<PAGE>
As filed with the Securities and Exchange Commission on January 6, 1997
Securities Act File No. 333-01999
Investment Company Act File No. 811-07577
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 1 / X /
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 3 / X /
Sierra Asset Management Portfolios
---------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
9301 Corbin Avenue
Northridge, California 91324
------------------------------------------
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (818) 725-0200
F. Brian Cerini
9301 Corbin Avenue
Northridge, California 91324
---------------------------------------
(Name and Address of Agent for Service)
Copies to:
Richard W. Grant, Esq. W. John McGuire, Esq.
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
2000 One Logan Square 1800 M Street, N.W.
Philadelphia, Pennsylvania 19103 Washington, D.C. 20036
It is proposed that this filing will become effective (check
appropriate box):
X immediately upon filing pursuant to paragraph (b), or
___ on [date] pursuant to paragraph (b), or
___ 60 days after filing pursuant to paragraph (a), or
___ 75 days after filing pursuant to paragraph (a), or
___ on [date] pursuant to paragraph (a) of Rule 485
<PAGE>
DECLARATION PURSUANT TO RULE 24f-2
Pursuant to Rule 24f-2 under the Investment Company Act of 1940,
the Registrant hereby declares that an indefinite number or amount of its shares
of beneficial interest, no par value, is being registered under the Securities
Act of 1933.
Part A - Information Required in a Prospectus
- ------ -------------------------------------
<TABLE>
<CAPTION>
Form N-1A
Item No. Location in Prospectus
- --------- ------------------------
<C> <S> <C>
1. Cover Page . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . Portfolio Expenses (Class A Shares);
Portfolio Expenses (Class B Shares);
Expense Ratios of the Underlying Funds
3. Condensed Financial
Information . . . . . . . . Financial Highlights
4. General Description of
Registrant . . . . . . . . Investments and Risk Considerations of
the Portfolios; Investment and Risk
Considerations of the Underlying Funds;
Securities and Investment Practices of
the Portfolios and the Underlying Funds
5. Management of the Fund . . . The Portfolios in Detail --
Organization; Sierra Services, Sierra
Advisors, Their Affiliates and the
Portfolios' Service Providers;
Breakdown of their Portfolio Expenses
5A. Management's Discussion of
Fund Performance . . . . . Not Applicable
6. Capital Stock and Other
Securities . . . . . . . . The Portfolios in Detail -- Dividends,
Capital Gains Distributions and Taxes
7. Purchase of Securities
Being Offered . . . . . . . Your Sierra Asset Management ("SAM")
Portfolio Account; Ways to Set Up Your
Account; Exchange Privileges and
Restrictions
8. Redemption or Repurchase . . How to Sell Shares; Transaction
Details; Exchange Privileges and
Restrictions
9. Pending Legal Proceedings. . None
</TABLE>
<PAGE>
Part B - Information Required in a Statement of Additional Information
- ------ -------------------------------------------------------------
<TABLE>
<CAPTION>
Form N-1A
Item No. Location in Statement of Additional Information
- -------- -----------------------------------------------
<C> <S> <C>
10. Cover Page . . . . . . . . . Cover Page
11. Table of Contents . . . . . Table of Contents
12. General Information and
History . . . . . . . . . . General Information and History
13. Investment Objectives and
Policies . . . . . . . . . Investment Objectives and Policies of
the Portfolios and Underlying Funds
14. Management of the Fund . . . Management of the Trust
15. Control Persons and Principal
Holders of Securities . . . Not Applicable
16. Investment Advisory and
Other Services . . . . . . How to Buy and Redeem Shares;
Management of the Trust
17. Brokerage Allocation and
Other Practices . . . . . . Portfolio Turnover; Portfolio
Transactions
18. Capital Stock and Other
Securities . . . . . . . . Management of the Trust; see Prospectus
-- "The Portfolios in Detail --
Organization" and "Dividends, Capital
Gain Distributions and Taxes"
19. Purchase, Redemption and
Pricing of Securities
Being Offered . . . . . . . How to Buy and Redeem Shares; Net Asset
Value; How to Exchange Shares
20. Tax Status . . . . . . . . . Taxes; see Prospectus -- "Dividends,
Capital Gains Distributions and Taxes"
21. Underwriters . . . . . . . . How to Buy and Redeem Shares;
Distributor
22. Calculation of Performance
Data . . . . . . . . . . . Determination of Performance; See
Prospectus -- "Performance Information"
23. Financial Statements . . . . 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 to this Registration Statement.
- ----------------------------------------------------------------------------
<PAGE>
The Prospectus for the Sierra Asset Management Portfolios is incorporated by
reference to Pre-Effective No. 2 to the Registrant's Registration Statement in
Form N-1A (File No. 333-01999), filed with the SEC on July 22, 1996 (Accession
Number 0000950150-96-000711).
<PAGE>
SUPPLEMENT DATED JANUARY 6, 1997
TO PROSPECTUS DATED JULY 22, 1996
OF
SIERRA ASSET MANAGEMENT PORTFOLIOS
P.O. BOX 5118
WESTBORO, MASSACHUSETTS 01581-5118
The Prospectus, dated July 22, 1996, relating to Class A and Class B Shares of
the INCOME, VALUE, BALANCED, GROWTH, AND CAPITAL GROWTH PORTFOLIOS of the Sierra
Asset Management Portfolios (the "Trust") is hereby amended and supplemented as
follows.
----------------------------
By inserting the following tables, labeled "FINANCIAL HIGHLIGHTS," immediately
before the section entitled "INVESTMENTS AND RISK CONSIDERATIONS OF THE
PORTFOLIOS" section on page 7 of the Prospectus:
FINANCIAL HIGHLIGHTS
Set forth below are the Trust's unaudited financial highlights for the period
from July 25, 1996 (commencement of operations) through November 30, 1996. The
Financial Statements and Notes to Financial Statements for the period ended
November 30, 1996 (unaudited) are included in the SAI, which can be obtained at
no charge by calling the Trust at 800-222-5852 or writing to the Trust at the
address shown on the first page of this Prospectus.
INCOME PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
--------- ---------
PERIOD ENDED PERIOD ENDED
11/30/96* 11/30/96*
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ........................................... $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................................................... 0.22 0.20
Net realized and unrealized gain on investments ................................ 0.30 0.30
------- -------
Total from investment operations ............................................... 0.52 0.50
LESS DISTRIBUTIONS:
Dividends from net investment income ........................................... (0.22) (0.20)
------- -------
Total distributions ............................................................ (0.22) (0.20)
------- -------
Net asset value, end of period ................................................. $10.30 $10.30
======= =======
TOTAL RETURN+ .................................................................. 5.29% 5.01%
======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........................................... $14,237 $4,023
Ratio of operating expenses to average net assets++ ............................ 0.99%** 1.74%**
Ratio of net investment income to average net assets ........................... 5.72%** 4.97%**
Portfolio turnover rate ........................................................ 20% 20%
Ratio of operating expenses to average net assets without
fees reduced by credits allowed by the custodian++ ............................ 1.00%** 1.75%**
Ratio of operating expenses to average net assets without fee waivers, expenses
absorbed and/or fees reduced by credits allowed by the custodian++ ............ 3.25%** 4.00%**
Net investment income per share without fee waivers, expenses absorbed and/or
fees reduced by credits allowed by the custodian .............................. $0.13 $0.11
- ---------------------------------------------------------------------------------------------------------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on July 25, 1996.
** Annualized.
+ Total return represents aggregate total return for the period indicated and does not reflect any applicable
sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses
absorbed by the investment advisor and/or administrator or if fees had not been reduced by credits allowed
by the custodian.
++ The Portfolio will indirectly bear its prorated share of expenses of the Underlying Funds.
</TABLE>
<PAGE>
VALUE PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
-------- --------
PERIOD ENDED PERIOD ENDED
11/30/96* 11/30/96*
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ........................................ $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................................................... 0.16 0.13
Net realized and unrealized gain on investments ............................. 0.58 0.58
------- -------
Total from investment operations ............................................ 0.74 0.71
LESS DISTRIBUTIONS:
Dividends from net investment income ........................................ (0.16) (0.13)
------- -------
Total distributions ......................................................... (0.16) (0.13)
------- -------
Net asset value, end of period .............................................. $ 10.58 $ 10.58
======= =======
TOTAL RETURN+ ............................................................... 7.48% 7.19%
======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........................................ $12,105 $ 5,711
Ratio of operating expenses to average net assets++ ......................... 0.98%** 1.73%**
Ratio of net investment income to average net assets ........................ 4.39%** 3.64%**
Portfolio turnover rate ..................................................... 24% 24%
Ratio of operating expenses to average net assets without
fees reduced by credits allowed by the custodian++ ......................... 0.99%** 1.74%**
Ratio of operating expenses to average net assets without
fee waivers, expenses absorbed and/or fees reduced by credits
allowed by the custodian++ ................................................. 3.29%** 4.04%**
Net investment income per share without fee waivers,
expenses absorbed and/or fees reduced by credits
allowed by the custodian ................................................... $0.08 $0.05
- ---------------------------------------------------------------------------------------------------------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on July 25, 1996.
** Annualized.
+ Total return represents aggregate total return for the period indicated and does not reflect any applicable
sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses
absorbed by the investment advisor and/or administrator or if fees had not been reduced by credits allowed
by the custodian.
++ The Portfolio will indirectly bear its prorated share of expenses of the Underlying Funds.
</TABLE>
<PAGE>
BALANCED PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
-------- --------
PERIOD ENDED PERIOD ENDED
11/30/96* 11/30/96*
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ........................................ $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................................................... 0.08 0.05
Net realized and unrealized gain on investments ............................. 0.73 0.73
------- -------
Total from investment operations ............................................ 0.81 0.78
LESS DISTRIBUTIONS:
Dividends from net investment income ........................................ (0.08) (0.05)
------- -------
Total distributions ......................................................... (0.08) (0.05)
------- -------
Net asset value, end of period .............................................. $10.73 $10.73
======= =======
TOTAL RETURN+ ............................................................... 8.09% 7.81%
======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........................................ $95,145 $64,576
Ratio of operating expenses to average net assets++ ......................... 0.97%** 1.72%**
Ratio of net investment income to average net assets ........................ 2.04%** 1.29%**
Portfolio turnover rate ..................................................... 0% 0%
Ratio of operating expenses to average net assets without
fees reduced by credits allowed by the custodian++ ......................... 0.97%** 1.72%**
Ratio of operating expenses to average net assets without
fee waivers, expenses absorbed and/or fees reduced by credits
allowed by the custodian++ ................................................. 1.67%** 2.42%**
Net investment income per share without fee waivers, expenses absorbed
and/or fees reduced by credits allowed by the custodian .................... $0.05 $0.02
- ---------------------------------------------------------------------------------------------------------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on July 25, 1996.
** Annualized.
+ Total return represents aggregate total return for the period indicated and does not reflect any applicable
sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses
absorbed by the investment advisor and/or administrator or if fees had not been reduced by credits allowed
by the custodian.
++ The Portfolio will indirectly bear its prorated share of expenses of the Underlying Funds.
