officer of HASCO.
c/o Hartford Mutual Funds Previously, Ms. Settimi was with
500 Bielenberg Drive American Express Financial
Woodbury, MN 55125 Advisors, where she was Director
of Retirement Plan Services from
1997 to 2003. In addition, Ms.
Settimi is a Vice President of
The Hartford Income Shares Fund,
Inc., Hartford Series Fund, Inc.
and Hartford HLS Series Fund II,
Inc.
22
(1) For The Hartford Mutual Funds, Inc.
(2) For The Hartford Mutual Funds II, Inc.
(3) Mr. Walters was duly elected as President and Chief Executive Officer of
The Hartford Mutual Funds, Inc. and The Hartford Mutual Funds II, Inc. on
November 7, 2007. Prior to Mr. Walters' election, Mr. Znamierowski served
in those capacities.
* Term of Office: Each officer and director may serve until his or her
successor is elected and qualifies.
** "Interested person", as defined in the 1940 Act, of the Company because of
the person's affiliation with, or equity ownership of, HIFSCO, Hartford
Investment Management or affiliated companies.
STANDING COMMITTEES. Each board of directors has established an Audit
Committee, a Compliance Committee, an Investment Committee, a Litigation
Committee and a Nominating Committee.
The Audit Committee currently consists of the following non-interested
directors: Robert M. Gavin, Sandra S. Jaffee, William P. Johnston and Phillip O.
Peterson. The Audit Committee (i) oversees the Fund's accounting and financial
reporting policies and practices, its internal controls and, as appropriate, the
internal controls of certain service providers, (ii) assists the board of
directors in its oversight of the qualifications, independence and performance
of the Fund's independent registered public accounting firm; the quality,
objectivity and integrity of the Fund's financial statements and the independent
audit thereof; and the performance of the Fund's internal audit function, and
(iii) acts as a liaison between the Fund's independent registered public
accounting firm and the full board. The Fund's independent registered accounting
firm reports directly to the Audit Committees. The Audit Committees regularly
report to the Boards of Directors.
The Compliance Committee currently consists of Robert M. Gavin, Sandra S.
Jaffee, William P. Johnston, Thomas M. Marra and Phillip O. Peterson. The
Compliance Committee assists the board in its oversight of the implementation by
the Fund of policies and procedures that are reasonably designed to prevent the
Fund from violating the Federal Securities Laws.
The Investment Committee currently consists of Lynn S. Birdsong, Duane E.
Hill, Lemma W. Senbet, Lowndes A. Smith and David M. Znamierowski. The
Investment Committee, which was established on February 1, 2005, assists the
board in its oversight of the Fund's investment performance and related matters.
The Litigation Committee consists of the following non-interested
directors: Lynn S. Birdsong, Duane E. Hill and Sandra S. Jaffee. The Litigation
Committee, which was established on April 26, 2004, manages any legal actions
that are brought by, on behalf of or against the Fund, its board and/or its
non-interested directors.
The Nominating Committee currently consists of all non-interested directors
of the Fund: Lynn S. Birdsong, Robert M. Gavin, Duane E. Hill, Sandra S. Jaffee,
William P. Johnston, Phillip O. Peterson and Lemma Senbet. The Nominating
Committee screens and selects candidates to the board of directors. The
Nominating Committee will consider nominees recommended by shareholders for
non-interested director positions if a vacancy among the non-interested
directors occurs and if the nominee meets the Committee's criteria.
During the Fiscal year ended October 31, 2007, the above referenced
committees of The Hartford Mutual Funds, Inc. met the following number of times:
Audit Committee - five times, Investment Committee - five times, Nominating
Committee - one time and the Compliance Committee three times. The Litigation
Committee did not meet during this time period.
All directors and officers of The Hartford Mutual Funds, Inc. are also
directors and officers of three other registered investment companies in the
fund complex, which is comprised of those investment companies for which HIFSCO
or HL Investment Advisors, LLC serves as investment adviser.
23
The following table discloses the dollar range of equity securities
beneficially owned by each director as of December 31, 2006 (i) in the Fund and
(ii) on an aggregate basis in any registered investment companies overseen by
the director within the same family of investment companies.
24
NON-INTERESTED DIRECTORS
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AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES IN
ALL REGISTERED INVESTMENT
COMPANIES OVERSEEN
DOLLAR RANGE OF EQUITY SECURITIES BY DIRECTOR IN FAMILY OF
NAME OF DIRECTOR IN THE FUND INVESTMENT COMPANIES
--------------------- --------------------------------- ---------------------------
Lynn S. Birdsong None Over $100,000
Dr. Robert M. Gavin None Over $100,000
Duane E. Hill None None
Sandra S. Jaffee None None
William P. Johnston None None
Phillip O. Peterson None $50,001-$100,000
Lemma W. Senbet None None
INTERESTED DIRECTORS
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AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES IN
ALL REGISTERED INVESTMENT
COMPANIES OVERSEEN
DOLLAR RANGE OF EQUITY SECURITIES BY DIRECTOR IN FAMILY OF
NAME OF DIRECTOR IN THE FUND INVESTMENT COMPANIES
--------------------- --------------------------------- -------------------------
Thomas M. Marra None Over $100,000
Lowndes A. Smith None Over $100,000
David M. Znamierowski None $10,001-$50,000
COMPENSATION OF OFFICERS AND DIRECTORS The Company does not pay salaries or
compensation to any of its officers or directors who are employed by The
Hartford. The chart below sets forth the compensation paid by the Company to the
following directors for the fiscal year ended October 31, 2007 and certain other
information.
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PENSION OR
RETIREMENT
AGGREGATE BENEFITS
COMPENSATION FROM ACCRUED AS ESTIMATED ANNUAL TOTAL COMPENSATION FROM
NAME OF PERSON, THE HARTFORD MUTUAL PART OF BENEFITS UPON THE FUNDS AND FUND
POSITION FUNDS FUND EXPENSES RETIREMENT COMPLEX PAID TO DIRECTORS*
--------------------- ------------------- ------------- ---------------- --------------------------
Lynn S. Birdsong, $ 80,268 $0 $0 $180,500
Director(1)
Dr. Robert M. Gavin, $110,285 $0 $0 $248,000
Director
Duane E. Hill, $ 70,262 $0 $0 $158,000
Director
Sandra S. Jaffee, $ 67,039 $0 $0 $150,750
Director(2)
25
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William P. Johnston, $ 78,712 $0 $0 $177,000
Director(3)
Phillip O. Peterson, $ 80,380 $0 $0 $180,750
Director
Lemma W. Senbet, $ 66,371 $0 $0 $149,250
Director(5)
Lowndes A. Smith, $ 77,600 $0 $0 $174,500
Director
* As of October 31, 2006, five registered investment companies in the Complex
paid compensation to the directors.
The sales load for Class A shares of the Fund is waived for present and
former officers, directors and employees of the Company, The Hartford, the
sub-adviser, the transfer agent and their affiliates. Such waiver is designed to
provide an incentive for individuals that are involved and affiliated with the
Fund and its operations to invest in the Fund.
The Company's Articles of Incorporation provide that the Company to the
full extent permitted by Maryland law and the federal securities laws shall
indemnify the directors and officers of the Company. The Articles of
Incorporation do not authorize the Company to indemnify any director or officer
against any liability to which he or she would otherwise be subject by reason of
or for willful misfeasance, bad faith, gross negligence or reckless disregard of
such person's duties.
As of November 30, 2007 the officers and directors of the Company as a
group beneficially owned no shares of any class of the Fund. As of that date, no
person held an interest in the Fund equal to 5% or more of outstanding shares of
a class.
Control is defined by the 1940 Act as the beneficial ownership, either
directly or through one or more controlled companies, of more than 25 percent of
the voting securities of a fund. A control person may be able to take actions
regarding a fund it controls without the consent or approval of other
shareholders. As of November 30, 2007, there were no control persons of the
Fund.
INVESTMENT MANAGEMENT ARRANGEMENTS
The Company, on behalf of the Fund, has entered into an investment
management agreement with HIFSCO. The investment management agreement provides
that HIFSCO, subject to the supervision and approval of the Company's board of
directors, is responsible for the management of the Fund. In addition, HIFSCO
provides administrative services to the Company, including, personnel, services,
equipment and facilities and office space for proper operation of the Company.
Although HIFSCO, or its affiliates, have agreed to arrange for the provision of
additional services necessary for the proper operation of the Company, the Fund
pays for these services directly.
HIFSCO has entered into an investment services agreement with Hartford
Investment Management for the provision of the day-to-day investment management
services. HIFSCO has entered into an investment sub-advisory agreement with
Hartford Investment Management. Under the sub-advisory agreement, Hartford
Investment Management, subject to the general supervision of the Company's board
of directors and HIFSCO, is responsible for (among other things) the day-to-day
investment and reinvestment of the assets of the Fund and furnishing the Fund
with advice and recommendations with respect to investments and the purchase and
sale of appropriate securities for the Fund.
The Company relies on an exemptive order from the SEC under which it uses a
"Manager of Managers" structure. HIFSCO has responsibility, subject to oversight
by the Board of Directors, to oversee the sub-advisers and recommend their
hiring, termination and replacement. The exemptive order permits HIFSCO to
appoint a new sub-adviser not affiliated with HIFSCO, with the approval of the
Board of Directors and without obtaining approval from those shareholders that
participate in the Fund. Within 90 days after hiring any new sub-adviser,
affected shareholders will receive information about the new sub-advisory
relationship.
The specific conditions of the exemptive order are as follows:
26
1. Before the Company may rely on the exemptive order, the operation of the
Company under a Manager of Managers structure must be approved by a majority of
the outstanding voting securities.
2. The Company must disclose in its prospectus the existence, substance and
effect of the exemptive order. In addition, the Company must hold itself out to
the public as employing the Manager of Managers structure. The prospectus will
prominently disclose that HIFSCO has ultimate responsibility (subject to
oversight by the Board of Directors) to oversee the sub-adviser and recommend
its hiring, termination and replacement.
3. Within ninety (90) days of the hiring of any new sub-adviser, the
shareholders participating in the Fund will be furnished all information about
the new sub-adviser that would be included in a proxy statement, except as
modified by the order to permit aggregate fee disclosure. This information will
include aggregate fee disclosure and any change in such disclosure caused by the
addition of a new sub-adviser. HIFSCO will meet this condition by providing
shareholders with an information statement meeting the requirements of
Regulation 14C, Schedule 14C, and Item 22 of Schedule 14A under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), except as modified by the
order to permit aggregate fee disclosure.
4. HIFSCO will not enter into a sub-advisory agreement with any affiliated
sub-adviser without that sub-advisory agreement, including the compensation to
be paid thereunder, being approved by shareholders.
5. At all times, a majority of the Board of Directors of the Company will
be directors who are not "interested persons," as that term is defined in
Section 2(a)(19) of the 1940 Act, of the Company ("Independent Directors"), and
the nomination of new or additional Independent Directors will be at the
discretion of the then-existing Independent Directors.
6. When a sub-adviser change is proposed for the Fund with an affiliated
sub-adviser, the Board of Directors, including a majority of the Independent
Directors, will make a separate finding, reflected in the Board of Directors'
minutes, that the change is in the best interests of the Fund and the
shareholders participating in the Fund and does not involve a conflict of
interest from which HIFSCO or the affiliated sub-adviser derives an
inappropriate advantage.
7. HIFSCO will provide general management services to the Company and the
Fund, including overall supervisory responsibility for the general management
and investment of the Fund's investments portfolio, and, subject to review and
approval by the Board of Directors, will: (a) set the Fund's overall investment
strategies; (b) evaluate, select and recommend sub-advisers to manage all or a
part of the Fund's assets; (c) allocate and, when appropriate, reallocate the
Fund's assets among multiple sub-advisers; (d) monitor and evaluate the
investment performance of sub-advisers; and (e) implement procedures reasonably
designed to ensure that the sub-adviser complies with the Fund's investment
objective, policies and restrictions.
8. No director or officer of the Company or directors or officers of HIFSCO
will own directly or indirectly (other than through a pooled investment vehicle
that is not controlled by such person) any interest in any sub-adviser except
for (i) ownership of interests in HIFSCO or any entity that controls, is
controlled by or is under common control with HIFSCO; or (ii) ownership of less
than 1% of the outstanding securities of any class of equity or debt of a
publicly-traded company that is either a sub-adviser or any entity that
controls, is controlled by or is under common control with a sub-adviser.
9. The Company will include in its registration statement the aggregate fee
disclosure.
10. Independent counsel knowledgeable about the 1940 Act and the duties of
Independent Directors will be engaged to represent the Independent Directors of
the Fund. The selection of such counsel will be within the discretion of the
then-existing Independent Directors.
11. HIFSCO will provide the Board of Directors, no less often than
quarterly, with information about HIFSCO's profitability. Such information will
reflect the impact on profitability of the hiring or termination of any
sub-adviser during the applicable quarter.
12. When a sub-adviser is hired or terminated, HIFSCO will provide the
Board of Directors with information showing the expected impact on HIFSCO's
profitability.
As provided by the investment management agreements, the Fund pays HIFSCO
an investment management fee, which is accrued daily and paid monthly, equal on
an annual basis to a stated percentage of the Fund's average daily net assets.
HIFSCO, not the Fund, pays the sub-advisory fees to the sub-adviser and the
investment services fee to Hartford Investment Management.
27
INVESTMENT MANAGEMENT FEES
The investment management fee rate is as follows:
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AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $500 million 1.00%
Next $500 million 0.95%
Amount Over $1 billion 0.90%
28
SUB-ADVISORY/INVESTMENT SERVICES FEES
Because the Fund did not commence operations until November 30, 2007, there is
no advisory fee or sub-advisory fee information available for the Fund.
HIFSCO has voluntarily agreed to limit the expenses of certain classes of
the Fund by reimbursing the Fund when total fund operating expenses exclusive of
taxes, dividend expense, interest expense, short sales program expenses,
brokerage commissions, acquired fund fees and extraordinary expenses of the
class exceed the following percentages. This policy may be discontinued at any
time.
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CLASS A CLASS B CLASS C CLASS I CLASS R3 CLASS R4 CLASS R5 CLASS Y
------- ------- ------- ------- -------- -------- -------- -------
Global Enhanced Dividend Fund 1.60% 2.35% 2.35% 1.35% 1.85% 1.60% 1.35% 1.25%
Pursuant to the investment management agreements, investment sub-advisory
agreements and investment services agreements, neither HIFSCO nor the
sub-adviser is liable to the Fund or its shareholders for an error of judgment
or mistake of law or for a loss suffered by the Fund in connection with the
matters to which their respective agreements relate, except a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of HIFSCO or
a sub-adviser in the performance of their duties or from their reckless
disregard of the obligations and duties under the applicable agreement.
HIFSCO, whose business address is 200 Hopmeadow Street, Simsbury,
Connecticut 06089, was organized in 1995. As of December 31, 2006, HIFSCO had
approximately $42 billion of assets under management.
Hartford Investment Management is located at 55 Farmington Avenue,
Hartford, Connecticut 06105 and was organized in 1996. Hartford Investment
Management is a professional money management firm that provides services to
investment companies, employee benefit plans, its affiliated insurance
companies, and other institutional accounts. Hartford Investment Management is a
wholly-owned subsidiary of The Hartford. As of September 30, 2007, Hartford
Investment Management had investment management authority over approximately
$143.1 billion in assets.
Hartford Life, an affiliate of HIFSCO, provides fund accounting services to
the Fund including, but not limited to, daily pricing of portfolio securities;
computation of the net asset value and the net income of the Fund in accordance
with the Fund's prospectus and statement of additional information; calculation
of dividend and capital gain distributions, if any; calculation of yields on the
Fund and all classes thereof; preparation of various reports; and such other
similar services with respect to the Fund as may be reasonably requested by the
Fund.
Hartford Life provides such fund accounting services pursuant to a fund
accounting agreement by and between The Hartford Mutual Funds, Inc., on behalf
of the Fund, and Hartford Life. In consideration of services rendered and
expenses assumed pursuant to this agreement, the Fund pays Hartford Life a fee
calculated at the following annual rate based on its aggregate net assets:
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First $5 billion 0.018%
Next $5 billion 0.016%
Over $10 billion 0.014%
Because the Fund had not commenced operations as of the date of this SAI,
no information is available regarding fund accounting fees paid to Hartford
Life.
29
PORTFOLIO MANAGERS
OTHER ACCOUNTS ADVISED BY HIFSCO OR SUB-ADVISED BY HARTFORD INVESTMENT
MANAGEMENT PORTFOLIO MANAGERS
The following table lists the number and types of other accounts advised by
HIFSCO or sub-advised by Hartford Investment Management managers and assets
under management in those accounts as of September 30, 2007:
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REGISTERED
INVESTMENT ASSETS MANAGED POOLED ASSETS MANAGED ASSETS MANAGED
PORTFOLIO MANAGER COMPANY ACCOUNTS (IN MILLION) ACCOUNTS (IN MILLIONS) OTHER ACCOUNTS (IN MILLIONS)
----------------- ---------------- -------------- -------- -------------- -------------- --------------
Paul Bukowski 1 $194 0 0 1 $10
CONFLICTS OF INTEREST BETWEEN THE GLOBAL ENHANCED DIVIDEND FUND SUB-ADVISED BY
HARTFORD INVESTMENT MANAGEMENT PORTFOLIO MANAGERS AND OTHER ACCOUNTS
In managing other portfolios (including affiliated accounts), certain
potential conflicts of interest may arise. Portfolio managers, including
assistant portfolio managers, at Hartford Investment Management manage multiple
portfolios for multiple clients. These accounts may include mutual funds,
separate accounts (assets managed on behalf of institutions such as pension
funds, insurance companies, foundations), commingled trust accounts, and other
types of funds. The portfolios managed by portfolio managers may have investment
objectives, strategies and risk profiles that differ from those of the Global
Enhanced Dividend Fund. Portfolio managers make investment decisions for each
portfolio, including the Global Enhanced Dividend Fund, based on the investment
objectives, policies, practices and other relevant investment considerations
applicable to that portfolio. Consequently, the portfolio managers may purchase
securities for one portfolio and not another portfolio. Securities purchased in
one portfolio may perform better than the securities purchased for another
portfolio, and vice versa. A portfolio manager or other investment professional
at Hartford Investment Management may place transactions on behalf of other
accounts that are directly or indirectly contrary to investment decisions made
on behalf of the Global Enhanced Dividend Fund, or make investment decisions
that are similar to those made for the Global Enhanced Dividend Fund, both of
which have the potential to adversely impact the Global Enhanced Dividend Fund
depending on market conditions. The Global Enhanced Dividend Fund may take a
short position in a security at the same time that other accounts managed by
Hartford Investment Management take a long position in the same security, or
take a long position in a security at the same time that other accounts managed
by Hartford Investment Management take a short position in the same security. In
addition, the Fund may from time to time take a long or short position in a
particular equity security while simultaneously taking the opposite position
with respect to an exchange traded fund ("ETF") which includes such particular
equity security as a constituent. ETFs are baskets of securities that, like
stocks, trade on exchanges such as the American Stock Exchange and the New York
Stock Exchange. These and other transactions undertaken on behalf of other
accounts managed by Hartford Investment Management may adversely impact the
Global Enhanced Dividend Fund. Transactions on behalf of other accounts managed
by Hartford Investment Management may have the effect of diluting or otherwise
disadvantaging the values, prices or investment strategies of the Global
Enhanced Dividend Fund. In addition, some of these portfolios have fee
structures that are or have the potential to be higher, in some cases
significantly higher, than the fees paid by the Global Enhanced Dividend Fund to
Hartford Investment Management. Because a portfolio manager's compensation is
affected by revenues earned by Hartford Investment Management, the incentives
associated with any given Fund may be significantly higher or lower than those
associated with other accounts managed by a given portfolio manager.
