SCHRODER CAPITAL FUNDS, POS AMI, 2000-02-29

SCHRODER CAPITAL FUNDS
POS AMI, 2000-02-29

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As filed with the Securities and Exchange Commission on February 29, 2000
Investment Company Act File No. 811-9130

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 17 [X]

SCHRODER CAPITAL FUNDS
P.O. Box 1713
Boston, Massachusetts 02105

Alexandra Poe, Esq.
Schroder Investment Management North America Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019

Copies to:
Julie Tedesco, Esq.
State Street Bank and Trust Company
P.O. Box 1713
Boston, Massachusetts 02105-1713

Timothy W. Diggins, Esq.
Ropes & Gray
One International Place
Boston, Massachusetts 02110-2624

It is proposed that this filing will become effective (check appropriate box):

If appropriate, check the following box:

| | This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

EXPLANATORY NOTE: This Registration Statement is being filed by Registrant
pursuant to Section 8(b) of the Investment Company Act of 1940, as amended.
Beneficial interests in the series of Registrant are not being registered
under the Securities Act of 1933, as amended,

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because such interests will be issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of that Act. Investments in Registrant's series may only be made
by certain institutional investors, whether organized within or without the
United States (excluding individuals, S corporations, partnerships, and
grantor trusts beneficially owned by any individuals, S corporations or
partnerships). This Registration Statement does not constitute an offer to
sell, or the solicitation of an offer to buy any beneficial interests in any
series of Registrant.

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CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
- --------------------------------------------------------------------------------

SCHRODER CAPITAL FUNDS

SCHRODER ASIAN GROWTH FUND PORTFOLIO
SCHRODER JAPAN PORTFOLIO

MARCH 1, 2000

Schroder Capital Funds (the "Trust"), acting through, Schroder Fund Advisors
Inc. (the "Placement Agent"), is making a private placement of shares of
beneficial interest ("Portfolio Interests") in separate series (each, a
"Portfolio"), each with a distinct investment objective and policies. The Trust
is registered as an open-end investment company under the Investment Company Act
of 1940, as amended (the "1940 Act"). Currently, the Trust offers three
Portfolios, two of which are described in this Confidential Private Placement
Memorandum (the "Memorandum"): Schroder Asian Growth Fund Portfolio and Schroder
Japan Portfolio.

Schroder Investment Management North America Inc. ("Schroder") manages each
Portfolio. Portfolio Interests are offered by the Placement Agent solely in
private placement transactions to qualified investors subject to the terms
contained in this Memorandum.

THE PORTFOLIO INTERESTS HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES. ACCORDINGLY, THE PORTFOLIO INTERESTS MAY NOT BE
OFFERED, SOLD OR TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, ANY U.S. PERSONS EXCEPT IN CERTAIN TRANSACTIONS THAT ARE EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE 1933 ACT. THE PORTFOLIO INTERESTS ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
MEMORANDUM IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

8197858

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TABLE OF CONTENTS

GENERAL CONSIDERATIONS 1

Offering to Accredited Investors 1
Confidential Memorandum 1
Private Placement in the United States 1

SUMMARY INFORMATION 2

Schroder Asian Growth Fund Portfolio 2
Schroder Japan Portfolio 3

OTHER INVESTMENT STRATEGIES AND RISKS 4

Risks of Investing in the Portfolios 5
Other Investment Strategies and Techniques 7

MANAGEMENT OF THE PORTFOLIOS 8

INTERESTHOLDER INFORMATION 9

How Portfolio Interests are Priced 9
Purchase of Portfolio Interests 10
Purchasing Interests in Exchange for Securities 11
Redemption of Portfolio Interests 11
Taxes 12

OTHER INFORMATION 12

Capital Structure 12
Restrictions On Transfer 12
Statement of Additional Information 12

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GENERAL CONSIDERATIONS

OFFERING TO ACCREDITED INVESTORS

The Trust, through the Placement Agent, is making a private placement of
Portfolio Interests in the Portfolios to a limited number of U.S. institutional
investors that are "accredited investors" within the meaning of Rule 501 of
Regulation D under the 1933 Act (each, an "Accredited Investor").

No sale of Portfolio Interests will be made in the United States or to any U.S.
Person (as such terms are defined in Regulation S under the 1933 Act) that does
not execute and deliver, for the benefit of the Trust and the Placement Agent, a
Subscription Agreement (the "Subscription Agreement") completed in a manner
acceptable to the Trust and the Placement Agent.

Portfolio Interests are being offered subject to prior sale and to withdrawal,
cancellation or modification of the offering. The Trust and the Placement Agent
reserve the right to accept or reject any offer to purchase Portfolio Interests
at any time prior to the termination of the offering.

CONFIDENTIAL MEMORANDUM

This Memorandum is confidential and has been prepared and submitted for use
solely in connection with the consideration of the purchase of Portfolio
Interests in the Portfolios by a limited group of sophisticated accredited
investors in a private placement. You should not use it for any other purpose,
and it should not be reproduced or transferred to any other person without the
consent of the Trust and the Placement Agent. By accepting delivery of this
Memorandum, you agree to return it and all related documents to the Placement
Agent in the event you do not purchase any Portfolio Interests in a Portfolio.

No person has been authorized to give any information or to make any
representations other than those contained in this Memorandum and the Trust's
Statement of Additional Information relating to the Portfolios (the "SAI"),
which is available from the Placement Agent and incorporated herein by
reference, and the Subscription Agreement in connection with the offering and
sale of Portfolio Interests. You should not rely upon any other information or
representations as having been authorized by the Trust or the Placement Agent.
The information contained in this Memorandum is correct as of the date hereof,
but may change subsequent to the date hereof.

The contents of this Memorandum and the SAI should not be considered to be legal
or tax advice and you should consult with your own legal counsel and advisers as
to all matters concerning an investment in a Portfolio. You must rely on your
own evaluation of the investment and the terms of the offering, including the
merits and risks involved, in making an investment decision with respect to a
Portfolio.

PRIVATE PLACEMENT IN THE UNITED STATES

The Portfolio Interests are not being registered under the 1933 Act or under any
of the securities laws of any state or other political subdivision of the United
States in reliance upon the offering and sale being exempt from registration in
the United States as a private placement. Accordingly, Portfolio Interests are
offered only to investors who have the qualifications necessary to permit the
Portfolio Interests to be sold in reliance upon the private placement exemption.
You and your advisors must have such knowledge and experience in business and
financial matters as will enable you to evaluate the merits and risks of a
proposed investment in a Portfolio and to bear the economic risk of the
investment. In the Subscription Agreement, you must confirm that you are
purchasing the Portfolio Interests for investment purposes only and not with a
view to, or for resale in connection with, any distribution or other disposition
of the Portfolio Interests and must represent that you are an Accredited
Investor.

Neither this Memorandum, the SAI nor the Subscription Agreement constitutes an
offer to sell or the solicitation of an offer to buy Portfolio Interests in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. In addition, this Memorandum constitutes an
offer only if a Memorandum

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Identification Number appears in red ink in the appropriate space on the cover
hereof.

SUMMARY INFORMATION

The following summary identifies the investment objective, principal investment
strategies, and principal risks of each Portfolio. The investment objective of a
Portfolio may be changed only with approval of the Portfolio's investors
("Interestholder"). The policies of a Portfolio may, unless otherwise
specifically stated, be changed by the Trustees of the Trust without a vote of
the Portfolio's Interestholders.

Because of the differences in objectives and strategies, each Portfolio will
achieve different investment returns and is subject to varying degrees of market
and financial risk. There is no assurance that either of the Portfolios will
achieve its stated objective. Further information about each Portfolio is
contained in the SAI.

SCHRODER ASIAN GROWTH FUND PORTFOLIO

- - INVESTMENT OBJECTIVE. Long-term capital appreciation through investment
primarily in equity securities of Asian companies.

- - PRINCIPAL INVESTMENT STRATEGIES. As a matter of fundamental policy, under
normal market conditions the Portfolio invests at least 65% of its total
assets in equity securities of Asian companies. "Asian companies" include:
(1) companies that are organized under the laws of China, Hong Kong SAR,
India, Indonesia, Korea, Malaysia, Pakistan, the Philippines, Singapore,
Sri Lanka, Taiwan, or Thailand, or any other countries in the Asian region
located south of the border of the former Soviet Union, east of the borders
of Afghanistan and Iran, north of the Australian sub-continent, and west of
the International Date Line and that, in the future, permit foreign
investors to participate in their stock markets (collectively, the "Asian
countries," and each, an "Asian country"); and (2) companies, wherever
organized, that are determined by Schroder at the time of investment,
either: (a) to derive at least 75% of their revenues from goods produced or
sold, investments made, or services performed in Asian countries; or (b) to
maintain at least 75% of their assets in Asian countries. The Portfolio
invests in a variety of equity securities, including common and preferred
stocks, securities convertible into common and preferred stocks, and
warrants to purchase common and preferred stocks.

- - INVESTMENT STRATEGIES. The Portfolio normally invests directly in equity
securities of companies located in at least five Asian countries.

The Portfolio also may do the following:

- - Invest in equity interests in trusts, partnerships, joint ventures, or
similar enterprises, and American or Global Depositary Receipts and other
similar instruments providing for indirect investment in securities of
foreign issuers.

- - Invest indirectly in equity securities by investing in other investment
companies or similar pooled vehicles that invest primarily in equity
securities of Asian companies.

- - Invest up to 10% of its total assets in debt securities of governments or
governmental agencies of Asian countries, as well as of Asian companies.

- - PRINCIPAL RISKS.

- - INVESTMENTS IN ASIA. Because the Portfolio's investments are concentrated
in Asian countries, the Portfolio is particularly sensitive to political,
economic, market and other factors affecting those countries and issuers in
those countries, which will determine the values of the Portfolio's
investments. Significant economic and political volatility in certain Asian
countries such as those experienced recently, could have an adverse effect
on

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the value of the Portfolio's investments in those countries. Due to its
concentration in Asia (which may involve concentration in particular Asian
countries), the Portfolio will generally be subject to higher levels of
risks and volatility than if it invested in a more geographically
diversified portfolio.

- - INVESTMENTS IN MALAYSIA. The Portfolio's investments include securities
issued by Malaysian companies. Currency restrictions imposed by the
Malaysian government impose a significant exit levy on repatriated
investments. In addition, changes to these restrictions by the Malaysian
government may make it difficult for the Portfolio to determine the fair
value of such securities (or of the Malaysian currency in which they are
denominated) for purposes of computing the Portfolio's net asset value.

- - FOREIGN SECURITIES. Investments in foreign securities entail risks not
present in domestic investments including, among others, risks related to
political or economic instability, currency exchange, and taxation.

- - EMERGING MARKETS. The Portfolio may invest in "emerging market" countries
whose securities markets may experience heightened levels of volatility.
The risks of investing in emerging markets include greater political and
economic uncertainties than in foreign developed markets, currency transfer
restrictions, a more limited number of potential buyers, and an emerging
market country's dependence on revenue from particular commodities or
international aid. Additionally, the securities markets and legal systems
in emerging market countries may only be in a developmental stage and may
provide few, or none, of the advantages or protections of markets or legal
systems available in more developed countries. Emerging market countries
may experience extremely high levels of inflation, which may adversely
affect those countries' economies, currencies and securities markets.

- - NON-DIVERSIFIED MUTUAL FUND. The Portfolio is a "non-diversified" mutual
fund, and will invest its assets in a more limited number of issuers than
may diversified investment companies. To the extent the Portfolio focuses
on fewer issuers, its risk of loss increases if the market value of a
security declines or if an issuer is not able to meet its obligations.

- - EQUITY SECURITIES. Another risk of investing in the Portfolio is the risk
that the value of the equity securities in which the Portfolio invests will
fall, or will not appreciate as anticipated by Schroder, due to factors
that adversely affect markets generally or particular companies in the
portfolio.

- - SMALL COMPANIES. The Portfolio may invest a substantial portion of its
assets in small companies, which tend to be more vulnerable to adverse
developments than larger companies. Small companies may have limited
product lines, markets, or financial resources, or may depend on a limited
management group. Their securities may trade infrequently and in limited
volumes. As a result, the prices of these securities may fluctuate more
than the prices of securities of larger, more widely traded companies.
Also, there may be less publicly available information about small
companies or less market interest in their securities as compared to larger
companies, and it may take longer for the prices of the securities to
reflect the full value of their issuers' earnings potential or assets.

SCHRODER JAPAN PORTFOLIO

- - INVESTMENT OBJECTIVE. Long-term capital appreciation through investment
primarily in equity securities of Japanese companies.

- - PRINCIPAL INVESTMENT STRATEGIES. As a matter of fundamental policy,
"Japanese companies" are: (1) companies that are organized under the laws
of Japan; and (2) companies, wherever organized, that are determined by
Schroder at the time of investment, either: (a) to derive at least 75% of
their revenues from goods produced or sold, investments made, or services
performed in Japan; or (b) to maintain at least 75% of their assets in
Japan. The Portfolio invests in a variety of equity securities, including
common and preferred stocks, securities convertible into common and
preferred stocks, and warrants to purchase common and preferred stocks.

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Under normal market conditions the Portfolio invests at least 65% of its
total assets in equity securities of Japanese companies.

The Portfolio also may do the following:

- - Invest indirectly in equity securities by investing in other investment
companies or similar pooled vehicles that invest primarily in equity
securities of Japanese companies.

- - Invest up to 10% of its total assets in debt securities of the Japanese
government or of Japanese governmental agencies or of Japanese companies.

- - PRINCIPAL RISKS.

- - INVESTMENTS IN JAPAN. Because the Portfolio's investments are concentrated
in Japan, political, economic, market and other factors affecting Japan
will determine the values of the Portfolio's investments. Recent
significant economic and political volatility in Japan may continue and
could have an adverse effect on the value of the Portfolio's investments.

- - SMALL COMPANIES. The Portfolio invests primarily in small companies, which
tend to be more vulnerable to adverse developments than larger companies.
Small companies may have limited product lines, markets, or financial
resources, or may depend on a limited management group. Their securities
may trade infrequently and in limited volumes. As a result, the prices of
these securities may fluctuate more than the prices of securities of
larger, more widely traded companies. Also, there may be less publicly
available information about small companies or less market interest in
their securities as compared to larger companies, and it may take longer
for the prices of the securities to reflect the full value of their
issuers' earnings potential or assets.

OTHER INVESTMENT STRATEGIES AND RISKS

The Portfolios may not achieve their investment objective in all circumstances.
The following provides more detail about each Portfolio's principal risks and
the circumstances that could adversely affect the value of Portfolio Interests
or their total return. You could lose money by investing.

RISKS OF INVESTING IN THE PORTFOLIOS

- - INVESTMENT IN ASIA. Certain Asian markets have experienced devaluation
and/or significant volatility during the past several years. Schroder
cannot predict whether, when and to what extent the Asian markets will
fully recover.

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Additionally, Schroder Asian Growth Fund Portfolio may invest more than 25%
of its total assets in issuers located in any one Asian country. To the
extent that the Portfolio focuses its investments in any Asian countries,
the Portfolio will be susceptible to adverse political, economic and market
developments in those countries. Similarly, Schroder Japan Portfolio will
be susceptible to adverse political, economic and market developments in
Japan because of its concentration in equity investments in Japan.

- - FOREIGN SECURITIES AND CURRENCIES. Except as otherwise noted in this
Memorandum, there is no limit on the amount of a Portfolio's assets that
may be invested in foreign securities. Investments in foreign securities
entail certain risks. There may be a possibility of nationalization or
expropriation of assets, confiscator taxation, political or financial
instability, and diplomatic developments that could affect the value of a
Portfolio's investments in certain foreign countries. Since foreign
securities normally are denominated and traded in foreign currencies, the
values of a Portfolio's assets may be affected favorably or unfavorably by
currency exchange rates, currency exchange control regulations, foreign
withholding taxes, and restrictions or prohibitions on the repatriation of
foreign currencies. There may be less information publicly available about
a foreign issuer than about a U.S. issuer, and foreign issuers are not
generally subject to accounting, auditing, and financial reporting
standards and practices comparable to those in the United States. The
securities of some foreign issuers are less liquid and at times more
volatile than securities of comparable U.S. issuers. Foreign brokerage
commissions and other fees are also generally higher than in the United
States. Foreign settlement procedures and trade regulations may involve
certain risks (such as delay in payment or delivery of securities or in the
recovery of a Portfolio's assets held abroad) and expenses not present in
the settlement of domestic investments.

In addition, legal remedies available to investors in certain foreign
countries may be more limited than those available to investors in the
United States or in other foreign countries. The willingness and ability of
foreign governmental entities to pay principal and interest on government
securities depends on various economic factors, including the issuer's
balance of payments, overall debt level, and cash-flow considerations
related to the availability of tax or other revenues to satisfy the
issuer's obligations. If a foreign governmental entity defaults on its
obligations on the securities, a Portfolio may have limited recourse
available to it. The laws of some foreign countries may limit a Portfolio's
ability to invest in securities of certain issuers located in those
countries.

If a Portfolio purchases securities denominated in foreign currencies, a
change in the value of any such currency against the U.S. dollar will
result in a change in the U.S. dollar value of a Portfolio's assets and a
Portfolio's income available for distribution. Officials in foreign
countries may from time to time take actions in respect of their currencies
which could significantly affect the value of a Portfolio's assets
denominated in those currencies or the liquidity of such investments. For
example, a foreign government may unilaterally devalue its currency against
other currencies, which would typically have the effect of reducing the
U.S. dollar value of investments denominated in that currency. A foreign
government may also limit the convertibility or repatriation of its
currency or assets denominated in its currency, which would adversely
affect the U.S. dollar value and liquidity of investments denominated in
that currency. In addition, although at times most of a Portfolio's income
may be received or realized in these currencies, a Portfolio will be
required to compute and distribute its income in U.S. dollars. As a result,
if the exchange rate for any such currency declines after a Portfolio's
income has been earned and translated into U.S. dollars but before payment
to Interestholders, a Portfolio could be required to liquidate portfolio
securities to make such distributions. Similarly, if a Portfolio incurs an
expense in U.S. dollars and the exchange rate declines before the expense
is paid, a Portfolio would have to convert a greater amount of U.S. dollars
to pay for the expense at that time than it would have had to convert at
the time a Portfolio incurred the expense. A Portfolio may, but is not
required to, buy or sell foreign currencies and options and futures
contracts on foreign currencies for hedging purposes in connection with its
foreign investments.

Special tax considerations apply to foreign securities. In determining
whether to invest a Portfolio's assets in debt securities of foreign
issuers, Schroder considers the likely impact of foreign taxes on the net
yield available to a Portfolio and its Interestholders. Income and/or gains
received by a Portfolio from sources within foreign countries may be
reduced by withholding and other taxes imposed by such countries. Tax
conventions between

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certain countries and the United States may reduce or eliminate such taxes.
Any such taxes paid by a Portfolio will reduce its income available for
distribution to Interestholders. In certain circumstances, a Portfolio may
be able to pass through to Interestholders credits for foreign taxes paid.

- - EMERGING MARKETS. Each Portfolio intends to invest in securities of issuers
in Asian emerging market countries and may at times invest a substantial
portion of its assets in such securities. The prices of securities of
issuers in emerging market countries are subject to greater volatility than
those of issuers in more developed countries. Investments in emerging
market countries may present market, credit, currency, liquidity, legal,
political, and other risks different from, or greater than, the risks of
investing in developed foreign countries. See "Foreign Securities and
Currencies" above. For example, the securities markets and legal systems in
emerging market countries may only be in a developmental stage and may
provide few, or none, of the advantages or protections of markets or legal
systems available in more developed countries. Although many of the
securities in which a Portfolio may invest are traded on securities
exchanges, they may trade in limited volume, and the exchanges may not
provide all of the conveniences or protections provided by securities
exchanges in more developed markets. Each Portfolio may also invest a
substantial portion of its assets in securities traded in the
over-the-counter markets in Asian countries and not on any exchange, which
may affect the liquidity of the investment and expose the Portfolio to the
credit risk of its counterparties in trading those investments. Emerging
market countries may experience extremely high rates of inflation, which
may adversely affect these countries' economies and securities markets.

- - DEBT SECURITIES. Each Portfolio may invest in debt securities, which are
subject to the risk of fluctuation of market value in response to changes
in interest rates and the risk that the issuer may default on the timely
payment of principal and interest. Additionally, each Portfolio may invest
in junk bonds, which are lower-quality, high-yielding debt securities rated
below Baa or BBB by Moody's Investors Services Inc. or Standard & Poor's
Ratings Services (or, if they are unrated, which Schroder believes to be of
comparable quality). See the SAI for further descriptions of securities
ratings assigned by Moody's and Standard & Poor's. Lower-rated debt
securities are predominantly speculative and tend to be more susceptible
than other debt securities to adverse changes in the financial condition of
the issuer, general economic conditions, or an unanticipated rise in
interest rates, which may affect an issuer's ability to pay interest and
principal. This would likely make the values of the securities held by a
Portfolio more volatile and could limit the Portfolio's ability to
liquidate its securities. Changes by recognized rating services in their
ratings of any fixed-income security and in the perceived ability of an
issuer to make payments of interest and principal also may affect the value
of these investments.

- - RISKS OF SMALLER CAPITALIZATION COMPANIES. Each Portfolio may invest in
companies that are smaller and less well known than larger, more widely
held companies. Small and mid-cap companies may offer greater opportunities
for capital appreciation than larger companies, but may also involve
certain special risks. They are more likely than larger companies to have
limited product lines, markets or financial resources, or to depend on a
small, inexperienced management group. Securities of smaller companies may
trade less frequently and in lesser volume than more widely held securities
and their values may fluctuate more sharply than other securities. They may
also trade in the over-the-counter market or on a regional exchange, or may
otherwise have limited liquidity. These securities may therefore be more
vulnerable to adverse developments than securities of larger companies and
a Portfolio may have difficulty establishing or closing out its securities
positions in smaller companies at prevailing market prices. Also, there may
be less publicly available information about smaller companies or less
market interest in their securities as compared to larger companies, and it
may take longer for the prices of the securities to reflect the full value
of their issuers' earnings potential or assets.