</TABLE>
<PAGE>
GROWTH PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------ ------
PERIOD ENDED PERIOD ENDED
11/30/96*++ 11/30/96*++
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ........................................ $ 10.00 $ 10.00
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income/(loss) ................................................ 0.01 (0.02)
Net realized and unrealized gain on investments ............................. 0.77 0.78
-------- --------
Total from investment operations ............................................ 0.78 0.76
LESS DISTRIBUTIONS:
Dividends from net investment income ........................................ (0.01) (0.00)#
-------- --------
Total distributions ......................................................... (0.01) (0.00)
--------- --------
Net asset value, end of period .............................................. $ 10.77 $ 10.76
======== ========
TOTAL RETURN+ ............................................................... 7.80% 7.64%
======== ========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........................................ $107,485 $101,888
Ratio of operating expenses to average net assets+++ ........................ 0.97%** 1.72%**
Ratio of net investment income/(loss) to average net assets ................. 0.29%** (0.46)%**
Portfolio turnover rate ..................................................... 0% 0%
Ratio of operating expenses to average net assets without
fees reduced by credits allowed by the custodian+++ ........................ 0.97%** 1.72%**
Ratio of operating expenses to average net assets without
fee waivers, expenses absorbed and/or fees reduced by credits
allowed by the custodian+++ ................................................ 1.64%** 2.39%**
Net investment income/(loss) per share without fee waivers, expenses absorbed
and/or fees reduced by credits allowed by the custodian .................... $ (0.02) $ (0.05)
- ---------------------------------------------------------------------------------------------------------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on July 25, 1996.
** Annualized.
+ Total return represents aggregate total return for the period indicated and does not reflect any applicable
sales charges. The total returns would have been lower if certain fees had not been waived and/or expenses
absorbed by the investment advisor and/or administrator or if fees had not been reduced by credits allowed
by the custodian.
++ Per share numbers have been calculated using the average shares method, which more appropriately presents
the per share data for the year since the use of the undistributed income method did not accord with
results of operations.
# Amount represents less than $0.01 per share.
+++ The Portfolio will indirectly bear its prorated share of expenses of the Underlying Funds.
</TABLE>
<PAGE>
CAPITAL GROWTH PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
-------- --------
PERIOD ENDED PERIOD ENDED
11/30/96*++ 11/30/96*++
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ........................................ $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ......................................................... (0.03) (0.06)
Net realized and unrealized gain on investments ............................. 1.11 1.12
------- -------
Total from investment operations ............................................ 1.08 1.06
------- -------
Net asset value, end of period .............................................. $ 11.08 $ 11.06
======= =======
TOTAL RETURN+ ............................................................... 10.80% 10.60%
======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........................................ $5,665 $15,282
Ratio of operating expenses to average net assets+++ 0.92%** 1.67%**
Ratio of net investment loss to average net assets .......................... (0.76)%** (1.51)%**
Portfolio turnover rate ..................................................... 1% 1%
Ratio of operating expenses to average net assets without
fees reduced by credits allowed by the custodian+++ ........................ 0.94%** 1.69%**
Ratio of operating expenses to average net assets without
fee waivers, expenses absorbed and/or fees reduced by credits
allowed by the custodian+++ ................................................ 3.21%** 3.96%**
Net investment loss per share without fee waivers, expenses absorbed and/or
fees reduced by credits allowed by the custodian ........................... $(0.13) $(0.16)
- ---------------------------------------------------------------------------------------------------------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on July 25, 1996.
** Annualized.
+ Total return represents aggregate total return for the period indicated and does not reflect any applicable
sales charges. The total return would have been lower if certain fees had not been waived and/or expenses
absorbed by the investment advisor and/or administrator or if fees had not been reduced by credits allowed
by the custodian.
++ Per share numbers have been calculated using the average shares method, which more appropriately presents
the per share data for the year since the use of the undistributed income method did not accord with results
of the operation.
+++ The Portfolio will indirectly bear its prorated share of expenses of the Underlying Funds.
</TABLE>
<PAGE>
-------------------------
By deleting the last statement under the heading "INCOME PORTFOLIO" in the
section entitled "INVESTMENTS AND RISK CONSIDERATIONS OF THE PORTFOLIOS" on page
8 and replacing it with the following:
Except for defensive periods or liquidity needs, the Income Portfolio
must invest 100% of its net assets available for investment in STF Fixed
Income Funds and SPIF.
-------------------------
By deleting the last statement under the heading "VALUE PORTFOLIO" in the
section entitled "INVESTMENTS AND RISK CONSIDERATIONS OF THE PORTFOLIOS" on page
8 and replacing it with the following:
Except for defensive periods or liquidity needs, the Value Portfolio
must invest no more than 30% of its net assets available for investment
in the STF Equity Funds.
-------------------------
By deleting the last statement under the heading "BALANCED PORTFOLIO" in the
section entitled "INVESTMENTS AND RISK CONSIDERATIONS OF THE PORTFOLIOS" on page
9 and replacing it with the following:
Except for defensive periods or liquidity needs, the Balanced Portfolio
must invest no less than 30% and no more than 70% of its net assets
available for investment in the STF Fixed Income Funds and SPIF and no
less than 30% and no more than 70% of its net assets available for
investment in the STF Equity Funds.
-------------------------
By deleting the last statement under the heading "GROWTH PORTFOLIO" in the
section entitled "INVESTMENTS AND RISK CONSIDERATIONS OF THE PORTFOLIOS" on page
9 and replacing it with the following:
Except for defensive periods or liquidity needs, the Growth Portfolio
must invest at least 60% of its net assets available for investment in
STF Equity Funds.
-------------------------
By deleting the last statement under the heading "CAPITAL GROWTH PORTFOLIO" in
the section entitled "INVESTMENTS AND RISK CONSIDERATIONS OF THE PORTFOLIOS" on
page 10 and replacing it with the following:
Except for defensive periods or liquidity needs, the Capital Growth
Portfolio must invest at least 75% of its net assets available for
investment in STF Equity Funds.
-------------------------
By deleting the fourth through eleventh sentences under the heading "VAN KAMPEN"
in the "INVESTMENT SUB-ADVISORS OF THE UNDERLYING FUNDS" section on page 56, and
replacing it with the following:
VK/AC Holding, Inc. is an indirectly, wholly-owned subsidiary of Morgan
Stanley Group, Inc.
-------------------------
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
spfin (12/96)
<PAGE>
The Statement of Additional Information for the Sierra Asset Management
Portfolios is incorporated by reference to Pre-Effective No. 2 to the
Registrant's Registration Statement in Form N-1A (File No. 333-01999), filed
with the SEC on July 22, 1996 (Accession Number 0000950150-96-000711).
<PAGE>
SUPPLEMENT DATED JANUARY 6, 1997
TO STATEMENT OF ADDITIONAL INFORMATION DATED JULY 22, 1996
OF
SIERRA ASSET MANAGEMENT PORTFOLIOS
P.O. BOX 5118
WESTBORO, MASSACHUSETTS 01581-5118
The Statement of Additional Information for the Sierra Asset Management
Portfolios (the "Trust") is hereby amended and supplemented by the following
unaudited financial statements for the INCOME, VALUE, BALANCED, GROWTH and
CAPITAL GROWTH PORTFOLIOS of the Trust for the period ended November 30, 1996.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS
INCOME PORTFOLIO
NOVEMBER 30, 1996 (UNAUDITED)
VALUE
SHARES (NOTE 2)
- --------- --------------
INVESTMENT COMPANY SECURITIES-98.9%
512,156 Corporate Income Fund..................... $ 5,449,336
358,684 Global Money Fund......................... 358,684
407,909 Short Term Global Government Fund......... 958,586
2,121,590 Short Term High Quality Bond Fund......... 4,964,521
655,275 U.S. Government Fund...................... 6,336,512
--------------
Total Investment Company Securities
(Cost $17,851,672).................... 18,067,639
--------------
TOTAL INVESTMENTS (Cost $17,851,672*) .............. 98.9% 18,067,639
OTHER ASSETS AND LIABILITIES (Net) ................. 1.1 192,380
----- --------------
NET ASSETS ......................................... 100.0% $ 18,260,019
- ---------- ===== ==============
* Aggregate cost for federal tax purposes.
See Notes to Financial Statements.
<PAGE>
PORTFOLIO OF INVESTMENTS
VALUE PORTFOLIO
NOVEMBER 30, 1996 (UNAUDITED)
VALUE
SHARES (NOTE 2)
- --------- --------------
INVESTMENT COMPANY SECURITIES-98.7%
251,740 Corporate Income Fund..................... $ 2,678,511
863,577 Global Money Fund......................... 863,577
234,521 Growth and Income Fund.................... 3,726,533
1,065,018 Short Term Global Government Fund......... 2,502,792
719,185 Short Term High Quality Bond Fund......... 1,682,893
633,708 U.S. Government Fund...................... 6,127,955
--------------
Total Investment Company Securities
(Cost $17,152,014).................... 17,582,261
--------------
TOTAL INVESTMENTS (Cost $17,152,014*) .............. 98.7% 17,582,261
OTHER ASSETS AND LIABILITIES (Net) ................. 1.3 233,599
----- --------------
NET ASSETS ......................................... 100.0% $ 17,815,860
- ---------- ===== ==============
* Aggregate cost for federal tax purposes.
See Notes to Financial Statements.
<PAGE>
PORTFOLIO OF INVESTMENTS
BALANCED PORTFOLIO
NOVEMBER 30, 1996 (UNAUDITED)
VALUE
SHARES (NOTE 2)
- --------- --------------
INVESTMENT COMPANY SECURITIES-99.2%
1,494,873 Corporate Income Fund..................... $ 15,905,454
433,232 Emerging Growth Fund...................... 8,391,700
15,026,718 Global Money Fund......................... 15,026,718
1,605,444 Growth and Income Fund.................... 25,510,498
1,446,458 Growth Fund............................... 24,040,128
2,815,689 International Growth Fund................. 30,212,342
4,067,949 U.S. Government Fund...................... 39,337,070
--------------
Total Investment Company Securities
(Cost $153,619,934)................... 158,423,910
--------------
PRINCIPAL
AMOUNT
- ----------
REPURCHASE AGREEMENT-0.5% (Cost $877,000)
$877,000 Agreement with Boston Safe Deposit & Trust
Company, 4.750% dated 11/29/1996, to be
repurchased at $877,347 on 12/02/1996,
collateralized by $925,000 Student Loan
Marketing Association, 5.370% due
02/08/1999............................. 877,000
--------------
TOTAL INVESTMENTS (Cost $154,496,934*) ............. 99.7% 159,300,910
OTHER ASSETS AND LIABILITIES (Net) ................. 0.3 420,159
----- --------------
NET ASSETS ......................................... 100.0% $ 159,721,069
- ---------- ===== ==============
* Aggregate cost for federal tax purposes.
See Notes to Financial Statements.
<PAGE>
PORTFOLIO OF INVESTMENTS
GROWTH PORTFOLIO
NOVEMBER 30, 1996 (UNAUDITED)
VALUE
SHARES (NOTE 2)
- --------- --------------
INVESTMENT COMPANY SECURITIES-98.9%
2,504,825 Emerging Growth Fund...................... $ 48,518,453
20,106,343 Global Money Fund......................... 20,106,343
1,434,110 Growth and Income Fund.................... 22,788,001
3,136,032 Growth Fund............................... 52,120,848
3,929,279 International Growth Fund................. 42,161,165
2,211,742 U.S. Government Fund...................... 21,387,547
--------------
Total Investment Company Securities
(Cost $201,179,057)................... 207,082,357
--------------
PRINCIPAL
AMOUNT
- ----------
REPURCHASE AGREEMENT-0.6% (Cost $1,250,000)
$1,250,000 Agreement with Boston Safe Deposit & Trust
Company, 4.750% dated 11/29/1996, to be
repurchased at $1,250,495 on 12/02/1996,
collateralized by $1,315,000 Student
Loan Marketing Association, 5.370% due
02/08/1999............................. 1,250,000
--------------
TOTAL INVESTMENTS (Cost $202,429,057*) ............. 99.5% 208,332,357
OTHER ASSETS AND LIABILITIES (Net) ................. 0.5 1,040,649
----- --------------
NET ASSETS ......................................... 100.0% $ 209,373,006
- ---------- ===== ==============
* Aggregate cost for federal tax purposes.