Hartford Investment Management's goal is to provide high quality investment
services to all of its clients, while meeting its fiduciary obligation to treat
all clients fairly. Hartford Investment Management has adopted and implemented
policies and procedures, including brokerage and trade allocation policies and
procedures, that it believes address the conflicts associated with managing
multiple accounts for multiple clients. In addition, Hartford Investment
Management monitors a variety of areas, including compliance with primary Fund
guidelines, the allocation of securities, and compliance with Hartford
Investment Management's Code of Ethics. Furthermore, senior investment and
business personnel at Hartford Investment Management periodically review the
performance of Hartford Investment Management's portfolio managers. Although
Hartford Investment Management does not track the time a portfolio manager
spends on a single portfolio, Hartford Investment Management does periodically
assess whether a portfolio manager has adequate time and resources to
effectively manage the portfolio manager's overall book of business.
30
Material conflicts of interest may arise when allocating and/or aggregating
trades. Hartford Investment Management may aggregate into a single trade order
several individual contemporaneous client trade orders for a single security,
absent specific client directions to the contrary. It is the policy of Hartford
Investment Management that when a decision is made to aggregate transactions on
behalf of more than one account (including the Global Enhanced Dividend Fund or
other accounts over which it has discretionary authority), such transactions
will be allocated to all participating client accounts in a fair and equitable
manner in accordance with Hartford Investment Management's trade allocation
policy. The trade allocation policy is described in Hartford Investment
Management's Form ADV. Hartford Investment Management's compliance unit monitors
block transactions to assure adherence to the trade allocation policy, and will
inform Hartford Investment Management's Issue Resolution Council of any
non-compliant transactions.
COMPENSATION OF HARTFORD INVESTMENT MANAGEMENT PORTFOLIO MANAGERS
Hartford Investment Management's portfolio managers are generally
responsible for multiple accounts with similar investment strategies. Portfolio
managers are compensated on the performance of the aggregate group of similar
accounts rather than for a specific Fund.
The compensation package for portfolio managers consists of three
components, which are fixed base pay, annual incentive and long-term incentive.
The base pay program provides a level of base pay that is competitive with the
marketplace and reflects a portfolio manager's contribution to Hartford
Investment Management's success.
The annual incentive plan provides cash bonuses dependent on both Hartford
Investment Management's overall performance and individual contributions. A
portion of the bonus pool is determined based on the aggregate portfolio pre-tax
performance results over three years relative to peer groups and benchmarks, and
the remaining portion is based on current year operating income relative to the
operating plan.
Bonuses for portfolio managers vary depending on the scope of
accountability and experience level of the individual portfolio manager. An
individual's award is based upon qualitative and quantitative factors including
the relative performance of their assigned portfolios compared to a peer group
and benchmark. The benchmark by which the Fund is measured can be found below
and is primarily geared to reward top quartile performance on a trailing
three-year basis. Qualitative factors such as leadership, teamwork and overall
contribution made during the year are also considered.
The long-term incentive plan provides an opportunity for portfolio managers
and other key contributors to Hartford Investment Management to be rewarded in
the future based on the continued profitable growth of Hartford Investment
Management. A designated portion of Hartford Investment Management's net
operating income will be allocated to long-term incentive awards each year. The
size of actual individual awards will vary greatly. The awards will vest over
three years for most participants and five years for Hartford Investment
Management's Managing Directors. The value of the awards will increase at the
growth rate of operating income each year during the vesting period. Awards will
be paid in cash at the end of the vesting period.
All portfolio managers are eligible to participate in The Hartford's
standard employee health and welfare programs, including retirement.
The benchmark by which the Fund's performance is measured for compensation
purposes is as follows:
[Download Table]
FUND* BENCHMARK
----- ---------
Global Enhanced Dividend Fund MSCI World Value Index
EQUITY SECURITIES BENEFICIALLY OWNED BY HIFSCO OR HARTFORD INVESTMENT MANAGEMENT
PORTFOLIO MANAGERS
31
As of November 30, 2007, the dollar range of equity securities beneficially
owned by the Hartford Investment Management manager in the Fund is as follows:
[Download Table]
DOLLAR RANGE OF EQUITY SECURITIES
PORTFOLIO MANAGER FUND(S) SUB-ADVISED/MANAGED BENEFICIALLY OWNED
----------------- ----------------------------- ---------------------------------
Paul Bukowski Global Enhanced Dividend Fund None
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Company has no obligation to deal with any dealer or group of dealers
in the execution of transactions in portfolio securities
Subject to any policy established by the Company's board of directors and
HIFSCO, the sub-adviser, as applicable, is primarily responsible for the
investment decisions of the Fund and the placing of its portfolio transactions.
In placing orders, it is the policy of the Fund to obtain the most favorable net
results, taking into account various factors, including price, dealer spread or
commission, if any, size of the transaction and difficulty of execution. While
the sub-adviser generally seeks reasonably competitive spreads or commissions,
the Fund does not necessarily pay the lowest possible spread or commission.
HIFSCO may instruct the sub-adviser to direct certain brokerage transactions,
using best efforts, subject to obtaining best execution, to broker/dealers in
connection with a commission recapture program used to defray fund expenses for
the Fund.
The sub-adviser generally deals directly with the dealers who make a market
in the securities involved (unless better prices and execution are available
elsewhere) if the securities are traded primarily in the over-the-counter
market. Such dealers usually act as principals for their own account. On
occasion, securities may be purchased directly from the issuer. In addition, the
sub-adviser may effect certain "riskless principal" transactions through certain
dealers in the over-the-counter market under which "commissions" are paid on
such transactions. Bonds and money market securities are generally traded on a
net basis and do not normally involve either brokerage commissions or transfer
taxes.
While the sub-adviser seeks to obtain the most favorable net results in
effecting transactions in the Fund's portfolio securities, broker-dealers who
provide investment research to the sub-advisers may receive orders for
transactions from the sub-advisers. Such research services ordinarily consist of
assessments and analyses of or affecting the business or prospects of a company,
industry, economic sector or financial market. To the extent consistent with
Section 28(e) of the 1934 Act, a sub-adviser may cause the Fund to pay a
broker-dealer that provides "brokerage and research services" (as defined in the
1934 Act) to the sub-adviser an amount in respect of securities transactions for
the Fund in excess of the amount that another broker-dealer would have charged
in respect of that transaction. Information so received is in addition to and
not in lieu of the services required that the sub-adviser must perform under the
applicable investment sub-advisory agreement. In circumstances where two or more
broker-dealers are equally capable of providing best execution, each sub-adviser
may, but is under no obligation to, choose the broker-dealer that provides
superior research or analysis as determined by the sub-adviser in its sole
discretion. The management fees paid by the Fund are not reduced because the
sub-adviser, or its affiliates, receive these services even though they might
otherwise be required to purchase some of these services for cash. Some of these
services are of value to the sub-advisers, or their affiliates, in advising
various of its clients (including the Fund), although not all of these services
are necessarily useful and of value in managing the Fund.
Hartford Investment Management has determined that at present it will
utilize soft dollars to obtain only: (i) brokerage services; (ii) research
created and provided by a broker-dealer involved in effecting a trade (e.g.,
research provided by a full service broker-dealer, or provided by a
broker-dealer to which a portion of a trade is directed for the purpose of
obtaining access to the research, in either case on a bundled basis); and (iii)
access to management personnel. Hartford Investment Management will not at
present utilize soft dollars to obtain research from parties who have no role in
effecting a trade.
To the extent that accounts managed by the sub-adviser are simultaneously
engaged in the purchase of the same security as the Fund, then, as authorized by
the Company's board of directors, available securities may be allocated to the
Fund and other client account and may be averaged as to price in a manner
determined by the sub-adviser to be fair and equitable. Such allocation and
pricing may affect the amount of brokerage commissions paid by the Fund. In some
cases, this system might adversely affect the price paid by the Fund (for
example, during periods of rapidly rising or falling interest rates) or limit
the size of the position obtainable for the Fund (for example, in the case of a
small issue).
Accounts managed by the sub-adviser (or its affiliates) may hold securities
held by the Fund. Because of different investment objectives or other factors, a
particular security may be purchased by the sub-adviser for one client when one
or more other clients are selling the same security.
32
Because Global Enhanced Dividend Fund had not commenced operations as of
the date of this SAI, no information regarding brokerage commissions paid is
available.
Because Global Enhanced Dividend Fund had not commenced operations as of
the date of this SAI, no information regarding brokerage commissions paid to
firms selected in recognition of research services is available.
Because Global Enhanced Dividend Fund had not commenced operations as of
the date of this SAI, no information regarding the Fund's regular brokers or
dealers (as defined under Rule 10b-1 of the 1940 Act) is available.
FUND EXPENSES
EXPENSES OF THE FUND The Fund pays its own expenses including, without
limitation: (1) expenses of maintaining the Fund and continuing its existence,
(2) registration of the Fund under the 1940 Act, (3) auditing, accounting and
legal expenses, (4) taxes, dividends and interest, (5) governmental fees, (6)
expenses of issue, sale, repurchase and redemption of Fund shares, (7) expenses
of registering and qualifying the Fund and its shares under federal and state
securities laws and of preparing and printing prospectuses for such purposes and
for distributing the same to shareholders and investors, and fees and expenses
of registering and maintaining registrations of the Fund and of the Fund's
principal underwriter, if any, as broker-dealer or agent under state securities
laws, (8) expenses of reports and notices to shareholders and of meetings of
shareholders and proxy solicitations thereof, (9) expenses of reports to
governmental officers and commissions, (10) insurance expenses, (11) fees,
expenses and disbursements of custodians for all services to the Fund, (12)
fees, expenses and disbursements of transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars for all services to the Fund, (13)
expenses for servicing shareholder accounts, (14) any direct charges to
shareholders approved by the directors of the Fund, (15) compensation and
expenses of directors of the Fund who are not "interested persons" of the Fund,
(16) such nonrecurring items as may arise, including expenses incurred in
connection with litigation, proceedings and claims and the obligation of the
Fund to indemnify its directors and officers with respect thereto, and (17)
short sales program expenses.
DISTRIBUTION ARRANGEMENTS
GENERAL
Hartford Investment Financial Services, LLC ("HIFSCO") serves as the
principal underwriter for the Fund pursuant to Underwriting Agreements initially
approved by the board of directors of the Company. HIFSCO is a registered
broker-dealer and member of the Financial Industry Regulatory Authority
("FINRA"). Shares of the Fund are continuously offered and sold by selected
broker-dealers who have selling agreements with HIFSCO. Except as discussed
below under Distribution Plans, HIFSCO bears all the expenses of providing
services pursuant to the Underwriting Agreements including the payment of the
expenses relating to the distribution of prospectuses for sales purposes as well
as any advertising or sales literature. The Underwriting Agreements continue in
effect for two years from initial approval and for successive one-year periods
thereafter, provided that each such continuance is specifically approved (1) by
the vote of a majority of the directors of the Company, including a majority of
the directors who are not parties to the Underwriting Agreements or interested
persons (as defined in the 1940 Act) of any such party, or (2) by the vote of a
majority of the outstanding voting securities of the Fund. HIFSCO is not
obligated to sell any specific amount of shares of the Fund.
HIFSCO is authorized by the Company to receive purchase and redemption
orders on behalf of the Fund. HIFSCO has the authority to, and has authorized
one or more financial services institutions and/or qualified plan intermediaries
to receive purchase and redemption orders on behalf of the Fund, subject to the
Fund's policies and procedures with respect to frequent purchases and
redemptions of Fund shares and applicable law. In these circumstances, the Fund
will be deemed to have received a purchase or redemption order when an
authorized financial services institution and/or qualified plan intermediary
receives the order. Accordingly, orders will be priced at the Fund's next net
asset value computed after the orders are received by an authorized financial
services institution and/or qualified plan intermediary and accepted by the
Fund. The Fund's net asset value is determined in the manner described in the
Fund's prospectus.
ADDITIONAL COMPENSATION TO BROKER-DEALERS, FINANCIAL INSTITUTIONS AND OTHER
PERSONS ("FINANCIAL INTERMEDIARIES")
In addition to the commissions (which may be paid or reallowed to Financial
Intermediaries from an applicable sales charge and/or advanced to Financial
Intermediaries) and Rule 12b-1 fees that are described above and in the SAI, the
distributor and its affiliates
33
pay, out of their own assets, significant additional compensation to Financial
Intermediaries (who may or may not be affiliates of the distributor) in
connection with the sale and distribution of the Fund's shares ("Additional
Payments") based on a number of factors that are described below.
These Additional Payments are generally based on average net assets (or on aged
assets, i.e., assets held over one year) of the Fund attributable to a
particular Financial Intermediary, on sales of the Fund's shares attributable to
a particular Financial Intermediary, and/or on reimbursement of ticket charges,
and may, but are normally not expected to, exceed, in the aggregate, 0.44% of
the average net assets of the funds attributable to a particular Financial
Intermediary.
Such Additional Payments are generally made for the placement of the Fund on a
Financial Intermediary's list of mutual funds available for purchase by its
customers and/or for including the Fund within a group of mutual funds that
receive special marketing focus. Certain additional compensation arrangements
are discussed below.
Apart from the Additional Payments, additional compensation arrangements may
take the form of, among others: (1) "due diligence" payments for a Financial
Intermediary's examination of the Fund and payments for providing extra employee
training and information relating to the Fund and (2) "marketing support" fees
for providing assistance in promoting the sale of the Fund's shares ("Other
Compensation"). Subject to FINRA regulations, HIFSCO and its affiliates may
contribute Other Amounts to various non-cash and cash incentive arrangements to
promote the sale of shares, as well as sponsor various educational programs,
sales contests and/or promotions in which participants may receive prizes such
as travel awards, merchandise and cash and/or investment research pertaining to
particular securities and other financial instruments or to the securities and
financial markets generally, educational information and related support
materials and hardware and/or software. HIFSCO and its affiliates may also pay
for the travel expenses, meals, lodging and entertainment of Financial
Intermediaries and their salespersons and guests in connection with education,
sales and promotional programs, subject to applicable FINRA regulations. These
programs, which may vary for different Financial Intermediaries, will not change
the price an investor will pay for shares or the amount that the Fund will
receive from such sale. Incurred payments of Other Compensation did not exceed
$1.1 million per Financial Intermediary for the calendar year ended December 31,
2006.
Additional Payments, including Other Compensation, may also pertain to the sale
and distribution of other investment products distributed by affiliates of the
distributor, and may, in some cases, act as a financial incentive for a
Financial Intermediary to recommend the purchase of one fund over another fund.
Additional Payments to Financial Intermediaries in connection with the sale and
distribution of the Fund's shares are negotiated based on a range of factors,
including, but not limited to, reputation in the industry, ability to attract
and retain assets (including distribution of particular classes of the funds'
shares), target markets, customer relationships and quality of service. No one
factor is determinative of the type or amount of Additional Payments to be
provided and factors are weighed in the assessment of such determination.
For the calendar year ended December 31, 2006, HIFSCO or its affiliates incurred
approximately $32.6 million in total Additional Payments, including Other
Compensation (excluding travel expenses, meals, lodging and entertainment of
Financial Intermediaries and their salespersons) to Financial Intermediaries, of
which approximately $13.7 million was incurred with respect to Edward D. Jones &
Co., L.P. For the calendar year ended December 31, 2006, total travel expenses,
meals, lodging and entertainment of Financial Intermediaries and their
salespersons did not in the aggregate exceed approximately $3.6 million.
As of January 1, 2007, HIFSCO has entered into arrangements to make Additional
Payments, including Other Compensation (excluding travel expenses, meals,
lodging and entertainment of Financial Intermediaries and their salespersons),
to: A.G. Edwards & Sons, Inc., AIG Advisors Group, Inc., (Advantage Capital
Corp., AIG Financial Advisors, American General, FSC Securities Corp., Royal
Alliance Associates, Inc.), Allen & Company of FL, Inc., American General
Securities, Inc., American Independent Securities Group, LLC, AmSouth Investment
Services, Anchor Investment Services, Inc., Associated Investment Services,
Inc., Associated Securities Corporation, Banc of America Investment Services,
Inc., BancorpSouth Services, Banc West Investment Services, B.C. Ziegler &
Company, BNY Investment Center, Inc., BOSC, Inc., Brookstreet Securities Corp.,
Cadaret Grant & Co., Inc., Cambridge Investment Research, Cantella & Company,
Inc., Capital Analysts, Inc., Capital Investment Group, Inc., Centaurus
Financial Inc., Charles Schwab & Co., Inc., Chase Investment Services
Corporation, Citicorp Investment Services, Citigroup Global Markets, Inc.,
Colonial Brokerage, Inc., Comerica Securities, Commerce Brokerage Services,
Inc., Commerce Capital Markets, Inc., Commonwealth Financial Network,
Commonwealth Financial Services, Crown Capital Securities, LP, Cuna Brokerage
Services, CUSO Financial Services, L.P., Dominion Investor Services, Duerr
Financial Corp, Eagle One Investments, Edward D. Jones & Co., Empire Securities
Corp, Equity Securities Corp, Equity Services, Inc., Essex National Securities,
Inc., Ferris Baker Watts, Inc., FFP Securities, Inc., Fidelity Investments,
Fifth Third Securities, Financial Planning Consultants, Inc., Fintegra, LLC,
First Allied Securities, Inc., First Citizens Investor Services, Inc., First
Heartland Capital Inc., First Tennessee Brokerage, Inc., Fiserv Brokerage
Services, Inc., Frost
34
Brokerage Services, Inc., Geneos Wealth Management, Inc., Girard Securities
Inc., Grant Bettingen, Great American Advisors, Inc., H. Beck, Inc., H&R Block,
Harbour Investments, Harvest Capital, LLC, HBW Securities, LLC, Hefren-Tillotson
Inc., Hilliard Lyons, HSBC Brokerage USA, Huntington Investment Co., IFMG
Securities, Inc., ING Advisor Network (Financial Network Investment Corporation,
Inc., ING Financial Partners, Inc., Multi-Financial Securities Corporation,
Inc., PrimeVest Financial Services, Inc.), Independent Financial Group, LLC,
Investment Professionals, Inc., Investors Capital Corp., Investors Security
Company, Inc., Janney Montgomery Scott, J.J.B. Hilliard, Jefferson Pilot
Securities Corp, Keybanc Capital Markets, Inc., KMS Financial Services, Inc.,
KNBT Securities Inc., Kovack Securities, Inc., LaSalle Financial Services,
LaSalle Street Securities, LLC, Lincoln Financial Advisors Group, Linsco/Private
Ledger Corp., M&T Securities Inc., Merrill Lynch Pierce Fenner & Smith, Mid
Atlantic Capital Corp, Money Concepts Capital Corp, Morgan Keegan & Company,
Inc., Morgan Stanley DW Inc., Mutual Service Corporation, National Advisors
Trust, National Planning Holdings, Inc. (Invest Financial Corporation,
Investment Centers of America, National Planning Corporation, SII Investments
Inc.), New England Securities, Newbridge Securities, NEXT Financial Group, Inc.,
North Ridge Securities Corp, Oppenheimer & Co, Inc., Pacific West Securities,
Inc., Prime Capital Services, Inc., ProEquities, Inc., Prospera Financial
Securities, Inc., QA3 Financial Corp., Raymond James & Associates Inc., Raymond
James Financial Services (IM&R), RBC Dain Rauscher, RDM Investment Services,
Robert W. Baird, Scott & Stringfellow Inc., Securian, Securities America, Inc.,
Securities Service Network, Inc., Sigma Financial Corp, Sorrento Pacific
Financial, Spectrum Capital, Inc., Stifel, Nicolaus & Company, Inc., Summit
Brokerage Services, SunAmerica Securities, Inc., Suntrust Investment Services,
TD Waterhouse, Inc., The Huntington Investment Company, TFS Securities, Inc.,
Transamerica Financial Advisors Inc., Triad Advisors, Inc., UBS Financial
Services Inc., UnionBanc Investment Services LLC, United Heritage Financial
Services, U.S. Bancorp Investments Inc., Uvest Financial Services Group, Inc.,
Vision Investment Services, Inc, Vorpahl Wing Securities, Wachovia Securities,
LLC, Wall Street Financial Group, Webster Investment Services, Inc, Wells Fargo
Investments, WM Financial Services, Inc., Workman Securities Corp, WRP
Investments, Inc., XCU Capital Corp., and Woodbury Financial Services, Inc. (an
indirect wholly-owned subsidiary of The Hartford). HIFSCO may enter into
arrangements with other Financial Intermediaries to make such Additional
Payments and Other Compensation.