OTHER INVESTMENT STRATEGIES AND TECHNIQUES

In addition to the principal investment strategies described in the Summary
Information section above, each Portfolio may at times, but is not required to,
use the strategies and techniques described below, which involve certain special
risks. This Memorandum does not attempt to disclose all of the various
investment techniques and types of securities that Schroder might use in
managing a Portfolio. As in any mutual fund, investors must rely on the
professional investment judgment and skill of the Portfolio's adviser.

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- - FOREIGN CURRENCY EXCHANGE TRANSACTIONS. Changes in currency exchange rates
will affect the U.S. dollar value of Portfolio assets, including securities
denominated in foreign currencies. Exchange rates between the U.S. dollar
and other currencies fluctuate in response to forces of supply and demand
in the foreign exchange markets. These forces are affected by the
international balance of payments and other political, economic and
financial conditions, which may be difficult to predict. Each Portfolio may
engage in currency exchange transactions to protect against unfavorable
fluctuations in exchange rates.

In particular, a Portfolio may enter into foreign currency exchange
transactions to protect against a change in exchange rates that may occur
between the date on which the Portfolio contracts to trade a security and
the settlement date ("transaction hedging") or in anticipation of placing a
trade ("anticipatory hedging"); to "lock in" the U.S. dollar value of
interest and dividends to be paid in a foreign currency; or to hedge
against the possibility that a foreign currency in which portfolio
securities are denominated or quoted may suffer a decline against the U.S.
dollar ("position hedging").

From time to time, a Portfolio's currency hedging transactions may call for
the delivery of one foreign currency in exchange for another foreign
currency and may at times involve currencies in which its portfolio
securities are not then denominated ("cross hedging"). Each Portfolio may
also engage in "proxy" hedging, whereby the Portfolio would seek to hedge
the value of portfolio holdings denominated in one currency by entering
into an exchange contract on a second currency, the valuation of which
Schroder believes correlates to the value of the first currency.

Schroder may buy or sell currencies in "spot" or forward transactions.
"Spot" transactions are executed contemporaneously on a cash basis at the
then-prevailing market rate. A forward currency contract is an obligation
to purchase or sell a specific currency at a future date (which may be any
fixed number of days from the date of the contract agreed upon by the
parties) at a price set at the time of the contract. Forward contracts do
not eliminate fluctuations in the underlying prices of securities and
expose a Portfolio to the risk that the counterparty is unable to perform.

Each Portfolio incurs foreign exchange expenses in converting assets from
one currency to another. A Portfolio may engage in foreign currency
exchange transactions only for hedging purposes. Although there is no limit
on the amount of a Portfolio's assets that may be invested in foreign
currency exchange and foreign currency forward contracts, a Portfolio may
enter into such transactions only to the extent necessary to effect the
hedging transactions described above. Suitable foreign currency hedging
transactions may not be available in all circumstances and there can be no
assurance that a Portfolio will utilize hedging transactions at any time.

- - SECURITIES LOANS, REPURCHASE AGREEMENTS, AND FORWARD COMMITMENTS. Each
Portfolio may lend portfolio securities to broker-dealers up to one-third
of the Portfolio's total assets. Each Portfolio may also enter into
repurchase agreements without limit. These transactions must be fully
collateralized at all times, but involve some risk to a Portfolio if the
other party should default on its obligation and the Portfolio is delayed
or prevented from recovering the collateral. Each Portfolio may also enter
into contracts to purchase securities for a fixed price at a future date
beyond customary settlement time, which may increase its overall investment
exposure and involves a risk of loss if the value of the securities
declines prior to the settlement date.

- - INVESTMENT IN OTHER INVESTMENT COMPANIES. Each Portfolio may invest in
other investment companies or pooled vehicles, including closed-end funds
that are advised by Schroder or its affiliates or by unaffiliated parties.
When investing in another investment company, a Portfolio may pay a premium
above such investment company's net asset value per share. As a shareholder
in an investment company, a Portfolio would bear its ratable share of the
investment company's expenses, including advisory and administrative fees,
and would at the same time continue to pay its own fees and expenses.

- - DERIVATIVE INVESTMENTS. To the extent permitted by the Portfolio's
investment policies as set forth in this Memorandum or listed in the
Statement of Additional Information, instead of investing directly in the
types of

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portfolio securities described in the Summary Information, each Portfolio
may buy or sell a variety of "derivative" investments to gain exposure to
particular securities or markets, in connection with hedging transactions,
and to increase total return. These may include options, futures, and
indices, for example. Derivatives involve the risk that they may not work
as intended due to unanticipated developments in market conditions or other
causes. Also, derivatives often involve the risk that the other party to
the transaction will be unable to meet its obligations or that a Portfolio
will be unable to close out the position at any particular time or at an
acceptable price.

- - PORTFOLIO TURNOVER. The length of time a Portfolio has held a particular
security is not generally a consideration in investment decisions. The
investment policies of a Portfolio may lead to frequent changes in the
Portfolio's investments, particularly in periods of volatile market
movements. A change in the securities held by a Portfolio is known as
"portfolio turnover." Portfolio turnover generally involves some expense to
a Portfolio, including brokerage commissions or dealer mark-ups and other
transaction costs on the sale of securities and reinvestment in other
securities. Such sales may increase the amount of capital gains (and, in
particular, short-term gains) realized by a Portfolio, on which
Interestholders may pay tax.

- - TEMPORARY DEFENSIVE STRATEGIES. At times, Schroder may judge that
conditions in the securities markets make pursuing a Portfolio's basic
investment strategy inconsistent with the best interests of its
Interestholders. At such times, Schroder may temporarily use alternate
investment strategies primarily designed to reduce fluctuations in the
value of a Portfolio's assets. In implementing these "defensive"
strategies, a Portfolio would invest in high-quality fixed-income
securities, cash, or money market instruments to any extent Schroder
considers consistent with such defensive strategies. It is impossible to
predict when, or for how long, a Portfolio will use these alternate
strategies. One risk of taking such temporary defensive positions is that a
Portfolio may not achieve its investment objective.

- - OTHER INVESTMENTS. Each Portfolio may also invest in other types of
securities and utilize a variety of investment techniques and strategies
that are not described in this Memorandum. These securities and techniques
may subject the Portfolios to additional risks. Please see the SAI for
additional information about the securities and investment techniques
described in this Memorandum and about additional techniques and strategies
that may be used by the Portfolios.

MANAGEMENT OF THE PORTFOLIOS

A Board of Trustees governs the Trust, which has retained Schroder to manage the
investments of each Portfolio. Subject to the control of the Trustees, Schroder
also manages the Portfolios' other affairs and business. Schroder has served as
investment adviser to the Portfolios since inception.

Schroder (itself and its predecessors) has been an investment manager since 1962
and serves as investment adviser to the Portfolios, other mutual funds, and a
broad range of institutional investors. Schroder's ultimate parent, Schroders
plc, and its affiliates currently engage in the investment banking and asset
management businesses, and as of June 30, 1999, had together assets under
management of approximately $208 billion. In January 2000, Schroders plc agreed
to sell its worldwide investment banking business to Salomon Smith Barney. The
transaction, which is expected to be completed by May 2000, is subject to
regulatory approvals and satisfaction of closing conditions. Schroders plc will
retain its asset management business.

- - INVESTMENT ADVISORY FEES PAID BY THE PORTFOLIOS. The Portfolios pay
investment advisory fees to Schroder at the following annual rates (based
on the average daily net assets of the Portfolio): SCHRODER ASIAN GROWTH
FUND PORTFOLIO 0.70%; SCHRODER JAPAN PORTFOLIO 0.55%.

- - EXPENSE LIMITATIONS AND WAIVERS. In order to limit the Portfolios'
expenses, Schroder is contractually obligated to reduce its compensation
until October 31, 2000 (and, if necessary, to pay certain other Portfolio
expenses) to the extent that the Portfolios' total operating expenses
exceed the following annual rates (based on the average

<PAGE>

daily net assets of the Portfolio) : Schroder Asian Growth Fund Portfolio
1.16%; Schroder Japan Portfolio 0.99%.

- - PORTFOLIO MANAGERS. An investment manager or an investment team generally
makes Schroder's investment decisions for the Portfolio, with the
assistance of an investment committee. The following portfolio managers
have had primary responsibility for making investment decisions for the
Portfolios since the years shown below. Their recent professional
experience is also shown.

<TABLE>
<CAPTION>
PORTFOLIO PORTFOLIO MANAGER SINCE RECENT PROFESSIONAL EXPERIENCE
--------- ----------------- ----- ------------------------------
<S> <C> <C> <C> <C>
Schroder Asian Louise Croset 1997 Employed as an investment
Growth Fund professional at Schroder since
Portfolio/Schroder 1993. Ms. Croset is also a
Japan Portfolio Trustee and President of the
Trust, and a Director and a
Senior Vice President and
a Director of Schroder.

Heather Crighton Inception (1993) Employed as an investment
professional at Schroder since
1993. Ms. Crighton is also a Vice
President of the Trust, and a
Director and a Senior Vice
President of Schroder.

Donald H.M. 1998 Employed as an investment
Farquharson professional at Schroder since
1988. Mr. Farquharson is also a
Vice President of the Trust and a
Senior Vice President of Schroder.
</TABLE>

INTERESTHOLDER INFORMATION

HOW PORTFOLIO INTERESTS ARE PRICED

Each Portfolio calculates the net asset value of its Portfolio Interests by
dividing the total value of its assets less its liabilities by the number of
Portfolio Interests outstanding. Portfolio Interests are valued as of the close
of trading on the New York Stock Exchange (normally 4:00 p.m., Eastern Time)
each day the Exchange is open (a "Business Day"). The Trust expects that days,
other than weekend days, that the Exchange will not be open are New Years Day,
Martin Luther King, Jr. Day, Presidents Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Each Portfolio
values its portfolio securities for which market quotations are readily
available at market value. Short-term investments that will mature in 60 days or
less are stated at amortized costs, which approximates market value. Each
Portfolio values securities and assets for which market values are not
ascertainable at their fair values as determined in accordance with procedures
adopted by the Board of Trustees. Generally, securities that are listed on
recognized stock exchanges are valued at the last reported sale price, on the
day the securities are valued (the "Valuation Day"), on the primary exchange on
which the securities are principally traded. Listed securities traded on
recognized stock exchanges for which there were no sales on the Valuation Day
are valued at the last sale price on the preceding trading day or at closing
mid-market prices. Securities traded in over-the-counter markets are valued at
the most recent reported mid-market price. The Portfolios value all other
securities and assets at their fair values as determined, in accordance with
procedures adopted by the Board of

<PAGE>

Trustees. All assets and liabilities of a Portfolio denominated in foreign
currencies are valued in U.S. dollars based on the exchange rate last quoted by
a major bank prior to the time when the net asset value of the Portfolio's
Portfolio Interests is calculated. Because certain of the securities in which a
Portfolio may invest may trade on days on which the Portfolios do not price
their Portfolio Interests, the net asset value of the Portfolio Interests may
change on days when Interestholders will not be able to purchase or redeem their
Portfolio Interests.

PURCHASE OF PORTFOLIO INTERESTS

Portfolio Interests are issued solely in private placement transactions that do
not involve any "public offering" within the meaning of Section 4(2) of the 1933
Act. Portfolio Interests are sold at a Portfolio's net asset value next
determined after an order is received, without a sales load. The Placement Agent
receives no compensation for its services.

Registered investment companies are not subject to a minimum initial or
subsequent investment amount. For other qualified investors, the minimum initial
investment amount is $2 million, and there is no minimum subsequent investment
amount. Investments must be made in federal funds (I.E., monies credited to the
account of the Trust's custodian by a Federal Reserve Bank). Minimum investment
amounts may be waived at the discretion of Schroder.

If the Placement Agent has accepted your completed Subscription Agreement, you
may transmit purchase payments by Federal Reserve Bank wire directly to the
Portfolio as follows:

State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
ABA No.: 011000028
Attn: Schroder Mutual Funds
DDA No.: 9904-650-0
FBO: Account Registration
A/C Mutual Fund Account Number
[Portfolio Name]

The wire order must specify the Portfolio's name, the account name and number,
address, confirmation number, amount to be wired, name of the wiring bank, and
name and telephone number of the person to be contacted in connection with the
order. If your initial investment is by wire, your completed Subscription
Agreement must be received and accepted by the Placement Agent, who will assign
you an Interestholder account number and activate your account. Wire orders
received prior to the close of the New York Stock Exchange (normally 4:00 p.m.,
Eastern time) on each Business Day are processed at the net asset value
determined as of that day. Wire orders received after that time are processed at
the net asset value next determined thereafter. The Trust reserves the right to
cease accepting investments in a Portfolio at any time or to reject any
Subscription Agreement or investment order.

PURCHASING INTERESTS IN EXCHANGE FOR SECURITIES

Portfolio Interests may be purchased for cash or in exchange for securities held
by the investor, subject to the determination by Schroder that the securities
are acceptable. (For purposes of determining whether securities will be
acceptable, Schroder will consider, among other things, whether they are liquid
securities of a type consistent with the investment objectives and policies of
the Portfolio in question and have a readily ascertainable value.) If a
Portfolio receives securities from an investor in exchange for Portfolio
Interests, the Portfolio will under some circumstances have the same tax basis
in the securities as the investor had prior to the exchange (and the Portfolio's
gain for tax purposes would be calculated with regard to the investor's tax
basis). Any gain on the sale of those securities would be subject to
distribution as capital gain to all of the Portfolio Interestholders. Schroder
reserves the right to reject any particular investment. Securities accepted by
Schroder will be valued in the same manner as are the Trust's portfolio
securities at the next determination of the Portfolio's' net asset value. All
dividend, subscription, or other rights which

<PAGE>

are reflected in the market price of accepted securities at the time of
valuation become the property of the relevant Portfolio and must be delivered to
the Portfolio upon receipt by the investor. Investors may realize a gain or loss
upon the exchange for federal income tax purposes. If you are interested in
purchases through exchange, please telephone the Trust at (800) 464-3108.

REDEMPTION OF PORTFOLIO INTERESTS

You may redeem all or any portion of your investment in a Portfolio at the net
asset value next determined after the you deliver a redemption request in proper
form to the Trust. Redemption proceeds are normally paid by each Portfolio in
federal funds on the Business Day after the withdrawal is effected but, in any
event, within seven calendar days. Investments in a Portfolio may not be
transferred. The right of redemption may not be suspended nor may the payment
dates be postponed for more than seven days except when the New York Stock
Exchange is closed (or when trading on the New York Stock Exchange is
restricted) for any reason other than its customary weekend or holiday closings,
or under any emergency or other circumstances as determined by the Securities
and Exchange Commission.

Redemption requests may be made between 9:00 a.m. and 6:00 p.m. (Eastern time)
on each Business Day. Redemption requests that are received prior to the closing
of the New York Stock Exchange are processed at the net asset value next
determined on that day. Redemption requests that are received after the closing
of the Exchange are processed at the net asset value next determined thereafter.
Redemption requests must include the name of the Interestholder, the Portfolio's
name, the dollar amount or number of Portfolio Interests to be redeemed,
Interestholder account number, and the signature of the holder designated on the
account.

Written redemption requests may be sent to the Trust at the following address:

[Name of Portfolio]
REGULAR MAIL
Schroder Mutual Funds
P.O. Box 8507
Boston, MA 02266

Telephone redemption requests may be made by telephoning the Trust at (800)
464-3108. A telephone redemption may be made only if the telephone redemption
privilege option has been elected on the Subscription Agreement or otherwise in
writing, and the Interestholder has obtained a password from the Trust's
Placement Agent. In an effort to prevent unauthorized or fraudulent redemption
requests by telephone, reasonable procedures will be followed by the Trust's
Placement Agent to confirm that telephone instructions are genuine. The
Placement Agent and the Trust generally will not be liable for any losses due to
unauthorized or fraudulent redemption requests, but either may be liable if it
does not follow these procedures. In times of drastic economic or market change
it may be difficult to make redemptions by telephone. If an Interestholder
cannot reach the Placement Agent by telephone, redemption requests may be mailed
or hand-delivered to the Placement Agent.

Redemption proceeds normally are paid in cash. If you paid for your Portfolio
Interests by check, you will not be sent redemption proceeds until the check you
used to pay for the Portfolio Interests has cleared, which may take up to 15
calendar days from the purchase date.

Redemptions from a Portfolio may be made wholly or partially in portfolio
securities, however, if the Trust's Board of Trustees determines that payment in
cash would be detrimental to the best interests of Interestholders. The Trust
has filed an election with the Securities and Exchange Commission pursuant to
which each Portfolio will only consider effecting a redemption in portfolio
securities if an Interestholder is redeeming more than $250,000 or 1% of the
Portfolio's net asset value, whichever is less, during any 90-day period.

TAXES

<PAGE>

Neither Portfolio is required to pay federal income taxes on its ordinary income
and capital gain because each Portfolio is treated as a partnership for federal
income tax purposes. All interest, dividends and gains and losses of a Portfolio
are deemed to "pass through" to its Interestholders, regardless of whether such
interest, dividends or gains are distributed by the Portfolio or the Portfolio
realizes losses. Under each Portfolio's operational method, it is not subject to
any federal income tax. However, each Interestholder in a Portfolio will be
taxed on its proportionate share (as determined in accordance with the Trust's
Trust Instrument and the Internal Revenue Code) of the Portfolio's ordinary
income and capital gain, to the extent that the Interestholder is subject to tax
on its income. The Trust will inform Interestholders of each Portfolio of the
amount and nature of such income or gain.

The foregoing discussion relates only to federal income tax law. Income from a
Portfolio also may be subject to foreign, state and local taxes, and the
treatment under foreign, state and local income tax laws may differ from the
federal income tax treatment. Interestholders should consult their tax advisors
with respect to particular questions of federal, foreign, state and local
taxation.

OTHER INFORMATION

CAPITAL STRUCTURE

The Trust was organized as a business trust under the laws of the State of
Delaware on September 7, 1995. Under the Trust Instrument, the Trustees are
authorized to issue interests in separate series of the Trust. The Trust
currently has three series (including the two Portfolios described in this
Memorandum). The Trust reserves the right to create additional series.

Each Interestholder in a Portfolio is entitled to participate equally in the
Portfolio's earnings and assets and to a vote in proportion to the amount of its
investment in the Portfolio. Investments in a Portfolio have no preemptive or
conversion rights and are fully paid and non-assessable. Upon liquidation of a
Portfolio, Interestholders will be entitled to share pro rata in the Portfolio's
net assets available for distribution to Interestholders.

RESTRICTIONS ON TRANSFER

Transfer of Portfolio Interests will be subject to the restrictions set forth in
the Subscription Agreement and in the Trust Instrument. These documents provide
that no sale or other transfer of Portfolio Interests may be made by an
Interestholder unless such sale or other transfer is exempt from registration
under the 1933 Act and other applicable legislation and that the consent of the
other Interestholders of a Portfolio will be required for any such sale or other
transfer of Portfolio Interests, other than redemptions.

STATEMENT OF ADDITIONAL INFORMATION
Further information about each Portfolio is contained in the Trust's Statement
of Additional Information relating to the Portfolios, which is available from
the Placement Agent and is incorporated herein by reference.

<PAGE>

SCHRODER CAPITAL FUNDS

SCHRODER ASIAN GROWTH FUND PORTFOLIO
SCHRODER JAPAN PORTFOLIO

FORM N-1A
PART B

CONFIDENTIAL STATEMENT OF ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

March 1, 2000

Schroder Capital Funds (the "Trust"), acting through Schroder Fund Advisors Inc.
(the "Placement Agent"), is making a private placement of shares of beneficial
interest ("Portfolio Interests") in separate series, each with a distinct
investment objective and policies. The Trust is registered as an open-end
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"). Currently, the Trust offers three series, two of which (each a
"Portfolio") are described in this Statement of Additional Information (the
"SAI"): Schroder Asian Growth Fund Portfolio and Schroder Japan Portfolio.

Schroder Investment Management North America manages each Portfolio. Portfolio
Interests are offered by the Placement Agent solely in private placement
transactions to qualified investors subject to the terms contained in the
Trust's Confidential Private Placement Memorandum (the "Memorandum") dated March
1, 1999 relating to the two Portfolios.

This SAI is not a Memorandum and is authorized for distribution only when
accompanied or preceded by the Memorandum. This SAI contains information that
may be useful to investors in a Portfolio ("Interestholders") but which is not
included in the Memorandum. You may obtain free copies of the Memorandum by
calling the Trust at (800) 464-3108.

Certain disclosure has been incorporated by reference into this SAI from the
Portfolios' annual reports. For a free copy of the annual reports, please call
(800) 464-3108.