See Notes to Financial Statements.
<PAGE>
PORTFOLIO OF INVESTMENTS
CAPITAL GROWTH PORTFOLIO
NOVEMBER 30, 1996 (UNAUDITED)
VALUE
SHARES (NOTE 2)
- --------- --------------
INVESTMENT COMPANY SECURITIES-94.7%
193,844 Emerging Growth Fund...................... $ 3,754,762
454,518 Growth and Income Fund.................... 7,222,294
296,317 Growth Fund............................... 4,924,790
366,923 International Growth Fund................. 3,937,083
--------------
Total Investment Company Securities
(Cost $19,014,663).................... 19,838,929
--------------
PRINCIPAL
AMOUNT
- ----------
REPURCHASE AGREEMENT-1.0% (Cost $204,000)
$204,000 Agreement with Boston Safe Deposit & Trust
Company, 4.750% dated 11/29/1996, to be
repurchased at $204,081 on 12/02/1996,
collateralized by $215,000 Student Loan
Marketing Association, 5.370% due
02/08/1999............................. 204,000
--------------
TOTAL INVESTMENTS (Cost $19,218,663*) .............. 95.7% 20,042,929
OTHER ASSETS AND LIABILITIES (Net) ................. 4.3 904,817
----- --------------
NET ASSETS ......................................... 100.0% $ 20,947,746
- ---------- ===== ==============
* Aggregate cost for federal tax purposes.
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
SIERRA ASSET MANAGEMENT PORTFOLIOS
NOVEMBER 30, 1996 (UNAUDITED)
INCOME VALUE BALANCED GROWTH CAPITAL GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (Note 2)
See portfolios of investments (a) ........... $ 18,067,639 $ 17,582,261 $ 159,300,910 $ 208,332,357 $ 20,042,929
Cash ........................................... 94,143 81,520 326 644 955
Dividends and/or interest receivable ........... 90,627 69,829 340,200 182,853 54
Receivable for Portfolio shares sold ........... 4,644 103,530 600,068 1,187,705 931,344
Unamortized organization and offering
costs (Note 8) .............................. 58,803 58,803 58,803 58,803 58,803
Receivable from investment advisor ............. 6,764 4,136 22,487 31,612 5,571
Prepaid expenses and other assets .............. 2,455 2,297 18,931 25,223 1,921
------------- ------------- -------------- ------------- --------------
Total Assets............................... 18,325,075 17,902,376 160,341,725 209,819,197 21,041,577
------------- ------------- -------------- ------------- --------------
LIABILITIES:
Payable for Portfolio shares redeemed .......... 1,074 7,935 67,141 205,471 -
Payable for investment securities purchased .... - - 177,326 - 54,955
Administration fee payable (Note 3) ............ 6,518 6,162 53,285 67,390 2,775
Shareholder servicing and distribution
fees payable (Note 5)........................ 5,592 6,356 62,843 91,575 10,920
Dividends payable............................... 39,474 53,145 198,010 - -
Custodian fees payable (Note 3)................. 200 179 157 139 148
Organization costs payable (Note 8) ............ 399 399 399 399 399
Accrued transfer agent fees..................... 913 972 7,993 12,226 1,957
Accrued Trustees' fees and expenses (Note 4) ... 124 120 1,052 1,382 126
Accrued registration and filing fees ........... 3,017 2,878 14,779 23,330 7,800
Accrued expenses and other payables ............ 7,745 8,370 37,671 44,279 14,751
------------- ------------- -------------- ------------- --------------
Total Liabilities ......................... 65,056 86,516 620,656 446,191 93,831
------------- ------------- -------------- ------------- --------------
NET ASSETS...................................... $ 18,260,019 $ 17,815,860 $ 159,721,069 $ 209,373,006 $ 20,947,746
============= ============= ============== ============= ==============
(a) INVESTMENTS, AT COST (NOTE 2) .............. 17,851,672 17,152,014 154,496,934 202,429,057 19,218,663
NET ASSETS CONSIST OF:
Undistributed net investment income/(accumulated
net investment loss/distributions in excess
of net investment income) ................... $ 33 $ (58) $ (53) $ (18,240)+ $ (26,089)+
Accumulated net realized gain
on investments sold........................... 9,057 20,471 507 - 1,561
Net unrealized appreciation of investments...... 215,967 430,247 4,803,976 5,903,300 824,266
Paid-in capital ................................ 18,034,962 17,365,200 154,916,639 203,487,946 20,148,008
------------- ------------- -------------- -------------- --------------
Total Net Assets........................... $ 18,260,019 $ 17,815,860 $ 159,721,069 $ 209,373,006 $ 20,947,746
============= ============= ============== ============= ==============
<PAGE>
NET ASSETS:
Class A Shares.................................. $ 14,237,149 $ 12,105,205 $ 95,144,591 $ 107,485,063 $ 5,665,437
============= ============= ============== ============= ==============
Class B Shares.................................. $ 4,022,870 $ 5,710,655 $ 64,576,478 $ 101,887,943 $ 15,282,309
============= ============= ============== ============= ==============
SHARES OUTSTANDING:
Class A Shares.................................. 1,381,761 1,143,899 8,866,316 9,977,466 511,161
============= ============= ============== ============= ==============
Class B Shares.................................. 390,438 539,600 6,017,543 9,472,509 1,382,155
============= ============= ============== ============= ==============
CLASS A SHARES:
Net asset value per share of beneficial
interest outstanding* ....................... $ 10.30 $ 10.58 $ 10.73 $ 10.77 $ 11.08
============= ============= ============== ============= ==============
Maximum sales charge............................ 4.50% 4.50% 5.25% 5.50% 5.75%
Maximum offering price per share of
beneficial interest outstanding ............ $ 10.79 $ 11.08 $ 11.32 $ 11.40 $ 11.76
============= ============= ============== ============= ==============
CLASS B SHARES:
Net asset value and offering price per share
of beneficial interest outstanding* ......... $ 10.30 $ 10.58 $ 10.73 $ 10.76 $ 11.06
============= ============= ============== ============= ==============
- -------------------------
* Redemption price per share is equal to Net Asset Value less any applicable contingent deferred sales charge.
+ Represents accumulated net investment loss.
</TABLE>
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
SIERRA ASSET MANAGEMENT PORTFOLIOS
FOR THE PERIOD ENDED NOVEMBER 30, 1996* (UNAUDITED)
INCOME VALUE BALANCED GROWTH CAPITAL GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends....................................... $ 93,529 $ 74,743 $ 373,925 $ 200,205 $ 1,408
Interest........................................ 28 67 5,716 7,719 1,818
------------- ------------- -------------- ------------- --------------
Total Investment Income................... 93,557 74,810 379,641 207,924 3,226
------------- ------------- -------------- ------------- --------------
EXPENSES:
Investment advisory fee (Note 3)................ 2,090 2,089 18,932 24,876 3,008
Administration fee (Note 3)..................... 6,967 6,964 63,108 82,921 10,025
Custodian fees (Note 3)......................... 438 473 466 401 533
Legal and audit fees............................ 7,294 7,904 32,954 38,231 14,035
Trustees' fees and expenses (Note 4) 143 166 1,520 1,882 342
Amortization of organization and offering
costs (Note 8)............................... 14,359 14,359 14,359 14,359 14,359
Registration and filing fees.................... 4,016 3,930 15,808 24,362 9,027
Shareholder reports expense..................... 2,519 2,410 20,194 26,619 2,382
Transfer agent fees ............................ 3,968 4,040 11,632 16,502 5,616
Other........................................... - - 500 500 -
------------- ------------- -------------- ------------- -------------
Subtotal.................................. 41,794 42,335 179,473 230,653 59,327
Shareholder servicing and distribution fees
(Note 5):
Class A Shares............................... 2,663 2,235 17,651 20,558 1,394
Class B Shares............................... 3,281 4,988 55,613 83,609 14,473
Fees waived and/or expenses absorbed by
investment advisor and administrator (Note 3) (31,369) (31,998) (88,844) (111,780) (45,550)
Fees reduced by credits allowed by the
custodian (Note 3)........................... (75) (147) (248) (161) (329)
------------- ------------- --------------- ------------- -------------
Total expenses............................ 16,294 17,413 163,645 222,879 29,315
------------- ------------- --------------- ------------- -------------
NET INVESTMENT INCOME/(LOSS).................... 77,263 57,397 215,996 (14,955) (26,089)
------------- ------------- --------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
(Notes 2 and 6):
Net realized gain on investments during
the period................................... 9,057 20,471 507 - 1,561
Net change in unrealized appreciation
of investments during the period ............. 215,967 430,247 4,803,976 5,903,300 824,266
------------- ------------- -------------- ------------- -------------
Net realized and unrealized gain on
investments.................................. 225,024 450,718 4,804,483 5,903,300 825,827
------------- ------------- -------------- ------------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................... $ 302,287 $ 508,115 $ 5,020,479 $ 5,888,345 $ 799,738
============= ============= ============ ============= ==============
- --------------------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on July 25, 1996.
</TABLE>
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIERRA ASSET MANAGEMENT PORTFOLIOS
FOR THE PERIOD ENDED NOVEMBER 30, 1996* (UNAUDITED)
CAPITAL
INCOME VALUE BALANCED GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net investment income/(loss).................... $ 77,263 $ 57,397 $ 215,996 $ (14,955) $ (26,089)
Net realized gain on investments sold
during the period............................ 9,057 20,471 507 - 1,561
Net unrealized appreciation
of investments during the period............. 215,967 430,247 4,803,976 5,903,300 824,266
----------- ----------- ------------ ------------ -----------
Net increase in net assets
resulting from operations.................... 302,287 508,115 5,020,479 5,888,345 799,738
Distributions to shareholders from:
Net investment income:
Class A Shares............................ (60,923) (39,347) (144,342) (1,670) -
Class B Shares............................ (16,307) (18,108) (71,707) (1,615) -
Net increase in net assets from
Portfolio share transactions:
Class A Shares............................ 14,054,135 11,794,768 92,276,053 104,366,237 5,430,578
Class B Shares............................ 3,960,827 5,550,432 62,620,586 99,101,709 14,697,430
----------- ----------- ------------ ------------ -----------
Net increase in net assets...................... 18,240,019 17,795,860 159,701,069 209,353,006 20,927,746
NET ASSETS:
Beginning of period............................. 20,000 20,000 20,000 20,000 20,000
----------- ----------- ------------ ------------ -----------
End of period................................... $18,260,019 $17,815,860 $159,721,069 $209,373,006 $20,947,746
=========== =========== ============ ============ ===========
Undistributed net investment income/
(accumulated net investment loss/
distributions in excess of net
investment income) at end of period......... $ 33 $ (58) $ (53) $ (18,240)+ $ (26,089)+
=========== =========== ============ ============ ===========
- -------------------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on July 25, 1996.
+ Represents accumulated net investment loss.
