<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON December 8, 1995
File No. 33-______
File No. 811-_____
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
SEI ASSET ALLOCATION TRUST
(Exact Name of Registrant as Specified in Charter)
c/o The CT Corporation System
2 Oliver Street
Boston, Massachusetts 02109
(Address of Principal Executive Offices, Zip Code)
Registrant's Telephone Number, including Area Code (610) 254-1000
DAVID G. LEE
C/O SEI CORPORATION
680 E. SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087
(Name and Address of Agent for Service)
Copies to:
RICHARD W. GRANT, ESQUIRE JOHN H. GRADY, JR., ESQUIRE
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
2000 ONE LOGAN SQUARE 1800 M STREET, NW
PHILADELPHIA, PENNSYLVANIA 19103 WASHINGTON, DC 20036
________________________________________________________________________________
/X/ Approximate date of Proposed Public Offering:
As soon as practicable after the
effective date of this Registration Statement
- --------------------------------------------------------------------------------
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a)
may determine.
Pursuant to the provisions of Rule 24f-2 under the Investment Act of 1940, an
indefinite number of units of beneficial interest is being registered by this
Registration Statement.
- --------------------------------------------------------------------------------
<PAGE>
SEI ASSET ALLOCATION TRUST
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PART A -
Item 1. Cover Page Cover Page
Item 2. Synopsis Table of Contents
Item 3. Condensed Financial Information *
Item 4. General Description of Registrant Fund Expenses (Class A); Fund Expenses (Class D); Investment Objectives and
Policies of the Funds; Portfolio Turnover of the Funds; Risk Factors of the
Funds; Additional Expense Information Concerning the Funds; Investment
Limitations of the Funds; Investment Focus of the Underlying Portfolios;
General Investment Policies and Limitations of the Underlying Portfolios;
Risk Factors of the Underlying Portfolios; Fundamental Limitations of the
Underlying Portfolios
Item 5. Management of the Trust General Information -- The Adviser and Manager of the Funds; The Advisers
and Sub-Advisers to the Underlying Portfolios; Distribution of Fund Shares;
Performance; General Information -- The Trust; Trustees of the Trust
Item 6. Capital Stock and Other Securities Voting Rights; Reporting; Shareholder Inquiries; Dividends; Counsel and
Independent Accountants; Custodian and Wire Agent; Taxes
Item 7. Purchase of Securities Being Offered Your Account and Doing Business With Us; Purchase and Redemption of Class A
Shares; How to Buy, Sell and Exchange Class D Shares Through Intermediaries;
How to Buy Class D Shares from the Distributor; Exchanging Class D Shares;
Other Information About Buying Class D Shares and the Contingent Deferred
Sales Charge; Exchanging Shares
Item 8. Redemption or Repurchase Redemption of Class A Shares; Additional Information About Doing Business
With Us
Item 9. Pending Legal Proceedings *
PART B -
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Trust
Item 13. Investment Objectives and Policies Description of Permitted Investments of the Underlying Portfolios;
Description of Ratings; Investment Limitations of the Funds; Investment
Limitations of the Underlying Portfolios
Item 14. Management of the Registrant The Manager and Shareholder Servicing Agent
Item 15. Control Persons and Principal Holders *
of Securities
Item 16. Investment Advisory and Other Services The Manager and Shareholder Servicing Agent; The Investment Adviser to the
Funds; The Advisers and Sub-Advisers to the Underlying Portfolios; Experts
Item 17. Brokerage Allocation Portfolio Transactions
Item 18. Capital Stock and Other Securities Description of Shares
Item 19. Purchase, Redemption, and Pricing Purchase and Redemption of Shares
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
of Securities Being Offered
Item 20. Tax Status Taxes
Item 21. Underwriters Distribution
Item 22. Calculation of Yield Quotations Performance
Item 23. Financial Statements *
</TABLE>
Part C -
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
* Not Applicable
ii
<PAGE>
SEI ASSET ALLOCATION TRUST
Class A and Class D Shares
Prospectus
_____________, 1996
- --------------------------------------------------------------------------------
Diversified Conservative Fund
Diversified Conservative Growth Fund
Diversified Moderate Growth Fund
Diversified Growth Fund
Diversified U.S. Stock Fund
- --------------------------------------------------------------------------------
Please read this Prospectus carefully before investing, and keep it on file for
future reference. It concisely sets forth information that can help you decide
if the Funds' investment goals match your own.
A Statement of Additional Information dated ______________, 1996, has been filed
with the Securities and Exchange Commission ("SEC") and may be obtained upon
request and without charge by writing the Distributor, SEI Financial Services
Company (the "Distributor"), at 680 East Swedesford Road, Wayne, Pennsylvania
19087-1658, or by calling 1-800-342-5734. The Statement of Additional
Information is incorporated into this Prospectus by reference.
SEI Asset Allocation Trust (the "Trust") is an open-end management investment
company consisting of the following five separate diversified investment
portfolios (each a "Fund" and, together, the "Funds"): Diversified Conservative
Fund, Diversified Conservative Growth Fund, Diversified Moderate Growth Fund,
Diversified Growth Fund and Diversified U.S. Stock Fund. Each Fund offers
investors a convenient means of investing in shares of mutual funds ("Underlying
Portfolios") managed by SEI Financial Management Corporation ("SFM" or the
"Adviser") according to certain predetermined percentage ranges. Each Fund
offers two classes of shares, Class A Shares and Class D Shares. Class A Shares
are offered primarily to tax-advantaged retirement accounts. Class D Shares are
offered to other accounts through banks, broker-dealers and other financial
institutions that have entered into arrangements with the Distributor to sell
Class D Shares to their customers. Class D Shares differ from Class A Shares
primarily in the allocation of certain distribution, shareholder servicing and
transfer agent expenses and in the range and types of shareholder services
offered to investors. This Prospectus offers both Class A Shares and Class D
Shares of the Funds.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
THE TRUST'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK. THE TRUST'S SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY. INVESTMENT IN THE FUNDS INVOLVES RISK, INCLUDING POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED.
<PAGE>
Table of Contents
Fund Expenses (Class A Shares) ............................................
Fund Expenses (Class D Shares) ............................................
Investment Objectives and Policies of the Funds ...........................
Portfolio Turnover of the Funds ...........................................
Risk Factors of the Funds .................................................
Additional Expense Information Concerning the Funds .......................
Investment Limitations of the Funds .......................................
Investment Focus of the Underlying Portfolios .............................
Investment Objectives and Policies of the Underlying
Portfolios ...............................................................
General Investment Policies of the Underlying Portfolios ..................
Risk Factors of the Underlying Portfolios .................................
Fundamental Limitations of the Underlying Portfolios.......................
The Adviser and Manager of the Funds ......................................
The Advisers and Sub-Advisers to the Underlying
Portfolios ...............................................................
Distribution of Fund Shares ...............................................
Performance ...............................................................
Taxes .....................................................................
Your Account and Doing Business with Us ...................................
Purchase and Redemption of Class A Shares .................................
How to Buy, Sell and Exchange Class D Shares Through
Intermediaries ...........................................................
How to Buy Class D Shares from the Distributor ............................
Exchanging Class D Shares .................................................
How to Sell Class D Shares Through the Distributor ........................
How to Close Your Account .................................................
2
<PAGE>
General Information .......................................................
Description of Permitted Investments and Risk Factors of the Underlying
Portfolios ...............................................................
Appendix ..................................................................
- --------------------------------------------------------------------------------
How to Read this Prospectus
This Prospectus gives you information that you should know about the Funds
before investing. Brief descriptions are also provided throughout the
Prospectus to better explain certain key points. To find these helpful guides,
look for this symbol. [Symbol appears here]
- --------------------------------------------------------------------------------
3
<PAGE>
Fund Expenses
(Class A Shares)________________________________________________________________
The purpose of the following table is to help you understand the various costs
and expenses that you, as a shareholder, will bear directly in connection with
an investment in each Fund's Class A Shares. In addition to these direct
expenses, Class A Shares of the Funds will indirectly bear their pro rata share
of the expenses of the Underlying Portfolios. See "Additional Expense
Information Concerning the Funds."
Shareholder Transaction Expenses (as a percentage of offering price)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Diversified Diversified Diversified Diversified
Conservative Conservative Moderate Growth Diversified Growth U.S. Stock
Fund Growth Fund Fund Fund Fund
---- ----------- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Maximum Sales Charge None None None None None
Imposed on Purchase
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge None None None None None
Imposed on Reinvested
Dividends
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum Contingent None None None None None
Deferred Sales Charge
- ------------------------------------------------------------------------------------------------------------------------------------
Wire Redemption Fees None None None None None
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Operating Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Management/Advisory Fees/1/ .00% .00% .00% .00% .00%
- ------------------------------------------------------------------------------------------------------------------------------------
Other Expenses/2/,/3/ .12% .12% .12% .12% .12%
- ------------------------------------------------------------------------------------------------------------------------------------
Rule 12b-1 Fees None None None None None
- ------------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses/3/ .12% .12% .12% .12% .12%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ The Adviser is currently waiving its advisory and management fees.
Absent fee waivers, management and advisory fees for each Fund would be
.10% and .20%, respectively. These fee waivers are voluntary and may be
discontinued by the Adviser at any time in its sole discretion.
/2/ Other Expenses are based on estimated amounts for the current fiscal
year. Absent SFM's voluntary expense reimbursement, Other Expenses are
estimated to be .13%.
/3/ Absent SFM's voluntary fee waivers and expense reimbursements, the
Total Operating Expenses of each Fund's Class A Shares would be .43%.
4
<PAGE>
Fund Expenses
(Class D Shares)________________________________________________________________
The purpose of the following table is to help you understand the various costs
and expenses that you, as a shareholder, will bear directly in connection with
an investment in each Fund's Class D Shares. In addition to these direct
expenses, Class D Shares of the Funds will indirectly bear their pro rata share
of the expenses of the Underlying Portfolios. See "Additional Expense
Information Concerning the Funds."
Shareholder Transaction Expenses (as a percentage of offering price).
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Diversified Diversified Diversified Diversified
Conservative Conservative Moderate Growth Diversified Growth U.S. Stock
Fund Growth Fund Fund Fund Fund
---- ----------- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Maximum Sales Charge None None None None None
Imposed on Purchase
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum Sales Charge None None None None None
Imposed on Reinvested
Dividends
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum Contingent None None None None None
Deferred Sales Charge
- ------------------------------------------------------------------------------------------------------------------------------------
Wire Redemption Fees $10.00 $10.00 $10.00 $10.00 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
Exchange Fees None None None None None
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Operating Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
Management/Advisory Fees/1/ .00% .00% .00% .00% .00%
- ------------------------------------------------------------------------------------------------------------------------------------
Other Expenses/2//,3/ .12% .12% .12% .12% .12%
- ------------------------------------------------------------------------------------------------------------------------------------
Rule 12b-1/Shareholder/4/ 1.00% 1.00% 1.00% 1.00% 1.00%
Servicing Fees
- ------------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses/3/ 1.12% 1.12% 1.12% 1.12% 1.12%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ The Adviser is currently waiving its advisory and management fees. Absent
fee waivers, management and advisory fees for each Fund would be .10% and
.20%, respectively. These fee waivers are voluntary and may be
discontinued by the Adviser at any time in its sole discretion.
/2/ Other Expenses are based on estimated amounts for the current fiscal
year. Absent SFM's voluntary expense reimbursement Other Expenses are
estimated to be .13%.
/3/ Absent SFM's voluntary fee waivers and expense reimbursements, the Total
Operating Expenses of each Fund's Class D Shares would be 1.43%.
/4/ In order to comply with the Trust's SEC exemption order and the sales
charge limitations imposed by the Rules of Fair Practice of the National
Association of Securities Dealer's ("NASD") there Rue 12b-1/Shareholder
Servicing fees will be reduced in an amount equal to a Fund's pro rata
--- ----
share of any Rule 12b-1/Shareholder Servicing fees charged by any
Underlying Portfolios in which such Fund invests.
5
<PAGE>
Based on the expense ratios of the Underlying Portfolios set forth below, the
range of average weighted expense ratios for Class A and Class D Shares
of the funds are expected to be as follows: /+/
Diversified Conservative Fund Class A .67% to .89%
Diversified Conservative Fund Class D 1.67% to 1.89%
Diversified Conservative Growth Fund Class A .71% to 1.04%
Diversified Conservative Growth Fund Class D 1.71% to 2.04%
Diversified Moderate Growth Fund Class A .73% to 1.11%
Diversified Moderate Growth Fund Class D 1.73% to 2.11%
Diversified Growth Fund Class A .86% to 1.37%
Diversified Growth Fund Class D 1.86% to 2.37%
Diversified U.S. Stock Fund Class A .86% to 1.06%
Diversified U.S. Stock Fund Class D 1.86% to 2.06%
+ A range is provided since the average of each Fund invested in each of
the Underlying Portfolios may fluctuate.
Example
Using the midpoint of the ranges set forth above, an investor in a Fund would
pay the following expenses on a $1000 investment assuming: (1) 5% annual
return, (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
1 Yr. 3 Yr.
------ ------
<S> <C> <C>
Diversified Conservative Fund Class A $ 8.00 $25.00
Diversified Conservative Fund Class D $18.00 $56.00
Diversified Conservative Growth Fund Class A $ 9.00 $28.00
Diversified Conservative Growth Fund Class D $19.00 $59.00
Diversified Moderate Growth Fund Class A $ 9.00 $29.00
Diversified Moderate Growth Fund Class D $20.00 $60.00
Diversified Growth Fund Class A $11.00 $36.00
Diversified Growth Fund Class D $22.00 $66.00
Diversified U.S. Stock Fund Class A $10.00 $31.00
Diversified U.S. Stock Fund Class D $20.00 $62.00
</TABLE>
The example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.
The purpose of the expense tables and example is to assist the investor in
understanding the various costs and expenses that may be directly or indirectly
borne by investors in Class A and Class D Shares of each Fund. A person who
purchases shares through an account with a financial institution may be charged
separate fees by that institution. The information set forth in the foregoing
table and example relates to both the Class A and Class D Shares. Class D
Shares are subject to the same management and advisory expenses as Class A
Shares, but are also subject to different distribution, shareholder servicing
and transfer agent expenses. Additional information may be found under "The
Adviser and Manager of the Funds" and "Distribution of Fund Shares."
Long-term Class D shareholders may pay more than the economic equivalent of the
maximum front-end sales charges otherwise permitted by the Rules of Fair
Practice of the NASD.
6
<PAGE>
Expense Rates of the Underlying Portfolios
------------------------------------------
Class A and Class D Shares of the Funds also will indirectly bear their pro
---
rata share of fees and expenses incurred by the Underlying Portfolios,
----
including distribution expenses, and the investment returns of each Class of
Shares of the Funds will be net of the expenses of the Underlying Portfolios.
The charts set forth below provide the expense ratios for each of the
Underlying Portfolios in which the Funds will invest (based on information as
of September 30, 1995).
Underlying Portfolios Eligible
for Purchase by the Diversified Underlying Portfolios
Conservative Fund Expense Ratios*
- ------------------------------- ---------------------
SIMT Large Cap Growth Portfolio .85%
SIMT Large Cap Value Portfolio .82%
SIMT Small Cap Growth Portfolio 1.10%
SIMT Small Cap Value Portfolio 1.10%
SIMT Core Fixed Income Portfolio .55%
SLAT Prime Obligation Portfolio .44%
Underlying Portfolios Eligible
for Purchase by the Diversified Underlying Portfolios
Moderate Growth Fund Expense Ratios*
- ------------------------------- ---------------------
SIMT Large Cap Growth Portfolio .85%
SIMT Large Cap Value Portfolio .82%
SIMT Small Cap Growth Portfolio 1.10%
SIMT Small Cap Value Portfolio 1.10%
SIT Core International Equity
Portfolio 1.23%
SIT European Equity Portfolio 1.30%
SIT Pacific Basin Equity
Portfolio 1.30%
SIMT Core Fixed Income Portfolio .55%
SIT International Fixed Income
Portfolio 1.00%
SLAT Prime Obligation Portfolio .44%
Underlying Portfolios Eligible
for Purchase by the Diversified Underlying Portfolios
U.S. Stock Fund Expense Ratios*
- ------------------------------- ---------------------
SIMT Large Cap Growth Portfolio .85%
SIMT Large Cap Value Portfolio .82%
SIMT Small Cap Growth Portfolio 1.10%
SIMT Small Cap Value Portfolio 1.10%
SLAT Prime Obligation Portfolio .44%
Underlying Portfolios Eligible
for Purchase by the Diversified Underlying Portfolios
Conservative Growth Fund Expense Ratios*
- ------------------------------- ---------------------
SIMT Large Cap Growth Portfolio .85%
SIMT Large Cap Value Portfolio .82%
SIMT Small Cap Growth Portfolio 1.10%
SIMT Small Cap Value Portfolio 1.10%
SIT Core International Equity
Portfolio 1.23%
SIT European Equity Portfolio 1.30%
SIT Pacific Basin Equity Portfolio 1.30%
SIMT Core Fixed Income Portfolio .55%
SIMT International Fixed Income 1.00%
SLAT Prime Obligation Portfolio .44%
Underlying Portfolios Eligible
for Purchase by the Diversified Underlying Portfolios
Growth Fund Expense Ratios*
- ------------------------------- ---------------------
SIMT Large Cap Growth Portfolio .85%
SIMT Large Cap Value Portfolio .82%
SIMT Small Cap Growth Portfolio 1.10%
SIMT Small Cap Value Portfolio 1.10%
SIT Core International Equity 1.23%
Portfolio
SIT Emerging Markets Equity Portfolio 1.95%
SIT European Equity Portfolio 1.30%
SIT Pacific Basin Equity Portfolio 1.30%
SIMT Core Fixed Income Portfolio .55%
SIMT High Yield Bond Portfolio .85%
SIT International Fixed Income
Portfolio 1.00%
SLAT Prime Obligation Portfolio .44%
* The funds will purchase only Class A Shares of the Underlying Portfolios.
The expense ratios of the Class A Shares of the Underlying Portfolios may
reflect fee waivers and expense reimbursements that may be discontinued at
any time. Absent these fee waivers on the Class A Shares of the Underlying
Portfolios, these expense ratios would be higher.
7
<PAGE>
Investment
Objectives and
Policies of the
Funds___________________________________________________________________________
- --------------------------------------------------------------------------------
[Symbol appears here]
What are Investment Objectives and Policies?
A Fund's investment objective is a statement of what it seeks to achieve. It is
important to make sure that the investment objective matches your own financial
needs and circumstances. The investment policies section spells out the types of
mutual funds in which each fund invests.
- --------------------------------------------------------------------------------
Each Fund offers investors the opportunity to invest in certain of the
Underlying Portfolios, which are separately-managed series of the following
investment companies among predetermined percentage ranges: SEI Institutional
Managed Trust ("SIMT"), SEI International Trust ("SIT") and SEI Liquid Asset
Trust ("SLAT"). Each of SIMT, SIT and SLAT is an "Underlying Trust" and,
together, SIMT, SIT and SLAT are the "Underlying Trusts." The SEC has issued an
exemptive order permitting the Funds to acquire up to 100% of the Shares of any
of the Underlying Portfolios under certain conditions. Absent this Order, the
Investment Company Act of 1940 (the "1940 Act") would substantially limit the
ability of the Funds and Underlying Portfolios to engage in these transactions.
The investment objective of each Fund is set forth below. Each
Fund's investment objective is a fundamental policy, and may not be changed
without shareholder approval. There can be no assurance that the Funds will
achieve their stated objectives.
-The Diversified Growth Fund seeks to provide long-term capital
appreciation. Current income is a secondary consideration.
-The Diversified Conservative Fund seeks to provide current income and an
opportunity for capital appreciation through modest participation in
domestic equity markets.
-The Diversified Conservative Growth Fund seeks to provide current income
with the opportunity for capital appreciation through modest participation
in the domestic and international equity markets.
-The Diversified Moderate Growth Fund seeks to provide long-term growth of
capital with a moderate level of current income.
-The Diversified U.S. Stock Fund seeks to provide long-term growth of
capital through a diversified domestic equity strategy. Current income is
an incidental consideration.
The investment focus of each Fund is summarized below in a chart that
illustrates the degree (relative to each other Fund) to which each Fund seeks to
obtain income or growth of capital, and exposes the Shareholder to risk of
principal loss:
8
<PAGE>
<TABLE>
<CAPTION>
Fund Name Potential Potential for Anticipated
--------- ----------- ---------------- -----------
Income Level Growth of Capital Risk of
------------ ----------------- Principal
---------
<S> <C> <C> <C>
Diversified Growth Fund Low to Medium Medium to High High
Diversified Conservative
Fund Medium to High Medium Medium
Diversified Conservative
Growth Fund Medium Low to Medium Medium
Diversified Moderate
Growth Fund Medium Medium Medium
Diversified U.S. Stock Fund Low High Medium to High
</TABLE>
In order to achieve its investment objective, each Fund may invest a
percentage of its assets in certain of the Underlying Portfolios. The
percentages reflect varying degrees of potential investment risk and
reward. The assets of each Fund will be allocated among the Underlying
Portfolios in accordance with its investment objective, the Adviser's
outlook for the economy, the financial markets and the relative market
valuations of the Underlying Portfolios. In addition, for temporary
defensive purposes and to maintain liquidity, each Fund may invest
directly in short-term debt securities, including U.S. Treasury Bills and
other short-term U.S. Government securities (or repurchase agreements
secured thereby), commercial paper, certificates of deposit or banker's
acceptances. See "Description of Permitted Investments." The adviser may
alter these percentage ranges when it deems appropriate. The tables below
illustrate the ranges in which each Fund is expected to invest in the
Underlying Portfolios:
<TABLE>
<CAPTION>
Diversified Growth Fund
-----------------------
Investment Range (Percent of the
Underlying Portfolio Diversified Growth Fund's Assets)
-------------------- ---------------------------------
<S> <C>
SIMT Large Cap Growth 15-30%
SIMT Large Cap Value 15-30%
SIMT Small Cap Growth 0-15%
SIMT Small Cap Value 0-15%
SIT Core International Equity 5-20%
SIT Emerging Markets Equity 5-20%
SIT European Equity 0-15%
SIT Pacific Basin Equity 0-15%
SIMT Core Fixed Income 5-20%
SIMT High Yield Bond 0-15%
SIT International Fixed Income 0-15%
SLAT Prime Obligation 0-30%
<CAPTION>
Diversified Conservative Fund
-----------------------------
Investment Range (Percent of the
Underlying Portfolio Diversified Conservative Fund's Assets)
-------------------- ---------------------------------------
<S> <C>
SIMT Large Cap Growth 5-20%
SIMT Large Cap Value 5-20%
SIMT Small Cap Growth 0-15%
SIMT Small Cap Value 0-15%
SIMT Core Fixed Income 50-65%
SLAT Prime Obligation 0-30%
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Diversified Conservative Growth Fund
------------------------------------
Investment Range (Percent of the
Underlying Portfolio Diversified Conservative Growth Fund's Assets)
-------------------- ----------------------------------------------
<S> <C>
SIMT Large Cap Growth 5-20%
SIMT Large Cap Value 5-20%
SIMT Small Cap Growth 0-15%
SIMT Small Cap Value 0-15%
SIT Core International Equity 0-15%
SIT European Equity 0-15%
SIT Pacific Basin Equity 0-15%
SIMT Core Fixed Income 40-55%
SIT International Fixed Income 10-25%
SLAT Prime Obligation 0-30%
<CAPTION>
Diversified Moderate Growth Fund
--------------------------------
Investment Range (Percent of the
Underlying Portfolio Diversified Moderate Growth Fund's Assets)
-------------------- ------------------------------------------
<S> <C>
SIMT Large Cap Growth 10-25%
SIMT Large Cap Value 10-25%
SIMT Small Cap Growth 0-15%
SIMT Small Cap Value 0-15%
SIT Core International Equity 0-15%
SIT European Equity 0-15%
SIT Pacific Basin Equity 0-15%
SIMT Core Fixed Income 25-40%
SIT International Fixed Income 5-20%
SLAT Prime Obligation 0-30%
<CAPTION>
Diversified U.S. Stock Fund
---------------------------
Investment Range (Percent of the
Underlying Portfolio Diversified U.S. Stock Fund's Assets)
-------------------- -------------------------------------
<S> <C>
SIMT Large Cap Growth 30-45%
SIMT Large Cap Value 30-45%
SIMT Small Cap Growth 5-20%
SIMT Small Cap Value 5-20%
SLAT Prime Obligation 0-30%
</TABLE>
Portfolio Turnover
of the Funds___________________________________________________________________
Each Fund's portfolio turnover rate (i.e., the rate at which the fund buys and
---
sells shares of the Underlying Portfolios) is expected to be low since asset
reallocation decisions will occur only once every __________. However, if
market conditions so warrant, SFM may make more frequent reallocation
decisions, which will result in a higher portfolio turnover rate. The Funds
will purchase or sell shares of the Underlying Portfolios: (a) to accommodate
purchases and redemptions of each Fund's shares; (b) in response to market or
other economic conditions; and (c) to maintain or modify the allocation of each
Fund's assets among the Underlying Portfolios within the percentage limits
described above or as altered by the Adviser from time to time.
Risk Factors
of the Funds___________________________________________________________________
Prospective investors in the Funds should consider the following factors:
. Any investment in a mutual fund involves risk and, although the Funds
invest in a number of Underlying Portfolios, this practice does not
eliminate investment risk;
10
<PAGE>
. Investing through the Funds in the Underlying Portfolios involves certain
additional expenses and tax results that would not be present in a direct
investment in the Underlying Portfolios;
. Under certain circumstances, an Underlying Portfolio may determine to make
payment of a redemption request by a Fund wholly or partly by a
distribution in kind of securities from its portfolio, instead of cash, in
accordance with the rules of the SEC. In such cases, the Funds may hold
securities distributed by an Underlying Portfolio until the Adviser
determines that it is appropriate to dispose of such securities;
. Certain Underlying Portfolios may: invest a portion of their assets in
foreign securities; enter into forward currency transactions; lend their
portfolio securities; enter into stock index, interest rate and currency
futures contracts, and options on such contracts; engage in options
transactions; make short sales; purchase zero coupon bonds and payment-in-
kind bonds; and engage in various other investment practices. Further
information about these investment policies and practices can be found
under "Investment Objectives and Policies of the Underlying Portfolios"
and "Description of Permitted Investments and Risk Factors of the
Underlying Portfolios" in this Prospectus and in the Trust's Statement of
Additional Information and the prospectuses of each of the Underlying
Portfolios;
. The Diversified Growth Fund can invest as much as 15% of its assets in the
SIMT High Yield Bond Portfolio. As a result, this Fund will be subject to
the risks associated with high yield investing;
. The Funds may invest in Underlying Portfolios which concentrate their
assets in certain industries and geographic regions. Under certain
circumstances, this could result in the Funds being indirectly
concentrated in these industries and geographic areas. If this were to
occur, each such Fund would consider whether to maintain or change its
investments in such Underlying Portfolio(s);
. Certain Funds invest at least 5% and can invest as much as 25%
of their assets in the SIT International Fixed Income Portfolio, which
invests primarily in foreign fixed-income securities; certain other
Funds invest at least 10% and can invest as much as 70% of their
assets in Underlying Portfolios that invest primarily in foreign equity
securities. These investments will subject the Funds to risks associated
with investing in foreign securities; and
. The officers and trustees of the Trust also serve as officers and trustees
of the Underlying Trusts. In addition, the investment adviser of each
Fund serves as investment adviser to certain of the Underlying Portfolios.
Conflicts may arise as these persons seek to fulfill their fiduciary
responsibilities at both levels.
Additional Expense
Information Concerning the Funds _____________________________________________
11
<PAGE>
Investors in the Funds should recognize that they may invest directly
in the Underlying Portfolios and that, by investing in Underlying Portfolios
indirectly through the Funds, they will bear not only their proportionate
share of the expenses of the Funds (including operating costs and investment
advisory and administrative fees to the extent the Adviser has not elected to
waive such fees), but will also indirectly bear similar expenses of the
Underlying Portfolios. Investors in the Funds through managed account
programs who pay separate advisory fees for asset allocation services should
recognize that the combined expenses of the program and the Funds (including
the expenses charged by the Underlying Portfolios) will involve greater fees
and expenses than those present in other types of investments without the
benefit of professional asset allocation recommendations. In addition, a
shareholder of a Fund's Class A Shares will bear a proportionate share of
expenses related to the distribution and shareholder servicing of the Fund's
shares, and also may indirectly bear expenses paid by an Underlying Portfolio
related to the distribution of its shares. In the case of Class D Shares, any
Fund distribution/shareholder servicing fees will be reduced in an amount equal
to the Fund's pro rata portion of any distribution/shareholder servicing fees
--- ----
charged to any Underlying Portfolio in which the Fund invests. See
"Distribution of Fund Shares."
Investment Limitations
of the Funds___________________________________________________________________
Each of the following investment limitations are fundamental for each Fund, and
may not be changed without shareholder approval.
Each Fund may not:
1. Invest more than 25% of its total assets in any one industry (except to
the extent that the Underlying Portfolios are so concentrated).
2. Borrow money in an amount exceeding 33 1/3% of the value of its total
assets. To the extent that its borrowings exceed 5% of its assets,
(i) all borrowings will be repaid before making additional investments and
any interest paid on such borrowings will reduce income, and (ii) asset
coverage of 300% is required.
Each Fund is subject to further restrictions which are described in the Trust's
Statement of Additional Information.
Investment Focus of
the Underlying
Portfolios_____________________________________________________________________
The following table describes the investment focus of each Underlying
Portfolio:
<TABLE>
<CAPTION>
UNDERLYING PORTFOLIO INVESTMENT FOCUS
-------------------- ----------------
<S> <C>
SIMT Large Cap Growth Growth of Capital
SIMT Large Cap Value Growth and Income of Capital
SIMT Small Cap Growth Aggressive Growth of Capital
SIMT Small Cap Value Aggressive Growth of Capital and Income
SIT Core International Equity Growth of Capital
SIT Emerging Markets Equity Aggressive Growth of Capital
SIT European Equity Growth of Capital
SIT Pacific Basin Equity Growth of Capital
SIMT Core Fixed Income Income
SIMT High Yield Bond Aggressive Income
SIT International Fixed Income Income
SLAT Prime Obligation Price Stability
</TABLE>
Investment Objectives and
Policies of the
Underlying Portfolios__________________________________________________________
12
<PAGE>
Set forth below are the specific investment objective and policies that apply
to each Underlying Portfolio. The investment objective of each Underlying
Portfolio is a fundamental policy of that Portfolio, and may not be changed
without shareholder approval. Certain general investment policies that apply to
two or more of the Underlying Portfolios are set forth in the "General
Investment Policies of the Underlying Portfolios" section, below. There can be
no assurance that the Underlying Portfolios will achieve their respective
investment objectives. For a description of the debt ratings discussed in this
Prospectus, see the Appendix.
Underlying Equity
-----------------
Portfolios
----------
SIMT Large Cap
Growth Portfolio The SIMT Large Cap Growth Portfolio seeks to provide capital
appreciation. Under normal conditions, the Portfolio will
invest at least 65% of its total assets in equity securities
of large companies (i.e., companies with market
----
capitalizations of more than $1 billion) which, in the
advisers' opinions, possess significant growth potential. Any
remaining assets may be invested in fixed income securities
or in equity securities of smaller companies that the
Portfolio's advisers believe are appropriate in light of the
Portfolio's investment objective. Equity securities include
common stock, preferred stock, warrants or rights to
subscribe to common stock and, in general, any security that
is convertible into or exchangeable for common stock. Fixed
income securities must be rated investment grade or better,
i.e., rated at least BBB by Standard & Poor's Corporation
----
("S&P") or Baa by Moody's Investors Service, Inc.
("Moody's").
In order to meet liquidity needs, or for temporary
defensive purposes, the Portfolio may invest up to 100% of
its assets in cash and money market securities. Money market
securities must be rated in one of the top two rating
categories by a nationally recognized statistical rating
service ("NRSRO") or, if unrated, determined by the
Portfolio's advisers to be of comparable quality.
SIMT Large Cap
Value Portfolio The SIMT Large Cap Value Portfolio seeks to provide long-
term growth of capital and income. Under normal market
conditions, the Portfolio will invest at least 65% of its
total assets in a diversified portfolio of high quality,
income producing common stocks of large companies (i.e.,
----
companies with market capitalizations of at least $1 billion)
which, in the advisers' opinions, are undervalued in the
marketplace at the time of purchase. In general, the advisers
characterize high quality securities as those that have
above average reinvestment rates. The advisers also consider
other factors, such as earnings and dividend growth prospects
as well as industry outlook and market share. Any remaining
assets may be invested in investment grade debt securities.
In order to meet liquidity needs, or for temporary
defensive purposes, the Portfolio may invest up to 100% of
its assets in cash and money market securities. Money market
securities must be rated in one of the top two rating
categories by an NRSRO, or if not rated, determined by the
Portfolio's advisers to be of comparable quality.
SIMT Small Cap
Growth Portfolio The SIMT Small Cap Growth Portfolio seeks to provide long-
term capital appreciation. Under normal market conditions,
the Portfolio will invest at least 65% of its total assets in
the equity securities of smaller growth companies (i.e.,
----
companies with market capitalizations of less than $1
billion) which, in the advisers' opinions, are in an early
stage or transitional point in their development and have
demonstrated or have the potential for above average capital
growth. The advisers will select companies that have the
potential to gain market share in their industry, achieve and
maintain high and consistent profitability or produce
increases in earnings. The advisers also seek companies with
strong company management and superior fundamental strength.
Small capitalization companies have the potential to show
earnings growth over time that is well above the growth rate
of the overall economy. Any remaining assets of the Portfolio
may be invested in the equity securities of more established
companies
13
<PAGE>
that the advisers believe may offer strong capital
appreciation potential due to their relative market position,
anticipated earnings growth, changes in management or other
similar opportunities. Equity securities include common
stock, preferred stock, warrants and rights to subscribe to
common stock and, in general, any security that is
convertible into or exchangeable for common stock.
In order to meet liquidity needs, or for temporary
defensive purposes, the Portfolio may invest all or a portion
of its assets in common stocks of larger, more established
companies, fixed income securities, cash or money market
securities. Fixed income securities will only be purchased if
they are rated investment grade or better. Investment grade
bonds include securities rated at least BBB by S&P or Baa by
Moody's. Money market securities will only be purchased if
they have been given one of the two top ratings by an NRSRO,
or if unrated, determined by the Portfolio's advisers to be
of comparable quality.
SIMT Small Cap
Value Portfolio The SIMT Small Cap Value Portfolio seeks to provide capital
appreciation. Under normal market conditions, the Portfolio
will invest at least 65% of its total assets in the equity
securities of smaller companies (i.e., companies with market
capitalizations of less than $1 billion) which, in the
advisers' opinion, have prices that appear low relative to
certain fundamental characteristics such as earnings, book
value, or return on equity. Any remaining assets may be
invested in fixed income securities or equity securities of
larger, more established companies that the Portfolio's
advisers believe are appropriate in light of the Portfolio's
objective. Equity securities include common stock, preferred
stock, warrants and rights to subscribe to common stock and,
in general, any security that is convertible into or
exchangeable for common stock. Fixed income securities must
be rated investment grade or better, i.e., rated at least BBB
----
by S&P or Baa by Moody's.
In order to meet liquidity needs, or for temporary
defensive purposes, the Portfolio may invest up to 100% of
its assets in cash and money market securities. Money market
securities must be rated in one of the two top categories by
an NRSRO or, if unrated, determined by the Portfolio's
advisers to be of comparable quality.
SIT Core
International
Equity Portfolio The SIT Core International Equity Portfolio seeks to provide
long-term capital appreciation. Under normal circumstances,
at least 65% of the Portfolio's assets will be invested in
equity securities of non-U.S. Issuers located in at least
three countries other than the United States. The Portfolio
may enter into forward foreign currency contracts as a hedge
against possible variations in foreign exchange rates. A
forward foreign currency contract is a commitment to purchase
or sell a specified currency, at a specified future date, at
a specified price. The Portfolio may enter into forward
foreign currency contracts to hedge a specific security
transaction or to hedge a portfolio position. These contracts
may be bought or sold to protect the Portfolio, to some
degree, against a possible loss resulting from an adverse
change in the relationship between foreign currencies and the
U.S. dollar. The Portfolio may also invest in options on
currencies.
Securities of non-U.S. issuers purchased by the Portfolio
may be purchased in foreign markets, on U.S. registered
exchanges, the over-the-counter market or in the form of
sponsored or unsponsored American Depositary Receipts
("ADRs") traded on registered exchanges or NASDAQ or
sponsored or unsponsored European Depositary Receipts
("EDRs"), Continental Depositary Receipts ("CDRs") or Global
Depositary Receipts ("GDRs"). The Portfolio will typically
invest in equity securities listed on recognized foreign
exchanges, but may also invest in securities traded in over-
the-counter markets. The Portfolio expects its investments to
emphasize both large and intermediate capitalization
companies.