8197860

<PAGE>

TABLE OF CONTENTS
TRUST HISTORY 1
PORTFOLIO CLASSIFICATION 1
CAPITAL STOCK AND OTHER SECURITIES 1
MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS 1
INVESTMENT RESTRICTIONS 14
TRUSTEES AND OFFICERS 16
SCHRODER AND ITS AFFILIATES 19
INVESTMENT ADVISORY AGREEMENTS 19
ADMINISTRATIVE SERVICES 21
PLACEMENT AGENT 22
BROKERAGE ALLOCATION AND OTHER PRACTICES 22
DETERMINATION OF NET ASSET VALUE 24
REDEMPTIONS IN KIND 25
TAXES 26
PRINCIPAL HOLDERS OF PORTFOLIO INTERESTS 29
PERFORMANCE INFORMATION 29
CUSTODIAN 30
INDEPENDENT AUDITORS 30
LEGAL COUNSEL 30
INTERESTHOLDER LIABILITY 30
FINANCIAL STATEMENTS 30
APPENDIX A 1
APPENDIX B 1

<PAGE>

SCHRODER CAPITAL FUNDS
CONFIDENTIAL STATEMENT OF ADDITIONAL INFORMATION
SCHRODER ASIAN GROWTH FUND PORTFOLIO
SCHRODER JAPAN PORTFOLIO

TRUST HISTORY

The Trust was organized as a Delaware business trust on September 7, 1995. The
Trust's Trust Instrument, which is governed by Delaware law, is on file with the
Secretary of State of the State of Delaware. Schroder Investment Management
North America Inc. ("Schroder") and its corporate predecessors have served as
investment adviser to the Trust since its inception.

PORTFOLIO CLASSIFICATION

Each of the two Portfolios described in and offered pursuant to the Memorandum
and this SAI has distinct investment objectives and policies. Each Portfolio is
a "non-diversified" investment company under the 1940 Act, and therefore may
invest its assets in a more limited number of issuers than may diversified
investment companies. To the extent a Portfolio invests a significant portion of
its assets in the securities of a particular issuer, it will be subject to an
increased risk of loss if the market value of the issuer's securities declines.

CAPITAL STOCK AND OTHER SECURITIES

Under the Trust Instrument of the Trust, the Trustees are authorized to issue
shares of beneficial interest in separate series of the Trust. The Trust
currently has three series (two being the Portfolios described in this SAI), and
the Trust reserves the right to create additional series.

Each Interestholder in a portfolio of the Trust (including the two Portfolios
described in this SAI) is entitled to participate equally in the portfolio's
earnings and assets and to a vote in proportion to the amount of its investment
in the portfolio. Investments in a portfolio may not be transferred without the
unanimous consent of the other Interestholders in the portfolio, but an
Interestholder may withdraw all or any portion of its investment at any time at
the next determined net asset value.

The Trust is not required, and has no current intention, to hold annual meetings
of Interestholders, but the Trust will hold special meetings of Interestholders
when in the Trustees' judgment it is necessary or desirable to submit matters
for an Interestholder vote or when it is otherwise required under state law or
the 1940 Act. Generally, portfolio interests are voted in the aggregate without
reference to a particular portfolio, unless the Trustees determine that the
matter affects only one portfolio or portfolio voting is required, in which case
portfolio interests are voted separately by each portfolio. Upon liquidation of
a portfolio, Interestholders will be entitled to share pro rata in the
portfolio's net assets available for distribution to Interestholders.

MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS

In addition to the principal investment strategies and the principal risks of
the Portfolios described in the Memorandum, each Portfolio may employ other
investment practices and may be subject to additional risks, which are described
below. Because the following is a combined description of investment strategies
and risks for both of the Portfolios, certain strategies or risks described
below may not apply to a Portfolio. Unless a strategy or policy described below
is specifically prohibited by the investment restrictions listed in the
Memorandum, under "Investment Restrictions" in this SAI, or by applicable law, a
Portfolio may engage in each of the practices described below.

CERTAIN DERIVATIVE INSTRUMENTS

<PAGE>

Derivative instruments are financial instruments whose value depends upon, or is
derived from, the value of an underlying asset, such as a security, index or
currency. As described below, to the extent permitted under "Investment
Restrictions" below and in the Memorandum, each Portfolio may engage in a
variety of transactions involving the use of derivative instruments, including
options and futures contracts on securities and securities indices and options
on futures contracts. These transactions may be used by a Portfolio for hedging
purposes or, to the extent permitted by applicable law, to increase its current
return. The Portfolios may also engage in derivative transactions involving
foreign currencies. See "Foreign Currency Transactions."

OPTIONS

Each Portfolio may purchase and sell covered put and call options on its
portfolio securities to enhance investment performance and to protect against
changes in market prices.

COVERED CALL OPTIONS. A Portfolio may write covered call options on its
portfolio to realize a greater current return through the receipt of premiums
than it would realize on its securities alone. Such option transactions may also
be used as a limited form of hedging against a decline in the price of
securities owned by a Portfolio.

A call option gives the holder the right to purchase, and obligates the writer
to sell a security at the exercise price at any time before the expiration date.
A call option is "covered" if the writer, at all times while obligated as a
writer, either owns the underlying securities (or comparable securities
satisfying the cover requirements of the securities exchanges), or has the right
to acquire such securities through immediate conversion of securities.

In return for the premium received when it writes a covered call option, the
Portfolio gives up some or all of the opportunity to profit from an increase in
the market price of the securities covering the call option during the life of
the option. The Portfolio retains the risk of loss should the price of such
securities decline. If the option expires unexercised, the Portfolio realizes a
gain equal to the premium, which may be offset by a decline in price of the
underlying security. If the option is exercised, the Portfolio realizes a gain
or loss equal to the difference between the Portfolio's cost for the underlying
security and the proceeds of the sale (exercise price minus commissions) plus
the amount of the premium.

A Portfolio may terminate a call option that it has written before it expires by
entering into a closing purchase transaction. A Portfolio may enter into closing
purchase transactions in order to free itself to sell the underlying security or
to write another call on the security, realize a profit on a previously written
call option, or protect a security from being called in an unexpected market
rise. Any profits from a closing purchase transaction may be offset by a decline
in the value of the underlying security. Conversely, because increases in the
market price of a call option will generally reflect increases in the market
price of the underlying security, any loss resulting from a closing purchase
transaction is likely to be offset in whole or in part by unrealized
appreciation of the underlying security owned by the Portfolio.

COVERED PUT OPTIONS. A Portfolio may write covered put options in order to
enhance its current return. Such options transactions may also be used as a
limited form of hedging against an increase in the price of securities that the
Portfolio plans to purchase. A put option gives the holder the right to sell,
and obligates the writer to buy, a security at the exercise price at any time
before the expiration date. A put option is "covered" if the writer segregates
cash and high-grade short-term debt obligations or other permissible collateral
equal to the price to be paid if the option is exercised.

In addition to the receipt of premiums and the potential gains from terminating
such options in closing purchase transactions, the Portfolio also receives
interest on the cash and debt securities maintained to cover the exercise price
of the option. By writing a put option, the Portfolio assumes the risk that it
may be required to purchase the underlying security for an exercise price higher
than its then current market value,

<PAGE>

resulting in a potential capital loss unless the security later appreciates in
value.

A Portfolio may terminate a put option that it has written before it expires by
a closing purchase transaction. Any loss from this transaction may be partially
or entirely offset by the premium received on the terminated option.

PURCHASING PUT AND CALL OPTIONS. A Portfolio may also purchase put options to
protect portfolio holdings against a decline in market value. This protection
lasts for the life of the put option because the Portfolio, as a holder of the
option, may sell the underlying security at the exercise price regardless of any
decline in its market price. In order for a put option to be profitable, the
market price of the underlying security must decline sufficiently below the
exercise price to cover the premium and transaction costs that the Portfolio
must pay. These costs will reduce any profit the Portfolio might have realized
had it sold the underlying security instead of buying the put option.

Portfolio may purchase call options to hedge against an increase in the price of
securities that the Portfolio wants ultimately to buy. Such hedge protection is
provided during the life of the call option since the Portfolio, as holder of
the call option, is able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the premium and
transaction costs. These costs will reduce any profit the Portfolio might have
realized had it bought the underlying security at the time it purchased the call
option.

A Portfolio may also purchase put and call options to enhance its current
return. A Portfolio may also buy and sell combinations of put and call options
on the same underlying security to earn additional income.

OPTIONS ON FOREIGN SECURITIES. A Portfolio may purchase and sell options on
foreign securities if in Schroder's opinion the investment characteristics of
such options, including the risks of investing in such options, are consistent
with the Portfolio's investment objectives. It is expected that risks related to
such options will not differ materially from risks related to options on U.S.
securities. However, position limits and other rules of foreign exchanges may
differ from those in the U.S. In addition, options markets in some countries,
many of which are relatively new, may be less liquid than comparable markets in
the U.S.

RISKS INVOLVED IN THE SALE OF OPTIONS. Options transactions involve certain
risks, including the risks that Schroder will not forecast interest rate or
market movements correctly, that a Portfolio may be unable at times to close out
such positions, or that hedging transactions may not accomplish their purpose
because of imperfect market correlations. The successful use of these strategies
depends on the ability of Schroder to forecast market and interest rate
movements correctly.

An exchange-listed option may be closed out only on an exchange that provides a
secondary market for an option of the same series. Although a Portfolio will
enter into an option position only if Schroder believes that a liquid secondary
market exists, there is no assurance that a liquid secondary market on an
exchange will exist for any particular option or at any particular time. If no
secondary market were to exist, it would be impossible to enter into a closing
transaction to close out an option position. As a result, a Portfolio may be
forced to continue to hold, or to purchase at a fixed price, a security on which
it has sold an option at a time when Schroder believes it is inadvisable to do
so.

Higher than anticipated trading activity or order flow or other unforeseen
events might cause the Options Clearing Corporation or an exchange to institute
special trading procedures or restrictions that might restrict the Portfolios'
use of options. The exchanges have established limitations on the maximum number
of calls and puts of each class that may be held or written by an investor or
group of investors acting in concert. It is possible that the Portfolios and
other clients of Schroder may be considered such a group. These position limits
may restrict the Portfolios' ability to purchase or sell options on particular
securities.

As described below, each Portfolio generally expects that its options
transactions will be conducted on

<PAGE>

recognized exchanges. In certain instances, however, a Portfolio may purchase
and sell options in the over-the-counter markets. Options, which are not traded
on national securities exchanges, may be closed out only with the other party to
the option transaction. For that reason, it may be more difficult to close out
over-the-counter options than exchange-traded options. Options in the
over-the-counter market may also involve the risk that securities dealers
participating in such transactions would be unable to meet their obligations to
a Portfolio. Furthermore, over-the-counter options are not subject to the
protection afforded purchasers of exchange-traded options by The Options
Clearing Corporation. A Portfolio will, however, engage in over-the-counter
options transactions only when appropriate exchange-traded options transactions
are unavailable and when, in the opinion of Schroder, the pricing mechanism and
liquidity of the over-the-counter markets are satisfactory and the participants
are responsible parties likely to meet their contractual obligations. A
Portfolio will treat over-the-counter options (and, in the case of options sold
by the Portfolio, the underlying securities held by the Portfolio) as illiquid
investments as required by applicable law.

Government regulations, particularly the requirements for qualification as a
"regulated investment company" under the United States Internal Revenue Code of
1986, as amended, may also restrict the Trust's use of options.

FUTURES CONTRACTS

In order to hedge against the effects of adverse market changes, each Portfolio
that may invest in debt securities may buy and sell futures contracts on U.S.
Government securities and other debt securities in which the Portfolio may
invest, and on indices of debt securities. In addition, each Portfolio that may
invest in equity securities may purchase and sell stock index futures to hedge
against changes in stock market prices. Each Portfolio may also, to the extent
permitted by applicable law, buy and sell futures contracts and options on
futures contracts to increase the Portfolio's current return. All such futures
and related options will, as may be required by applicable law, be traded on
exchanges that are licensed and regulated by the Commodity Futures Trading
Commission (the "CFTC"). Depending upon the change in the value of the
underlying security or index when a Portfolio enters into or terminates a
futures contract, the Portfolio may realize a gain or loss.

FUTURES ON DEBT SECURITIES AND RELATED OPTIONS. A futures contract on a debt
security is a binding contractual commitment which, if held to maturity, will
result in an obligation to make or accept delivery, during a particular month,
of securities having a standardized face value and rate of return. By purchasing
futures on debt securities -- assuming a "long" position -- a Portfolio will
legally obligate itself to accept the future delivery of the underlying security
and pay the agreed price. By selling futures on debt securities - assuming a
"short" position - it will legally obligate itself to make the future delivery
of the security against payment of the agreed price. Open futures positions on
debt securities will be valued at the most recent settlement price, unless that
price does not, in the judgment of persons acting at the direction of the
Trustees as to the valuation of the Portfolio's assets, reflect the fair value
of the contract, in which case the positions will be valued by the Trustees or
such persons.

Positions taken in the futures markets are not normally held to maturity, but
are instead liquidated through offsetting transactions that may result in a
profit or a loss. While futures positions taken by a Portfolio will usually be
liquidated in this manner, a Portfolio may instead make or take delivery of the
underlying securities whenever it appears economically advantageous to the
Portfolio to do so. A clearing corporation associated with the exchange on which
futures are traded assumes responsibility for such closing transactions and
guarantees that a Portfolio's sale and purchase obligations under closed-out
positions will be performed at the termination of the contract.

Hedging by use of futures on debt securities seeks to establish more certainly
than would otherwise be possible the effective rate of return on portfolio
securities. A Portfolio may, for example, take a "short" position in the futures
market by selling contracts for the future delivery of debt securities held by
the Portfolio (or securities having characteristics similar to those held by the
Portfolio) in order to hedge

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against an anticipated rise in interest rates that would adversely affect the
value of the Portfolio's portfolio securities. When hedging of this character is
successful, any depreciation in the value of portfolio securities may
substantially be offset by appreciation in the value of the futures position.

On other occasions, a Portfolio may take a "long" position by purchasing futures
on debt securities. This would be done, for example, when the Portfolio expects
to purchase particular securities when it has the necessary cash, but expects
the rate of return available in the securities markets at that time to be less
favorable than rates currently available in the futures markets. If the
anticipated rise in the price of the securities should occur (with its
concomitant reduction in yield), the increased cost to the Portfolio of
purchasing the securities may be offset, at least to some extent, by the rise in
the value of the futures position taken in anticipation of the subsequent
securities purchase.

Successful use by a Portfolio of futures contracts on debt securities is subject
to Schroder's ability to predict correctly movements in the direction of
interest rates and other factors affecting markets for debt securities. For
example, if a Portfolio has hedged against the possibility of an increase in
interest rates that would adversely affect the market prices of debt securities
held by it and the prices of such securities increase instead, the Portfolio
will lose part or all of the benefit of the increased value of its securities
that it has hedged because it will have offsetting losses in its futures
positions. In addition, in such situations, if the Portfolio has insufficient
cash, it may have to sell securities to meet daily maintenance margin
requirements. The Portfolio may have to sell securities at a time when it may be
disadvantageous to do so.

A Portfolio may purchase and write put and call options on certain debt futures
contracts, as they become available. Such options are similar to options on
securities except that options on futures contracts give the purchaser the
right, in return for the premium paid, to assume a position in a futures
contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the period of
the option. As with options on securities, the holder or writer of an option may
terminate his position by selling or purchasing an option of the same series.
There is no guarantee that such closing transactions can be effected. A
Portfolio will be required to deposit initial margin and maintenance margin with
respect to put and call options on futures contracts written by it pursuant to
brokers' requirements, and, in addition, net option premiums received will be
included as initial margin deposits. See "Margin Payments" below. Compared to
the purchase or sale of futures contracts, the purchase of call or put options
on futures contracts involves less potential risk to a Portfolio because the
maximum amount at risk is the premium paid for the options plus transactions
costs. However, there may be circumstances when the purchase of call or put
options on a futures contract would result in a loss to a Portfolio when the
purchase or sale of the futures contracts would not, such as when there is no
movement in the prices of debt securities. The writing of a put or call option
on a futures contract involves risks similar to those risks relating to the
purchase or sale of futures contracts.

INDEX FUTURES CONTRACTS AND OPTIONS. A Portfolio may invest in debt index
futures contracts and stock index futures contracts, and in related options. A
debt index futures contract is a contract to buy or sell units of a specified
debt index at a specified future date at a price agreed upon when the contract
is made. A unit is the current value of the index. A stock index futures
contract is a contract to buy or sell units of a stock index at a specified
future date at a price agreed upon when the contract is made. A unit is the
current value of the stock index.

Depending on the change in the value of the index between the time when a
Portfolio enters into and terminates an index futures transaction, the Portfolio
may realize a gain or loss. The following example illustrates generally the
manner in which index futures contracts operate. The Standard & Poor's 100 Stock
Index is composed of 100 selected common stocks, most of which are listed on the
New York Stock Exchange. The S&P 100 Index assigns relative weightings to the
common stocks included in the Index, and the Index fluctuates with changes in
the market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures contract specifies that no delivery of the actual stocks making up
the index will take place. Instead, settlement in cash must occur

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upon the termination of the contract, with the settlement being the difference
between the contract price and the actual level of the stock index at the
expiration of the contract. For example, if a Portfolio enters into a futures
contract to buy 100 units of the S&P 100 Index at a specified future date at a
contract price of $180 and the S&P 100 Index is at $184 on that future date, the
Portfolio will gain $400 (100 units x gain of $4). If a Portfolio enters into a
futures contract to sell 100 units of the stock index at a specified future date
at a contract price of $180 and the S&P 100 Index is at $182 on that future
date, the Portfolio will lose $200 (100 units x loss of $2).

A Portfolio may purchase or sell futures contracts with respect to any
securities indices. Positions in index futures may be closed out only on an
exchange or board of trade that provides a secondary market for such futures.

In order to hedge a Portfolio's investments successfully using futures contracts
and related options, a Portfolio must invest in futures contracts with respect
to indices or sub-indices the movements of which will, in Schroder's judgment,
have a significant correlation with movements in the prices of the Portfolio's
securities.

Options on index futures contracts are similar to options on securities except
that options on index futures contracts give the purchaser the right, in return
for the premium paid, to assume a position in an index futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the holder would assume the underlying futures position
and would receive a variation margin payment of cash or securities approximating
the increase in the value of the holder's option position. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash based on the difference between the
exercise price of the option and the closing level of the index on which the
futures contract is based on the expiration date. Purchasers of options who fail
to exercise their options prior to the exercise date suffer a loss of the
premium paid.

As an alternative to purchasing and selling call and put options on index
futures contracts, each of the Portfolios that may purchase and sell index
futures contracts may purchase and sell call and put options on the underlying
indices themselves to the extent that such options are traded on national
securities exchanges. Index options are similar to options on individual
securities in that the purchaser of an index option acquires the right to buy
(in the case of a call) or sell (in the case of a put), and the writer
undertakes the obligation to sell or buy (as the case may be), units of an index
at a stated exercise price during the term of the option. Instead of giving the
right to take or make actual delivery of securities, the holder of an index
option has the right to receive a cash "exercise settlement amount." This amount
is equal to the amount by which the fixed exercise price of the option exceeds
(in the case of a put) or is less than (in the case of a call) the closing value
of the underlying index on the date of the exercise, multiplied by a fixed
"index multiplier".

A Portfolio may purchase or sell options on stock indices in order to close out
its outstanding positions in options on stock indices that it has purchased. A
Portfolio may also allow such options to expire unexercised.

Compared to the purchase or sale of futures contracts, the purchase of call or
put options on an index involves less potential risk to a Portfolio because the
maximum amount at risk is the premium paid for the options plus transactions
costs. The writing of a put or call option on an index involves risks similar to
those risks relating to the purchase or sale of index futures contracts.

A Portfolio may also purchase warrants, issued by banks and other financial
institutions, whose values are based on the values from time to time of one or
more securities indices.

MARGIN PAYMENTS. When a Portfolio purchases or sells a futures contract, it is
required to deposit with its custodian an amount of cash, U.S. Treasury bills,
or other permissible collateral equal to a small percentage

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of the amount of the futures contract. This amount is known as "initial margin."
The nature of initial margin is different from that of margin in security
transactions in that it does not involve borrowing money to finance
transactions. Rather, initial margin is similar to a performance bond or good
faith deposit that is returned to a Portfolio upon termination of the contract,
assuming a Portfolio satisfies its contractual obligations.

Subsequent payments to and from the broker occur on a daily basis in a process
known as "marking to market." These payments are called "variation margin" and
are made as the value of the underlying futures contract fluctuates. For
example, when a Portfolio sells a futures contract and the price of the
underlying debt security rises above the delivery price, the Portfolio's
position declines in value. The Portfolio then pays the broker a variation
margin payment equal to the difference between the delivery price of the futures
contract and the market price of the securities underlying the futures contract.
Conversely, if the price of the underlying security falls below the delivery
price of the contract, the Portfolio's futures position increases in value. The
broker then must make a variation margin payment equal to the difference between
the delivery price of the futures contract and the market price of the
securities underlying the futures contract.

When a Portfolio terminates a position in a futures contract, a final
determination of variation margin is made, additional cash is paid by or to the
Portfolio, and the Portfolio realizes a loss or a gain. Such closing
transactions involve additional commission costs.

SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS

LIQUIDITY RISKS. Positions in futures contracts may be closed out only on an
exchange or board of trade that provides a secondary market for such futures.
Although each Portfolio intends to purchase or sell futures only on exchanges or
boards of trade where there appears to be an active secondary market, there is
no assurance that a liquid secondary market on an exchange or board of trade
will exist for any particular contract or at any particular time. If there is
not a liquid secondary market at a particular time, it may not be possible to
close a futures position at such time and, in the event of adverse price
movements, a Portfolio would continue to be required to make daily cash payments
of variation margin. However, in the event financial futures are used to hedge
portfolio securities, such securities will not generally be sold until the
financial futures can be terminated. In such circumstances, an increase in the
price of the portfolio securities, if any, may partially or completely offset
losses on the financial futures.

In addition to the risks that apply to all options transactions, there are
several special risks relating to options on futures contracts. The ability to
establish and close out positions in such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain that
such a market will develop. Although a Portfolio generally will purchase only
those options for which there appears to be an active secondary market, there is
no assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. In the event no such market exists
for particular options, it might not be possible to effect closing transactions
in such options with the result that a Portfolio would have to exercise the
options in order to realize any profit.