In addition to the above payments, HIFSCO and its affiliates, out of their own
assets, may pay compensation for subaccounting, administrative and/or
shareholder processing services as described below.
ADDITIONAL COMPENSATION TO SERVICING INSTITUTIONS AND OTHER PERSONS ("SERVICING
INTERMEDIARIES") FOR SUBACCOUNTING, ADMINISTRATIVE AND/OR SHAREHOLDER PROCESSING
SERVICES.
In addition to payments made in connection with the sale and distribution of the
Fund's shares (described above) and administration and Rule 12b-1 fees paid by
the Fund, the distributor and its affiliates pay, out of their own assets,
significant additional compensation to Servicing Intermediaries (who may or may
not be affiliates of the distributor) in connection with subaccounting,
administrative and/or shareholder processing services ("Servicing Compensation")
based on a number of factors described below.
Servicing Compensation is generally based on average net assets of the Fund
attributable to a particular Servicing Intermediary, and may, but is normally
not expected to, exceed, in the aggregate, 0.20% of the average net assets of
the funds attributable to a particular Servicing Intermediary. Such Servicing
Compensation is generally made for subaccounting, administrative and/or
shareholder processing services. These programs, which may vary for different
Servicing Intermediaries, will not change the price an investor will pay for
shares. This Servicing Compensation may act as a financial incentive for a
Servicing Intermediary in choosing to provide services to one fund over another
fund.
The Servicing Compensation to Servicing Intermediaries is negotiated based on a
range of factors, including, but not limited to, reputation in the industry,
customer relationships and quality of service. No one factor is determinative of
the amount of Servicing Compensation to be provided and factors are weighed in
the assessment of such determination. For the year ended December 31, 2006,
HIFSCO incurred approximately $250,000 in total Servicing Compensation to
Servicing Intermediaries and an incurred payment of such Servicing Compensation
did not exceed $210,000 for any Servicing Intermediary.
As of January 1, 2007, HIFSCO has entered into arrangements to pay Servicing
Compensation to: The 401(k) Company; American Century Investment Management,
Inc.; AmeriMutual Funds Distributor, Inc.; Ameriprise Financial Services, Inc.;
BenefitStreet, Inc.; Diversified Investment Advisors, Inc.; Fidelity Investments
Institutional Operations Company, Inc. & Fidelity Investments Institutional
Services Company, Inc. ("Fidelity"); Gold Trust Company GWFS Equities, Inc.;
Invesmart, Inc. & Invesmart Securities, LLC; J.P. Morgan Retirement Plan
Services, LLC; Lincoln Retirement Services Company, LLC & AMG Service Corp;
Mercer HR Services, LLC; Mid Atlantic Capital Corporation; Reliance Trust
Company; T. Rowe Price Retirement Plan Services, Inc. & T. Rowe Price Investment
Services, Inc; and Upromise Investments, Inc.. HIFSCO may enter into
arrangements with other Servicing Intermediaries to pay such Servicing
Compensation.
35
Servicing Compensation is also paid to certain Servicing Intermediaries by HASCO
out of the transfer agency fees it receives from the funds. Although some
arrangements are based on average net assets attributable to the Servicing
Intermediary, such Servicing Intermediaries are generally paid a per account fee
ranging to no more than $16 per account. As of January 1, 2007, such Servicing
Intermediaries paid by HASCO are: ADP Broker-Dealer, Inc.; A.G. Edwards;
American Stock Transfer and Trust Company; CPI Qualified Plan Consultants, Inc;
SunGard InstitutionalBrokerage Inc.; Expert Plan, Inc.; Fiserv Trust Company;
Gail Weiss & Associates, Inc.; Gem Group L.P.; Hewitt Associates LLC; Legette
Actuaries, Inc.; Mid Atlantic Capital Corporation; MSCS Financial Services, LLC;
Ceridian Retirement Plan Services, Inc.; Northeast Retirement Services, Inc.;
Prudential Investment Management Services LLC & Prudential Investments LLC; QBC,
Inc.; Swerdlin & Company; and Stanton Trust Company N.A. Other Servicing
Intermediaries may be paid by HASCO in the future.
COMMISSIONS TO DEALERS
Because the Fund did not commence operations until November 30, 2007, there
is no information regarding the aggregate dollar amount of commissions received
by HIFSCO for the sale of Fund shares.
Generally, commissions on sales of Class A shares are reallowed to
broker-dealers as follows:
[Enlarge/Download Table]
FRONT-END SALES CHARGE FRONT-END SALES CHARGE COMMISSION AS
AS A PERCENTAGE OF AS A PERCENTAGE OF PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
------------------ ---------------------- ---------------------- --------------
Less than $50,000 5.50% 5.82% 4.75%
$50,000 or more but less than $100,000 4.50% 4.71% 4.00%
$100,000 or more but less than $250,000 3.50% 3.63% 3.00%
$250,000 or more but less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but less than $1 million 2.00% 2.04% 1.75%
$1 million or more(1) 0% 0% 0%
(1) Investments of $1 million or more in Class A shares may be made with no
front-end sales charge. However, there is a contingent deferred sales
charge (CDSC) of 1% on any shares sold within 18 months of purchase. For
purposes of this CDSC, all purchases made during a calendar month are
counted as having been made on the first day of that month. The CDSC is
based on the lesser of the original purchase cost or the current market
value of the shares being sold and is not charged on shares you acquired by
reinvesting your dividends and distributions. To keep your CDSC as low as
possible, each time you place a request to sell shares we will first sell
any shares in your account that are not subject to a CDSC.
36
HIFSCO may pay up to the entire amount of the sales commission to
particular broker-dealers. HIFSCO also may pay dealers of record commissions on
purchases over $1 million in an amount up to the sum of 1.0% of the first $4
million, plus 0.50% of the next $6 million, plus 0.25% of share purchases over
$10 million. In addition, HIFSCO may provide compensation to dealers of record
for certain shares purchased without a sales charge.
HIFSCO pays commissions to dealers of up to 4% of the purchase price of
Class B shares purchased through dealers and pays commissions to dealers of up
to 1% of the purchase price of Class C shares purchased through dealers.
HIFSCO's principal business address is 200 Hopmeadow Street, Simsbury,
Connecticut 06089. HIFSCO was organized as a Delaware corporation on December 9,
1996 and is an indirect wholly-owned subsidiary of The Hartford.
DISTRIBUTION PLANS
The Company, on behalf of the Fund, has adopted a separate distribution
plan (the "Plan") for each of the Class A, Class B, Class C, Class R3 and Class
R4 shares of the Fund, pursuant to appropriate resolutions of the Company's
board of directors in accordance with the requirements of Rule 12b-1 under the
1940 Act and the requirements of the applicable FINRA market conduct rules
concerning asset-based sales charges.
CLASS A PLAN Pursuant to the Class A Plan, the Fund may compensate HIFSCO
for its expenditures in financing any activity primarily intended to result in
the sale of Fund shares and for maintenance and personal service provided to
existing Class A shareholders. The expenses of the Fund pursuant to the Class A
Plan are accrued on a fiscal year basis and may not exceed, with respect to the
Class A shares of the Fund, the annual rate of 0.35% of the Fund's average daily
net assets attributable to Class A shares. However, the Company's boards of
directors have currently authorized Rule 12b-1 payments of only up to 0.25% of
the Fund's average daily net assets attributable to Class A shares. The entire
amount of the fee may be used for shareholder servicing expenses with the
remainder, if any, used for distribution expenses. HIFSCO or its affiliates are
entitled to retain all service fees payable under the Class A Plan for which
there is no dealer of record or for which qualification standards have not been
met as partial consideration for personal services and/or account maintenance
services performed by HIFSCO or its affiliates for shareholder accounts.
CLASS B PLAN Pursuant to the Class B Plan, the Fund may pay HIFSCO a fee of
up to 1.00% of the average daily net assets attributable to Class B shares,
0.75% of which is a fee for distribution financing activities and 0.25% of which
is for shareholder account services. HIFSCO will advance to dealers the
first-year service fee at a rate equal to 0.25% of the amount invested. As
compensation for such advance, HIFSCO may retain the service fee paid by the
Fund with respect to such shares for the first year after purchase. Dealers will
become eligible for additional service fees with respect to such shares
commencing in the thirteenth month following purchase. Brokers may from time to
time be required to meet certain other criteria in order to receive service
fees. HIFSCO or its affiliates are entitled to retain all service fees payable
under the Class B Plan for which there is no dealer of record or for which
qualification standards have not been met as partial consideration for personal
services and/or account maintenance services performed by HIFSCO or its
affiliates for shareholder accounts. The Class B Plan also provides that HIFSCO
will receive all contingent deferred sales charges attributable to Class B
shares.
CLASS C PLAN Pursuant to the Class C Plan, the Fund may pay HIFSCO a fee of
up to 1.00% of the average daily net assets attributable to Class C shares,
0.75% of which is a fee for distribution financing activities and 0.25% of which
is for shareholder account services. HIFSCO will advance to dealers the
first-year service fee at a rate equal to 0.25% of the amount invested. As
compensation for such advance, HIFSCO may retain the service fee paid by the
Fund with respect to such shares for the first year after purchase. Dealers will
become eligible for additional service fees with respect to such shares
commencing in the thirteenth month following purchase. Brokers may from time to
time be required to meet certain other criteria in order to receive service
fees. HIFSCO or its affiliates are entitled to retain all service fees payable
under the Class C Plan for which there is no dealer of record or for which
qualification standards have not been met as partial consideration for personal
services and/or account maintenance services performed by HIFSCO or its
affiliates for shareholder accounts. The Class C Plan also provides that HIFSCO
will receive all contingent deferred sales charges attributable to Class C
shares.
CLASS R3 PLAN Pursuant to the Class R3 Plan, a fund may pay HIFSCO a fee of
up to 0.50% of the average daily net assets attributable to Class R3 shares for
distribution financing activities and up to 0.25% may be used for shareholder
account services. HIFSCO will pay to dealers the service fee at a rate equal to
0.50% of the amount invested. Brokers may from time to time be required to meet
certain other criteria in order to receive service fees. HIFSCO or its
affiliates are entitled to retain all service fees payable under the Class R3
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial
37
consideration for personal services and/or account maintenance services
performed by HIFSCO or its affiliates for shareholder accounts.
CLASS R4 PLAN Pursuant to the Class R4 Plan, a fund may pay HIFSCO a fee of
up to 0.25% of the average daily net assets attributable to Class R4 shares for
distribution financing activities and up to 0.25% may be used for shareholder
account services. HIFSCO will pay to dealers the service fee at a rate equal to
0.25% of the amount invested. Brokers may from time to time be required to meet
certain other criteria in order to receive service fees. HIFSCO or its
affiliates are entitled to retain all service fees payable under the Class R4
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by HIFSCO or its affiliates for shareholder
accounts.
GENERAL Distribution fees paid to HIFSCO may be spent on any activities or
expenses primarily intended to result in the sale of the Company's shares
including: (a) payment of initial and ongoing commissions and other compensation
payments to brokers, dealers, financial institutions or others who sell the
Fund's shares, (b) compensation to employees of HIFSCO, (c) compensation to and
expenses, including overhead such as communications and telephone, training,
supplies, photocopying and similar types of expenses, of HIFSCO incurred in the
printing and mailing or other dissemination of all prospectuses and statements
of additional information, (d) the costs of preparation, printing and mailing of
reports used for sales literature and related expenses, i.e., advertisements and
sales literature, and (e) other distribution-related expenses and for the
provision of personal service and/or the maintenance of shareholder accounts.
These Plans are considered compensation type plans which means that the Fund
pays HIFSCO the entire fee regardless of HIFSCO's expenditures. Conversely, even
if HIFSCO's actual expenditures exceed the fee payable to HIFSCO at any given
time, the Fund will not be obligated to pay more than that fee.
In accordance with the terms of the Plans, HIFSCO provides to the Fund, for
review by the Company's board of directors, a quarterly written report of the
amounts expended under the respective Plans and the purpose for which such
expenditures were made. In the board of directors' quarterly review of the
Plans, they review the level of compensation the Plans provide.
The Plans were adopted by a majority vote of the board of directors of the
Company, including at least a majority of directors who are not, and were not at
the time they voted, interested persons of the Fund as defined in the 1940 Act
and do not and did not have any direct or indirect financial interest in the
operation of the Plans, cast in person at a meeting called for the purpose of
voting on the Plans. Potential benefits which the Plans may provide to the Fund
include shareholder servicing, the potential to increase assets and possibly
benefit from economies of scale, the potential to avoid a decrease in assets and
portfolio liquidations through redemption activity, the ability to sell shares
of the Fund through adviser and broker distribution channels, and the ability to
provide investors with an alternative to paying front end sales loads. The board
of directors of the Company believes that there is a reasonable likelihood that
the Plans will benefit the Fund and its current and future shareholders. Under
their terms, the Plans remain in effect from year to year provided such
continuance is approved annually by vote of the directors of the board in the
manner described above. The Plans may not be amended to increase materially the
amount to be spent for distribution without approval of the shareholders of the
Fund, and material amendments to the Plans must also be approved by the
applicable board of directors in the manner described above. A Plan may be
terminated at any time, without payment of any penalty, by vote of the majority
of the directors of the board who are not interested persons of the Fund and
have no direct or indirect financial interest in the operations of the Plan, or
by a vote of a "majority of the outstanding voting securities" of the Fund. A
Plan will automatically terminate in the event of its assignment.
Because Global Enhanced Dividend Fund had not commenced operations as of the
date of this SAI, no information regarding 12b-1 fees paid is available.
PURCHASE AND REDEMPTION OF SHARES
For information regarding the purchase of Fund shares, see "About Your
Account -- Buying Shares" in the Fund's prospectus.
EXEMPTIONS FROM SUBSEQUENT INVESTMENT MINIMUMS FOR OMNIBUS ACCOUNTS Certain
accounts held on the Fund's books, known as omnibus accounts, contain multiple
underlying accounts that are invested in shares of the Fund. These underlying
accounts are maintained by entities such as financial intermediaries and are
subject to the applicable initial purchase minimums as described in the
prospectus. However, in the case where the entity maintaining these accounts
aggregates the accounts' purchase orders for Fund shares, such accounts are not
required to meet the minimum amount for subsequent purchases.
For a description of how a shareholder may have a Fund redeem his/her
shares, or how he/she may sell shares, see "About Your Account -- Selling
Shares" in the Fund's prospectus.
38
RIGHTS OF ACCUMULATION Each Fund offers to all qualifying investors rights
of accumulation under which investors are permitted to purchase Class A and
Class L shares of any Funds of The Hartford Mutual Funds, Inc. and The Hartford
Mutual Funds II, Inc. at the price applicable to the total of (a) the dollar
amount then being purchased plus (b) an amount equal to the then current net
asset value of the purchaser's holdings of all shares of any Funds of The
Hartford Mutual Funds, Inc. and The Hartford Mutual Funds II, Inc. For purposes
of the rights of accumulation program, the purchaser may include all shares
owned by family members. For Class A shares, the definition of family member
varies depending upon when the purchaser opened the account. For accounts opened
on or after August 16, 2004, a family member is the owner's spouse (or legal
equivalent recognized under state law) and any minor children living in the
owner's household. For accounts opened before August 16, 2004 for Class A shares
and for all Class L shares, a family member is an owner's spouse (or legal
equivalent recognized under state law), parent, grandparent, child, grandchild,
brother, sister, step-family members and in-laws. As of August 16, 2004, account
values invested in fixed annuity, variable annuity and variable life insurance
products will no longer be considered towards the accumulation privilege for
Class A and Class L shares. Participants in retirement plans receive breakpoints
at the plan level. Acceptance of the purchase order is subject to confirmation
of qualification. The rights of accumulation may be amended or terminated at any
time as to subsequent purchases. Hartford Administrative Services Company
("HASCO"), The Hartford Mutual Funds, Inc. and The Hartford Mutual Funds II,
Inc.'s transfer agent, must be notified by you or your broker each time a
qualifying purchase is made.
LETTER OF INTENT Any person may qualify for a reduced sales charge on
purchases of Class A and Class L shares made within a thirteen-month period
pursuant to a Letter of Intent ("LOI"). Class A and Class L shares acquired
through the reinvestment of distributions do not constitute purchases for
purposes of the LOI. A Class A and Class L shareholder may include, as an
accumulation credit towards the completion of such LOI, the value of all shares
of all Funds of The Hartford Mutual Funds, Inc. and The Hartford Mutual Funds
II, Inc. owned by the shareholder as described above under "Rights of
Accumulation." Such value is determined based on the public offering price on
the date of the LOI. During the term of a LOI, HASCO will hold shares in escrow
to secure payment of the higher sales charge applicable for shares actually
purchased if the indicated amount on the LOI is not purchased. Dividends and
capital gains will be paid on all escrowed shares and these shares will be
released when the amount indicated on the LOI has been purchased. A LOI does not
obligate the investor to buy or the Fund to sell the indicated amount of the
LOI. If a Class A or Class L shareholder exceeds the specified amount of the LOI
and reaches an amount which would qualify for a further quantity discount, a
retroactive price adjustment will be made at the time of the expiration of the
LOI. The resulting difference in offering price will purchase additional Class A
or Class L shares for the shareholder's account at the applicable offering
price. If the specified amount of the LOI is not purchased, the shareholder
shall remit to HASCO an amount equal to the difference between the sales charge
paid and the sales charge that would have been paid had the aggregate purchases
been made at a single time. If the Class A or L Class shareholder does not
within twenty days after a written request by HASCO pay such difference in sales
charge, HASCO will redeem an appropriate number of escrowed shares in order to
realize such difference. Purchases based on a LOI may include holdings as
described above under "Rights of Accumulation." Additional information about the
terms of the LOI is available from your registered representative or from HASCO
at 1-888-843-7824. HASCO, The Hartford Mutual Funds, Inc. and The Hartford
Mutual Funds II, Inc.'s transfer agent, must be notified by you or your broker
each time a qualifying purchase is made.
SYSTEMATIC WITHDRAWAL PLAN The Systematic Withdrawal Plan ("SWP") is
designed to provide a convenient method of receiving fixed payments at regular
intervals only from Class A shares not subject to a CDSC (except as noted below
under Deferred Sales Charge) of the Fund deposited by the applicant under this
SWP. The applicant must deposit or purchase for deposit shares of the Fund
having a total value of not less than $5,000. Periodic checks of $50 or more
will be sent to the applicant, or any person designated by him, monthly or
quarterly.
Any income dividends or capital gains distributions on shares under the SWP
will be credited to the SWP account on the payment date in full and fractional
shares at the net asset value per share in effect on the record date.
SWP payments are made from the proceeds of the redemption of shares
deposited in a SWP account. Redemptions are potentially taxable transactions to
shareholders. To the extent that such redemptions for periodic withdrawals
exceed dividend income reinvested in the SWP account, such redemptions will
reduce and may ultimately exhaust the number of shares deposited in the SWP
account. In addition, the amounts received by a shareholder cannot be considered
as an actual yield or income on his or her investment because part of such
payments may be a return of his or her capital.
The SWP may be terminated at any time (1) by written notice to the Fund or
from the Fund to the shareholder, (2) upon receipt by the Fund of appropriate
evidence of the shareholder's death, or (3) when all shares under the SWP have
been redeemed. The fees of the Fund for maintaining SWPs are paid by the Fund.
39
SPECIAL REDEMPTIONS Although it would not normally do so, the Fund has the
right to pay the redemption price of shares of the Fund in whole or in part in
portfolio securities as prescribed by the Company's directors. When the
shareholder sells portfolio securities received in this fashion, he/she would
incur a brokerage charge. Any such securities would be valued for the purposes
of making such payment at the same value as used in determining net asset value.