The Portfolio expects to be fully invested in its primary
investments described above, but may invest up to 35% of its
total assets in U.S. or non-U.S. cash reserves; money market
instruments; swaps; options on securities, non-U.S. indices
and
14
<PAGE>
currencies; futures contracts, including stock index futures
contracts; and options on futures contracts.
Permissible money market instruments include securities
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities; securities issued or guaranteed by non-
U.S. governments, which are rated at time of purchase A or
higher by S&P or Moody's, or are determined by the advisers
to be of comparable quality; repurchase agreements;
certificates of deposit and bankers' acceptances issued by
banks or savings and loan associations having net assets of
at least $500 million as of the end of their most recent
fiscal year; high-grade commercial paper; and other long- and
short-term debt instruments which are rated at time of
purchase A or higher by S&P or Moody's, and which, with
respect to such long-term debt instruments, are within 397
days of their maturity.
The Portfolio is also permitted to acquire floating and
variable rate securities, purchase securities on a when-
issued or delayed delivery basis and invest up to 10% of its
total assets in illiquid securities. Although permitted to do
so, the Portfolio does not currently intend to invest in
securities issued by passive foreign investment companies or
to engage in securities lending.
For temporary defensive purposes, when an adviser
determines that market conditions warrant, the Portfolio may
invest up to 50% of its assets in the U.S. and non-U.S. money
market instruments described above and other U.S. and non-
U.S. long- and short-term debt instruments which are rated
BBB or higher by S&P or Baa or higher by Moody's at the time
of purchase, or are determined by the advisers to be of
comparable quality; may hold a portion of its assets in cash;
and may invest in securities of supranational entities which
are rated A or higher by S&P or Moody's at the time of
purchase, or are determined by the advisers to be of
comparable quality.
SIT Emerging
Markets Equity
Portfolio The SIT Emerging Markets Equity Portfolio seeks to provide
capital appreciation. Under normal circumstances, at least
65% of the Portfolio's assets will be invested in equity
securities of emerging market issuers. Under normal
conditions, the Portfolio maintains investments in at least
six emerging market countries and does not invest more than
35% of its total assets in any one emerging market country.
For these purposes, the Portfolio defines an emerging market
country as any country the economy and market of which the
World Bank or the United Nations considers to be emerging or
developing. The Portfolio's advisers consider emerging market
issuers to be companies the securities of which are
principally traded in the capital markets of emerging market
countries that derive at least 50% of their total revenue
from either goods produced or services rendered in emerging
market countries, regardless of where the securities of such
companies are principally traded; or that are organized under
the laws of and have a principal office in an emerging market
country. In addition to its primary investments, described
above, the Portfolio may invest up to 35% of its total assets
in debt securities, including up to 5% of its total assets in
debt securities rated below investment grade. These debt
securities will include debt securities of emerging market
companies. Bonds rated below investment grade are often
referred to as "junk bonds." Such securities involve greater
risk of default or price declines than investment grade
securities.
The Portfolio may invest in certain debt securities issued
by the governments of emerging market countries that are or
may be eligible for conversion into investments in emerging
market companies under debt conversion programs sponsored by
such governments.
The Portfolio may invest up to 10% of its total assets in
illiquid securities. The Portfolio's advisers believe that
carefully selected investments in joint ventures,
cooperatives, partnerships, private placements, unlisted
securities and other similar situations (collectively,
"special situations") could enhance the Portfolio's capital
appreciation potential. Investments in special situations may
be illiquid, as determined by the Portfolio's advisers based
on criteria approved by the Portfolio's Board of Trustees. To
the extent these investments are deemed illiquid, the
Portfolio's investment in them will be consistent with its
10% restriction on investment in illiquid securities.
15
<PAGE>
The Portfolio may invest up to 10% of its total assets in
shares of other investment companies.
The Portfolio may invest in futures contracts and purchase
securities on a when-issued or delayed delivery basis. The
Portfolio may also purchase and write options to buy or sell
futures contracts.
For temporary defensive purposes, when the advisers
determine that market conditions warrant, the Portfolio may
invest up to 20% of its total assets in the equity securities
of companies constituting the Morgan Stanley Capital
International Europe, Australia, Far East Index (the "EAFE
Index"). These companies typically have larger average market
capitalizations than the emerging market companies in which
the Portfolio generally invests.
The Portfolio's investments in emerging markets can be
considered speculative, and therefore may offer higher
potential for gains and losses than developed markets of the
world. With respect to any emerging country, there is the
greater potential for nationalization, expropriation or
confiscatory taxation, political changes, government
regulation, social instability or diplomatic developments
(including war) which could affect adversely the economies of
such countries or investments in such countries. The
economies of developing countries generally are heavily
dependent upon international trade and, accordingly, have
been and may continue to be adversely affected by trade
barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or
negotiated by the countries with which they trade.
SIT European
Equity
Portfolio The SIT European Equity Portfolio seeks to provide long-term
capital appreciation. Under normal circumstances, at least
65% of the Portfolio's assets will be invested in equity
securities of European issuers. The Portfolio's advisers
consider European issuers to be companies the securities of
which are principally traded in the European capital markets;
that derive at least 50% of their total revenue from either
goods produced or services rendered in countries located in
Europe, regardless of where the securities of such companies
are principally traded; or that are organized under the laws
of and have a principal office in a European country. The SIT
European Equity Portfolio has the same general investment
policies as the SIT Core International Equity Portfolio.
Investments in equity securities of European issuers could
include securities of companies located in, and governments
of, developing countries (possibly including countries
formerly controlled by communist governments), and such
securities may be traded in emerging markets. Investments in
any such emerging markets or less developed countries,
including investments in former communist countries, will not
exceed 5% of a Portfolio's total assets at the time of
purchase.
Furthermore, the Portfolio may enter into foreign currency
contracts to hedge a specific security transaction, to hedge
a portfolio position or to adjust the Portfolio's currency
exposure. In addition, the Portfolio may invest in futures
contracts and swaps and may purchase securities on a when-
issued or delayed delivery basis. The Portfolio may also
purchase and write options to buy or sell futures contracts.
Securities of non-U.S. issuers purchased by these
Portfolios may be purchased in foreign markets, on U.S.
registered exchanges, the over-the-counter market or in the
form of sponsored or unsponsored ADRs traded on registered
exchanges or NASDAQ or sponsored or unsponsored EDRs, CDRs or
GDRs. The Portfolio will typically invest in equity
securities listed on recognized foreign exchanges, but may
also invest in securities traded in over-the-counter markets.
For temporary defensive purposes, when the advisers
determine that market conditions warrant, the Portfolio may
invest up to 50% of its assets in the U.S. and non-U.S. money
market instruments described above and other U.S. and non-
U.S. long- and short-term debt instruments which are rated A
or higher by S&P or Moody's at the time of purchase, or are
determined by the advisers to be of comparable quality; may
hold a portfolio of its assets in cash; and may invest in
securities of supranational entities which are rated A or
higher by S&P or Moody's at the time of purchase or are
determined by the advisers to be of comparable quality.
16
<PAGE>
The advisers' approach to selecting the equity securities
in which the Portfolio will invest is fundamental and stock
driven; portfolio managers and analysts concentrate primarily
on finding the best stock ideas, premised on undervalued
growth, that exist in the advisers' stock universe and which
satisfy their growth oriented screening process. After the
generation of stock ideas and the initial stage of portfolio
construction, country exposure and the industry concentration
of the Portfolio are reviewed to ensure proper
diversification.
SIT Pacific Basin
Equity Portfolio The SIT Pacific Basin Equity Portfolio seeks to provide
long-term capital appreciation. Under normal
circumstances, at least 65% of the Portfolio's assets will
be invested in equity securities of Pacific Basin issuers.
The Portfolio's advisers consider Pacific Basin issuers to
be companies the securities of which are principally
traded in the capital markets of Pacific Basin countries;
that derive at least 50% of their total revenue from
either goods produced or services rendered in Pacific
Basin countries, regardless of where the securities of
such companies are principally traded; or that are
organized under the laws of and have a principal office in
a Pacific Basin country. The SIT Pacific Basin Equity
Portfolio has the same general investment policies as the SIT
Core International Equity Portfolio. Investments in equity
securities of Pacific Basin issuers could include securities
of companies located in and governments of developing
countries (possibly including countries controlled by
communist governments), and such securities may be traded in
emerging markets. Investments in any such emerging markets or
less developed countries, including investments in communist
countries, will not exceed 5% of a Portfolio's total assets
at the time of purchase.
Furthermore, the Portfolio may enter into foreign currency
contracts to hedge a specific security transaction, to hedge
a portfolio position or to adjust the Portfolio's currency
exposure. In addition, the Portfolio may invest in futures
contracts and swaps and may purchase securities on a when-
issued or delayed delivery basis. The Portfolio may also
purchase and write options to buy or sell futures contracts.
Securities of non-U.S. issuers purchased by these
Portfolios may be purchased in foreign markets, on U.S.
registered exchanges, the over-the-counter market or in the
form of sponsored or unsponsored ADRs traded on registered
exchanges or NASDAQ or sponsored or unsponsored EDRs, CDRs or
GDRs. The Portfolio will typically invest in equity
securities listed on recognized foreign exchanges, but may
also invest in securities traded in over-the-counter markets.
For temporary defensive purposes, when the advisers
determine that market conditions warrant, the Portfolio may
invest up to 50% of its assets in the U.S. and non-U.S. money
market instruments described above and other U.S. and non-
U.S. long- and short-term debt instruments which are rated A
or higher by S&P or Moody's at the time of purchase, or are
determined by the advisers to be of comparable quality; may
hold a portfolio of its assets in cash; and may invest in
securities of supranational entities which are rated A or
higher by S&P or Moody's at the time of purchase or are
determined by the advisers to be of comparable quality.
The advisers' approach to selecting the equity securities
in which the Portfolio will invest is to place great emphasis
on a research driven process based upon its belief that stock
market returns reflect underlying fundamentals. In managing a
Pacific Basin portfolio, the advisers view the region in two
parts: Japan and all other areas. In Japan, the dominant
economy and stock market in the region, there is a strong
emphasis on stock selection with small- to medium-sized
companies playing an important role during specific cycles of
the Japanese economy. In considering opportunities throughout
the rest of the region, the advisers aim to capitalize on the
faster growth rates occurring outside Japan and a rapidly
expanding universe of securities.
Underlying Fixed
----------------
Income Portfolios
-----------------
17
<PAGE>
SIMT Core Fixed
Income Portfolio The SIMT Core Fixed Income Portfolio seeks to provide current
income consistent with the preservation of capital. Under
normal market conditions, the Portfolio invests at least 65%
of its total assets in fixed income securities that are rated
investment grade or better, i.e., rated in one of the four
----
highest rating categories by an NRSRO at the time of
purchase, or if not rated, determined by the advisers to be
of comparable quality. Fixed income securities in which the
Portfolio may invest consist of: (i) corporate bonds and
debentures; (ii) obligations issued by the United States
Government, its agencies and instrumentalities; (iii)
municipal securities of issuers located in all fifty states,
the District of Columbia, Puerto Rico and other U.S.
territories and possessions, consisting of municipal bond,
municipal notes, tax-exempt commercial paper and municipal
lease obligations; (iv) receipts involving U.S. Treasury
obligations; (v) mortgage-backed securities; (vi) asset-
backed securities; and (vii) zero coupon, pay-in-kind or
deferred payment securities.
Any remaining assets may be invested in (i) interest-only
components of mortgage-backed securities; (ii) mortgage
dollar rolls; (iii) securities issued on a when-issued and
delayed-delivery basis, including TBA mortgage-backed
securities; (iv) warrants; (v) money market securities; and
(vi) Yankee obligations. In addition, the Portfolio may
purchase or write options, futures (including futures on U.S.
Treasury obligations and Eurodollar instruments) and options
on futures.
Duration is a measure of the expected life of a fixed
income security on a cash flow basis. Most debt obligations
provide interest payments and a final payment at maturity.
Some also have put or call provisions that allow the security
to be redeemed at specified dates prior to maturity. Duration
incorporates yield, coupon interest payments, final maturity
and call features into a single measure. The advisers
therefore consider it a more accurate measure of a security's
expected life and sensitivity to interest rate changes than
is the security's term of maturity.
The Portfolio maintains a dollar-weighted average duration
that will, under normal market conditions, stay within plus
or minus 20% of what the advisers believe to be the average
duration of the domestic bond market as a whole. The advisers
base their analysis of the average duration of the domestic
bond market on bond market indices which they believe to be
representative. The advisers currently use the Lehman
Aggregate Bond Index for this purpose.
SIMT High Yield
Bond Portfolio The SIMT High Yield Bond Portfolio seeks to maximize total
return. Under normal market conditions, the Portfolio will
invest at least 65% of its total assets in fixed-income debt
securities that are rated below investment grade (i.e., below
----
Baa by Moody's or BBB by S&P), or, if not rated, are
determined by the Portfolio's advisers to be of comparable
quality. Below investment grade securities are commonly
referred to as "junk bonds," and generally entail increased
credit and market risk. The achievement of the Portfolio's
investment objective may be more dependent on the Portfolio's
adviser's own credit analysis than is the case for higher
rated securities. There is no bottom limit on the ratings of
high yield securities that may be purchased or held by the
Portfolio.
The Portfolio may invest in all types of fixed income
securities issued by domestic and foreign issuers, including:
(i) mortgage-backed securities; (ii) asset-backed securities;
(iii) zero coupon, pay-in-kind or deferred payment
securities; and (iv) variable and floating rate instruments.
Any assets of the Portfolio not invested in the fixed
income securities described above may be invested in (i)
convertible securities; (ii) preferred stocks; (iii) equity
securities; (vi) investment grade fixed income securities;
(v) money market securities; (vi) securities issued on a
when-issued and delayed-delivery basis, including TBA
mortgage-backed securities; (vii) forward foreign currency
contracts; and (viii) Yankee obligations. In addition, the
Portfolio may purchase or write options, futures and options
on futures.
The advisers may vary the average maturity of the
securities in the Portfolio without limit and there is no
restriction on the maturity of any individual security.
18
<PAGE>
In order to meet liquidity needs, or for temporary
defensive purposes, the Portfolio may invest up to 100% of
its assets in cash and short term money market securities.
Money market securities must be rated in one of the top two
categories by an NRSRO or, if unrated, determined by the
Portfolio's advisers to be of comparable quality.
The "Appendix" to this Prospectus sets forth a description
of the bond rating categories of Moody's and S&P. Ratings of
S&P and Moody's represent their opinions of the safety of
principal and interest payments (and not the market risk) of
bonds and other debt securities they undertake to rate at the
time of issuance. Ratings are not absolute standards of
quality and may not reflect changes in an issuer's
creditworthiness. Accordingly, although the Portfolio's
advisers will consider ratings, they will perform their own
analyses and will not rely principally on ratings. The
Portfolio's advisers will consider, among other things, the
price of the security and the financial history and
condition, the prospects and the management of an issuer in
selecting securities for the Portfolio.
Risk Factors Relating to Investing in Lower Rated
Securities -- The Portfolio may invest in lower rated
securities. Fixed income securities are subject to the risk
of an issuer's ability to meet principal and interest
payments on the obligation (credit risk), and may also be
subject to price volatility due to such factors as interest
rate sensitivity, market perception of the creditworthiness
of the issuer and general market liquidity (market risk).
Lower rated or unrated (i.e., high yield) securities are more
----
likely to react to developments affecting market and credit
risk than are more highly rated securities, which primarily
react to movements in the general level of interest rates.
The market values of fixed-income securities tend to vary
inversely with the level of interest rates. Yields and market
values of high yield securities will fluctuate over time,
reflecting not only changing interest rates but the market's
perception of credit quality and the outlook for economic
growth. When economic conditions appear to be deteriorating,
medium to lower rated securities may decline in value due to
heightened concern over credit quality, regardless of the
prevailing interest rates. Investors should carefully
consider the relative risks of investing in high yield
securities and understand that such securities are not
generally meant for short-term investing.
The high yield market is relatively new and its growth has
paralleled a long period of economic expansion and an
increase in merger, acquisition and leveraged buyout
activity. Adverse economic developments can disrupt the
market for high yield securities, and severely affect the
ability of issuers, especially highly leveraged issuers, to
service their debt obligations or to repay their obligations
upon maturity which may lead to a higher incidence of default
on such securities. In addition, the secondary market for
high yield securities, which is concentrated in relatively
few market makers, may not be as liquid as the secondary
market for more highly rated securities. As a result, the
Portfolio could find it more difficult to sell these
securities or may be able to sell the securities only at
prices lower than if such securities were widely traded.
Furthermore, the Trust may experience difficulty in valuing
certain securities at certain times. Prices realized upon the
sale of such lower rated or unrated securities, under these
circumstances, may be less than the prices used in
calculating the Portfolio's net asset value.
Lower rated or unrated debt obligations also present risks
based on payment expectations. If an issuer calls an
obligation for redemption, the Portfolio may have to replace
the security with a lower yielding security, resulting in a
decreased return for investors. If the Portfolio experiences
unexpected net redemptions, it may be forced to sell its
higher rated securities, resulting in a decline in the
overall credit quality of the Portfolio's investment
portfolio and increasing the exposure of the Portfolio to the
risks of high yield securities.
SIT International
Fixed Income
Portfolio The SIT International Fixed Income Portfolio seeks to provide
capital appreciation and current income. Under normal market
conditions, at least 65% of the Portfolio's assets will be
invested in foreign government and foreign corporate fixed
income securities
19
<PAGE>
or debt obligations of issuers located in at least three
countries other than the United States.
The fixed income securities in which the SIT International
Fixed Income Portfolio may invest are (i) fixed income
securities issued or guaranteed by a foreign government or
one of its agencies, authorities, instrumentalities or
political subdivisions; (ii) fixed income securities issued
or guaranteed by supranational entities; (iii) fixed income
securities issued by foreign corporations; (iv) convertible
securities; and (v) fixed income securities issued by foreign
banks or bank holding companies. All such investments will be
in high quality securities denominated in various currencies,
including the European Currency Unit. High quality securities
are rated in one of the highest four rating categories by an
NRSRO or, if unrated, determined by the adviser to be of
comparable quality at the time of purchase.
Any remaining assets of the Portfolio will be invested in
obligations issued or guaranteed as to principal and interest
by the U.S. Government, its agencies or instrumentalities
("U.S. Government Securities"), swaps, options and futures.
The Portfolio may also purchase and write options to buy or
sell futures contracts. The Portfolio also may enter into
forward currency contracts, purchase securities on a when-
issued or delayed delivery basis and engage in short selling.
Furthermore, although the Portfolio will concentrate its
investments in relatively developed countries, the Portfolio
may invest up to 5% of its assets in similar securities or
debt obligations that are denominated in the currencies of
developing countries and that are of comparable quality to
such securities and debt obligations at the time of purchase
as determined by the adviser.
There are no restrictions on the average maturity of the
securities held by the Portfolio or the maturity of any
single instrument. Maturities may vary widely depending on
the adviser's assessment of interest rate trends and other
economic and market factors. In the event a security owned by
the Portfolio is downgraded below the rating categories
discussed above, the adviser will review the situation and
take appropriate action with regard to the security.
The Portfolio is a non-diversified investment company, as
defined in the 1940 Act, which means that more than 5% of its
assets may be invested in one or more issuers, although the
adviser does not intend to invest more than 5% of its assets
in any single issuer with the exception of securities which
are issued or guaranteed by a national government. Since a
relatively high percentage of assets of the Portfolio may be
invested in the obligations of a limited number of issuers,
the value of shares of the Portfolio may be more susceptible
to any single economic, political or regulatory occurrence
than the shares of a diversified investment company would be.
The Portfolio intends to satisfy the diversification
requirements necessary to qualify as a regulated investment
company under the Internal Revenue Code of 1986, as amended
(the "Code"), by limiting its investments so that, at the
close of each quarter of the taxable year, (a) not more than
25% of the market value of the Portfolio's total assets is
invested in the securities (other than U.S. Government
Securities) of a single issuer and (b) at least 50% of the
market value of the Portfolio's total assets is represented
by (i) cash and cash items, (ii) U.S. Government Securities
and (iii) other securities limited in respect to any one
issuer to an amount not greater in value than 5% of the
market value of the Portfolio's total assets and to not more
than 10% of the outstanding voting securities of such issuer.
For temporary defensive purposes, when the adviser
determines that market conditions warrant, the Portfolio may
invest up to 100% of its assets in U.S. dollar-denominated
fixed income securities or debt obligations and the following
domestic and foreign money market instruments: government
obligations, certificates of deposit, bankers' acceptances,
time deposits, commercial paper, short-term corporate debt
issues and repurchase agreements. The Portfolio may hold a
portion of its assets in cash for liquidity purposes.
Underlying Money
----------------
20
<PAGE>
Market Portfolio
----------------
SLAT Prime
Obligation
Portfolio The SLAT Prime Obligation Portfolio seeks to preserve
principal value and maintain a high degree of liquidity while
providing current income. The Portfolio invests exclusively
in (i) commercial paper rated at least A-1 by S&P or Prime-1
by Moody's at the time of investment or, if not rated,
determined by the adviser to be of comparable quality; (ii)
obligations (including certificates of deposit, time
deposits, bankers' acceptances and bank notes) of U.S.
commercial banks that are members of the Federal Reserve
System or the Federal Deposit Insurance Corporation or
savings and loan institutions, which banks or institutions
have total assets of $500 million or more as shown on their
most recent public financial statements at the time of
investment, provided that such obligations are rated in the
top two short-term rating categories by two or more NRSROs,
or one NRSRO if only one NRSRO has rated the security at the
time of investment or, if not rated, determined by the
adviser to be of comparable quality; (iii) short-term
corporate obligations rated AAA or AA by S&P or Aaa or Aa by
Moody's at the time of investment or, if not rated,
determined by the adviser to be of comparable quality; (iv)
short-term obligations issued by state and local governmental
issuers, which are rated, at the time of investment, by at
least two NRSROs in one of the two highest municipal bond
rating categories, and which carry yields that are
competitive with those of other types of money market
instruments of comparable quality; (v) U.S Treasury
obligations, obligations issued or guaranteed as to principal
and interest by agencies or instrumentalities of the U.S.
Government; and (vi) repurchase agreements involving any of
the foregoing obligations.
The Portfolio may invest in restricted securities and may
invest up to 10% of its net assets in illiquid securities.
Rule 144A Securities and Section 4(2) commercial paper that
meet the criteria established by the Board of Trustees of the
Trust may be considered liquid.
The Portfolio may only purchase securities with a
remaining maturity of 365 days or less, and, as a matter of
non-fundamental policy, will maintain a dollar-weighted
average portfolio maturity of 90 days or less. An investment
in the Portfolio is neither insured or guaranteed by the U.S.
Government and there can be no assurance that the Portfolio
will be able to maintain a stable net asset value of $1.00
per share.
General Investment
Policies of the
Underlying Portfolios__________________________________________________________
Borrowing Each Underlying Portfolio, except the SLAT Prime Obligation
Portfolio, may borrow money to meet redemptions for temporary
or emergency purposes. A Portfolio will not purchase
securities while its borrowings exceed 5% of its total
assets.
Common Stocks Each Underlying Portfolio, except the SLAT Prime Obligation,
SIMT Core Fixed Income, SIMT High Yield Bond and SIT
International Fixed Income Portfolios, will invest in common
stocks; provided, however, that the Underlying Portfolios may
only invest in such securities if they are listed on
registered exchanges or actively traded in the over-the-
counter market.
Forward Foreign
Currency
Contracts The Underlying Portfolios, except the SIMT Core Fixed Income,
SIMT Large Cap Growth, SIMT Small Cap Growth, SIMT Large Cap
Value, SIMT Small Cap Value, and SLAT Prime Obligation
Portfolios may purchase forward foreign currency contracts.
21
<PAGE>
Illiquid
Securities Each Underlying Portfolio's investment in illiquid securities
will be limited to 15% of its net assets (10% with respect to
the SLAT Prime Obligation and SIT International Fixed Income
Portfolios).
Investment Company
Securities Each Underlying Portfolio, except the SLAT Prime Obligation
Portfolio, may purchase investment company securities, which
will result in additional layering of expenses. There are
legal limits on the amount of such securities that may be
acquired by an Underlying Portfolio. However, as a condition
to the exemptive relief that was granted to the Trust by the
SEC, no Underlying Portfolio in which a Fund invests may
purchase (i) more than 3 percent of the total outstanding
voting securities of another registered investment company;
(ii) securities issued by such investment company if such
securities have an aggregate value of more than 5 percent of
the total assets of such Underlying Portfolio; or (iii)
securities issued by such investment company and all other
investment companies if such securities have an aggregate
value of more than 10 percent of the total assets of such
Underlying Portfolio.
Investment Grade
Debt Securities Each Underlying Portfolio, except the SLAT Prime Obligation,
SIMT Core Fixed Income, SIT European Equity, SIT Pacific
Basin Equity Portfolios, may invest in investment grade debt
securities. Interest payments and principal security for such
securities appear adequate for the present but certain
protective elements may be lacking or may be
characteristically unreliable over any great length of time.
Such securities lack outstanding investment characteristics
and in fact have speculative characteristics as well.
Money Market
Instruments In order to meet liquidity needs, the Underlying Portfolios
may hold cash reserves and invest in money market instruments
(including securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, repurchase
agreements, certificates of deposit and bankers' acceptances
issued by banks or savings and loan associations having net
assets of at least $500 million as of the end of their most
recent fiscal year and high-grade commercial paper) rated at
time of purchase in the top two categories by an NRSRO or
determined by the adviser to be of comparable quality at the
time of purchase.
Options and
Futures Each Underlying Portfolio, except the SLAT Prime Obligation
Portfolio, may purchase or sell options, futures and options
on futures. Risks associated with investing in options and
futures may include lack of a liquid secondary market,
trading restrictions which may be imposed by an exchange and
government regulations which may restrict trading.
Securities
Lending Each Underlying Portfolio, except the SLAT Prime Obligation
Portfolio, may lend its securities to qualified investors for
the purpose of realizing additional income.
Temporary
Defensive
Investments For temporary defensive purposes when the advisers determine
that market conditions warrant, each of the Underlying
Portfolios may invest up to 100% of its assets in the money
market instruments described above and other long and short-
term debt instruments that are rated A or higher by S&P or
Moody's at the time of purchase, and may hold a portion of
its assets in cash. To the extent any Underlying Portfolio is
engaged in temporary defensive investing, it will not be
pursuing its investment objective.
U.S. Dollar
Denominated
Securities of
Foreign Issuers Each Underlying Portfolio, except the SLAT Prime Obligation
Portfolio, SIMT Small Cap Growth, and SIMT Core Fixed
Income Portfolios, may invest in U.S.
22
<PAGE>
dollar denominated securities of foreign issuers, including
American Depositary Receipts that are traded on registered
exchanges or listed on NASDAQ.
Warrants Consistent with any applicable state law limitations, each
Underlying Portfolio, except the SLAT Prime Obligation, SIT
International Fixed Income, SIT Core International Equity,
SIT European Equity and SIT Pacific Basin Equity Portfolios,
may purchase warrants in order to increase total return.
When-Issued and
Delayed-Delivery
Securities The Underlying Portfolios may purchase securities on a when-
issued or delayed-delivery basis.
For additional information regarding the permitted investments of the
Underlying Portfolios see the "Description of Permitted Investments and Risk
Factors of the Underlying Portfolios" in this Prospectus, the Trust's Statement
of Additional Information, the "Description of Permitted Investments and Risk
Factors" in the Underlying Portfolios' Prospectuses and the "Description of
Permitted Investments" in the Underlying Portfolios' Statements of Additional
Information.
Risk Factors of the
Underlying Portfolios__________________________________________________________
From time to time, the Underlying Portfolios may experience
relatively large purchases or redemptions due to asset
allocation decisions made by the Adviser for its clients,
including the Trust. These transactions may have a material
effect on the Underlying Portfolios, since Underlying
Portfolios that experience redemptions as a result of
reallocations may have to sell portfolio securities and
because Underlying Portfolios that receive additional cash
will have to invest it. While it is impossible to predict the
overall impact of these transactions over time, there could
be adverse effects on portfolio management to the extent that
Underlying Portfolios may be required to sell securities at
times when they would not otherwise do so, or receive cash
that cannot be invested in an expeditious manner. There may
be tax consequences associated with purchases and sales of
securities, and such sales may also increase transaction
costs. The Adviser is committed to minimizing the impact of
these transactions on the Underlying Portfolios to the extent
it is consistent with pursuing the investment objectives of
its asset allocation clients, and will monitor the impact of
asset allocation decisions on the Underlying Portfolios. The
Adviser will nevertheless face conflicts in fulfilling its
responsibilities because of the possible differences between
the interests of its asset allocation clients and the
interests of the Underlying Portfolios.
Fundamental Limitations
of the Underlying
Portfolios_____________________________________________________________________
Each Underlying Portfolio, except the SIT International Fixed
Income Fund, may not invest more than 5% of its assets in the
securities of a single issuer. (This limitation applies to
75% of the assets of the SIMT and SIT Portfolios, and does
not apply to securities issued by the U.S. Government, its
agencies or instrumentalities.)
Each Underlying Portfolio may not purchase securities
which would cause more than 25% of such Portfolio's assets to
be invested in the securities of issuers conducting business
in the same industry. (This limitation does not apply to
investments in securities issued by the U.S. Government, its
agencies or instrumentalities and, with respect to the SLAT
Prime Obligation Portfolio, obligations of domestic banks.)
The foregoing percentage limitations relating to the
Underlying Portfolios' investment limitations will apply at
the time of the purchase of the security by an
23
<PAGE>
Underlying Portfolio. Additional investment limitations are
set forth in the Underlying Portfolios' Prospectuses and
Statements of Additional Information.
The Adviser and Manager
of the Funds___________________________________________________________________
- --------------------------------------------------------------------------------
[Symbol Appears Here]
Investment Adviser
A Fund's investment adviser manages the investment activities and is responsible
for the performance of the Fund. The adviser executes investment strategies
based on an assessment of economic and market conditions, and determines the
appropriate allocation of the Fund's asset among the Underlying Portfolios.
- --------------------------------------------------------------------------------
Under an Investment Advisory Agreement with the Trust, SEI Financial
Management Corporation ("SFM" or the "Adviser") acts as the
investment adviser to each Fund. Under the Agreement, the Adviser
will provide its proprietary asset allocation services to the Funds,
and will exercise investment discretion over the assets of the
Funds. The Adviser will monitor the allocation of each Fund's
assets, and will be responsible for supervising compliance with each
Fund's fundamental investment objectives and policies. Although it
is expected that each Fund will typically be fully invested in the
Underlying Portfolios, the Adviser may, from time to time, direct
the investment of each Fund's cash balances in short-term debt
securities, including U.S. Treasury Bills and other short-term U.S.
Government securities (or repurchase agreements secured thereby),
commercial paper, certificates of deposit or banker's acceptances.
For its investment advisory services to the Trust, the Adviser is
entitled to a fee, which is calculated daily and paid monthly, at an
annual rate of .10% of each Fund's average daily net assets. The
Adviser has voluntarily agreed to waive this fee for the foreseeable
future. This waiver may be terminated by the Adviser at any time in
its sole discretion.
Under an Administration Agreement with the Trust, SFM also
provides the Trust with overall management services, regulatory
reporting, all necessary office space, equipment, personnel, and
facilities, and acts as dividend disbursing agent and shareholder
servicing agent. In addition, SFM serves as transfer agent for each
Fund's Class A shares. For these services to the Funds, SFM is
entitled to a fee, which is calculated daily and paid monthly, at an
annual rate of .20% of the average daily net assets of each Fund.
SFM has agreed to waive its management fee for the foreseeable
future. This waiver is voluntary and may be discontinued at any time
in SFM's sole discretion. When combined with the fees payable by
each Underlying Portfolio in which a Fund invests, the management
and advisory fees for each Fund may be higher than that paid by most
mutual funds.
The Adviser is a wholly-owned subsidiary of SEI Corporation
("SEI"), a financial services company located in Wayne,
Pennsylvania. The principal business address of the Adviser is 680
East Swedesford Road, Wayne, Pennsylvania 19087-1658. SEI was
founded in 1968, and is a leading provider of investment solutions
to banks, institutional investors, investment advisers and insurance
companies. Affiliates of the Adviser have provided consulting advice
to institutional investors for more than 20 years, including advice
regarding the selection and evaluation of investment advisers and
advice regarding asset allocation strategies. The Adviser currently
serves as manager or administrator to more than ___ investment
companies, including more than ____ portfolios, which investment
companies had more than $____ billion in assets as of
______________.
Investment and asset allocation decisions for the Funds are made by
committee.
In addition, the Trust and DST Systems, Inc. (the "Transfer
Agent"), 210 West 10th Street, Kansas, City, Missouri 64105, have
entered into a transfer agent agreement with respect to the Trust's
Class D shares.
24
<PAGE>
The Advisers and Sub-
Advisers to the Underlying
Portfolios_____________________________________________________________________
Overview: The following table sets forth information regarding the advisers
and sub-advisers to the Underlying Portfolios:
<TABLE>
<CAPTION>
=====================================================================================
Underlying Portfolio Investment Adviser Sub-Adviser(s)
- -------------------------------------------------------------------------------------
<S> <C> <C>
SIMT Large Cap Growth SFM Alliance Capital Management, L.P.
IDS Advisory Group Inc.
- -------------------------------------------------------------------------------------
SIMT Large Cap Value SFM LSV Asset Management
Mellon Equity Associates
Merus Capital Management
- -------------------------------------------------------------------------------------
SIMT Small Cap Growth SFM Apodaca-Johnston Capital
Management
Nicholas-Applegate Capital
Management
Pilgrim Baxter & Associates, Ltd.
Wall Street Associates
- -------------------------------------------------------------------------------------
SIMT Small Cap Value SFM Boston Partners Asset Management,
L.P.
1838 Investment Advisors, L.P.
- -------------------------------------------------------------------------------------
SIT Core International SFM Acadian Asset Management, Inc.
Equity
- -------------------------------------------------------------------------------------
SIT Emerging Markets Equity SFM Montgomery Asset Management, L.P.
- -------------------------------------------------------------------------------------
SIT European Equity SFM Morgan Grenfell Investment
Services, Ltd.
- -------------------------------------------------------------------------------------
SIT Pacific Basin Equity SFM Schroder Capital Management Int'l
Ltd.
- -------------------------------------------------------------------------------------
SIMT Core Fixed Income SFM Western Asset Management
Company
Firstar Investment Research &
Management Company
BlackRock Financial Management,
Inc.
- -------------------------------------------------------------------------------------
SIMT High Yield Bond SFM BEA Associates
- -------------------------------------------------------------------------------------
SIT International Fixed Strategic Fixed None
Income Income, L.P.
- -------------------------------------------------------------------------------------
SLAT Prime Obligation Wellington None
Management
Corporation
=====================================================================================
</TABLE>
Advisers to the Underlying Portfolios
-------------------------------------
SEI Financial In addition to serving as the Trust's Adviser, SFM serves
Management as investment adviser to each Underlying Portfolio except SIT
Corporation International Fixed Income Portfolio and SLAT Prime
Obligation Portfolio.
Under its advisory agreement with each Underlying
Portfolio for which it serves as investment adviser (an
"Underlying SEI Portfolio"), the Adviser is authorized to make
investment decisions for the assets of the Underlying SEI
Portfolio, and to continuously review, supervise and administer
the Underlying SEI Portfolio's investment program.