HEDGING RISKS. There are several risks in connection with the use by a Portfolio
of futures contracts and related options as a hedging device. One risk arises
because of the imperfect correlation between movements in the prices of the
futures contracts and options and movements in the underlying securities or
index or in the prices of a Portfolio's securities, which are the subject of a
hedge. Schroder will, however, attempt to reduce this risk by purchasing and
selling, to the extent possible, futures contracts and related options on
securities and indices the movements of which will, in its judgment, correlate
closely with movements in the prices of the underlying securities or index and a
Portfolio's investments sought to be hedged.

Successful use of futures contracts and options by a Portfolio for hedging
purposes is also subject to Schroder's ability to predict correctly movements in
the direction of the market. It is possible that, where a

<PAGE>

Portfolio has purchased puts on futures contracts to hedge its portfolio against
a decline in the market, the securities or index on which the puts are purchased
may increase in value and the value of securities held in the portfolio may
decline. If this occurred, the Portfolio would lose money on the puts and also
experience a decline in the value of its portfolio securities. In addition, the
prices of futures, for a number of reasons, may not correlate perfectly with
movements in the underlying securities or index due to certain market
distortions. First, all participants in the futures market are subject to margin
deposit requirements. Such requirements may cause investors to close futures
contracts through offsetting transactions that could distort the normal
relationship between the underlying security or index and futures markets.
Second, the margin requirements in the futures markets are less onerous than
margin requirements in the securities markets in general, and as a result the
futures markets may attract more speculators than the securities markets do.
Increased participation by speculators in the futures markets may also cause
temporary price distortions. Due to the possibility of price distortion, even a
correct forecast of general market trends by Schroder may still not result in a
successful hedging transaction over a very short time period.

LACK OF AVAILABILITY. Because the markets for certain options and futures
contracts and other derivative instruments in which a Portfolio may invest
(including markets located in foreign countries) are relatively new and still
developing and may be subject to regulatory restraints, a Portfolio's ability to
engage in transactions using such instruments may be limited. Suitable
derivative transactions may not be available in all circumstances and there is
no assurance that a Portfolio will engage in such transactions at any time or
from time to time. A Portfolio's ability to engage in hedging transactions may
also be limited by certain regulatory and tax considerations.

OTHER RISKS. Each Portfolio will incur brokerage fees in connection with its
futures and options transactions. In addition, while futures contracts and
options on futures may be purchased and sold to reduce certain risks, those
transactions themselves entail certain other risks. Thus, while a Portfolio may
benefit from the use of futures and related options, unanticipated changes in
interest rates or stock price movements may result in a poorer overall
performance for the Portfolio than if it had not entered into any futures
contracts or options transactions. Moreover, in the event of an imperfect
correlation between the futures position and the portfolio position that is
intended to be protected, the desired protection may not be obtained and the
Portfolio may be exposed to risk of loss.

FORWARD COMMITMENTS

Each Portfolio may enter into contracts to purchase securities for a fixed price
at a future date beyond customary settlement time ("forward commitments") if the
Portfolio holds, and maintains until the settlement date in a segregated
account, cash or liquid securities in an amount sufficient to meet the purchase
price, or if the Portfolio enters into offsetting contracts for the forward sale
of other securities it owns. Forward commitments may be considered securities in
themselves, and involve a risk of loss if the value of the security to be
purchased declines prior to the settlement date, which risk is in addition to
the risk of decline in the value of the Portfolio's other assets. Where such
purchases are made through dealers, the Portfolio relies on the dealer to
consummate the sale. The dealer's failure to do so may result in the loss to the
Portfolio of an advantageous yield or price.

Although a Portfolio will generally enter into forward commitments with the
intention of acquiring securities for its portfolio or for delivery pursuant to
options contracts it has entered into, a Portfolio may dispose of a commitment
prior to settlement if Schroder deems it appropriate to do so. A Portfolio may
realize short-term profits or losses upon the sale of forward commitments.

REPURCHASE AGREEMENTS

Each Portfolio may enter into repurchase agreements. A repurchase agreement is a
contract under which the Portfolio acquires a security for a relatively short
period (usually not more than one week) subject to the obligation of the seller
to repurchase and the Portfolio to resell such security at a fixed time and
price (representing the Portfolio's cost plus interest). It is the Portfolio's
present intention to enter into

<PAGE>

repurchase agreements only with member banks of the Federal Reserve System and
securities dealers meeting certain criteria as to creditworthiness and financial
condition, and only with respect to obligations of the U.S. Government or its
agencies or instrumentalities or other high quality short-term debt obligations.
Repurchase agreements may also be viewed as loans made by a Portfolio that are
collateralized by the securities subject to repurchase. Schroder will monitor
such transactions to ensure that the value of the underlying securities will be
at least equal at all times to the total amount of the repurchase obligation,
including the interest factor. If the seller defaults, a Portfolio could realize
a loss on the sale of the underlying security to the extent that the proceeds of
the sale, including accrued interest, are less than the resale price provided in
the agreement including interest. In addition, if the seller should be involved
in bankruptcy or insolvency proceedings, a Portfolio may incur delay and costs
in selling the underlying security or may suffer a loss of principal and
interest if a Portfolio is treated as an unsecured creditor and required to
return the underlying collateral to the seller's estate.

WHEN-ISSUED SECURITIES

Each Portfolio may from time to time purchase securities on a "when-issued"
basis. Debt securities are often issued on this basis. The price of such
securities, which may be expressed in yield terms, is fixed at the time a
commitment to purchase is made, but delivery and payment for the when-issued
securities take place at a later date. Normally, the settlement date occurs
within one month of the purchase. During the period between purchase and
settlement, no payment is made by a Portfolio and no interest accrues to the
Portfolio. To the extent that assets of a Portfolio are held in cash pending the
settlement of a purchase of securities, that Portfolio would earn no income.
While a Portfolio may sell its right to acquire when-issued securities prior to
the settlement date, a Portfolio intends actually to acquire such securities
unless a sale prior to settlement appears desirable for investment reasons. At
the time a Portfolio makes the commitment to purchase a security on a
when-issued basis, it will record the transaction and reflect the amount due and
the value of the security in determining the Portfolio's net asset value. The
market value of the when-issued securities may be more or less than the purchase
price payable at the settlement date. Each Portfolio will establish a segregated
account in which it will maintain cash and U.S. Government securities or other
liquid securities at least equal in value to commitments for when-issued
securities. Such segregated securities either will mature or, if necessary, be
sold on or before the settlement date.

LOANS OF PORTFOLIO SECURITIES

A Portfolio may lend its portfolio securities, provided: (1) the loan is secured
continuously by collateral consisting of U.S. Government securities, cash, or
cash equivalents adjusted daily to have market value at least equal to the
current market value of the securities loaned; (2) the Portfolio may at any time
call the loan and regain the securities loaned; (3) the Portfolio will receive
any interest or dividends paid on the loaned securities; and (4) the aggregate
market value of the Portfolio's portfolio securities loaned will not at any time
exceed one-third of the total assets of the Portfolio. In addition, it is
anticipated that the Portfolio may share with the borrower some of the income
received on the collateral for the loan or that it will be paid a premium for
the loan. Before a Portfolio enters into a loan, Schroder considers all relevant
facts and circumstances, including the creditworthiness of the borrower. The
risks in lending portfolio securities, as with other extensions of credit,
consist of possible delay in recovery of the securities or possible loss of
rights in the collateral should the borrower fail financially. Although voting
rights or rights to consent with respect to the loaned securities pass to the
borrower, a Portfolio retains the right to call the loans at any time on
reasonable notice, and it will do so in order that the securities may be voted
by the Portfolio if the holders of such securities are asked to vote upon or
consent to matters materially affecting the investment. A Portfolio will not
lend portfolio securities to borrowers affiliated with that Portfolio.

FOREIGN SECURITIES

Each Portfolio may invest without limit in securities principally traded in
foreign markets. Each Portfolio may also invest without limit in Eurodollar
certificates of deposit and other certificates of deposit issued by

<PAGE>

United States branches of foreign banks and foreign branches of United States
banks.

Investments in foreign securities may involve risks and considerations different
from or in addition to investments in domestic securities. There may be less
information publicly available about a foreign company than about an U.S.
company, and foreign companies are not generally subject to accounting,
auditing, and financial reporting standards and practices comparable to those in
the United States. The securities of some foreign companies are less liquid and
at times more volatile than securities of comparable U.S. companies. Foreign
brokerage commissions and other fees are also generally higher than in the
United States. Foreign settlement procedures and trade regulations may involve
certain risks (such as delay in payment or delivery of securities or in the
recovery of a Portfolio's assets held abroad) and expenses not present in the
settlement of domestic investments. Also, because foreign securities are
normally denominated and traded in foreign currencies, the values of a
Portfolio's assets may be affected favorably or unfavorably by currency exchange
rates and exchange control regulations, and a Portfolio may incur costs in
connection with conversion between currencies.

In addition, with respect to certain foreign countries, there is a possibility
of nationalization or expropriation of assets, imposition of currency exchange
controls, adoption of foreign governmental restrictions affecting the payment of
principal and interest, imposition of withholding or confiscatory taxes,
political or financial instability, and adverse political, diplomatic or
economic developments which could affect the values of investments in those
countries. In certain countries, legal remedies available to investors may be
more limited than those available with respect to investments in the United
States or other countries and it may be more difficult to obtain and enforce a
judgment against a foreign issuer. Also, the laws of some foreign countries may
limit a Portfolio's ability to invest in securities of certain issuers located
in those countries.

Special tax considerations apply to foreign securities. In determining whether
to invest in securities of foreign issuers, Schroder will consider the likely
impact of foreign taxes on the net yield available to a Portfolio and its
Interestholders. Income received by a Portfolio from sources within foreign
countries may be reduced by withholding and other taxes imposed by such
countries. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes. It is impossible to determine the effective rate
of foreign tax in advance since the amount of a Portfolio's assets to be
invested in various countries is not known, and tax laws and their
interpretations may change from time to time and may change without advance
notice. Any such taxes paid by a Portfolio will reduce its net income available
for distribution to Interestholders.

EMERGING MARKET SECURITIES

The risks of investing in foreign securities are particularly high
when securities of issuers based in developing or emerging market countries
are involved. Investing in emerging market countries involves certain risks
not typically associated with investing in U.S. securities, and imposes risks
greater than, or in addition to, risks of investing in foreign, developed
countries. These risks include: greater risks of nationalization or
expropriation of assets or confiscatory taxation; currency devaluations and
other currency exchange rate fluctuations; greater social, economic and
political uncertainty and instability (including the risk of war); more
substantial government involvement in the economy; less government
supervision and regulation of the securities markets and participants in
those markets; controls on foreign investment and limitations on repatriation
of invested capital and on a Portfolio's ability to exchange local currencies
for U.S. dollars; unavailability of currency hedging techniques in certain
emerging market countries; the fact that companies in emerging market
countries may be smaller, less seasoned and newly organized companies; the
difference in, or lack of, auditing and financial reporting standards, which
may result in unavailability of material information about issuers; the risk
that it may be more difficult to obtain and/or enforce a judgment in a court
outside the United States; and greater price volatility, substantially less
liquidity, and significantly smaller market capitalization of securities
markets. Also, any change in the leadership or politics of emerging market
countries, or the countries that exercise a significant influence

<PAGE>

over those countries, may halt the expansion of or reverse the liberalization of
foreign investment policies now occurring and adversely affect existing
investment opportunities.

In addition, a number of emerging market countries restrict, to various degrees,
foreign investment in securities. Furthermore, high rates of inflation and rapid
fluctuations in inflation rates have had, and may continue to have, negative
effects on the economies and securities markets of certain emerging market
countries.

FOREIGN CURRENCY TRANSACTIONS

Each Portfolio may engage in currency exchange transactions to protect against
uncertainty in the level of future foreign currency exchange rates and to
increase current return. A Portfolio may engage in both "transaction hedging"
and "position hedging."

When it engages in transaction hedging, a Portfolio enters into foreign currency
transactions with respect to specific receivables or payables of that Portfolio
generally arising in connection with the purchase or sale of its portfolio
securities. A Portfolio will engage in transaction hedging when it desires to
"lock in" the U.S. dollar price of a security it has agreed to purchase or sell,
or the U.S. dollar equivalent of a dividend or interest payment in a foreign
currency. By transaction hedging, a Portfolio will attempt to protect against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the applicable foreign currency during the period between the
date on which the security is purchased or sold or on which the dividend or
interest payment is declared, and the date on which such payments are made or
received.

A Portfolio may purchase or sell a foreign currency on a spot (or cash) basis at
the prevailing spot rate in connection with transaction hedging. A Portfolio may
also enter into contracts to purchase or sell foreign currencies at a future
date ("forward contracts") and purchase and sell foreign currency futures
contracts.

For transaction hedging purposes, a Portfolio may also purchase exchange-listed
and over-the-counter call and put options on foreign currency futures contracts
and on foreign currencies. A put option on a futures contract gives a Portfolio
the right to assume a short position in the futures contract until expiration of
the option. A put option on currency gives a Portfolio the right to sell a
currency at an exercise price until the expiration of the option. A call option
on a futures contract gives a Portfolio the right to assume a long position in
the futures contract until the expiration of the option. A call option on
currency gives a Portfolio the right to purchase a currency at the exercise
price until the expiration of the option. A Portfolio will engage in
over-the-counter transactions only when appropriate exchange-traded transactions
are unavailable and when, in Schroder's opinion, the pricing mechanism and
liquidity are satisfactory and the participants are responsible parties likely
to meet their contractual obligations.

When it engages in position hedging, a Portfolio enters into foreign currency
exchange transactions to protect against a decline in the values of the foreign
currencies in which securities held by a Portfolio are denominated or are quoted
in their principal trading markets or an increase in the value of currency for
securities which a Portfolio expects to purchase. In connection with position
hedging, a Portfolio may purchase put or call options on foreign currency and
foreign currency futures contracts and buy or sell forward contracts and foreign
currency futures contracts. A Portfolio may also purchase or sell foreign
currency on a spot basis.

The precise matching of the amounts of foreign currency exchange transactions
and the value of the portfolio securities involved will not generally be
possible since the future value of such securities in foreign currencies will
change as a consequence of market movements in the values of those securities
between the dates the currency exchange transactions are entered into and the
dates they mature.

It is impossible to forecast with precision the market value of a Portfolio's
portfolio securities at the expiration or maturity of a forward or futures
contract. Accordingly, it may be necessary for a Portfolio to

<PAGE>

purchase additional foreign currency on the spot market (and bear the expense of
such purchase) if the market value of the security or securities being hedged is
less than the amount of foreign currency a Portfolio is obligated to deliver and
if a decision is made to sell the security or securities and make delivery of
the foreign currency. Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security or
securities of a Portfolio if the market value of such security or securities
exceeds the amount of foreign currency a Portfolio is obligated to deliver.

To offset some of the costs to a Portfolio of hedging against fluctuations in
currency exchange rates, a Portfolio may write covered call options on those
currencies.

Transaction and position hedging do not eliminate fluctuations in the underlying
prices of the securities, which a Portfolio owns or intends to purchase or sell.
They simply establish a rate of exchange that one can achieve at some future
point in time. Additionally, although these techniques tend to minimize the risk
of loss due to a decline in the value of the hedged currency, they tend to limit
any potential gain which might result from the increase in the value of such
currency. Also, suitable foreign currency hedging transactions may not be
available in all circumstances and there can be no assurance that a Portfolio
will utilize hedging transactions at any time or from time to time.

A Portfolio may also seek to increase its current return by purchasing and
selling foreign currency on a spot basis, and by purchasing and selling options
on foreign currencies and on foreign currency futures contracts, and by
purchasing and selling foreign currency forward contracts.

CURRENCY FORWARD AND FUTURES CONTRACTS. A forward foreign currency exchange
contract involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days from the date of the contract
as agreed by the parties, at a price set at the time of the contract. In the
case of a cancelable forward contract, the holder has the unilateral right to
cancel the contract at maturity by paying a specified fee. The contracts are
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades. A foreign currency futures contract is a standardized contract
for the future delivery of a specified amount of a foreign currency at a future
date at a price set at the time of the contract. Foreign currency futures
contracts traded in the United States are designed by and traded on exchanges
regulated by the CFTC, such as the New York Mercantile Exchange.

Forward foreign currency exchange contracts differ from foreign currency futures
contracts in certain respects. For example, the maturity date of a forward
contract may be any fixed number of days from the date of the contract agreed
upon by the parties, rather than a predetermined date in a given month. Forward
contracts may be in any amounts agreed upon by the parties rather than
predetermined amounts. Also, forward foreign exchange contracts are traded
directly between currency traders so that no intermediary is required. A forward
contract generally requires no margin or other deposit.

At the maturity of a forward or futures contract, a Portfolio may either accept
or make delivery of the currency specified in the contract, or at or prior to
maturity enter into a closing transaction involving the purchase or sale of an
offsetting contract. Closing transactions with respect to forward contracts are
usually effected with the currency trader who is a party to the original forward
contract. Closing transactions with respect to futures contracts are effected on
a commodities exchange; a clearing corporation associated with the exchange
assumes responsibility for closing out such contracts.

Positions in foreign currency futures contracts and related options may be
closed out only on an exchange or board of trade, which provides a secondary
market in such contracts or options. Although a Portfolio will normally purchase
or sell foreign currency futures contracts and related options only on exchanges
or boards of trade where there appears to be an active secondary market, there
is no assurance that a secondary market on an exchange or board of trade will
exist for any particular contract or option or at any particular time. In such
event, it may not be possible to close a futures or related option position and,
in the

<PAGE>

event of adverse price movements, a Portfolio would continue to be required to
make daily cash payments of variation margin on its futures positions.

FOREIGN CURRENCY OPTIONS. Options on foreign currencies operate similarly to
options on securities, and are traded primarily in the over-the-counter market,
although options on foreign currencies have recently been listed on several
exchanges. Such options will be purchased or written only when Schroder believes
that a liquid secondary market exists for such options. There can be no
assurance that a liquid secondary market will exist for a particular option at
any specific time. Options on foreign currencies are affected by all of those
factors that influence exchange rates and investments generally.

The value of a foreign currency option is dependent upon the value of the
foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors may
be disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.

There is no systematic reporting of last sale information for foreign currencies
and there is no regulatory requirement that quotations available through dealers
or other market sources be firm or revised on a timely basis. Available
quotation information is generally representative of very large transactions in
the interbank market and thus may not reflect relatively smaller transactions
(less than $1 million) where rates may be less favorable. The interbank market
in foreign currencies is a global, around-the-clock market. To the extent that
the U.S. options markets are closed while the markets for the underlying
currencies remain open, significant price and rate movements may take place in
the underlying markets that cannot be reflected in the U.S. options markets.

FOREIGN CURRENCY CONVERSION. Although foreign exchange dealers do not charge a
fee for currency conversion, they do realize a profit based on the difference
(the "spread") between prices at which they buy and sell various currencies.
Thus, a dealer may offer to sell a foreign currency to a Portfolio at one rate,
while offering a lesser rate of exchange should a Portfolio desire to resell
that currency to the dealer.

WARRANTS TO PURCHASE SECURITIES. Each Portfolio may invest in warrants to
purchase securities. Bonds issued with warrants attached to purchase equity
securities have many characteristics of convertible bonds and their prices
may, to some degree, reflect the performance of the underlying stock. Bonds
also may be issued with warrants attached to purchase additional fixed income
securities at the same coupon rate. A decline in interest rates would permit
the Portfolio to buy additional bonds at the favorable rate or to sell the
warrants at a profit. If interest rates rise, the warrants would generally
expire with no value.

ZERO-COUPON SECURITIES

Zero-coupon securities in which a Portfolio may invest are debt obligations
which are generally issued at a discount and payable in full at maturity, and
which do not provide for current payments of interest prior to maturity.
Zero-coupon securities usually trade at a deep discount from their face or par
value and are subject to greater market value fluctuations from changing
interest rates than debt obligations of comparable maturities which make current
distributions of interest. As a result, the net asset value of Portfolio
Interests of a Portfolio investing in zero-coupon securities may fluctuate over
a greater range than Portfolio Interests of other series of the Trust and other
mutual funds investing in securities making current distributions of interest
and having similar maturities.

Zero-coupon securities may include U.S. Treasury bills issued directly by the
U.S. Treasury or other short-term debt obligations, and longer-term bonds or
notes and their unmatured interest coupons which have been separated by their
holder, typically a custodian bank or investment brokerage firm. A number of
securities firms and banks have stripped the interest coupons from the
underlying principal (the "corpus") of U.S. Treasury securities and resold them
in custodial receipt programs with a number of different names,

<PAGE>

including Treasury Income Growth Receipts ("TIGRS") and Certificates of Accrual
on Treasuries ("CATS"). CATS and TIGRS are not considered U.S. Government
securities. The underlying U.S. Treasury bonds and notes themselves are held in
book-entry form at the Federal Reserve Bank or, in the case of bearer securities
(I.E., unregistered securities which are owned ostensibly by the bearer or
holder thereof), in trust on behalf of the owners thereof.

In addition, the Treasury has facilitated transfers of ownership of zero-coupon
securities by accounting separately for the beneficial ownership of particular
interest coupons and corpus payments on Treasury securities through the Federal
Reserve book-entry record-keeping system. The Federal Reserve program as
established by the Treasury Department is known as "STRIPS" or "Separate Trading
of Registered Interest and Principal of Securities." Under the STRIPS program, a
Portfolio will be able to have its beneficial ownership of U.S. Treasury
zero-coupon securities recorded directly in the book-entry record-keeping system
in lieu of having to hold certificates or other evidences of ownership of the
underlying U.S. Treasury securities.