</TABLE>
See Notes to Financial Statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS -- CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
SIERRA ASSET MANAGEMENT PORTFOLIOS
FOR THE PERIOD ENDED NOVEMBER 30, 1996* (UNAUDITED)
CAPITAL
INCOME VALUE BALANCED GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
AMOUNT
CLASS A:
Sold............................................ $ 14,887,306 $ 12,264,319 $ 93,658,100 $ 106,059,624 $ 5,592,370
Issued as reinvestment of dividends............. 25,743 35,533 140,193 1,670 -
Redeemed........................................ (858,914) (505,084) (1,522,240) (1,695,057) (161,792)
------------- ------------- ------------- ------------ --------------
Net increase.................................... $ 14,054,135 $ 11,794,768 $ 92,276,053 $ 104,366,237 $ 5,430,578
============= ============= ============== ============= ==============
CLASS B:
Sold............................................ $ 4,058,161 $ 6,023,719 $ 63,138,938 $ 99,780,802 $ 14,793,697
Issued as reinvestment of dividends............. 9,266 16,788 70,352 1,615 -
Redeemed........................................ (106,600) (490,075) (588,704) (680,708) (96,267)
------------- ------------- -------------- ------------- --------------
Net increase.................................... $ 3,960,827 $ 5,550,432 $ 62,620,586 $ 99,101,709 $ 14,697,430
============= ============= ============== ============= ==============
SHARES
CLASS A:
Sold............................................ 1,462,106 1,187,874 8,995,779 10,134,868 525,035
Issued as reinvestment of dividends............. 2,499 3,359 13,078 159 -
Redeemed........................................ (83,844) (48,334) (143,541) (158,561) (14,874)
------------- ------------- -------------- ------------- --------------
Net increase.................................... 1,380,761 1,142,899 8,865,316 9,976,466 510,161
============= ============= ============== ============= ==============
CLASS B:
Sold............................................ 398,945 583,930 6,065,331 9,535,618 1,389,967
Issued as reinvestment of dividends............. 901 1,596 6,598 154 -
Redeemed........................................ (10,408) (46,926) (55,386) (64,263) (8,812)
------------- ------------- -------------- ------------- --------------
Net increase.................................... 389,438 538,600 6,016,543 9,471,509 1,381,155
============= ============= ============== ============= ==============
- --------------------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on July 25, 1996.
</TABLE>
See Notes to Financial Statements.
<PAGE>
FINANCIAL HIGHLIGHTS
INCOME PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT THE PERIOD.
CLASS A CLASS B
SHARES SHARES
------ ------
PERIOD PERIOD
ENDED ENDED
11/30/96* 11/30/96*
(UNAUDITED) (UNAUDITED)
----------- -----------
Net asset value, beginning of period ........ $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.22 0.20
Net realized and unrealized gain on
investments ............................... 0.30 0.30
------- -------
Total from investment operations ............ 0.52 0.50
LESS DISTRIBUTIONS:
Dividends from net investment income ....... (0.22) (0.20)
------- -------
Total distributions ......................... (0.22) (0.20)
------- -------
Net asset value, end of period .............. $ 10.30 $ 10.30
======= =======
Total return+ ............................... 5.29% 5.01%
======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)......... $14,237 $ 4,023
Ratio of operating expenses to average net
assets++ .................................. 0.99%** 1.74%**
Ratio of net investment income to average net
assets .................................... 5.72%** 4.97%**
Portfolio turnover rate ..................... 20% 20%
Ratio of operating expenses to average net
assets without fees reduced by credits
allowed by the custodian++ ................ 1.00%** 1.75%**
Ratio of operating expenses to average net
assets without fee waivers, expenses
absorbed and/or fees reduced by credits
allowed by the custodian++ ............... 3.25%** 4.00%**
Net investment income per share without fee
waivers, expenses absorbed and/or fees
reduced by credits allowed by the custodian $0.13 $0.11
- --------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on
July 25, 1996.
** Annualized.
+ Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges. The total returns would have
been lower if certain fees had not been waived and/or expenses absorbed by
the investment advisor and/or administrator or if fees had not been reduced
by credits allowed by the custodian.
++ The Portfolio will indirectly bear its prorated share of expenses of the
Underlying Funds.
<PAGE>
FINANCIAL HIGHLIGHTS
VALUE PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT THE PERIOD.
CLASS A CLASS B
SHARES SHARES
------ ------
PERIOD PERIOD
ENDED ENDED
11/30/96* 11/30/96*
(UNAUDITED) (UNAUDITED)
----------- -----------
Net asset value, beginning of period ........ $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income........................ 0.16 0.13
Net realized and unrealized gain on
investments ............................... 0.58 0.58
------- -------
Total from investment operations............. 0.74 0.71
LESS DISTRIBUTIONS:
Dividends from net investment income ........ (0.16) (0.13)
------- -------
Total distributions.......................... (0.16) (0.13)
------- -------
Net asset value, end of period............... $ 10.58 $ 10.58
======= =======
TOTAL RETURN+................................ 7.48% 7.19%
======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........ $12,105 $ 5,711
Ratio of operating expenses to average net
assets++ .................................. 0.98%** 1.73%**
Ratio of net investment income to average net
assets .................................... 4.39%** 3.64%**
Portfolio turnover rate ........... 24% 24%
Ratio of operating expenses to average net
assets without fees reduced by credits
allowed by the custodian++ ................ 0.99%** 1.74%**
Ratio of operating expenses to average net
assets without fee waivers, expenses
absorbed and/or fees reduced by credits
allowed by the custodian++ ................ 3.29%** 4.04%**
Net investment income per share without fee
waivers, expenses absorbed and/or fees
reduced by credits allowed by the custodian $0.08 $0.05
- --------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on
July 25, 1996
** Annualized.
+ Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges. The total returns would have
been lower if certain fees had not been waived and/or expenses absorbed by
the investment advisor or if fees had not been reduced by credits allowed by
the custodian.
++ The Portfolio will indirectly bear its prorated share of expenses of the
Underlying Funds.
<PAGE>
FINANCIAL HIGHLIGHTS
BALANCED PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT THE PERIOD.
CLASS A CLASS B
SHARES SHARES
------ ------
PERIOD PERIOD
ENDED ENDED
11/30/96* 11/30/96*
(UNAUDITED) (UNAUDITED)
----------- -----------
Net asset value, beginning of period ........ $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income........................ 0.08 0.05
Net realized and unrealized gain on
investments ............................... 0.73 0.73
------- -------
Total from investment operations............. 0.81 0.78
LESS DISTRIBUTIONS:
Dividends from net investment income ........ (0.08) (0.05)
------- -------
Total distributions.......................... (0.08) (0.05)
------- -------
Net asset value, end of period............... $ 10.73 $ 10.73
======= =======
TOTAL RETURN+................................ 8.09% 7.81%
======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........ $95,145 $64,576
Ratio of operating expenses to average net
assets++ .................................. 0.97%** 1.72%**
Ratio of net investment income to average net
assets .................................... 2.04%** 1.29%**
Portfolio turnover rate ..................... 0% 0%
Ratio of operating expenses to average net
assets without fees reduced by credits
allowed by the custodian++ ................ 0.97%** 1.72%**
Ratio of operating expenses to average net
assets without fee waivers, expenses
absorbed and/or fees reduced by credits
allowed by the custodian++ ................ 1.67%** 2.42%**
Net investment income per share without fee
waivers, expenses absorbed and/or fees
reduced by credits allowed by the custodian $0.05 $0.02
- --------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on
July 25, 1996
** Annualized.
+ Total return represents aggregate total return for the period indicated and
does not refoect any applicable sales charges. The total returns would have
been lower if certain fees had not been waived and/or expenses absorbed by
the investment advisor and/or administrator or fees ahd not been reduced by
credits allowed by the custodian.
++ The Portfolio will indirectly bear its prorated share of expenses of the
Underlying Funds.
<PAGE>
FINANCIAL HIGHLIGHTS
GROWTH PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT THE PERIOD.
CLASS A CLASS B
SHARES SHARES
------ ------
PERIOD PERIOD
ENDED ENDED
11/30/96* ++ 11/30/96* ++
(UNAUDITED) (UNAUDITED)
----------- -----------
Net asset value, beginning of period ........ $ 10.00 $ 10.00
-------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income/(loss)................. 0.01 (0.02)
Net realized and unrealized gain on
investments ............................... 0.77 0.78
-------- --------
Total from investment operations............. 0.78 0.76
Less distributions:
Dividends from net investment income ........ (0.01) (0.00)#
-------- --------
Total distributions.......................... (0.01) (0.00)
-------- --------
Net asset value, end of period............... $ 10.77 $ 10.76
======== ========
TOTAL RETURN+................................ 7.80% 7.64%
======== ========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........ $107,485 $101,888
Ratio of operating expenses to average
net assets+++.............................. 0.97%** 1.72%**
Ratio of net investment income/(loss) to
average net assets......................... 0.29%** (0.46)%**
Portfolio turnover rate ..................... 0% 0%
Ratio of operating expenses to average
net assets without fees reduced by credits
allowed by the custodian+++ .............. 0.97%** 1.72%**
Ratio of operating expenses to average net
assets without fee waivers, expenses
absorbed and/or fees reduced by credits
allowed by the custodian+++ ............... 1.64%** 2.39%**
Net investment income/(loss) per share
without fee waivers, expenses absorbed
and/or fees reduced by credits allowed by
the custodian ............................. $ (0.02) $ (0.05)
- --------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on
July 25, 1996
** Annualized.
+ Total return represents aggregate total return for the period indicated
anddoes not refoect any applicable sales charges. The total returns would
have been lower if certain fees had not been waived and/or expenses absorbed
by the investment advisor and/or administrator or if fees had not been
reduced by credits allowed by the custodian.
++ Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the year since the
use of the undistributed income method did not accord with results of
operations.
# Amount represents less than $0.01 per share.
+++ The Portfolio will indirectly bear its prorated share of expenses of the
Underlying Funds.
<PAGE>
FINANCIAL HIGHLIGHTS
CAPITAL GROWTH PORTFOLIO
FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT THE PERIOD.
CLASS A CLASS B
SHARES SHARES
------ ------
PERIOD PERIOD
ENDED ENDED
11/30/96* ++ 11/30/96* ++
(UNAUDITED) (UNAUDITED)
----------- -----------
NET ASSET VALUE, BEGINNING OF PERIOD ........ $ 10.00 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ......................... (0.03) (0.06)
Net realized and unrealized gain on
investments ............................... 1.11 1.12
------- -------
Total from investment operations............. 1.08 1.06
------- -------
Net asset value, end of period............... $ 11.08 $ 11.06
======= ========
TOTAL RETURN+................................ 10.80% 10.60%
======= ========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) ........ $ 5,665 $15,282
Ratio of operating expenses to average net
assets+++ ................................. 0.92%** 1.67%**
Ratio of net investment loss to average net
assets .................................... (0.76)%** (1.51)%**
Portfolio turnover rate ..................... 1% 1%
Ratio of operating expenses to average net
assets without fees reduced by credits
allowed by the custodian+++ ............... 0.94%** 1.69%**
Ratio of operating expenses to average net
assets without fee waivers, expenses
absorbed and/or fees reduced by credits
allowed by the custodian+++ ............... 3.21%** 3.96%**
Net investment loss per share without fee
waivers, expenses absorbed and/or fees
reduced by credits allowed by the custodian $ (0.13) $ (0.16)
- --------------
* The Portfolio's Class A Shares and Class B Shares commenced operations on
July 25, 1996.
** Annualized.
+ Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charges. The total returns wuopld have
been lower if certain fees had not been waived and/or expenses absorbed by
the investment advisor or if fees had not been reduced by credits allowed by
the custodian.
++ Per share numbers have been calculated using the average shares method,
which more appropriately presents the per share data for the year since the
use of the undistributed income method did not accord with results of
operations.