In addition, the Adviser has general oversight
responsibility for the investment sub-advisory services
provided to the Underlying SEI Portfolio, including formulating
investment policies and analyzing economic trends affecting the
Underlying SEI Portfolio. The Adviser is also responsible for
managing the allocation of assets among the Underlying SEI
Portfolio's sub-advisers, and directing and evaluating the
investment services provided by the sub-advisers, including
their adherence to the investment objectives and policies and
investment performance of each Underlying SEI Portfolio. In
accordance with these investment objective and policies,
25
<PAGE>
and under the supervision of the Adviser and the Trust's Board
of Trustees, each sub-adviser is responsible for the day-to-day
investment management of all or a discrete portion of the
assets of an Underlying SEI Portfolio. The Adviser and the sub-
advisers are authorized to make investment decisions for the
Underlying SEI Portfolios and place orders on behalf of the
Underlying SEI Portfolios to effect the investment decisions
made. For its advisory services to the Underlying Portfolios,
the Adviser is entitled to the following fees:
<TABLE>
<CAPTION>
===============================================================================
Advisory Fee Payable to the Adviser (as a
Underlying Portfolio Percentage of Average Daily Net Assets)
- -------------------------------------------------------------------------------
<S> <C>
SIMT Large Cap Growth .40%
- -------------------------------------------------------------------------------
SIMT Large Cap Value .35%
- -------------------------------------------------------------------------------
SIMT Small Cap Growth .65%
- -------------------------------------------------------------------------------
SIMT Small Cap Value .65%
- -------------------------------------------------------------------------------
SIT Core International Equity .475%
- -------------------------------------------------------------------------------
SIT Emerging Markets Equity 1.05%
- -------------------------------------------------------------------------------
SIT European Equity .475%
- -------------------------------------------------------------------------------
SIT Pacific Basin Equity .55%
- -------------------------------------------------------------------------------
SIMT Core Fixed Income .275%
- -------------------------------------------------------------------------------
SIMT High Yield Bond .4875%
===============================================================================
</TABLE>
The Adviser is seeking an exemptive order from the SEC that
would permit the Adviser, with the approval of the Underlying
Trusts' Boards of Trustees, to retain sub-advisers for
Underlying SEI Portfolios of SIMT and SIT without submitting
the sub-advisory agreement to a vote of the Underlying SEI
Portfolio's shareholders. If granted, the exemptive relief also
will permit the non-disclosure of amounts payable by the
Adviser under such sub-advisory agreements. Until or unless
this exemptive order is granted, if one of the sub-advisers is
terminated or departs from an Underlying SEI Portfolio with
multiple sub-advisers, the Underlying SEI Portfolio will handle
such termination or departure in one of two ways. First, the
Underlying SEI Portfolio may propose that a new sub-adviser be
appointed to manage that portion of the Underlying SEI
Portfolio's assets managed by the departing sub-adviser. In
this case, the Underlying SEI Portfolio would be required to
submit to the Underlying SEI Portfolio's shareholders the
investment sub-advisory contract with the new sub-adviser. In
the alternative, the Underlying SEI Portfolio may decide to
allocate the departing sub-adviser's assets among the remaining
sub-advisers. This allocation would not require a new
investment sub-advisory contract, and consequently no
shareholder approval would be necessary.
Strategic Fixed
Income L.P. Strategic Fixed Income L.P. ("SFI") acts as the investment
adviser to the SIT International Fixed Income Portfolio. SFI is
a limited partnership formed in 1991 under the laws of the
State of Delaware, to manage multi-currency fixed income
portfolios. The general partner of the firm is Kenneth Windheim
and the limited partner is Strategic Investment Management
("SIM"). As of __ 1995, SFI managed $__ billion of client
assets under management. Together, SFI and SIM managed over $__
billion in client assets as of that date. The principal address
of SFI is 1001 Nineteenth Street North, 16th Floor, Arlington,
Virginia 22209.
SFI is entitled to a fee, which is calculated daily and
paid monthly by the Portfolio, at an annual rate of .30% of the
average daily net assets of the SIT International Fixed Income
Portfolio. SFI has voluntarily agreed to waive all or a
26
<PAGE>
portion of its fee in order to limit the total operating
expenses of the Portfolio. SFI reserves the right to terminate
its voluntary fee waiver at any time in its sole discretion.
Wellington
Management
Corporation Wellington Management Company ("WMC"), 75 State Street, Boston,
Massachusetts 02109, serves as the investment adviser to the
SLAT Prime Obligation Portfolio.
As of September 30, 1995, WMC had investment management
authority with respect to approximately $102.4 billion of
assets. WMC is a professional investment counseling firm which
provides investment services to investment companies, employee
benefit plans, endowments, foundations, and other institutions
and individuals. The WMC's predecessor organizations have
provided investment advisory services to investment companies
since 1933, and to investment counseling clients since 1960.
WMC is a Massachusetts general partnership of which the
following persons are managing partners: Robert W. Doran,
Duncan M. McFarland and John B. Neff.
WMC is entitled to a fee which is calculated daily and
paid monthly at an annual rate of .075% of the combined average
daily net assets of the various portfolios of SLAT up to $500
million, and .02% of such average daily net assets in excess of
$500 million. Such fees are allocated daily among the various
portfolios of SLAT on the basis of their relative net assets.
The Sub-Advisers to the
-----------------------
Underlying Portfolios
---------------------
Acadian Asset
Management,
Inc. Acadian Asset Management, Inc. ("Acadian") act as an investment
sub-adviser to the SIT Core International Equity Portfolio
pursuant to a sub-advisory agreement with the Adviser. In
accordance with the Portfolio's investment objectives and
policies and under the supervision of the Adviser and the
Underlying Trust's Board of Trustees, Acadian is responsible
for the day-to-day investment management of the portion of the
Portfolio assigned to it by the Board of Trustees and, with
respect thereto, places orders on behalf of the Portfolio to
effect the investment decisions made.
Acadian, a wholly-owned subsidiary of United Asset
Management Corporation, was founded in 1977, and manages
approximately $2 billion in assets invested globally. Acadian's
business address is 260 Franklin Street, Boston, Massachusetts
02110.
Acadian is entitled to a fee from the Adviser calculated
on the basis of a percentage of the market value of the assets
assigned to it. That fee, which is paid monthly, is based on an
annual percentage rate of .325% of assets managed up to $150
million; .25% of the next $100 million of such assets; .15% of
the next $100 million of such assets; and .10% of such assets
in excess of $350 million.
Alliance Capital
Management L.P. Alliance Capital Management L.P. ("Alliance Capital") serves
as investment sub-adviser to a portion of the assets of the
SIMT Large Cap Growth Portfolio. Alliance is a registered
investment adviser organized as a Delaware limited partnership
which originated as Alliance Capital Management Corporation in
1971. Alliance Capital Management Corporation, an indirect
wholly-owned subsidiary of The Equitable Life Assurance Society
of the United States, is the general partner of Alliance. As
of September 30, 1995, Alliance managed over $123 billion in
assets. The principal business address of Alliance is 1345
Avenue of the Americas, New York, New York 10105.
The Adviser pays Alliance the greater of $125,000 or a
fee, which is calculated and paid monthly, based on an annual
percentage rate of .25% of the average monthly market value of
assets of the SIMT Large Cap Growth Portfolio managed by
Alliance. Alliance may waive all or a portion of its fee in
order to limit the operating expenses of the Portfolio.
Alliance reserves the right, in its sole discretion, to
terminate any such voluntary fee waiver at any time.
Apodaca-Johnston
27
<PAGE>
Capital
Management Apodaca-Johnston Capital Management ("Apodaca") serves as
an investment sub-adviser to a portion of the assets of the
SIMT Small Cap Growth Portfolio. Apodaca is a California
corporation with its principal address at 580 California
Street, Suite 2200, San Francisco, California 94014. Apodaca
is owned equally by Scott Johnson, Jerry C. Apodaca, Jr., and
Jerry C. Apodaca, Sr. Apodaca's predecessor was founded in
1985, and as of September 30, 1995, Apodaca has approximately
$_________ million in assets under management. Apodaca's
clients include individuals, pension and profit sharing plans,
an endowment fund and an investment company portfolio.
The Adviser pays Apodaca a fee, which is calculated and
paid monthly, based on an annual percentage rate of .50% of the
average monthly market value of the assets of the SIMT Small
Cap Growth Portfolio managed by Apodaca.
BEA Associates BEA Associates ("BEA") serves as investment sub-adviser to
the SIMT High Yield Bond Portfolio. BEA is a general
partnership organized under the laws of the State of New York
and, together with its predecessor firms, has been engaged in
the investment advisory business for over 50 years. BEA's
principal offices are located at One Citicorp Center, 153 East
53rd Street, New York, New York 10022. Credit Suisse Capital
Corporation ("CS Capital") is an 80% partner in BEA and Basic
Appraisals, Inc., is a 20% partner in BEA. CS Capital is a
wholly-owned subsidiary of Credit Suisse Investment
Corporation, which is a wholly-owned subsidiary of Credit
Suisse, the second largest Swiss bank, which, in turn, is a
subsidiary of CS Holding, a Swiss corporation. No one person
or entity possesses a controlling interest in Basic Appraisals,
Inc. BEA is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended.
BEA is a diversified asset manager, handling global
equity, balanced, fixed income and derivative securities
accounts for private individuals, as well as corporate pension
and profit-sharing plans, state pension funds, union funds,
endowments and other charitable institutions. As of September
30, 1995, BEA managed approximately $28.6 billion in assets.
The Adviser pays BEA a fee, which is calculated and paid
monthly, based on an annual percentage rate of .3375% of the
average monthly market value of the assets of the SIMT High
Yield Bond Portfolio managed by BEA.
BlackRock
Financial
Management,
Inc. BlackRock Financial Management, Inc. ("BlackRock") serves as
an investment sub-adviser to a portion of the assets of the
SIMT Core Fixed Income Portfolio. BlackRock, a registered
investment adviser, is a Delaware corporation with its
principal business address at 345 Park Avenue, 30th Floor, New
York, New York 10154. BlackRock's predecessor was founded in
1988, and as of September 30, 1995, BlackRock had $______
billion in assets under management. BlackRock is wholly-owned
by PNC Asset Management Group, Inc., a wholly-owned subsidiary
of PNC Bank, N.A. PNC Bank, N.A.'s ultimate parent is PNC Bank
Corp., One PNC Plaza, Pittsburgh, Pennsylvania 15265, a bank
holding company. BlackRock provides investment advice to
investment companies, trust, charitable organizations, pension
and profit sharing plans and government entities.
The Adviser pays BlackRock a fee, which is calculated and
paid monthly, based on an annual percentage rate of .15% of the
average monthly market value of the assets of the SIMT Core
Fixed Income Portfolio managed by BlackRock.
Boston Partners
Asset Management,
L.P. Boston Partners Asset Management, L.P. ("Boston") serves as
investment sub-adviser to a portion of the assets of the SIMT
Small Cap Value Portfolio. Boston, a Delaware limited
partnership, is a registered investment adviser with its
principal business address at One Financial Center, 43rd Floor,
Boston, Massachusetts 02111. Boston's general partner, Boston
Partners, Inc., One Financial Center, 43rd Floor, Boston,
Massachusetts 02111, whose sole shareholder is Desmond J.
Heathwood, Chief Investment Office of Boston, owns
approximately 20% of Boston's partnership interests. Boston
was founded in April 1995, and as of September 30, 1995, it had
approximately $____
28
<PAGE>
billion in assets under management. Boston's clients include
corporations, endowments, foundations, pension and profit
sharing plans and one other investment company.
The Adviser pays Boston a fee, which is calculated and
paid monthly, based on an annual percentage rate of .50% of the
average monthly market value of the assets of the SIMT Small
Cap Value Portfolio managed by Boston.
1838 Investment
Advisors, L.P. 1838 Investment Advisors, L.P. ("1838") serves as investment
sub-adviser to a portion of the assets of the SIMT Small Cap
Value Portfolio. 1838 is a Delaware limited partnership
located at 100 Matsonford Road, Radnor, Pennsylvania. As of
September 30, 1995, 1838 managed $3.5 billion in assets in
large and small capitalization equity, fixed income and
balanced account portfolios. Clients include corporate
employee benefit plans, municipalities, endowments,
foundations, jointly trusteed plans, insurance companies and
wealthy individuals.
The Adviser pays 1838 a fee, which is calculated and paid
monthly, based on an annual percentage rate of .50% of the
average monthly market value of assets of the SIMT Small Cap
Value Portfolio managed by 1838.
Firstar
Investment
Research &
Management
Company Firstar Investment Research & Management Company ("FIRMCO")
serves as an investment sub-adviser to a portion of the assets
of the SIMT Core Fixed Income Portfolio. FIRMCO is a
registered investment adviser with its principal business
address at 777 East Wisconsin Avenue, Suite 800, Milwaukee,
Wisconsin 53202. FIRMCO was founded in 1986, and as of
September 30, 1995, it had approximately $_____ billion in
assets under management. FIRMCO is a wholly-owned subsidiary
of Firstar Corporation, a bank holding company located at 777
East Wisconsin Avenue, Milwaukee, Wisconsin 53202. FIRMCO's
clients include pension and profit sharing plans, trusts and
estates and one other investment company.
The Adviser pays Firstar a fee, which is calculated and
paid monthly, based on an annual percentage rate of .10% of the
average monthly market value of the assets of the SIMT Core
Fixed Income Portfolio managed by Firstar.
IDS Advisory
Group Inc. IDS Advisory Group Inc. ("IDS") serves as investment sub-
adviser to a portion of the assets of the SIMT Large Cap Growth
Portfolio. IDS is a registered investment adviser and wholly-
owned subsidiary of American Express Financial Corporation. As
of September 30, 1995, IDS managed over $20.5 billion in assets
with $5 billion of this total in large capitalization growth
domestic equities. IDS was founded in 1972 to manage tax-
exempt assets for institutional clients. The principal
business address of IDS is IDS Tower 10, Minneapolis,
Minnesota 55440.
The Adviser pays IDS the greater of $125,000 or a fee
which is calculated and paid monthly, based on an annual
percentage rate of .25% of the average monthly market value of
assets of the SIMT Large Cap Growth Portfolio managed by IDS.
LSV Asset
Management LSV Asset Management ("LSV") serves as investment sub-adviser
to a portion of the assets of the SIMT Large Cap Value
Portfolio. LSV is a registered investment adviser organized as
a Delaware general partnership. An affiliate of the Adviser
owns a majority interest of LSV. The principal business
address of LSV is 181 W. Madison Avenue, Chicago, Illinois
60602.
The general partners of LSV have developed quantitative
value analysis methodology and software which has been used to
manage assets over the past 5 years. LSV makes investment
decisions based on a quantitative computer model and, based on
its ongoing research and statistical analysis, make adjustments
to the model. Securities are identified for purchase or sale
by the Portfolio based upon the computer
29
<PAGE>
model and defined variance tolerances. Purchases and sales are
effected by LSV based upon the output from the model.
The Adviser pays LSV a fee, which is calculated and paid
monthly, based on an annual percentage rate of .20% of the
average monthly market value of the assets of the SIMT Large
Cap Value Portfolio managed by LSV.
Mellon Equity
Associates Mellon Equity Associates ("Mellon") serves as investment sub-
adviser to a portion of the assets of the SIMT Large Cap Value
Portfolio. Mellon is a Pennsylvania business trust founded in
1987, whose sole beneficiary is MBC Investments Corporation, a
wholly-owned subsidiary of the Mellon Bank Corporation. Mellon
is a professional investment counseling firm that provides
investment management services to the equity and balanced
pension, public fund and profit-sharing investment management
markets, and is a registered investment adviser under the 1940
Act. Mellon had discretionary management authority with
respect to approximately $6.2 billion of assets as of September
30, 1995. Mellon's predecessor organization had managed
domestic equity tax-exempt institutional accounts since 1947.
The business address for Mellon is 500 Grant Street, Suite
3700, Pittsburgh, Pennsylvania 15258.
The Adviser pays Mellon a fee, which is calculated and
paid monthly, based on an annual percentage rate of .20% of the
average monthly market value of the assets of the SIMT Large
Cap Value Portfolio managed by Mellon.
Merus Capital
Management Merus Capital Management ("Merus") serves as investment sub-
adviser to a portion of the assets of the SIMT Large Cap Value
Portfolio. Merus is a division of the Bank of California and
provides equity and fixed-income management services to a broad
array of corporate and municipal clients. As of September 30,
1995, Merus had discretionary management authority with respect
to approximately $______ billion of assets. The principal
business address of Merus is 475 Sansome Street, San Francisco,
California 94111.
The Adviser pays Merus a fee, which is calculated and paid
monthly, based on an annual percentage rate of .20% of the
average monthly market value of the assets of the SIMT Large
Cap Value Portfolio managed by Merus.
Montgomery
Asset
Management,
L.P. Montgomery Asset Management, L.P. ("MAM") acts as the
investment sub-adviser to the SIT Emerging Markets Equity
Portfolio. In accordance with the Portfolio's investment
objective and policies and under the supervision of the Adviser
and the Underlying Trust's Board of Trustees, MAM is
responsible for the day-to-day investment management of the
Portfolio and places orders on behalf of the Portfolio to
effect the investment decisions made.
MAM is an independent affiliate of Montgomery Securities,
a San Francisco based investment banking firm. As of __ 1995,
MAM had approximately $__ billion in assets under management.
MAM has over four years experience providing investment
management services. The principal address of MAM is 600
Montgomery Street, San Francisco, CA 94111.
MAM is entitled to a fee from the Adviser calculated on
the basis of a percentage of the market value of the assets
assigned to it. That fee, which is paid monthly, is based on an
annual percentage rate of .90% of the first $50 million and
.55% of the assets in excess of $50 million.
Morgan Grenfell
Investment
Services
Limited Morgan Grenfell Investment Services Limited ("MG") acts as the
investment sub-adviser to the SIT European Equity Portfolio.
MG, a subsidiary of Morgan Grenfell Asset Management Limited,
managed over $__ billion in assets as of __, 1995. Morgan
Grenfell Asset Management Limited, a wholly-owned subsidiary of
30
<PAGE>
Deutsche Bank, A.G., a German financial services conglomerate,
managed over $__ billion in assets as of _______ __, 1995. MG
has over 11 years experience in managing international
portfolios for North American clients. Morgan Grenfell Asset
Management employs more than 15 European investment
professionals. MG attempts to exploit perceived inefficiencies
present in the European markets with original research and an
emphasis on stock selection. The principal address of MG is 20
Finsbury Circus, London, England, EC2M 1NB.
MG is entitled to a fee from the Adviser calculated on the
basis of a percentage of the market value of assets assigned to
it. That fee, which is paid monthly, is based on an annual
percentage rate of .325%.
Nicholas-
Applegate
Capital
Management Nicholas-Applegate Capital Management ("Nicholas-Applegate")
serves as investment sub-adviser to a portion of the assets of
the SIMT Small Cap Growth Portfolio. Nicholas-Applegate has
operated as an investment adviser which provides investment
services to employee benefit plans, endowments, foundations,
other institutions and investment companies since April 20,
1987. As of September 30, 1995, Nicholas-Applegate had
discretionary management authority with respect to
approximately $13 billion of assets. The principal business
address of Nicholas-Applegate is 600 West Broadway, 29th Floor,
San Diego, California 92101. Nicholas-Applegate, pursuant to a
partnership agreement, is controlled by its general partner
Nicholas-Applegate Capital Management, Inc., a corporation
owned by Arthur E. Nicholas.
The Adviser pays Nicholas-Applegate a fee, which is
calculated and paid monthly, based on an annual percentage rate
of .50% of the average monthly market value of assets of the
SIMT Small Cap Growth Portfolio managed by Nicholas-Applegate.
Pilgrim Baxter
& Associates,
Ltd. Pilgrim Baxter & Associates, Ltd. ("Pilgrim Baxter") serves as
investment sub-adviser to a portion of the assets of the SIMT
Small-Cap Growth Portfolio. Pilgrim Baxter & Associates, Ltd.
is a professional investment management firm and registered
investment adviser that, along with its predecessors, has been
in business since 1982. The controlling shareholder of the
Adviser is United Asset Management Corporation ("UAM"), a New
York Stock Exchange listed holding company principally engaged,
through affiliated firms, in providing institutional investment
management services and acquiring institutional investment
management firms. UAM's corporate headquarters are located at
One International Place, Boston, Massachusetts 02110. The
Adviser currently has discretionary management authority with
respect to approximately $6.5 billion in assets. In addition to
advising the Portfolio, the Adviser provides advisory services
to pension and profit-sharing plans, charitable institutions,
corporations, individual investors, trust and estates, and
other investment companies. The principal business address of
the Adviser is 1255 Drummers Lane, Suite 300, Wayne,
Pennsylvania 19087.
The Adviser pays Pilgrim Baxter a fee, which is calculated
and paid monthly, based on an annual percentage rate of .50% of
the average monthly market value of assets of the SIMT Small
Cap Growth Portfolio managed by Pilgrim Baxter.
Schroder Capital
Management
International
Limited Schroder Capital Management International Limited ("SC") acts
as the investment sub-adviser to the SIT Pacific Basin Equity
Portfolio. SC was founded in January 1989 and is a wholly-owned
indirect subsidiary of Schroders plc, the holding company
parent of an investment banking and investment management group
of companies (the "Schroder Group"). The investment management
operations of the Schroder Group are located in
31
<PAGE>
17 countries worldwide, including seven in Asia. As of
___________, 1995, the Schroder Group had over $__ billion in
assets under management. As of that date, SC had over $__
billion in assets under management.
The Schroder Group has research resources throughout the
Asian region, consisting of offices in Tokyo, Hong Kong,
Singapore, Kuala Lumpur, Seoul, Taipei and Jakarta, staffed by
38 investment professionals. SC's investment process emphasizes
individual stock selection and company research conducted by
professionals at each local office which is integrated into
SC's global research network by the manager of research in
London. The principal address of SC is 33 Gutter Lane, London
EC2V 8AS, England.
SC is entitled to a fee from the Adviser calculated on the
basis of a percentage of the market value of assets assigned to
it. That fee, which is paid monthly, is based on an annual
percentage rate of .40% of the first $100 million in assets,
.30% of the next $50 million in assets, and .20% of assets in
excess of $150 million.
Wall Street
Associates Wall Street Associates ("WSA") serves as investment sub-adviser
to a portion of the assets of the SIMT Small Cap Growth
Portfolio. WSA is organized as a corporation with its
principal business address at 1200 Prospect Street, Suite 100,
La Jolla, California 92037. WSA was founded in 1987, and as of
September 30, 1995, had approximately $____ million in assets
under management. WSA is owned equally by William Jeffrey III,
Kenneth F. McCain, and Richard S. Coons. WSA provides
investment advisory services for institutional clients, an
investment partnership for which it serves as general partner,
a group trust, for which it serves as sole investment manager,
and an offshore fund for foreign investors for which it serves
as the sole investment manager.
WSA is entitled to a fee from the Adviser, which is
calculated on the basis of a percentage of the market value of
the assets assigned to it. That fee, which is paid monthly, is
based on an annual percentage rate of .50% of the Portfolio's
average net assets.
Western Asset
Management
Company Western Asset Management Company ("Western") serves as an
investment sub-adviser to a portion of the assets of the SIMT
Core Fixed Income Portfolio. Western is located at 117 East
Colorado Boulevard, Pasadena, California 91105, and is a wholly
owned subsidiary of Legg Mason, Inc., a financial services
company located in Baltimore, Maryland. Western was founded in
1971, and specializes in the management of fixed income
portfolios. As of September 30, 1995, Western Managed
approximately $12 billion in client assets, including $2
billion of investment company assets.
The Adviser pays Western a fee, which is calculated and
paid monthly, based on an annual percentage rate of .125% of
the average monthly market value of assets of the SIMT Core
Fixed Income Portfolio managed by Western.
Distribution
of Fund Shares_________________________________________________________________
SEI Financial Services Company (the "Distributor"), a wholly-
owned subsidiary of SEI, serves as each Fund's distributor
pursuant to a distribution agreement (the "Distribution
Agreement") with the Trust. The Trustees of the Trust have
adopted a distribution and service plan for the Trust's Class D
shares (the "Class D Plan") pursuant to Rule 12b-1 under the
1940 Act.
The Class D Plan provides for payments to the Distributor
for distribution-related services at an annual rate of .75% of
each Fund's average daily net assets attributable to Class D
Shares. In addition, each Fund is authorized to pay the
Distributor a fee in connection with the ongoing servicing of
shareholder accounts owning such Class D Shares, calculated and
payable monthly, at the annual rate of .25% of the value of the
average daily net assets attributable to Class D Shares of the
Fund.
The distribution-related payment may be used by the
Distributor to provide initial and ongoing sales compensation
to its investment executives and to other broker-dealers and
financial intermediaries in respect of sales of Class D Shares,
to compensate third parties for the provision of recordkeeping
and other distribution-related services relating to Class D
32
<PAGE>
Shares, and to pay for advertising and promotional expenses in
connection with the distribution of Class D Shares. These
advertising and promotional expenses may include: costs of
printing and mailing prospectuses, statements of additional
information and shareholder reports to prospective investors;
preparation and distribution of sales literature; advertising
of any type; an allocation of other expenses of the Distributor
related to the distribution of Class D Shares; and payments to,
and expenses of, officers, employees or representatives of the
Distributor, of other broker-dealers, banks or other financial
institutions, and of any other persons who provide support
services in connection with the distribution of the Fund
Shares.
The service fee payable to the Distributor may be used by
the Distributor to provide compensation to financial
intermediaries for ongoing service and/or maintenance of
shareholder accounts with respect to Class D Shares of the
applicable Funds. Such shareholder services may include:
telephone service to shareholders, including acceptance of
telephone inquiries and transaction requests; acceptance and
processing of written correspondence, new account applications
and subsequent purchases by check; mailing of confirmations,
statements and tax forms directly to shareholders; maintenance
of customer accounts, and acceptance of payment for trades by
check, Federal Reserve wire or Automatic Clearing House
payment. In addition, Distributor shall perform or supervise
the performance by others of other shareholder services in
connection with the operations of the applicable Funds, as
agreed from time to time.
Payments under the Class D Plan are not tied exclusively
to the expenses for distribution or shareholder servicing
activities actually incurred by the Distributor or third
parties, so that such payments may exceed expenses actually
incurred by the Distributor. The Trust's Board of Trustees will
evaluate the appropriateness of the Plan and its payment terms
on a continuing basis and in doing so will consider all
relevant factors, including expenses borne by the Distributor
and amounts it receives under the Class D Plan.
Periodically, the Distributor may waive a portion of the
fees payable to it under the Class D Plan in order to keep
within certain sales charge limits imposed by the Rules of the
NASD. Specifically, any Fund distribution/shareholder servicing
fees will be reduced in an amount equal to the Fund's pro rata
--- ----
portion of any distribution/shareholder servicing fees charged
to any Underlying Portfolio in which the Fund invests.
It is possible that an institution may offer different
categories of shares to its customers and thus receive
different compensation with respect to the different
categories. These financial institutions may also charge
separate fees to their customers.
The Distributor may, from time to time in its sole
discretion, institute one or more promotional incentive
programs, which will be paid for by the Distributor from the
sales charge it receives or from any other source available to
it. Under any such program, the Distributor will provide
promotional incentives, in the form of cash or other
compensation, including merchandise, airline vouchers, trips
and vacation packages, to all dealers selling shares of the
Funds. Such promotional incentives will be offered uniformly
to all shares of the Funds and also will be offered uniformly
to all dealers, predicated upon the amount of shares of the
Funds sold by such dealer.
Performance____________________________________________________________________
From time to time, the Funds may advertise yield and total
return. These figures will be based on historical earnings and
are not intended to indicate future performance. The yield of
a Fund refers to the annualized income generated by an
investment in the Fund over a specified 30-day period. The
yield is calculated by assuming that the same amount of income
generated by the investment during that period is generated in
each 30-day period over one year and is shown as a percentage
of the investment.
33
<PAGE>
The total return of a Fund refers to the average
compounded rate of return to a hypothetical investment for
designated time periods (including but not limited to, the
period from which the Fund commenced operations through the
specified date), assuming that the entire investment is
redeemed at the end of each period and assuming the
reinvestment of all dividend and capital gain distributions.
The total return of a Fund may also be quoted as a dollar
amount or on an aggregate basis or an actual basis, without
inclusion of any front-end or contingent sales charges, or with
a reduced sales charge in advertisements distributed to
investors entitled to a reduced sales charge.
A Fund may periodically compare its performance to that
of: (i) other mutual funds tracked by mutual fund rating
services (such as Lipper Analytical), financial and business
publications and periodicals; (ii) broad groups of comparable
mutual funds; (iii) unmanaged indices which may assume
investment of dividends but generally do not reflect deductions
for administrative and management costs; or (iv) other
investment alternatives. The Fund may quote Morningstar, Inc.,
a service that ranks mutual funds on the basis of risk-adjusted
performance. The Fund may quote Ibbotson Associates of
Chicago, Illinois, which provides historical returns of the
capital markets in the U.S. The Fund may use long-term
performance of these capital markets to demonstrate general
long-term risk versus reward scenarios and could include the
value of a hypothetical investment in any of the capital
markets. The Fund may also quote financial and business
publications and periodicals as they relate to fund management,
investment philosophy, and investment techniques.
The Fund may quote various measures of volatility and
benchmark correlation in advertising and may compare these
measures to those of other funds. Measures of volatility
attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation
indicate how valid a comparative benchmark might be. Measures
of volatility and correlation are calculated using averages of
historical data and cannot be calculated precisely.
For each Portfolio, the performance of Class A Shares will
normally be higher than the performance of the Class D shares
of that Portfolio because of the additional distribution,
shareholder servicing and transfer agent expenses charged to
Class D Shares.
Taxes__________________________________________________________________________
- --------------------------------------------------------------------------------
[Symbol Appears Here]
Taxes
You must pay taxes on your Fund's earnings, whether you take your payments in
cash or additional shares.
- --------------------------------------------------------------------------------
The following summary of federal income tax consequences
is based on current tax laws and regulations, which may be
changed by legislative, judicial, or administrative action. No
attempt has been made to present a detailed explanation of the
federal, state, or local tax treatment of the Funds or their
shareholders. In addition, state and local tax consequences of
an investment in a Fund may differ from the federal income tax
consequences described below. Accordingly, shareholders are
urged to consult their tax advisers regarding specific
questions as to federal, state, and local taxes. Additional
information concerning taxes is set forth in the Statement of
Additional Information.
Tax Status
of the Funds Each Fund is treated as a separate entity for federal income
tax purposes and is not combined with the Trust's other Funds.
Each Fund intends to continue to qualify for the special tax
treatment afforded regulated investment companies ("RICs")
under Subchapter M of the Code, so as to be relieved of federal
income tax on net investment income and net capital gains (the
excess of net long-term capital gain over net short-term
capital losses) distributed to shareholders.
34
<PAGE>
- --------------------------------------------------------------------------------
[Symbol Appears Here]
Distributions: A Fund distributes income dividends and capital gains. Income
dividends represent the earnings from the Fund's investments; capital gains
distributions occur when the Fund's investments are sold for more than their
original purchase price.
- --------------------------------------------------------------------------------
Tax Status of
Distributions Each Fund will distribute substantially all of its net
investment income (including net short-term capital gains) and
net capital gain to shareholders. Dividends from a Fund's net
investment income will be taxable to its shareholders as
ordinary income, whether received in cash or in additional
shares, to the extent of the Fund's earnings and profits.
Dividends from a Fund's net investment income will qualify for
the dividends received deduction for corporate shareholders to
the extent such dividends are derived from dividends paid by
Underlying Portfolios that qualify for such deduction.
Distributions of net capital gains are taxable to shareholders
as long-term capital gains regardless of how long the
shareholders have held shares or whether the distributions are
received in cash or in additional shares. Each Fund will make
annual reports to shareholders of the federal income tax status
of all distributions. Each Fund intends to make sufficient
distributions to avoid liability for the federal excise tax
applicable to RICs. Dividends declared by a Fund in October,
November or December of any year and payable to shareholders of
record on a date in such a month will be deemed to have been
paid by the Fund and received by the shareholders on December
31 of that year if paid by the Fund at any time during the
following January.
Investment income received by the Funds from sources
within foreign countries may be subject to foreign income taxes
withheld at the source. The Funds will not be able to treat
shareholders as having paid their proportionate share of such
taxes for foreign tax credit purposes.
Each sale, exchange, or redemption of a Fund's shares is a
taxable transaction to the shareholder.
Your Account
and Doing Business
with Us________________________________________________________________________
Class A Shares of the Funds are sold on a continuous basis and
may be purchased directly from the Trust's Distributor, SEI
Financial Services Company. Class D Shares may be purchased
through the Distribution or through financial institutions,
broker-dealers, or other organizations which have established a
dealer agreement or other arrangement with SEI Financial
Services Company ("Intermediaries").
- --------------------------------------------------------------------------------
[Symbol Appears Here]
Buy, Exchange and Sell Requests are in "Good Order" when:
. The account number and portfolio name are shown
. The amount of the transaction is specified in dollars or shares
. Signatures of all owners appear exactly as they are registered on the
account
. Any required signature guarantees (if applicable) are included
. Other supporting legal documents (as necessary) are present
- --------------------------------------------------------------------------------
Business Days You may buy, sell or exchange shares on days on which the New
York Stock Exchange is open for business (a "Business Day").
Shares of the Funds are offered only to residents of states in
which the shares are eligible for purchase. All purchase,
exchange and redemption requests received in "good order" will
be effective as of the Business
35
<PAGE>
Day received by the Transfer Agent as long as the Transfer
Agent receives the order and, in the case of a purchase
request, payment before 4:00 p.m. Eastern time. Otherwise the
purchase will be effective when payment is received.
Intermediaries may have separate arrangements with respect to
Class D Shares of the Funds.
Net Asset Value An order to buy shares will be executed at a per share price
equal to the net asset value next determined after the receipt
of the purchase order by the Transfer Agent. No certificates
representing shares will be issued. An order to sell shares
will be executed at the net asset value per share next
determined after receipt and effectiveness of a request for
redemption in good order. Net asset value per share is
determined daily as of the close of business of the New York
Stock Exchange (currently, 4:00 p.m. Eastern time) on any
Business Day. Payment to shareholders for shares redeemed will
be made within 7 days after receipt by the Transfer Agent of
the redemption order.
How the
Net Asset Value
is Determined The net asset value per share of each Class of Shares of a Fund
is determined by dividing the total market value of such class
investments and other assets, less any liabilities, by the
total number of outstanding shares of that class of that Fund.
The assets of each Fund consist primarily of the Underlying
Portfolios, which are valued at their respective net asset
values. The Underlying Portfolios value their portfolio
securities at the last quoted sales price for such securities,
or, if there is no such reported sales price on the valuation
date, at the most recent quoted bid price. An Underlying
Portfolio may also use a pricing service to obtain the last
sale price of each equity or fixed income security held in its
portfolio. Unlisted securities for which market quotations are
readily available are valued at the most recent quoted bid
price. Net asset value per share is determined daily as of the
close of business of the New York Stock Exchange (currently,
4:00 p.m. Eastern time) on each Business Day. Purchases will be
made in full and fractional shares of a Fund calculated to
three decimal places. Although the methodology and procedures
for determining net asset value per share are identical for
both Classes of a Fund, the net asset value per share of one
Class may differ from that of another Class because of the
different distribution and shareholder servicing fees charged
to each Class.
- --------------------------------------------------------------------------------
[Symbol Appears Here]
What is a Signature Guarantee?
A signature guarantee verifies the authenticity of your signature and may be
obtained from any of the following: banks, brokers, dealers, certain credit
unions, securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee.
- --------------------------------------------------------------------------------
Signature
Guarantees The Transfer Agent may require that the signatures on the
written request be guaranteed. You should be able to obtain a
signature guarantee from a bank, broker, dealer, certain credit
unions, securities exchange or association, clearing agency or
savings association. Notaries public cannot guarantee
signatures. The signature guarantee requirement will be waived
if all of the following conditions apply: (1) the redemption is
for not more than $5,000 worth of shares, (2) the redemption
check is payable to the shareholder(s) of record, and (3) the
redemption check is mailed to the shareholder(s) at the
shareholder(s) address of record. The Trust and the Transfer
Agent reserve the right to amend these requirements without
notice.
Telephone/Wire
Instructions Redemption orders may be placed by telephone. Neither the Trust
nor the Transfer Agent will be responsible for any loss,
liability, cost or expense for acting upon wire instructions or
upon telephone instructions that it reasonably believes to be
genuine. The Trust and the Trust's Transfer Agent will each
employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, including requiring a
form of personal identification prior to acting upon
instructions received by telephone and recording telephone
instructions.
36
<PAGE>
If market conditions are extraordinarily active, or other
extraordinary circumstances exist, and you experience
difficulties placing redemption orders by telephone, you may
wish to consider placing your order by other means.
Purchase and
Redemption of
Class A Shares__________________________________________________________________
Financial institutions may acquire Class A Shares of the
Funds for their own account or as record owner on behalf of
fiduciary agency or custody accounts by placing orders with the
Transfer Agent. Institutions that use certain SEI proprietary
systems may place orders electronically through those systems.
State securities laws may require Intermediaries purchasing
shares for their customers to register as dealers pursuant to
state laws. Financial institutions may impose an earlier cut-
off time for receipt of purchase orders directed through them
to allow for processing and transmittal of these orders to the
Transfer Agent for effectiveness the same day. Financial
institutions which purchase shares for the accounts of their
customers may impose separate changes on these customers for
account services.
Redemption of
Class A Shares Class A Shares may be redeemed through the Transfer Agent
prior to 4:00 p.m. Eastern time on any Business Day.
How to Buy,
Sell and Exchange
Class D Shares Through
Intermediaries__________________________________________________________________
- --------------------------------------------------------------------------------
[Symbol Appears Here]
What is an Intermediary?: Any entity, such as a bank, broker-dealer, other
financial institution, association or organization which has entered into an
arrangement with the Distributor to sell Class D Shares to its customers.