When debt obligations have been stripped of their unmatured interest coupons by
the holder, the stripped coupons are sold separately. The principal or corpus is
sold at a deep discount because the buyer receives only the right to receive a
future fixed payment on the security and does not receive any rights to periodic
cash interest payments. Once stripped or separated, the corpus and coupons may
be sold separately. Typically, the coupons are sold separately or grouped with
other coupons with like maturity dates and sold in such bundled form. Purchasers
of stripped obligations acquire, in effect, discount obligations that are
economically identical to the zero-coupon securities issued directly by the
obligor.

TEMPORARY DEFENSIVE STRATEGIES

As described in the Memorandum, Schroder may at times judge that conditions in
the securities markets make pursuing a Portfolio's basic investment strategies
inconsistent with the best interests of its Interestholders and may temporarily
use alternate investment strategies primarily designed to reduce fluctuations in
the value of a Portfolio's assets. In implementing these "defensive" strategies,
the Portfolio would invest in high-quality debt securities, cash, or money
market instruments to any extent Schroder considers consistent with such
defensive strategies. It is impossible to predict when, or for how long, a
Portfolio will use these alternate strategies. One risk of taking such temporary
defensive positions is that the Portfolio may not achieve its investment
objective.

INVESTMENT RESTRICTIONS

The Trust has adopted the following fundamental and non-fundamental investment
restrictions for each Portfolio. A Portfolio's Fundamental investment
restrictions may not be changed without the affirmative vote of a "majority of
the outstanding voting securities" of the affected Portfolio, which is defined
in the 1940 Act to mean the affirmative vote of the lesser of (1) more than 50%
of the outstanding Portfolio Interests and (2) 67% or more of the Portfolio
Interests present at a meeting if more than 50% of the outstanding Portfolio
Interests are represented at the meeting in person or by proxy. The
non-fundamental investment policies described in the Memorandum and this SAI may
be changed by the Trustees without Interestholder approval.

FUNDAMENTAL RESTRICTIONS

The Portfolios will not:

1. Purchase any securities which would cause 25% or more of the value of its
total assets, taken at market value at the time of such purchase, to be
invested in securities of one or more issuers conducting their principal
business activities in the same industry, provided that there is no
limitation with respect to investment in obligations issued or guaranteed
by the U.S. Government, its agencies or

<PAGE>

instrumentalities. For purposes of this restriction, a foreign government
is deemed to be an "industry."

2. Borrow money except that the each Portfolio may borrow from banks up to
33 1/3% of its total assets (including the amount borrowed) for temporary
or emergency purposes or to meet redemption requests. The Portfolios may
not issue any class of securities which is senior to the Portfolio's shares
of beneficial interest; provided, however, that none of the following shall
be deemed to create senior securities: (1) any borrowing permitted by this
restriction or any pledge or encumbrance to secure such borrowing; (2) any
collateral arrangements with respect to options, futures contracts, options
on futures contracts or other financial instruments; or (3) any purchase,
sale or other permitted transaction in options, forward contracts, futures
contracts, options on futures contracts or other financial instruments.
(The following are not treated as borrowings to the extent they are fully
collateralized: (1) the delayed delivery of purchased securities (such as
the purchase of when-issued securities); (2) reverse repurchase agreements;
(3) dollar-roll transactions; and (4) the lending of securities.)

3. Purchase or sell real estate, real estate mortgage loans or real estate
limited partnership interests (other than securities secured by real estate
or interests therein or securities issued by companies that invest in real
estate or interests therein).

4. Make loans to other parties, except that each Portfolio may: (a) purchase
and hold debt instruments (including bonds, debentures or other obligations
and certificates of deposit, bankers' acceptances and fixed time deposits)
in accordance with its investment objective and policies, (b) enter into
repurchase agreements with respect to portfolio securities, and (c) make
loans of portfolio securities.

5. Purchase or sell commodities or commodity contracts, including futures
contracts and options thereon, except that the Portfolio may purchase or
sell financial futures contracts and related options, and futures
contracts, forward contracts, and options with respect to foreign
currencies, and may enter into swaps or other financial transactions.

6. Underwrite (as that term is defined in the Securities Act of 1933, as
amended) securities issued by other persons except to the extent that, in
connection with the disposition of its portfolio securities, it may be
deemed to be an underwriter.

7. Invest for the purpose of exercising control over the management of any
company.

8. Make short sales of securities or maintain a short position.

9. Purchase securities on margin (except for delayed delivery or when-issued
transactions or such short-term credits as are necessary for the clearance
of transactions and for hedging purposes and margin deposits in connection
with transactions in futures contracts, options on futures contracts,
options on securities and securities indices, and currency transactions)
and other financial transactions.

Notwithstanding any other investment policy or restriction to the contrary, each
Portfolio may seek to achieve its investment objective by investing some or all
of its assets in the securities of one or more investment companies to the
extent permitted by the 1940 Act or an applicable exemptive order under such
Act; provided that, except to the extent a Portfolio invests in other investment
companies pursuant to Section 12(d)(1)(A) of the 1940 Act, the Portfolio treats
the assets of the investment companies in which it invests as its own. (The
foregoing investment policy is fundamental.)

NON-FUNDAMENTAL LIMITATIONS

1. Under these additional restrictions, a Portfolio may not invest more than
25% of its total assets in obligations of any one issuer other than U.S.
Government securities and, with respect to 50% of its total assets, the
Portfolio may not invest more than 5% of its total assets in the securities
of any one issuer (except U.S. Government securities). Thus, a Portfolio
may invest up to 25% of its total assets

<PAGE>

in the securities of each of any two issuers.

2. A Portfolio may not invest more than 15% of its net assets in: (1)
securities that cannot be disposed of within seven days at their
then-current value; (2) repurchase agreements not entitling the holder to
payment of principal within seven days; and (3) securities subject to
restrictions on the sale of the securities to the public without
registration under the Securities Act of 1933, as amended ("restricted
securities") that are not readily marketable. A Portfolio may treat certain
restricted securities as liquid pursuant to guidelines adopted by the
Board.

3. A Portfolio may not lend a security if, as a result, the amount of loaned
securities would exceed an amount equal to one third of the Portfolio's
total assets.

-------------------

All percentage limitations on investments (other than limitations on borrowing
and illiquid securities) will apply at the time of investment and shall not be
considered violated unless an excess or deficiency occurs or exists immediately
after and as a result of such investment.

TRUSTEES AND OFFICERS

The Trustees of the Trust are responsible for the general oversight of the
Trust's business. Subject to such policies as the Trustees may determine,
Schroder furnishes a continuing investment program for each Portfolio and makes
investment decisions on its behalf. Subject to the control of the Trustees,
Schroder also manages the Portfolios' other affairs and business.

The Trustees and executive officers of the Trust and their principal occupations
during the last five years are set forth below. The mailing address of each of
the officers and Trustees is 787 Seventh Avenue, New York, New York 10019.

David N. Dinkins, Trustee. 72. Trustee, Schroder Capital Funds (Delaware) and
Schroder Series Trust. Professor, Columbia University School of International
and Public Affairs. Director, American Stock Exchange, Carver Federal Savings
Bank, Transderm Laboratory Corporation, and The Cosmetics Center, Inc. Formerly,
Mayor, City of New York.

John I. Howell, Trustee. 83. Trustee, Schroder Capital Funds (Delaware) and
Schroder Series Trust. Partner, Wunder, Knight, Levine, Thelen & Forscey.
Director, Comsat Corp., Medicis Pharmaceutical Corp., and Whitman Education
Group, Inc. Formerly, Campaign Manager, Clinton/Gore '96.

Peter S. Knight, Trustee. 49. Trustee, Schroder Capital Funds (Delaware),
Schroder Capital Funds II, and Schroder Series Trust. Partner, Wunder, Knight,
Levine, Thelen & Forscey. Director, Comsat Corp., Medicis Pharmaceutical Corp.,
and Whitman Education Group, Inc. Formerly, Campaign Manager, Clinton/Gore `96.

Peter E. Guernsey, Trustee. 78. Trustee, Schroder Capital Funds (Delaware),
Schroder Capital Funds II, Schroder Series Trust, and Schroder Series Trust II.
Formerly, Senior Vice President, Marsh & McLennan, Inc.

(*) Sharon L. Haugh, Trustee. 54. Trustee, Schroder Capital Funds (Delaware) and
Schroder Series Trust. Director and Chairman, Schroder. Director and Chairman,
Schroder Fund Advisors Inc.

William L. Means, Trustee. 64. Trustee, Schroder Capital Funds (Delaware),
Schroder Schroder Series Trust II. Formerly, Chief Investment Officer, Alaska
Permanent Fund Corporation.

<PAGE>

Clarence F. Michalis, Trustee. 78. Trustee, Schroder Capital Funds (Delaware),
and Schroder Series Trust. Chairman of the Board of Directors, Josiah Macy, Jr.
Foundation.

Hermann C. Schwab, Trustee. 80. Trustee, Schroder Capital Funds (Delaware), and
Schroder Schroder Series Trust. Trustee, St. Luke's/Roosevelt Hospital Center.
Formerly, consultant to Schroder Capital Management International Inc.

Alexandra Poe, President of the Trust. 39. First Vice President, Schroder.
Senior Vice President, Secretary, and General Counsel, Schroder Fund Advisors
Inc. President, Schroder Capital Funds (Delaware) and Schroder Series Trust.
Assistant Secretary, Schroder Series Trust II. Formerly, Attorney, Gordon,
Altman, Butowsky, Weitzen, Shalov & Wein and Vice President and Counsel,
Citibank, N.A.

(*) Mark J. Smith, President and Trustee of the Trust. 37. Director and Senior
Vice President, Schroder Capital Management International Limited and Schroder
Capital Management International Inc. Director, Schroder Investment Management
Ltd., Schroder Fund Advisors Inc., and Schroder Japanese Warrant Fund Ltd.
Trustee, Schroder Capital Funds (Delaware), Schroder Capital Funds II, and
Schroder Series Trust. Vice President, Schroder Series Trust II.

Mark Astley, Vice President of the Trust. 35. First Vice President of Schroder
Capital Management International Inc. Formerly, employed by various affiliates
of Schroder Capital Management International Inc. in various positions in the
investment research and portfolio management areas since 1987.

Robert G. Davy, Vice President of the Trust. 38. Director of Schroder Capital
Management International Inc. and Schroder Capital Management International Ltd.
since 1994; First Vice President of Schroder Capital Management International
Inc. since July 1992. Formerly, employed by various affiliates of Schroder
Capital Management International Inc. in various positions in the investment
research and portfolio management areas since 1986.

Margaret H. Douglas-Hamilton, Vice President of the Trust. 58. Director and
Secretary of Schroder Capital Management Inc.

Richard R. Foulkes, Vice President of the Trust. 54. Deputy Chairman of Schroder
Capital Management International Inc. since October 1995; Director and Executive
Vice President of Schroder Capital Management International Ltd. since 1989.

Michael Perelstein, Vice President of the Trust. 44. Director since May 1997 and
Senior Vice President of Schroder Capital Management International Inc. since
January 1997. Formerly, Managing Director of MacKay - Shields Financial Corp.

Catherine A. Mazza, Vice President of the Trust. 40. Director and Senior Vice
President, Schroder. Exeutive Vice President and Director, Schroder Fund
Advisors Inc. Vice President, Schroder Capital Funds (Delaware), Schroder Series
Trust, and Schroder Series Trust II. Formerly, Vice President, Alliance Capital
Management L.P.

- --------
(*) Trustee who is an "interested person" (as defined in the 1940 Act) of the
Trust, Schroder, or Schroder Fund Advisors Inc.

<PAGE>

Jane E. Lucas, Vice President of the Trust. 39. Senior Vice President, Schroder.

Fergal Cassidy, Assistant Treasurer of the Trust. 30. Assistant Treasurer,
Schroder Capital Funds (Delaware) and Schroder Series Trust. Treasurer and Chief
Financial Officer, Schroder Series Trust II. Vice President and Treasurer,
Schroder. Treasurer and Chief Financial Officer, Schroder Fund Advisors Inc.
Formerly, Senior Accountant, Concurrency Management Corp.

Alan Mandel, Assistant Treasurer of the Trust. 42. First Vice President of
Schroder Capital Management International Inc. since September 1998. Formerly,
Director of Mutual Fund Administration for Salomon Brothers Asset Management;
Chief Financial Officer and Vice President of Mutual Capital Management.

Carin Muhlbaum, Assistant Secretary of the Trust. 37. Assistant Secretary,
Schroder Capital Funds (Delaware) and Assistant Clerk, Schroder Series Trust.
Vice President, Schroder. Formerly, an investment management attorney with
Seward & Kissel and prior thereto, with Gordon Altman Butowsky Weitzen Shalov &
Wein.

Nicholas Rossi, Assistant Secretary of the Trust. 36. Assistant Secretary,
Schroder Capital Funds (Delware) and Assistant Clerk, Schroder Series Trust.
Associate, Schroder. Assistant Vie President, Schroder Fund Advisors Inc.
Formerly, Mutual Fund Specialist, Willkie Farr & Gallagher; Fund Administrator,
Furman Selz LLC.

John A. Troiano, Vice President of the Trust. 40. Director of Schroder Capital
Management Inc. since April 1997; Chief Executive Officer, since July 1, 1997,
of Schroder Capital Management International Inc. and Managing Director and
Senior Vice President of Schroder Capital Management International Inc. since
October 1995. Formerly, employed by various affiliates of Schroder Capital
Management International Inc. in various positions in the investment research
and portfolio management areas since 1981.

Ira L. Unschuld, Vice President of the Trust. 34. Group Vice President of
Schroder Capital Management International Inc. since April 1998 and an Associate
from July 1990 to April 1993.

Except as otherwise noted, the principal occupations of the Trustees and
officers for the last five years have been with the employers shown above,
although in some cases they have held different positions with such employers or
their affiliates.

TRUSTEE COMPENSATION

Trustees who are not "interested persons" (as defined in the Investment
Company Act) of the Trust, Schroder, or Schroder Fund Advisors Inc.
("Disinterested Trustees") receive an annual retainer of $11,000 for their
services as Trustees of all open-end investment companies distributed by
Schroder Fund Advisors Inc. with the exception of Schroder Series Trust II, and
$1,250 per meeting attended in person or $500 per meeting attended by telephone.
Members of an Audit Committee for one or more of such investment companies
receive an additional $1,000 per year. Payment of the annual retainer is
allocated among such investment companies based on their relative net assets.
Payments of meeting fees are allocated only among those investment companies to
which the meeting relates.

The table below sets forth information regarding compensation paid for the
fiscal year ended October 31, 1999 to the Disinterested Trustees by the Trust
and other funds in the Schroder "Fund Complex" (as defined below).

<PAGE>

<TABLE>
<CAPTION>
COMPENSATION TABLE

- -----------------------------------------------------------------------------------------------------------
(1) (2) (3)
NAME OF AGGREGATE TOTAL COMPENSATION FROM TRUST
TRUSTEE COMPENSATION AND
FROM TRUST FUND COMPLEX PAID TO TRUSTEES*
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
David N. Dinkins $5,232 $16,250
- -----------------------------------------------------------------------------------------------------------

Peter E. Guernsey $5,523 $26,500
- -----------------------------------------------------------------------------------------------------------

John I. Howell $5,468 $29,000
- -----------------------------------------------------------------------------------------------------------

Peter S. Knight $5,523 $17,000
- -----------------------------------------------------------------------------------------------------------

William L. Means** $5,584 $26,500
- -----------------------------------------------------------------------------------------------------------

Clarence F. Michalis $5,523 $17,000
- -----------------------------------------------------------------------------------------------------------

Hermann C. Schwab $5,523 $17,000
- -----------------------------------------------------------------------------------------------------------
</TABLE>

* The Total Compensation listed in column (3) for each Trustee includes
compensation for services as a Trustee of the Trust, Schroder Capital
Funds II ("SCF II"), Schroder Capital Funds (Delaware) ("SCF(D)"),
Schroder Series Trust ("SST"), and Schroder Series Trust II ("SST
II"). The Trust, SCF(D), SCF II, SST, and SST II are considered part
of the same "Fund Complex" for these purposes.

** Mr. Means was elected Trustee of the Trust on December 15, 1998.

As of February 1, 1999, the Trustees of the Trust as a group owned less than 1%
of the Portfolio Interests.

The Trust's Trust Instrument provides that the Trust will indemnify its Trustees
and officers against liabilities and expenses incurred in connection with
litigation in which they may be involved because of their offices with the
Trust, except if it is determined, in the manner specified in the Trust
Instrument, that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust or that such
indemnification would relieve any officer or Trustee of any liability to the
Trust or its Interestholders by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of his or her duties. The Trust, at its
expense, provides liability insurance for the benefit of its Trustees and
officers.

SCHRODER AND ITS AFFILIATES

Schroder (together with its predecessors) has served as the investment
adviser for each of the Portfolios since their inception. Schroder is a
wholly owned subsidiary of Schroder U.S. Holdings Inc., which engages through
its subsidiary firms in the investment banking, asset management, and
securities businesses. Affiliates of Schroder U.S. Holdings Inc. (or their
predecessors) have been investment managers since 1927. Schroder U.S.
Holdings Inc. is an indirect, wholly-owned U.S. subsidiary of Schroders plc,
a publicly owned holding company organized under the laws of England.
Schroders plc and its affiliates currently engage in worldwide investment
banking and asset management businesses, and as of June 30, 1999, had under
management assets of approximately $208 billion. Schroder's address is 787
Seventh Avenue, New York, New York 10019.

In January 2000, Schroders plc agreed to sell its worldwide investment
banking business to Salomon Smith Barney. The transaction, which is expected
to be completed by May 2000, is subject to regulatory approvals and
satisfaction of closing conditions. Schroders plc will retain its asset
management businesses. Schroder Fund Advisors Inc., the Trust's principal
underwriter, is a wholly-owned subsidiary of Schroder Investment Management
North America Inc.

<PAGE>

INVESTMENT ADVISORY AGREEMENTS

Under an Amended and Restated Investment Advisory Agreements (the "Advisory
Agreements") between the Trust and Schroder (the "Advisory Agreements"),
Schroder, at its expense, provides the Portfolios with investment advisory
services and advises and assists the officers of the Trust in taking such steps
as are necessary or appropriate to carry out the decisions of its Trustees
regarding the conduct of business of the Trust and each Portfolio. The fees to
be paid under the Advisory Agreements are set forth in the Memorandum.

Under the Advisory Agreements, Schroder is required to regularly provide the
Portfolios with investment research, advice, and supervision and furnishes
continuously investment programs consistent with the investment objectives and
policies of the various Portfolios. Schroder also determines, for the various
Portfolios, what securities shall be purchased, what securities shall be held or
sold, and what portion of a Portfolio's assets shall be held uninvested, subject
always to the provisions of the Trust's Trust Instrument and By-laws, and the
1940 Act, and to a Portfolio's investment objectives, policies, and
restrictions, and subject further to such policies and instructions as the
Trustees may from time to time establish.

Schroder makes available to the Trust, without additional expense to the Trust,
the services of such of its directors, officers, and employees as may duly be
elected Trustees or officers of the Trust, subject to their individual consent
to serve and to any limitations imposed by law. Schroder pays the compensation
and expenses of officers and executive employees of the Trust. Schroder also
provides investment advisory research and statistical facilities and all
clerical services relating to such research, statistical, and investment work.
Schroder pays the Trust's office rent.

Under the Advisory Agreements, the Trust is responsible for all its other
expenses, including clerical salaries not related to investment activities; fees
and expenses incurred in connection with membership in investment company
organizations; brokers' commissions; payment for portfolio pricing services to a
pricing agent, if any; legal expenses; auditing expenses; accounting expenses;
taxes and governmental fees; fees and expenses of the placement agent of the
Trust; the cost of preparing subscription documents or any other expenses,
including clerical expenses, incurred in connection with the issue, sale,
underwriting, redemption, or repurchase of Portfolio Interests; the expenses of
and fees for registering or qualifying securities for exemptions from
registration requirements; the fees and expenses of the Trustees of the Trust
who are not affiliated with Schroder or Forum Fund Services, LLC, or their
respective affiliates; the cost of preparing and distributing reports and
notices to Interestholders; public and investor relations expenses; and fees and
disbursements of custodians of the Portfolios' assets. The Trust is also
responsible for its expenses incurred in connection with litigation, legal
proceedings, and claims and the legal obligation it may have to indemnify its
officers and Trustees with respect thereto.

Schroder's compensation under the Advisory Agreements may be reduced in any year
if a Portfolio's expenses exceed the limits on investment company expenses
imposed by any statute or regulatory authority of any jurisdiction in which
Portfolio Interests are qualified for offer or sale.

The Advisory Agreement provides that Schroder shall not be subject to any
liability for any error of judgement or mistake of law or for any loss suffered
by the Trust in connection with rendering service to the Trust in the absence of
willful misfeasance, bad faith, gross negligence, or reckless disregard of its
duties.

The Advisory Agreements may be terminated without penalty by vote of the
Trustees as to any Portfolio, by the Interestholders of that Portfolio, or by
Schroder on 60 days written notice. Each Advisory Agreement also terminates
without payment of any penalty in the event of its assignment. In addition, each
Advisory Agreement may be amended only by a vote of the Interestholders of the
affected Portfolio(s), and each Advisory Agreement provides that it will
continue in effect from year to year only so long as such continuance is
approved at least annually with respect to a Portfolio by vote of either the
Trustees or the Interestholders of the Portfolio, and, in either case, by a
majority of the Trustees who are not "interested

<PAGE>

persons" of Schroder. In each of the foregoing cases, the vote of the
Interestholders is the affirmative vote of a "majority of the outstanding voting
securities" as defined in the 1940 Act.