+++ The Portfolio will indirectly bear its prorated share of expenses of the
Underlying Funds.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
SIERRA ASSET MANAGEMENT PORTFOLIOS
1. ORGANIZATION AND BUSINESS
Sierra Asset Management Portfolios (the "Trust") was organized as a
Massachusetts business trust under the laws of the Commonwealth of Massachusetts
on March 26, 1996 and is registered under the Investment Company Act of 1940, as
amended, (the "1940 Act"), as an open-end management investment company. The
Trust was established in order to offer a range of asset allocation strategies
to accommodate different investment philosophies and goals. The Trust offers
five Portfolios (the "Portfolios"); Income Portfolio, Value Portfolio, Balanced
Portfolio, Growth Portfolio and Capital Growth Portfolio. Each of the Portfolios
offers two classes of shares; Class A Shares and Class B Shares. Class A Shares
are subject to an initial sales charge at the time of purchase. Certain Class A
Shares purchased without an initial sales charge may be subject to a contingent
deferred sales charge ("CDSC") if redeemed within one or two years from the date
of purchase, depending on circumstances. Class B Shares are subject to a CDSC if
redeemed within six years from the date of purchase.
The Trust invests, within certain percentage ranges, in Class I Shares of The
Sierra Trust Funds' Global Money and US Government Money Funds, (the "Money
Funds"); Short Term High Quality Bond, Short Term Global Government, US
Government, and Corporate Income Funds (the "Bond Funds"); and Growth and
Income, Growth, Emerging Growth and International Growth Funds (the "Equity
Funds"), collectively (the "Underlying Funds"). In order to achieve its
investment objective, each Portfolio typically allocates its assets, within
determined percentage ranges, among certain of the Underlying Funds. The
percentages reflect the extent to which each Portfolio will invest in the
particular market segment represented by each Underlying Fund, and the varying
degrees of potential investment risk and reward represented by each Portfolios'
investments in those market segments and their corresponding Underlying Funds.
Sierra Investment Services Corporation ("Sierra Services") may alter these
percentage ranges when it deems appropriate. The assets of each Portfolio will
be allocated among each of the Underlying Funds in accordance with its
investment objective, Sierra Services' outlook for the economy and the financial
markets and the relative market valuations of the Underlying Funds. In addition,
in order to meet liquidity needs or for temporary defensive purposes, each Fund
may invest its assets directly in cash, stock or bond index futures, options,
money market securities and certain short term debt instruments.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Portfolios in the
preparation of their financial statements.
PORTFOLIO VALUATION:
Investments in the Underlying Funds are valued at the price of each Class I
Share of the respective Underlying Funds determined as of the close of the New
York Stock Exchange on the valuation date. A security that is primarily traded
on a U.S. exchange (including securities traded through the NASDAQ National
Market System) is valued at the last sale price on that exchange or, if there
were no sales during the day, at the current quoted bid price. Over-the-counter
securities that are not traded through the NASDAQ National Market System are
valued on the basis of the bid price at the close of business on each day. An
option is generally valued at the last sale price or, in the absence of a last
sale price, the last offer price. Investments in U.S. government securities
(other than short-term securities) are valued at the average of the quoted bid
and asked prices in the over-the-counter market. Short term investments that
mature in 60 days or less are valued at amortized cost when the Board of
Trustees determines that this constitutes fair value. The value of a futures
contract equals the unrealized gain or loss on the contract, which is determined
by marking the contract to the current settlement price for a like contract
acquired on the day on which the futures contract is being valued. A settlement
price may not be issued if the market makes a limited move with respect to the
security or index underlying the futures contract. In such event, the futures
contract will be valued at a fair market value to be determined by or under the
direction of the Board of Trustees of the Trust.
REPURCHASE AGREEMENTS:
Each Portfolio may engage in repurchase agreement transactions. Under the terms
of a typical repurchase agreement, the Portfolio through its custodian takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Portfolio to resell, the obligation at an agreed
upon price and time, thereby determining the yield during the Portfolio's
holding period. This arrangement results in a fixed rate of return that is not
subject to market fluctuations during the Portfolio's holding period. The value
of the collateral is at least equal at all times to the total amount of the
repurchase obligation, including interest. In the event of counterpart default,
the Portfolio has the right to use the collateral to offset losses incurred.
There is potential loss to the Portfolio in the event the Portfolio is delayed
or prevented from exercising its right to dispose of the collateral securities,
including the risk of a possible decline in the value of the underlying
securities during the period while the Portfolio seeks to assert its rights.
Sierra Services, acting under the supervision of the Board of Trustees, reviews
the value of the collateral and the creditworthiness of those banks and dealers
with which the Portfolio enters into repurchase agreements to evaluate potential
risks.
FUTURES CONTRACTS:
Each Portfolio may engage in futures transactions. The Portfolios may use
futures contracts to manage their exposure to the stock and bond markets and to
fluctuations in interest rates and currency values. Buying futures contracts
tends to increase the Portfolio's exposure to the underlying instrument. Selling
futures contracts tends to either decrease the Portfolio's exposure to the
underlying instrument, or to hedge other Portfolio investments.
Upon entering into a futures contract, the Portfolio is required to deposit with
the broker an amount of cash or cash equivalents equal to a certain percentage
of the contract amount. This is known as the "initial margin." Subsequent
payments ("variation margin") are made or received by the Portfolio each day,
depending on the daily fluctuation of the value of the contract. The daily
changes in contract value are recorded as unrealized gains and losses and the
Portfolio recognizes a realized gain or loss when the contract is closed.
Futures contracts are valued at the settlement price established by the board of
trade or exchange on which they are traded.
There are several risks in connection with the use of futures contracts as a
hedging device. Futures contracts involve, to varying degrees, risk of loss in
excess of the futures variation margin reflected in the Statements of Assets and
Liabilities. The change in the value of futures contracts primarily corresponds
with the value of their underlying instruments, which may not correlate with the
change in the value of the hedged instruments. In addition, there is the risk
that the Portfolio may not be able to enter into a closing transaction because
of an illiquid secondary market.
OPTION ON FUTURES CONTRACTS:
Each Portfolio may purchase and write put and call options on futures contracts
that are traded on a US exchange or board of trade as a hedge against changes in
the value of its portfolio securities.
Writing puts and buying calls tends to increase the Portfolios' exposure to the
underlying instrument. Buying puts and writing calls tends to decrease the
Portfolios' exposure to the underlying instruments or to hedge other Portfolio
investments.
Upon the purchase of a put option or a call option by the Portfolios, the
premium paid is recorded as an investment, the value of which is
marked-to-market daily. When a purchased option expires, the Portfolio will
realize a loss in the amount of the cost of the option. When the Portfolios
enter into a closing sale transaction, the Portfolios will realize a gain or
loss depending on whether the sales proceeds from the closing sale transaction
are greater or less than the cost of the option. When the Portfolios exercise a
put option, they will realize a gain or loss from the sale of the underlying
futures contract and the proceeds from such sale will be decreased by the
premium originally paid. When the Portfolios exercise a call option, the cost of
the security which the Portfolios purchase upon exercise will be increased by
the premium originally paid.
When the Portfolios write a call option or a put option, an amount equal to the
premium received by the Portfolios is recorded as a liability, the value of
which is marked-to-market daily. When a written option expires, the Portfolios
realize a gain equal to the amount of the premium received. When the Portfolios
enter into a closing purchase transaction, the Portfolios realize a gain (or
loss if the cost of the closing purchase transaction exceeds the premium
received when the option was sold) without regard to any unrealized gain or loss
on the underlying futures contracts, and the liability related to such option is
eliminated. When a written call option is exercised, the Portfolios realize a
gain or loss from the sale of the underlying futures contracts and the proceeds
from such sale are increased by the premium originally received. When a written
put option is exercised, the amount of the premium originally received will
reduce the cost of the security that the Portfolios purchased upon exercise.
The risk associated with purchasing options is limited to the premium originally
paid. Options written by a Portfolio involve, to varying degrees, risk of loss
in excess of the option value reflected in the Statements of Assets and
Liabilities. The risk in writing a covered call option is that the Portfolios
may forego the opportunity of profit if the market price of the underlying
security increases and the option is exercised. The risk in writing a covered
put option is that the Portfolios may incur a loss if the market price of the
underlying futures contracts decreases and the option is exercised.
Certain risks are associated with the use of options on futures as hedging
devices. The predominant risk is that the movement in the price of the
instrument underlying such options may not correlate perfectly with the movement
in the prices of the assets being hedged. The lack of correlation could render
the Portfolios' strategy unsuccessful and could result in a loss to the
Portfolios. In addition, there is the risk the Portfolios may not be able to
enter into a closing transaction because of an illiquid secondary market or, for
over-the-counter options, because of the counterpart's inability to perform.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are recorded as of the trade date (the date the order to
buy or sell is executed). Realized gains and losses from securities sold are
recorded on the identified cost basis. Interest income is recorded on the
accrual basis. Dividend income is recorded on the ex-dividend date. Each
Portfolio's investment income and realized and unrealized gains and losses are
allocated among the Portfolio's classes of shares based upon the relative
average net assets of each class of shares.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income of the Income Portfolio, Value Portfolio
and Balanced Portfolio will be declared daily and paid monthly. Dividends from
net investment income of the Growth Portfolio will be declared and paid
quarterly and from the Capital Growth Portfolio will be declared and paid
semi-annually. Distributions of any net long-term capital gains earned by a
Portfolio will be distributed no less frequently than annually at the discretion
of the Board of Trustees. Additional distributions of net investment income and
capital gains for each Portfolio may be made at the discretion of the Board of
Trustees in order to avoid the application of a 4% non-deductible excise tax on
certain undistributed amounts of ordinary income and capital gains. Income
distributions and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments of
income and gains on various investment securities held by the Portfolio, timing
differences and differing characterization of distributions made by each
Portfolio as a whole.
FEDERAL INCOME TAXES:
It is each Portfolio's policy to qualify as a regulated investment company by
complying with the requirements of the Internal Revenue Code of 1986, as
amended, applicable to regulated investment companies and by, among other
things, distributing substantially all of its taxable and tax-exempt earnings to
its shareholders. Therefore, no Federal income tax provision is required.
EXPENSES:
Expenses that are directly related to one of the Portfolios are charged directly
to that Portfolio. General expenses of the Trust are allocated to all the
Portfolios based upon relative net assets of each Portfolio. In addition, the
Portfolios will indirectly bear their prorated share of expenses of the
Underlying Funds. Operating expenses directly attributable to a class of shares
are charged to the operations of that class of shares. Expenses of each
Portfolio not directly attributable to the operations of any class of shares are
prorated among the classes to which the expenses relate based on the relative
average net assets of each class of shares.
3. INVESTMENT ADVISORY, ADMINISTRATION FEES AND OTHER TRANSACTIONS
Sierra Services serves as investment advisor to the Trust. Sierra Services
provides its proprietary asset allocation services to the Portfolio, formulates
the Portfolios' investment policies, analyzes economic and market trends,
exercises investment discretion over the assets of the Portfolios and monitors
the allocation of each Portfolio's assets and each Portfolio's performance. For
its investment advisory services to the Portfolios, Sierra Services is entitled
to a monthly fee, at an annual rate of 0.15% of each Portfolio's average daily
net assets.
Sierra Services is a wholly-owned subsidiary of Sierra Capital Management
Corporation ("SCMC"), which is a wholly-owned subsidiary of Great Western
Financial Corporation ("GWFC"), a publically held corporation.
Fees voluntarily waived and expenses absorbed by Sierra Services for the period
ended November 30, 1996 are as follows:
NAME OF FUND FEES WAIVED EXPENSES ABSORBED
------------ ----------- -----------------
Income Portfolio........................ $ 2,090 $28,998
Value Portfolio......................... 2,089 29,506
Balanced Portfolio...................... 18,932 65,592
Growth Portfolio........................ 24,876 78,227
Capital Growth Portfolio................ 3,008 37,907
Sierra Fund Administration Corporation ("Sierra Administration"), an indirect
wholly owned subsidiary of GWFC, under common control with Sierra Services,
serves as administrator to the Trust. For its services as administrator, Sierra
Administration is entitled to a monthly fee at an annual rate of 0.50% of each
Portfolio's average daily net assets. First Data Investor Services Group, Inc.