- --------------------------------------------------------------------------------
Class D shares of the Funds may be purchased through
Intermediaries which provide various levels of shareholder
services to their customers. Contact your Intermediary for
information about the services available to you and for
specific instructions on how to buy, sell and exchange shares.
To allow for processing and transmittal of orders to the
Distributor on the same day, Intermediaries may impose earlier
cut-off times for receipt of purchase orders. Certain
Intermediaries may charge customer account fees. Information
concerning shareholder services and any charges will be
provided to the customer by the Intermediary. Certain of these
Intermediaries may be required to register as broker-dealers
under state law.
The shares you purchase through an Intermediary may be
held "of record" by that Intermediary. If you want to transfer
the registration of shares beneficially owned by you, but held
"of record" by an Intermediary, you should call the
Intermediary to request this change.
How to Buy Class D Shares
from the Distributor____________________________________________________________
Opening an
Account
By Check Account Application forms can be obtained by calling 1-800-342-
5734.
You may buy Class D Shares by mailing a completed application
and a check (or other negotiable bank instrument or money
order) payable to "Class D Shares (Fund Name)." If you send a
check that does not clear, the purchase will be canceled and
you could be liable for any losses or fees incurred.
37
<PAGE>
By Fed Wire To buy shares by Fed Wire call toll-free at 1-800-342-5734.
Automatic
Investment Plan
("AIP") You may systematically buy Class D Shares through deductions
from your checking or savings accounts, provided these accounts
are maintained through banks which are part of the Automated
Clearing House ("ACH") system. You may purchase shares on a
fixed schedule (semi-monthly or monthly) with amounts as low as
$25, or as high as $100,000. Upon notice, the amount you commit
to the AIP may be changed or canceled at any time. The AIP is
subject to account minimum initial purchase amounts and minimum
maintained balance requirements.
Minimum
Investments The minimum initial investment in a Fund's Class D shares is
$1,000, however, the minimum investment may be waived at the
Distributor's discretion. All subsequent purchases must be at
least $100 ($25 for payroll deductions authorized pursuant to
pre-approved payroll deduction plans). The Trust reserves the
right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust or
its shareholders to accept such order. In addition, because
excessive trading (including short-term "market timing"
trading) can hurt a Fund's performance, each Fund may refuse
purchase orders from any shareholder account if the
accountholder has been advised that previous purchase and
redemption transactions were considered excessive in number or
amount. Accounts under common control or ownership, including
those with the same taxpayer identification number and those
administered so as to redeem or purchase shares based upon
certain predetermined market indicators, will be considered one
account for this purpose.
Maintaining a
Minimum Account
Balance Due to the relatively high cost of handling small investments,
a Fund reserves the right to redeem, at net asset value, the
Class D Shares of any shareholder if, because of redemptions of
shares by or on behalf of the shareholder, the account of such
shareholder in a Fund has a value of less than $1,000, the
minimum initial purchase amount. Accordingly, an investor
purchasing shares of a Fund in only the minimum investment
amount may be subject to such involuntary redemption if he or
she thereafter redeems any of these shares. Before a Fund
exercises its right to redeem such shares and to send the
proceeds to the shareholder, the shareholder will be given
notice that the value of the shares in his or her account is
less than the minimum amount and will be allowed 60 days to
make an additional investment in a Fund in an amount that will
increase the value of the account to at least $1,000. See
"Purchase and Redemption of Shares" in the Statement of
Additional Information for examples of when the right of
redemption may be suspended.
At various times, a Fund may be requested to redeem shares
for which it has not yet received good payment. In such
circumstances, redemption proceeds will be forwarded upon
collection of payment for the shares; collection of payment may
take 10 or more days. Each Fund intends to pay cash for all
shares redeemed, but under abnormal conditions that make
payment in cash unwise, payment may be made wholly or partly in
portfolio securities with a market value equal to the
redemption price. In such cases, an investor may incur
brokerage costs in converting such securities to cash.
Exchanging
Class D Shares__________________________________________________________________
- --------------------------------------------------------------------------------
[Symbol Appears Here]
How Does an Exchange Take Place? When making an exchange, you authorize the
sale of your shares of one or more Funds in order to purchase the shares of
another Fund. In other words, you are executing a sell order and then a buy
order. This sale of your shares is a taxable event which could result in a
taxable gain or loss.
- --------------------------------------------------------------------------------
38
<PAGE>
When Can
You Exchange
Shares? Once good payment for your shares has been received and
accepted (i.e., an account has been established), you may
----
exchange some or all of your shares for Class D Shares of other
Funds. Exchanges are made at net asset value.
The Trust reserves the right to change the terms and
conditions of the exchange privilege discussed herein, or to
terminate the exchange privilege, upon 60 days' notice.
Requesting an
Exchange
of Shares To request an exchange, you must provide proper instructions in
writing to the Transfer Agent. Telephone exchanges will also be
accepted if you previously elected this option on your account
application.
In the case of shares held "of record" by an Intermediary
but beneficially owned by you, you should contact the
Intermediary who will contact the Transfer Agent and effect the
exchange on your behalf.
If an exchange request is for Class D Shares of a Fund
whose net asset value is calculated as of a time earlier than
4:00 p.m. Eastern time, the exchange request will not be
effective until the next Business Day. Anyone who wishes to
make an exchange must have received a current prospectus of the
Fund into which the exchange is being made before the exchange
will be effected.
How to Sell
Class D Shares
Through the
Distributor_____________________________________________________________________
To sell your Class D Shares, a written request for redemption
in good order must be received by the Transfer Agent. Valid
written redemption requests will be effective on receipt. All
shareholders of record must sign the redemption request.
By Mail For information about the proper form of redemption requests,
call 1-800-342-5734. You may also have the proceeds mailed to
an address of record designated on the Account Application or
specified by written instruction to the Transfer Agent.
By Telephone You may sell your shares by telephone if you previously elected
that option on the Account Application. You may have the
proceeds mailed to the address of record, wired or sent by ACH
to a commercial bank account previously designated on the
Account Application. Under most circumstances, payments will be
transmitted on the next Business Day following receipt of a
valid telephone request for redemption. Wire redemption
requests may be made by calling 1-800-342-5734, who will
subtract a wire redemption charge (presently $10.00) from the
amount of the redemption.
Systematic
Withdrawal
Plan ("SWP") You may establish a systematic withdrawal plan for a Class D
account with a $10,000 minimum balance. Under the plan,
redemptions can be automatically processed from accounts
(monthly, quarterly, semi-annually or annually) by check or by
ACH wire with a minimum redemption amount of $50. Please note
that if withdrawals exceed income dividends, your invested
principal in the account will be depleted. Thus, depending upon
the frequency and amounts of the withdrawal payments and/or any
fluctuations in the net asset value per share, your original
investment could be exhausted entirely. To participate in the
SWP, you must have your dividends automatically reinvested.
You may change or cancel the SWP at any time, upon written
notice to SFM.
How To
Close Your Account______________________________________________________________
39
<PAGE>
An account may be closed by providing written notice to the
Transfer Agent. You may also close your account by telephone if
you have previously elected telephone options on your account
application.
General Information_____________________________________________________________
The Trust The Trust was organized as a Massachusetts business trust under
a Declaration of Trust dated November 20, 1995.
The Declaration of Trust permits the Trust to offer separate
portfolios of shares and different classes of each portfolio.
Shareholders may purchase shares in each Fund through two
separate classes of shares: Class A Shares and Class D Shares,
which provide for variations in distribution, shareholder
servicing and transfer agent costs, voting rights and
dividends. Additional information pertaining to the Trust may
be obtained by writing to SEI Financial Management Corporation,
680 East Swedesford Road, Wayne, Pennsylvania 19087-1658, or by
calling 1-800-342-5734. All consideration received by the Trust
for shares of any Fund and all assets of such Fund belong to
that Fund and would be subject to liabilities related thereto.
The Trust pays its expenses, including fees of its service
providers, audit and legal expenses, expenses of preparing
prospectuses, proxy solicitation materials and reports to
shareholders, costs of custodial services and registering the
shares under federal and state securities laws, pricing,
insurance expenses, including litigation and other
extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.
Trustees of
the Trust The management and affairs of the Trust are supervised by the
Trustees under the laws of the Commonwealth of Massachusetts.
The Trustees have approved contracts under which, as described
above, certain companies provide essential management services
to the Trust.
Voting Rights Each share held entitles the shareholder of record to one vote.
Each portfolio of the Trust will vote separately on matters
relating solely to that portfolio. Each class will vote
separately on matters pertaining to its distribution plan. As a
Massachusetts business trust, the Trust is not required to hold
annual meetings of shareholders but approval will be sought for
certain changes in the operation of the Trust and for the
election of Trustees under certain circumstances. In addition,
a Trustee may be removed by the remaining Trustees or by
shareholders at a special meeting called upon written request
of shareholders owning at least 10% of the outstanding shares
of the Trust. In the event that such a meeting is requested the
Trust will provide appropriate assistance and information to
the shareholders requesting the meeting.
Each Fund will vote its Underlying Portfolio shares in
proportion to the votes of all other shareholders of each
respective Underlying Portfolio.
Reporting The Trust issues unaudited financial information semiannually
and audited financial statements annually. The Trust furnishes
proxy statements and other reports to shareholders of record.
Shareholder
Inquiries Class A shareholder inquiries should be directed to SEI
Financial Management Corporation, 680 East Swedesford Road,
Wayne, Pennsylvania 19087-1658. Class D shareholder inquiries
should be directed to DST Systems, Inc., P.O. Box 419240,
Kansas City, Missouri 64141-6240.
Dividends Substantially all of the net investment income (exclusive of
capital gains) of each Fund is periodically declared and paid
as a dividend. Capital gains, if any, are distributed at least
annually.
Shareholders automatically receive all income dividends
and capital gain distributions in additional shares at the net
asset value next determined following the record date, unless
the shareholder has elected to take such payment in cash.
Shareholders may change their election by providing written
notice to the Adviser at least 15 days prior to the
distribution.
40
<PAGE>
Dividends and capital gains of each Fund are paid on a
per-share basis. The value of each share will be reduced by the
amount of any such payment. If shares are purchased shortly
before the record date for dividend or capital gains
distributions, a shareholder will pay the full price for the
shares and receive some portion of the price back as a taxable
dividend or distribution.
The dividends on Class D Shares will normally be lower
than on Class A Shares of a Fund because of the additional
distribution, shareholder servicing and transfer agent expenses
charged to Class D Shares.
Counsel and
Independent
Accountants Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
Price Waterhouse LLP serves as the independent public
accountants of the Trust.
Custodian
and Wire Agent SFM, which serves as transfer agent for the Underlying
Portfolios, also maintains custody of mutual fund assets of
each Fund. CoreStates Bank, N.A., Broad and Chestnut Streets,
P.O. Box 7618, Philadelphia, Pennsylvania 19101 acts as
Custodian for the non-mutual fund assets of each Fund (the
"Custodian"). The Custodian holds cash, securities and other
assets of the Trust as required by the 1940 Act, and acts as
wire agent of the Trust's assets.
Description
of Permitted
Investments
and Risk Factors
of the Underlying
Portfolios______________________________________________________________________
The following is a description of the permitted investment practices for the
Underlying Portfolios, and the associated risk factors:
American Depositary
Receipts ("ADRs"),
Continental Depositary
Receipts ("CDRs"),
European Depositary
Receipts ("EDRs")
and Global
Depositary Receipts
("GDRs") ADRs are securities, typically issued by a U.S. financial
institution (a "depositary"), that evidence ownership interests in a
security or a pool of securities issued by a foreign issuer and
deposited with the depositary. ADRs include American Depositary
Shares and New York Shares. EDRs, which are sometimes referred to as
Continental Depositary Receipts ("CDRs"), are securities, typically
issued by a non-U.S. financial institution, that evidence ownership
interests in a security or a pool of securities issued by either a
U.S. or foreign issuer. GDRs are issued globally and evidence
similar ownership. Generally, ADRs are designed for trading in the
U.S. securities market, EDRs are designed for trading in European
securities markets and GDRs are designed for trading in non-U.S.
securities markets. ADRs, EDRs, CDRs and GDRs may be available for
investment through "sponsored" or "unsponsored" facilities. A
sponsored facility is established jointly by the issuer of the
security underlying the receipt and a depositary, whereas an
unsponsored facility may be established by a depositary without
participation by the issuer of the receipt's underlying security.
Holders of an unsponsored depositary receipt generally bear all the
costs of the unsponsored facility. The depositary of an unsponsored
facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or
to pass through to the holders of the receipts voting rights with
respect to the deposited securities.
Bank Notes Bank notes are notes used to represent debt obligations issued by
banks in large denominations.
41
<PAGE>
Bankers'
Acceptances Bankers' acceptances are bills of exchange or time drafts drawn on
and accepted by a commercial bank. Bankers' acceptances are issued
by corporations to finance the shipment and storage of goods.
Maturities are generally six months or less.
Certificates
of Deposit Certificates of deposit are interest bearing instruments with a
specific maturity. They are issued by banks and savings and loan
institutions in exchange for the deposit of funds and normally can
be traded in the secondary market prior to maturity. Certificates of
deposit with penalties for early withdrawal will be considered
illiquid.
Commercial
Paper Commercial paper is a term used to describe unsecured short-term
promissory notes issued by banks, municipalities, corporations and
other entities. Maturities on these issues vary, generally from a
few to 270 days.
Convertible
Securities Convertible securities are corporate securities that are
exchangeable for a set number of another security at a prestated
price. Convertible securities typically have characteristics similar
to both fixed income and equity securities. Because of the
conversion feature, the market value of a convertible security tends
to move with the market value of the underlying stock. The value of
a convertible security is also affected by prevailing interest
rates, the credit quality of the issuer, and any call provisions.
Demand
Instruments Demand instruments are instruments which may involve a conditional
or unconditional demand feature which permits the holder to demand
payment of the principal amount of the instrument. They may include
variable amount master demand notes.
Equity
Securities Equity securities represent ownership interests in a company or
corporation and consist of common stock, preferred stock, warrants
and rights to subscribe to common stock and in general, any security
that is convertible into or exchangeable for common stock.
Investments in common stocks are subject to market risks which may
cause their prices to fluctuate over time. The value of convertible
securities is also affected by prevailing interest rates, the credit
quality of the issuer and any call provisions. Changes in the value
of fund securities will not necessarily affect cash income derived
from these securities but will affect a Portfolio's net asset value.
Fixed Income
Securities Fixed income securities are debt obligations issued by corporations,
municipalities and other borrowers. The market value of fixed income
investments will generally change in response to interest rate
changes and other factors. During periods of falling interest rates,
the values of outstanding fixed income securities generally rise.
Conversely, during periods of rising interest rates, the values of
such securities generally decline. Moreover, while securities with
longer maturities tend to produce higher yields, the prices of
longer maturity securities are also subject to greater market
fluctuations as a result of changes in interest rates. Changes by
recognized agencies in the rating of any fixed income security and
in the ability of an issuer to make payments of interest and
principal will also affect the value of these investments. Changes
in the value of portfolio securities will not affect cash income
derived from these securities but will affect a Portfolio's net
asset value.
The SIT International Fixed Income Portfolio may invest in
securities rated in the fourth highest category by an NRSRO; such
securities, while still investment grade, are considered to have
speculative characteristics. The SIT Emerging Markets Equity
Portfolio may invest up to 5% of its net assets in securities rated
lower than investment grade. Bonds rated below investment grade are
often referred to as "junk bonds." Such securities involve greater
risk of default or price declines than investment grade securities
due to changes in the issuer's creditworthiness and the outlook for
economic growth. The market for these securities may be less active,
causing market price volatility and limited liquidity in the
secondary market. This may limit the SIT Emerging Market Equity
Portfolio's ability to sell such securities at their market value.
In addition, the market for these securities may be adversely
affected by legislative and regulatory developments. Credit quality
in the junk bond market can change suddenly and unexpectedly, and
even recently issued credit ratings may not fully reflect the actual
risks imposed by a particular security.
42
<PAGE>
Forward
Foreign
Currency
Contracts A forward contract involves an obligation to purchase or sell a
specific currency amount at a future date, agreed upon by the
parties, at a price set at the time of the contract. A Portfolio may
also enter into a contract to sell, for a fixed amount of U.S.
dollars or other appropriate currency, the amount of foreign
currency approximating the value of some or all of the Portfolio's
securities denominated in such foreign currency.
At the maturity of a forward contract, the Portfolio may either
sell a portfolio security and make delivery of the foreign currency,
or it may retain the security and terminate its contractual
obligation to deliver the foreign currency by purchasing an
"offsetting" contract with the same currency trader, obligating it
to purchase, on the same maturity date, the same amount of the
foreign currency. The Portfolio may realize a gain or loss from
currency transactions.
Futures
Contracts
and Options
on Futures
Contracts Futures contracts provide for the future sale by one party and
purchase by another party of a specified amount of a specific
security at a specified future time and at a specified price. An
option on a futures contract gives the purchaser the right, in
exchange for a premium, to assume a position in a futures contract
at a specified exercise price during the term of the option. A
Portfolio may use futures contracts and related options for bona
fide hedging purposes, to offset changes in the value of securities
held or expected to be acquired or be disposed of, to minimize
fluctuations in foreign currencies, or to gain exposure to a
particular market or instrument. A Portfolio will minimize the risk
that it will be unable to close out a futures contract by only
entering into futures contracts which are traded on national futures
exchanges. In addition, a Portfolio will only sell covered futures
contracts and options on futures contracts.
Stock and bond index futures are futures contracts for various
stock and bond indices that are traded on registered securities
exchanges. Stock and bond index futures contracts obligate the
seller to deliver (and the purchaser to take) an amount of cash
equal to a specific dollar amount times the difference between the
value of a specific stock or bond index at the close of the last
trading day of the contract and the price at which the agreement is
made.
Stock and bond index futures contracts are bilateral agreements
pursuant to which two parties agree to take or make delivery of an
amount of cash equal to a specified dollar amount times the
difference between the stock or bond index value at the close of
trading of the contract and the price at which the futures contract
is originally struck. No physical delivery of the stocks or bonds
comprising the Index is made; generally contracts are closed out
prior to the expiration date of the contract. No price is paid upon
entering into futures contracts. Instead, a Portfolio would be
required to deposit an amount of cash or U.S. Treasury securities
known as "initial margin." Subsequent payments, called "variation
margin," to and from the broker, would be made on a daily basis as
the value of the futures position varies (a process known as
"marking to market"). The margin is in the nature of a performance
bond or good-faith deposit on a futures contract.
There are risks associated with these activities, including the
following: (1) the success of a hedging strategy may depend on an
ability to predict movements in the prices of individual securities,
fluctuations in markets and movements in interest rates; (2) there
may be an imperfect or no correlation between the changes in market
value of the securities held by the Portfolio and the prices of
futures and options on futures; (3) there may not be a liquid
secondary market for a futures contract or option; (4) trading
restrictions or limitations may be imposed by an exchange; and (5)
government regulations may restrict trading in futures contracts and
futures options.
A Portfolio may enter into futures contracts and options on
futures contracts traded on an exchange regulated by the Commodities
Futures Trading Commission ("CFTC"), as long as, to the extent that
such transactions are not for "bona fide hedging purposes," the
aggregate initial margin and premiums on such positions (excluding
the amount by which such options are in the money) do not exceed 5%
of a Portfolio's net assets. A Portfolio may buy and sell futures
contracts and related options to manage its exposure to changing
interest rates and securities prices. Some strategies reduce a
Portfolio's exposure to price fluctuations, while others tend to
increase its market exposure. Futures and options on futures can be
volatile instruments and involve certain risks that could negatively
impact a Portfolio's return.
In order to avoid leveraging and related risks, when a
Portfolio purchases futures contracts, it will collateralize its
position by depositing an amount of cash or cash equivalents, equal
to the market value of the futures positions held, less margin
deposits, in a segregated account with the Trust's custodian.
Collateral equal to the current market value of the futures position
will be marked to market on a daily basis.
43
<PAGE>
Illiquid
Securities Illiquid securities are securities that cannot be disposed of within
seven business days at approximately the price at which they are
being carried on the Portfolio's books. An illiquid security
includes a demand instrument with a demand notice period exceeding
seven days, when there is no secondary market for such security and
repurchase agreements with durations over seven days in length. In
addition, the SIT Emerging Markets Equity Portfolio believes that
carefully selected investments in joint ventures, cooperatives,
partnerships, private placements, unlisted securities and other
similar situations (collectively, "special situations") could
enhance the Portfolio's capital appreciation potential. Investments
in special situations may be illiquid, as determined by the
Portfolio's advisers based on criteria approved by the Board of
Trustees. To the extent these investments are deemed illiquid, the
Portfolio's investment in them will be consistent with its 10%
restriction on investment in illiquid securities.
Mortgage-
Backed
Securities Mortgage-backed securities are instruments that entitle the holder
to a share of all interest and principal payments from mortgages
underlying the security. The mortgages backing these securities
include conventional thirty-year fixed rate mortgages, graduated
payment mortgages, and adjustable rate mortgages. During periods of
declining interest rates, prepayment of mortgages underlying
mortgage-backed securities can be expected to accelerate.
Prepayment of mortgages which underlie securities purchased at a
premium often results in capital losses, while prepayment of
mortgages purchased at a discount often results in capital gains.
Because of these unpredictable prepayment characteristics, it is
often not possible to predict accurately the average life or
realized yield of a particular issue.
Government Pass-Through Securities. These are securities that
----------------------------------
are issued or guaranteed by a U.S. Government agency representing an
interest in a pool of mortgage loans. The primary issuers or
guarantors of these mortgage-backed securities are GNMA, FNMA and
FHLMC. FNMA and FHLMC obligations are not backed by the full faith
and credit of the U.S. Government as GNMA certificates are, but FNMA
and FHLMC securities are supported by the instrumentalities' right
to borrow from the U.S. Treasury. GNMA, FNMA and FHLMC each
guarantees timely distributions of interest to certificate holders.
GNMA and FNMA also each guarantees timely distributions of scheduled
principal. FHLMC has in the past guaranteed only the ultimate
collection of principal of the underlying mortgage loan; however,
FHLMC now issues mortgage-backed securities (FHLMC Gold PCs) which
also guarantee timely payment of monthly principal reductions.
Government and private guarantees do not extend to the securities'
value, which is likely to vary inversely with fluctuations in
interest rates.
Private Pass-Through Securities. These are mortgage-backed
-------------------------------
securities issued by a non-governmental entity, such as a trust.
These securities include collateralized mortgage obligations
("CMOs") and real estate mortgage investment conduits ("REMICs")
that are rated in one of the top two rating categories. While they
are generally structured with one or more types of credit
enhancement, private pass-through securities typically lack a
guarantee by an entity having the credit status of a governmental
agency or instrumentality.
Collateralized Mortgage Obligations ("CMOs"). CMOs are debt
--------------------------------------------
obligations or multiclass pass-through certificates issued by
agencies or instrumentalities of the U.S. Government or by private
originators or investors in mortgage loans. In a CMO, series of
bonds or certificates are usually issued in multiple classes.
Principal and interest paid on the underlying mortgage assets may be
allocated among the several classes of a series of a CMO in a
variety of ways. Each class of a CMO, often referred to as a
"tranche," is issued with a specific fixed or floating coupon rate
and has a stated maturity or final distribution date. Principal
payments on the underlying mortgage assets may cause CMOs to be
retired substantially earlier then their stated maturities or final
distribution dates, resulting in a loss of all or part of any
premium paid.
REMICs. A REMIC is a CMO that qualifies for special tax
------
treatment under the Internal Revenue Code and invests in certain
mortgages principally secured by interests in real property.
Investors may purchase beneficial interests in REMICs, which are
known as "regular" interests, or "residual" interests. Guaranteed
REMIC pass-through certificates ("REMIC Certificates") issued by
FNMA or FHLMC represent beneficial ownership interests in a REMIC
trust consisting principally of mortgage loans or FNMA, FHLMC or
GNMA-guaranteed mortgage
44
<PAGE>
pass-through certificates. For FHLMC REMIC Certificates, FHLMC
guarantees the timely payment of interest, and also guarantees the
payment of principal as payments are required to be made on the
underlying mortgage participation certificates. FNMA REMIC
Certificates are issued and guaranteed as to timely distribution of
principal and interest by FNMA.
Parallel Pay Securities; PAC Bonds. Parallel pay CMOs and
----------------------------------
REMICS are structured to provide payments of principal on each
payment date to more than one class. These simultaneous payments are
taken into account in calculating the stated maturity date or final
distribution date of each class, which must be retired by its stated
maturity date or final distribution date, but may be retired
earlier. Planned Amortization Class CMOs ("PAC Bonds") generally
require payments of a specified amount of principal on each payment
date. PAC Bonds are always parallel pay CMOs with the required
principal payment on such securities having the highest priority
after interest has been paid to all classes.
REITs. REITs are trusts that invest primarily in commercial
-----
real estate or real estate-related loans. The value of interests in
REITs may be affected by the value of the property owned or the
quality of the mortgages held by the trust.
Stripped Mortgage-Backed Securities ("SMBs"). SMBs are usually
--------------------------------------------
structured with two classes that receive specified proportions of
the monthly interest and principal payments from a pool of mortgage
securities. One class may receive all of the interest payments and
is thus termed an interest-only class ("IO"), while the other class
may receive all of the principal payments and is thus termed the
principal-only class ("PO"). The value of IOs tends to increase as
rates rise and decrease as rates fall; the opposite is true of POs.
SMBs are extremely sensitive to changes in interest rates because of
the impact thereon of prepayment of principal on the underlying
mortgage securities. The market for SMBs is not as fully developed
as other markets; SMBs therefore may be illiquid.
Risk Factors. Due to the possibility of prepayments of the
------------
underlying mortgage instruments, mortgage-backed securities
generally do not have a known maturity. In the absence of a known
maturity, market participants generally refer to an estimated
average life. An average life estimate is a function of an
assumption regarding anticipated prepayment patterns, based upon
current interest rates, current conditions in the relevant housing
markets and other factors. The assumption is necessarily
subjective, and thus different market participants can produce
different average life estimates with regard to the same security.
There can be no assurance that estimated average life will be a
security's actual average life.
Obligations of
Supranational
Entities Supranational entities are entities established through the joint
participation of several governments and include the Asian
Development Bank, the Inter-American Development Bank, International
Bank for Reconstruction and Development (World Bank), African
Development Bank, European Economic Community, European Investment
Bank and the Nordic Investment Bank.
Options A put option gives the purchaser of the option the right to sell,
and the writer of the option the obligation to buy, the underlying
security at any time during the option period. A call option gives
the purchaser of the option the right to buy, and the writer of the
option the obligation to sell, the underlying security at any time
during the option period. The premium paid to the writer is the
consideration for undertaking the obligations under the option
contract. The initial purchase (sale) of an option contract is an
"opening transaction." In order to close out an option position, a
Portfolio may enter into a "closing transaction," which is simply
the sale (purchase) of an option contract on the same security with
the same exercise price and expiration date as the option contract
originally opened.
A Portfolio may purchase put and call options to protect
against a decline in the market value of the securities in its
portfolio or to anticipate an increase in the market value of
securities that the Portfolio may seek to purchase in the future. A
Portfolio purchasing put and call options pays a premium therefor.
If price movements in the underlying securities are such that
exercise of the options would not be profitable for the Portfolio,
loss of the premium paid may be offset by an increase in the value
of the Portfolio's securities or by a decrease in the cost of
acquisition of securities by the Portfolio.
A Portfolio may write covered call options as a means of
increasing the yield on its fund and as a means of providing limited
protection against decreases in its market value. When
<PAGE>
a fund sells an option, if the underlying securities do not increase
or decrease to a price level that would make the exercise of the
option profitable to the holder thereof, the option generally will
expire without being exercised and the Portfolio will realized as
profit the premium received for such option. When a call option of
which a Portfolio is the writer is exercised, the Portfolio will be
required to sell the underlying securities to the option holder at
the strike price, and will not participate in any increase in the
price of such securities above the strike price. When a put option
of which a Portfolio is the writer is exercised, the Portfolio will
be required to purchase the underlying securities at the strike
price, which may be in excess of the market value of such
securities.
A Portfolio may purchase and write options on an exchange or
over-the-counter. Over-the-counter options ("OTC options") differ
from exchange-traded options in several respects. They are
transacted directly with dealers and not with a clearing
corporation, and therefore entail the risk of non-performance by the
dealer. OTC options are available for a greater variety of
securities and for a wider range of expiration dates and exercise
prices than are available for exchange-traded options. Because OTC
options are not traded on an exchange, pricing is done normally by
reference to information from a market maker. It is the position of
the SEC that OTC options are generally illiquid.
A Portfolio may purchase and write put and call options on
foreign currencies (traded on U.S. and foreign exchanges or over-
the-counter markets) to manage its exposure to exchange rates. Call
options on foreign currency written by a Portfolio will be
"covered," which means that the Portfolio will own an equal amount
of the underlying foreign currency. With respect to put options on
foreign currency written by a Portfolio, the Portfolio will
establish a segregated account with its custodian bank consisting of
cash or liquid, high grade debt securities in an amount equal to the
amount the Portfolio would be required to pay upon exercise of the
put.
A Portfolio may purchase and write put and call options on
indices and enter into related closing transactions. Put and call
options on indices are similar to options on securities except that
options on an index give the holder the right to receive, upon
exercise of the option, an amount of cash if the closing level of
the underlying index is greater than (or less than, in the case of
puts) the exercise price of the option. This amount of cash is equal
to the difference between the closing price of the index and the
exercise price of the option, expressed in dollars multiplied by a
specified number. Thus, unlike options on individual securities, all
settlements are in cash, and gain or loss depends on price movements
in the particular market represented by the index generally, rather
than the price movements in individual securities. A Portfolio may
choose to terminate an option position by entering into a closing
transaction. The ability of a Portfolio to enter into closing
transactions depends upon the existence of a liquid secondary market
for such transactions.
The Portfolio may engage in writing covered call options. Under
a call option, the purchaser has the right to purchase and the
writer (the Portfolio) the obligation to sell the underlying
security at the exercise price during the option period. Options
purchased by the Portfolio will be listed on a national securities
exchange. In order to close out an option position, the Portfolio
may enter into a "closing purchase transaction," which involves the
purchase of an option on the same security at the same exercise
price and expiration date. If the Portfolio is unable to effect a
closing purchase transaction with respect to an option it has
written, it will not be able to sell the underlying security until
the option expires or the Portfolio delivers the security upon
exercise. Permissible options include options on stock indices.
All options written on indices must be covered. When a
Portfolio writes an option on an index, it will establish a
segregated account containing cash or liquid, high grade debt
securities with its Custodian in an amount at least equal to the
market value of the option and will maintain the account while the
option is open or will otherwise cover the transaction.
Risk Factors: Risks associated with options transactions
-------------
include: (1) the success of a hedging strategy may depend on an
ability to predict movements in the prices of individual securities,
fluctuations in markets and movements in interest rates; (2) there
may be an imperfect correlation between the movement in prices of
options and the securities underlying them; (3) there may not be a
liquid secondary market for options; and (4) while a Portfolio will
receive a premium when it writes covered call options, it may not
participate fully in a rise in the market value of the underlying
security.
Privatiza-
tions Privatizations are foreign government programs for selling all or
part of the interests in government owned or controlled enterprises.
The ability of a U.S. entity to participate in privatizations in
certain foreign countries may be limited by local law, or the terms
on which a Portfolio may be permitted to participate may be less
advantageous than those applicable for local investors. There can be
no assurance that foreign governments will continue to sell their
46
<PAGE>
interests in companies currently owned or controlled by them or that
privatization programs will be successful.
Repurchase
Agreements Repurchase agreements are agreements by which a Portfolio obtains a
security and simultaneously commits to return the security to the
seller at an agreed upon price (including principal and interest) on
an agreed upon date within a number of days from the date of
purchase. The Custodian or its agent will hold the security as
collateral for the repurchase agreement. Collateral must be
maintained at a value at least equal to 102% of the purchase price.
The Portfolio bears a risk of loss in the event the other party
defaults on its obligations and the Portfolio is delayed or
prevented from exercising its right to dispose of the collateral
securities or if the Portfolio realizes a loss on the sale of the
collateral securities. The advisers will enter into repurchase
agreements on behalf of a Portfolio only with financial institutions
deemed to present minimal risk of bankruptcy during the term of the
agreement based on guidelines established and periodically reviewed
by the Trustees. Repurchase agreements are considered loans under
the 1940 Act.
Securities
of Foreign
Issuers There are certain risks connected with investing in foreign
securities. These include risks of adverse political and economic
developments (including possible governmental seizure or
nationalization of assets), the possible imposition of exchange
controls or other governmental restrictions, less uniformity in
accounting and reporting requirements, the possibility that there
will be less information on such securities and their issuers
available to the public, the difficulty of obtaining or enforcing
court judgments abroad, restrictions on foreign investments in other
jurisdictions, difficulties in effecting repatriation of capital
invested abroad and difficulties in transaction settlements and the
effect of delay on shareholder equity. Foreign securities may be
subject to foreign taxes, and may be less marketable than comparable
U.S. securities. The value of a Portfolio's investments denominated
in foreign currencies will depend on the relative strengths of those
currencies and the U.S. dollars, and a Portfolio may be affected
favorably or unfavorably by changes in the exchange rates or
exchange control regulations between foreign currencies and the U.S.
dollar. Changes in foreign currency exchange rates also may affect
the value of dividends and interest earned, gains and losses
realized on the sale of securities and net investment income and
gains if any, to be distributed to shareholders by a Portfolio.
Furthermore, emerging market countries may have less stable
political environments than more developed countries. Also it may be
more difficult to obtain a judgment in a court outside the United
States.
Short
Sales A Portfolio may sell securities short against the box. A short sale
is "against the box" if at all times during which the short position
is open, the Portfolio owns at least an equal amount of the
securities or securities convertible into, or exchangeable without
further consideration for, securities of the same issue as the
securities that are sold short.
Swaps,
Caps,
Floors and
Collars Interest rate swaps, mortgage swaps, currency swaps and other types
of swap agreements such as caps, floors and collars are designed to
permit the purchaser to preserve a return or spread on a particular
investment or portion of its portfolio, and to protect against any
increase in the price of securities a Portfolio anticipates
purchasing at a later date. In a typical interest rate swap, one
party agrees to make regular payments equal to a floating interest
rate times a "notional principal amount," in return for payments
equal to a fixed rate times the same amount, for a specific period
of time. If a swap agreement provides for payment in different
currencies, the parties might agree to exchange the notional
principal amount as well. Swaps may also depend on other prices or
rates, such as the value of an index or mortgage prepayment rates.
In a typical cap or floor agreement, one party agrees to make
payments only under specified circumstances, usually in return for
payment of a fee by the other party. For example, the buyer of an
interest rate cap obtains the right to receive payments to the
extent that a specific interest rate exceeds an agreed-upon level,
while the seller of an interest rate floor is obligated to make
payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of
buying a cap and selling a floor.
Swap agreements are sophisticated hedging instruments that
typically involve a small investment of cash relative to the
magnitude of risk assumed. As a result, swaps can be highly volatile
and have a considerable impact on a Portfolio's performance. Swap
agreements are subject to risks related to the counterparty's
ability to perform, and may decline in value if the
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<PAGE>
counterparty's creditworthiness deteriorates. A Portfolio may also
suffer losses if it is unable to terminate outstanding swap
agreements or reduce its exposure through offsetting transactions.
Any obligation a Portfolio may have under these types of
arrangements will be covered by setting aside liquid high grade
securities in a segregated account. A Portfolio will enter into
swaps only with counterparties believed to be creditworthy.
Time
Deposits Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, a
time deposit earns a specified rate of interest over a definite
period of time; however, it cannot be traded in the secondary
market. Time deposits with a withdrawal penalty are considered to be
illiquid securities.
U.S.
Government
Agency
Obligations Obligations issued or guaranteed by agencies of the U.S. Government,
including, among others, the Federal Farm Credit Bank, the Federal
Housing Administration and the Small Business Administration and
obligations issued or guaranteed by instrumentalities of the U.S.
Government, including, among others, the Federal Home Loan Mortgage
Corporation, the Federal Land Banks and the U.S. Postal Service.
Some of these securities are supported by the full faith and credit
of the U.S. Treasury (e.g., Government National Mortgage
----
Association), and others are supported by the right of the issuer to
borrow from the Treasury (e.g., Federal Farm Credit Bank), while
----
still others are supported only by the credit of the instrumentality
(e.g., Federal National Mortgage Association). Guarantees of
----
principal by agencies or instrumentalities of the United Sates
Government may be a guarantee of payment at the maturity of the
obligation so that in the event of a default prior to maturity there
might not be a market and thus no means of realizing on the
obligation prior to maturity. Guarantees as to the timely payment of
principal and interest do not extend to the value or yield of these
securities nor to the value of the Portfolio's shares.