The Fund has elected to be governed by Rule 18f-1 under the 1940 Act, pursuant
to which the Fund is obligated to redeem shares solely in cash up to the lesser
of $250,000 or 1% of the net asset value of the Fund during any 90-day period
for any one account.
DEFERRED SALES CHARGE ON CLASS A, CLASS B AND CLASS C SHARES Investments in
Class B and Class C shares are purchased at net asset value per share without
the imposition of an initial sales charge so that the Fund will receive the full
amount of the purchase payment.
Class A shares which were purchased without a front-end sales charge and
which are redeemed within eighteen months of purchase, Class B shares which are
redeemed within six years of purchase, and Class C shares, which are redeemed
within one year of purchase, are subject to a CDSC at the rates set forth in the
prospectus as a percentage of the dollar amount subject to the CDSC. The charge
is assessed on an amount equal to the lesser of the current market value or the
original purchase cost of the Class A, Class B or Class C shares being redeemed.
No CDSC is imposed on increases in account value above the initial purchase
prices, including all shares derived from reinvestment of dividends or capital
gains distributions.
40
The amount of the CDSC, if any, varies depending on the number of years
from the time of payment for the purchase of Class B shares until the time of
redemption of such shares. Solely for purposes of determining the length of time
of any payment for the purchases of Class B and Class C shares, all payments
during a month will be aggregated and deemed to have been made on the first day
of the month.
In determining whether a CDSC applies to a redemption, the calculation is
determined in a manner that results in the lowest possible rate being charged.
To determine whether a CDSC applies, the Fund redeems shares in the following
order: (1) shares representing an increase over the original purchase cost, (2)
shares acquired through reinvestment of dividends and capital gains
distributions, (3) Class B shares held for over 6 years or Class C shares held
over 1 year, and (4) Class B shares held the longest during the six-year period.
When requesting a redemption the specified dollar amount will be redeemed
from your account plus any applicable CDSC. If you do not want any additional
amount withdrawn from your account please indicate that the applicable CDSC
should be withdrawn from the total distribution amount requested.
Proceeds from the CDSC are paid to the distributor and are used in whole or
in part by the distributor to defray its expenses related to providing
distribution-related services to the Fund in connection with the sale of the
Class A, Class B and Class C shares, such as the payment of compensation to
select selling brokers for selling these classes of shares. The combination of
the CDSC and the distribution and service fees facilitates the ability of the
Fund to sell the Class B and Class C shares without a sales charge being
deducted, and to sell Class A shares with a 3.00%, 4.50% or 5.50% maximum sales
charge, as applicable, at the time of purchase.
The CDSC will be waived on redemptions of Class B and Class C shares and of
Class A shares that are subject to the CDSC in the following cases:
- to make SWP payments that are limited annually to no more than 12% of
the value of the account at the time the plan is initiated,
- because of shareholder death or disability in the case of a transfer
or rollover to an affiliated Hartford company only,
- under reorganization, liquidation, merger or acquisition transactions
involving other investment companies, and
- for retirement plans under the following circumstances:
(1) to return excess contributions,
(2) hardship withdrawals as defined by the IRS as applicable to
403(b) plans,
(3) under a Qualified Domestic Relations Order as defined in the
Internal Revenue Code,
(4) to meet minimum distribution requirements under the Internal
Revenue Code,
(5) to make "substantially equal payments" as described in Section
72(t) of the Internal Revenue Code, and
(6) after separation from service for employer-sponsored retirement
plans.
SUSPENSION OF REDEMPTIONS
The Fund may not suspend a shareholder's right of redemption, or postpone
payment for a redemption for more than seven days, unless the New York Stock
Exchange (NYSE) is closed for other than customary weekends or holidays, or
trading on the NYSE is restricted, or for any period during which an emergency
exists as a result of which (1) disposal by the Fund of securities owned by it
is not reasonably practicable, or (2) it is not reasonably practicable for the
Fund to fairly determine the value of its assets, or for such other periods as
the SEC may permit for the protection of investors.
DETERMINATION OF NET ASSET VALUE
41
The net asset value of the shares of all classes of the Fund is determined
by Hartford Life in the manner described in the Fund's prospectus. The Fund is
closed for business and does not price its shares on the following business
holidays: New Year's Day, Martin Luther King Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and
other holidays observed by the NYSE. Securities held by the Fund will be valued
as follows: debt securities (other than short-term obligations) are valued on
the basis of valuations furnished by an unaffiliated pricing service which
determines valuations for normal institutional size trading units of securities.
Loans generally trade in over-the-counter markets and are priced through an
independent pricing service utilizing independent market quotations from loan
dealers or financial institutions. Securities for which prices are not available
from an independent pricing service, but where an active market exists, are
valued using market quotations obtained from one or more dealers that make
markets in the securities or from a widely-used quotation system in accordance
with procedures established by the Company's board of directors. The Fund's debt
investments with a maturity of 60 days or less are valued at amortized cost,
which approximates market value. Short-term investments with a maturity of more
than 60 days when purchased are valued based on market quotations until the
remaining days to maturity become less than 61 days. From such time until
maturity, the investments are valued at amortized cost.
Equity securities are valued at the official closing price or at the last
sales price reported on principal securities exchanges (domestic or foreign) on
which they are traded. If no sale took place on a particular day and in the case
of certain equity securities traded over-the-counter, then such securities are
valued at the mean between the bid and asked prices. For securities traded on
the NASDAQ national market system, the Fund utilizes the NASDAQ Official Closing
Price which compares the last trade to the bid/ask range of a security. If the
last trade falls within the bid-ask range, then that price will be the closing
price. If the last trade is outside the bid/ask range, and falls above the ask,
the ask will be the closing price. If the last price is below the bid, the bid
will be the closing price. Securities quoted in foreign currencies are
translated into U.S. dollars at the prevailing exchange rates. Options are
valued at the last sales price; if no sale took place on a particular day, then
options are valued at the mean between the bid and asked prices. Securities for
which market quotations are not readily available or are deemed unreliable and
all other assets are valued in good faith at fair value by, or under guidelines
established by, the Fund's boards of directors.
Foreign securities markets may trade on days when the Fund does not compute
its net asset value or may close at times that differ from the close of the
NYSE. With respect to the valuation of securities principally traded on foreign
markets, the Fund uses a fair value pricing service approved by the Fund's
Board, which employs quantitative models to adjust for "stale" prices caused by
the movement of other markets and other factors occurring after the close of the
foreign exchanges but before the close of the NYSE.
Under the amortized cost method of valuation, an instrument is valued at
cost and the interest payable at maturity upon the instrument is accrued as
income, on a daily basis, over the remaining life of the instrument. Neither the
amount of daily income nor the net asset value is affected by unrealized
appreciation or depreciation of the portfolio's investments assuming the
instrument's obligation is paid in full on maturity.
The Fund's maximum offering price per Class A share is determined by adding
the maximum sales charge to the net asset value per share. Class B, Class C,
Class I, Class R3, Class R4, Class R5 and Class Y shares are offered at net
asset value without the imposition of an initial sales charge.
CAPITALIZATION AND VOTING RIGHTS
The Hartford Mutual Funds, Inc. was incorporated in Maryland on March 21,
1996. The authorized capital stock of the Company consists of 34.2 billion
shares of common stock, par value $0.001 per share ("Common Stock"). The shares
of Common Stock are divided into fifty-five series.
The board of directors of the Company may reclassify authorized shares to
increase or decrease the allocation of shares among the series described above
or to add any new series to the Fund. The Company's board of directors is also
authorized, from time to time and without further shareholder approval, to
authorize additional shares and to classify and reclassify existing and new
series into one or more classes. Accordingly, the directors of the Company have
authorized the issuance of eight classes of shares of the Fund designated in
each instance as Class A, Class B, Class C, Class I, Class R3, Class R4, Class
R5 and Class Y shares.
Each issued and outstanding share is entitled to participate equally in
dividends and distributions declared by the Fund and, upon liquidation or
dissolution, in the net assets of the Fund remaining after satisfaction of
outstanding liabilities. The shares of each series, and each class within each
series, are, when issued, fully paid and non-assessable. Such shares have no
preemptive or, for Class A, Class C, Class R3, Class R4, Class R5 and Class Y
conversion rights and are freely transferable.
42
As an investment company incorporated in Maryland, the Company is not
required to hold routine annual shareholder meetings. Meetings of shareholders
will be called whenever one or more of the following, among other matters, is
required to be acted upon by shareholders pursuant to the 1940 Act: (1) election
of directors, (2) approval of an investment management agreement or sub-advisory
agreement, or (3) ratification of the selection of the Fund's independent
registered public accounting firm.
Shares of common stock have equal voting rights (regardless of the net
asset value per share). Shares do not have cumulative voting rights.
Accordingly, the holders of more than 50% of the shares of the Company voting
for the election of directors can elect all of the directors if they choose to
do so, and in such an event, the holders of the remaining shares would not be
able to elect any directors. Although directors are not elected annually,
shareholders have the right to remove one or more directors. When required by
law, if the holders of 25% or more of the Company's outstanding shares request
it in writing, a meeting of the Company's shareholders will be held to approve
or disapprove the removal of director or directors.
Matters in which the interests of all the Funds of the Company are
substantially identical (such as the election of directors or the ratification
of the selection of the independent registered public accounting firm) are voted
on by all shareholders of the Company without regard to the separate Funds.
Matters that affect all or several Funds, but where the interests of the Funds
are not substantially identical (such as approval of an investment management
agreement) are voted on separately by the shareholders of each Fund for their
Fund. Matters that affect only one Fund (such as a change in its fundamental
policies) are voted on separately for the Fund by the shareholders of that Fund.
Likewise, matters that affect only one class of shares of a Fund (such as
approval of a plan of distribution) are voted on separately for that class by
the holders of shares of that class.
TAXES
FEDERAL TAX STATUS OF THE FUND
The following discussion of the federal tax status of the Fund is a general and
abbreviated summary based on tax laws and regulations in effect on the date of
this SAI. Tax law is subject to change by legislative, administrative or
judicial action.
The Fund is treated as a separate taxpayer for federal income tax purposes.
The Company intends for the Fund to elect to be treated as a regulated
investment company under Subchapter M of Chapter 1 of the Internal Revenue Code
of 1986, as amended (the "Code"), and to qualify as a regulated investment
company each year. If the Fund: (1) continues to qualify as a regulated
investment company, and (2) distributes to its shareholders at least 90% of its
investment company taxable income (including for this purpose its net ordinary
investment income and net realized short-term capital gains) and 90% of its
tax-exempt interest income (reduced by certain expenses) (the "90% distribution
requirement") (which the Company intends the Fund to do), then under the
provisions of Subchapter M, the Fund should have little or no income taxable to
it under the Code. In particular, the Fund generally is not subject to federal
income tax on the portion of its investment company taxable income and net
capital gain (i.e., net long-term capital gain in excess of short-term capital
loss) it distributes to shareholders (or treats as having been distributed to
shareholders).
The Fund must meet several requirements to maintain its status as a
regulated investment company. These requirements include the following: (1) at
least 90% of the Fund's gross income for each taxable year must be derived from
dividends, interest, payments with respect to loaned securities, gains from the
sale or disposition of securities (including gains from related investments in
foreign currencies), or other income (including gains from options, futures or
forward contracts) derived with respect to its business of investing in such
securities or currencies, as well as net income from interests in certain
publicly traded partnerships; and (2) at the close of each quarter of the Fund's
taxable year, (a) at least 50% of the value of the Fund's total assets must
consist of cash, cash items, securities of other regulated investment companies,
U.S. Government securities and other securities which, with respect to any one
issuer, do not represent more than 5% of all of the Fund's assets nor more than
10% of the outstanding voting securities of such issuer, and (b) the Fund must
not invest more than 25% of its total assets in the securities of any one issuer
(other than U.S. Government securities or the securities of other regulated
investment companies), or of any two or more issuers that are controlled by the
Fund and that are engaged in the same or similar trades or businesses or related
trades or businesses, or of one or more qualified publicly traded partnerships.
The Fund generally will endeavor to distribute (or treat as deemed
distributed) to its shareholders all of its investment company taxable income
and its net capital gain, if any, for each taxable year so that it will not
incur federal income or excise taxes on its earnings.
In addition, in order to avoid a 4% nondeductible federal excise tax on
certain of its undistributed income, the Fund generally must distribute in a
timely manner the sum of (1) 98% of its ordinary income for each calendar year,
(2) 98% of its capital gain net income
43
for the one-year period ending October 31 in that calendar year, and (3) any
income not distributed in prior years (the "excise tax avoidance requirements").
If for any taxable year the Fund fails to qualify as a regulated investment
company or fails to satisfy the 90% distribution requirement, then all of its
taxable income becomes subject to federal, and possibly state and local, income
tax at regular corporate rates (without any deduction for distributions to its
shareholders) and distributions to its shareholders constitute dividend income
(with such dividend income including dividends derived from interest on
tax-exempt obligations) to the extent of the Fund's available earnings and
profits.
Investment income received from sources within foreign countries, or
capital gains earned by the Fund from investing in securities of foreign
issuers, may be subject to foreign income taxes withheld at the source. In this
regard, withholding tax rates in countries with which the United States does not
have a tax treaty are often as high as 35% or more. The United States has
entered into tax treaties with many foreign countries that may entitle the Fund
to a reduced rate of tax or exemption from tax on this related income and gains.
The effective rate of foreign tax cannot be determined at this time since the
amount of the Fund's assets to be invested within various countries is not now
known. The Company intends that the Fund will seek to operate so as to qualify
for treaty-reduced rates of tax when applicable.
Any gains derived from short sales will generally be taxed as short-term
capital gains that would be taxed to shareholders on distributions as ordinary
income.
In addition, if the Fund qualifies as a regulated investment company under
the Code, and if more than 50% of the Fund's total assets at the close of the
taxable year consists of securities of foreign corporations, the Fund may elect,
for U.S. federal income tax purposes, to treat foreign income taxes paid by the
Fund (including certain withholding taxes) that can be treated as income taxes
under U.S. income tax principles as paid by its shareholders. The Fund
anticipates that it may qualify for and make this election in most, but not
necessarily all, of its taxable years. If the Fund makes such an election, an
amount equal to the foreign income taxes paid by the Fund would be included in
the income of its shareholders and the shareholders often are entitled to credit
their portions of this amount against their U.S. tax liabilities, if any, or to
deduct those portions from their U.S. taxable income, if any. Shortly after any
year for which it makes such an election, the Fund will report to its
shareholders, in writing, the amount per share of foreign tax that must be
included in each shareholder's gross income and the amount that will be
available as a deduction or credit. Shareholders must itemize their deductions
in order to deduct foreign taxes. Certain limitations may apply that could limit
the extent to which the credit or the deduction for foreign taxes may be claimed
by a shareholder.
The Fund's transactions in options contracts and futures contracts are
subject to special provisions of the Code that, among other things, may affect
the character of gains and losses realized by the Fund (that is, may affect
whether gains or losses are ordinary or capital), accelerate recognition of
income to the Fund and defer losses of the Fund. These rules (1) could affect
the character, amount and timing of distributions to shareholders of the Fund,
(2) could require the Fund to "mark to market" certain types of the positions in
its portfolio (that is, treat them as if they were closed out) and (3) may cause
the Fund to recognize income without receiving cash with which to make
distributions in amounts necessary to satisfy the 90% distribution requirement
and the excise tax avoidance requirements described above. The Company seeks to
monitor transactions of the Fund, seeks to make the appropriate tax elections on
behalf of the Fund and seeks to make the appropriate entries in the Fund's books
and records when the Fund acquires any option, futures contract or hedged
investment, to mitigate the effect of these rules.
Because Global Enhanced Dividend Fund had not commenced operations as of
the date of this SAI, no information regarding capital loss carryforwards is
available for these funds,
If the Fund acquires stock in certain foreign corporations that receive at
least 75% of their annual gross income from passive sources (such as interest,
dividends, rents, royalties or capital gain) or hold at least 50% of their total
assets in investments producing such passive income ("passive foreign investment
companies"), the Fund could be subject to federal income tax and additional
interest charges on "excess distributions" received from such companies or gain
from the sale of stock in such companies, even if all income or gain actually
received by the Fund is timely distributed to its shareholders. The Fund would
not be able to pass through to its shareholders any credit or deduction for such
a tax. Certain elections may, if available, ameliorate these adverse tax
consequences, but any such election requires the Fund to recognize taxable
income or gain without the concurrent receipt of cash. The Fund may limit and/or
manage its holdings in passive foreign investment companies to minimize its tax
liability.
Foreign exchange gains and losses realized by the Fund in connection with
certain transactions involving non-dollar debt securities, certain foreign
currency futures contracts, foreign currency option contracts, foreign currency
forward contracts, foreign currencies, or payables or receivables denominated in
a foreign currency are subject to Code provisions which generally treat such
gains and losses as ordinary income and losses and may affect the amount, timing
and character of distributions to shareholders. Any such transactions that are
not directly related to the Fund's investment in securities (possibly including
speculative currency positions
44
or currency derivatives not used for hedging purposes) could, under future
Treasury regulations, produce income not among the types of "qualifying income"
from which the Fund must derive at least 90% of its annual gross income.
If the Fund invests in certain PIKs, zero coupon securities or certain
deferred interest securities (and, in general, any other securities with
original issue discount or with market discount if the Fund elects to include
market discount in current income) must accrue income on such investments prior
to the receipt of the corresponding cash. However, because the Fund must meet
the 90% distribution requirement to qualify as a regulated investment company,
the Fund may have to dispose of its portfolio investments under disadvantageous
circumstances to generate cash, or may have to leverage itself by borrowing the
cash, to satisfy the applicable distribution requirements.
The federal income tax rules applicable to interest rate swaps, caps and
floors are unclear in certain respects, and the Fund may be required to account
for these transactions in a manner that, in certain circumstances, may limit the
degree to which it may utilize these transactions.
SHAREHOLDER TAXATION
The following discussion of certain federal income tax issues of shareholders of
the Fund is a general and abbreviated summary based on tax laws and regulations
in effect on the date of this statement of additional information. Tax law is
subject to change by legislative, administrative or judicial action. The
following discussion relates solely to U.S. federal income tax law as applicable
to U.S. taxpayers (e.g., U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts or estates). The discussion does not address
special tax rules applicable to certain classes of investors, such as qualified
retirement accounts or trusts, tax-exempt entities, insurance companies, banks
and other financial institutions or to non-U.S. taxpayers. Dividends, capital
gain distributions, and ownership of or gains realized on the redemption
(including an exchange) of the shares of the Fund may also be subject to state
and local taxes. This summary does not address any federal estate tax issues
that may arise from ownership of Fund shares. Shareholders should consult their
own tax advisers as to the federal, state and local tax consequences of
ownership of shares of, and receipt of distributions from, the Fund in their
particular circumstances.
In general, as described in the prospectus, distributions from the Fund are
generally taxable to shareholders as ordinary income, qualified dividend income,
or long-term capital gains. Distributions of the Fund's investment company
taxable income (other than qualified dividend income) are taxable as ordinary
income to shareholders to the extent of the Fund's current or accumulated
earnings and profits, whether paid in cash or reinvested in additional shares.
Distributions from net short-term capital gains are taxable to a shareholder as
ordinary income. Distributions of the Fund's net capital gain properly
designated by the Fund as "capital gain dividends" are taxable to a shareholder
as long-term capital gain regardless of the shareholder's holding period for his
or her shares and regardless of whether paid in cash or reinvested in additional
shares. Distributions, if any, in excess of earnings and profits usually
constitute a return of capital, which first reduces an investor's tax basis in
the Fund's shares and thereafter (after such basis is reduced to zero) generally
gives rise to capital gains. Shareholders electing to receive distributions in
the form of additional shares have a cost basis for federal income tax purposes
in each share so received equal to the amount of cash they would have received
had they elected to receive the distribution in cash. For a summary of the tax
rates applicable to capital gains, including capital gain dividends, see the
discussion below.