("FDISG"), a subsidiary of First Data Corporation, serves as sub-administrator
and transfer agent of the Trust. Sierra Administration pays FDISG for its
services as a sub-administrator while the Trust pays FDISG for its services as
transfer agent.
Fees voluntarily waived by Sierra Administration for the period ended November
30, 1996 are as follows:
NAME OF FUND FEES WAIVED
------------ -----------
Income Portfolio................................ $ 281
Value Portfolio................................. 403
Balanced Portfolio.............................. 4,320
Growth Portfolio................................ 8,677
Capital Growth Portfolio........................ 4,635
Sierra Administration also pays Boston Safe Deposit and Trust Company ("Boston
Safe"), a wholly-owned subsidiary of Mellon Bank Corporation, for its services
as custodian of the Trust. The Trust pays certain of the transfer agent's and
sub-administrator's out-of-pocket expenses and pays Boston Safe certain
custodial transaction charges.
Custodian fees for certain Portfolios have been reduced by credits allowed by
Boston Safe for the period ended November 30, 1996 as follows:
CREDITS ALLOWED
BY THE
NAME OF FUND CUSTODIAN
------------ ---------------
Income Portfolio................................ $ 75
Value Portfolio................................. 147
Balanced Portfolio.............................. 248
Growth Portfolio................................ 161
Capital Growth Portfolio........................ 329
For the period ended November 30, 1996, Great Western Financial Securities
Corporation ("GW Securities"), a registered broker-dealer, and Sierra Services
have informed the Portfolios that they received $148,646 and $63,365
respectively, representing commissions (front-end sales charges). In addition,
for the period ended November 30, 1996, Sierra Services and Funds Distributor
Inc. informed the Portfolios that they received $20,338 from CDSC fees.
4. TRUSTEES' FEES
No director, officer or employee of Sierra Services, a registered investment
adviser and broker-dealer, Sierra Administration or FDISG, or any of their
affiliates receives any compensation from the Trust for serving as an officer or
Trustee of the Trust. The Trust pays each Trustee who is not a director, officer
or employee of Sierra Services, Sierra Administration or FDISG, or any of their
affiliates $250 per board meeting attended and $200 per audit and/or nominating
committee meeting attended and reimbursement for travel and out-of-pocket
expenses.
5. DISTRIBUTION PLANS
Sierra Services serves as distributor of the Class A Shares and Class B Shares
of the Portfolios and is also the distributor of the shares of the Underlying
Funds. Each of the Portfolios has adopted two distribution plans, pursuant to
Rule 12b-1 under the 1940 Act, one for the Class A Shares ("Class A Plan") and
one for the Class B Shares ("Class B Plan"). Under the Class A Plan, Sierra
Services is to be paid an annual distribution fee of up to 0.25% of the average
daily net assets of the Class A Shares of each Portfolio for activities
primarily intended to result in the sale of Class A Shares of the Portfolios.
Under the Class B Plan, Sierra Services is to be paid an annual distribution fee
of up to 0.75% of the average daily net assets of the Class B Shares of each
Portfolio for activities primarily intended to result in the sale of Class B
Shares of the Portfolios. In addition, under the Class B Plan, Class B Shares
are also subject to a shareholder service fee at an annual rate of 0.25% of the
average daily net assets of the Class B Shares. The shareholder service fee is
paid by the Portfolios to Sierra Services.
For the period ended November 30, 1996, the Funds incurred the following fees
pursuant to the respective distribution plans described above:
CLASS A CLASS B
------------ -------------------------
DISTRIBUTION DISTRIBUTION SERVICE
NAME OF FUND FEE FEE FEE
------------ ------------ ------------ ---------
Income Portfolio................... $ 2,663 $ 2,461 $ 820
Value Portfolio.................... 2,235 3,741 1,247
Balanced Portfolio................. 17,651 41,710 13,903
Growth Portfolio................... 20,558 62,707 20,902
Capital Growth Portfolio........... 1,394 10,855 3,618
6. PURCHASES AND SALES
The aggregate cost of purchases and proceeds from sales, excluding short-term
investments, for the period ended November 30, 1996 were as follows:
NAME OF FUND PURCHASES SALES
- ------------ ----------- --------
Income Portfolio ............. $18,482,745 $640,130
Value Portfolio .............. 17,891,499 759,956
Balanced Portfolio ........... 153,651,173 31,746
Growth Portfolio ............. 201,179,057 -
Capital Growth Portfolio .... 19,041,188 28,086
At November 30, 1996, aggregate gross unrealized appreciation for all Underlying
Funds in which there is an excess of value over tax cost was as follows:
TAX BASIS
UNREALIZED
NAME OF FUND APPRECIATION
------------ ------------
Income Portfolio..................................... $ 215,967
Value Portfolio...................................... 430,247
Balanced Portfolio................................... 4,803,976
Growth Portfolio..................................... 5,903,300
Capital Growth Portfolio............................. 824,266
7. SHARES OF BENEFICIAL INTEREST
The Company may issue an unlimited number of shares of beneficial interest each
without par value.
8. ORGANIZATION AND OFFERING COSTS
Costs incurred in connection with the organization of the Portfolios are being
amortized on a straight-line basis over a period of five years from commencement
of operations of each Portfolio, respectively. Costs incurred in connection with
the initial offering of the Portfolios are being expensed over a one year period
from commencement of operations of each Portfolio. In the event any of the
initial shares of a Portfolio are redeemed by any holder thereof during the
amortization period, the proceeds of such redemptions will be reduced by an
amount equal to the pro-rata portion of unamortized deferred organizational
expenses in the same proportion as the number of shares being redeemed bears to
the number of initial shares of such Portfolio outstanding at the time of such
redemption.
9. RISK FACTORS OF THE PORTFOLIOS
Investing in the Underlying Funds through the Portfolios involves certain
additional expenses and tax results that would not be present in a direct
investment in the Underlying Funds. Under certain circumstances, an Underlying
Fund may determine to make payment of a redemption request by a Portfolio 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 Portfolios may
hold securities distributed by an Underlying Fund until Sierra Services
determines that it is appropriate to dispose of such securities.
Certain Underlying Funds 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; enter into interest rate swaps or
purchase or sell interest rate caps or floors; engage in other types of options
transactions; make short sales; purchase zero coupon and payment-in-kind bonds;
engage in repurchase or reverse repurchase agreements; purchase and sell
"when-issued" securities and engage in "delayed-delivery" transactions; and
engage in various other investment practices each with inherent risks.
The Capital Growth Portfolio can invest as much as 50% of its total asset in the
Sierra Trust Funds Growth Fund and as much as 50% of its total asset in the
Sierra Trust Funds Emerging Growth Fund, each of which Underlying Funds may
invest as much as 35% of its total assets in lower-rated bonds. Securities rated
below investment grade generally involve greater price volatility and risk of
principal and income and may be less liquid than higher rated securities.
Certain Portfolios invest as much as 50% of their total assets in the Sierra
Trust Funds' Growth or Emerging Growth Funds, each of which may invest up to 25%
of its total assets in foreign equity securities and as much as 5% of its total
assets in securities in developing or emerging markets countries. Certain
Portfolios invest as much as 50% of their total assets in the Sierra Trust Funds
International Growth Fund, which invests primarily in the foreign equity
securities, and may invest as much as 30% of its total assets in securities in
developing or emerging market countries. These investments will subject such
Portfolios to risks associated with investing in foreign securities including
those resulting from future adverse political and economic developments and the
possible imposition of currency exchange blockages or other foreign governmental
laws or restrictions.
The officers and trustees of the Trust also serve as officers and trustees of
the Underlying Funds. In addition, Sierra Services, the investment advisor and
distributor of each Portfolio, and Sierra Investment Advisors Corporation
("Sierra Advisors"), an indirect wholly-owned subsidiary of GWFC, the investment
advisor of the Underlying Funds, are both wholly owned subsidiaries of SCMC.
Also, Sierra Services is the distributor of the shares of the Underlying Funds.
Conflicts may arise as these companies seek to fulfill their fiduciary
responsibilities to both the Portfolios and the Underlying Funds.
From time to time, one or more of the Underlying Funds used for investment by a
Portfolio may experience relatively large investments or redemptions due to
reallocations or rebalancings by the Portfolios as recommended by Sierra
Services. These transactions will affect the Underlying Funds, since the
Underlying Funds that experience redemptions as a result of the reallocations or
rebalancings may have to sell portfolio securities and Underlying Funds that
receive additional cash will have to invest such cash. 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 the Underlying Funds
may be required to sell securities or invest cash at times when they would not
otherwise do so. These transactions could also have tax consequences if sales of
securities resulted in gains and could also increase transactions costs. Sierra
Advisors, representing the interests of the Underlying Funds, is committed to
minimizing the impact of Portfolio transactions on the Underlying Funds; Sierra
Services, representing the interest of the shareholders of the Portfolios, is
also committed to minimizing such impact on the Underlying Funds to the extent
it is consistent with pursuing the investment objectives of the Portfolios.
Sierra Advisors and Sierra Services will nevertheless face conflicts in
fulfilling their respective responsibilities because they are affiliates and
employ some of the same investment professionals.
<PAGE>
SIERRA ASSET MANAGEMENT PORTFOLIOS
PART C
Item 24. Financial Statements and Exhibits
(a) Financial Statements: (*)
Financial Statements included in Part A:
- Financial Highlights (Unaudited)
Financial Statements Included in Part B:
- Portfolio of Investments (Unaudited)
- Statement of Assets and Liabilities as of
November 30, 1996 (Unaudited)
- Statements of Operations for the period ended
November 30, 1996 (Unaudited)
- Statements of Changes in Net Assets for the Period
ended November 30, 1996 (Unaudited)
- Notes to Financial Statements (Unaudited)
(b) Exhibits
(1) Agreement and Declaration of Trust dated March 26,
1996 Amended and Restated July 19, 1996 (3)
(Replaces Agreement and Declaration of Trust dated
March 26, 1996 which was filed with the Securities
and Exchange Commission on March 27, 1996.)
(2) By-laws (1)
(3) Not applicable
(4) Not applicable
(5) Form of Investment Advisory Agreement (2)
(6)(a) Form of Class A Distribution Agreement (2)
(6)(b) Form of Class B Distribution Agreement (2)
(7) Not applicable
(8) Custody Agreement (*)
(Replaces Form of Custody Agreement (3))
(9)(a) Administration Agreement (*)
(Replaces Form of Administration Agreement (3))
(9)(b) Form of Sub-Administration Agreement (First Data
Investor Services Group, Inc.) (2)
(9)(c) Form of Sub-Administration Agreement (Dealers) (3)
(9)(d) Form of Transfer Agency and Services Agreement (3)
(10) Opinion and consent of Morgan, Lewis & Bockius LLP (3)
(11) Consent of Accountant (3)
(12) Not applicable
(13) Purchase Agreement relating to the Income, Value,
Balanced, Growth and Capital Growth Portfolios (*)
(14) Not applicable
(15)(a) Class A Distribution Plan (2)
(15)(b) Class B Distribution Plan (2)
(16) Not applicable
(17) Financial Data Schedules (*)
(18) Rule 18f-3 Multiple Class Plan (2)
(19) Not applicable
(20) Not applicable
(21) Not applicable
(22) Not applicable
(23) Not applicable
(24) Powers of Attorney with respect to Registration
Statement and Amendments thereto signed by the
following persons in their capacities as Trustees and,
where applicable, Officers of the Trust: F. Brian
Cerini, Arthur H. Bernstein, David E. Anderson,
Edmond R. Davis, John W. English and Alfred E.