U.S.
Treasury
Obligations U.S. Treasury obligations consist of bills, notes and bonds issued
by the U.S. Treasury and separately traded interest and principal
component parts of such obligations that are transferable through
the Federal book-entry system known as Separately Traded Registered
Interest and Principal Securities ("STRIPS").
Variable
and
Floating
Rate
Instruments Certain obligations may carry variable or floating rates of
interest, may involve a conditional or unconditional demand feature.
Such instruments bear interest at rates which are not fixed, but
which vary with changes in specified market rates or indices. The
interest rates on these securities may be reset daily, weekly,
quarterly or some other reset period, and may have a floor or
ceiling on interest rate changes. There is a risk that the current
interest rate on such obligations may not accurately reflect
existing market interest rates. A demand instrument with a demand
notice exceeding seven days may be considered illiquid if there is
no secondary market for such security.
Warrants Warrants are instruments giving holders the right, but not the
obligation, to buy equity or fixed income securities of a company at
a given price during a specified period.
When-Issued
and Delayed
Delivery
Securities When-issued or delayed delivery transactions involve the purchase of
an instrument with payment and delivery taking place in the future.
Delivery of and payment for these securities may occur a month or
more after the date of the purchase commitment. A Portfolio will
maintain with its Custodian a separate account with liquid high
grade debt securities or cash in an amount at least equal to these
commitments. The interest rate realized on these securities is fixed
as of the purchase date, and no interest accrues to a Portfolio
before settlement. These securities are subject to market
fluctuation due to changes in market interest rates, and it is
possible that the market value at the time of settlement could be
higher or lower than the purchase price if the general level of
interest rates has changed. Although a Portfolio generally purchases
securities on a when-issued or forward commitment basis with the
intention of actually acquiring securities, a Portfolio may dispose
of a when-issued security or forward commitment prior to settlement
if the adviser deems it appropriate to do so.
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Additional information on other permitted investments can be found in the
Trust's Statement of Additional Information and in the Underlying Portfolios'
Prospectuses and Statements of Additional Information.
49
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APPENDIX
DESCRIPTION OF CORPORATE BOND RATINGS
MOODY'S RATING DEFINITIONS
LONG TERM BOND RATINGS
Aaa Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risk appear somewhat larger than the Aaa
securities.
A Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa Bonds which are rated Baa are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's bond ratings, where specified, are applied to senior bank obligations
and insurance company senior policyholder and claims obligations with an
original maturity in excess of one year. Obligations relying upon support
mechanisms such as letters-of-credit and bonds of indemnity are excluded unless
explicitly rated.
Obligations of a branch of a bank are considered to be domiciled in the country
in which the branch is located. Unless noted as an exception, Moody's rating
on a bank's ability to repay senior obligations extends only to branches
located in countries which carry a Moody's sovereign rating. Such branch
obligations are rated at the lower of the bank's rating or Moody's sovereign
rating for the bank deposits for the country in which the branch is located.
When the currency in which an obligation is denominated is not the same as the
currency of the country in which the obligation is domiciled, Moody's ratings
do not incorporate an opinion as to whether payment of the obligation will be
affected by the actions of the government controlling the currency of
denomination. In addition, risk associated with bilateral conflicts between an
investor's home country and either the issuer's home country or the country
where an issuer branch is located are not incorporated into Moody's ratings.
Moody's makes no representation that rated bank obligations or insurance
company obligations are exempt from registration under the U.S. Securities Act
of 1933 or issued in conformity with any other applicable law or
50
<PAGE>
regulation. Nor does Moody's represent that any specific bank or insurance
company obligation is legally enforceable or is a valid senior obligation of a
rated issuer.
Moody's ratings are opinions, not recommendations to buy or sell, and their
accuracy is not guaranteed. A rating should be weighed solely as one factor in
an investment decision and you should make your own study and evaluation of any
issuer whose securities or debt obligations you consider buying or selling.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond 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 the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
STANDARD & POOR'S RATING DEFINITIONS
A Standard & Poor's corporate or municipal debt 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 debt rating is not a recommendation to purchase, sell, or hold a
security, as it does not comment on market price or suitability for a
particular investor.
The ratings are based, in varying degrees, on the following
considerations:
(1) Likelihood of default. The rating assesses the obligor's capacity
and willingness as to timely payment of interest and repayment of principal in
accordance with the terms of the obligation.
(2) The obligation's nature and provisions.
(3) Protection afforded to, and relative position of, the obligation in
the event of bankruptcy, reorganization, or other arrangement under bankruptcy
laws and other laws affecting creditors' rights.
Likelihood of default is indicated by an issuer's senior debt rating. If
senior debt is not rated, an implied senior debt rating is determined.
Subordinated debt usually is rated lower than senior debt to better reflect
relative position of the obligation in bankruptcy. Unsecured debt, where
significant secured debt exists, is treated similarly to subordinated debt.
LONG-TERM RATINGS DEFINITIONS
Investment Grade
----------------
AAA Debt rated 'AAA' has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt only in small degree.
A Debt rated 'A' has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to adverse effects of changes in
circumstances and economic conditions than debt in higher-rated
categories.
BBB Debt rated 'BBB' is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.
Speculative Grade
-----------------
Debt rated 'BB', 'B', 'CCC', 'CC', and 'C' is 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 debt will likely have
some quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
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BB Debt rated 'BB' has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions that could
lead to inadequate capacity to meet timely interest and principal
payments. The 'BB' rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied 'BBB-' rating.
B Debt rate 'B' has greater vulnerability to default but presently has 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. The 'B' rating
category also is used for debt subordinated to senior debt that is
assigned an actual or implied 'BB' or 'BB-' rating.
CCC Debt rated 'CCC' has a current identifiable vulnerability to default, and
is dependent on favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event
of adverse business, financial, or economic conditions, it is not likely
to have the capacity to pay interest and repay principal. The 'CCC'
rating category also is used for debt subordinated to senior debt that is
assigned an actual or implied 'B' or 'B-' rating.
CC The rating 'CC' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC' rating.
C The rating 'C' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC-' debt rating. The 'C' rating
may be used to cover a situation where a bankruptcy petition has been
filed, but debt service payments are continued.
CI Debt rated 'CI' is reserved for income bonds on which no interest is being
paid.
D Debt is rated 'D' when the issue is in payment default, or the obligor has
filed for bankruptcy. The 'D' rating is used when interest or principal
payments are not made on the date due, even if the applicable grace period
has not expired, unless S&P believes that such payments will be made
during such grace period.
Plus (+) or minus (-): The ratings from 'AA' to 'CCC' may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
c The letter 'c' indicates that the holder's option to tender the security
for purchase may be canceled under certain prestated conditions enumerated
in the tender option documents.
p The letter 'p' indicates that the rating is provisional. A provisional
rating assumes the successful completion of the project financed by the
debt being rated and indicates that payment of debt service requirements
is largely or entirely dependent upon the successful timely completion of
the project. This rating, however, while addressing credit quality
subsequent to completion of the project, makes no comment on the
likelihood of, or the risk of default upon failure of such completion.
The investor should exercise his own judgement with respect to such
likelihood and risk.
L The letter 'L' indicates that the rating pertains to the principal amount
of those bonds to the extent that the underlying deposit collateral is
federally insured, and interest is adequately collateralized. In the case
of certificates of deposit, the letter 'L' indicates that the deposit,
combined with other deposits being held in the same right and capacity,
will be honored for principal and pre-default interest up to federal
insurance limits within 30 days after closing of the insured institution
or, in the event that the deposit is assumed by a successor insured
institution, upon maturity.
*Continuance of the rating is contingent upon S&P's receipt of an executed
copy of the escrow agreement or closing documentation confirming
investments and cash flows.
N.R. Not rated.
Debt obligations of issuers outside the United States and its territories are
rated on the same basis as domestic corporate and municipal issues. The
ratings measure the creditworthiness of the obligor but do not take into
account currency exchange and related uncertainties.
If an issuer's actual or implied senior debt rating is 'AAA', its
subordinated or junior debt is rated 'AAA' or 'AA+'. If an issuer's actual or
implied senior debt rating is lower than 'AAA' but higher than 'BB+', its
junior debt is typically rated one designation lower than the senior debt
rating. For example, if the senior debt
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rating is 'A', subordinated debt normally would be rated 'A-'. If an issuer's
actual or implied senior debt rating is 'BB+' or lower, its subordinated debt
is typically rated two designations lower than the senior debt rating.
Investment and speculative grades
The term "investment grade" was originally used by various regulatory
bodies to connote obligations eligible for investment by institutions such as
banks, insurance companies, and savings and loan associations. Over time, this
term gained widespread usage throughout the investment community. Issues rated
in the four highest categories, 'AAA', 'AA', 'A', 'BBB', generally are
recognized as being investment grade. Debt rated 'BB' or below generally is
referred to as speculative grade. The term "junk bond" is merely a more
irreverent expression for this category of more risky debt. Neither term
indicates which securities S&P deems worthy of investment, as an investor with
a particular risk preference may appropriately invest in securities that are
not investment grade.
Ratings continue as a factor in may regulations, both in the U.S. and
abroad, notably in Japan. For example, the Securities and Exchange Commission
(SEC) requires investment-grade status in order to register debt on Form-3,
which, in turn, is how one offers debt via a Rule 415 shelf registration. The
Federal Reserve Board allows members of the Federal Reserve System to invest in
securities rated in the four highest categories, just as the Federal Home Loan
Bank System permits federally chartered savings and loan associations to invest
in corporate debt with those ratings, and the Department of Labor allows
pension funds to invest in commercial paper rated in one of the three highest
categories. In similar fashion, California regulates investments of
municipalities and county treasurers, Illinois limits collateral acceptable for
public deposits, and Vermont restricts investments of insurers and banks. The
New York and Philadelphia Stock Exchanges fix margin requirements for mortgage
securities depending on their rating, and the securities haircut for commercial
paper, debt securities, and preferred stock that determines net capital
requirements is also a function of the ratings assigned.
Short-Term Debt Ratings (may be assigned, for example, to commercial paper,
master demand notes, bank instruments, and letters of credit).
Moody's description of its three highest short-term debt ratings:
Prime-1 Issuers rated Prime-1 (or supporting institutions) have a
superior capacity for repayment of senior short-term promissory
obligations. Prime-1 repayment capacity will normally be
evidenced by many of the following characteristics:
-Leading market positions in well-established industries.
-High rates of return on funds employed.
-Conservative capitalization structures with moderate
reliance on debt and ample asset protection.
-Broad margins in earnings coverage of fixed financial
charges and high internal cash generation.
-Well-established access to a range of financial markets
and assured sources of alternate liquidity.
Prime-2 Issuers rated Prime-2 (or supporting institutions) have a strong
capacity for repayment of senior short-term debt obligations.
This will normally be evidenced by many of the characteristics
cited above but to a lesser degree. Earnings trends and coverage
ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity
is maintained.
Prime-3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market
compositions may be more pronounced. Variability in earnings and
profitability may result in changes in the level of debt
protection measurements and may require relatively high financial
leverage. Adequate alternate liquidity is maintained.
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S&P's description of its three highest short-term debt ratings:
A-1 This designation indicates that the degree of safety regarding
timely payment is strong. Those issues determined to have extremely
strong safety characteristics are denoted with a plus sign (+).
A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high
as for issues designated "A-1."
A-3 Issues carrying this designation have adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects
of changes in circumstances than obligations carrying the higher
designations.
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SEI ASSET ALLOCATION TRUST
Manager and Shareholder Servicing Agent:
SEI Financial Management Corporation
Distributor:
SEI Financial Services Company
Investment Adviser
SEI Financial Management Corporation
This Statement of Additional Information is not a Prospectus. It is intended to
provide additional information regarding the activities and operations of the
Trust and should be read in conjunction with the Trust's Prospectus dated
_______________, 1996. A Prospectus may be obtained upon request and without
charge by writing the Trust's distributor, SEI Financial Services Company, at
680 East Swedesford Road, Wayne, Pennsylvania 19087-1658, or by calling 1-800-
342-5734.
TABLE OF CONTENTS
The Trust................................................................ S-2
Description of Permitted Investments of the
Underlying Portfolios................................................... S-2
Investment Limitations of the Funds...................................... S-10
Investment Limitations of the Underlying
Portfolios.............................................................. S-12
The Manager and Shareholder Servicing Agent.............................. S-17
The Investment Adviser to the Funds...................................... S-18
The Advisers and Sub-Advisers
To the Underlying Portfolios............................................ S-18
Distribution............................................................. S-19
Trustees and Officers of the Trust....................................... S-20
Performance.............................................................. S-21
Purchase and Redemption of Shares........................................ S-22
Shareholder Services..................................................... S-22
Taxes.................................................................... S-23
Portfolio Transactions................................................... S-25
Description of Shares.................................................... S-26
Limitation of Trustees' Liability........................................ S-26
Voting................................................................... S-26
Shareholder Liability.................................................... S-26
__________, 1996
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THE TRUST
SEI Asset Allocation (the "Trust") is an open-end management investment company
that currently consists of the following five separate investment portfolios
(each a "Fund" and, together, the "Funds"): Diversified Conservative Fund,
Diversified Conservative Growth Fund, Diversified Moderate Growth Fund,
Diversified Growth Fund, and Diversified U.S. Stock Fund. The Funds invest in
shares of certain portfolios (the "Underlying Portfolios") of SEI Liquid Asset
Trust ("SLAT"), SEI Institutional Managed Trust ("SIMT") and SEI International
Trust ("SIT"), each of which is managed by SEI Financial Management Corporation
("SFM"), the Trust's investment adviser and manager. (Together, SLAT, SIMT and
SIT are "Underlying Trusts.") The Funds may invest in the following Underlying
Portfolios: SIMT Large Cap Growth Portfolio, SIMT Large Cap Value Portfolio,
SIMT Small Cap Growth Portfolio, SIMT Small Cap Value Portfolio, SIT Core
International Equity Portfolio, SIT Emerging Markets Equity Portfolio, SIT
European Equity Portfolio, SIT Pacific Basin Equity Portfolio, SIMT Core Fixed
Income Portfolio, SIMT High Yield Bond Portfolio, SIT International Fixed Income
Portfolio and SLAT Prime Obligation Portfolio.
The Trust was established as a Massachusetts business trust pursuant to a
Declaration of Trust dated ____________, 1995. The Declaration of Trust permits
the Trust to offer separate series ("portfolios") of units of beneficial
interest ("shares") and separate classes of portfolios. Except for differences
between the Class A shares and Class D shares pertaining to sales charges,
distribution, voting rights, dividends and transfer agent expenses, each share
of each portfolio represents an equal proportionate interest in that Fund with
each other share of that Portfolio.
This Statement of Additional Information relates to the following Funds:
Diversified Conservative Fund, Diversified Conservative Growth Fund, Diversified
Moderate Growth Fund, Diversified Growth Fund and Diversified U.S. Stock Fund.
Shareholders may purchase shares in the Funds through two separate classes,
Class A and Class D, which provide for variations in distribution costs,
transfer agent fees, voting rights and dividends.
DESCRIPTION OF PERMITTED INVESTMENTS OF THE UNDERLYING PORTFOLIOS
ASSET-BACKED SECURITIES Asset-backed securities are securities backed by
automobile or credit-card receivables and other securities backed by other types
of receivables or other assets. Credit support for asset-backed securities may
be based on the underlying assets and/or provided by a third party through
credit enhancements. Credit enhancement techniques include letters of credit,
insurance bonds, limited guarantees (which are generally provided by the
issuer), senior-subordinated structures and over-collateralization.
AMERICAN DEPOSITORY RECEIPTS ("ADRs") ADRs are securities that evidence
ownership interests in a security or a pool of securities issued by a foreign
issuer. Certain of the Underlying Portfolios may invest in ADRs traded on
registered exchanges or NASDAQ, while certain others may also invest in ADRs not
traded on an established exchange. While the Underlying Portfolios expect to
invest primarily in sponsored ADRs, a joint arrangement between the issuer and
the depositary, some ADRs may be unsponsored. Unlike sponsored ADRs, the
holders of unsponsored ADRs bear all expenses and the depositary may not be
obligated to distribute shareholder communications or to pass through the voting
rights on the deposited securities.
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BANKERS' ACCEPTANCES Bankers' acceptances are bills of exchange or time drafts
drawn on and accepted by a commercial bank. They are used by corporations to
finance the shipment and storage of goods and to furnish dollar exchange.
Maturities are generally six months or less.
CERTIFICATES OF DEPOSIT Certificates of deposit are negotiable interest bearing
instruments with a specific maturity. Certificates of deposit are issued by
banks and savings and loan institutions in exchange for the deposit of funds and
normally can be traded in the secondary market, prior to maturity. Certificates
of deposit have penalties for early withdrawal.
COMMERCIAL PAPER Commercial paper is unsecured short-term promissory notes
issued by corporations and other entities. Maturities on these issues vary from
a few days to nine months.
CONVERTIBLE SECURITIES Convertible securities, such as rights, bonds, notes
and preferred stocks, which are convertible into or exchange for common stocks,
have characteristics similar to both fixed income and equity securities.
Because of the conversion feature, the market value of convertible securities
tends to move together with the market value of the underlying stock. As a
result, an Underlying Portfolio's selection of convertible securities is based,
to a great extent, on the potential for capital appreciation that may exist in
the underlying stock. The value of convertible securities is also affected by
prevailing interest rates, the credit quality of the issuer and any call
provisions.
CORPORATE ZERO COUPON SECURITIES Corporate zero coupon securities are: (i)
notes or debentures which do not pay current interest and are issued at
substantial discounts from par value, or (ii) notes or debentures that pay no
current interest until a stated date one or more years into the future, after
which date the issuer is obligated to pay interest until maturity,usually at a
higher rate than if interest were payable from the date of issuance and may also
make interest payments in kind (e.g., with identical zero coupon securities).
----
Such corporate zero coupon securities, in addition to the risks identified
above, are subject to the risk of the issuer's failure to pay interest and repay
principal in accordance with the terms of the obligation.
FOREIGN SECURITIES Foreign securities are securities issued by non-U.S.
issuers. Certain of the Underlying Portfolios may invest in U.S. dollar
denominated obligations or securities of foreign issuers. Permissible
investments may consist of obligations of foreign branches of U.S. banks and
foreign banks, including European Certificates of Deposit, European Time
Deposits, Canadian Time Deposits, Yankee Certificates of Deposit and investments
in Canadian Commercial Paper, and Europaper. These instruments may subject the
Underlying Portfolio to investment risks that differ in some respects from those
related to investments in obligations of U.S. domestic issuers. Such risks
include future adverse political and economic developments, the possible
imposition of withholding taxes on interest or other income, possible seizure,
nationalization, or expropriation of foreign deposits, the possible
establishment of exchange controls or taxation at the source, greater
fluctuations in value due to changes in the exchange rates, or the adoption of
other foreign governmental restrictions which might adversely affect the payment
of principal and interest on such obligations. Such investments may also entail
higher custodial fees and sales commissions than domestic investments. Foreign
issuers of securities or obligations are often subject to different accounting
treatment and engage in business practices different from those respecting
domestic issuers of similar securities or obligations. Foreign branches of U.S.
banks and foreign banks may be subject to less stringent reserve requirements
than those applicable to domestic branches of U.S. banks.
FORWARD FOREIGN CURRENCY CONTRACTS Forward Foreign Currency Contracts are
contracts which involve an obligation to purchase or sell a specified currency
at a future date at a price set at the time of the
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contract. Forward currency contracts do not eliminate fluctuations in the
values of portfolio securities but rather allow an Underlying Portfolio to
establish a rate of exchange for a future point in time.
When entering into a contract for the purchase or sale of a security in a
foreign currency, an Underlying Portfolio may enter into a foreign forward
currency contract for the amount of the purchase or sale price to protect
against variations, between the date the security is purchased or sold and the
date on which payment is made or received, in the value of the foreign currency
relative to the United States dollar or other foreign currency.
Also, when the Underlying Portfolio's adviser or sub-adviser anticipates that a
particular foreign currency may decline substantially relative to the United
States dollar or other leading currencies, in order to reduce risk, an
Underlying Portfolio may enter into a forward contract to sell, for a fixed
amount, the amount of foreign currency approximating the value of its securities
denominated in such foreign currency. With respect to any such forward foreign
currency contract, it will not generally be possible to match precisely the
amount covered by that contract and the value of the securities involved due to
changes in the values of such securities resulting from market movements between
the date the forward contract is entered into and the date it matures. In
addition, while forward currency contracts may offer protection from losses
resulting from declines in value of a particular foreign currency, they also
limit potential gains which might result from increases in the value of such
currency. An Underlying Portfolio will also incur costs in connection with
forward foreign currency contracts and conversions of foreign currencies into
United States dollars. The Underlying Portfolios may enter into forward foreign
currency contracts.
ILLIQUID SECURITIES Illiquid Securities are securities that cannot be disposed
of in 7 days or less at approximately their carrying value (which is the value
given the security by the Underlying Portfolio on its books).
LOWER RATED SECURITIES Lower-rated securities are lower-rated bonds commonly
referred to as "junk bonds" or high yield/high risk securities. These
securities are rated "Baa" or lower by Moody's Investors Service, Inc.
("Moody's") or "BBB" or lower by Standard & Poor's Corporation ("S&P"). The
SIMT High Yield Bond Portfolio may invest in securities rated as low as "C" by
Moody's or "D" by S&P. These ratings indicate that the obligations are
speculative and may be in default. In addition, the Portfolio may invest in
unrated securities of comparable quality subject to the restrictions stated in
the Portfolio's Prospectus.
Certain Risk Factors Relating to High-Yield, High-Risk Securities.
The descriptions below are intended to supplement the discussion in the
Portfolio's Prospectus under "Risk Factors Relating to Investing in Lower Rated
Securities."
Growth of High Yield Bond, High-Risk Bond Market. The widespread
expansion of government, consumer and corporate debt within the U.S. economy has
made the corporate sector more vulnerable to economic downturns or increased
interest rates. Further, an economic downturn could severely disrupt the market
for lower rated bonds and adversely affect the value of outstanding bonds and
the ability of the issuers to repay principal and interest.
Sensitivity to Interest Rate and Economic Changes. Lower rated bonds
are very sensitive to adverse economic changes and corporate developments.
During an economic down turn or substantial period of rising interest rates,
highly leveraged issuers may experience financial stress that would adversely
affect their ability to service their principal and interest payment
obligations, to meet projected business goals, and to obtain additional
financing. If the issuer of a bond defaulted on its obligations to pay interest
or principal or entered into
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bankruptcy proceedings, the Portfolio may incur losses or expenses in seeking
recovery of amounts owed to it. In addition, periods of economic uncertainty and
change can be expected to result in increased volatility of market prices of
high-yield, high-risk bonds and the Portfolio's net asset value.
Payment Expectations. High-yield, high-risk bonds may contain
redemption or call provisions. If an issuer exercised these provisions in a
declining interest rate market, the Portfolio would have to replace the security
with a lower yielding security, resulting in a decreased return for investors.
Conversely, a high-yield, high-risk bond's value will decrease in a rising
interest rate market, as will the value of the Portfolio's assets. If the
Portfolio experiences significant unexpected net redemptions, this may force it
to sell high-yield, high-risk bonds without regard to their investment merits,
thereby decreasing the asset base upon which expenses can be spread and possibly
reducing the Portfolio's rate of return.
Liquidity and Valuation. There may be little trading in the secondary
market for particular bonds, which may affect adversely the Portfolio's ability
to value accurately or dispose of such bonds. Adverse publicity and investor
perception, whether or not based on fundamental analysis, may decrease the
values and liquidity of high-yield, high-risk bonds, especially in a thin
market.
Legislation. Federal laws require the divestiture by federally
insured savings and loan associations of their investments in lower rated bonds
and limit the deductibility of interest by certain corporate issuers of high
yield bonds. These laws could adversely affect the Portfolio's net asset value
and investment practices, the secondary market for high yield securities, the
financial condition of issuers of these securities and the value of outstanding
high yield securities.
Taxes. The Portfolio may purchase debt securities (such as zero-
coupon or pay-in-kind securities) that contain original issue discount.
Original issue discount that accrues in a taxable year is treated as earned by a
Portfolio and therefore is subject to the distribution requirements of the code
even though the Portfolio has not received any interest payments on such
obligations during that period. Because the original issue discount earned by
the Portfolio in a taxable year may not be represented by cash income, the
Portfolio may have to dispose of other securities and use the proceeds to make
distributions to shareholders.
MORTGAGE-BACKED SECURITIES Mortgage-backed securities are securities which
represent pools of mortgage loans assembled for sale to investors by various
governmental agencies such as the Government National Mortgage Association
("GNMA") and government-related organizations such as the Federal National
Mortgage Association ("FNMA") and the Federal Home Loan Mortgage Corporation
("FHLMC"), as well as by non-governmental issuers such as commercial banks,
savings and loan institutions, mortgage bankers, and private mortgage insurance
companies. Certain Underlying Portfolios may, consistent with their respective
investment objectives and policies, invest in mortgage-backed securities issued
or guaranteed by the U.S. Government or its agencies or instrumentalities. The
SIMT Core Fixed Income Portfolio will only purchase mortgage-backed securities
issued or guaranteed by either the U.S. Government, or its agencies or
instrumentalities. Although certain mortgage-backed securities are guaranteed
by a third party or otherwise similarly secured, the market value of the
security, which may fluctuate, is not so secured. If an Underlying Portfolio
purchases a mortgage-backed security at a premium, that portion may be lost if
there is a decline in the market value of the security whether resulting from
changes in interest rates or prepayments in the underlying mortgage collateral.
As with other interest-bearing securities, the prices of such securities are
inversely affected by changes in interest rates. However, though the value of a
mortgage-backed security may decline when interest rates rise, the converse is
not necessarily true since in periods of declining interest rates the mortgages
underlying the securities are prone to prepayment. For this and other reasons,
a mortgage-backed security's stated maturity may be shortened by
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unscheduled prepayments on the underlying mortgages and, therefore, it is not
possible to predict accurately the security's investment return to an Underlying
Portfolio. In addition, regular payments received in respect of mortgage-backed
securities include both interest and principal. No assurance can be given as to
the return an Underlying Portfolio will receive when these amounts are
reinvested.
An Underlying Portfolio may also invest in collateralized mortgage obligations
structured on pools of mortgage pass-through certificates or mortgage loans.
Collateralized mortgage obligations will be purchased only if rated in the three
highest rating categories by a nationally recognized statistical rating
organization such as Moody's or S&P. For purposes of determining the average
maturity of a mortgage-backed security in its investment portfolio, the SIMT
Core Fixed Income Portfolio will utilize the expected average life of the
security, as estimated in good faith by the Portfolio's adviser and sub-
advisers, and will not invest in mortgage-backed securities with an expected
average maturity of over seven years.
There are a number of important differences among the agencies and
instrumentalities of the U.S. Government that issue mortgage-backed securities
and among the securities that they issue. Mortgage-backed securities issued by
the GNMA include GNMA Mortgage Pass-Through Certificates (also known as "Ginnie
Maes") that are guaranteed as to the timely payment of principal and interest by
GNMA and such guarantee is backed by the full faith and credit of the United
States. GNMA is a wholly-owned U.S. Government corporation within the
Department of Housing and Urban Development. GNMA certificates also are
supported by the authority of GNMA to borrow funds from the U.S. Treasury to
make payments under its guarantee. Mortgage-backed securities issued by the
FNMA include FNMA Guaranteed Mortgage Pass-Through Certificates (also known as
"Fannie Maes") that are solely the obligations of the FNMA and are not backed by
or entitled to the full faith and credit of the United States. The FNMA is a
government-sponsored organization owned entirely by private stockholders.
Fannie Maes are guaranteed as to timely payment of the principal and interest by
FNMA. Mortgage-backed securities issued by the FHLMC include FHLMC Mortgage
Participation Certificates (also known as "Freddie Macs" or "PC's"). The FHLMC
is a corporate instrumentality of the United States, created pursuant to an Act
of Congress, which is owned entirely by Federal Home Loan Banks. Freddie Macs
are not guaranteed by the United States or by any Federal Home Loan Banks and do
not constitute a debt or obligation of the United States or of any Federal Home
Loan Bank. Freddie Macs entitle the holder to timely payment of interest, which
is guaranteed by the FHLMC. The FHLMC guarantees either ultimate collection or
timely payment of all principal payments on the underlying mortgage loans. When
the FHLMC does not guarantee timely payment of principal, FHLMC may remit the
amount due on account of its guarantee of ultimate payment of principal at any
time after default on an underlying mortgage, but in no event later than one
year after it becomes payable.
OPTIONS Options are contracts that give one of the parties to the contract the
right to buy or sell the security that is subject to the option at a stated
price during the option period, and obligates the other party to the contract to
buy or sell such security at the stated price during the option period.
The Underlying Portfolios may trade put and call options on stocks and stock
indices to a limited extent, as the Adviser or Sub-Adviser determines is
appropriate in seeking an Underlying Portfolio's investment objective, and
except as restricted by each Underlying Portfolio's investment limitations as
set forth below. See "Investment Limitations."
The initial purchase (sale) of an option contract is an "opening transaction".
In order to close out an option position, the Underlying Portfolio may enter
into a "closing transaction," which is a sale (purchase) of an option
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contract on the same security with the same exercise price and expiration date
as the option contract originally opened.
A put option gives the purchaser (the Underlying Portfolio) the right to sell,
and imposes on the writer the obligation to buy, the underlying security at the
exercise price during the option period. The advantage to the Underlying
Portfolio of buying the protective put is that if the price of the stock falls
during the option period, the Underlying Portfolio may exercise the put and
receive the higher exercise price for the stock. However, if the security rises
in value, the Underlying Portfolio will have paid a premium for the put, which
will expire unexercised.
A call option gives the purchaser (the Underlying Portfolio) the right to buy,
and imposes on the writer the obligation to sell, the underlying security at the
exercise price during the option period. An Underlying Portfolio may buy
fiduciary calls on stocks that it is trying to buy. The advantage to the
Underlying Portfolio of buying the fiduciary call is that if the price of the
stock rises during the option period, the Underlying Portfolio may exercise the
call and buy the stock for the lower exercise price. If the security falls in
value, however, the Underlying Portfolio will have paid a premium for the call
which will expire worthless, but the Underlying Portfolio will be able to buy
the stock at a lower price.
As discussed above, a call gives the purchaser the right to buy and imposes on
the writer (the Underlying Portfolio) the obligation to sell, the underlying
security at the exercise price during the option period. The advantage to the
Underlying Portfolio of writing covered call options is that the Underlying
Portfolio receives a premium, which is additional income. However, if the
security rises in value, the Underlying Portfolio may not fully participate in
the market appreciation. During the option period, a covered call option writer
may be assigned an exercise notice by the broker-dealer through whom such call
option was sold requiring the writer to deliver the underlying security against
payment of the exercise price. The Underlying Portfolio's obligation as the
writer of a covered call is terminated upon the expiration of the option period
or at such earlier time in which the writer effects a closing purchase
transaction. As noted above, a closing purchase transaction is one in which the
Underlying Portfolio, when obligated as a writer of an option, terminates its
obligation by purchasing an option of the same series as the option previously
written. A closing purchase transaction cannot be effected with respect to an
option once the option writer has received an exercise notice for such option.
The market value of an option generally reflects the market price of an
underlying security. Other principal factors affecting market value include
supply and demand, interest rates, the pricing volatility of the underlying
security and the time remaining until the expiration date.
Although the Underlying Portfolios will engage in option transactions only as
hedging transactions and not for speculative purposes, there are risks
associated with such investments including the following: (i) the success of a
hedging strategy may depend on the ability of the Adviser or Sub-Adviser to
predict movements in the prices of the individual securities, fluctuations in
markets and movements in interest rates; (ii) there may be imperfect correlation
between the movement in prices of securities held by the Underlying Portfolio;
(iii) there may not be a liquid secondary market for options; and (iv) while the
Underlying Portfolio will receive a premium when it writes covered call options,
it may not participate fully in a rise in the market value of the underlying
security.
PAY-IN-KIND BONDS Pay-in-kind securities are securities which pay interest in
either cash or additional securities, at the issuer's option, for a specified
period. Pay-in-kind bonds, like zero coupon bonds, are designed to give an
issuer flexibility in managing cash flow. Pay-in-kind bonds are expected to
reflect the market value of the underlying debt plus an amount representing
accrued interest since the last payment. Pay-in-kind bonds
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are usually less volatile than zero coupon bonds, but more volatile than cash
pay securities. The SIMT High Yield Bond Portfolio may purchase in pay-in-kind
bonds.
RECEIPTS Receipts are interests in separately traded interest and principal
component parts of U.S. Government obligations that are issued by banks or
brokerage firms and are created by depositing U.S. Government obligations into a
special account at a custodian bank. The custodian holds the interest and
principal payments for the benefit of the registered owners of the certificates
or receipts. The custodian arranges for the issuance of the certificates or
receipts evidencing ownership and maintains the register. Receipts include
"Treasury Receipts" ("TRs"), "Treasury Investment Growth Receipts" ("TIGRs"),
and "Certificates of Accrual on Treasury Securities" ("CATS"). TIGRs and CATS
are interests in private proprietary accounts while TRs and STRIPS (See "U.S.
Treasury Obligations") are interests in accounts sponsored by the U.S. Treasury.
Receipts are sold as zero coupon securities; for more information, see "Zero
Coupon Securities."
REPURCHASE AGREEMENTS Repurchase agreements are agreements under which
securities are acquired from a securities dealer or bank subject to resale on an
agreed upon date and at an agreed upon price which includes principal and
interest. An Underlying Portfolio involved bears a risk of loss in the event
that the other party to a repurchase agreement defaults on its obligations and
the Underlying Portfolio is delayed or prevented from exercising its rights to
dispose of the collateral securities. An Underlying Portfolio enters into
repurchase agreements only with financial institutions that it deems to present
minimal risk of bankruptcy during the term of the agreement, based on guidelines
that are periodically reviewed by the Board of Trustees. These guidelines
currently permit each Portfolio to enter into repurchase agreements only with
approved banks and primary securities dealers, as recognized by the Federal
Reserve Bank of New York, which have minimum net capital of $100 million, or
with a member bank of the Federal Reserve System. Repurchase agreements are
considered to be loans collateralized by the underlying security. Repurchase
agreements entered into by an Underlying Portfolio will provide that the
underlying security at all times shall have a value at least equal to 102% of
the price stated in the agreement. This underlying security will be marked to
market daily. The advisers and sub-advisers will monitor compliance with this
requirement. Under all repurchase agreements entered into by an Underlying
Portfolio, the Custodian or its agent must take possession of the underlying
collateral. However, if the seller defaults, an Underlying Portfolio could
realize a loss on the sale of the underlying security to the extent the proceeds
of the sale are less than the resale price. In addition, even though the
Bankruptcy Code provides protection for most repurchase agreements, if the
seller should be involved in bankruptcy or insolvency proceedings, an Underlying
Portfolio may incur delay and costs in selling the security and may suffer a
loss of principal and interest if the Underlying Portfolio is treated as an
unsecured creditor.
RESTRICTED SECURITIES Restricted securities are securities that may not be
sold freely to the public absent registration under the Securities Act of 1933,
as amended (the "1933 Act"), or an exemption from registration. Section 4(2)
commercial paper is issued in reliance on an exemption from registration under
Section 4(2) of the 1933 Act, and is generally sold to institutional investors
(including investment companies) who purchase for investment. Any resale of
such commercial paper must be in an exempt transaction, usually to an
institutional investor through the issuer or investment dealers who make a
market on such commercial paper. Rule 144A securities are securities sold in
reliance on an exemption from registration provided by Rule 144A under the 1933
Act.
SECURITIES LENDING Securities lending is an investment technique which enables
an Underlying Portfolio to generate additional income by lending its securities
pursuant to agreements requiring that the loans be continuously secured by cash,
securities of the U.S. Government or its agencies, or any combination of cash
and such securities, as collateral equal to at least the market value at all
times of the loaned securities. Such loans
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will not be made if, as a result, the aggregate amount of all outstanding loaned
securities for an Underlying Portfolio exceeds 20% of the value of that
Portfolio's total assets taken at fair market value. An Underlying Portfolio
will continue to receive interest on the loaned securities while simultaneously
earning interest on the investment of the cash collateral in U.S. Government
securities. However, an Underlying Portfolio will normally pay lending fees to
such broker-dealers and related expenses from the interest earned on invested
collateral. There may be risks of delay in receiving additional collateral or
risks of delay in recovery of the securities or even loss of rights in the
collateral should the borrower of the securities fail financially. However,
loans are made only to borrowers deemed by the adviser or sub-adviser to be of
good standing and when, in the judgment of the adviser or sub-adviser, the
consideration that can be earned currently from such loaned securities justifies
the attendant risk. Any loan may be terminated by either party upon reasonable
notice to the other party. Each of the Underlying Portfolios may use the
Distributor as a broker in these transactions.