At the Company's option, the Company may cause the Fund to retain some or
all of its net capital gain for a tax year, but may designate the retained
amount as a "deemed distribution." In that case, among other consequences, the
Fund pays tax on the retained amount for the benefit of its shareholders, the
shareholders are required to report their share of the deemed distribution on
their tax returns as if it had been distributed to them, and the shareholders
may report a credit for the tax paid thereon by the Fund. The amount of the
deemed distribution net of such tax is added to the shareholder's cost basis for
his or her shares. Since the Company expects the Fund to pay tax on any retained
net capital gain at its regular corporate capital gain tax rate, and since that
rate is in excess of the maximum rate currently payable by individuals on
long-term capital gain, the amount of tax that individual shareholders are
treated as having paid will exceed the amount of tax that such shareholders
would be required to pay on the retained net capital gain. A shareholder that is
not subject to U.S. federal income tax or tax on long-term capital gain should
be able to file a return on the appropriate form or a claim for refund that
allows such shareholder to recover the taxes paid by the Fund on his or her
behalf. In the event that the Company chooses this option on behalf of the Fund,
the Company must provide written notice to the shareholders prior to the
expiration of 60 days after the close of the relevant tax year.
Any dividend declared by the Fund in October, November, or December of any
calendar year, payable to shareholders of record on a specified date in such a
month and actually paid during January of the following year, is treated as if
it had been received by the shareholders on December 31 of the year in which the
dividend was declared.
45
An investor should consider the tax implications of buying shares just
prior to a distribution. Even if the price of the shares includes the amount
of the forthcoming distribution, the shareholder generally will be taxed upon
receipt of the distribution and is not entitled to offset the distribution
against the tax basis in his or her shares. In addition, an investor should be
aware that, at the time he or she purchases shares of the Fund, a portion of the
purchase price is often attributable to realized or unrealized appreciation in
the Fund's portfolio or undistributed taxable income of the Fund. Subsequent
distributions from such appreciation or income may be taxable to such investor
even if the net asset value of the investor's shares is, as a result of the
distributions, reduced below the investor's cost for such shares, and the
distributions in reality represent a return of a portion of the purchase price.
A shareholder generally recognizes taxable gain or loss on a sale or
redemption (including by exercise of the exchange privilege) of his or her
shares. The amount of the gain or loss is measured by the difference between the
shareholder's adjusted tax basis in his or her shares and the amount of the
proceeds received in exchange for such shares. Any gain or loss arising from
(or, in the case of distributions in excess of earnings and profits, treated as
arising from) the sale or redemption of shares generally is a capital gain or
loss if such shares are held as capital assets. This capital gain or loss
normally is treated as a long-term capital gain or loss if the shareholder has
held his or her shares for more than one year at the time of such sale or
redemption; otherwise, it is classified as short-term capital gain or loss. If,
however, a shareholder receives a capital gain dividend with respect to any
share of the Fund, and if the share is sold before it has been held by the
shareholder for at least six months, then any loss on the sale or exchange of
the share, to the extent of the capital gain dividend, is treated as a long-term
capital loss. The lower tax rates on long-term capital gains for individuals are
currently scheduled to expire after 2010, at which time the maximum rate is
currently scheduled to increase to 20%.
In addition, all or a portion of any loss realized upon a taxable
disposition of shares may be disallowed if other shares of the Fund are
purchased (including any purchase through a reinvestment of distributions from
the Fund) within 30 days before or after the disposition. In such a case, the
basis of the shares acquired will be adjusted to reflect the disallowed loss.
Also, if a shareholder who incurred a sales charge on the acquisition of shares
of the Fund sells his or her shares within 90 days of purchase and subsequently
acquires shares of the same or another Fund of the Company on which a sales
charge normally is imposed without paying such sales charge in accordance with
the exchange privilege described in the prospectuses, such shareholder will not
be entitled to include the amount of the sales charge in his or her basis in the
shares sold for purposes of determining gain or loss. In these cases, any gain
on the disposition of the shares of the Fund is increased, or loss decreased, by
the amount of the sales charge paid when the shares were acquired, and that
amount will increase the adjusted basis of the shares of the Fund subsequently
acquired.
In general, non-corporate shareholders currently are subject to a
maximum federal income tax rate of 15% on their net long-term capital gain (the
excess of net long-term capital gain over net short-term capital loss) for a
taxable year (including a long-term capital gain derived from an investment in
the shares) and certain qualified dividend income, while other income may be
taxed at rates as high as 35%. Shareholders must satisfy a holding period of
more than 60 days with respect to a distribution that is otherwise eligible to
be treated as a qualified dividend during the 121-day period that begins 60 days
before the ex-dividend date. The lower tax rates on qualified dividend income
are currently scheduled to expire after 2010. After 2010, such amounts would be
taxed at ordinary income rates in the absence of further congressional action.
Corporate taxpayers currently are subject to federal income tax on net capital
gain at the maximum 35% rate also applied to ordinary income. Tax rates imposed
by states and local jurisdictions on capital gain and ordinary income may
differ. Non-corporate shareholders with net capital losses for a year (i.e.,
capital losses in excess of capital gains) generally may deduct up to $3,000 of
such losses against their ordinary income each year; any net capital losses of a
non-corporate shareholder in excess of $3,000 generally may be carried forward
and used in subsequent years as provided in the Code. Corporate shareholders
generally may not deduct any net capital losses for a year, but may carry back
such losses for three years or carry forward such losses for five years.
The Fund's ordinary income dividends from domestic corporations may, if
certain conditions are met, qualify for the dividends received deduction for
corporate shareholders to the extent that the Fund has received qualifying
dividend income during the taxable year; capital gain dividends distributed by
the Fund are not eligible for the dividends received deduction. The dividends
received deduction is reduced to the extent that the shares held by the Fund are
treated as debt-financed under federal income tax law and is eliminated if
either those shares or the shares of the Fund are deemed to have been held by
the Fund or a shareholder, as the case may be, for less than 46 days during the
91-day period that begins 45 days before the stock becomes ex-dividend.
The Fund sends to each of its shareholders, as promptly as possible after
the end of each calendar year, a notice detailing, on a per share and per
distribution basis, the amounts includible in such shareholder's taxable income
for such year as ordinary income and as long-term capital gain. In addition, the
federal tax status of each year's distributions generally is reported to the
IRS. Distributions may also be subject to additional state, local, and foreign
taxes depending on a shareholder's particular situation.
Dividends paid by the Fund to a non-U.S. shareholder generally are
subject to U.S. withholding tax at a rate of 30% (unless the tax is reduced or
eliminated by an applicable treaty). The ownership of Fund shares by a non-U.S.
investor may be subject to U.S. estate tax.
46
The Fund may be required to withhold U.S. federal income tax at a rate of
28% ("backup withholding") from all taxable distributions payable to (1) any
shareholder who fails to furnish the applicable Company with its correct
taxpayer identification number or a certificate that the shareholder is exempt
from backup withholding, and (2) any shareholder with respect to whom the IRS
notifies the Company that the shareholder has failed to properly report certain
interest and dividend income to the IRS and to respond to notices to that
effect. An individual's taxpayer identification number is his or her social
security number. The 28% backup withholding tax is not an additional tax and may
be credited against a taxpayer's regular federal income tax liability.
47
PRINCIPAL UNDERWRITER
HIFSCO, the investment manager of each Fund, also serves as the principal
underwriter. HIFSCO is located at 200 Hopmeadow Street, Simsbury, Connecticut
06089.
CUSTODIAN
Portfolio securities of the Fund are held pursuant to a separate Custody
Agreement between the Company and State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110.
TRANSFER AGENT
Hartford Administrative Services Company ("HASCO"), 500 Bielenberg Drive,
Woodbury, Minnesota 55125, is the transfer agent for the Fund. As transfer
agent, HASCO, among other things, receives and processes purchase and redemption
orders, effects transfers of shares, prepares and transmits payments for
dividends and distributions, and maintains records of account. For its services,
HASCO is paid a fee based on assets or number of accounts, depending on the
class of shares.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audited financial statements and the financial highlights appearing in
the annual report will be audited by Ernst & Young LLP, the Fund's independent
registered public accounting firm. The principal business address of Ernst
&Young LLP is 220 South Sixth Street, Suite 1400, Minneapolis, MN 55402.
OTHER INFORMATION
The Hartford has granted the Company the right to use the name, "The
Hartford" or "Hartford", and has reserved the right to withdraw its consent to
the use of such name by the Company and the Fund at any time, or to grant the
use of such name to any other company.
CODE OF ETHICS
The Fund, HIFSCO and the sub-adviser has each adopted a code of ethics
designed to protect the interests of the Fund's shareholders. Under each code of
ethics, investment personnel are permitted to trade securities for their own
account, including securities that may be purchased or held by the Fund, subject
to certain restrictions. Each code of ethics has been filed with the SEC and may
be viewed by the public.
48
FINANCIAL STATEMENTS
The Company's audited financial statements, together with the notes
thereto, and report of Ernst & Young LLP, the Company's independent registered
public accounting firm, will be available in the Fund's annual report once the
Fund has completed its first annual period.
49
PROXY VOTING POLICIES AND PROCEDURES
The Board of Directors believes that the voting of proxies with respect to
securities held by the Fund is an important element of the overall investment
process. The Fund has delegated the responsibility to vote such proxies to the
Fund's investment manager subject to the continuing oversight of the Board of
Directors. The investment manager has delegated to the sub-adviser the
responsibility to vote proxies. The sub-adviser has a duty to vote or not vote
such proxies in the best interests of the Fund and its shareholders, and to
avoid the influence of conflicts of interest.
The policies and procedures used by the investment manager and the sub-adviser
to determine how to vote certain proxies relating to portfolio securities are
described below. In addition to a summary description of such policies and
procedures, included below are descriptions of how such policies and procedures
apply to various topics. However, the following are descriptions only and more
complete information should be obtained by reviewing the sub-adviser's policies
and procedures, as well as, the Fund's voting records. For a complete copy of
each sub-adviser's proxy voting policies and procedures, as well as any separate
guidelines it utilizes, please refer to
www.hartfordinvestor.com/mutualfunds/proxyvotingpolicies.
HARTFORD INVESTMENT MANAGEMENT COMPANY
The Fund for which Hartford Investment Management Company ("Hartford Investment
Management") serves as sub-adviser has granted to Hartford Investment Management
the authority to vote proxies on its behalf with respect to the assets managed
by Hartford Investment Management. Hartford Investment Management votes proxies
in what it believes are the best economic interests of its clients and in
accordance with its Proxy Policies and Procedures. Hartford Investment
Management's Proxy Committee is responsible for the review and approval of the
Hartford Investment Management's Proxy Policies and Procedures. Day-to-day
administration of the proxy voting process at Hartford Investment Management is
the responsibility of the portfolio manager of the relevant client account.
Although Hartford Investment Management has established its own Proxy Guidelines
setting forth general guidelines for voting proxies, Hartford Investment
Management personnel evaluate all proxies and vote proxies based on their
assessment of the merits of each proposal. Absent a material conflict of
interest, the applicable portfolio manager has the authority to determine the
final vote for securities held in the account for which he or she serves as the
designated manager.
Hartford Investment Management votes proxies solicited by an investment company
in the same proportion as the vote of the investment company's other
shareholders (sometimes called "mirror" or "echo" voting).
Hartford Investment Management maintains procedures designed to identify and
address material conflicts of interest in voting proxies. Proxy votes for which
an apparent conflict of interest is identified are reviewed by the Proxy
Committee to resolve the conflict and direct the vote.
Hartford Investment Management may be unable to vote or may determine not to
vote a proxy on behalf of the Fund due to, for example, the existence of
securities lending arrangements, lack of adequate information, and untimely
receipt of proxy materials.
In order to facilitate the proxy voting process, Hartford Investment Management
has retained Glass Lewis & Company ("Glass Lewis") as experts in the proxy
voting and corporate governance area. Glass Lewis specializes in providing a
variety of fiduciary-level proxy advisory and voting services. These services
include in-depth research, analysis and voting recommendations as well as vote
execution, reporting, auditing and consulting assistance for the handling of
proxy voting responsibility and corporate governance-related efforts. While
Hartford Investment Management will rely upon Glass Lewis research and
recommendations in voting proxies (and will often follow such recommendations),
Hartford Investment Management may deviate from Glass Lewis's recommendations on
general policy issues or specific proxy proposals.
Glass Lewis provides comprehensive summaries of proxy proposals, publications
discussing key proxy voting issues and specific vote recommendations regarding
portfolio company proxies to assist in the proxy research process. Upon request,
portfolio managers may receive any or all of the above-mentioned research
materials to assist in the vote determination process. The final authority and
responsibility for proxy voting decisions remains with Hartford Investment
Management.
MATERIAL CONFLICT OF INTEREST IDENTIFICATION AND RESOLUTION PROCESSES
50
Hartford Investment Management's functional lines of responsibility serve to
minimize the number of, but not prevent, material conflicts of interest it faces
in voting proxies. The portfolio manager or his or her designee reviews each
proxy to assess the extent to which there may be a potential conflict of
interest. Some of these potential conflicts of interest may include:
- The issuer that is soliciting Hartford Investment Management's proxy
vote is also a client of Hartford Investment Management or an
affiliate;
- A Hartford Investment Management employee has acquired non-public
information about an issuer that is soliciting proxies;
- A Hartford Investment Management employee has a business or personal
relationship with, or financial interest in, the issuer or officer or
Board member of the issuer; and
- A Hartford Investment Management employee is contacted by management
or board member of a company regarding an upcoming proxy vote.
All personnel are required to contact Investment Compliance about any apparent
conflicts of interest, including apparent conflicts of interest involving
personal relationships. In cases of apparent conflicts of interest, the proxy
will be voted according to the recommendations set forth by Glass Lewis. Should
Investment Compliance believe other considerations should be taken into account
for a particular proxy with an apparent conflict of interest, the Proxy
Committee will be consulted to review such potential conflict and the special
considerations raised by Investment Compliance. The Proxy Committee will then
resolve the conflict and direct the vote. In order to avoid even the appearance
of impropriety, the Proxy Committee will not take Hartford Investment
Management's relationship with a company into account, and will vote the
company's proxies in the best interest of Hartford Investment Management's
clients, in accordance with the Proxy Voting Policies and Procedures. Any Proxy
Committee member who is himself or herself subject to the identified conflict
will not participate in the Proxy Committee's proxy voting activities regarding
and any discussions of the particular proxy, including the decision on whether
and how to vote the proxy in question. Investment Compliance will record and
maintain minutes for the Proxy Committee meetings to document the factors that
were considered to evidence that there was a reasonable basis for the Proxy
Committee's decision.
SITUATIONS IN WHICH HARTFORD INVESTMENT MANAGEMENT MAY NOT VOTE PROXIES
In certain instances, Hartford Investment Management may be unable to vote or
may determine not to vote a proxy on behalf of one or more clients. While not
exhaustive, the following list of considerations highlights some potential
instances in which a proxy vote might not be entered:
- Securities Lending - Hartford Investment Management's mutual funds and
third party (client) accounts may have a securities lending agent. In
this case, Hartford Investment Management may be unable to vote
proxies when the underlying securities have been lent out pursuant to
such securities lending program. In general, Hartford Investment
Management does not know when securities have been lent out and are
therefore unavailable to be voted.
- Lack of Adequate Information or Untimely Receipt of Proxy - Hartford
Investment Management may be unable to enter an informed vote in
certain circumstances due to the lack of information provided in the
proxy statement or by the issuer or other resolution sponsor, and may
abstain from voting in those instances. Proxy materials not delivered
in a timely fashion may prevent analysis or entry of a vote by voting
deadlines.
GLASS LEWIS PROXY VOTING GUIDELINES SUMMARY
ANTI-TAKEOVER MEASURES
Poison Pills (Shareholder Rights Plans). Typically Glass Lewis
recommends that shareholders vote against these plans to protect their financial
interests and ensure that they have the opportunity to consider any offer for
their shares, especially those at a premium. In certain limited circumstances,
Glass Lewis will support a limited poison pill to accomplish a particular
objective, such as the closing of an important merger, or a pill that contains
what Glass Lewis believes to be a reasonable 'qualifying offer' clause.
Right of Shareholders to Call a Special Meeting. In order to prevent
abuse and waste of corporate resources by a minority of shareholders, Glass
Lewis believes that such rights should be limited to a minimum threshold of at
least 15% of the shareholders requesting such a meeting. However, when proposals
are presented to allow shareholders the opportunity to call special meetings
that do not specify a minimum threshold, Glass Lewis will support them because
the possible abuse of the right to call shareholder meetings is outweighed by
the benefit to shareholders of having that right.
51
Shareholder Action by Written Consent. In order to prevent abuse and
waste of corporate resources by a minority of shareholders, Glass Lewis believes
that such rights should be limited to a minimum threshold of at least 15% of the
shareholders requesting action by written consent. However, when proposals are
presented to allow shareholders the opportunity to act by written consent
without specifying a minimum threshold, Glass Lewis will support them based on
the belief that shareholders are better off with this right than without it, and
because the possible abuse of the right to act by written consent is outweighed
by the benefit to shareholders of having that right.
Advance Notice Requirements for Shareholder Ballot Proposals. Glass
Lewis typically recommends that shareholders vote against these proposals.
Cumulative Voting. Glass Lewis reviews these proposals on a
case-by-case basis factoring in the independence of the board and the status of
the company's governance structure. However, Glass Lewis typically finds that
these proposals are on ballots at companies where independence is lacking and
where the appropriate checks and balances that favor shareholders are not in
place. In those instances Glass Lewis typically recommends in favor of
cumulative voting.
Supermajority Vote Requirements. Glass Lewis believes that
supermajority vote requirements act as impediments to shareholder action on
ballot items that are critical to shareholder interests.
ELECTION OF DIRECTORS
Voting Recommendation on the Basis of Independence: Glass Lewis looks
at each director nominee and examines his or her relationships with the company,
the company's executives and with other directors. The purpose of this inquiry
is to determine whether pre-existing personal, familial or financial
relationships (apart from compensation as a director) are likely to impact the
decisions of that director. Glass Lewis believes the existence of personal,
familial or financial relationships makes it difficult for a director to put the
interests of the shareholders whom she is elected to serve above her own
interests or those of the related party. Glass Lewis also believes that a
director who owns more than 20% of a company can exert disproportionate
influence on the board and, in particular, the audit committee.
In general, Glass Lewis feels that a board will be most effective in protecting
shareholders' interests if at least two-thirds of the members of the board
should consist of independent directors. In the event that more than one third
of the members are affiliated or inside directors, Glass Lewis typically(1)
recommends withholding votes from some of the inside and/or affiliated directors
in order to satisfy the two-thirds threshold it believes is appropriate.
Glass Lewis believes that only independent directors should serve on a company's
audit, compensation, nominating and governance committees.(2) Glass Lewis
typically recommends that shareholders withhold their votes for any affiliated
or inside director seeking appointment to an audit, compensation, nominating or
governance committee or who has served in that capacity in the past year.
Voting Recommendation on the Basis of Performance: Glass Lewis
disfavors directors who have a track record of poor performance in fulfilling
their responsibilities to shareholders at any company where they have held a
board or executive position. See full guidelines for criteria.
Voting Recommendation on the Basis of Experience: Glass Lewis
typically recommends that shareholders withhold votes from directors who have
served on boards or as executives of companies with track records of poor
performance, overcompensation, audit or accounting related issues and/or other
indicators of mismanagement or actions against the interests of shareholders.
Voting Recommendation on the Basis of Other Considerations: Glass
Lewis recommends shareholders withhold votes from certain types of affiliated or
inside directors under nearly all circumstances.
APPOINTMENT OF AUDITORS
----------
(1) In the case of a staggered board, if the affiliates or insiders that we
believe should not be on the board are not standing for election, Glass
Lewis will express our concern regarding those directors, but Glass Lewis
will not recommend withholding from the affiliates or insiders who are up
for election just to achieve two-thirds independence.
(2) Glass Lewis will recommend withholding votes from any member of the audit
committee who owns 20% or more of the company's stock and Glass Lewis
believes that there should be a maximum of one director (or no directors if
the committee is comprised of less than three directors) who owns 20% or
more of the company's stock on the compensation, nominating and governance
committees.