Osborne, Jr. (*)
- --------------------
(*) Filed herewith
(1) Incorporated by reference to Registration Statement as filed with the
Securities and Exchange Commission on March 27, 1996.
(2) Incorporated by reference to Pre-Effective Amendment No. 1 as filed with the
Securities and Exchange Commission on June 21, 1996.
(3) Incorporated by reference to Pre-Effective Amendment No. 2 filed with the
Securities and Exchange Commission on July 22, 1996.
Item 25. Persons Controlled by or Under Common Control with Registrant
See the Prospectus and Statement of Additional Information
regarding the Registrant's Control relationships.
Item 26. Number of Holders of Securities
Number of Record Holders
at November 30, 1996
----------------------
CLASS CLASS
"A" "B"
Shares of the Income Portfolio, without par value..... 365 94
Shares of the Balanced Portfolio, without par value... 2,473 1,586
Shares of the Growth Portfolio, without par value .... 3,205 2,927
Shares of the Capital Growth Portfolio, without
par value ........................................... 240 573
Shares of the Value Portfolio, without par value ..... 340 147
Item 27. Indemnification
Under Section 8.1 of Registrant's Declaration of Trust ("Declaration
of Trust"), any past or present Trustee or officer of Registrant (including
persons who serve at Registrant's request as directors, officers or trustees of
another organization in which Registrant has any interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person"), is
indemnified to the fullest extent permitted by law against liability and all
expenses reasonably incurred by him in connection with any action, suit or
proceeding to which he may be a party or otherwise involved by reason of his
being or having been a Covered Person. This provision does not authorize
indemnification when it is determined, in the manner specified in the
Declaration of Trust, that a Covered Person has not acted in good faith in the
reasonable belief that his actions were in or not opposed to the best interests
of Registrant. Moreover, this provision does not authorize indemnification when
it is determined, in the manner specified in the Declaration of Trust, that the
Covered Person would otherwise be liable to Registrant or its shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of his duties. Expenses may be paid by Registrant in advance of the final
disposition of any action, suit or proceeding upon receipt of an undertaking by
a Covered Person to repay those expenses to Registrant in the event that it is
ultimately determined that indemnification of the expenses is not authorized
under the Declaration of Trust and the Covered Person either provides security
for such undertaking or insures Registrant against losses from such advances or
either of the disinterested Trustees or independent legal counsel determines, in
the manner specified in the Declaration of Trust, that there is reason to
believe the Covered Person will be found to be entitled to indemnification.
Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "1933 Act"), may be permitted to Trustees, officers
and controlling persons of Registrant pursuant to the foregoing provisions, or
otherwise, Registrant has been advised that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the 1933 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person in
connection with the securities being registered, 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 1933 Act and
will be governed by the final adjudication of such issue.
Item 28(a). Business and Other Connections of Investment Advisor
Sierra Investment Services Corporation ("Sierra Services") is the
investment advisor of the Funds.
Sierra Services does not currently act as depositor or investment
advisor for any other investment company.
The information required by this Item 28 with respect to each director
and officer of Sierra Services is incorporated by reference to Schedule A of
Form BD filed by Sierra Services pursuant to the Securities Exchange Act of 1934
(SEC File No. 8-45144).
Item 29. Principal Underwriter -- Sierra Investment Services Corporation
("Sierra Services") is the principal underwriter of the Class A and Class B
Shares of the Funds and serves as the principal underwriter of the Sierra Trust
Funds, The Sierra Variable Trust and the Sierra Prime Income Fund.
Sierra Services does not currently act as depositor or investment
advisor for any other investment company.
The information required by this Item 29 with respect to each director
and officer of Sierra Services is incorporated by reference to Schedule A of
Form BD filed by Sierra Services pursuant to the Securities Exchange Act of 1934
(SEC File No. 8-45144).
Item 30. Location of Accounts and Records
(1) Sierra Asset Management Portfolios
9301 Corbin Avenue
Northridge, California 91324
(declaration of trust and by-laws)
(2) Sierra Investment Services Corporation
9301 Corbin Avenue
Northridge, California 91324
(with respect to their services as the principal underwriter)
(3) Great Western Financial Securities Corporation
9301 Corbin Avenue
Northridge, California 91324
(with respect to their services as a dealer)
(4) Sierra Fund Administration Corporation
9301 Corbin Avenue
Northridge, California 91324
(with respect to their services as administrator)
(5) Boston Safe Deposit and Trust Company
One Boston Place
Boston, Massachusetts 02108
(with respect to their services as custodian)
(6) First Data Investor Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
(with respect to their services as a sub-administrator,
shareholder servicing agent and transfer agent).
(7) Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, Pennsylvania 19103
(with respect to their services as counsel to the Fund)
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Registrant undertakes to furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
(b) Registrant hereby undertakes to call a meeting of shareholders for
the purpose of voting upon the question of removal of a Trustee when requested
in writing to do so by the holders of at least 10% of the Registrant's
outstanding shares and in connection with such meetings to comply with the
provisions of Section 16(c) of the 1940 Act.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended
("1933 Act"), and the Investment Company Act of 1940, as amended, the Registrant
certifies that it meets all of the requirements for effectiveness of this
Post-Effective Amendment No. 1 pursuant to Rule 485(b) under the 1933 Act and
has duly caused this Post-Effective Amendment No. 1 to be signed on its behalf
by the undersigned, thereto duly authorized, in the City of Northridge and State
of California on the 3rd day of January, 1997.
SIERRA ASSET MANAGEMENT PORTFOLIOS
By: /s/ F. Brian Cerini
---------------------------
F. Brian Cerini
President
Pursuant to the requirements of the 1933 Act, this Post-Effective
Amendment No. 1 has been signed below by the following persons in the capacities
and on the date(s) indicated.
Signature Title Date
--------- ----- ------
/s/ F. Brian Cerini President and Trustee January 3, 1997
- ------------------------- (Principal Executive
F. Brian Cerini Officer)
/s/ Keith B. Pipes Executive Vice President, January 3, 1997
- ------------------------- Treasurer and Secretary
Keith B. Pipes (Principal Financial and
Accounting Officer)
* Trustee January 3, 1997
- -------------------------
Arthur H. Bernstein
* Trustee January 3, 1997
- -------------------------
David E. Anderson
* Trustee January 3, 1997
- -------------------------
Edmond R. Davis
* Trustee January 3, 1997
- -------------------------
John W. English
* Trustee January 3, 1997
- ----------------------------
Alfred E. Osborne, Jr. Ph.D.
* By: /s/ F. Brian Cerini
---------------------------------------
F. Brian Cerini
Executed by F. Brian Cerini pursuant to a power of attorney
filed with this Post-Effective Amendment No. 1 to this
Registration Statement.
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
(1) Agreement and Declaration of Trust dated March 26, 1996
Amended and Restated July 19, 1996 (3)
(Replaces Agreement and Declaration of Trust dated
March 26, 1996 which was filed with the Securities and
Exchange Commission on March 27, 1996.)
(2) By-Laws(1)
(3) Not applicable
(4) Not applicable
(5) Form of Investment Advisory Agreement (2)
(6)(a) Form of Class A Distribution Agreement (2)
(6)(b) Form of Class B Distribution Agreement (2)
(7) Not applicable
Ex-99.B(8) Custody Agreement (*)
(Replaces Form of Custody Agreement (3))
Ex-99.B(9)(a)Administration Agreement (*)
(Replaces Form of Administration Agreement (3))
(9)(b) Form of Sub-Administration Agreement (First Data
Investor Services Group, Inc.) (2)
(9)(c) Form of Sub-Administration Agreement (Dealers) (3)
(9)(d) Form of Transfer Agency and Service Agreement (3)
(10) Opinion and consent of Morgan, Lewis & Bockius LLP (3)
(11) Consent of Accountant (3)
(12) Not applicable
Ex-99.B(13) Purchase Agreement relating to the Income, Value, Balanced,
Growth and Capital Growth Portfolios (*)
(14) Not applicable
(15)(a) Class A Distribution Plan (2)
(15)(b) Class B Distribution Plan (2)
(16) Not applicable
(17) Not applicable
(18) Rule 18f-3 Multiple Class Plan (2)
(19) Not applicable
(20) Not applicable
(21) Not applicable
(22) Not applicable
(23) Not applicable
Ex-99.B(24) Powers of Attorney with respect to Registration
Statement and Amendments thereto signed by the
following persons in their capacities as Trustees and,
where applicable, Officers of the Trust: F. Brian
Cerini, Arthur H. Bernstein, David E. Anderson, Edmond
R. Davis, John W. English and Alfred E. Osborne, Jr.(*)
Ex-99.B(27) Financial Data Schedules (*)
- ----------------
(*) Filed herewith
(1) Incorporated by reference to Registration Statement as filed with the
Securities and Exchange Commission on March 27, 1996.
(2) Incorporated by reference to Pre-Effective Amendment No. 1 as filed
with the Securities and Exchange Commission on June 21, 1996.
(3) Incorporated by reference to Pre-Effective Amendment No. 2 filed with
the Securities and Exchange Commission on July 22, 1996.
<PAGE>
EXHIBIT 8
CUSTODY AGREEMENT
AGREEMENT dated as of July 19, 1996, between SIERRA ASSET MANAGEMENT
PORTFOLIOS (the "Trust"), a business trust organized under the laws of the
Commonwealth of Massachusetts, and registered as an investment company under the
1940 Act, having its principal office and place of business at 9301 Corbin
Avenue, Suite 333, Northridge, California 91324, on behalf of its managed
investment portfolios currently existing or as may from time to time be created
and designated by the Trust and covered under this Agreement pursuant to Section
2 hereof (individually, a "Portfolio" and collectively, the "Portfolios") and
BOSTON SAFE DEPOSIT AND TRUST COMPANY (the "Custodian"), a Massachusetts trust
company with its principal place of business at One Boston Place, Boston,
Massachusetts 02108.
W I T N E S S E T H:
That for and in consideration of the mutual promises hereinafter set
forth, the Trust and the Custodian agree as follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
(a) "Authorized Person" shall be deemed to include the Chairman of the
Board of Trustees, the President, and any Vice President, the
Secretary, the Treasurer or any other person, whether or not any such
person is an officer or employee of the Trust, duly authorized by the
Board of Trustees of the Trust to give Oral Instructions and Written
Instructions on behalf of the Trust and listed in the certification
annexed hereto as Appendix A or such other certification as may be
received by the Custodian from time to time.
(b) "Book-Entry System" shall mean the Federal Reserve/Treasury
book-entry system for United States and federal agency Securities, its
successor or successors and its nominee or nominees.
(c) "Business Day" shall mean any day on which any Portfolio and the
Custodian are open for business.
(d) "Certificate" shall mean any notice, instruction or other
instrument in writing, authorized or required by this Agreement to be
given by the Trust to the Custodian, which is actually received by the
Custodian and signed on behalf of the Trust by any two Authorized
Persons or any two officers thereof.
(e) "Master Trust Agreement" shall mean the Agreement and Declaration
of Trust of the Trust dated March 26, 1996, as the same may be amended
from time to time.
(f) "Depository" shall mean The Depository Trust Company ("DTC"), a
clearing agency registered with the Securities and Exchange Commission
under Section 17(a) of the Securities Exchange Act of 1934, as amended,
and authorized to act as a depository under the 1940 Act, its successor
or successors and its nominee or nominees, in which the Custodian is
hereby specifically authorized to make deposits. The term "Depository"
shall further mean and include any other person to be named in a
Certificate authorized to act as a depository under the 1940 Act, its
successor or successors and its nominee or nominees.