TIME DEPOSITS Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits with a withdrawal penalty are
considered to be illiquid securities; no Underlying Portfolio will invest more
than 15% of its net assets in such time deposits and other illiquid securities.
U.S. TREASURY OBLIGATIONS U.S. Treasury obligations are bills, notes and bonds
issued by the U.S. Treasury, and separately traded interest and principal
component parts of such obligations that are transferable through the Federal
book-entry system known as Separately Traded Registered Interest and Principal
Securities ("STRIPS"). No Underlying Portfolio may actively trade STRIPS.
STRIPS are sold as zero coupon securities; for more information, see "Zero
Coupon Securities."
U.S. GOVERNMENT AGENCY OBLIGATIONS U.S. government agency obligations are
securities issued or guaranteed by agencies of the United States Government that
issue obligations, including, among others, Farmers Home Administration, Federal
Farm Credit System, Federal Housing Administration, Government National Mortgage
Association, Maritime Administration, Small Business Administration and The
Tennessee Valley Authority. Each Portfolio may purchase securities issued or
guaranteed by GNMA, which represent participations in Veterans Administration-
and Federal Housing Administration-backed mortgage pools. Obligations of
instrumentalities of the United States Government include securities issued by,
among others, Federal Home Loan Banks, FHLMC, Federal Land Banks, FNMA and the
United States Postal Service. Some of these securities are supported by the
full faith and credit of the United States Treasury (e.g., GNMA Securities),
----
others are supported by the right of the issuer to borrow from the Treasury, and
still others are supported only by the credit of the instrumentality (e.g., FNMA
----
Securities). Guarantees of principal by agencies or instrumentalities of the
United States Government may be a guarantee of payment at the maturity of the
obligation so that in the event of a default prior to maturity there might not
be a market and thus no means of realizing the value of the obligation prior to
maturity.
VARIABLE OR FLOATING RATE INSTRUMENTS Variable or floating rate instruments
are instruments which may involve a demand feature and may include variable
amount master demand notes available through the Custodian. Variable or
floating rate instruments bear interest at a rate which varies with changes in
market rates. The holder of an instrument with a demand feature may tender the
instrument back to the issuer at par prior to maturity. A variable amount
master demand note is issued pursuant to a written agreement between the issuer
and the holder, its amount may be increased by the holder or decreased by the
holder or issuer, it is payable on demand, and the rate of interest varies based
upon an agreed formula. The quality of the underlying credit must, in the
opinion of the Underlying Portfolio's advisers, be equivalent to the long-term
bond or commercial
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paper ratings applicable to permitted investments for each Underlying Portfolio.
Each Underlying Portfolio's advisers will monitor on an ongoing basis the
earning power, cash flow, and liquidity ratios of the issuers of such
instruments and will similarly monitor the ability of an issuer of a demand
instrument to pay principal and interest on demand.
In case of obligations which include a put feature at the option of the debt
holder, the date of the put may be used as an effective maturity date for the
purpose of determining weighted average portfolio maturity.
WHEN-ISSUED SECURITIES When-issued securities are securities for which
delivery and payment normally take place within 45 days after the date of
commitment to purchase. The SIMT Core Fixed Income and SIMT High Yield Bond
Portfolios may purchase when-issued securities that involve the purchase of debt
obligations on a when-issued basis. An Underlying Portfolio will only make
commitments to purchase obligations on a when-issued basis with the intention of
actually acquiring the securities, but may sell them before the settlement date.
The when-issued securities are subject to market fluctuation, and no interest
accrues to the purchaser during this period. The payment obligation and the
interest rate that will be received on the securities are each fixed at the time
the purchaser enters into the commitment. Purchasing obligations on a when-
issued basis is a form of leveraging and can involve a risk that the yields
available in the market when the delivery takes place may actually be higher
than those obtained in the transaction itself. In that case there could be an
unrealized loss at the time of delivery. An Underlying Portfolio will establish
a segregated account with the Custodian and maintain liquid assets in an amount
at least equal in value to that Underlying Portfolio's commitments to purchase
when-issued securities. If the value of these assets declines, the Underlying
Portfolio involved will place additional liquid assets in the account on a daily
basis so that the value of the assets in the account is equal to the amount of
such commitments.
ZERO COUPON SECURITIES Zero coupon securities are fixed income securities that
have been stripped of their unmatured interest coupons. Zero coupon securities,
including STRIPS and Receipts (TRs, TIGRs and CATS) are sold at a (usually
substantial) discount and redeemed at face value at their maturity date without
interim cash payments of interest or principal. The amount of this discount is
accredited over the life of the security, and the accretion constitutes the
income earned on the security for both accounting and tax purposes. Because of
these features, the market prices of zero coupon securities are generally more
volatile than the market prices of securities that have similar maturity but
that pay interest periodically. Zero coupon securities are likely to respond to
a greater degree to interest rate changes than are non-zero coupon securities
with similar maturity and credit qualities. See also "Taxes."
INVESTMENT LIMITATIONS OF THE FUNDS
Fundamental Policies
Each Fund may not:
1. Make loans if, as a result, more than 33 1/3% of its total assets would be
loaned to other parties.
2. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Fund may purchase commodities contracts
relating to financial instruments, such as financial futures or index
contracts and options on such contracts.
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3. Issue senior securities (as defined in the 1940 Act) except as permitted by
rule, regulation or order of the Securities and Exchange Commission (the
"SEC").
4. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
5. Invest in interests in oil, gas, or other mineral exploration or
development programs and oil, gas or mineral leases.
These investment limitations and the investment limitations in each Prospectus
are fundamental policies of the Funds and may not be changed without the
approval of a majority of a Fund's outstanding shares. The term "majority of
outstanding shares" means the vote of (i) 67% or more of a Fund's shares present
at a meeting, if not more than 50% of the outstanding shares of a Fund are
present or represented by proxy, or (ii) more than 50% of a Fund's outstanding
shares, whichever is less.
Non-Fundamental Policies
Each Fund may not:
1. Pledge, mortgage or hypothecate assets except to secure borrowings
permitted by the Fund's fundamental limitation on borrowing.
2. Invest in companies for the purpose of exercising control.
3. Purchase securities on margin or effect short sales, except that each Fund
may (i) obtain short-term credits as necessary for the clearance of
security transactions; (ii) provide initial and variation margin payments
in connection with transactions involving futures contracts and options on
such contracts; and (iii) make short sales "against the box" or in
compliance with the SEC's position regarding the asset segregation
requirements imposed by Section 18 of the 1940 Act.
4. Invest its assets in securities of any investment company, except (i) by
purchase in the open market involving only customary brokers' commissions;
(ii) in connection with mergers, acquisitions of assets, or consolidations;
or (iii) as permitted by the Trust's SEC Order; or (iv) as otherwise
permitted by the 1940 Act.
5. Purchase or retain securities (other than obligations issued or guaranteed
by the U.S. Government or any foreign government, their agencies or
instrumentalities or shares of the Underlying Portfolios) of an issuer if,
to the knowledge of the Trust, an officer, trustee, partner or director of
the Trust or any investment adviser of the Trust owns beneficially more
than 1/2 of the 1% of the shares or securities of such issuer and all such
officers, trustees, partners and directors owning more than 1/2 of 1% of
such shares or securities together own more than 5% of such shares or
securities.
6. Purchase securities of any company which has (with predecessors) a record
of less than three years continuing operations if, as a result, more than
5% of the total assets (taken at fair market value) would be invested in
such securities.
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7. Purchase or hold illiquid securities, i.e., securities that cannot be
disposed of for their approximate carrying value in seven days or less
(which term includes repurchase agreements and time deposits maturing in
more than seven days) if, in the aggregate, more than 15% of its net assets
would be invested in illiquid securities.
8. Purchase securities which must be registered under the 1933 Act, as
amended, before they may be sold to the public, if, in the aggregate, more
than 15% of its net assets would be invested in such restricted securities.
A Fund's purchase of investment company securities results in the bearing of
expenses such that shareholders would indirectly bear a proportionate share of
the operating expenses of such investment companies, including advisory fees.
Each of the foregoing percentage limitations (except with respect to the
limitation on investing in illiquid securities) applies at the time of purchase.
These limitations are non-fundamental and may be changed by the Trust's Board of
Trustees without a vote of shareholders.
Additional Restrictions
The following are non-fundamental investment limitations that are currently
required by one or more states in which the Trust sells shares of the Funds.
These limitations are in addition to, and in some cases more restrictive than,
the fundamental and non-fundamental investment limitations listed above. A
limitation may be changed or eliminated without shareholder approval if the
relevant state changes or eliminates its policy regarding such investment
restriction. As long as a Fund's shares are registered for sale in such states,
it may not:
1. Invest more than 5% of its net assets in warrants; provided that, of this
5%, no more than 2% will be in warrants that are not listed on the New York
Stock Exchange or the American Stock Exchange.
2. Invest more than 15% of its net assets in illiquid securities, including
securities which are not readily marketable.
3. Invest more than 15% of its net assets in restricted securities.
INVESTMENT LIMITATIONS OF THE UNDERLYING PORTFOLIOS
Fundamental Policies
The following investment limitations are fundamental policies of each Underlying
Portfolio which cannot be changed with respect to an Underlying Portfolio
without the consent of the holders of a majority of that Portfolio's outstanding
shares. The term "majority of outstanding shares" means the vote of (i) 67% or
more of an Underlying Portfolio's shares present at a meeting, if not more than
50% of the outstanding shares of an Underlying Portfolio are present or
represented by proxy, or (ii) more than 50% of an Underlying Portfolio's
outstanding shares, whichever is less.
The SIMT Core Fixed Income, SIMT High Yield Bond, SIMT Large Cap Growth, SIMT
Large Cap Value, SIMT Small Cap Growth, SIMT Small Cap Value, SIT Core
International Equity, SIT European Equity, SIT Pacific Basin Equity and SIT
Emerging Markets Equity Portfolios may not:
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1. Borrow money in an amount exceeding 33 1/3% of the value of its total
assets, provided that, for purposes of this limitation, investment
strategies which either obligate a Portfolio to purchase securities or
require a Portfolio to segregate assets are not considered to be
borrowings. To the extent that its borrowings exceed 5% of its assets, (i)
all borrowings will be repaid before making additional investments and any
interest paid on such borrowings will reduce income; and (ii) asset
coverage of at least 300% is required.
2. Make loans if, as a result, more than 33 1/3% of its total assets would be
lent to other parties, except that each Portfolio may (i) purchase or hold
debt instruments in accordance with its investment objective and policies;
(ii) enter into repurchase agreements; and (iii) lend its securities.
3. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Portfolio may purchase (i) marketable
securities issued by companies which own or invest in real estate
(including real estate investment trusts), commodities, or commodities
contracts; and (ii) commodities contracts relating to financial
instruments, such as financial futures contracts and options on such
contracts.
4. Issue senior securities (as defined in the 1940 Act) except as permitted by
rule, regulation or order of the Securities and Exchange Commission (the
"SEC").
5. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
6. Invest in interests in oil, gas, or other mineral exploration or
development programs and oil, gas or mineral leases.
The SIT International Fixed Income Portfolio may not:
1. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings as described in the Prospectuses in aggregate amounts not to
exceed 10% of the net assets of such Portfolio taken at current value at
the time of the incurrence of such loan.
2. Make loans, except that the Portfolio may (i) purchase or hold debt
securities in accordance with its investment objectives and policies; (ii)
engage in securities lending as described in this Prospectus and in the
Statement of Additional Information; and (iii) enter into repurchase
agreements, provided that repurchase agreements and time deposits maturing
in more than seven days, and other illiquid securities, including
securities which are not readily marketable or are restricted, are not to
exceed, in the aggregate, 10% of the total assets of the International
Fixed Income Portfolio.
3. Invest in companies for the purpose of exercising control.
4. Acquire more than 10% of the voting securities of any one issuer.
5. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts. However, subject to its permitted
investments, the Portfolio may purchase obligations issued by companies
which invest in real estate, commodities or commodities contracts.
6. Make short sales of securities, maintain a short position or purchase
securities on margin, except as described in the Prospectus and except that
the Trust may obtain short-term credits as necessary for the clearance of
security transactions.
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7. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
8. Purchase securities of other investment companies except as permitted by
the 1940 Act and the rules and regulations thereunder and may only purchase
securities of money market funds.
9. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowing as described in the Prospectuses in this Statement
of Additional Information or as permitted by rule, regulation or order of
the SEC.
10. Purchase or retain securities of an issuer if, to the knowledge of the
Trust, an officer, trustee, partner or director of the Trust or any
investment adviser of the Trust owns beneficially more than 1/2 of 1% of
the shares or securities of such issuer and all such officers, trustees,
partners and directors owning more than 1/2 of 1% of such shares or
securities together own more than 5% of such shares or securities.
11. Purchase securities of any company which has (with predecessors) a record
of less than three years continuing operations if, as a result, more than
5% of the total assets (taken at current value) would be invested in such
securities.
12. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.
13. Purchase restricted securities (securities which must be registered under
the Securities Act of 1933, as amended (the "1933 Act"), before they may be
offered or sold to the public) or other illiquid securities except as
described in the Prospectuses and this Statement of Additional Information.
The SLAT Prime Obligation Portfolio may not:
1. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding 10% of the value of the total assets of the Portfolio.
This borrowing provision is included solely to facilitate the orderly sale
of portfolio securities to accommodate substantial redemption requests if
they should occur and is not for investment purposes. All borrowings by
the Portfolio will be repaid before making additional investments for the
Portfolio and any interest on such borrowings will reduce the income of the
Portfolio.
2. Make loans, except that the Portfolio may purchase or hold debt instruments
in accordance with its investment objective and policies and may enter into
repurchase agreements, provided that repurchase agreements maturing in more
than seven days, restricted securities and other illiquid securities are
not to exceed, in the aggregate, 10% of the Portfolio's total assets.
3. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings, as described in the Prospectus, in aggregate amounts not to
exceed 10% of the net assets of such Portfolio taken at fair market value
at the time such loan is incurred.
4. Invest in companies for the purpose of exercising control.
5. Acquire more than 10% of the voting securities of any one issuer.
6. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts including futures contracts. However,
subject to its permitted investments, the Portfolio may purchase
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obligations issued by companies which invest in real estate, real estate
limited partnerships, commodities or commodities contracts.
7. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the Portfolio may obtain short-term
credits as necessary for the clearance of securities transactions.
8. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security.
9. Purchase securities of other investment companies except as permitted by
the 1940 Act and the rules and regulations thereunder and, in any event,
may not purchase securities of other open-end investment companies. Under
these rules and regulations, the Portfolio is prohibited from acquiring the
securities of other investment companies if, as a result of such
acquisition, the Portfolio owns more than 3% of the total voting stock of
an investment company; securities issued by any one investment company
represent more than 5% of the total Portfolio assets; or securities (other
than treasury stock) issued by all investment companies represent more than
10% of the total assets of the Portfolio. These investment companies
typically incur fees that are separate from those fees incurred directly by
the Portfolio. The Portfolio's purchase of such investment companies
results in the layering of expenses such that shareholders would indirectly
bear a proportionate share of such investment companies' expenses,
including advisory fees.
10. Issue senior securities (as defined in the Investment Company Act of 1940)
except in connection with permitted borrowings as described in the
Prospectus and Statement of Additional Information or as permitted by rule,
regulation or order of the Securities and Exchange Commission.
11. Purchase or retain securities of an issuer if, to the knowledge of the
Trust, an officer, trustee, partner or director of the Trust or any
investment adviser of the Trust owns beneficially more than 1/2 of 1% of
the shares or securities of such issuer and all such officers, trustees,
partners and directors owning more than 1/2 of 1% of such shares or
securities together own more than 5% of such shares of securities.
12. Purchase securities of any company which has (with predecessors) a record
of less than three years' continuing operations, except (i) obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, or (ii) municipal securities which are rated by at least
two nationally recognized municipal bond rating services, if, as a result,
more than 5% of the total assets (taken at fair market value) of the
Portfolio would be invested in such securities.
13. Purchase warrants, puts, calls, straddles, spreads or combinations thereof.
14. Invest in interests in oil, gas or other mineral exploration or development
programs.
15. Purchase restricted securities (securities which must be registered under
the Securities Act of 1933 before they may be offered or sold to the
public) or other illiquid securities except as described in the Prospectus
and this Statement of Additional Information.
The foregoing percentages will apply at the time of the purchase of a security
and shall not be considered violated unless an excess or deficiency occurs
immediately after or as a result of a purchase of such security. These
investment limitations and the investment limitations in each Prospectus are
fundamental policies of the Trust and may not be changed without shareholder
approval.
Non-Fundamental Policies
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The SIMT Core Fixed Income, SIMT High Yield Bond, SIMT Large Cap Growth, SIMT
Large Cap Value, SIMT Small Cap Growth, SIMT Small Cap Value, SIT Core
International Equity, SIT European Equity, SIT Pacific Basin Equity and SIT
Emerging Markets Equity Portfolios may not:
1. Pledge, mortgage or hypothecate assets except to secure borrowings
permitted by the Portfolio's fundamental limitation on borrowing.
2. Invest in companies for the purpose of exercising control.
3. Purchase securities on margin or effect short sales, except that each
Portfolio may (i) obtain short-term credits as necessary for the clearance
of security transactions; (ii) provide initial and variation margin
payments in connection with transactions involving futures contracts and
options on such contracts; and (iii) make short sales "against the box" or
in compliance with the SEC's position regarding the asset segregation
requirements imposed by Section 18 of the 1940 Act.
4. Invest its assets in securities of any investment company, except (i) by
purchase in the open market involving only customary brokers' commissions;
(ii) in connection with mergers, acquisitions of assets, or consolidations;
or (iii) as otherwise permitted by the 1940 Act.
5. Purchase or retain securities of an issuer if, to the knowledge of the
Trust, an officer, trustee, partner or director of the Trust or any
investment adviser of the Trust owns beneficially more than 1/2 of the 1%
of the shares or securities of such issuer and all such officers, trustees,
partners and directors owning more than 1/2 of 1% of such shares or
securities together own more than 5% of such shares or securities.
6. Purchase securities of any company which has (with predecessors) a record
of less than three years continuing operations if, as a result, more than
5% of the total assets (taken at fair market value) would be invested in
such securities.
7. Purchase or hold illiquid securities, i.e., securities that cannot be
disposed of for their approximate carrying value in seven days or less
(which term includes repurchase agreements and time deposits maturing in
more than seven days) if, in the aggregate, more than 15% of its net assets
would be invested in illiquid securities. Notwithstanding the foregoing,
securities issued pursuant to Section 4(2) of the 1933 Act and securities
eligible to be re-sold under Rule 144A of the 1933 Act may be treated as
liquid securities under procedures adopted by the Board of Trustees.
8. Purchase securities which must be registered under the 1933 Act, as
amended, before they may be sold to the public, if, in the aggregate, more
than 15% of its net assets would be invested in such restricted securities.
Securities issued pursuant to Section 4(2) of the 1933 Act and securities
exempted from registration upon re-sale by Rule 144A under the 1933 Act are
not deemed to be restricted securities for purposes of this limitation.
The SLAT Prime Obligation Portfolio must:
1. Maintain an average dollar-weighted portfolio maturity of 90 days or less.
Under rules and regulations, established by the SEC, an Underlying Portfolio is
prohibited from acquiring the securities of other investment companies if, as a
result of such acquisition, the Underlying Portfolio owns more than 3% of the
total voting stock of the company; securities issued by any one investment
company represent more than 5% of the Underlying Portfolio's total assets; or
securities (other than treasury stock) issued by all
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investment companies represent more than 10% of the total assets of the
Underlying Portfolio. An Underlying Portfolio's purchase of such investment
company securities results in the bearing of expenses such that shareholders
would indirectly bear a proportionate share of the operating expenses of such
investment companies, including advisory fees.
Each of the foregoing percentage limitations (except with respect to the
limitation on investing in illiquid securities) apply at the time of purchase.
These limitations are non-fundamental and may be changed by the Underlying
Trust's Board of Trustees without a vote of shareholders.
Additional Restrictions
The following are non-fundamental investment limitations that are currently
required by one or more states in which the Trust sells shares of the Underlying
Portfolios. These limitations are in addition to, and in some cases more
restrictive than, the fundamental and non-fundamental investment limitations
listed above. A limitation may be changed or eliminated without shareholder
approval if the relevant state changes or eliminates its policy regarding such
investment restriction. As long as an Underlying Portfolio's shares are
registered for sale in such states, it may not:
1. Invest more than 5% of its net assets in warrants; provided that of this 5%
no more than 2% will be in warrants that are not listed on the New York
Stock Exchange or the American Stock Exchange.
2. Invest in the securities of other investment companies except by purchase
in the open market where no commission or profit to a sponsor or dealer
results from the purchase other than the customary broker's commission, or
except when the purchase is part of a plan of merger, consolidation,
reorganization or acquisition. [This restriction does not apply to the SIMT
High Yield Bond Portfolio.]
3. Invest more than 15% (10% with respect to the SIT Core International
Equity, SIT Emerging Markets Equity, SIT European Equity, SIT Pacific Basin
Equity, SIT International Fixed Income and SLAT Prime Obligation
Portfolios) of its net assets in illiquid securities, including securities
which are not readily marketable or are restricted.
4. Invest more than 15% of its net assets in restricted securities. For
purposes of this limitation, securities exempted from registration under
the 1933 Act, including Rule 144A securities and Section 4(2) commercial
paper, are considered to be restricted securities.
5. [SIT Portfolios only] Make short sales, except short sales "against the
box."
THE MANAGER AND SHAREHOLDER SERVICING AGENT
The Administration Agreement provides that SEI Financial Management
Corporation ("SFM") shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Trust in connection with the matters to
which the Administration Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of SFM in the
performance of its duties or from reckless disregard of its duties and
obligations thereunder.
The Administration Agreement shall remain effective for the initial term of the
Agreement and each renewal term thereof unless earlier terminated (a) by the
mutual written agreement of the parties; (b) by either party of the
Administration Agreement on 90 days' written notice, as of the end of the
initial term or the end of any renewal term; (c) by either party of the
Administration Agreement on such date as is specified in written notice given by
the terminating party, in the event of a material breach of the Administration
Agreement by the other party, provided the terminating party has notified the
other party of such breach at least 45 days prior to the specified date of
termination and the breaching party has not remedied such breach by the
specified date; (d) effective upon the liquidation of the Administrator; or (e)
as to any Fund or the Trust, effective upon the liquidation of such Fund or the
Trust, as the case may be.
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SFM, a wholly-owned subsidiary of SEI, was organized as a Delaware corporation
in 1969, and has its principal business offices at 680 East Swedesford Road,
Wayne, Pennsylvania 19087-1658. Alfred P. West, Jr., Henry H. Greer and Carmen
V. Romeo constitute the Board of Directors of SFM. Mr. West serves as the
Chairman of the Board of Directors and Chief Executive Officer of SFM and SEI.
Mr. Greer serves as President and Chief Operating Officer of SFM and SEI. SEI
and its subsidiaries are leading providers of funds evaluation services, trust
accounting systems, and brokerage and information services to financial
institutions, institutional investors and money managers. SFM also serves as
manager to the following other mutual funds: SEI Liquid Asset Trust; SEI Daily
Income Trust, SEI Tax Exempt Trust, SEI Index Funds, SEI International Trust,
SEI Institutional Managed Trust, Stepstone Funds, The Compass Capital Group, FFB
Lexicon Funds, The Advisors' Inner Circle Fund, The Pillar Funds, CUFUND, STI
Classic Funds, CoreFunds, Inc., First American Funds, Inc., First American
Investment Funds, Inc., Rembrandt Funds(R), The Arbor Fund, 1784 Funds, The PBHG
Fund, Inc., Bishop Street Funds, Conestoga Family of Funds, Insurance Investment
Products Trust, Marquis/sm/ Funds, Morgan Grenfell Investment Trust, Morgan
Grenfell Investment Trust, The Achievement Funds Trust, CrestFunds, STI Classic
Variable Trust and Inventor Funds.
If operating expenses of any Fund exceed limitations established by certain
states, SFM will pay such excess. SFM will not be required to bear expenses of
any Fund to an extent which would result in the Fund's inability to qualify as a
regulated investment company under provisions of the Internal Revenue Code. The
term "expenses" is defined in such laws or regulations, and generally excludes
brokerage commissions, distribution expenses, taxes, interest and extraordinary
expenses.
THE INVESTMENT ADVISER TO THE FUNDS
SFM will discharge its responsibilities subject to the supervision of, and
policies set by, the Trustees of the Trust. The Trust's Advisory Agreement with
SFM provides that SFM Adviser shall not be protected against any liability to
the Trust or its shareholders by reason of willful misfeasance, bad faith or
gross negligence on its part in the performance of its duties or from reckless
disregard of its obligations or duties thereunder.
The Trust will operate in a manner that is distinctly different from virtually
all other investment companies. Most investment companies operate under a
structure in which a single related group of companies provide investment
advisory, administrative, and distribution services, and in which the investment
companies purchase equity and debt securities. The Trust, however, invests in
shares of certain related investment companies that are advised and/or
administered by SFM (i.e., the Underlying Portfolios). In turn, these Underlying
----
Portfolios invest in equity and debt securities. SFM is responsible for
investing the assets of each Fund in certain of the Underlying Portfolios within
percentage ranges established by SFM, and for investing uninvested cash balances
in short-term investments, including repurchase agreements.
The continuance of the Advisory Agreement must be specifically approved at least
annually (i) by the vote of a majority of the outstanding shares of that Fund or
by the Trustees, and (ii) by the vote of a majority of the Trustees who are not
parties to such Agreement or "interested persons" of any party thereto,
person at a meeting called for the purpose of voting on such approval. The
Advisory Agreement will terminate automatically in the event of its assignment,
and is terminable at any time without penalty by the Trustees of the Trust or,
with respect to a Fund, by a majority of the outstanding shares of that Fund, on
not less than 30 days nor more than 60 days written notice to the SFM or by SFM
on 90 days written notice to the Trust.
THE ADVISERS AND SUB-ADVISERS TO THE UNDERLYING PORTFOLIOS
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Each Advisory and Sub-Advisory Agreement provides that each Adviser (or Sub-
Adviser) shall not be protected against any liability to the Underlying Trusts
or their shareholders by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard of its obligations or duties thereunder.
Pursuant to the Advisory and Sub-Advisory Agreements, the Underlying SIMT and
SIT Portfolios rely upon SFM for access, on a pooled investment basis, the core
elements of SFM's investment adviser selection, monitoring, and asset allocation
services. Under the "Manager of Managers" approach employed by the Underlying
SIMT and SIT Portfolios, SFM will recommend and, if the Trustees of the
Underlying Trusts approve the recommendation, monitor for the Underlying
Portfolios one or more managers using a range of investment styles.
The continuance of each Advisory and Sub-Advisory Agreement must be specifically
approved at least annually (i) by the vote of a majority of the outstanding
shares of that Underlying Portfolio or by the Trustees, and (ii) by the vote of
a majority of the Trustees who are not parties to such Agreement or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. Each Advisory or Sub-Advisory Agreement will
terminate automatically in the event of its assignment, and is terminable at any
time without penalty by the Trustees of the Trust or, with respect to an
Underlying Portfolio, by a majority of the outstanding shares of that Underlying
Portfolio, on not less than 30 days nor more than 60 days written notice to the
Adviser (or Sub-Adviser) or by the Adviser (or Sub-Adviser) on 90 days written
notice to the Trust. However, SFM is currently seeking an exemptive order from
the Securities and Exchange Commission (the "SEC") that would permit SFM, with
the approval of the Trust's Board of Trustees, to retain sub-advisers for an
Underlying Portfolio without submitting the sub-advisory agreement to a vote of
the Underlying Portfolio's shareholders. If granted, the exemptive relief will
permit the non-disclosure of amounts payable by SFM under such sub-advisory
agreements.
DISTRIBUTION
The Trust has adopted a Distribution and Service Plan for Class D (the "Class D
Plan") in accordance with the provisions of Rule 12b-1 under the 1940 Act (which
regulates circumstances under which an investment company may directly or
indirectly bear expenses relating to the distribution of its shares). In this
regard, the Board of Trustees has determined that the Class D Plan and the
Distribution Agreement are in the best interests of the shareholders.
Continuance of the Class D Plan must be approved annually by a majority of the
Trustees of the Trust and by a majority of the Trustees who are not "interested
persons" of the Trust (as that term is defined in the 1940 Act) and who have no
direct or indirect financial interest in the operation of a Distribution Plan or
in any agreements related thereto ("Qualified Trustees"). The Class D Plan
requires that quarterly written reports of amounts spent under the Plan and the
purposes of such expenditures be furnished to and reviewed by the Trustees. The
Class D Plan may not be amended to increase materially the amount which may be
spent thereunder without approval by a majority of the outstanding shares of the
Fund or class affected. All material amendments of the Class D Plan will
require approval by a majority of the Trustees of the Trust and of the Qualified
Trustees.
Except to the extent that SFM (as Manager and investment adviser) benefitted
through increased fees from an increase in the net assets of the Trust which may
have resulted in part from the expenditures, no interested person of the Trust
nor any Trustee of the Trust who is not an interested person of the Trust had a
direct or indirect financial interest in the operation of the Class D Plan
or related agreements.
Although banking laws and regulations prohibit banks from distributing shares of
open-end investment companies such as the Trust, according to an opinion issued
to the staff of the SEC by the Office of the Comptroller of the Currency,
financial institutions are not prohibited from acting in other capacities for
investment companies, such
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as providing shareholder services. Should future legislative, judicial or
administrative action prohibit or restrict the activities of financial
institutions in connection with providing shareholder services, the Trust may be
required to alter materially or discontinue its arrangements with such financial
institutions.
TRUSTEES AND OFFICERS OF THE TRUST
The Trustees and executive officers of the Trust and their principal occupations
for the last five years are set forth below. Each may have held other positions
with the named companies during that period. Unless otherwise noted, the
business address of each Trustee and executive officer is SEI Financial
Management Corporation, 680 East Swedesford Road, Wayne, Pennsylvania 19087-
1658. Certain trustees and officers of the Trust also serve as trustees and
officers of some or all of the following: SEI Liquid Asset Trust, SEI Daily
Income Trust, SEI Tax Exempt Trust, SEI Index Funds, SEI International Trust,
SEI Institutional Managed Trust, Stepstone Funds, The Compass Capital Group, FFB
Lexicon Funds, The Advisors' Inner Circle Fund, The Pillar Funds, CUFUND, STI
Classic Funds, CoreFunds, Inc., First American Funds, Inc., First American
Investment Funds, Inc., Rembrandt Funds(R), The Arbor Fund, 1784 Funds, The PBHG
Funds, Inc., Bishop Street Funds, Conestoga Family of Funds, Marquis/sm/ Funds,
Morgan Grenfell Investment Trust, The Achievement Funds Trust, CrestFunds, Inc.,
STI Classic Variable Trust, Inventor Funds, and Insurance Investment Products
Trust, open-end management investment companies which are managed by SFM and/or
distributed by SEI Financial Services Company.
ROBERT A. NESHER - Chairman of the Board of Trustees* - Retired since 1994.
Executive Vice President of SEI 1986-94. Director and Executive Vice President
of the Manager and Executive Vice President of the Distributor 1981-94.
RICHARD F. BLANCHARD - Trustee** - P.O. Box 76, Canfield Road, Convent Station,
NJ 07961. Private Investor. Director of AEA Investors Inc. (acquisition and
investment firm) June 1981-86, Director of Baker Hughes Corp. (oil service
company) 1976-88. Director of Imperial Clevite Industries (transportation
equipment company) 1981-87. Executive Vice President of American Express
Company (financial services company), responsible for the investment function,
before June 1981.
WILLIAM M. DORAN - Trustee* - 2000 One Logan Square, Philadelphia, PA 19103.
Partner of Morgan, Lewis & Bockius LLP, counsel to the Trust, Manager and
Distributor, Director and Secretary of SEI and Secretary of the Manager and
Distributor.
F. WENDELL GOOCH - Trustee** - P.O. Box 190, Paoli, IN 47454. President, Orange
County Publishing Co., Inc., since October 1981. Publisher of the Paoli News
and the Paoli Republican and Editor of the Paoli Republican since January 1981,
President, H & W Distribution, Inc. since July 1984. Executive Vice President,
Trust Department, Harris Trust and Savings Bank and Chairman of the Board of
Directors of The Harris Trust Company of Arizona before January 1981. Trustee
of STI Classic Funds.
FRANK E. MORRIS - Trustee - 105 Walpole Street, Dover, MA 02030. Retired since
1990. Peter Drucker Professor of Management, Boston College, since 1989.
President, Federal Reserve Bank of Boston, 1968-1988. Trustee of The Arbor
Fund, Marquis Funds, Advisors' Inner Circle Fund, Advisors' Inner Circle Fund
II, Inc. and FFB Lexicon Funds.
JAMES M. STOREY - Trustee** - Ten Post Office Square, Boston, MA 02109. Partner
of Dechert Price & Rhodes (law firm).
DAVID G. LEE - President, Chief Executive Officer - Senior Vice President of
the Distributor since 1993. Vice President of the Distributor since 1991.
President, GW Sierra Trust Funds prior to 1991.
S-20
<PAGE>
SANDRA K. ORLOW - Vice President, Assistant Secretary - Vice President and
Assistant Secretary of the Manager and Distributor since 1988. Corporate Legal
Assistant, Omni Exploration (oil and gas investment) prior to 1983.
ROBERT B. CARROLL - Vice President, Assistant Secretary - Vice President and
Assistant Secretary of the SEI, the Manager and Distributor since 1994. United
States Securities and Exchange Commission, Division of Investment Management,
1990-94. Associate, McGuire, Woods, Battle & Boothe (law firm), prior to 1990.
KATHRYN L. STANTON - Vice President, Assistant Secretary - Vice President and
Assistant Secretary of SEI Corporation, the Manager and Distributor since 1994.
Associate, Morgan, Lewis & Bockius LLP (law firm), 1989-94.
KEVIN P. ROBINS - Vice President, Assistant Secretary - Senior Vice President
and General Counsel of SEI and the Distributor since 1994. Vice President and
Assistant Secretary of the Manager and Distributor 1992-94. Associate, Morgan,
Lewis & Bockius LLP (law firm) prior to 1992.
JEFFREY A. COHEN - Controller, Assistant Secretary - Director of Funds
Accounting of SEI since 1991. Senior Accountant of Price Waterhouse 1988-1991.
RICHARD W. GRANT - Secretary - 2000 One Logan Square, Philadelphia, PA 19103,
Partner, Morgan, Lewis & Bockius LLP, counsel to the Trust, Manager and
Distributor since 19____.
JOHN H. GRADY, JR. - Assistant Secretary - 1800 M Street, N.W., Washington, D.C.
20036, Partner (since 1995) and Associate (1993-1995), Morgan, Lewis & Bockius
LLP, counsel to the Trust, Manager and Distributor. Associate, Ropes & Gray
(law firm), 1988 to 1993.
==============
*Messrs. Nesher and Doran are Trustees who may be deemed to be "interested
persons" of the Trust as the term is defined in the 1940 Act.
**Messrs. Blanchard, Gooch, Morris and Storey serve as members of the Audit
Committee of the Trust.
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust. The Trust pays the fees for unaffiliated Trustees.
Compensation of officers and affiliated Trustees of the Trust is paid by the
Manager.
PERFORMANCE
From time to time, each Fund may advertise yield and/or total return. These
figures will be based on historical earnings and are not intended to indicate
future performance.
The yield of a Fund refers to the annualized income generated by an investment
in the Fund over a specified 30-day period. The yield is calculated by assuming
that the income generated by the investment during that period generated each
period over one year and is shown as a percentage of the investment. In
particular, yield will be calculated according to the following formula: Yield =
2[((a-b)/cd) + 1)/6/-1], where a = dividends and interest
S-21
<PAGE>
earned during the period; b = expenses accrued for the period (net of
reimbursement); c = the current daily number of shares outstanding during the
period that were entitled to receive dividends; and d = the maximum offering
price per share on the last day of the period.
PURCHASE AND REDEMPTION OF SHARES
The purchase and redemption price of shares is the net asset value of each
share. The net asset value of each fund is determined by SFM and is based upon
the proportional net asset values of each Fund's Underlying Portfolio shares
(plus any available cash). Each Underlying Portfolio's securities are valued by
SFM pursuant to valuations provided by an independent pricing service (generally
the last quoted sale price). Underlying Portfolio securities listed on a
securities exchange for which market quotations are available are valued at the
last quoted sale price on each Business Day (defined as days on which the New
York Stock Exchange is open for business ("Business Day")) or, if there is no
such reported sale, at the most recently quoted bid price. Unlisted securities
for which market quotations are readily available are valued at the most
recently quoted bid price. The pricing service may also use a matrix system to
determine valuations. This system considers such factors as security prices,
yields, maturities, call features, ratings and developments relating to specific
securities in arriving at valuations. The procedures of the pricing service and
its valuations are reviewed by the officers of the Trust under the general
supervision of the Trustees.