52
Glass Lewis generally supports management's recommendation regarding the
selection of an auditor except in cases where Glass Lewis believes the
independence of an auditor or the integrity of the audit has been compromised.
Where the board has not allowed shareholders to exercise their right and
responsibility to review and ratify the auditor, Glass Lewis typically
recommends withholding votes from the chairman of the audit committee of the
board and when there have been material restatements of annual financial
statements or material weakness in internal controls reported, from the entire
audit committee.
Glass Lewis typically supports audit related proposals regarding mandatory
auditor rotation when the proposal uses a reasonable period of time (usually not
less than 5-7 years).
CHANGES TO CAPITAL STRUCTURE
When analyzing a request for additional shares, Glass Lewis typically reviews
four common reasons why a company might need additional capital stock beyond
what is currently available:
- Stock Split - Glass Lewis typically considers three metrics when
evaluating whether Glass Lewis thinks a stock split is likely or
necessary. First, Glass Lewis looks at the historical stock pre-split
price, if any. Second, Glass Lewis considers the current share price
relative to the price in the prior 52 weeks to assess the current
price relative to the Company's most common trading price over that
period. Finally, Glass Lewis considers some absolute limits on stock
price that in Glass Lewis' view either always make a stock split
appropriate if desired by management or conversely would almost never
be a reasonable price at which to split a stock.
- Shareholder Defenses - Additional authorized shares could be used to
bolster the efficacy of takeover defenses such as a "poison pill." The
fact that the additional shares could be used to defend or discourage
a hostile takeover is often discussed as a reason for a requested
increase in the proxy. Glass Lewis is typically against such defenses
and, therefore, will oppose actions intended to increase the efficacy
of such defenses.
- Financing for Acquisitions - Glass Lewis looks to see whether the
company has a history of using stock for acquisitions and attempts to
determine what levels of stock have typically been required to
accomplish such transactions. Likewise, Glass Lewis looks to see
whether this is discussed as a reason for additional shares in the
proxy.
- Financing for Operations - Glass Lewis reviews the company's cash
position and its ability to secure financing through borrowing or
other means. Glass Lewis looks at the company's history of
capitalization and whether or not the company has had to use stock in
the recent past as a means of raising capital.
Issuing additional shares can dilute existing holders in limited circumstances.
Further, the availability of additional shares, where the board has discretion
to implement a poison pill, can often serve as a deterrent to interested
suitors. Accordingly, where Glass Lewis finds that the company has not detailed
a plan for use of the proposed shares, or where the number of shares far exceeds
those needed to accomplish a detailed plan, Glass Lewis typically recommends
against the authorization of additional shares. While Glass Lewis thinks that
having adequate shares to allow management to make quick decisions and
effectively operate the business is critical, Glass Lewis prefers that, for
significant transactions, management come to shareholders to justify their use
of additional shares rather than providing a blank check in the form of a large
pool of unallocated shares available for any purpose.
EQUITY BASED COMPENSATION PLANS
Glass Lewis evaluates option and other equity-based compensation plans with a
detailed model and analyst review. Glass Lewis believes that equity compensation
awards are a useful tool, when not abused, for retaining and incentivizing
employees to engage in conduct that will improve the performance of the Company.
Glass Lewis' analysis is quantitative and focused on the cost of the plan as
compared to the operating metrics of the business. Glass Lewis runs twenty
different analyses, comparing the program with both absolute limits Glass Lewis
believes are key to equity value creation and with a carefully chosen peer
group. In general, Glass Lewis' model seeks to determine whether the proposed
plan is either absolutely excessive or is more than one standard deviation away
from the average plan for the peer group on a range of criteria, including
dilution to shareholders and the projected annual cost relative to the company's
financial performance. Each of the twenty analyses (and their constituent parts)
is weighted and the plan is scored in accordance with that weight.
53
Option Exchanges. Glass Lewis views option repricing plans and option
exchange programs with great skepticism. Shareholders have substantial risk in
owning stock and, as a general matter, Glass Lewis believes that the employees,
officers and directors that receive stock options should be similarly situated
to align interests optimally.
Performance Based Options. Glass Lewis believes in performance-based
equity compensation plans for senior executives. Glass Lewis feels that
executives should be compensated with equity when their performance and that of
the company warrants such rewards. While Glass Lewis does not believe that
equity-based compensation plans for all employees need to be based on overall
company performance, Glass Lewis does support such limitations for grants to
senior executives (although some equity-based compensation of senior executives
without performance criteria is acceptable, such as in the case of moderate
incentive grants made in an initial offer of employment or in emerging
industries). Glass Lewis generally recommends that shareholders vote in favor of
performance based option requirements.
Linking Pay with Performance. Glass Lewis strongly believes that
executive compensation should be linked directly with the performance of the
business the executive is charged with managing. Glass Lewis has a proprietary
pay-for-performance model that evaluates compensation of the top five executives
at every company in the Russell 3000. Glass Lewis' model benchmarks the
compensation of these executives compared with their performance using three
peer groups for each company: an industry peer group, a smaller sector peer
group and a geographic peer group. Using a forced curve and a school
letter-grade system, Glass Lewis ranks companies according to their
pay-for-performance. Glass Lewis uses this analysis to inform Glass Lewis'
voting decisions on each of the compensation issues that arise on the ballot.
Likewise, Glass Lewis uses this analysis in Glass Lewis' evaluation of the
compensation committee's performance.
162(m) Plans. Section 162(m) of the Internal Revenue Code allows
companies to deduct compensation in excess of $1 million for the CEO and the
next four most highly compensated executive officers upon shareholder approval
of the excess compensation. Glass Lewis recognizes the value of executive
incentive programs and the tax benefit of shareholder-approved incentive plans.
Glass Lewis believes the best practice for companies is to provide reasonable
disclosure to shareholders so that they can make sound judgments about the
reasonableness of the proposed compensation plan. To allow for meaningful
shareholder review, they prefer that the proposals include: specific performance
goals, a maximum award pool, and a maximum award amount per employee. They also
believe it is important to analyze the estimated grants to see if they are
reasonable and in line with the company's peers. Glass Lewis typically
recommends against a 162(m) plan where: a company fails to provide at least a
list of performance targets; a company fails to provide one of either a total
pool or an individual maximum; or the proposed plan is excessive when compared
with the plans of the company's peers. However, where a company has a record of
reasonable pay relative to business performance, Glass Lewis is not typically
inclined to recommend against a plan even if the plan caps seem large relative
to peers because they recognize the value in special pay arrangements for
continued exceptional performance.
Director Compensation Plans. Glass Lewis believes that non-employee
directors should receive compensation for the time and effort they spend serving
on the board and its committees. In particular, Glass Lewis supports
compensation plans that include option grants or other equity-based awards,
which help to align the interests of outside directors with those of
shareholders. Director fees should be competitive in order to retain and attract
qualified individuals. However, excessive fees represent a financial cost to the
company and threaten to compromise the objectivity and independence of
non-employee directors. Therefore, a balance is required.
Limits on Executive Compensation. As a general rule, Glass Lewis
believes that shareholders should not be involved in setting executive
compensation. Such matters should be left to the board's compensation committee.
Glass Lewis views the election of compensation committee members as the
appropriate mechanism for shareholders to express their disapproval or support
of board policy on this issue. Further, Glass Lewis believes that companies
whose pay-for-performance is in line with its peers should be able to compensate
their executives in a manner that drives growth and profit without destroying
ethical values, giving consideration to their peers' comparable size and
performance. However, Glass Lewis favors performance-based compensation as an
effective means of motivating executives to act in the best interests of
shareholders. Performance-based compensation may be limited if a CEO's pay is
capped at a low level rather than flexibly tied to the performance of the
Company.
Limits on Executive Stock Options. Glass Lewis typically recommends
that Glass Lewis' clients oppose caps on executive stock options.
Linking Pay to Social Criteria. Glass Lewis believes that ethical
behavior is an important component of executive performance and should be taken
into account when evaluating performance and determining compensation. Glass
Lewis also believes, however, that the board and specifically its compensation
committee are in the best position to set policy on management
54
compensation. Shareholders can hold the board's compensation committee
accountable for the compensation awarded through the election of directors.
Full Disclosure of Executive Compensation. Glass Lewis believes that
complete, timely and transparent disclosure of information regarding
compensation is critical to allowing shareholders to evaluate the extent to
which a company's pay is keeping pace with its performance. However, Glass Lewis
is concerned when a proposal goes too far in the level of detail that it
requests for executives other than the most high-ranking leaders of the company.
While Glass Lewis is in favor of full disclosure for senior executives and Glass
Lewis views information about compensation at the aggregate level (e.g. number
of employees being paid over a certain amount or in certain categories)
potentially very useful, Glass Lewis does not believe that shareholders need or
will benefit from detailed reports about individual management employees other
than the most senior executives.
SOCIAL AND CORPORATE RESPONSIBILITY
Glass Lewis believes that disclosure regarding how a company uses its funds is
an important component of corporate accountability to shareholders. Some
campaign contributions are heavily regulated by federal, state and local laws.
Most jurisdictions have detailed disclosure laws so that information on some
contributions is publicly available. Other than where a company does not
adequately disclose information about its contributions to shareholders or where
a company has a history of abuse in the donation process, Glass Lewis believes
that the mechanism for disclosure and the standards for giving are best left to
the board. However, Glass Lewis will consider supporting shareholder proposals
seeking greater disclosures of political giving if in cases where additional
company disclosure is nonexistent or limited and there is some evidence or
credible allegation that the company is mismanaging corporate funds through
political donations or has a record of doing so.
Glass Lewis believes that labor and human resource policies are typically best
left to management and the board, absent a showing of egregious or illegal
conduct that might threaten shareholder value. It is Glass Lewis' opinion that
management is in the best position to determine appropriate practices in the
context of its business. Glass Lewis will hold directors accountable for company
decisions related to labor and employment issues. However, in situations where
there is clear evidence of practices resulting in significant economic exposure
to the company, Glass Lewis will support shareholders proposals that seek to
address labor policies.
Non-Discrimination Policies. Glass Lewis believes that human resource
policies are best left to management and the board, absent a showing of
egregious or illegal conduct that might threaten shareholder value. Management
is in the best position to determine which policies will promote the interests
of the firm across its various businesses. Board members are accountable to
shareholders for the decisions they make about these issues when they face
re-election.
Military and US Government Business Policies. Glass Lewis believes
that disclosure to shareholders of information on key company endeavors is
important. However, Glass Lewis generally does not support resolutions that call
for shareholder approval of policy statements for or against government programs
that are subject to thorough review by the Federal Government and elected
officials at the national level.
Foreign Government Business Policies. Glass Lewis believes that
worldwide business policies are best left to management and the board, absent a
showing of egregious or illegal conduct that might threaten shareholder value.
Glass Lewis believes that board members can be held accountable for these issues
when they face re-election.
Environmental Policies. Glass Lewis believes that when management and
the board have displayed disregard for environmental risks, have engaged in
egregious or illegal conduct, or have failed to adequately respond to current or
imminent environmental risks that threaten shareholder value, board members
should be held accountable when they face reelection. They believe that part of
the board's role is to ensure that management conducts a complete risk analysis
of company operations, including those that have environmental implications, and
that directors should monitor management's performance in mitigating the
environmental risks attendant with relevant operations in order to eliminate or
minimize the risks to the company and shareholders. Glass Lewis may recommend
that votes be withheld from responsible members of the governance committee when
a substantial environmental risk has been ignored or inadequately addressed, and
may in some cases recommend that votes be withheld from all directors who were
on the board when the substantial risk arose, was ignored or was not mitigated.
55
APPENDIX A
The rating information which follows describes how the rating services
mentioned presently rate the described securities. No reliance is made upon the
rating firms as "experts" as that term is defined for securities purposes.
Rather, reliance on this information is on the basis that such ratings have
become generally accepted in the investment business.
RATING OF BONDS
MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")
Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risks appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C - Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever earning any
real investment standing.
56
STANDARD AND POOR'S CORPORATION ("STANDARD & POOR'S")
AAA - Bonds rated AAA are the highest grade obligations. Capacity to pay
interest and repay principal is extremely strong.
AA - Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from AAA issues only in small degree.
A - Bonds rated A have a very strong capacity to pay interest and repay
principal although they are somewhat more susceptible to adverse effects of
changes in circumstances and economic conditions than debt in the highest rated
categories.
BBB - Bonds rated BBB and regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category then in higher rated categories.
BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC, and C is regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay interest and repay principal in accordance with the terms of the obligation.
While such debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions.
RATING OF COMMERCIAL PAPER
MOODY'S
Issuers rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics:
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structures with moderate reliance on debt
and ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Issuers rated Prime-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes in
the level of debt protection measurements and the requirement for relatively
high financial leverage. Adequate alternate liquidity is maintained.
Issuers rated Not Prime do not fall within any of the Prime rating
categories.
STANDARD & POOR'S
The relative strength or weakness of the following factors determines
whether the issuer's commercial paper is rated A-1 or A-2.
- Liquidity ratios are adequate to meet cash requirements.
57
Liquidity ratios are basically as follows, broken down by the type of issuer:
Industrial Company: acid test ratio, cash flow as a percent of current
liabilities, short-term debt as a percent of current liabilities,
short-term debt as a percent of current assets.
Utility: current liabilities as a percent of revenues, cash flow as a
percent of current liabilities, short-term debt as a percent of
capitalization.
Finance Company: current ratio, current liabilities as a percent of
net receivables, current liabilities as a percent of total
liabilities.
- The long-term senior debt rating is "A" or better; in some instances
"BBB" credits may be allowed if other factors outweigh the "BBB".
- The issuer has access to at least two additional channels of
borrowing.
- Basic earnings and cash flow have an upward trend with allowances made
for unusual circumstances.
- Typically, the issuer's industry is well established and the issuer
has a strong position within its industry.
- The reliability and quality of management are unquestioned.
RATING OF TAX EXEMPT BONDS
STANDARD & POOR'S RATINGS SERVICES. Its ratings for municipal debt have the
following definitions:
Debt rated "AAA" has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in a small degree.
Debt rated "A" has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
Debt rated "BBB" is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
Debt rated "BB", "B", "CCC" and "CC" is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "C" the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
Debt rated "BB" has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The "BB"
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BBB-" rating.
Debt rated "B" has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The "B" rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied "BB" or "BB"
rating.
Debt rated "CCC" has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The "CCC" rating category is also
used to debt subordinated to senior debt that is assigned an actual or implied
"B" or "B-" rating.
58
The rating "CC" is typically applied to debt subordinated to senior debt
that is assigned an actual or implied "CCC" rating.
The rating "C" is typically applied to debt subordinated to senior debt
which is assigned an actual or implied "CCC-" debt rating. The "C" rating may be
used to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.
The rating "CI" is reserved for income bonds on which no interest is being
paid.
Debt rated "D" is in payment default. The "D" rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The "D" rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
The ratings from "AA" to "CCC" may be modified by the addition of a plus or
minus sign to show relative standing within the major categories.
"NR" indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular type of obligation as a matter of policy.
BOND INVESTMENT QUALITY STANDARDS: Under present commercial bank
regulations issued by the Comptroller of the Currency, bonds rated in the top
four categories (AAA, A, BBB, commonly known as "Investment Grade" ratings) are
generally regarded as eligible for bank investment. In addition, the legal
investment laws of various states impose certain rating or other standards for
obligations eligible for investment by savings banks, trust companies, insurance
companies, and fiduciaries generally.
MOODY'S INVESTORS SERVICE, INC.: Its ratings for municipal bonds include
the following:
Bonds which are rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Bonds which are rated "Aa" are judged to be of high qualify by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make long-term risk appear somewhat larger than in Aaa securities.
Bonds which are rated "A" possess many favorable attributes and are to be
considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Bonds which are rated "Baa" are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Bonds which are rated "Ba" are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
Bonds which are rated "B" generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Bonds which are rated "Caa" are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Bonds which are rated "Ca" represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
59
Bonds which are rated "C" are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
RATING OF MUNICIPAL NOTES AND OTHER SHORT-TERM LOANS
STANDARD & POOR'S RATINGS SERVICES. A Standard & Poor's note rating
reflects the liquidity concerns and market access risks unique to notes. Notes
due in three years or less will likely receive a note rating. Notes maturing
beyond three years will most likely receive a long-term debt rating.
Note rating symbols are as follows:
SP-1 - Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
SP-2 - Satisfactory capacity to pay principal and interest.
SP-3 - Speculative capacity to pay principal and interest.
MOODY'S INVESTORS SERVICES. Moody's ratings for state and municipal notes
and other short-term loans are designated Moody's Investment Grade (MIG). This
distinction is in recognition of the differences between short-term credit risk
and long-term risk. Factors affecting the liquidity of the borrower and
short-term cyclical elements are critical in short-term ratings, while other
factors of major importance in bond risk may be less important over the short
run. In the case of variable rate demand obligations, two ratings are assigned:
one representing an evaluation of the degree of risk associated with scheduled
principal and interest payments, and the other representing an evaluation of the
degree of risk associated with the demand feature. The short-term rating
assigned to the demand feature of variable rate demand obligations is designated
as VMIG. Moody's ratings for short-term loans have the following definitions:
MIG-1/VMIG-1. This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support, or
demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2. This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
MIG-3/VMIG-3. This designation denotes favorable quality. All security
elements are accounted for but there is lacking the undeniable strength of
the preceding grades. Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.
MIG-4/VMIG-4. This designation denotes adequate quality. Protection
commonly regarded as required of an investment security is present and
although not distinctly or predominantly speculative, there is specific
risk.
RATING OF TAX-EXEMPT DEMAND BONDS
Standard & Poor's assigns "dual" ratings to all long-term debt issues that
have as part of their provisions a demand or double feature.
The first rating addresses the likelihood of repayment of principal and
interest as due, and the second rating addresses only the demand feature. The
long-term debt rating symbols are used for bonds to denote the long-term
maturity and the commercial paper rating symbols are used to denote the put
option (for example, "AAA/A-1+"). For the newer "demand notes", Standard &
Poor's note rating symbols, combined with the commercial paper symbols, are used
(for example, "SP-1+/A-1+").
60
INTERNATIONAL LONG-TERM CREDIT RATINGS
FITCH, INC.
The following ratings scale applies to foreign currency and local currency
ratings.
INVESTMENT GRADE
AAA
Highest credit quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.
AA
Very high credit quality. "AA" ratings denote a very low expectation of
credit risk. They indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.
A
High credit quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered strong.
This capacity may, nevertheless, be more vulnerable to changes in circumstances
or in economic conditions than is the case for higher ratings.
BBB
Good credit quality. "BBB" ratings indicate that there is currently a low
expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity. This is the lowest
investment-grade category.
SPECULATIVE GRADE
BB
Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time; however, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.
B
Highly speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met; however, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.
CCC, CC, C
High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon sustained, favorable business or
economic developments. A "CC" rating indicates that default of some kind appears
probable. "C" ratings signal imminent default.
61
DDD, DD, D
Default. The ratings of obligations in this category are based on their
prospects for achieving partial or full recovery in a reorganization or
liquidation of the obligor. While expected recovery values are highly
speculative and cannot be estimated with any precision, the following serve as
general guidelines. "DDD" obligations have the highest potential for recovery,
around 90% - 100% of outstanding amounts and accrued interest. "DD" indicates
potential recoveries in the range of 50% - 90% and "D" the lowest recovery
potential, i.e., below 50%.
Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect of repaying all obligations.
INTERNATIONAL SHORT-TERM CREDIT RATINGS
FITCH, INC.
The following ratings scale applies to foreign currency and local currency
ratings. A Short-term rating has a time horizon of less than 12 months for most
obligations, or up to three years for US public finance securities, and thus
places greater emphasis on the liquidity necessary to meet financial commitments
in a timely manner.
F1
Highest credit quality. Indicates the strongest capacity for timely payment
of financial commitments; may have an added "+" to denote any exceptionally
strong credit feature.
F2
Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the case
of the higher ratings.