RECENT INVESTMENT ADVISORY FEES. The total investment advisory fees paid by the
Portfolios to Schroder during the three most recent fiscal years are set forth
in the following table. The fees listed in the following table reflects
reductions pursuant to expense limitations in effect during such periods.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
INVESTMENT ADVISORY INVESTMENT ADVISORY INVESTMENT ADVISORY
FEES PAID FOR FISCAL FEES PAID FOR FISCAL FEES PAID FOR FISCAL
PORTFOLIO YEAR ENDED 10/31/99 YEAR ENDED 10/31/98 YEAR ENDED 10/31/97
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Schroder Asian Growth Fund $147,448 $147,140 N/A
Portfolio
- --------------------------------------------------------------------------------------------------------------------
Schroder Japan Portfolio $32,884 $63,136 N/A
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

FEE WAIVERS

Schroder voluntarily waived its fees during the three most recent fiscal years
pursuant to voluntary expense limitations and/or waivers in effect during such
periods. The table below reflects the amount of the investment advisory fees
scheduled to be paid by each Portfolio that was waived by Schroder.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
FEES WAIVED DURING FEES WAIVED DURING FEES WAIVED DURING
FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
PORTFOLIO 10/31/99 10/31/98 10/31/97
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Schroder Asian Growth Fund $41,634 $11,385 N/A
Portfolio
- --------------------------------------------------------------------------------------------------------------------

Schroder Japan Portfolio $60,722 $7,699 N/A
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

ADMINISTRATIVE SERVICES

On behalf of each Portfolio, the Trust has entered into an administration
agreement with Schroder Fund Advisors Inc., under which Schroder Fund Advisors
Inc. provides management and administrative services necessary for the operation
of the Portfolios, including: (1) preparation of Interestholder reports and
communications; (2) regulatory compliance, such as reports to and filings with
the SEC and state securities commissions; and (3) general supervision of the
operation of the Portfolios, including coordination of the services performed by
its investment adviser, transfer agent, custodian, independent accountants,
legal counsel and others. Schroder Fund Advisors Inc. is a wholly owned
subsidiary of Schroder and is a registered broker-dealer organized to act as
administrator and distributor of mutual funds.

For providing administrative services, Schroder Fund Advisors Inc. is entitled
to receive a monthly fee of 0.05% (based upon each Portfolio's average daily net
assets). The administration agreement is terminable with respect to a Portfolio
without penalty, at any time, by the Trustees upon 60 days written notice to
Schroder Fund Advisors Inc. or by Schroder Fund Advisors Inc. upon 60 days
written notice to the Trust.

Effective June 1, 1999, the Trust entered into a subadministration agreement
with State Street Bank and

<PAGE>

Trust Company ("State Street"). Under that agreement, the Trust, together with
all mutual funds managed by Schroder and certain related entities, pay fees to
State Street based on the combined average daily net assets of all the funds in
the Schroder complex, according to the following annual rates: 0.06% on the
first $1.7 billion of such assets; 0.04% on the next $1.7 billion of such
assets; and 0.02% of such assets in excess of $3.4 billion, subject to certain
minimum charges. Each Portfolio pays its pro rata portion of such expenses. The
subadministration agreement is terminable with respect to a Portfolio without
penalty, at any time, by the Trust upon 60 days written notice to State Street
or by State Street upon 60 days written notice to the Trust. Prior to June 1,
1999, Forum Administrative Services, LLC ("FAdS") provided certain
administrative services to the Portfolios according to a different fee schedule
than the schedule currently payable to Schroder Fund Advisors Inc. and State
Street.

State Street also provides certain accounting services to the Trust. The Trust
compensates State Street on a basis approved by the Trustees.

Schroder Fund Advisors Inc. is contractually obligated to waive a portion of its
administration fee and has assumed certain expenses of each Portfolio until
October 31, 2000 so that such Portfolio's total expenses would not exceed the
following rates (based on each of the respective Portfolio's average daily net
assets):

Schroder Asian Growth Fund Portfolio 1.16%
Schroder Japan Portfolio 0.99%

RECENT ADMINISTRATIVE FEES. During the three most recent fiscal years, the
Portfolios paid the following fees to Schroder Fund Advisors Inc. and FadS
pursuant to the administration agreements in place during such periods. The fees
listed in the following table reflect reductions pursuant to fee waivers and
expense limitations in effect during such periods.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
ADMINISTRATIVE FEES ADMINISTRATIVE FEES ADMINISTRATIVE FEES
PAID FOR FISCAL YEAR PAID FOR FISCAL YEAR PAID FOR FISCAL YEAR
PORTFOLIO ENDED 10/31/99 ENDED 10/31/98 ENDED 10/31/97
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Schroder Asian Growth Fund Schroder Fund Advisors Schroder Fund Advisors N/A
Portfolio Inc. $13,506 Inc. $11,385
FAdS $6,977 FAdS $11,385

- --------------------------------------------------------------------------------------------------------------------
Schroder Japan Portfolio Schroder Fund Advisors Schroder Fund Advisors Schroder Fund Advisors
Inc. $8,510 Inc. $ Inc. $
FAdS $5,269 FAdS $ FAdS $

- --------------------------------------------------------------------------------------------------------------------
</TABLE>

PLACEMENT AGENT

Schroder Fund Advisors Inc., 787 Seventh Avenue, New York, New York, 10019
serves as the Trust's placement agent (underwriter). The Placement Agent
receives no compensation for its services.

BROKERAGE ALLOCATION AND OTHER PRACTICES

Schroder may place portfolio transactions with broker-dealers which furnish,
without cost, certain research, statistical, and quotation services of value to
Schroder and its affiliates in advising the Trust and other clients, provided
that it shall always seek best price and execution with respect to transactions.
Certain

<PAGE>

investments may be appropriate for the Trust and for other clients advised by
Schroder. Investment decisions for the Trust and other clients are made with a
view to achieving their respective investment objectives and after consideration
of such factors as their current holdings, availability of cash for investment,
and the size of their investments generally. Frequently, a particular security
may be bought or sold for only one client or in different amounts and at
different times for more than one but less than all clients. Likewise, a
particular security may be bought for one or more clients when one or more other
clients are selling the security. In addition, purchases or sales of the same
security may be made for two or more clients of Schroder on the same day. In
such event, such transactions will be allocated among the clients in a manner
believed by Schroder to be equitable to each. In some cases, this procedure
could have an adverse effect on the price or amount of the securities purchased
or sold by the Trust. Purchase and sale orders for the Trust may be combined
with those of other clients of Schroder in the interest of achieving the most
favorable net results for the Trust.

BROKERAGE AND RESEARCH SERVICES. Transactions on U.S. stock exchanges and other
agency transactions involve the payment by the Trust of negotiated brokerage
commissions. Such commissions vary among different brokers. Also, a particular
broker may charge different commissions according to such factors as the
difficulty and size of the transaction. Transactions in foreign securities often
involve the payment of fixed brokerage commissions, which are generally higher
than those in the United States, and therefore certain portfolio transaction
costs may be higher than the costs for similar transactions executed on U.S.
securities exchanges. There is generally no stated commission in the case of
securities traded in the over-the-counter markets, but the price paid by the
Trust usually includes an undisclosed dealer commission or mark-up. In
underwritten offerings, the price paid by the Trust includes a disclosed, fixed
commission or discount retained by the underwriter or dealer.

Schroder places all orders for the purchase and sale of portfolio securities and
buys and sells securities through a substantial number of brokers and dealers.
In so doing, it uses its best efforts to obtain the best price and execution
available. In seeking the best price and execution, Schroder considers all
factors it deems relevant, including price, the size of the transaction, the
nature of the market for the security, the amount of the commission, the timing
of the transaction (taking into account market prices and trends), the
reputation, experience, and financial stability of the broker-dealer involved,
and the quality of service rendered by the broker-dealer in other transactions.

It has for many years been a common practice in the investment advisory business
for advisers of investment companies and other institutional investors to
receive research, statistical, and quotation services from broker-dealers that
execute portfolio transactions for the clients of such advisers. Consistent with
this practice, Schroder receives research, statistical, and quotation services
from many broker-dealers with which it places the Trust's portfolio
transactions. These services, which in some cases may also be purchased for
cash, include such matters as general economic and security market reviews,
industry and company reviews, evaluations of securities, and recommendations as
to the purchase and sale of securities. Some of these services are of value to
Schroder and its affiliates in advising various of their clients (including the
Trust or a Portfolio), although not all of these services are necessarily useful
and of value in managing a Portfolio. The investment advisory fee paid by a
Portfolio is not reduced because Schroder and its affiliates receive such
services.

As permitted by Section 28(e) of the Securities Exchange Act of 1934, as
amended, and by the Advisory Agreements, Schroder may cause a Portfolio to pay a
broker that provides brokerage and research services to Schroder an amount of
disclosed commission for effecting a securities transaction for a Portfolio in
excess of the commission which another broker would have charged for effecting
that transaction. Schroder's authority to cause a Portfolio to pay any such
greater commissions is also subject to such policies as the Trustees may adopt
from time to time.

To the extent permitted by law, the Portfolios may engage in brokerage
transactions with Schroder & Co. Inc. ("Schroder & Co."), which is an
affiliate of Schroder, or with unaffiliated brokers who trade or clear
through Schroder & Co., or Lewco Securities Corp. ("Lewco"), another
affiliate of Schroder,

<PAGE>

to effect securities transactions on U.S. exchanges, or Schroder Securities
Limited and its affiliates (collectively, "Schroder Securities"), affiliates
of Schroder, to effect securities transactions on various foreign securities
exchanges on which Schroder Securities has trading privileges. Consistent
with regulations under the 1940 Act, the Portfolios have adopted procedures
which are reasonably designed to provide that any commissions or other
remuneration the Portfolios pay to any affiliated broker do not exceed the
usual and customary broker's commission. The procedures require periodic
review of these transactions by the Trustees. In addition, the Portfolios
will adhere to the rule, under the Securities Exchange Act of 1934, governing
floor trading. This rule permits the Portfolio's to effect, but not execute,
exchange listed securities transactions with an affiliated broker that pays a
portion of the brokerage commissions it receives from a Portfolio to the
brokers executing the transactions. Also, due to securities law limitations,
the Portfolios may be required to limit purchases of securities in a public
offering if Schroder & Co., Lewco, or Schroder Securities or one of their
affiliates is a member of the syndicate for that offering.

The Portfolios do not have any understanding or arrangement to direct any
specific portion of its brokerage to Schroder & Co., Lewco, or Schroder
Securities, and will not direct brokerage to Schroder & Co., Lewco, or Schroder
Securities in recognition of research services.

The following table shows the aggregate brokerage commissions paid for the three
most recent fiscal years with respect to each Portfolio.

<PAGE>

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
BROKERAGE COMMISSIONS BROKERAGE COMMISSIONS BROKERAGE COMMISSIONS
PAID DURING FISCAL YEAR PAID DURING FISCAL YEAR PAID DURING FISCAL YEAR
PORTFOLIO ENDED 10/31/99 ENDED 10/31/98 ENDED 10/31/97
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Schroder Asian Growth Fund $173,473 $310,531 N/A
Portfolio

- --------------------------------------------------------------------------------------------------------------------
Schroder Japan Portfolio $24,775 $45,502 N/A

- --------------------------------------------------------------------------------------------------------------------
</TABLE>

In the fiscal year ended October 31, 1999, Schroder, on behalf of the Trust,
placed agency and underwritten transactions having an approximate aggregate
dollar value of $________, (___% of the Trust's aggregate agency and
underwritten transactions, on which approximately $_______ of commissions were
paid) with brokers and dealers (other than Schroder & Co. and Schroder
Securities) whose research, statistical, and quotation services Schroder
considered to be particularly useful to it and its affiliates. However, many of
such transactions were placed with such brokers and dealers without regard to
the furnishing of such services.

The following table shows the aggregate brokerage commissions paid to Schroder &
Co. and Schroder Securities for the three most recent fiscal years, as well as
the percentage such commissions represented of all transactions on which a
Portfolio paid brokerage commissions during such fiscal year.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
BROKERAGE COMMISSIONS BROKERAGE COMMISSIONS BROKERAGE
PAID DURING FISCAL YEAR PAID DURING FISCAL YEAR COMMISSIONS PAID
ENDED 10/31/99 ENDED 10/31/98 DURING FISCAL YEAR
PORTFOLIO ENDED 10/31/97
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Schroder Asian Growth Fund Schroder & Co. $0% Schroder & Co. $0 0% N/A
Portfolio Schroder Securities $0%
Schroder Securities $0 0%

- -----------------------------------------------------------------------------------------------------------------
Schroder Japan Portfolio Schroder & Co. $0% Schroder & Co. $0 0% N/A
Schroder Securities $0%
Schroder Securities $0 0%

- -----------------------------------------------------------------------------------------------------------------
</TABLE>

DETERMINATION OF NET ASSET VALUE

The net asset value per share of the Portfolio Invests of a Portfolio is
determined daily as of the close of trading on the New York Stock Exchange
(normally 4:00 p.m., Eastern Time) on each day the Exchange is open for trading.

The Trustees have established procedures for the valuation of a Portfolio's
securities, which are summarized as follows:

Equities listed or traded on a domestic or foreign stock exchange (including the
National Association of Securities Dealers' Automated Quotation System
("NASDAQ")) for which last sales information is regularly reported are valued at
their last reported sales prices on such exchange on that day or, in the absence
of sales that day, such securities are valued at the mean of closing bid and ask
prices ("mid-market

<PAGE>

price") or, if none, the last sales price on the preceding trading day. (Where
the securities are traded on more than one exchange, they are valued on the
exchange on which the security is primarily traded.) Securities purchased in an
initial public offering and which have not commenced trading in a secondary
market are valued at cost. Unlisted securities for which over-the-counter market
quotations are readily available generally are valued at the most recently
reported mid-market prices. Fixed income securities with remaining maturities of
more than 60 days are valued on the basis of valuations provided by pricing
services that determine valuations for normal institutional size trading units
of fixed income securities, or through obtaining independent quotes from market
makers. Short-term fixed income securities with remaining maturities of 60 days
or less are valued at amortized cost, which approximates market value, unless
Schroder believes another valuation is more appropriate. Securities for which
current market quotations are not readily available are valued at fair value
pursuant to procedures established by the Trustees.

All assets and liabilities of a Portfolio denominated in foreign currencies are
translated into U.S. dollars based on the mid-market price of such currencies
against the U.S. dollar at the time when last quoted.

Long-term corporate bonds and notes, certain preferred stocks, tax-exempt
securities, and certain foreign securities may be stated at fair value on the
basis of valuations furnished by pricing services, which determine valuations
for normal, institutional-size trading units of such securities using methods
based on market transactions for comparable securities.

If any securities held by a Portfolio are restricted as to resale, Schroder will
obtain a valuation based on the current bid for the restricted security from one
or more independent dealers or other parties reasonably familiar with the facts
and circumstances of the security. If Schroder is unable to obtain a fair
valuation for a restricted security from an independent dealer or other
independent party, a pricing committee (comprised of certain directors and
officers at Schroder) shall determine the bid value of such security. The
valuation procedures applied any specific instance are likely to vary from case
to case. However, consideration is generally given to the financial position of
the issuer and other fundamental analytical data relating to the investment and
to the nature of the restrictions on disposition of the securities (including
any registration expenses that might be borne by the Trust in connection with
such disposition). In addition, specific factors are also generally considered,
such as the cost of the investment, the market value of any unrestricted
securities of the same class (both at the time of purchase and at the time of
valuation), the size of the holding, the prices of any recent transactions or
offers with respect to such securities, and any available analysts' reports
regarding the issuer.

Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of the New
York Stock Exchange. The values of these securities used in determining the net
asset value of the Trust's Interests are computed as of such times. Also,
because of the amount of time required to collect and process trading
information as to large numbers of securities issues, the values of certain
securities (such as convertible bonds and U.S. Government securities) are
determined based on market quotations collected earlier in the day at the latest
practicable time prior to the close of the New York Stock Exchange.
Occasionally, events affecting the value of such securities may occur between
such times and the close of the New York Stock Exchange that will not be
reflected in the computation of a Portfolio's net asset value. If events
materially affecting the value of such securities occur during such period, then
these securities will be valued at their fair value, in the manner described
above.

The proceeds received by a Portfolio for each issue or sale of its Portfolio
Interests, and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, will be specifically allocated to the Portfolio, and
constitute the underlying assets of the Portfolio. The underlying assets of each
Portfolio will be segregated on the Trust's books of account, and will be
charged with the liabilities in respect of the Portfolio and with a share of the
general liabilities of the Trust. Expenses with respect to any two or more
series of the Trust or classes may be allocated in proportion to the
net asset values of the respective series except where allocations of
direct expenses can otherwise be fairly made

<PAGE>

to a specific series or class.

REDEMPTIONS IN KIND

In consideration of the best interests of the remaining Interestholders, the
Trust may pay certain redemption proceeds in whole or in part by a distribution
in kind of securities held by a Portfolio in lieu of cash. The Trust does not
expect to redeem Portfolio Interests in kind under normal circumstances. If your
Portfolio Interests are redeemed in kind, you should expect to incur transaction
costs upon the disposition of the securities received in the distribution.

TAXES

Each Portfolio is classified for federal income tax purposes as a partnership
that is not a "publicly traded partnership." As a result, each Portfolio is not
subject to federal income tax; instead, each Interestholder in a Portfolio is
required to take into account in determining its federal income tax liability
its share of the Portfolio's income, gains, losses, deductions, and credits,
without regard to whether it has received any cash distributions from the
Portfolio. The Portfolio also is not subject to Delaware income or franchise
tax.

Each Interestholder in a Portfolio is deemed to own a proportionate share of the
Portfolio's assets and to earn a proportionate share of the Portfolio's income,
for, among other things, purposes of determining whether the Interestholder
satisfies the requirements to qualify as a regulated investment company ("RIC").
Accordingly, each Portfolio intends to conduct its operations so that its
Interestholders that invest substantially all of their assets in the Portfolio
and intend to qualify as RICs should be able to satisfy all those requirements.

Distributions to an Interestholder from a Portfolio (whether pursuant to a
partial or complete withdrawal or otherwise) will not result in the
Interestholder's recognition of any gain or loss for federal income tax
purposes, except that: (1) gain will be recognized to the extent any cash that
is distributed exceeds the Interestholder's basis for its interest in the
Portfolio before the distribution; (2) income or gain will be recognized if the
distribution is in liquidation of the Interestholder's entire interest in the
Portfolio and includes a disproportionate share of any unrealized receivables
held by the Portfolio; (3) loss will be recognized to the extent that a
liquidation distribution consisting solely of cash and/or unrealized receivables
is less than the Interestholder's basis for its interest in the Portfolio prior
to the distribution; and (4) gain or loss may be recognized on a distribution to
an Interestholder that contributed property to the Portfolio. An
Interestholder's basis for its interest in the Portfolio generally will equal
the amount of cash and the basis of any property it invests in the Portfolio,
increased by the Interestholder's share of the Portfolio's net income and gains
and decreased by (a) the amount of cash and the basis of any property the
Portfolio distributes to the Interestholder and (b) the Interestholder's share
of the Portfolio's losses.

INVESTMENTS IN FOREIGN SECURITIES

Dividends and interest received by a Portfolio may be subject to income,
withholding, or other taxes imposed by foreign countries and U.S. possessions
that would reduce the return on the security with respect to which the dividend
or interest is paid. Tax conventions between certain countries and the United
States may reduce or eliminate these foreign taxes, however, and many foreign
countries do not impose taxes on capital gains in respect of investments by
foreign investors. If, however, more than 50% in value of a Portfolio's total
assets at the close of its taxable year consists of securities of foreign
corporations, the Portfolio will be eligible, and ordinarily expects to file an
election with the Internal Revenue Service ("IRS") pursuant to which
Interestholders of the Portfolio will be required to include their proportionate
share of such withholding taxes in their U.S. income tax returns as gross
income; treat such proportionate share as taxes paid by them; and, subject to
certain limitations (including a holding period requirement imposed at both the
Portfolio and Interestholder levels), deduct such proportionate share in
computing their taxable incomes or, alternatively, use them as foreign tax
credits against their U.S. income taxes. No deductions for foreign taxes,
however, may be claimed by noncorporate Interestholders who do not itemize

<PAGE>

deductions. An Interestholder that is a nonresident alien individual or a
foreign corporation may be subject to U.S. withholding tax on the income
resulting from a Portfolio's election described in this paragraph but will not
be able to claim a credit or deduction against such U.S. tax for the foreign
taxes treated as having been paid by such Interestholder. Each Portfolio will
report annually to its Interestholders their proportionate shares of such
withholding taxes.

Each Portfolio may invest in the stock of "passive foreign investment companies"
("PFICs"). A PFIC is a foreign corporation that, in general, meets either of the
following tests: (1) at least 75% of its gross income is passive; or (2) an
average of at least 50% of its assets produce, or are held for the production
of, passive income. Under certain circumstances, RICs and certain other
investors that hold stock of a PFIC indirectly, through an interest in a
Portfolio, will be subject to federal income tax on a portion of any "excess
distribution" received on the stock or of any gain on disposition of the stock
(collectively "PFIC income"), plus interest thereon, even if the RIC distributes
the PFIC income as a taxable dividend to its shareholders. The balance of the
PFIC income will be included in the RIC's investment company taxable income and,
accordingly, will not be taxable to it to the extent that income is distributed
to its shareholders.