It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in kind of readily marketable securities held
by an Underlying Portfolio in lieu of cash. Shareholders may incur brokerage
charges on the sale of any such securities so received in payment of
redemptions. However, a shareholder will at all times be entitled to aggregate
cash redemptions from all Underlying Portfolios of the Trust during any 90-day
period of up to the lesser of $250,000 or 1% of the Trust's net assets.
A gain or loss for federal income tax purposes may be realized by a taxable
shareholder upon an in-kind redemption depending upon the shareholder's basis in
the shares of the Trust redeemed.
Purchases and redemptions of shares of the Funds may be made on any day the New
York Stock Exchange is open for business. Currently, the following holidays are
observed by the Trust: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period during which trading
on the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or evaluation of the portfolio securities is not reasonably
practicable, or for such other periods as the SEC may by order permit. The
Trust also reserves the right to suspend sales of shares of the Portfolios for
any period during which the New York Stock Exchange, the Manager, the
Distributor, the and/or the Custodian are not open for business.
SHAREHOLDER SERVICES
Distribution Investment Option: Distributions of dividends and capital gains
made by the Funds may be automatically invested in shares of one of the Funds if
shares of the Fund are available for sale. Such investments will be subject to
initial investment minimums, as well as additional purchase minimums. A
shareholder considering the Distribution Investment Option should obtain and
read the prospectus of the Underlying Portfolios and consider the differences in
objectives and policies before making any investment.
S-22
<PAGE>
Reinstatement Privilege: A shareholder who has redeemed shares of any of the
Funds has a one-time right to reinvest the redemption proceeds in shares of the
Fund at their net asset value as of the time of reinvestment. Such a
reinvestment must be made within 30 days of the redemption and is limited to the
amount of the redemption proceeds. Although redemptions and repurchases of
shares are taxable events, a reinvestment within such 30-day period in the same
fund is considered a "wash sale" and results in the inability to recognize
currently all or a portion of a loss realized on the original redemption for
federal income tax purposes. The investor must notify the Transfer Agent at the
time the trade is placed that the transaction is a reinvestment.
Exchange Privilege: Some or all of the shares of a Fund's Class D Shares
for which payment has been received (i.e., an established account), may be
----
exchanged for Class D Shares of other Funds of the Trust. A shareholder may
exchange the shares of each Fund's Class D Shares, for which good payment has
been received, in his or her account at any time, regardless of how long he or
she has held his or her shares. Exchanges are made at net asset value. The Trust
reserves the right to change the terms and conditions of the exchange privilege
discussed herein, or to terminate the exchange privilege, upon sixty days'
notice. Exchanges will be made only after proper instructions in writing or by
telephone (an "Exchange Request") are received for an established account by the
Distributor.
Each Exchange Request must be in proper form (i.e., if in writing, signed by the
----
record owner(s) exactly as the shares are registered; if by telephone-proper
account identification is given by the dealer or shareholder of record), and
each exchange must involve either shares having an aggregate value of at least
$1,000 or all the shares in the account. Each exchange involves the redemption
of the shares of a Fund (the "Old Fund") to be exchanged and the purchase at net
asset value of the shares of the other Funds (the "New Funds"). Any gain or loss
on the redemption of the shares exchanged is reportable on the shareholder's
federal income tax return, unless such shares were held in a tax-deferred
retirement plan or other tax-exempt account. If the Exchange Request is received
by the Distributor in writing or by telephone on any business day prior to the
redemption cut-off time specified in the Prospectus, the exchange usually will
occur on that day if all the restrictions set forth above have been complied
with at that time. However, payment of the redemption proceeds by the Old Funds,
and thus the purchase of shares of the New Funds, may be delayed for up to seven
days if the Fund determines that such delay would be in the best interest of all
of its shareholders. Investment dealers which have satisfied criteria
established by the Funds may also communicate a Shareholder's Exchange Request
to the Funds subject to the restrictions set forth above. No more than five
exchange requests may be made in any one telephone Exchange Request.
TAXES
S-23
<PAGE>
The following is only a summary of certain additional federal tax considerations
generally affecting the Funds and their shareholders that are not described in
the Funds' prospectus. No attempt is made to present a detailed explanation of
the federal, state or local tax treatment of the Funds or their shareholders and
the discussion here and in the Funds' prospectus is not intended as a substitute
for careful tax planning.
This discussion of federal income tax consequences is based on the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations issued
thereunder, in effect on the date of this Statement of Additional Information.
New legislation, as well as administrative changes or court decisions, may
significantly change the conclusions expressed herein, and may have a
retroactive effect with respect to the transactions contemplated herein.
Each Fund is treated as a separate entity for federal income tax purposes and is
not combined with the Trust's other Funds. Each Fund intends to qualify as a
regulated investment company ("RIC") under Subchapter M of the Code so that it
will be relieved of federal income tax on that part of its income that is
distributed to shareholders. In order to qualify for treatment as a RIC, a Fund
must distribute annually to its shareholders at least 90% of its investment
company taxable income (generally, net investment income plus the excess, if
any, of net short-term capital gain over net long-term capital losses)
("Distribution Requirement") and also must meet several additional requirements.
Among these requirements are the following (i) at least 90% of a Fund's gross
income each taxable year must be derived from dividends, interest, payments with
respect to securities loans, and gains from the sale or other disposition of
stock or securities, or other income derived with respect to its business of
investing in such stock or securities; (ii) less than 30% of a Fund's gross
income each taxable year must be derived from the sale or other disposition of
stocks, securities or certain other investments held for less than three months;
(iii) at the close of each quarter of a Fund's taxable year, at least 50% of the
value of its total assets must be represented by cash and cash items, U.S.
government securities, securities of other RICs and other securities, with such
other securities limited, in respect of any one issuer, to an amount that does
not exceed 5% of the value of a Fund's assets and that does not represent more
than 10% of the outstanding voting securities of such issuer; and (iv) at the
close of each quarter of a Fund's taxable year, not more than 25% of the value
of its assets may be invested in securities (other than U.S. Government
securities or the securities of other RICs) of any one issuer or of two or more
issuers which are engaged in the same, similar, or related trades or businesses,
if the Fund owns at least 20% of the voting power of such issuers.
Notwithstanding the Distribution Requirement described above, which only
requires a Fund to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital
gain, a Fund will be subject to a nondeductible 4% federal excise tax to the
extent it fails to distribute by the end of any calendar year at least 98% of
its ordinary income for that year and 98% of its capital gain net income (the
excess of short- and long-term capital gain over short- and long-term capital
loss) for the one-year period ending on October 31 of that year, plus certain
other amounts. Each Fund intends to make sufficient distributions to avoid
liability for the federal excise tax. A Fund may in certain circumstances be
required to liquidate portfolio investments in order to make sufficient
distributions to avoid federal excise tax liability when the investment advisor
might not otherwise have chosen to do so, and liquidation of investments in such
circumstances may affect the ability of a Fund to satisfy the requirements for
qualification as a RIC.
If capital gain distributions have been made with respect to shares that are
sold at a loss after being held for six months or less, then the loss is treated
as a long-term capital loss to the extent of the capital gain distributions.
If a Fund fails to qualify as a RIC for any year, all of its income will be
subject to tax at corporate rates, and its distributions (including capital gain
distributions) generally will be taxable as ordinary income dividends to its
shareholders, subject to the dividends received deduction for corporate
shareholders who have held shares for more than 45 days.
S-24
<PAGE>
A Fund will be required in certain cases to withhold and remit to the United
States Treasury 31% of amounts payable to any shareholder who (1) has provided
the Fund either an incorrect tax identification number or no number at all, (2)
who is subject to backup withholding by the Internal Revenue Service for failure
to properly report payments of interest or dividends, or (3) who has failed to
certify to the Fund that such shareholder is not subject to backup withholding.
State Taxes
A Fund is not liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Distributions by the Fund to
shareholders and the ownership of shares may be subject to state and local
taxes. Shareholders should consult their own tax advisers regarding the effect
of federal, state and local taxes in their own individual circumstances.
PORTFOLIO TRANSACTIONS
The Trust has no obligation to deal with any dealer or group of dealers in the
execution of transactions in portfolio securities. Subject to policies
established by the Trustees, the advisers and sub-advisers are responsible for
placing orders to execute Fund transactions. In placing orders, it is the
Trust's policy to seek to obtain the best net results taking into account such
factors as price (including the applicable dealer spread), size, type and
difficulty of the transaction involved, the firm's general execution and
operational facilities, and the firm's risk in positioning the securities
involved. While the advisers generally seek reasonably competitive spreads or
commissions, the Trust will not necessarily be paying the lowest spread or
commission available. The Trust will not purchase portfolio securities from any
affiliated person acting as principal except in conformity with the regulations
of the SEC.
It is expected that the Funds may execute brokerage or other agency transactions
through the Distributor, a registered broker-dealer, for a commission, in
conformity with the 1940 Act, the Securities Exchange Act of 1934, as amended,
and rules and regulations of the SEC. Under these provisions, the Distributor
is permitted to receive and retain compensation for effecting portfolio
transactions for a Fund on an exchange if a written contract is in effect
between the Distributor and the Trust expressly permitting the Distributor to
receive and retain such compensation. These provisions further require that
commissions paid to the Distributor by the Trust for exchange transactions not
exceed "usual and customary" brokerage commissions. The rules define "usual and
customary" commissions to include amounts which are "reasonable and fair
compared to the commission, fee or other remuneration received or to be received
by other brokers in connection with comparable transactions involving similar
securities being purchased or sold on a securities exchange during a comparable
period of time." In addition, the Fund may direct commission business to one or
more designated broker-dealers, including the Distributor, in connection with
such broker-dealer's payment of certain of the Fund's expenses. The Trustees,
including those who are not "interested persons" of the Trust, have adopted
procedures for evaluating the reasonableness of commissions paid to the
Distributor and will review these procedures periodically.
Since the Trust does not market its shares through intermediary brokers or
dealers, it is not the Trust's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, the Underlying Portfolio's advisers or sub-advisers may place
portfolio orders with qualified broker-dealers who recommend the Trust to
clients, and may, when a number of brokers and dealers can provide best price
and execution on a particular transaction, consider such recommendations by a
broker or dealer in selecting among broker-dealers.
The Trust does not expect to use one particular dealer, but the Underlying
Portfolio's advisers or sub-advisers may, consistent with the interests of the
Underlying Portfolios, select brokers on the basis of the research services they
provide to the Portfolio's advisers and sub-advisers. Such services may include
analysis of the business or prospects of a company, industry or economic sector
or statistical and pricing services. Information so received by the advisers or
sub-advisers will be in addition to and not in lieu of the services required to
be performed by
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<PAGE>
an Underlying Portfolio's advisers or sub-advisers under the advisory and sub-
advisory agreements. If in the judgment of an Underlying Portfolio's advisers,
the Underlying Portfolio, or other accounts managed by the Underlying
Portfolio's advisers or sub-advisers, will be benefitted by supplemental
research services, the Underlying Portfolio's advisers or sub-advisers are
authorized to pay brokerage commissions to a broker furnishing such services
that are in excess of commissions which another broker may have charged for
effecting the same transaction. The expenses of an Underlying Portfolio's
advisers or sub-advisers will not necessarily be reduced as a result of the
receipt of such supplemental information.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of each Fund, each of which represents an equal proportionate interest in
that Fund. Each share upon liquidation entitles a shareholder to a pro rata
share in the net assets of that Fund, after taking into account the additional
distribution second transfer agency expenses attributable to Class D Shares.
Shareholders have no preemptive rights. The Declaration of Trust provides that
the Trustees of the Trust may create additional series of shares or separate
classes of portfolios. Share certificates representing the shares will not be
issued.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for his or
her own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or administrators, shall not be liable
for any neglect or wrongdoing of any such person. The Declaration of Trust also
provides that the Trust will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with actual or threatened
litigation in which they may be involved because of their offices with the Trust
unless it is determined in the manner provided in the Declaration of Trust that
they have not acted in good faith in the reasonable belief that their actions
were in the best interests of the Trust. However, nothing in the Declaration of
Trust shall protect or indemnify a Trustee against any liability for his or her
willful misfeasance, bad faith, gross negligence or reckless disregard of his or
her duties.
VOTING
Where the Trust's Prospectuses or Statement of Additional Information state that
an investment limitation or a fundamental policy may not be changed without
shareholder approval, such approval means the vote of (i) 67% or more of the
affected Portfolio's shares present at a meeting if the holders of more than 50%
of the outstanding shares of the Portfolio are present or represented by Proxy,
or (ii) more than 50% of the affected Portfolio's outstanding shares, whichever
is less.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust could, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. Even if, however, the Trust were held to be a partnership, the
possibility of the shareholders incurring financial loss for that reason appears
remote because the Trust's Declaration of Trust contains an express disclaimer
of shareholder liability for obligations of the Trust and requires that notice
of such disclaimer be given in each agreement, obligation or instrument entered
into or executed by or on behalf of the Trust or the Trustees, and because, the
Declaration of Trust provides for indemnification out of the Trust property for
any shareholders held personally liable for the obligations of the Trust.
S-26
<PAGE>
PART C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements
Not applicable.
(b) Additional Exhibits
1 Agreement and Declaration of Trust of the Registrant, dated
October 20, 1995, filed herewith
2 By-Laws of the Registrant, filed herewith.
*5 Form of Investment Advisory Agreement between the Registrant
and SEI Financial Management Corporation.
*6 Form of Distribution Agreement between the Registrant and SEI
Financial Services Company.
*8 Form of Custodian Agreement between the Registrant and
CoreStates Bank, N.A.
*9(a) Form of Administration Agreement between the Registrant and
SEI Financial Management Corporation.
*9(b) Form of Transfer Agent Agreement between the Registrant and
SEI Financial Management Corporation.
*10 Opinion and Consent of Counsel.
*11 Opinion and Consent of Independent Public Accountants
*15 Form of 12b-1 Plan.
*16 Performance Calculations.
*18 18f-3 Plan.
24 Powers of Attorney, filed herewith.
* To be filed by amendment
Item 25. Persons Controlled by or under Common Control with Registrant:
See the Prospectus and the Statement of Additional Information regarding
the Registrant's control relationships. The Administrator is a subsidiary of SEI
Corporation, which also controls the distributor of the Registrant, SEI
Financial Services Company, other corporations engaged in providing various
financial and record keeping services, primarily to bank trust departments,
pension plan sponsors, and investment managers.
Item 26. Number of Holders of Securities: None
Item 27. Indemnification:
C-1
<PAGE>
Article VIII of the Agreement of Declaration of Trust filed as Exhibit 1 to
the Registration Statement is incorporated by reference. Insofar as
indemnification for liability arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the Declaration of Trust or otherwise, the Registrant is aware that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Act and, therefore, is
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by trustees, directors, officers or controlling persons of the Registrant
in connection with the successful defense of any act, suit or proceeding) is
asserted by such trustees, directors, officers or controlling persons in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issues.
Item 28. Business and Other Connections of Investment Adviser:
ADVISER
- -------
SEI Financial Management Company ("SFM") is the investment adviser for the
Trust. The principal address of SFM is 680 East Swedesford Road, Wayne,
Pennsylvania 19087-1658. SFM is an investment adviser registered under the
Advisers Act.
The list required by this Item 28 of officers and directors of SFM, together
with information as to any other business profession, vocation or employment of
substantial nature engaged in by such officers and directors during the past two
years is incorporated by reference to Schedules A and D of Form ADV filed by SFM
to the Advisers Act (SEC File No. 801-24593).
Item 29. Principal Underwriters:
(a) Furnish the name of each investment company (other than the Registrant) for
which each principal underwriter currently distributing the securities of
the Registrant also acts as a principal underwriter, distributor or
investment adviser.
Registrant's distributor, SEI Financial Services Company ("SFS"), acts as
distributor for:
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 30, 1988
Stepstone Funds January 30, 1991
The Compass Capital Group March 8, 1991
FFB Lexicon Funds October 18, 1991
C-2
<PAGE>
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
1784 Funds June 1, 1993
The PBHG Funds, Inc. July 16, 1993
Marquis/SM/ Funds August 17, 1993
Morgan Grenfell Investment Trust January 3, 1994
Inventor Funds, Inc. August 1, 1994
The Achievement Funds Trust December 27, 1994
Insurance Investment Products Trust December 30, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
Conestoga Family of Funds May 1, 1995
STI Variable Classic Trust August 18, 1995
SFS provides numerous financial services to investment managers, pension
plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement and consulting services
("Funds Evaluation") and automated execution, clearing and settlement of
securities transactions ("MarketLink").
(b) Furnish the Information required by the following table with respect to
each director, officer or partner of each principal underwriter named in
the answer to Item 21 of Part B. Unless otherwise noted, the business
address of each director or officer is 680 East Swedesford Road, Wayne,
Pennsylvania 19087-1658.
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief --
Executive Officer
Henry H. Greer Director, President & Chief --
Operating Officer
Carmen V. Romeo Director, Executive Vice Treasurer
President & Treasurer
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President --
Charles A. Marsh Executive Vice --
President-Capital Resources
Division
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Jerome Hickey Senior Vice President --
David G. Lee Senior Vice President President & Chief
Executive Officer
William Madden Senior Vice President --
A. Keith McDowell Senior Vice President --
Dennis J. McGonigle Senior Vice President --
</TABLE>
C-3
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------------
<S> <C> <C>
Hartland J. McKeown Senior Vice President --
James V. Morris Senior Vice President --
Steven Onofrio Senior Vice President --
Kevin P. Robins Senior Vice President, Vice President &
General Counsel & Assistant Secretary
Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Kenneth Zimmer Senior Vice President --
Robert Crudup Managing Director --
Vic Galef Managing Director --
Kim Kirk Managing Director --
John Krzeminski Managing Director --
Carolyn McLaurin Managing Director --
Barbara Moore Managing Director --
Donald Pepin Managing Director --
Mark Samuels Managing Director --
Wayne M. Withrow Managing Director --
Mick Duncan Team Leader --
Robert Ludwig Team Leader --
Vicki Malloy Team Leader --
Robert Aller Vice President --
C. Tony Baker Vice President --
Steve Bendinelli Vice President --
Cris Brookmyer Vice President & Controller --
Gordon W. Carpenter Vice President --
Robert B. Carroll Vice President & Assistant Vice President &
Secretary Assistant Secretary
Todd B. Cipperman Vice President & Assistant
Secretary
Ed Daly Vice President --
Jeff Drennen Vice President --
Lucinda Duncalfe Vice President --
Kathy Heilig Vice President --
Larry Hutchison Vice President --
Michael Kantor Vice President --
Samuel King Vice President --
Donald H. Korytowski Vice President --
Robert S. Ludwig Vice President --
Jack May Vice President --
Sandra K. Orlow Vice President & Assistant Vice President &
Secretary Assistant Secretary
Larry Pokora Vice President --
Kim Rainey Vice President --
Paul Sachs Vice President --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Vice President &
Secretary Assistant Secretary
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------------
<S> <C> <C>
William Zawaski Vice President --
James Dougherty Director of Brokerage --
Services
</TABLE>
Item 30. Location of Accounts and Records:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3); (6);
(8); (12); and 31a-1(d), the required books and records will be maintained
at the offices of Registrant's Custodian:
CoreStates Bank, N.A.
Broad & Chestnut Streets
P.O. Box 7618
Philadelphia, Pennsylvania 19101
(b)/(c) With respect to Rules 31a-1(a); 31a-1(b)(1),(4); (2)(C) and (D);
(4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required books and
records are maintained at the offices of Registrant's Administrator:
SEI Financial Management Corporation
680 East Swedesford Road
Wayne, Pennsylvania 19087-1658
(c) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and 31a-1(f), the
required books and records are maintained at the principal offices of the
Registrant's Adviser:
SEI Financial Management Corporation
680 East Swedesford Road
Wayne, Pennsylvania 19087-1658
Item 31. Management Services: None.
Item 32. Undertakings:
C-5
<PAGE>
Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940 inform the
Board of Directors of their desire to communicate with Shareholders of the
Corporation, the Directors will inform such Shareholders as to the approximate
number of Shareholders of record and the approximate costs of mailing or afford
said Shareholders access to a list of Shareholders.
Registrant hereby undertakes to call a meeting of Shareholders for the
purpose of voting upon the question of removal of a Director(s) when requested
in writing to do so by the holders of at least 10% of Registrant's outstanding
shares and in connection with such meetings to comply with the provisions of
Section 16(c) of the Investment Company Act of 1940.
Registrant hereby undertakes to file a post-effective amendment, including
financial statements which need not be audited, within 4-6 months from the
effective date of the Registrant's 1933 Act Registration Statement.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Wayne, Commonwealth of Pennsylvania on the 5th
day of December, 1995.
SEI ASSET ALLOCATION TRUST
By: *
--------------------------
David G. Lee
President
ATTEST:
/s/ Jeffrey A. Cohen
- -------------------------------------
Jeffrey A. Cohen
Controller and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacity on the
dates indicated.
* Trustee December 5, 1995
- -------------------------------
Richard F. Blanchard
Trustee December 5, 1995
- -------------------------------
William M. Doran
* Trustee December 5, 1995
- -------------------------------
F. Wendell Gooch
* Trustee December 5, 1995
- -------------------------------
Frank E. Morris
* Trustee December 5, 1995
- -------------------------------
James M. Storey
* Trustee December 5, 1995
- -------------------------------
Robert A. Nesher
/s/ Jeffrey A. Cohen Controller and Chief December 5, 1995
- ------------------------------- Financial Officer
Jeffrey A. Cohen
* By: /s/ Robert. B. Carroll
----------------------
Robert B. Carroll
Attorney-in-Fact
C-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Name Exhibit
- ---- -------
<S> <C>
Agreement and Declaration of Trust of the EX-99.B1
Registrant, dated October 20, 1995,
filed herewith.
By-Laws of the Registrant, filed herewith. EX-99.B2
Powers of Attorney, filed herewith. EX-99.B24
</TABLE>
C-8
<PAGE>
Exhibit 99.B.1
AGREEMENT AND DECLARATION OF TRUST
SEI ASSET ALLOCATION TRUST
AGREEMENT AND DECLARATION OF TRUST dated as of the 20th day of October, 1995, by
Robert B. Carroll, the Trustee hereunder, and by the holders of Shares of
beneficial interest to be issued hereunder as hereinafter provided.
WHEREAS, this Trust has been formed to carry on the business of an investment
company; and
WHEREAS, the Trustee and any successor Trustees elected in accordance with
Article IV hereof have agreed to manage all property coming into their hands as
trustees of a Massachusetts voluntary association with transferable Shares in
accordance with the provisions hereinafter set forth.
NOW, THEREFORE, the Trustee and any successor Trustees elected in accordance
with Article IV hereof hereby declare that they will hold all cash, securities
and other assets, which they may from time to time acquire in any manner as
Trustees hereunder IN TRUST to manage and dispose of the same for the pro rata
benefit of the holders from time to time of Shares in this Trust issued
hereunder on the terms and conditions hereinafter set forth.
ARTICLE I
NAME, PRINCIPAL PLACE OF BUSINESS AND RESIDENT AGENT, AND DEFINITIONS
NAME
- ----
Section 1. This Trust shall be known as the SEI Asset Allocation Trust, and the
- ---------
Trustees shall conduct the business of the Trust under that name or any other
name as they may from time to time determine.
PRINCIPAL PLACE OF BUSINESS AND RESIDENT AGENT
- ----------------------------------------------
Section 2. The principal place of business of the Trust is 680 East Swedesford
- ---------
Road, Wayne, PA 19087. The name of the Trust's resident agent in the
Commonwealth of Massachusetts is CT Corporation System at 2 Oliver Street,
Boston, Massachusetts 02109.
DEFINITIONS
- -----------
Section 3. Whenever used herein, unless otherwise required by the context or
- ---------
specifically provided:
(a) The "Trust" refers to the SEI Asset Allocation Trust, the Trust
created hereby.
(b) "Trustee" or "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV hereof and then in
office.
(c) "Shares" refers to units of beneficial interest in the assets of
the Trust, when used in relation to any particular series
established by the Trustees hereunder refers to units of
beneficial interest in the assets specifically allocated to that
series, and includes fractional as well as whole Shares.
(d) "Shareholder" means a record owner of Shares.
<PAGE>
(e) "Affiliated Person," "Assignment," "Commission," "Interested
Person," and "Principal Underwriter" shall have the meanings given
them in the 1940 Act.
(f) "Majority Shareholder Vote" shall have the same meaning as "vote
of a majority of the outstanding voting securities" as that phrase
is defined in the 1940 Act, except that such term may be used
herein with respect to the Shares of the Trust as a whole or the
Shares of a particular series, as the context may require.
(g) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust, as amended or restated from time to time, provided that
reference made in this Agreement and Declaration of Trust to
"hereby," "hereof," "herein," "hereunder" or similar terms shall
be deemed to refer to this Declaration of Trust rather than the
Article or Section in which such words appear, unless the context
otherwise requires.
(h) "By-Laws" shall mean the By-Laws of the Trust referred to in
Article IV, Section 4 hereof, as amended from time to time.
(i) The "1940 Act" refers to the Investment Company Act of 1940 and
the rules and regulations thereunder, all as amended from time to
time.
(j) "Disinterested Trustees" shall mean Trustees who are not
"interested persons" as such term is defined in the 1940 Act
(including any Trustee who has been exempted from being an
"interested person" by any rule, regulation or order of the
Commission). In limitation of the foregoing, however, as used in
Article VIII hereof, a "Disinterested Trustee" shall mean a
Disinterested Trustee against whom, at the time of the votes to be
taken pursuant to said Article VIII, none of the actions, suits or
other proceedings referred to in such Article VIII, nor any other
action, suit or other proceeding on the same or similar grounds,
is or has been pending.
ARTICLE II
PURPOSE
The purpose of the Trust is to provide investors with one or more
investment portfolio(s) consisting primarily of securities, including debt
instruments or obligations.
ARTICLE III
SHARES
DIVISION OF BENEFICIAL INTEREST
- -------------------------------
Section 1. The Trustees may divide the beneficial interest in the Trust
---------
into an unlimited number of Shares and authorize the issuance of Shares without
prior Shareholder approval. Shares may be issued in series and, if so, Shares of
any series will constitute units of beneficial interest in assets of the Trust
specifically allocated to such series. Shares of the Trust, or any series
thereof, shall have no par value, shall represent equal and proportionate
interests in the Trust, or such series, with none having priority or preference
over any other except as specifically set forth in this Article III, and shall
be transferable. All Shares issued hereunder, including
2
<PAGE>
any Shares issued in payment of dividends or other distributions or in
connection with any split of Shares, shall be fully paid and non-assessable.
Shares of the Trust or of any series may be issued in two or more classes, as
the Trustees may, without Shareholder approval, authorize, and Shares of any
class shall be identical to those of any other class of the Trust or such series
except that, if the Trustees have authorized the issuance of Shares of any
particular series in two or more classes, then such classes may, consistent with
the 1940 Act, or pursuant to any exemptive order issued by the Commission and
other applicable law, have such variations as to dividends, redemption charges,
conversion, voting rights, net asset value, expenses borne by the class, and
other matters as the Trustees shall have determined. The Trustees may from time
to time, without Shareholder approval, divide or combine the Shares of a series
into a greater or lesser number without thereby changing their proportionate
beneficial interests in assets allocated to such series.
OWNERSHIP OF SHARES
- -------------------
Section 2. The ownership of Shares shall be recorded on the books of the
---------
Trust or its transfer or similar agent. No certificates certifying the ownership
of Shares shall be issued except as the Trustees may otherwise determine from
time to time. The Trustees may make such rules as they consider appropriate for
the issuance of Share certificates, the transfer of Shares and similar matters.
The record books of the Trust as kept by the Trust or any transfer or similar
agent of the Trust, as the case may be, shall be conclusive as to who are the
Shareholders of each series or class and as to the number of Shares of each
series or class held from time to time by each Shareholder.
INVESTMENTS IN THE TRUST; ASSETS OF THE SERIES
- -----------------------------------------------
Section 3. The Trustees may accept investments in the Trust from such
---------
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they may from time to time authorize.
All consideration received by the Trust for the issue or sale of Shares
of each series, together with all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
thereof, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong to the
series of Shares with respect to which the same were received by the Trust for
all purposes, subject only to the rights of creditors, and shall be so recorded
upon the books of account of the Trust and are herein referred to as "assets of"
such series. In addition, any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as belonging to
any particular series shall be allocated by the Trustees between and among one
or more of the series in such manner as they, in their sole discretion, deem
fair and equitable. Each such allocation to any series shall be conclusive and
binding upon the Shareholders of all series for all purposes, and shall be
referred to as assets belonging to that series. No holder of Shares of any
particular series shall have any claim on or right to any assets allocated or
belonging to any other series.
ESTABLISHMENT OF CLASS OR SERIES
- --------------------------------
Section 4. The establishment and designation of any class or series
---------
of Shares shall be effective upon the adoption of a resolution by a majority of
the Trustees (or of a committee thereof) setting forth such establishment and
designation and the relative rights and preferences of the Shares of such class
or series. Such establishment and designation shall not constitute an amendment
to this Declaration of Trust, although the Trustees may, at
3
<PAGE>
their option, set forth such establishment and designation in a written
instrument signed by them or by an officer of the Trust. The Trustees (or a
committee thereof) may by majority vote amend such establishment and
designation. At any time, if no Shares are outstanding of a particular class or
series previously so established and designated, the Trustees (or a committee
thereof) may by majority vote abolish such class or series and said
establishment and designation thereof.
NO PREEMPTIVE RIGHTS
- --------------------
Section 5. Shareholders shall have no preemptive or other right to
---------
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust, except as otherwise provided herein or as the Trustees in
their sole discretion shall have determined by resolution.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
- -----------------------------------------------------
Section 6. Shares shall be deemed to be personal property giving only
---------
the rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms of this Declaration of Trust and to have become a party hereto. The death
of a Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased Shareholder to
an accounting or to take any action in court or elsewhere against the Trust or
the Trustees, but only to the rights of said decedent under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholder, nor, except as specifically provided herein, to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
- -------------------------------------
Section 7. Any Trustee, officer or other agent of the Trust may acquire,
---------
own and dispose of Shares of the Trust to the same extent as if he or she were
not a Trustee, officer or agent; and the Trustees may issue and sell or cause to
be issued and sold Shares to and buy such Shares from any such person of any
firm or company in which he is interested, subject only to the general
limitations herein contained as to the sale and purchase of such Shares; and all
subject to any restrictions which may be contained in the By-Laws.
ARTICLE IV
THE TRUSTEES
QUALIFICATION; NUMBER OF TRUSTEES; ELECTION
- -------------------------------------------
Section 1. Each Trustee shall be a natural person and may, but need not,
---------
be a Shareholder. A Trustee may be elected either by the Trustees or the
Shareholders subject to the limitations of the 1940 Act. Each Trustee shall hold
office during the lifetime of this Trust until the election and qualification of
his or her successor, or until he or she sooner dies, resigns or is removed. The
initial Trustee shall be Robert B. Carroll. The number of Trustees shall be
fixed from time to time by a vote of a majority of the Trustees then in office,
except that, commencing with the first Shareholders' meeting at which Trustees
are elected, there shall be not fewer than three
4
<PAGE>
nor more than fifteen Trustees. The number of Trustees so fixed may be increased
either by the Shareholders or by the Trustees by a vote of a majority of the
Trustees then in office. The number of Trustees so fixed may be decreased either
by the Shareholders or by the Trustees by vote of a majority of the Trustees
then in office, but only to eliminate vacancies existing by reason of the death,
resignation or removal of one or more Trustees.
In case of the declination, death, resignation, retirement, removal,
incapacity, or inability of any of the Trustees, or in case a vacancy shall
exist by reason of an increase in number, or for any other reason, the remaining
Trustees shall fill such vacancy by appointing such other person as they in
their discretion shall see fit consistent with the 1940 Act. Until any such
vacancy is filled as provided in this Section 1, the Trustees then in office
shall, regardless of their number, have all powers granted to and discharge all
duties imposed on the Trustees hereby. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office, even though
less than a quorum, or by recording in the records of the Trust, and shall take
effect upon such signing or recording and the acceptance of such appointment by
the Trustee so appointed. An appointment of a Trustee may be made by the
Trustees then in office in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees.
REMOVAL AND RESIGNATION
- -----------------------
Section 2. By vote of the Shareholders holding a majority of the shares
---------
entitled to vote, the Shareholders may remove a Trustee with or without cause.
By vote of a majority of the Trustees then in office, the Trustees may remove a
Trustee with or without cause. Any Trustee may resign at any time by written
instrument signed by him or her and delivered to any officer of the Trust, to
each other Trustee or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time.
Except to the extent expressly provided in a written agreement with the Trust,
no Trustee resigning and no Trustee removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
- -----------------------------------------------
Section 3. The death, declination, resignation, retirement, removal,
---------
or incapacity of the Trustees, or any one of them, shall not operate to annul
the Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
POWERS
- ------
Section 4. Subject to the provisions of this Declaration of Trust, the
---------
Trustees shall manage the business of the Trust as an investment company, and
they shall have all powers necessary or convenient to carry out that
responsibility. Without limiting the foregoing, the Trustees may adopt By-Laws
not inconsistent with this Declaration of Trust providing for the conduct of the
business of the Trust and may amend and repeal them to the extent that such By-
Laws do not reserve that right to the Shareholders; they may fill vacancies in
their number, including vacancies resulting from increases in their number, and
may elect and remove such officers and appoint and terminate such agents as they
consider appropriate; they may appoint from their own number, and terminate, any
one or more committees consisting of two or more Trustees, including an
executive committee which may, when the Trustees are not in session, exercise
some or all of the powers and authority of the Trustees as the
5
<PAGE>
Trustees may determine; they may appoint an advisory board, the members of which
shall not be Trustees and need not be Shareholders; they may employ one or more
investment advisers or administrators as provided in Section 9 of this Article
IV; they may employ one or more custodians of the assets of the trust and may
authorize such custodians to employ subcustodians and to deposit all or any part
of such assets in a system or systems for the central handling of securities,
retain a transfer agent or a Shareholder servicing agent, or both, provide for
the distribution of Shares by the Trust, through one or more principal
underwriters or otherwise, set record dates for the determination of
Shareholders with respect to various matters, and in general delegate such
authority as they consider desirable to any officer of the Trust, to any
committee of the Trustees and to any agent or employee of the Trust or to any
such custodian or underwriter; and they may elect and remove such officers and
appoint and terminate such agents as they consider appropriate.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute
and deliver proxies or powers of attorney to such person or persons
as the Trustees shall deem proper, granting to such person or
persons such power and discretion with relation to securities or
property as the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or
in the name of the Trustees or of the Trust or in the name of a
custodian, subcustodian or other depositary or a nominee or
nominees or otherwise;
(f) To establish separate and distinct series of shares with separately
defined investment objectives, policies and purposes, and with
separately defined relative powers, rights, privileges and
liabilities, and to allocate assets, liabilities and expenses of
the Trust to a particular series of Shares or to apportion the same
among two or more series, provided that any liability or expense
determined by the Trustees to have been incurred by a particular
series of Shares shall be payable solely out of the assets of that
series and to establish separate classes of shares of each series,
all in accordance with Article III hereof;
(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security
or property of which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with
respect to any security held in the Trust;
(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such
power and authority with
6
<PAGE>
relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to
pay, and to pay, such portion of the expenses and compensation of
such committee, depositary or trustee as the Trustees shall deem
proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not
limited to claims for taxes;
(j) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(k) To borrow funds;
(l) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof; and
to mortgage and pledge the Trust property or any part thereof to
secure any or all of such obligations;
(m) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct
of the business, including, without limitation, insurance policies
insuring the assets of the Trust and payment of distributions and
principal on its portfolio investments, and insurance policies
insuring the Shareholders, Trustees, officers, employees, agents,
investment advisers or administrators, principal underwriters, or
independent contractors of the Trust individually against all
claims and liabilities of every nature arising by reason of
holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any
such person as Shareholder, Trustee, officer, employee, agent,
investment adviser or administrator, principal underwriter, or
independent contractor, including any action taken or omitted that
may be determined to constitute negligence, whether or not the
Trust would have the power to indemnify such person against such
liability;
(n) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other
retirement, incentive and benefit plans, trusts and provisions,
including the purchasing of life insurance and annuity contracts as
a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;
(o) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder;
(p) To enter into contracts of any kind and description;
(q) To name, or to change the name or designation of the Trust or any
series or class of the Trust;
(r) To take whatever action may be necessary to enable the Trust to
comply with any applicable Federal, state or local statute, rule or
regulation; and
7
<PAGE>
(s) To engage in any other lawful act or activity in which corporations
organized under the Massachusetts Business Corporation Law may
engage.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees.