F3
Fair credit quality. The capacity for timely payment of financial
commitments is adequate; however, near-term adverse changes could result in a
reduction to non-investment grade.
B
Speculative. Minimal capacity for timely payment of financial commitments,
plus vulnerability to near-term adverse changes in financial and economic
conditions.
C
High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.
D
Default. Denotes actual or imminent payment default.
NOTES TO LONG-TERM AND SHORT-TERM RATINGS: "+" or "-" may be appended to a
rating to denote relative status within major rating categories. Such suffixes
are not added to the "AAA" Long-term rating category, to categories below "CCC",
or to Short-term ratings other than "F1".
"NR" indicates that Fitch Ratings does not rate the issuer or issue in question.
62
"Withdrawn": A rating is withdrawn when Fitch Ratings deems the amount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.
Rating Watch: Ratings are placed on Rating Watch to notify investors that there
is a reasonable probability of a rating change and the likely direction of such
change. These are designated as "Positive", indicating a potential upgrade,
"Negative", for a potential downgrade, or "Evolving", if ratings may be raised,
lowered or maintained. Rating Watch is typically resolved over a relatively
short period.
A Rating Overlook indicates the direction a rating is likely to move over a one
to two-year period. Outlooks may be positive, stable or negative. A positive or
negative Rating Outlook does not imply a rating change is inevitable. Similarly,
ratings for which outlooks are "stable" could be upgraded or downgraded before
an outlook moves to positive or negative if circumstances warrant such an
action. Occasionally, Fitch Ratings may be unable to identify the fundamental
trend. In these cases, the Rating Outlook may be described as evolving.
63
PART C
OTHER INFORMATION
Item 23. Exhibits
a.(i) Articles of Incorporation dated March 19, 1996 (incorporated by
reference to Initial Registration Statement filed on April 9,
1996)
a.(ii) Articles Supplementary dated August 30, 2002 (incorporated by
reference to Post-Effective Amendment No. 23 to Registration
Statement on Form N-1A (File No. 333-02381) filed on October 25,
2002)
a.(iii) Articles Supplementary dated September 12, 2002 (incorporated by
reference to Post-Effective Amendment No. 23 to Registration
Statement on Form N-1A (File No. 333-02381) filed on October 25,
2002)
a.(iv) Articles of Amendment to the Articles of Incorporation
(incorporated by reference to Post-Effective Amendment No. 24 to
Registration Statement on Form N-1A (File No. 333-02381) filed on
December 16, 2002)
a.(v) Articles Supplementary dated June 10, 2003 (incorporated by
reference to Post-Effective Amendment No. 27 to Registration
Statement on Form N-1A (File No. 333-02381) filed on August 19,
2003)
a.(vi) Articles of Amendment dated June 10, 2003 (incorporated by
reference to Post-Effective Amendment No. 27 to Registration
Statement on Form N-1A (File No. 333-02381) filed on August 19,
2003)
a.(vii) Articles Supplementary dated August 26, 2003 (incorporated by
reference to Post-Effective Amendment No. 28 to Registration
Statement on Form N-1A (File No. 333-02381) filed on December 15,
2003)
a.(viii) Articles Supplementary dated March 10, 2004 (incorporated by
reference to Post-Effective Amendment No. 35 to Registration
Statement on Form N-1A (File No. 333-02381) filed on May 19, 2004)
a.(ix) Articles Supplementary dated August 19, 2004 (incorporated by
reference to Post-Effective Amendment No. 37 to Registration
Statement on Form N-1A (File No. 333-02381) filed on December 23,
2004)
a.(x) Articles Supplementary dated February 3, 2005 (incorporated by
reference to Post-Effective Amendment No. 39 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 11,
2005)
a.(xi) Articles Supplementary dated June 28, 2005 (incorporated by
reference to Post-Effective Amendment No. 42 to Registration
Statement on Form N-1A (File No. 333-02381) filed on July 15,
2005)
a.(xii) Articles Supplementary dated April 11, 2006 (incorporated by
reference to Post-Effective Amendment No. 48 to Registration
Statement on Form N-1A (File No. 333-02381) filed on May 17, 2006)
a.(xiii) Articles Supplementary dated June 14, 2006 (incorporated by
reference to Post-Effective Amendment No. 50 filed to Registration
Statement on Form N-1A (File No. 333-02381) on July 31, 2006)
a.(xiv) Articles Supplementary dated October 25, 2006 (incorporated by
reference to Post-Effective Amendment No. 54 to Registration
Statement on Form N-1A (File No. 333-02381) filed on November 29,
2006)
a.(xv) Articles Supplementary dated February 27, 2007 (incorporated by
reference to Post-Effective Amendment No. 59 to Registration
Statement on Form N-1A (File No. 333-02381) filed on May 30, 2007)
a.(xvi) Articles Supplementary dated May 25, 2007 (incorporated by
reference to Post-Effective Amendment No. 62 to Registration
Statement on Form N-1A (File No. 333-02381) filed on September 14,
2007)
a.(xvii) Articles of Amendment dated May 25, 2007 (incorporated by
reference to Post-Effective Amendment No. 62 to Registration
Statement on Form N-1A (File No. 333-02381) filed on September 14,
2007)
a.(xviii) Articles of Amendment dated May 25, 2007 (incorporated by
reference to Post-Effective Amendment No. 62 to Registration
Statement on Form N-1A (File No. 333-02381) filed on September 14,
2007)
a.(xix) Articles Supplementary dated August 15, 2007 (incorporated by
reference to Post-Effective Amendment No. 61 to Registration
Statement on Form N-1A (File No. 333-02381) filed on August 30,
2007)
a.(xx) Articles of Amendment dated August 15, 2007 (incorporated by
reference to Post-Effective Amendment No. 61 to Registration
Statement on Form N-1A (File No. 333-02381) filed on August 30,
2007)
a.(xxi) Articles of Amendment dated August 15, 2007 (incorporated by
reference to Post-Effective Amendment No. 61 to Registration
Statement on Form N-1A (File No. 333-02381) filed on August 30,
2007)
a.(xxii) Articles Supplementary dated September 14, 2007 (filed herewith)
b. By-Laws adopted January 24, 1996, last amended May 13, 2003
(incorporated by reference to Post-Effective Amendment No. 27 to
Registration Statement on Form N-1A (File No. 333-02381) filed on
August 19, 2003)
c. Not Applicable
d.(i) Investment Management Agreement with Hartford Investment Financial
Services Company dated March 3, 1997 (incorporated by reference to
Post-Effective Amendment No. 3 to Registration Statement on Form
N-1A (File No. 333-02381) filed on June 20, 1997)
d.(ii) Amendment No. 1 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
d.(iii) Amendment No. 2 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
d.(iv) Amendment No. 3 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
d.(v) Amendment No. 4 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
d.(vi) Amendment No. 5 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
d.(vii) Amendment No. 6 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
d.(viii) Amendment No. 7 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
d.(ix) Amendment No. 8 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 28 to Registration
Statement on Form N-1A (File No. 333-02381) filed on December 15,
2003)
d.(x) Amendment No. 9 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 39 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 11,
2005)
d.(xi) Amendment No. 10 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 39 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 11,
2005)
d.(xii) Amendment No. 11 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 41 to Registration
Statement on Form N-1A (File No. 333-02381) filed on April 29,
2005)
d.(xiii) Amendment No. 12 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 44 to Registration
Statement on Form N-1A (File No. 333-02381) filed on September 29,
2005)
d.(xiv) Amendment No. 13 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 48 to Registration
Statement on Form N-1A (File No. 333-02381) filed on May 17, 2006)
d.(xv) Amendment No. 14 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 50 to Registration
Statement on Form N-1A (File No. 333-02381) filed on July 31,
2006)
d.(xvi) Amendment No. 15 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 50 to Registration
Statement on Form N-1A (File No. 333-02381) filed on July 31,
2006)
d.(xvii) Amendment No. 16 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 59 to Registration
Statement on Form N-1A (File No. 333-02381) filed on May 30, 2007)
d.(xviii) Amendment No. 17 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 59 to Registration
Statement on Form N-1A (File No. 333-02381) filed on May 30, 2007)
d.(xix) Amendment No. 18 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 59 to Registration
Statement on Form N-1A (File No. 333-02381) filed on May 30, 2007)
d.(xx) Amendment No. 19 to Investment Management Agreement (incorporated
by reference to Post-Effective Amendment No. 59 to Registration
Statement on Form N-1A (File No. 333-02381) filed on May 30, 2007)
d.(xxi) Amendment No. 20 to Investment Management Agreement (filed
herewith)
d.(xxii) Investment Sub-Advisory Agreement with Wellington Management
Company, LLP dated March 3, 1997 (incorporated by reference to
Post-Effective Amendment No. 3 to Registration Statement on Form
N-1A (File No. 333-02381) filed on June 20, 1997)
d.(xxiii) Amendment No. 1 to Investment Sub-Advisory Agreement with
Wellington Management Company, LLP (incorporated by reference to
Post-Effective Amendment No. 25 to Registration Statement on Form
N-1A (File No. 333-02381) filed on February 28, 2003)
d.(xxiv) Amendment No. 2 to Investment Sub-Advisory Agreement with
Wellington Management Company, LLP (incorporated by reference to
Post-Effective Amendment No. 25 to Registration Statement on Form
N-1A (File No. 333-02381) filed on February 28, 2003)
d.(xxv) Amendment No. 3 to Investment Sub-Advisory Agreement with
Wellington Management Company, LLP (incorporated by reference to
Post-Effective Amendment No. 25 to Registration Statement on Form
N-1A (File No. 333-02381) filed on February 28, 2003)
d.(xxvi) Amendment No. 4 to Investment Sub-Advisory Agreement with
Wellington Management Company, LLP (incorporated by reference to
Post-Effective Amendment No. 25 to Registration Statement on Form
N-1A (File No. 333-02381) filed on February 28, 2003)
d.(xxvii) Amendment No. 5 to Investment Sub-Advisory Agreement with
Wellington Management Company, LLP (incorporated by reference to
Post-Effective Amendment No. 25 to Registration Statement on Form
N-1A (File No. 333-02381) filed on February 28, 2003)
d.(xxviii) Amendment No. 6 to Investment Sub-Advisory Agreement with
Wellington Management Company, LLP (incorporated by reference to
Post-Effective Amendment No. 25 to Registration Statement on Form
N-1A (File No. 333-02381) filed on February 28, 2003)
d.(xxix) Amendment No. 7 to Sub-Advisory Agreement with Wellington
Management Company, LLP (incorporated by reference to
Post-Effective Amendment No. 28 to Registration Statement on Form
N-1A (File No. 333-02381) filed on December 15, 2003)
d.(xxx) Amendment No. 8 to Sub-Advisory Agreement with Wellington
Management Company, LLP (incorporated by reference to
Post-Effective Amendment No. 41 to Registration Statement on Form
N-1A (File No. 333-02381) filed on April 29, 2005)
d.(xxxi) Amendment No. 9 to Sub-Advisory Agreement with Wellington
Management Company, LLP (incorporated by reference to
Post-Effective Amendment No. 50 to Registration Statement on Form
N-1A (File No. 333-02381) filed on July 31, 2006)
d.(xxxii) Amendment No. 10 to Sub-Advisory Agreement with Wellington
Management Company, LLP (incorporated by reference to
Post-Effective Amendment No. 57 to Registration Statement on Form
N-1A (File No. 333-02381) filed on February 28, 2007)
d.(xxxiii) Investment Services Agreement with Hartford Investment Management
Company dated as of March 3, 1997 (incorporated by reference to
Post-Effective Amendment No. 3 to Registration Statement on Form
N-1A (File No. 333-02381) filed on June 20, 1997)
d.(xxxiv) Amendment No. 1 to Investment Services Agreement with Hartford
Investment Management Company (incorporated by reference to
Post-Effective Amendment No. 25 to Registration Statement on Form
N-1A (File No. 333-02381) filed on February 28, 2003)
d.(xxxv) Amendment No. 2 to Investment Services Agreement with Hartford
Investment Management Company (incorporated by reference to
Post-Effective Amendment No. 25 to Registration Statement on Form
N-1A (File No. 333-02381) filed on February 28, 2003)
d.(xxxvi) Amendment No. 3 to Investment Services Agreement with Hartford
Investment Management Company (incorporated by reference to
Post-Effective Amendment No. 41 to Registration Statement on Form
N-1A (File No. 333-02381) filed on April 29, 2005)
d.(xxxvii) Amendment No. 4 to Investment Services Agreement with Hartford
Investment Management Company (incorporated by reference to
Post-Effective Amendment No. 44 to Registration Statement on Form
N-1A (File No. 333-02381) filed on September 29, 2005)
d.(xxxviii) Amendment No. 5 Investment Services Agreement with Hartford
Investment Management Company (incorporated by reference to
Post-Effective Amendment No. 50 to Registration Statement on Form
N-1A (File No. 333-02381) filed on July 31, 2006)
d.(xxxix) Amendment No. 6 Investment Services Agreement with Hartford
Investment Management Company (incorporated by reference to
Post-Effective Amendment No. 50 to Registration Statement on Form
N-1A (File No. 333-02381) filed on July 31, 2006)
d.(xl) Amendment No. 7 Investment Services Agreement with Hartford
Investment Management Company (incorporated by reference to
Post-Effective Amendment No. 54 to Registration Statement on Form
N-1A (File No. 333-02381) filed on November 29, 2006)
d.(xli) Amendment No. 8 Investment Services Agreement with Hartford
Investment Management Company (incorporated by reference to
Post-Effective Amendment No. 55 to Registration Statement on Form
N-1A (File No. 333-02381) filed on December 15, 2006)
d.(xlii) Amendment No. 9 Investment Services Agreement with Hartford
Investment Management Company (incorporated by reference to
Post-Effective Amendment No. 59 to Registration Statement on Form
N-1A (File No. 333-02381) filed on May 30, 2007)
d.(xliii) Amendment No. 10 Investment Services Agreement with Hartford
Investment Management Company (incorporated by reference to
Post-Effective Amendment No. 61 to Registration Statement on Form
N-1A (File No. 333-02381) filed on August 30, 2007)
d.(xliv) Amendment No. 11 Investment Services Agreement with Hartford
Investment Management Company (filed herewith)
d.(xlv) Investment Sub-Advisory Agreement with Oberweis Asset Management,
Inc. (incorporated by reference to Post-Effective Amendment No. 44
to Registration Statement on Form N-1A (File No. 333-02381) filed
on September 29, 2005)
d.(xlvi) Investment Sub-Advisory Agreement with Jennison Associates LLC
(incorporated by reference to Post-Effective Amendment No. 44 to
Registration Statement on Form N-1A (File No. 333-02381) filed on
September 29, 2005)
d.(xlvii) Investment Sub-Advisory Agreement with Kayne Anderson Rudnick
Investment Management, LLC (incorporated by reference to
Post-
Effective Amendment No. 50 to Registration Statement on Form N-1A
(File No. 333-02381) filed on July 31, 2006)
d.(xlviii) Investment Sub-Advisory Agreement with Metropolitan West Capital
Management, LLC (incorporated by reference to Post-Effective
Amendment No. 50 to Registration Statement on Form N-1A (File No.
333-02381) filed on July 31, 2006)
d.(xlix) Investment Sub-Advisory Agreement with SSgA Funds Management, Inc.
(incorporated by reference to Post-Effective Amendment No. 50 to
Registration Statement on Form N-1A (File No. 333-02381) filed on
July 31, 2006)
e.(i) Principal Underwriting Agreement (incorporated by reference to
Post-Effective Amendment No. 25 to Registration Statement on Form
N-1A (File No. 333-02381) filed on February 28, 2003)
e.(ii) Form of Dealer Agreement with the Distributor (incorporated by
reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form N-1A (File No. 333-02381) filed on June 27,
1996)
e.(iii) Amendment No. 1 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
e.(iv) Amendment No. 2 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
e.(v) Amendment No. 3 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
e.(vi) Assignment of Principal Underwriting Agreement from Hartford
Securities Distribution Company, Inc. to Hartford Investment
Financial Services Company dated November 1, 1998 (incorporated by
reference to Post-Effective Amendment No. 20 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 15,
2002)
e.(vii) Amendment No. 4 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
e.(viii) Amendment No. 5 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
e.(ix) Amendment No. 6 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
e.(x) Amendment No. 7 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 25 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2003)
e.(xi) Amendment No. 8 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 28 to Registration
Statement on Form N-1A (File No. 333-02381) filed on December 15,
2003)
e.(xii) Amendment No. 9 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 39 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 11,
2005)
e.(xiii) Amendment No. 10 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 39 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 11,
2005)
e.(xiv) Amendment No. 11 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 41 to Registration
Statement on Form N-1A (File No. 333-02381) filed on April 29,
2005)
e.(xv) Amendment No. 12 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 44 to Registration
Statement on Form N-1A (File No. 333-02381) filed on September 29,
2005)
e.(xvi) Amendment No. 13 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 50 to Registration
Statement on Form N-1A (File No. 333-02381) filed on July 31,
2006)
e.(xvii) Amendment No. 14 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 54 to Registration
Statement on Form N-1A (File No. 333-02381) filed on November 29,
2006)
e.(xviii) Amendment No. 15 to Principal Underwriting Agreement (incorporated
by reference to Post-Effective Amendment No. 59 to Registration
Statement on Form N-1A (File No. 333-02381) filed on May 30, 2007)
e.(xix) Amendment No. 16 to Principal Underwriting Agreement (filed
herewith)
f. Not Applicable
g. Master Custodian Agreement (incorporated by reference to
Post-Effective Amendment No. 58 to Registration Statement on Form
N-1A (File No. 333-02381) filed on March 15, 2007)
h.(i) Transfer Agency and Service Agreement between The Hartford Mutual
Funds, Inc., The Hartford Mutual Funds II, Inc, and Hartford
Administrative Services Company dated February 1, 2006
(incorporated by reference to Post-Effective Amendment No. 52 to
Registration Statement on Form N-1A (File No. 333-02381) filed on
September 15, 2006)
h.(ii) Amendment No. 1 to Transfer Agency and Service Agreement between
The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II,
Inc, and Hartford Administrative Services Company (incorporated by
reference to Post-Effective Amendment No. 54 to Registration
Statement on Form N-1A (File No. 333-02381) filed on November 29,
2006)
h.(iii) Amendment No. 2 to Transfer Agency and Service Agreement between
The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II,
Inc, and Hartford Administrative Services Company (incorporated by
reference to Post-Effective Amendment No. 55 to Registration
Statement on Form N-1A (File No. 333-02381) filed on December 15,
2006)
h.(iv) Share Purchase Agreement (incorporated by reference to
Post-Effective Amendment No. 35 to Registration Statement on Form
N-1A (File No. 333-02381) filed on May 19, 2004)
h.(v) Fund Accounting Agreement dated January 3, 2000 (incorporated by
reference to Post-Effective Amendment No. 48 to Registration
Statement on Form N-1A (File No. 333-02381) filed on May 17, 2006)
h.(vi) Amendment No. 1 to the Fund Accounting Agreement, dated July 23,
2001 (incorporated by reference to Post-Effective Amendment No. 48
to Registration Statement on Form N-1A (File No. 333-02381) filed
on May 17, 2006)
h.(vii) Second Amendment to the Fund Accounting Agreement, dated October
31, 2002 (incorporated by reference to Post-Effective Amendment
No. 48 to Registration Statement on Form N-1A (File No. 333-02381)
filed on May 17, 2006)
h.(viii) Third Amendment to the Fund Accounting Agreement, dated August 25,
2003 (incorporated by reference to Post-Effective Amendment No. 48
to
Registration Statement on Form N-1A (File No. 333-02381) filed on
May 17, 2006)
h.(ix) Fourth Amendment to the Fund Accounting Agreement, dated September
27, 2005 (incorporated by reference to Post-Effective Amendment
No. 48 to Registration Statement on Form N-1A (File No. 333-02381)
filed on May 17, 2006)
h.(x) Fifth Amendment to the Fund Accounting Agreement, dated January 1,
2006 (incorporated by reference to Post-Effective Amendment No. 48
to Registration Statement on Form N-1A (File No. 333-02381) filed
on May 17, 2006)
h.(xi) Sixth Amendment to the Fund Accounting Agreement, July 31, 2006
(incorporated by reference to Post-Effective Amendment No. 50 to
Registration Statement on Form N-1A (File No. 333-02381) filed on
July 31, 2006)
h.(xii) Seventh Amendment to the Fund Accounting Agreement, November 30,
2006 (incorporated by reference to Post-Effective Amendment No. 54
to Registration Statement on Form N-1A (File No. 333-02381) filed
on November 29, 2006)
h.(xiii) Eighth Amendment to the Fund Accounting Agreement, May 31, 2007
(incorporated by reference to Post-Effective Amendment No. 59 to
Registration Statement on Form N-1A (File No. 333-02381) filed on
May 30, 2007)
h.(xiv) Ninth Amendment to the Fund Accounting Agreement, November 30,
2007 (filed herewith)
i. Opinion and Consent of Counsel (filed herewith)
j. Not applicable
k. Not Applicable
l. Not Applicable
m. Amended and Restated Rule 12b-1 Distribution Plan for Class A,
Class B, Class C, Class R3, Class R4 and Class R5 Shares (filed
herewith)
n. Multiple Class Plan Pursuant to Rule 18f-3 (filed herewith)
o. Not Applicable
p.(i) Code of Ethics of HL Investment Advisors, LLC, Hartford Investment
Financial Services, LLC and The Hartford-Sponsored Mutual Funds
(filed herewith)
p.(ii) Code of Ethics of Hartford Investment Management Company
(incorporated by reference to Post-Effective Amendment No. 57 to
Registration Statement on Form N-1A (File No. 333-02381) filed on
February 28, 2007)
p.(iii) Code of Ethics of Wellington Management Company, LLP (incorporated
by reference to Post-Effective Amendment No. 40 to Registration
Statement on Form N-1A (File No. 333-02381) filed on February 28,
2005)
p.(iv) Code of Ethics of Kayne Anderson Rudnick Investment Management,
LLC (incorporated by reference to Post-Effective Amendment No. 50
to Registration Statement on Form N-1A (File No. 333-02381) filed
on July 31, 2006)
p.(v) Code of Ethics of Metropolitan West Capital Management, LLC
(incorporated by reference to Post-Effective Amendment No. 50 to
Registration Statement on Form N-1A (File No. 333-02381) filed on
July 31, 2006)
p.(vi) Code of Ethics of SSgA Funds Management, Inc. (incorporated by
reference to Post-Effective Amendment No. 61 to Registration
Statement on Form N-1A (File No. 333-02381) filed on August 30,
2007)
q.(i) Power of Attorney (incorporated by reference to Post-Effective
Amendment No. 57 to Registration Statement on Form N-1A (File No.