If a Portfolio invests in a PFIC and elects to mark such investment to market
annually or to treat the PFIC as a "qualified electing fund," then in lieu of
the foregoing tax and interest obligation, the Portfolio would be required to
include in income each year its pro rata share of the qualified electing fund's
annual ordinary earnings and net capital gain (the excess of net long-term
capital gain over net short-term capital loss) -which most likely would have to
be distributed by the Portfolio's RIC investors to satisfy the distribution
requirements applicable to them -- even if those earnings and gain were not
received by the Portfolio. In most instances it will be very difficult, if not
impossible, to make this election because of certain requirements thereof.

A Portfolio's transactions in foreign currencies, foreign currency-denominated
debt securities and certain foreign currency options, futures contracts and
forward contracts (and similar instruments) may give rise to ordinary income or
loss to the extent such income or loss results from fluctuations in the value of
the foreign currency concerned.

OTHER PORTFOLIO INVESTMENTS

If a Portfolio engages in hedging transactions, including hedging transactions
in options, futures contracts, and straddles, or other similar transactions, it
will be subject to special tax rules (including constructive sale,
mark-to-market, straddle, wash sale, and short sale rules), the effect of which
may be to accelerate income to the Portfolio, defer losses to the Portfolio,
cause adjustments in the holding periods of the Portfolio's securities, or
convert short-term capital losses into long-term capital losses. These rules
could, therefore, adversely affect the amount, timing and character of
Interestholder income. The Portfolio will endeavor to make any available
elections pertaining to such transactions in a manner believed to be in the best
interests of the Portfolio.

"Constructive sale" provisions apply to activities by a Portfolio that lock-in
gain on an "appreciated financial position." Generally, a "position" is defined
to include stock, a debt instrument, or partnership interest, or an interest in
any of the foregoing, including through a swap contract, or a future or forward
contract. The entry into a swap contract or a future or forward contract
relating to an appreciated direct position in any stock or debt instrument, or
the acquisition of stock or debt instrument at a time when the Portfolio
occupies an offsetting (short) appreciated position in the stock or debt
instrument, is treated as a "constructive sale" that gives rise to the immediate
recognition of gain (but not loss). The application of these provisions may
cause the Portfolio to recognize taxable income from these offsetting
transactions in excess of the cash generated by such activities.

Each Portfolio may write, purchase or sell options or futures contracts. Unless
a Portfolio is eligible to, and does, make a special election, such options and
futures contracts that are "Section 1256 contracts" will be "marked to market"
for federal income tax purposes at the end of each taxable year (I.E., each
option or

<PAGE>

futures contract will be treated as sold for its fair market value on the last
day of the taxable year). In general, unless such special election is made, gain
or loss from transactions in options and futures contracts will be 60% long-term
and 40% short-term capital gain or loss.

Code Section 1092, which applies to certain "straddles," may affect the taxation
of a Portfolio's transactions in options and futures contracts. Under Section
1092, the Portfolio may be required to postpone recognition for tax purposes of
losses incurred in certain closing transactions in options and futures.

WITHHOLDING

Ordinary income paid to Interestholders who are nonresident aliens is subject to
a 30% U.S. withholding tax under existing provisions of the Code applicable to
foreign individuals and entities unless a reduced rate of withholding or a
withholding exemption is provided under applicable treaty law. Nonresident
Interestholders are urged to consult their own tax advisors concerning the
applicability of the U.S. withholding tax.

The Trust is required to report to the IRS all distributions and gross proceeds
from the redemption of Portfolio Interests (except in the case of certain exempt
Interestholders). All such distributions and proceeds generally will be subject
to the withholding of federal income tax at a rate of 31% ("backup withholding")
in the case of non-exempt Interestholders if: (1) the Interestholder fails to
furnish the Trust with and to certify the Interestholder's correct taxpayer
identification number; (2) the IRS notifies the Trust that the Interestholder
has failed to report properly certain interest and dividend income to the IRS
and to respond to notices to that effect; or (3) when required to do so, the
Interestholder fails to certify that it is not subject to backup withholding. If
the withholding provisions are applicable, any such distributions or proceeds
will be reduced by the amount required to be withheld. Any amounts withheld may
be credited against the Interestholder's federal income tax liability.

New federal tax regulations (effective for payments made on or after January 1,
1999, although transition rules apply) will increase the U.S. federal income
taxation of an Interestholder who, under the Code, is a non-resident alien
individual, a foreign trust or estate, foreign corporation or foreign
partnership ("non-U.S. Interestholder"), depending on whether the income from
the Portfolio is "effectively connected" with a U.S. trade or business carried
on by such Interestholder. Ordinarily, income from a Portfolio will not be
treated as so "effectively connected."

If the income from a Portfolio is not treated as "effectively connected" with a
U.S. trade or business carried on by the non-U.S. Interestholders, dividends of
net investment income (which includes short-term capital gains), whether
received in cash or reinvested in Portfolio Interests, will be subject to a U.S.
federal income tax of 30% (or lower treaty rate), which tax is generally
withheld from such dividends. Furthermore, such non-U.S. Interestholders may be
subject to U.S. federal income tax at the rate of 30% (or lower treaty rate) on
their income resulting from a Portfolio's election (described above) to "pass
through" the amount of non-U.S. taxes paid by the Portfolio, but may not be able
to claim a credit or deduction with respect to the non-U.S. income taxes treated
as having been paid by them.

A non-U.S. Interestholder whose income is not treated as "effectively connected"
with a U.S. trade or business generally will not be subject to U.S. federal
income taxation on distributions of net long-term capital gains and any gain
realized upon the sale of Portfolio Interests. If the non-U.S. Interestholder is
treated as a non-resident alien individual but is physically present in the
United States for more than 182 days during the taxable year, then in certain
circumstances such distributions of net long-term capital gains amounts retained
by the Portfolio which is designated as undistributed capital gains and gain
from the sale of the Portfolio shares will be subject to a U.S. federal income
tax of 30% (or lower treaty rate). In the case of a non-U.S. Interestholder who
is a non-resident alien individual, the Portfolio may be required to withhold
U.S. federal income tax at a rate of 31% of distributions (including
distributions of net long-term capital gains) unless IRS Form W-8 is provided.

<PAGE>

If the income from a Portfolio is "effectively connected" with a U.S. trade or
business carried on by a non-U.S. Interestholder, then distributions of net
investment income (which includes short-term capital gains) whether received in
cash or reinvested in Portfolio Interests, net long-term capital gains and
amounts otherwise includable in income (such as amounts retained by the
Portfolio which are designated as undistributed capital gains and any gains
realized upon the sale of Portfolio Interests of the Portfolio), will be subject
to U.S. federal income tax at the graduated rates applicable to U.S. taxpayers.
Non-U.S. Interestholders that are corporations may also be subject to the branch
profits tax.

Transfers of shares of the Portfolio by gift by a non-U.S. Interestholder will
generally not be subject to U.S. federal gift tax, but the value of shares of
the Portfolio held by such an Interestholder at death will be includable in the
Interestholder's gross estate for U.S. federal income tax purposes.

GENERAL

The income tax and estate tax consequences to a non-U.S. Interestholder entitled
to claim the benefits of an applicable tax treaty may be different from those
described herein. Non-U.S. Interestholders may be required to provide
appropriate documentation to establish their entitlement to the benefits of such
a treaty. Non-U.S. Interestholders are advised to consult their own tax advisers
with respect to the particular tax consequences to them of an investment in the
Portfolio.

The foregoing discussion relates only to federal income tax law. Income from a
Portfolio also may be subject to foreign, state and local taxes, and their
treatment under foreign, state and local income tax laws may differ from the
federal income tax treatment. Interestholders should consult their tax advisors
with respect to particular questions of federal, foreign, state and local
taxation.

PRINCIPAL HOLDERS OF PORTFOLIO INTERESTS

As of February 18, 2000, Schroder All-Asia Fund owned beneficially more than 99%
of the outstanding voting securities of the Portfolios. Schroder All-Asia Fund
may be deemed to control the Portfolios. The Trust is not aware of any other
person that may control a Portfolio.

As of February 18, 2000, the Trustees of the Trust and the officers of the
Trust, as a group, owned less than 1% of the outstanding shares of either class
of each Portfolio.

To the knowledge of the Trust, as of February 18, 2000, no other person owned or
record or beneficially more than 5% of the outstanding Portfolio Interests of a
Portfolio other than as set forth on Appendix A to this Statement. Because these
interestholders hold a substantial number of Portfolio Interests, they may be
able to require that the Trust hold special interestholder meetings and may be
able to determine the outcome of any interestholder vote.

PERFORMANCE INFORMATION

Average annual total return of a Portfolio for one-, five-, and ten-year periods
(or for such shorter periods as Portfolio Interests of the Portfolio have been
offered) is determined by calculating the actual dollar amount of investment
return on a $1,000 investment at the beginning of the period, and then
calculating the annual compounded rate of return which would produce that
amount. Total return for a period of one year or less is equal to the actual
return during that period. Total return calculations assume reinvestment of all
Portfolio distributions at net asset value on their respective reinvestment
dates. Total return may be presented for other periods.

ALL PERFORMANCE DATA IS BASED ON PAST INVESTMENT RESULTS AND DOES NOT PREDICT
FUTURE PERFORMANCE.

<PAGE>

Investment performance is based on many factors, including
market conditions, the composition of the Portfolio's investments, and the
Portfolio's operating expenses. Investment performance also often reflects the
risks associated with a Portfolio's investment objectives and policies.
Quotations of yield or total return for any period when an expense limitation is
in effect will be greater than if the limitation had not been in effect. These
factors should be considered when comparing the investment results of a
Portfolio to other mutual funds and other investment vehicles. Performance for
each Portfolio may be compared to various indices.

The table below sets forth the total return of the Portfolios for the one-year
and since inception periods ended October 31, 1999.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 1999

-------------------------------------------------------------------------------------
SINCE INCEPTION INCEPTION DATE OF
PORTFOLIO 1 YEAR OF PORTFOLIO PORTFOLIO
(3/23/98)
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Schroder Asian 57.06% 6.78% 3/23/98
Growth Fund
Portfolio
-------------------------------------------------------------------------------------
Schroder Japan 53.51% 25.42% 3/23/98
Portfolio
-------------------------------------------------------------------------------------
</TABLE>

From time to time, Schroder, State Street or any of their affiliates that
provide services to the Portfolio may reduce their compensation or assume
expenses of a Portfolio in order to reduce the Portfolio's expenses, as
described in the Memorandum. Any such waiver or assumption
would increase a Portfolio's total return for each class of shares during the
period of the waiver or assumption.

CUSTODIAN

State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, is the custodian of the assets of the Portfolios. The
custodian's responsibilities include safeguarding and controlling each
Portfolio's cash and securities, handling the receipt and delivery of
securities, and collecting interest and dividends on a Portfolio's
investments. The custodian does not determine the investment policies of
either Portfolio or decide which securities a Portfolio will buy or sell.

INDEPENDENT AUDITORS

PricewaterhouseCoopers LLP, the Trust's independent auditors, provide audit
services, tax return preparation services, and assistance and consultation in
connection with the Trust's various Securities and Exchange Commission filings.
Their address is One Post Office Square, Boston, Massachusetts 02109.

LEGAL COUNSEL

Ropes & Gray, One International Place, Boston, Massachusetts 02110-2624, serves
as counsel to the Trust.

INTERESTHOLDER LIABILITY

Under Delaware law, Interestholders could, under certain circumstances, be held
personally liable for the obligations of the Trust. However, the Trust's Trust
Instrument disclaims Interestholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each agreement,
obligation, or instrument entered into or executed by the Trust or the Trustees.
The Trust's Trust Instrument provides for indemnification out of a Portfolio's
property for all loss and expense of any Interestholder held

<PAGE>

personally liable for the obligations of a Portfolio. Thus the risk of a
Interestholder's incurring financial loss on account of Interestholder liability
is limited to circumstances in which the Portfolio would be unable to meet its
obligations.

FINANCIAL STATEMENTS

The following Financial Statements required by Part B and the related Report of
Independent Public Accountants are incorporated herein by reference to the
Trust's Annual Report, dated December 22, 1999, which was filed electronically
with the Securities and Exchange Commission on December 30, 1999 (Accession
Number: 0000912057-99-011018).

<PAGE>

APPENDIX A

HOLDERS OF OUTSTANDING PORTFOLIO INTERESTS

To the knowledge of the Trust, as of February 18, 2000, no other person owned
of record or beneficially 5% or more of the outstanding Portfolio Interests
of either Portfolio, except as set forth below.

Percentage of
Outstanding
RECORD OR BENEFICIAL OWNER Portfolio Interests
Owned

SCHRODER ASIA GROWTH FUND PORTFOLIO
- -----------------------------------
<S> <C>
Schroder All-Asia Fund 99.78%

SCHRODER JAPAN PORTFOLIO
- ------------------------
Schroder All-Asia Fund 99.50%

</TABLE>

A-1
<PAGE>

APPENDIX B

RATINGS OF CORPORATE DEBT INSTRUMENTS

MOODY'S INVESTORS SERVICE INC. ("MOODY'S")

FIXED-INCOME SECURITY RATINGS

"Aaa" Fixed-income securities 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" Fixed-income securities 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 fixed-income securities. They are rated lower than
the best fixed-income securities 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" Fixed-income securities 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" Fixed-income securities 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 fixed-income securities lack
outstanding investment characteristics and in fact have speculative
characteristics as well.

Fixed-income securities rated "Aaa", "Aa", "A" and "Baa" are considered
investment grade.

"Ba" Fixed-income securities 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
therefore not well safeguarded during both good and bad times in the future.
Uncertainty of position characterizes bonds in this class.

"B" Fixed-income securities 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" Fixed-income securities 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" Fixed-income securities which are rated "Ca" present obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

"C" Fixed-income securities which are rated "C" are the lowest rated class of
fixed-income securities, and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.

B-1
<PAGE>

Rating Refinements: Moody's may apply numerical modifiers, "1", "2",
and "3" in each generic rating classification from "Aa" through "B" in its
municipal fixed-income security rating system. The modifier "1" indicates that
the security ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and a modifier "3" indicates that
the issue ranks in the lower end of its generic rating category.

COMMERCIAL PAPER RATINGS

Moody's Commercial Paper ratings are opinions of the ability to repay
punctually promissory obligations not having an original maturity in excess of
nine months. The ratings apply to Municipal Commercial Paper as well as taxable
Commercial Paper. Moody's employs the following three designations, all judged
to be investment grade, to indicate the relative repayment capacity of rated
issuers: "Prime-1", "Prime-2", "Prime-3".

Issuers rated "Prime-1" have a superior capacity for repayment of
short-term promissory obligations. Issuers rated "Prime-2" have a strong
capacity for repayment of short-term promissory obligations; and Issuers rated
"Prime-3" have an acceptable capacity for repayment of short-term promissory
obligations. Issuers rated "Not Prime" do not fall within any of the Prime
rating categories.

STANDARD & POOR'S RATING GROUP("STANDARD & POOR'S")

FIXED-INCOME SECURITY RATINGS

A Standard & Poor's fixed-income security rating is a current
assessment of the creditworthiness of an obligor with respect to a specific
obligation. This assessment may take into consideration obligors such as
guarantors, insurers, or lessees.

The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. The
ratings are based, in varying degrees, on the following considerations: (1)
likelihood of default-capacity and willingness of the obligor as to the timely
payment of interest and repayment of principal in accordance with the terms of
the obligation; (2) nature of and provisions of the obligation; and (3)
protection afforded by, and relative position of, the obligation in the event of
bankruptcy, reorganization or other arrangement under the laws of bankruptcy and
other laws affecting creditors' rights.

Standard & Poor's does not perform an audit in connection with any
rating and may, on occasion, rely on unaudited financial information. The
ratings may be changed, suspended or withdrawn as a result of changes in, or
unavailability of, such information, or for other reasons.

"AAA" Fixed-income securities rated "AAA" have the highest rating assigned by
Standard & Poor's. Capacity to pay interest and repay principal is extremely
strong.

"AA" Fixed-income securities rated "AA" have a very strong capacity to pay
interest and repay principal and differs from the highest-rated issues only in
small degree.

"A" Fixed-income securities rated "A" have a strong capacity to pay interest and
repay principal although they are somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than fixed-income
securities in higher-rated categories.

"BBB" Fixed-income securities rated "BBB" are 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

B-2
<PAGE>

repay principal for fixed-income securities in this category than for
fixed-income securities in higher-rated categories.

Fixed-income securities rated "AAA", "AA", "A" and "BBB" are considered
investment grade.

"BB" Fixed-income securities rated "BB" have less near-term vulnerability to
default than other speculative grade fixed-income securities. However, it faces
major ongoing uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity or willingness to
pay interest and repay principal.

"B" Fixed-income securities rated "B" have a greater vulnerability to default
but presently have the capacity to meet interest payments and principal
repayments. Adverse business, financial or economic conditions would likely
impair capacity or willingness to pay interest and repay principal.

"CCC" Fixed-income securities rated "CCC" have a current identifiable
vulnerability to default, and the obligor is dependent upon favorable business,
financial and economic conditions to meet timely payments of interest and
repayments 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.

"CC" The rating "CC" is typically applied to fixed-income securities
subordinated to senior debt, which is assigned an actual or implied "CCC"
rating.

"C" The rating "C" is typically applied to fixed-income securities subordinated
to senior debt, which is assigned an actual or implied "CCC-" rating.

"CI" The rating "CI" is reserved for fixed-income securities on which no
interest is being paid.

"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.

Fixed-income securities rated "BB", "B", "CCC", "CC" and "C" are
regarded as having predominantly speculative characteristics with respect to
capacity to pay interest and repay principal. "BB" indicates the least degree of
speculation and "C" the highest degree of speculation. While such fixed-income
securities will likely have some quality and protective
characteristics, these are out-weighed by large uncertainties or major risk
exposures to adverse conditions.

Plus (+) or minus (-): The rating from "AA" TO "CCC" may be modified by
the addition of a plus or minus sign to show relative standing with the major
ratings categories.

COMMERCIAL PAPER RATINGS

Standard & Poor's commercial paper rating is a current assessment of
the likelihood of timely payment of debt having an original maturity of no more
than 365 days. The commercial paper rating is not a recommendation to purchase
or sell a security. The ratings are based upon current information furnished by
the issuer or obtained by Standard & Poor's from other sources it considers
reliable. The ratings may be changed, suspended, or withdrawn as a result of
changes in or unavailability of such information. Ratings are graded into group
categories, ranging from "A" for the highest quality obligations to "D" for the
lowest. Ratings are applicable to both taxable and tax-exempt commercial paper.

Issues assigned "A" ratings are regarded as having the greatest
capacity for timely payment. Issues in this category are further refined with
the designation "1", "2", and "3" to indicate the relative degree of safety.

"A-1" Indicates that the degree of safety regarding timely payment is very
strong.

B-3
<PAGE>

"A-2" Indicates capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as overwhelming as for
issues designated "A-1".

"A-3" Indicates a satisfactory capacity for timely payment. Obligations carrying
this designation are, however, somewhat more vulnerable to the adverse effects
of changes in circumstances than obligations carrying the higher designations.

B-4
<PAGE>

PART C OTHER INFORMATION

ITEM 23. EXHIBITS

(a) Trust Instrument of Registrant dated September 6, 1995, as amended November
30, 1995 and restated March 13, 1998 (see Note 1).

(b) Not applicable.

(c) See the following Articles and Sections in the Trust Instrument filed as
Exhibit (a): Article II, Section 2.3, 2.4; Article V; Article VI; Article
VII; Article IX; and Article X.

(d) (1) Form of Amended and Restated Investment Advisory Agreement between
Registrant and Schroder Investment Management North America Inc. (SIM N.A.)
dated as of September 15, 1999 with respect to Schroder Global Growth
Portfolio (see Note 2).

(2) Form of Amended and Restated Investment Advisory Agreement between
Registrant and SIM N.A. dated as of September 15, 1999 with respect to
Schroder Asian Growth Fund Portfolio and Schroder Japan Portfolio (see Note
2).

(e) Not required.

(f) Not applicable.

(g) Form of Custodian Contract between the Registrant and State Street Bank
and Trust Company dated as of May 31, 1999 (see Note 2).

(h) (1) Administration Agreement between Registrant and Schroder Fund
Advisors Inc. ("Schroder Advisors") dated as of June 1, 1999,
Schroder Global Growth Portfolio, Schroder Asian Growth Fund
Portfolio, and Schroder Japan Portfolio is filed herewith.

(2) Form of Sub-administration Agreement between Registrant and State
Street Bank and Trust Company dated as of June 1, 1999 (see Note 2).

(i) Not required.

(j) Consent of PricewaterhouseCoopers LLP dated February 29, 2000 is filed
herewith.

(k) Not required.

(l) Not applicable.

(m) Not applicable.

<PAGE>

(n) Not applicable.

(o) Power of Attorney from Nancy A. Curtin, David N. Dinkins, Peter E.
Guernsey, Sharon L. Haugh, John I. Howell, Peter S. Knight, Alan M. Mandel,
William L. Means, Clarence F. Michalis, Hermann C. Schwab (see Note 2).

Notes:

1. Exhibit incorporated by reference as filed on Amendment No. 12 via EDGAR on
September 28, 1998, accession number 0001004402-98-000526.

2. Exhibit incorporated by reference as filed on Amendment No. 16 via EDGAR on
September 30, 1999, accession number 0001047469-99-037398.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

None.