MANNER OF ACTING
- ----------------
Section 5. Except as otherwise provided herein or from time to time in
---------
the By-Laws, any action to be taken by the Trustees, or a committee thereof, may
be taken by a majority of the Trustees present at a meeting of Trustees, or of
the committee members present at a meeting of such committee (if in either case
a quorum be present), within or without Massachusetts, including any meeting
held by means of a conference telephone or other communications equipment by
means of which all persons participating in the meeting can communicate with
each other simultaneously and participation by such means shall constitute
presence in person at a meeting, or by written consent of a majority of the
Trustees, or members of such committee, then in office. At any meeting of the
Trustees, or a committee thereof, a majority of the Trustees or members of such
committee, as the case may be, shall constitute a quorum. If a quorum is present
when a duly called or held meeting is convened, the Trustees present thereat
may, following the withdrawal of one or more Trustees originally present,
continue to transact business until adjournment thereof, even though such
Trustees would not otherwise constitute a quorum. Meetings of the Trustees, or a
committee thereof, may be called orally or in writing by the Chairman of the
Trustees or of such committee or by any two other Trustees or committee members,
as the case may be. Notice of the time, date and place of all meeting of the
Trustees, or a committee thereof, shall be given to each Trustee or committee
member as provided in the By-Laws.
Notice of any meeting need not be given to any Trustee (or committee
member) who attends that meeting without objecting to the lack of notice or who
executes a written waiver of notice with respect to the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may delegate to any
one of their number the authority to approve particular matters or take
particular actions on behalf of the Trust.
PAYMENT OF EXPENSES BY THE TRUST
- --------------------------------
Section 6. The Trustees are authorized to pay or to cause to be paid out
---------
of the principal or income of the Trust, or partly out of principal and partly
out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation, as authorized pursuant to Article VII, Section 1 hereof, and
reimbursement for expenses and disbursements and such expenses and charges for
the services of the Trust's officers, employees, investment adviser or
administrator, principal underwriter, auditor, counsel, custodian, transfer
agent, Shareholder servicing agent, and such other agents or independent
contractors and such other expenses and charges as the Trustees may deem
necessary or proper to incur, provided, however, that all expenses, fees,
--------
charges, taxes and liabilities incurred or arising in connection with a
particular series of Shares or class as determined by the Trustees consistent
with applicable law, shall be payable solely out of the assets of that series or
class. Any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any particular series
shall be allocated and charged by the Trustees between or among any one or more
of the series in such manner as the Trustees in their sole discretion deem fair
and equitable. Each
8
<PAGE>
such allocation shall be conclusive and binding upon the Shareholders of all
series for all purposes. Any creditor of any series may look only to the assets
of that series to satisfy such creditor's debt.
Section 7. The Trustees shall have the power, as frequently as they may
---------
determine, to cause each Shareholder to pay directly, in advance or arrears, for
any and all expenses of the Trust, an amount fixed from time to time by the
Trustees, by setting off such charges due from such Shareholder from declared
but unpaid dividends owed such Shareholder and/or by reducing the number of
Shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.
OWNERSHIP OF ASSETS OF THE TRUST
- --------------------------------
Section 8. Title to all of the assets of each series of Shares and the
---------
Trust shall at all times be considered as vested in the Trustees as joint
tenants. The right, title and interest of the Trustees in such assets shall
vest automatically in each person who may hereafter become a Trustee, and upon
any Trustees' death, resignation or removal, such Trustee shall automatically
cease to have any right, title or interest in such assets. Vesting and
cessation of title as set forth in this Section 8 shall be effective
notwithstanding the absence of execution and delivery of any conveyancing
documents.
ADVISORY, ADMINISTRATION AND DISTRIBUTION
- -----------------------------------------
Section 9. The Trustees may, at any time and from time to time, contract
---------
with respect to the Trust or any series thereof for exclusive or nonexclusive
advisory and/or administration services with SEI Financial Management
Corporation, a Delaware corporation, and/or any other corporation, trust,
association or other organization, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine, including, without
limitation, in the case of a contract for advisory or sub-advisory services,
authority to determine from time to time what investments shall be purchased,
held, sold or exchanged and what portion, if any, of the assets of the Trust or
any series thereof shall be held uninvested and to make changes in the
investments of the Trust or any series thereof. Any contract for advisory
services shall be subject to such Shareholder approval as is required by the
1940 Act. The Trustees may also, at any time and from time to time, contract
with SEI Financial Services Company, a Pennsylvania corporation, and/or any
other corporation, trust, association or other organization, appointing it
exclusive or nonexclusive distributor or principal underwriter for the Shares,
every such contract to comply with such requirements and restrictions as may be
set forth in the By-Laws, and any such contract may contain such other terms
interpretive of or in addition to said requirements and restrictions as the
Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee,
administrator, adviser, principal underwriter, or distributor or
agent of or for any corporation, trust, association, or other
organization, or of or for any parent or affiliate of any
organization, with which an advisory or administration or
principal underwriter's or distributor's contract, or transfer,
Shareholder servicing or other agency contract may have been or
may hereafter be made, or that any such organization, or any
parent or affiliate thereof, is a Shareholder or has an interest
in the Trust, or that
9
<PAGE>
(ii) any corporation, trust, association or other organization with
which an advisory or administration or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or
other agency contract may have been or may hereafter be made also
has an advisory or administration contract, or principal
underwriter's or distributor's contract, or transfer, Shareholder
servicing or other agency contract with one or more other
corporations, trusts, associations, or other organizations, or has
other businesses or interests
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
The Shareholders shall have power to vote only (i) for the election or
removal of Trustees as provided in Article IV, Section 1 hereof, (ii) with
respect to any investment adviser as provided in Article IV, Section 9 hereof,
(iii) with respect to any termination of the Trust or any series or class to the
extent and as provided in Article IX, Section 4 hereof, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Article
IX, Section 9 hereof, (v) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders, (vi) with
respect to any merger, consolidation, sale of assets, or incorporation of the
Trust or any series to the extent and as provided in Article IX, Sections 6 and
7 hereof, and (vii) with respect to such additional matters relating to the
Trust as may be required by law, by this Declaration of Trust, by the By-Laws or
by any registration of the Trust with the Securities and Exchange Commission or
any state, or as the Trustees may consider necessary or desirable.
Notwithstanding any other provisions of this Declaration of Trust, on any matter
submitted to a vote of Shareholders, all Shares of the Trust then entitled to
vote shall be voted by individual series or class, except that (1) when so
required by the 1940 Act, then Shares shall be voted in the aggregate and not by
individual series or class, and (2) when the Trustees have determined that the
matter affects only the interests of one or more series or class, then only
Shareholders of such series or class(es) shall be entitled to vote thereon. The
Shareholders may hold meetings and take action as provided in the By-Laws,
subject to the requirements of the 1940 Act where applicable. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, this Declaration of Trust or the By-Laws to be taken by
Shareholders.
ARTICLE VI
DISTRIBUTIONS, REDEMPTIONS, REPURCHASES AND DETERMINATION OF NET ASSET VALUE
DISTRIBUTIONS
- -------------
Section 1. The Trustees may, but need not, distribute from time to time
---------
to the Shareholders of each series such income and gains, accrued or realized,
as the Trustees may determine, after providing for actual and accrued expenses
and liabilities (including such reserves as the Trustees may establish)
determined in accordance with good accounting practices. The Trustees shall have
full discretion to determine which items shall be treated as income and which
items as capital and their determination shall be binding upon the Shareholders.
Distributions of each year's income of each series, if any be made, may be made
in one or more payments, which shall be in Shares, in cash or otherwise and on a
date or dates determined by the Trustees. At any time and from
10
<PAGE>
time to time in their discretion, the Trustees may distribute to the
Shareholders of any one or more series as of a record date or dates determined
by the Trustees, in Shares, in cash or otherwise, all or part of any gains
realized on the sale or disposition of property of the series or otherwise, or
all or part of any other principal of the Trust attributable to the series. Each
distribution pursuant to this Section 1 shall be made ratably according to the
number of Shares of the series or class held by the several Shareholders on the
applicable record date thereof, provided that no distributions need be made on
Shares purchased pursuant to orders received, or for which payment is made,
after such time or times as the Trustees may determine. Any such distribution
paid in Shares will be paid at the net asset value thereof as determined in
accordance with this Declaration of Trust.
REDEMPTIONS AND REPURCHASES
- ---------------------------
Section 2. Any holder of Shares of the Trust may, by presentation of a
---------
written request, together with his or her certificates, if any, for such Shares,
in proper form for transfer, at the office of the Trust, the adviser, the
underwriter or the distributors, or at a principal office of a transfer or
Shareholder services agent appointed by the Trust (as the Trustees may
determine), or in accordance with such other procedures for redemption as the
Trustees may from time to time authorize, redeem his or her Shares in accordance
with the provisions of this Section 2 for the net asset value thereof determined
and computed in accordance with the By-Laws, less any redemption charge the
Trustees may establish including any contingent deferred sales charge to which
redemption of such Shares may be subject. Upon receipt of such written request
for redemption of Shares by the Trust, the adviser, the underwriter or the
distributor, or the Trust's transfer or Shareholder services agent, the Trust
shall purchase such Shares and shall pay therefor the net asset value thereof
next determined after such receipt or, in the case of Shares for which
certificates have been issued, the net asset value thereof next determined after
such Shares are tendered in proper form for transfer to the Trust or, in either
case, the net asset value thereof determined as of such other time fixed by the
Trustees, as may be permitted or required by the 1940 Act.
The obligation of the Trust to redeem its Shares as set forth in this
Section 2 shall be subject to the condition that, during any time of emergency,
as hereinafter defined, such obligation may be suspended by the Trust by or
under authority of the Trustees for such period or periods during such time of
emergency as shall be determined by or under authority of the Trustees. If there
is such a suspension, any Shareholder may withdraw any demand for redemption and
any tender of Shares which has been received by the Trust during any such period
and any tender of Shares the applicable net asset value of which would but for
such suspension be calculated as of a time during such period. Upon such
withdrawal, the Trust shall return to the Shareholder the certificates therefor,
if any. Shareholders who do not so withdraw any such demand shall receive
payment based on the net asset value next determined after the termination of
such suspension. For the purposes of any such suspension "time of emergency"
shall mean, either with respect to all Shares or any series of Shares, as
appropriate, any period during which:
(a) the New York Stock Exchange is closed other than for customary
weekend and holiday closings; or
(b) the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and
regulations or orders of the Commission, either that trading on
the New York Stock Exchange is restricted, or that an emergency
exists as a result of which (i) disposal by the Trust of
securities owned by it is not reasonably practicable or (ii) it is
not reasonably practicable for the Trust fairly to determine the
current value of the net assets of the Trust or of a series; or
11
<PAGE>
(c) the suspension or postponement of such obligations is permitted by
order of the Commission.
The Trust may also purchase, repurchase or redeem Shares in accordance
with such other methods, upon such other terms and subject to such other
conditions as the Trustees may from time to time authorize at a price not
exceeding the net asset value of such Shares in effect when the purchase or
repurchase or any contract to purchase or repurchase is made.
PAYMENT IN KIND
- ---------------
Section 3. Subject to any generally applicable limitation imposed by the
---------
Trustees, any payment on redemption, purchase or repurchase by the Trust of
Shares may, if authorized by the Trustees, be made wholly or partly in kind,
instead of in cash. Such payment in kind shall be made by distributing
securities or other property, constituting, in the opinion of the Trustees, a
fair representation of the various types of securities and other property then
held by the series of Shares being redeemed, purchased or repurchased (but not
necessarily involving a portion of each of that series' holdings) and taken at
their value used in determining the net asset value of the Shares in respect of
which payment is made.
ADDITIONAL PROVISIONS RELATING TO REDEMPTIONS AND REPURCHASES
- -------------------------------------------------------------
Section 4. The completion of redemption, purchase or repurchase of
---------
Shares shall constitute a full discharge of the Trust and the Trustees with
respect to such Shares and the Trustees may require that any certificate or
certificates issued by the Trust to evidence the ownership of such Shares shall
be surrendered to the Trustees for cancellation or notation.
ASSETS AVAILABLE FOR DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES
- --------------------------------------------------------------------------
Section 5. No dividend or distribution (including, without limitation,
---------
any distribution paid upon termination of the Trust or of any series) with
respect to, nor any redemption or repurchase of, the Shares of any series shall
be effected by the Trust other than from the assets of such series.
REDEMPTIONS AT THE OPTION OF THE TRUST
- --------------------------------------
Section 6. The Trustees shall have the power at any time to redeem
---------
Shares, of any class of any series, of a Shareholder at a redemption price
determined in accordance with the provisions of Section 2 of this Article if at
such time the aggregate net asset value of the Shares of that class of that
series in such Shareholder's account is less than the minimum investment amount
established by the Trustees for that class of that series. A Shareholder shall
be notified prior to any such redemption and shall be allowed 60 days to make
additional investments in Shares of that class of that series before such
redemption is effected.
ARTICLE VII
COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES
COMPENSATION
- ------------
12
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Section 1. The Trustees as such shall be entitled to reasonable
---------
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, administration, legal, accounting, investment banking or other
services and payment for the same by the Trust.
LIMITATION OF LIABILITY
- -----------------------
Section 2. The Trustees shall not be responsible or liable in any event
---------
for any neglect or wrongdoing of any officer, agent, employee, investment
adviser or administrator, principal underwriter or custodian, nor shall any
Trustee be responsible for the act or omission of any other Trustee, but nothing
herein contained shall protect any Trustee against any liability to which he or
she would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office.
Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
ARTICLE VIII
INDEMNIFICATION
Subject to the exceptions and limitations contained in this Article,
every person who is, or has been, a Trustee or officer of the Trust shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Trustee or officer:
(a) against any liability to the Trust or its Shareholders by reason
of a final adjudication by the court or other body before which
the proceeding was brought that he engaged in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office;
(b) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interests of the Trust;
(c) in the event of a settlement or other disposition not involving a
final adjudication (as provided in paragraph (a) or (b)) and
resulting in a payment by a Trustee or officer, unless there has
been either a determination that such Trustee or officer did not
engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his
office by the court or other body approving the settlement or
other disposition or a reasonable determination, based on a review
of readily available facts (as opposed to a full trial-type
inquiry) that he did not engage in such conduct:
13
<PAGE>
(i) by a vote of a majority of the Disinterested Trustees
acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter);
or
(ii) by written opinion of independent legal counsel.
The rights of indemnification hereinafter provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to indemnification to
which Trust personnel other than Trustees and officers may be entitled by
contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in the next to the last
paragraph of this Article shall be advanced by the Trust prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Article, provided that either:
(a) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses
arising out of any such advances; or
(b) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in
office act on the matter) or independent legal counsel in a
written opinion shall determine, based upon a review of the
readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the recipient ultimately will
be found entitled to indemnification.
As used in this Article, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without limitation, attorney's fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.
In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his or her being or having been a
shareholder and not because of his or her acts or omissions or for some other
reason, the shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled to be
held harmless from and indemnified against all loss and expenses arising from
such liability, but only out of the assets of the particular series of Shares of
which he or she is or was a Shareholder.
ARTICLE IX
MISCELLANEOUS
TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE
- ----------------------------------------------------------
Section 1. All persons extending credit to, contracting with or having
---------
any claim against the Trust or a particular series or class of Shares shall look
only to the assets of the Trust or the assets of that particular series of
Shares for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any
14
<PAGE>
of the Trust's officers, employees or agents, whether past, present or future,
shall be personally liable therefor. Nothing in this Declaration of Trust shall
protect any Trustee against any liability to which such Trustee would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee.
Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE; NO BOND OR SURETY
- -------------------------------------------------------------
Section 2. The exercise by the Trustees of their powers and discretion
---------
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.
LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES
- ------------------------------------------------
Section 3. No person dealing with the Trustees shall be bound to make
---------
any inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
DURATION AND TERMINATION OF TRUST
- ---------------------------------
Section 4. Unless terminated as provided herein, the Trust shall
---------
continue without limitation of time. The Trust may be terminated at any time by
vote of Shareholders holding at least a majority of the Shares entitled to vote
or by the Trustees by written notice to the Shareholders. Any series of Shares
may be terminated at any time by vote of Shareholders holding at least a
majority of the Shares of such series entitled to vote or by the Trustees by
written notice to the Shareholders of such series. Upon termination of the
Trust or of any one or more series of Shares, after paying or otherwise
providing for all charges, taxes, expenses and liabilities, whether due or
accrued or anticipated, of the Trust or of the particular series as may be
determined by the Trustees, the Trust shall, in accordance with such procedures
as the Trustees consider appropriate, reduce the remaining assets to
distributable form in cash or Shares or other securities, or any combination
thereof, and distribute the proceeds to the Shareholders of the series involved,
ratably according to the number of Shares of such series held by the several
Shareholders of such series on the date of termination.
Section 5. The original or a copy of this instrument and of each
---------
amendment hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. A copy of this instrument and of each
15
<PAGE>
amendment hereto shall be filed by the Trust with the Secretary of the
Commonwealth of Massachusetts and with the Boston City Clerk, as well as any
other governmental office where such filing may from time to time be required.
Anyone dealing with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such amendments have been made and as to any
matters in connection with the Trust hereunder; and, with the same effect as if
it were the original, may rely on a copy certified by an officer of the Trust to
be a copy of this instrument or of any such amendments. In this instrument and
in such amendment, references to this instrument, and the expression "herein,"
"hereof," and "hereunder" shall be deemed to refer to this instrument as amended
from time to time. Headings are placed herein for convenience of reference only
and shall not be taken as part hereof or control or affect the meaning,
construction or effect of this instrument. This instrument may be executed in
any number of counterparts each of which shall be deemed an original.
MERGER, CONSOLIDATION AND SALE OF ASSETS
- ----------------------------------------
Section 6. The Trust may merge or consolidate with any other
---------
corporation,Corporation, association, trust or other organization or may sell,
lease or exchange all or substantially all of the assets of the Trust (or all or
substantially all of the assets allocated or belonging to a particular series of
the Trust) including its good will, upon such terms and conditions and for such
consideration when and as authorized, at any meeting of Shareholders called for
such purpose, by the vote or written consent of the Shareholders of all series
of the Trust voting as a single class, or of the affected series of the Trust,
as the case may be; and any such merger, consolidation, sale, lease or exchange
shall be deemed for all purposes to have been accomplished under and pursuant to
the statutes of the Commonwealth of Massachusetts. Nothing contained herein
shall be construed as requiring approval of Shareholders for any sale of assets
in the ordinary course of the business of the Trust. Holders of Shares of any
series or class shall have no appraisal rights with respect to their Shares.
INCORPORATION, REORGANIZATION
- -----------------------------
Section 7. With the approval of the Shareholders, the Trustees may cause
---------
to be organized or assist in organizing a corporation or corporations under the
laws of any jurisdiction, or any other trust, unit investment trust,
partnership, association or other organization to take over the assets of the
Trust or to carry on any business in which the Trust shall directly or
indirectly have any interest, and to sell, convey and transfer such assets to
any such corporation, trust, partnership, association or organization in
exchange for the shares or securities thereof or otherwise, and to lend money
to, subscribe for the shares or securities of, and enter into any contracts with
any such corporation, trust, partnership, association or organization in which
the Trust holds or is about to acquire shares or any other interest. Subject to
Section 6 of this Article IX, the Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and to the
extent permitted by law. Nothing contained in this Section shall be construed as
requiring approval of Shareholders for the Trustees to organize or assist in
organizing one or more corporations, trusts, partnerships, associations or other
organizations and selling, conveying or transferring a portion of the assets of
the Trust to such organization or entities.
With the approval of Shareholders of any series, the Trustees may sell,
lease or exchange all of the assets allocated or belonging to that series, or
cause to be organized or assist in organizing a corporation or corporations
under the laws of any other jurisdiction, or any other trust, unit investment
trust, partnership, association or other organization, to take over all of the
assets allocated or belonging to that series and to sell, convey or transfer
such assets to any such corporation, trust, unit investment trust, partnership,
association, or other organization in exchange for the shares or securities
thereof or otherwise.
16
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APPLICABLE LAW
- --------------
Section 8. The Trust shall be of the type commonly called a
---------
Massachusetts business trust, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a trust.
This Declaration of Trust is to be governed by and construed and administered
according to the laws of said Commonwealth.
AMENDMENTS
- ----------
Section 9. This Declaration of Trust may be amended at any time by an
---------
instrument in writing signed by a majority of the then Trustees when authorized
to do so by a vote or written consent of Shareholders, except that an amendment
which shall affect the holders of one or more series or classes of Shares but
not the holders of all outstanding series or classes shall be authorized by vote
or written consent of the Shareholders of each series or classes affected and no
vote of Shareholders of a series or classes not affected shall be required.
Amendments having the purpose of changing the name of the Trust or of supplying
any omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned being the sole initial Trustee of the
Trust has executed this document this 20th day of October, 1995.
/s/ Robert B. Carroll
---------------------
Robert B. Carroll
c/o SEI Financial Services Company
680 E. Swedesford Road
Wayne, PA 19087
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF PHILADELPHIA
I, the undersigned authority, hereby certify that the foregoing is a true and
correct copy of the instrument presented to me by Robert B. Carroll as the
original of such instrument.
WITNESS my hand and official seal, this 20th day of October, 1995.
/s/ Christine L. Trecroci
--------------------------------------
Notary Public
[SEAL APPEARS HERE]
My commission expires: October 12, 1998
----------------
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Exhibit 99.B.2
BY-LAWS
OF
SEI ASSET ALLOCATION TRUST
SECTION 1. AGREEMENT AND DECLARATION OF TRUST AND PRINCIPAL OFFICE
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to the
-----------------------------------
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of SEI Asset Allocation Trust, a Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust. The principal office of the Trust shall be
------------------------------
located in Boston, Massachusetts.
SECTION 2. SHAREHOLDERS
2.1 Annual Meeting. The Trust will not hold annual meetings of the
---------------
shareholders.
2.2 Special Meetings. A special meeting of the shareholders may be called at
-----------------
any time by the Trustees, by the president or, if the Trustees and the
president shall fail to call any meeting of shareholders for a period of 30
days after written application of one or more shareholders who hold at
least 10% of all shares issued and outstanding and entitled to vote at the
meeting, then such shareholders may call such meeting. Each call of a
meeting shall state the place, date, hour and purposes of the meeting.
2.3 Place of Meetings. All meetings of the shareholders shall be held at such
------------------
place within the United States as shall be designated by the Trustees or
the president of the Trust.
2.4 Notice of Meetings. A written notice of each meeting of shareholders,
-------------------
stating the place, date and hour and the purposes of the meeting, shall be
given at least seven days before the meeting to each shareholder entitled
to vote thereat by leaving such notice with him or at his residence or
usual place of business or by mailing it, postage prepaid, and addressed to
such shareholder at his address as it appears in the records of the Trust.
Such notice shall be given by the secretary or an assistant secretary or by
an officer designated by the Trustees. No notice of any meeting of
shareholders need be given to a shareholder if a written waiver of notice,
executed before or after the meeting by such shareholder or his attorney
thereunto duly authorized, is filed with the records of the meeting.
2.5 Ballots. No ballot shall be required for any election unless requested by
--------
a shareholder present or represented at the meeting and entitled to vote in
the election.
2.6 Proxies. Shareholders entitled to vote may vote either in person or by
--------
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted.
1
<PAGE>
Unless otherwise specifically limited by their terms, such proxies shall
entitle the holders thereof to vote at any adjournment of such meeting but
shall not be valid after the final adjournment of such meeting.
SECTION 3. TRUSTEES
3.1 Committees and Advisory Board. The Trustees may appoint from their number
------------------------------
an executive committee and other committees. Except as the Trustees may
otherwise determine, any such committee may make rules for conduct of its
business. The Trustees may appoint an advisory board to consist of not
less than two nor more than five members. The members of the advisory
board shall be compensated in such manner as the Trustees may determine and
shall confer with and advise the Trustees regarding the investments and
other affairs of the Trust. Each member of the advisory board shall hold
office until the first meeting of the Trustees following the next annual
meeting of the shareholders and until his successor is elected and
qualified, or until he sooner dies, resigns, is removed, or becomes
disqualified, or until the advisory board is sooner abolished by the
Trustees.
3.2 Regular Meetings. Regular meetings of the Trustees may be held without
-----------------
call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A
regular meeting of the Trustees may be held without call or notice
immediately after and at the same place as the annual meeting of the
shareholders.
3.3 Special Meetings. Special meetings of the Trustees may be held at any time
-----------------
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the
secretary or an assistant secretary or by the officer or one of the
Trustees calling the meeting.
3.4 Notice. It shall be sufficient notice to a Trustee to send notice by mail
-------
at least forty-eight hours or by telegram at least twenty-four hours before
the meeting addressed to the Trustee at his or her usual or last known
business or residence address or to give notice to him or her in person or
by telephone at least twenty-four hours before the meeting. Notice of a
meeting need not be given to any Trustee if a written waiver of notice,
executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him
or her. Neither notice of a meeting nor a waiver of a notice need specify
the purposes of the meeting.
3.5 Quorum. At any meeting of the Trustees one-third of the Trustees then in
-------
office shall constitute a quorum; provided, however, a quorum shall not be
less than two. Any meeting may be adjourned from time to time by a
majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice.
SECTION 4. OFFICERS AND AGENTS
4.1 Enumeration; Qualification. The officers of the Trust shall be a
---------------------------
president, a treasurer, a secretary and such other officers, if any, as the
Trustees from time to time may in their discretion elect or
2
<PAGE>
appoint. The Trust may also have such agents, if any, as the Trustees from
time to time may in their discretion appoint. Any officer may be but none
need be a Trustee or shareholder. Any two or more offices may be held by
the same person.
4.2 Powers. Subject to the other provisions of these By-Laws, each officer
-------
shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly
incident to his or her office as if the Trust were organized as a
Massachusetts business corporation and such other duties and powers as the
Trustees may from time to time designate.
4.3 Election. The president, the treasurer and the secretary shall be elected
---------
annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at any time.
4.4 Tenure. The president, the treasurer and the secretary shall hold office
-------
for a one year term and until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed
or becomes disqualified. Each agent shall retain his or her authority at
the pleasure of the Trustees.
4.5 President and Vice Presidents. The president shall be the chief executive
------------------------------
officer of the Trust. The president shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust.
Any vice president shall have such duties and powers as shall be designated
from time to time by the Trustees.
4.6 Chairman of the Board. If a Chairman of the Board of Trustees is elected,
----------------------
he shall have the duties and powers specified in these By-Laws and, except
as the Trustees shall otherwise determine, preside at all meetings of the
shareholders and of the Trustees at which he or she is present and have
such other duties and powers as may be determined by the Trustees.
4.7 Treasurer and Controller. The treasurer shall be the chief financial
-------------------------
officer of the Trust and subject to any arrangement made by the Trustees
with a bank or trust company or other organization as custodian or transfer
or shareholder services agent, shall be in charge of its valuable papers
and shall have such other duties and powers as may be designated from time
to time by the Trustees or by the president. If at any time there shall be
no controller, the treasurer shall also be the chief accounting officer of
the Trust and shall have the duties and powers prescribed the Trust and
shall have the duties and powers prescribed herein for the controller. Any
assistant treasurer shall have such duties and powers as shall be
designated from time to time by the Trustees.
The controller, if any be elected, shall be the chief accounting officer of
the Trust and shall be in charge of its books of account and accounting
records. The controller shall be responsible for preparation of financial
statements of the Trust and shall have such other duties and powers as may
be designated from time to time by the Trustees or the president.
4.8 Secretary and Assistant Secretaries. The secretary shall record all
------------------------------------
proceedings of the shareholders and the Trustees in books to be kept
therefor, which books shall be kept at the principal office of the Trust.
In the absence of the secretary from any meeting of shareholders or
Trustees, an
3
<PAGE>
assistant secretary, or if there be none or he or she is absent, a
temporary clerk chosen at the meeting shall record the proceedings thereof
in the aforesaid books.
SECTION 5. RESIGNATION AND REMOVALS
Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by the
vote of a majority of the Trustees then in office. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee, officer,
or advisory board member resigning, and no officer or advisory board member
removed shall have any right to any compensation for any period following his or
her resignation or removal, or any right to damages on account of such removal.
SECTION 6. VACANCIES
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
SECTION 7. SHARES OF BENEFICIAL INTEREST
In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
SECTION 8. RECORD DATE
The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date.
SECTION 9. SEAL
The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts", together with the name of
the Trust and the year of its organization, cut or engraved thereon; but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
SECTION 10. EXECUTION OF PAPERS
4
<PAGE>
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that purpose by the vote of the Trustees and need not bear the seal of the
Trust.
Section 11. Fiscal Year
The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.
Section 12. Provisions Relating to the Conduct of the Trust's Business
12.1 Dealings with Affiliates. The Trust shall not purchase or retain
-------------------------
securities issued by any issuer if one or more of the holders of the
securities of such issuer or one or more of the officers or directors of
such issuer is an officer or Trustee of the Trust or officer or director
of any organization, association or corporation with which the Trust has
an investment adviser's contract ("investment adviser"), if to the
knowledge of the Trust one or more of such officers or Trustees of the
Trust or such officers or directors of such investment advisers owns
beneficially more than one-half of one percent of the shares or
securities of such issuer and such officers, Trustees and directors
owning more than one-half of one percent of such shares or securities
together own beneficially more than five percent of such outstanding
shares or securities. Each Trustee and officer of the Trust shall give
notice to the secretary of the identity of all issuers whose securities
are held by the Trust of which such officer or Trustee owns as much as
one-half of one percent of the outstanding securities, and the Trust
shall not be charged with the knowledge of such holdings in the absence
of receiving such notice if the Trust has requested such information not
less often than quarterly.
Subject to the provisions of the preceding paragraph, no officer,
Trustee or agent of the Trust and no officer, director or agent of any
investment adviser shall deal for or on behalf of the Trust with himself
as principal or agent, or with any partnership, association or
corporation in which he has a material financial interest; provided that
the foregoing provisions shall not prevent (a) officers and Trustees of
the Trust from buying, holding or selling shares in the Trust, or from
being partners, officers or directors of or financially interested in
any investment adviser to the Trust or in any corporation, firm or
association which may at any time have a distributor's or principal
underwriter's contract with the Trust; (b) purchases or sales of
securities or other property if such transaction is permitted by or is
exempt or exempted from the provisions of the Investment Company Act of
1940 or any Rule or Regulation thereunder and if such transaction does
not involve any commission or profit to any security dealer who is, or
one or more of whose partners, shareholders, officers or directors is,
an officer or Trustee of the Trust or an officer or director of the
investment adviser, administrator or principal underwriter of the Trust;
(c) employment of legal counsel, registrar, transfer agent, shareholder
services, dividend disbursing agent or custodian who is, or has a
partner, stockholder, officer or director who is, an officer or Trustee
of the Trust; (d) sharing statistical, research and management expenses,
including office hire and services, with any other company in which an
officer or Trustee of the Trust is an officer or director or financially
interested.
5
<PAGE>
12.2 Dealing in Securities of the Trust. The Trust, the investment adviser,
-----------------------------------
any corporation, firm or association which may at any time have an
exclusive distributor's or principal underwriter's contract with the
Trust (the "distributor") and the officers and Trustees of the Trust and
officers and directors of every investment adviser and distributor,
shall not take long or short positions in the securities of the Trust,
except that:
(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset
value for investment by the investment adviser and by officers
and directors of the distributor, investment adviser, or the
Trust and by any trust, pension, profit-sharing or other benefit
plan for such persons, no such purchase to be in contravention of
any applicable state or federal requirement.
12.3 Limitation on Certain Loans. The Trust shall not make loans to any
----------------------------
officer, Trustee or employee of the Trust or any investment adviser or
distributor or their respective officers, directors or partners or
employees.
12.4 Custodian. All securities and cash owned by the Trust shall be
----------
maintained in the custody of one or more banks or trust companies having
(according to its last published report) not less than two million
dollars ($2,000,000) aggregate capital, surplus and undivided profits
(any such bank or trust company is hereinafter referred to as the
"custodian"); provided, however, the custodian may deliver securities as
collateral on borrowings effected by the Trust, provided, that such
delivery shall be conditioned upon receipt of the borrowed funds by the
custodian except where additional collateral is being pledged on an
outstanding loan and the custodian may deliver securities lent by the
Trust against receipt of initial collateral specified by the Trust.
Subject to such rules, regulations and orders, if any, as the Securities
and Exchange Commission may adopt, the Trust may, or may not permit any
custodian to, deposit all or any part of the securities owned by the
Trust in a system for the central handling of securities operated by the
Federal Reserve Banks, or established by a national securities exchange
or national securities association registered with said Commission under
the Securities Exchange Act of 1934, or such other person as may be
permitted by said Commission, pursuant to which system all securities of
any particular class or series of any issue deposited with the system
are treated as fungible and may be transferred or pledged by bookkeeping
entry, without physical delivery of such securities.
The Trust shall upon the resignation or inability to serve of its
custodian or upon change of the custodian:
(a) in the case of such resignation or inability to serve use its
best efforts to obtain a successor custodian;
(b) require that the cash and securities owned by the Trust be
delivered directly to the successor custodian; and
6
<PAGE>
(c) in the event that no successor custodian can be found, submit to
the shareholders, before permitting delivery of the cash and
securities owned by this Trust otherwise than to a successor
custodian, the question whether or not this Trust shall be
liquidated or shall function without a custodian.
12.5 Limitations on Investments. Each series of shares may not invest in
---------------------------
securities other than those described in the Trust's then current
prospectus as appropriate for the series of shares for which such
securities are being purchased.
12.6 Determination of Net Asset Value. Determinations of net asset value made
---------------------------------
in good faith shall be binding on all parties concerned.
12.7 Reports to Shareholders; Distributions from Realized Gains. The Trust
-----------------------------------------------------------
shall send to each shareholder of record at least annually a statement
of the condition of the Trust and of the results of its operation,
containing all information required by applicable laws or regulations.
Section 13. Amendments
These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.
7
<PAGE>
SEI ASSET ALLOCATION TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Kevin P. Robins and Robert B. Carroll, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to the Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
(Signature Appears Here)
- ------------------------------ Date:
James M. Storey ----------------
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Kevin P. Robins and Robert B. Carroll, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to the Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
(Signature Appears Here)
- ------------------------------ Date:
Robert A. Nesher ----------------
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Kevin P. Robins and Robert B. Carroll, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to the Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
(Signature Appears Here)
- ------------------------------ Date:
Richard F. Blanchard ----------------
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Kevin P. Robins and Robert B. Carroll, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to the Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
- ------------------------------ Date:
William M. Doran ----------------
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Kevin P. Robins and Robert B. Carroll, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to the Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
(Signature Appears Here)
- ------------------------------ Date:
F. Wendell Gooch ----------------
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Kevin P. Robins and Robert B. Carroll, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to the Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
Signature Appears here
- ------------------------------ Date:
Frank E. Morris ----------------
Trustee
<PAGE>
SEI ASSET ALLOCATION TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee, Kevin P. Robins and Robert C. Carroll, and each of them
singly, his or her true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him or her and in his or her name,
place and stead, and in the capacity indicated below, to sign any or all
amendments (including post-effective amendments) to the Trust's Registration
Statement on Form N-1A under the provisions of the Investment Company Act of
1940 and the Securities Act of 1933, each such Act as amended, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents, and each of them, acting alone, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents or any of them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
(Signature Appears Here)
- ------------------------------ Date:
Jeffrey A. Cohen ----------------
Controller and Chief
Financial Officer
<PAGE>
SEI ASSET ALLOCATION TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints Kevin P. Robins and Robert B. Carroll, and each of them singly, his or
her true and lawful attorney-in-fact and agent with full power of substitution
and resubstitution, to sign for him or her and in his or her name, place and
stead, and in the capacity indicated below, to sign any or all amendments
(including post-effective amendments) to the Trust's Registration Statement on
Form N-1A under the provisions of the Investment Company Act of 1940 and the
Securities Act of 1933, each such Act as amended, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, acting alone, full power and authority to do and
perform each and every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
(Signature Appears Here)
- ------------------------------ Date:
David G. Lee ----------------
President
<PAGE>
SEI ASSET ALLOCATION TRUST
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced fund (the "Trust"), a business trust organized
under the laws of The Commonwealth of Massachusetts, hereby constitutes and
appoints David G. Lee and Robert B. Carroll, and each of them singly, his or her
true and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him or her and in his or her name, place and stead,
and in the capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trust's Registration Statement on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
any of them, or their substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand and
seal as of the date set forth below.
(Signature Appears Here)
- ------------------------------ Date:
Kevin P. Robins ----------------
Vice President &
Assistant Secretary