333-02381) filed on February 28, 2007)
Item 24. Persons Controlled by or Under Common Control with Registrant
As of October 31, 2007, any persons directly or indirectly under
common control with The Hartford Mutual Funds, Inc. are affiliates of,
and are controlled by, The Hartford Financial Services Group, Inc., a
Delaware corporation. Information about all such persons is
incorporated herein by reference to the Form 10-K of The Hartford
Financial Services Group, Inc. filed on February 23, 2007.
In addition, subsidiaries of The Hartford Financial Services Group,
Inc., beneficially owned as of October 31, 2007 more than 25% of the
following funds:
The Hartford Global Financial Services Fund
The Hartford LargeCap Growth Fund
The Hartford MidCap Growth Fund
The Hartford Select SmallCap Value Fund
The Hartford Strategic Income Fund
The Hartford Tax-Free New York Fund
Item 25. Indemnification
Article V of the Registrant's Articles of Incorporation dated March
19, 1996 and incorporated herein by reference to Registrant's initial
registration statement on April 9, 1996 provides in effect that the
Registrant will indemnify its officers and directors under certain
circumstances. However, in accordance with Section 17(h) and 17(i) of
the Investment Company Act of 1940 and its own terms, Article V does
not protect any person against liability to the Registrant or its
shareholders to which such Director would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his
office. The rights of indemnification contained in Article V are not
exclusive to any other rights to which any officer, director or
employee seeking indemnification may be entitled.
Subsection (b) of Section 2-418 of the General Corporation Law of
Maryland permits a corporation to indemnify any person who was or is
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation or enterprise, against
reasonable expenses (including attorneys' fees), judgments, penalties,
fines and amounts paid in settlement actually incurred by him in
connection with such action, suit or proceeding
unless it is proved that: (i) the act or omission of the person was
material to the cause of action adjudicated in the proceeding and was
committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the person actually received an improper personal
benefit of money, property or services; or (iii) with respect to any
criminal action or proceeding, the person had reasonable cause to
believe his act or omission was unlawful.
Indemnification under subsection (b) of Section 2-418 may not be made
by a corporation unless authorized for a specific proceeding after a
determination has been made that indemnification is permissible in the
circumstances because the party to be indemnified has met the standard
of conduct set forth in subsection (b). This determination shall be
made (i) by the Board of Directors by a majority vote of a quorum
consisting of directors not, at the time, parties to the proceeding,
or, if such quorum cannot be obtained, then by a majority vote of a
committee of the Board consisting solely of two or more directors not,
at the time, parties to such proceeding and who were duly designated
to act in the matter by a majority vote of the full Board in which the
designated directors who are parties may participate; (ii) by special
legal counsel selected by the Board of Directors or a committee of the
Board by vote as set forth in subparagraph (i), or, if the requisite
quorum of the full Board cannot be obtained therefor and the committee
cannot be established, by a majority vote of the full Board in which
any director who is a party may participate; or (iii) by the
stockholders (except that shares held by directors who are parties to
the specific proceeding may not be voted). A court of appropriate
jurisdiction may also order indemnification if the court determines
that a person seeking indemnification is entitled to reimbursement
under subsection (b).
Section 2-418 further provides that indemnification provided for by
Section 2-418 shall not be deemed exclusive of any rights to which the
indemnified party may be entitled; and permits a corporation to
purchase and maintain insurance on behalf of a director, officer,
employee or agent of the corporation against any liability asserted
against or incurred by such person in any such capacity or arising out
of such person's status as such whether or not the corporation would
have the power to indemnify such person against such liabilities under
Section 2-418.
Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "Act") may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a
director, officer or controlling person in connection with the
securities being registered), the Registrant undertakes that it will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the questions whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 26. Business and Other Connections of Investment Adviser
Hartford Investment Financial Services, LLC serves as investment adviser to each
of the funds included in this Registration Statement.
[Enlarge/Download Table]
Position with Hartford Investment
Name Financial Services, LLC Other Business
---- --------------------------------- --------------
Thomas M. Marra Chairman of the Board Director, President and Chief Operating
Officer of Hartford Life, Inc. ("HL, Inc.
")(1); and Chief Operating Officer and
President of The Hartford Financial Services
Group, Inc. ("The Hartford")(2)
John C. Walters Chief Executive Officer, Executive Vice President of The Hartford;
President and Manager Co-Chief Executive Officer, Co-President and
Director of Hartford Life Insurance Company
("HLIC")(3); Chief Executive Officer, Manager
and President of HL Investment Advisors,
LLC(4); and Director and President of US
Wealth Management at HL, Inc.
Tamara L. Fagely Chief Financial Officer and Chief Financial Officer and Vice President of
Controller/FINOP Hartford Administrative Services Company
("HASCO")(5) and Vice President of HLIC
Colleen B. Pernerewski Chief Investment Advisor Assistant Vice President of The Hartford;
Compliance Officer Chief Compliance Officer of Separate Accounts
of HLIC and Chief Compliance Officer of HL
Investment Advisors, LLC
William D. Wilcox Chief Compliance Officer, AML Assistant Vice President of The Hartford
Compliance Officer and Secretary
Robert M. Arena Senior Vice President / Business Line Director and Senior Vice President of HASCO;
Principal and Manager Senior Vice President of HLIC; and Manager and
Senior Vice President of HL Investment
Advisors, LLC
Kenneth A. McCullum Senior Vice President Senior Vice President and Actuary of HLIC; and
Senior Vice President of HL Investment
Advisors, LLC
Vernon J. Meyer Senior Vice President Senior Vice President of HLIC and Senior Vice
President of HL Investment Advisors, LLC
Thomas D. Jones Vice President Vice President of The Hartford, HLIC and HL
Investment Advisors, LLC
[Enlarge/Download Table]
Edward P. Macdonald Vice President and Assistant Vice President of The Hartford;
Chief Legal Officer Assistant Vice President of HLIC; Vice
President of HASCO; Chief Legal Officer,
Secretary and Vice President of HL Investment
Advisors, LLC; and Vice President of HASCO
Peter J. Michalik Vice President Vice President of HASCO and HLIC
Scott R. Sanderson Vice President/Marketing Vice President of HLIC
John N. Giamalis Treasurer Senior Vice President and Treasurer of HL
Inc., The Hartford, HASCO, HLIC, and HL
Investment Advisors; and Treasurer of Hartford
Investment Management
Glen J. Kvadus Assistant Secretary
Todd G. Picken Assistant Treasurer Assistant Treasurer and Assistant Vice
President of HL Inc., HASCO and HL Investment
Advisors, LLC; Assistant Treasurer and Vice
President of HLIC; Assistant Treasurer and
Vice President of The Hartford; and Assistant
Treasurer of Hartford Investment Management
Company(6)
Marilyn Orr Assistant Vice President Assistant Vice President of HLIC
Alice Pellegrino Assistant Vice President Assistant Vice President HASCO, HLIC and HL
Investment Advisors, LLC
Elizabeth L. Schroeder Assistant Vice President Assistant Vice President of HLIC and HL
Investment Advisors, LLC
Denise A. Settimi Assistant Vice President Chief Operating Officer and Assistant Vice
President of HASCO; and Assistant Vice
President of HLIC
Brian Murphy Manager Executive Vice President of HLIC
(1) The principal business address for HL, Inc. is 200 Hopmeadow Street,
Simsbury, CT 06089.
(2) The principal business address for The Hartford is Hartford Plaza,
Hartford, CT 06115.
(3) The principal business address for HLIC is 200 Hopmeadow Street, Simsbury,
CT 06089.
(4) The principal business address for HL Investment Advisors, LLC is 200
Hopmeadow Street, Simsbury, CT 06089.
(5) The principal business address for HASCO is 500 Bielenberg Drive, Woodbury,
MN 55125.
(6) The principal business address for Hartford Investment Management is 55
Farmington Avenue, Hartford, CT 06105.
Item 27. Principal Underwriters
Hartford Investment Financial Services, LLC ("HIFSCO") is an indirect
wholly owned subsidiary of The Hartford Financial Services Group, Inc. HIFSCO is
also the principal underwriter for The Hartford Mutual Funds II, Inc.
The directors and principal officers of HIFSCO and their position with the
Registrant are set forth below:
[Enlarge/Download Table]
Name and Principal
Business Address Positions and Offices with Underwriter Position and Offices with Registrant
------------------ -------------------------------------- ------------------------------------
Thomas M. Marra(1) Chairman of the Board None
John C. Walters(2) Chief Executive Officer, President and Chief Executive Officer
President and Manager
Tamara L. Fagely(3) Chief Financial Officer and Vice President, Treasurer and Controller
Controller/FINOP
Colleen B. Pernerewski(2) Chief Investment Advisor None
Compliance Officer
William D. Wilcox(2) Chief Compliance Officer, AML None
Compliance Officer and Secretary
Robert M. Arena(2) Senior Vice President / Business Line Vice President
Principal and Manager
Kenneth A. McCullum(2) Senior Vice President None
Vernon J. Meyer(2) Senior Vice President Vice President
Thomas D. Jones(2) Vice President None
Edward P. Macdonald(2) Vice President and Chief Legal Officer Vice President, Secretary and Chief
Legal Officer
Peter J. Michalik(2) Vice President None
Scott R. Sanderson(2) Vice President/Marketing None
John N. Giamalis(1) Treasurer None
Glen J. Kvadus(2) Assistant Secretary None
Todd G. Picken(1) Assistant Treasurer None
Marilyn Orr(3) Assistant Vice President Assistant Treasurer
Alice Pellegrino(2) Assistant Vice President None
Elizabeth L. Schroeder(2) Assistant Vice President None
Denise A. Settimi(3) Assistant Vice President Vice President
Brian Murphy(2) Manager None
(1) The principal business address is 690 Asylum Avenue, Hartford, CT 06115.
(2) The principal business address is 200 Hopmeadow Street, Simsbury, CT 06089.
(3) The principal business address is 500 Bielenberg Drive, Woodbury, MN 55125.
Item 28. Location of Accounts and Records
Books or other documents required to be maintained by the Registrant by
Section 31(a) of the Investment Company Act of 1940 and the rules promulgated
thereunder are maintained by the Registrant's custodian, State Street Bank and
Trust Company, 225 Franklin Street, Boston, MA 02110 and the Registrant's
transfer agent, Hartford Administrative Services Company, 500 Bielenberg Drive,
Woodbury, Minnesota 55125. Registrant's financial ledgers and other corporate
records are maintained at its offices at the Hartford Life Insurance Companies,
200 Hopmeadow Street, Simsbury, CT 06089.
Item 29. Management Services
Not Applicable
Item 30. Undertakings
Not Applicable
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this registration statement under rule
485(b) under the Securities Act and has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Hartford, State of Connecticut, on the 29th day of November, 2007.
THE HARTFORD MUTUAL FUNDS, INC.
By: /s/ John C. Walters
------------------------------------
John C. Walters
Its: President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
[Enlarge/Download Table]
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Tamara L. Fagely Controller & Treasurer November 29, 2007
------------------------------------- (Chief Accounting Officer &
Tamara L. Fagely Chief Financial Officer)
* Director November 29, 2007
-------------------------------------
Lynn S. Birdsong
* Chairman of the Board November 29, 2007
------------------------------------- and Director
Robert M. Gavin, Jr.
* Director November 29, 2007
-------------------------------------
Duane E. Hill
* Director November 29, 2007
-------------------------------------
Sandra S. Jaffee
* Director November 29, 2007
-------------------------------------
William P. Johnston
[Download Table]
* Director November 29, 2007
-------------------------------------
Lemma W. Senbet
* Director November 29, 2007
-------------------------------------
Thomas M. Marra
* Director November 29, 2007
-------------------------------------
Phillip O. Peterson
* Director November 29, 2007
-------------------------------------
Lowndes A. Smith
* Director November 29, 2007
-------------------------------------
David M. Znamierowski
/s/ Edward P. Macdonald November 29, 2007
-------------------------------------
* By Edward P. Macdonald
Attorney-in-fact
* Pursuant to Power of Attorney (incorporated by reference to Post-Effective
Amendment No. 57 to Registration Statement on Form N-1A (File No.
333-02381) filed on February 28, 2007)
EXHIBIT INDEX
a.(xxii) Articles Supplementary dated September 14, 2007
d.(xxi) Amendment No. 20 to Investment Management Agreement
d.(xliv) Amendment No. 11 Investment Services Agreement with Hartford
Investment Management Company
e.(xix) Amendment No. 16 to Principal Underwriting Agreement
h.(xiv) Ninth Amendment to the Fund Accounting Agreement, November 30, 2007
i. Opinion and Consent of Counsel
m. Amended and Restated Rule 12b-1 Distribution Plan for Class A, Class
B, Class C, Class R3, Class R4 and Class R5 Shares
n. Multiple Class Plan Pursuant to Rule 18f-3
p.(i) Code of Ethics of HL Investment Advisors, LLC, Hartford Investment
Financial Services, LLC and The Hartford-Sponsored Mutual Funds
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘485BPOS’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Effective on: | | 11/30/07 | | 1 | | 215 |
| Filed on: | | 11/29/07 | | 1 | | 214 |
| | 11/7/07 | | 154 |
| | 10/31/07 | | 154 | | 207 | | | 24F-2NT, N-CSR, NSAR-B, NSAR-B/A |
| | 9/30/07 | | 14 | | 161 |
| | 9/14/07 | | 196 | | 215 | | | 485APOS |
| | 8/30/07 | | 196 | | 206 | | | 485BPOS, N-PX |
| | 8/15/07 | | 196 | | | | | 497 |
| | 5/31/07 | | 6 | | 205 | | | 485BPOS |
| | 5/30/07 | | 196 | | 205 | | | 485BPOS |
| | 5/25/07 | | 196 | | | | | 497 |
| | 3/15/07 | | 204 | | | | | 485APOS, 497 |
| | 2/28/07 | | 200 | | 214 | | | 485BPOS |
| | 2/27/07 | | 196 |
| | 2/23/07 | | 207 |
| | 1/1/07 | | 22 | | 167 |
| | 12/31/06 | | 21 | | 166 |
| | 12/15/06 | | 201 | | 204 | | | 485BPOS |
| | 11/30/06 | | 205 | | | | | 485BPOS, 497 |
| | 11/29/06 | | 196 | | 205 | | | 485BPOS |
| | 10/31/06 | | 151 | | 157 | | | 24F-2NT, N-CSR, NSAR-B |
| | 10/25/06 | | 196 |
| | 9/15/06 | | 204 | | | | | 485APOS |
| | 7/31/06 | | 196 | | 206 | | | 485BPOS, N-Q |
| | 6/14/06 | | 196 |
| | 6/6/06 | | 151 |
| | 5/17/06 | | 196 | | 205 | | | 485APOS |
| | 4/11/06 | | 196 | | | | | DEFA14A |
| | 2/1/06 | | 204 | | | | | 497 |
| | 1/1/06 | | 205 |
| | 9/29/05 | | 198 | | 203 | | | 485BPOS, N-Q |
| | 9/27/05 | | 205 |
| | 7/15/05 | | 196 | | | | | 485APOS, DEF 14A |
| | 6/28/05 | | 196 |
| | 4/29/05 | | 198 | | 203 | | | 485BPOS |
| | 2/28/05 | | 206 | | | | | 485BPOS |
| | 2/11/05 | | 195 | | 203 | | | 485APOS |
| | 2/3/05 | | 195 |
| | 2/1/05 | | 154 |
| | 12/23/04 | | 195 | | | | | 485APOS |
| | 8/19/04 | | 195 |
| | 8/16/04 | | 19 | | 170 |
| | 5/19/04 | | 195 | | 204 | | | 485BPOS, 497 |
| | 4/26/04 | | 154 |
| | 3/10/04 | | 195 |
| | 2/27/04 | | 14 | | 114 | | | 485BPOS |
| | 12/15/03 | | 195 | | 203 | | | 485APOS |
| | 8/26/03 | | 195 |
| | 8/25/03 | | 204 |
| | 8/19/03 | | 195 | | 197 | | | 485BXT |
| | 6/10/03 | | 195 |
| | 5/13/03 | | 197 |
| | 2/28/03 | | 197 | | 203 | | | 485BPOS |
| | 2/27/03 | | 14 | | 114 |
| | 12/16/02 | | 195 | | | | | 485APOS |
| | 10/31/02 | | 204 | | | | | 24F-2NT, N-30D, NSAR-B, NSAR-B/A |
| | 10/25/02 | | 195 | | | | | 485BPOS, 497 |
| | 9/12/02 | | 195 |
| | 8/30/02 | | 195 | | | | | 497 |
| | 2/15/02 | | 202 | | | | | 485BPOS |
| | 7/23/01 | | 204 |
| | 1/3/00 | | 204 | | | | | 497 |
| | 11/1/98 | | 202 |
| | 6/20/97 | | 197 | | 200 | | | 485A24F |
| | 3/3/97 | | 197 | | 200 | | | NSAR-B |
| | 12/9/96 | | 168 |
| | 6/27/96 | | 202 | | | | | N-1A EL/A |
| | 4/9/96 | | 195 | | 207 | | | N-1A EL, N-8A |
| | 3/21/96 | | 134 | | 173 |
| | 3/19/96 | | 195 | | 207 |
| | 1/24/96 | | 197 |
| List all Filings |
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