ITEM 25. INDEMNIFICATION

Registrant currently holds a joint directors' and officers'/errors and omissions
insurance policy pursuant to Rule 17d-1(d)(7). The general effect of Article 5
of Registrant's Trust Instrument (filed as Exhibit (a) and incorporated herein
by reference) is to indemnify existing or former trustees and officers of
Registrant to the fullest extent permitted by law against liability and
expenses. There is no indemnification if, among other things, any such person is
adjudicated liable to the Registrant or its interestholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

(a) Schroder Investment Management North America Inc. The directors and officers
of Schroder Investment Management North America Inc. ("SIM N.A.") have been
engaged during the past

<PAGE>

two fiscal years in no business, vocation or employment of a substantial nature
other than as directors, officers or employees of SIM N.A. or certain of its
corporate affiliates, except the following, whose principal occupations during
that period, other than as directors or officers of SIM N.A. or certain of its
corporate affiliates are as follows: Stefan Bottcher, Director of SIM N.A., who
was Director, Robert Fleming; Robert R. Coby, Director of SIM N.A., who was
President and Chief Operating Officer at Lynch & Mayer; Nancy A. Curtin,
Managing Director and Senior Vice President of SIM N.A., who was Director,
Barings Asset Management; Barbara Brooke Manning, First Vice President and Chief
Compliance Officer of SIM N.A., who was Senior Manager, Ernst & Young LLP; and
Robert C. Michele, Director and Managing Director of SIM N.A., who was Managing
Director, BlackRock Financial Management. The address of SIM N.A. and Schroder
Fund Advisors is 787 Seventh Avenue, 34th Floor, New York, NY 10019.

The addresses of the corporate affiliates of SIM N.A. are as follows:
Schroder Ltd. and Schroders plc. are located at 31 Gresham St., London EC2V 7QA,
United Kingdom. Each of Schroder Investment Management Limited, Schroder
Investment Management (UK) Limited, Schroder Investment Management (Europe),
Korea Schroder Fund Management Limited and Schroder Personal Investment
Management, are located at 33 Gutter Lane, London EC2V 8AS United Kingdom.
Schroder Investment Management (Singapore) Limited is located at #47-01 OCBC
Centre, Singapore. Schroder Investment Management (Hong Kong) Limited is located
at 8 Connaight Place, Hong Kong. Schroder Investment Management (Australasia)
Limited is located at 225 George Place, Sydney Australia. PT Schroder Investment
Management Indonesia is located at Lippo Plaza Bldg., 25 Jakarta, 12820.
Schroders (C.I.) Limited is located at St. Peter Port, Guernsey, Channel
Islands, GY1 3UF. Schroder Properties Limited is located at Senator House, 85
Queen Victoria Street, London EC4V 4EJ, United Kingdom. Schroder Fund Advisors
Inc. and SIM N.A. are located at 787 Seventh Avenue, 34th Floor, New York, NY
10019.

ITEM 27. PRINCIPAL UNDERWRITERS

(a) Schroder Fund Advisors Inc. is the Registrant's placement agent. Registrant
has no underwriters.

(b) Not applicable.

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

The accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules thereunder are
maintained at the offices of SIM N.A. (investment management records) and
Schroder Fund Advisors Inc. (administrator and distributor records), 787 Seventh
Avenue, New York, New York 10019, except that certain items are maintained at
State Street Bank and Trust Company, 2 Avenue de Lafayette, Boston,
Massachusetts 02111 and Two Heritage Drive, N. Quincy, Massachusetts 02171.

ITEM 29. MANAGEMENT SERVICES

<PAGE>

Not applicable.

ITEM 30. UNDERTAKINGS

None.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Investment Company Act of 1940, as amended,
the Registrant certifies that it has duly caused this amendment number 17 to the
Registrant's registration statement to be signed on its behalf by the
undersigned, duly authorized, in the City of New York, and State of New York on
February 28, 2000.

Schroder Capital Funds
By: /s/ Alexandra Poe
Name: Alexandra Poe
Title: President

<PAGE>

EXHIBIT LIST
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
(h)(1) Administration Agreement
(j) Consent of PricewaterhouseCoopers LLP
</TABLE>

<PAGE>

SCHRODER CAPITAL FUNDS
AMENDED AND RESTATED ADMINISTRATION AGREEMENT

AGREEMENT made this 26th day of November, 1996, as amended and
restated as of this 1st day of June, 1999, between Schroder Capital Funds (the
"Trust"), a business trust organized under the laws of the State of Delaware
with its principal place of business at 787 7th Avenue, 34th Floor, New York,
New York 10019, and Schroder Fund Advisors Inc. ("Schroder"), a corporation
organized under the laws of the State of Maryland.

WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended, (the "1940 Act") as an open-end management investment
company and is authorized to issue shares of beneficial interest ("Shares") in
separate series;

WHEREAS, the Trust has entered into various Investment Advisory
Agreements with Schroder Investment Management North America Inc. (the
"Adviser"), pursuant to which the Adviser provides investment advisory
services for the Trust;

WHEREAS, the Trust desires that Schroder perform certain
administrative services for each of the series of the Trust as listed in
APPENDIX A hereto (each a "Series"),other than any administrative services
required to be performed by the Adviser, and Schroder is willing to provide
those services on the terms and conditions set forth in this Agreement;

NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Trust and Schroder agree as follows:

SECTION 1. APPOINTMENT.

The Trust hereby appoints Schroder as administrator of the Trust and
of each Series and Schroder hereby accepts such appointment, all in accordance
with the terms and conditions of this Agreement. In connection therewith, the
Trust has delivered to Schroder copies of its Trust Instrument, the Trust's
Registration Statement and all amendments thereto filed pursuant to the 1940 Act
(the "Registration Statement"), and the current Parts A and B of each Series
(collectively, as currently in effect and as amended or supplemented, the
"Prospectus"), all in such manner and to such extent as may from time to time be
authorized by the Trust's Board of Trustees (the "Board"), and shall promptly
furnish Schroder with all amendments of or supplements to the foregoing.

SECTION 2. FURNISHING OF EXISTING ACCOUNTS AND RECORDS.

The Trust shall promptly turn over to Schroder such of the accounts
and records previously maintained by or for it as are necessary for Schroder to
perform its functions under this Agreement. The Trust authorizes Schroder to
rely on such accounts and records turned over to it and hereby indemnifies and
will hold Schroder, its successors and assigns, harmless of and from any and all
expenses, damages, claims, suits, liabilities, actions, demands and losses
whatsoever arising out of or in connection with any error, omission, inaccuracy
or other deficiency of such accounts and records or in the failure of the Trust
to provide any portion of such or to provide any information needed by Schroder
to knowledgeably perform its functions.

1
<PAGE>

SECTION 3. ADMINISTRATIVE DUTIES

(a) Subject to the direction and control of the Board and in
cooperation with the Adviser, Schroder shall provide, or oversee, as applicable,
administrative services necessary for the Trust's operations with respect to
each Series except those services that are the responsibility of the Adviser or
the Series' custodian or transfer agent, all in such manner and to such extent
as may be authorized by the Board.

(b) With respect to the Trust and each Series, as applicable,
Schroder shall:

(i) oversee (A) the preparation and maintenance by the
Adviser and the Trust's subadministrator, custodian,
interestholder record keeper, dividend disbursing agent and fund
accountant (or if appropriate, prepare and maintain) in such
form, for such periods and in such locations as may be required
by applicable law, of all documents and records relating to the
operation of the Trust required to be prepared or maintained by
the Trust or its agents pursuant to applicable law; (B) the
reconciliation of account information and balances among the
Adviser and the Trust's custodian, transfer agent, dividend
disbursing agent, interestholder record keeper and fund
accountant; (C) the transmission of purchase and redemption
orders for Shares; (D) the notification to the Adviser of
available finds for investment; and (E) the performance of fund
accounting, including the calculation of the net asset value of
the Shares;

(ii) oversee the performance of administrative and
professional services rendered to the Trust by others, including
its subadministrator, custodian, transfer agent, interestholder
record keeper, dividend disbursing agent and fund accountant as
well as legal, auditing and shareholder servicing and other
services performed for each Series;

(iii) oversee the preparation and the printing of the periodic
updating of the Registration Statement and Prospectus, tax
returns, and reports to interestholders, the Securities and
Exchange Commission (the "SEC") and state securities commissions;

(iv) oversee the preparation of proxy and information
statements and any other communications to interestholders;

(v) at the request of the Board, provide the Trust with
adequate general office space and facilities and provide persons
suitable to the Board to serve as officers of the Trust;

(vi) provide the Trust, at the Trust's request, with the
services of persons who are competent to perform such supervisory
or administrative functions as are necessary for effective
operation of the Trust;

(vii) oversee the preparation, filing and maintenance the
Trust's governing documents, including the Trust Instrument and
minutes of meetings of Trustees and interestholders;

2
<PAGE>

(viii) oversee with the cooperation of the Trust's counsel, the
Adviser and other relevant parties, preparation and dissemination
of materials for meetings of the Board;

(ix) oversee, and if required, monitor sales of Shares and
ensure that such Shares are properly and duly registered with the
SEC and applicable state securities commissions;

(x) oversee the calculation of performance data for
dissemination to information services covering the investment
company industry, for sales literature of the Trust and other
appropriate purposes;

(xi) oversee the determination of the amount of, and supervise
distributions to interestholders; and

(xii) advise the Trust and its Board on matters concerning the
Trust and its affairs.

(c) Schroder shall oversee the preparation and maintenance, or cause
to be prepared and maintained, records in such form for such periods and in such
locations as may be required by applicable regulations, all documents and
records relating to the services provided to the Trust pursuant to this
Agreement required to be maintained pursuant to the 1940 Act, rules and
regulations of the SEC, the Internal Revenue Service and any other national,
state or local government entity with jurisdiction over the Trust. The accounts
and records pertaining to the Trust which are in possession of Schroder, or an
entity subcontracted by Schroder, shall be the property of the Trust. The Trust,
or the Trust's authorized representatives, shall have access to such accounts
and records at all times during Schroder's, or its subcontractor's, normal
business hours. Upon the reasonable request of the Trust, copies of any such
accounts and records shall be provided promptly by Schroder to the Trust or the
Trust's authorized representatives. In the event the Trust designates a
successor to any of Schroder's obligations under this agreement, Schroder shall,
at the expense and direction of the Trust, transfer to such successor all
relevant books, records and other data established or maintained by Schroder, or
its subcontractor, under this Agreement.

SECTION 4. STANDARD OF CARE

(a) Schroder, in performing under the terms and conditions of this
Agreement, shall use its best judgment and efforts in rendering the services
described herein, and shall incur no liability for its status under this
agreement or for any reasonable actions taken or omitted in good faith. As an
inducement to Schroder' s undertaking to render these services, the Trust hereby
agrees to indemnifies and hold harmless Schroder, its employees, agents,
officers and directors, from any and all loss, liability and expense, including
any legal expenses, arising out of Schroder's performance under this Agreement,
or status, or any act or omission of Schroder, its employees, agents, officers
and directors; provided that this indemnification shall not apply to Schroder's
actions taken or failures to act in cases of Schroder's own bad faith, willful
misconduct or gross negligence in the performance of its duties under this
Agreement, and further provided, that Schroder shall give the Trust notice and
reasonable opportunity to defend against any such loss, claim, damage, liability
or expense in the name of the Trust or Schroder, or both. The Trust will be
entitled to assume the defense of any suit brought to enforce any such claim or
demand, and to retain counsel of good standing chosen by the Trust

3
<PAGE>

and approved by Schroder, which approval shall not be withheld unreasonably. In
the event the Trust does elect to assume the defense of any such suit and retain
counsel of good standing approved by Schroder, the defendant or defendants in
such suit shall bear the fees and expenses of any additional counsel retained by
any of them; but in case the Trust does not elect to assume the defense of any
such suit, or in case Schroder does not approve of counsel chosen by the Trust
or Schroder has been advised that it may have available defenses or claims which
are not available or conflict with those available to the Trust, the Trust will
reimburse Schroder, its employees, agents, officers and directors for the fees
and expenses of any one law firm retained as counsel by Schroder or them.
Schroder may, at any time, waive its right to indemnification under this
agreement and assume its own defense. The provisions of paragraphs (b) through
(d) of this Section 4 should not in any way limit the foregoing:

(b) Schroder may rely upon the advice of the Trust or of counsel, who
may be counsel for the Trust or counsel for Schroder, and upon statements of
accountants, brokers and other persons believed by it in good faith to be expert
in the matters upon which they are consulted, and Schroder shall not be liable
to anyone for any actions taken in good faith upon such statements.

(c) Schroder may act upon any oral instruction which it receives and
which it believes in good faith was transmitted by the person or persons
authorized by the Board of the Trust to give such oral instruction. Schroder
shall have no duty or obligation to make any inquiry or effort of certification
of such oral instruction.

(d) Schroder shall not be liable for any action taken in good faith
reliance upon any written instruction or certified copy of any resolution of the
Board of the Trust, and Schroder may rely upon the genuineness of any such
document or copy thereof reasonably believed in good faith by Schroder to have
been validly executed.

(e) Schroder may rely and shall be protected in acting upon any
signature, instruction, request, letter of transmittal, certificate, opinion of
counsel, statement, instrument, report, notice, consent, order, or other paper
document believed by it to be genuine and to have been signed or presented by
the purchaser, Trust or other proper party or parties.

SECTION 5. EXPENSES

Subject to any agreement by Schroder or other person to reimburse any
expenses of the Trust that relate to any Series, the Trust shall be responsible
for and assume the obligation for payment of all of its expenses, including: (a)
the fee payable under Section 6 hereof; (b) any fees payable to the Adviser; (c)
any fees payable to Schroder; (d) expenses at issue, repurchase and redemption
of shares; (e) interest charges, taxes and brokerage fees and commissions; (f)
premiums of insurance for the Trust, its Trustees and officers and fidelity bond
premiums; (g) fees, interest charges and expenses of third parties, including
the Trust's custodian, transfer agent, dividend disbursing agent and fund
accountant; (h) telecommunications expenses; (i) auditing, legal and compliance
expenses; (j) costs of forming the Trust and maintaining its existence; (k) to
the extent permitted by the 1940 Act, costs of preparing the Trust's
registration statement, subscription application forms and interestholder
reports and delivering them to existing and prospective interestholders; (l)
costs of maintaining books of original entry for portfolio and fund accounting
and other required books and accounts, of calculating the net asset value of
shares of the Trust and of preparing tax returns; (m) costs of reproduction,
stationery and supplies; (n) fees and expenses of the Trust's Trustees; (o)
compensation of the Trust's officers and employees who are not employees of the
Adviser

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or Schroder or their respective affiliated persons and costs of other personnel
(who may be employees of the Adviser, Schroder or their respective affiliated
persons) performing services for the Trust; (p) costs of Trustee meetings; (q)
SEC registration fees and related expenses; (r) state or foreign securities laws
registration fees and related expenses; and (s) fees and out-of-pocket expenses
payable to each investment adviser under any investment advisory or similar
agreement.

SECTION 6. COMPENSATION

(a) In consideration of the services performed by Schroder under this
Agreement, the Trust will pay Schroder, with respect to each Series, a fee at
the annual rate, as listed in APPENDIX B hereto. Such fee shall be accrued by
the Trust daily and shall be payable monthly in arrears on the first day of each
calendar month for services performed under this agreement during the prior
calendar month. If the fees payable pursuant to this provision begin to accrue
before the end of any month or if this Agreement terminates before the end of
any month, the fees for the period from that date to the end of that month or
from the beginning of that month to the date of termination, as the case may be,
shall be prorated according to the proportion that the period bears to the full
month in which the effectiveness or termination occurs. Upon the termination of
this Agreement, the Trust shall pay to Schroder such compensation as shall be
payable prior to the effective date of such termination.

(b) In the event that this Agreement is terminated, Schroder shall be
reimbursed for reasonable charges and disbursements associated with promptly
transferring to its successor as designated by the Trust the original or copies
of all accounts and records maintained by Schroder under this agreement, and
cooperating with, and providing reasonable assistance to its successor in the
establishment of the accounts and records necessary to carry out the successor's
or other person's responsibilities.

(c) Notwithstanding anything in this Agreement to the contrary,
Schroder and its affiliated persons may receive compensation or reimbursement
from the Trust with respect to (i) the provision of services on behalf of the
Series in accordance with any distribution plan adopted by the Trust pursuant to
Rule 12b-1 under the 1940 Act or (ii) the provision of shareholder support or
other services, including fund accounting services.

SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION

(a) This Agreement shall become effective on the date first above
written with respect to each Series of the Trust then existing and shall
relate to every other Series as of the later of the date on which the Trust's
Registration Statement relating to the shares of such Series becomes effective
or the Series commences operations.

(b) This Agreement shall continue in effect for twelve months and,
thereafter, shall be automatically renewed each year for an additional term of
one year.

(c) This Agreement may be terminated with respect to a Series at any
time, without the payment of any penalty, (i) by the Board on 60 days' written
notice to Schroder or (ii) by Schroder on 60 days' written notice to the Trust.
Upon receiving notice of termination by Schroder, the Trust shall use its best
efforts to obtain a successor administrator. Upon receipt of written notice from
the Trust of the appointment of a successor, and upon payment to Schroder of all
fees owed through the effective termination date, and reimbursement for
reasonable charges and disbursements, Schroder shall promptly transfer to the
successor administrator the original or copies of all accounts and records
maintained by Schroder under this agreement including, in the case of records
maintained on computer systems, copies of such records in machine-

5
<PAGE>

readable form, and shall cooperate with, and provide reasonable assistance to,
the successor administrator in the establishment of the accounts and records
necessary to carry out the successor administrator's responsibilities. For so
long as Schroder continues to perform any of the services contemplated by this
Agreement after termination of this Agreement as agreed to by the Trust and
Schroder, the provisions of Sections 4 and 6 hereof shall continue in full force
and effect.

SECTION 8. ACTIVITIES OF SCHRODER

(a) Except to the extent necessary to perform Schroder's obligations
under this Agreement, nothing herein shall be deemed to limit or restrict the
right of Schroder, or any affiliate of Schroder, or any employee of the
Schroder, to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association.

(b) Schroder may subcontract any or all of its functions or
responsibilities pursuant to this Agreement to one or more corporations, trusts,
firms, individuals or associations, which may be affiliates of Schroder, who
agree to comply with the terms of this Agreement. Schroder may pay those persons
for their services, but no such payment will increase Schroder' s compensation
from the Trust.

SECTION 9. COOPERATION WITH INDEPENDENT ACCOUNTANTS.

Schroder shall cooperate, if applicable, with the Trust's independent
public accountants and shall take reasonable action to make all necessary
information available to such accountants for the performance of their duties.

SECTION 10. SERVICE DAYS.

Nothing contained in this Agreement is intended to or shall require
Schroder, in any capacity under this agreement, to perform any functions or
duties on any day other than a business day of the Trust or of a Series.
Functions or duties normally scheduled to be performed on any day which is not a
business day of the Trust or of a Series shall be performed on, and as of, the
next business day, unless otherwise required by law.

SECTION 11. NOTICES.

Any notice or other communication required by or permitted to be given
in connection with this Agreement shall be in writing and shall be delivered in
person, or by first-class mail, postage prepaid, or by overnight or two-day
private mail service to the respective party. Notice to the Trust shall be given
as follows or at such other address as the Trust may designate in writing:

Schroder Capital Funds
787 Seventh Avenue, 34th Floor
New York, New York 10019

Notice to Schroder shall be given as follows or at such other address
as Schroder may designate

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<PAGE>

in writing:

Schroder Fund Advisors Inc.
787 Seventh Avenue
New York, New York 10019

Notices and other communications received by the parties at the
addresses listed above shall be deemed to have been properly given.

SECTION 12. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY

The Trustees of the Trust and the shareholders of each Series shall not
be liable for any obligations of the Trust or of the Series under this
Agreement, and Schroder agrees that, in asserting any rights or claims under
this Agreement, it shall look only to the assets and property of the Trust or
the Series to which Schroder's rights or claims relate in settlement of such
rights or claims, and not to the Trustees of the Trust or the shareholders of
the Series.

SECTION 13. MISCELLANEOUS

(a) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties hereto.

(b) This Agreement may be executed in two or more counterparts, each
of which, when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.

(c) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.

(d) Section and Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.

(e) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Trust without the written
consent of Schroder, or by Schroder, without the written consent of the Trust
authorized or approved by a resolution of the Board.

(f) This Agreement shall be governed by the laws of the State of New
York.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.

SCHRODER CAPITAL FUNDS
/s/Alexandra Poe
-----------------------------

Name: Alexandra Poe
Title: President

SCHRODER FUND ADVISORS INC.
/s/Catherine A. Mazza
--------------------------------
Name: Catherine A. Mazza
Title: Executive Vice President

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<PAGE>

APPENDIX A
SERIES OF THE TRUST

Schroder Global Growth Portfolio
Schroder Asian Growth Fund Portfolio
Schroder Japan Portfolio

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<PAGE>

APPENDIX B
ADMINISTRATION FEES

<TABLE>
<CAPTION>
Fee As % of the Average Annual
Series of the Trust Daily Net Assets of the Series
- ------------------- ------------------------------
<S> <C>
Schroder Global Growth Portfolio 0.15%

Schroder Asian Growth Fund Portfolio 0.05%

Schroder Japan Portfolio 0.05%
</TABLE>

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------

We hereby consent to the incorporation by reference in Post-Effective Amendment
No. 17 to the Registration Statement on Form N-1A (File No. 811-9130) of our
report dated December 17, 1999, relating to the financial statements and
financial highlights which appear in the October 31, 1999 Annual Report to
Interestholders of Schroder Asian Growth Fund Portfolio and Schroder Japan
Portfolio, each a series of Schroder Capital Funds, which are also incorporated
by reference into the Registration Statement. We also consent to the references
to us under the headings "Financial Highlights", "Independent Accountants" and
"Financial Statements" in such Registration Statement.

PricewaterhouseCoopers LLP

Boston, Massachusetts
February 29, 2000