(g) "Money Market Security" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to interest and
principal by the Government of the United States or agencies or
instrumentalities thereof, commercial paper, bank certificates of
deposit, bankers' acceptances and short-term corporate obligations,
where the purchase or sale of such securities normally requires
settlement in federal funds on the same day as such purchase or sale,
and repurchase and reverse repurchase agreements with respect to any of
the foregoing types of securities.
(h) "Oral Instruction" shall mean one or more verbal instructions
actually received by the Custodian from a person reasonably believed by
the Custodian to be an Authorized Person.
(i) "Prospectus" shall mean the Portfolios' current prospectus(es) and
statement(s) of additional information relating to the registration of
the Trust's Shares under the Securities Act of 1933, as amended.
(j) "Shares" refers to units of beneficial interest of any of the
Portfolios.
(k) "Security" or "Securities" shall be deemed to include bonds,
debentures, notes, stocks, shares, evidences of indebtedness, and all
other securities, commodities interests and investments from time to
time owned by any of the Portfolios.
(l) "Transfer Agent" shall mean the person that performs the transfer
agent, dividend disbursing agent and shareholder servicing agent
functions for the Portfolios.
(m) "Written Instruction" shall mean one or more written communications
actually received by the Custodian from a person reasonably believed by
the Custodian to be an Authorized Person by any system whereby the
receiver of such communication is able to verify through codes or
otherwise with a reasonable degree of certainty the authenticity of the
sender of such communication.
(n) The "1940 Act" refers to the Investment Company Act of 1940, and
the Rules and Regulations thereunder, all as amended from time to time.
2. Appointment of Custodian.
(a) The Trust hereby constitutes and appoints the Custodian as
custodian of all the Securities and monies at the time owned by or in
the possession of the Trust and specifically allocated to a Portfolio
during the period of this Agreement.
(b) In the event that the Trust establishes one or more investment
portfolios other than the Portfolios with respect to which the Trust
decides to retain the Custodian to provide custody services, the Trust
shall so notify the Custodian in writing. If the Custodian is willing
to render such services, the Custodian shall notify the Trust in
writing, whereupon each such investment portfolio shall be deemed a
Portfolio hereunder as provided in Section 2(c) below.
(c) Any Portfolio may be added to or deleted from coverage under this
Agreement by attaching a revised Schedule C to this Agreement
reflecting such addition or termination, dated and signed by an
authorized officer or representative of each party hereto.
(d) The Custodian hereby accepts appointment as such custodian for each
Portfolio and agrees to perform the duties thereof as set forth herein.
3. Compensation.
(a) The Trust will compensate the Custodian for its services rendered
under this Agreement in accordance with the fees set forth in the Fee
Schedule annexed hereto as Schedule A and incorporated herein. Such Fee
Schedule does not include commercially reasonable out-of-pocket
disbursements of the Custodian for which the Custodian shall be
entitled to bill separately. Commercially reasonable out-of-pocket
disbursements shall include, but shall not be limited to, the items
specified in the Schedule of Out-of-Pocket Charges annexed hereto as
Schedule B and incorporated herein, which schedule may be modified by
the Custodian (i) upon not less than thirty days' prior written notice
to the Trust and (ii) agreement of the Trust. In addition, the expenses
that the Custodian may charge a Portfolio include, but are not limited
to, the usual and customary expenses of Sub-Custodians and foreign
branches of the Custodian incurred in settling transactions outside of
Boston, Massachusetts or New York City, New York involving the purchase
and sale of Securities of such Portfolio.
(b) Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule A and/or Schedule B of this Agreement a
revised Fee Schedule and/or Schedule of Out-of-Pocket Charges, dated
and signed by an Authorized Person or authorized representative of each
party hereto.
(c) The Custodian will bill the Trust for each Portfolio as soon as
practicable after the end of each calendar month, and said billings
will be detailed in accordance with the Fee Schedule and Schedule of
Out-of-Pocket Charges for each Portfolio. The Trust will promptly pay
to the Custodian the amount of such billing. In the alternative, the
Custodian may charge against any monies specifically allocated to a
Portfolio and held on behalf of the Trust pursuant to this Agreement
such compensation and any reasonable expenses incurred by the Custodian
in the performance of its duties with respect to such Portfolio
pursuant to this Agreement. The Custodian shall also be entitled to
place in an escrow account with a third party escrow agent that is
agreeable to the Custodian and the Trust (provided that such approval
of the third party escrow agent shall not be unreasonably withheld by
either party), any monies held by the Custodian and specifically
allocated to a Portfolio on behalf of the Trust pursuant to this
Agreement in the amount of any loss, damage, liability or expense
incurred with respect to such Portfolio, including counsel fees, for
which the Custodian shall be entitled to reimbursement under the
provisions of this Agreement; provided, that the Custodian shall
promptly notify such Portfolio in writing of such placement of monies
in escrow and shall not withdraw for the account of the Custodian any
monies from such escrow except as mutually agreed in writing between
the Custodian and the Portfolio; and provided further, that in the
event that the Custodian and the Portfolio can not agree as to the
withdrawal of any amount of monies from such escrow, the amount of
monies to be withdrawn shall be determined by arbitration conducted as
mutually agreed by the Custodian and the Trust.
4. Custody of Monies and Securities.
(a) Receipt and Holding of Assets.
The Trust will deliver or cause to be delivered to the Custodian all
Securities and monies owned by it at any time during the period of this
Agreement and shall specify the Portfolio to which the Securities and
monies are to be specifically allocated. The Custodian will not be
responsible for such Securities and monies until actually received by
it. The Trust shall instruct the Custodian from time to time in its
sole discretion, by means of a Written Instruction, or, in connection
with the purchase or sale of Money Market Securities, by means of an
Oral Instruction or a Written Instruction, as to the manner in which
and in what amounts Securities and monies of a Portfolio are to be
deposited on behalf of such Portfolio in the Book-Entry System or a
Depository and specifically allocated on the books of the Custodian to
such Portfolio; provided, however, that prior to the deposit of
Securities of a Portfolio in the Book-Entry System or a Depository,
including a deposit in connection with the settlement of a purchase or
sale, the Custodian shall have received a Certificate specifically
approving such deposits by the Custodian in the Book-Entry System or a
Depository. Securities and monies of a Portfolio deposited in the
Book-Entry System or a Depository will be represented in accounts which
include only assets held by the Custodian for customers, including but
not limited to accounts which the Custodian acts in a fiduciary or
representative capacity.
(b) Accounts and Disbursements. The Custodian shall establish and
maintain a separate account for each Portfolio and shall credit to the
separate account for each Portfolio all monies received by it for the
account of such Portfolio and shall disburse the same only:
1. In payment for Securities purchased for such
Portfolio, as provided in Section 5 hereof;
2. In payment of dividends or distributions with respect to the
Shares of such Portfolio, as provided in Section 7 hereof;
3. For the payment of any expenses or liability incurred by a
Portfolio, including, but not limited to, the following:
management, accounting, transfer agent and legal fees and
operating expenses of a Portfolio whether or not expenses are, in
whole or in part, to be capitalized or treated as deferred
expenses;
4. In payment of original issue or other taxes with respect to the
Shares of such Portfolio, as provided in Section 8 hereof;
5. In payment for Shares of such Portfolio which have been redeemed
by that Portfolio, as provided in Section 8 hereof;
6. Pursuant to a Written Instruction, or with respect to Money
Market Securities, an Oral Instruction or a Written Instruction,
setting forth the name of such Portfolio, the name and address of
the person to whom the payment is to be made, the amount to be
paid and the purpose for which payment is to be made; or
7. In payment of fees and in reimbursement of the expenses and
liabilities of the Custodian attributable to such Portfolio, as
provided in Sections 3 and 11(j) hereof.
(c) Confirmation and Statements. Promptly after the close of business
on each day, the Custodian shall furnish the Trust with confirmations
and a summary of all transfers to or from the account of each Portfolio
during such day. Where securities purchased by a Portfolio are in a
fungible bulk of securities registered in the name of the Custodian (or
its nominee) or shown on the Custodian's account on the books of a
Depository or the Book-Entry System, the Custodian shall by book entry
or otherwise identify the quantity of those securities belonging to
such Portfolio. At least monthly, the Custodian shall furnish the Trust
with a detailed statement of the Securities and monies held for each
Portfolio under this Agreement.
(d) Registration of Securities and Physical Separation. All Securities
held for a Portfolio which are issued or issuable only in bearer form,
except such Securities as are held in the Book-Entry System, shall be
held by the Custodian in that form; all other Securities held for a
Portfolio may be registered in the name of that Portfolio, in the name
of any duly appointed registered nominee of the Custodian as the
Custodian may from time to time determine, or in the name of the
Book-Entry System or a Depository or their successor or successors, or
their nominee or nominees. The Trust reserves the right to instruct the
Custodian as to the method of registration and safekeeping of the
Securities of each Portfolio. The Trust agrees to furnish to the
Custodian appropriate instruments to enable the Custodian to hold or
deliver in proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System or a
Depository, any Securities which it may hold for the account of a
Portfolio and which may from time to time be registered in the name of
a Portfolio. The Custodian shall hold all such Securities specifically
allocated to a Portfolio which are not held in the Book-Entry System
or a Depository in a separate account for such Portfolio, in the name
of such Portfolio, physically segregated at all times from those of any
other person or persons.
(e) Segregated Accounts. Upon receipt of a Written Instruction the
Custodian will establish segregated accounts on behalf of each
Portfolio to hold liquid or other assets as it shall be directed by
such Written Instruction and shall increase or decrease the assets in
such Segregated Accounts only as it shall be directed by any subsequent
Written Instructions.
(f) Collection of Income and Other Matters Affecting Securities. Unless
otherwise instructed to the contrary by a Written Instruction, the
Custodian by itself, or through the use of the Book-Entry System or a
Depository with respect to Securities therein deposited, shall with
respect to all Securities held for a Portfolio in accordance with this
Agreement:
1. Collect all income due or payable;
2. Present for payment and collect the amount payable upon all
Securities which may mature or be called, redeemed or retired, or
otherwise become payable. The Custodian also shall have the
responsibility to each Portfolio for monitoring or ascertaining
any call, redemption or retirement dates with respect to put
bonds which are owned by that Portfolio and held by the Custodian
or its nominees;
3. Surrender Securities in temporary form for definitive Securities;
4. Execute any necessary declarations or certificates of ownership
under the Federal income tax laws or the laws or regulations of
any other taxing authority now or hereafter in effect; and
5. Hold directly, or through the Book-Entry System or a Depository
with respect to Securities therein deposited, for the account of
a Portfolio all rights and similar Securities issued with respect
to any Securities held by the Custodian hereunder for that
Portfolio.
(g) Delivery of Securities and Evidence of Authority. Upon receipt of a
Written Instruction and not otherwise, except for subparagraphs 5, 6,
7, and 8 of this section 4(g) which may be effected by either an Oral
or Written Instruction, the Custodian, directly or through the use of
the Book-Entry System or a Depository, shall:
1. Execute and deliver or cause to be executed and delivered to such
persons as may be designated in such Written Instruction,
proxies, consents, authorizations, and any other instruments
whereby the authority of a Portfolio as owner of any Securities
may be exercised;
2. Deliver or cause to be delivered any Securities held for a
Portfolio in exchange for other Securities or monies issued or
paid in connection with the liquidation, reorganization,
refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
3. Deliver or cause to be delivered any Securities held for a
Portfolio to any protective committee, reorganization committee
or other person in connection with the reorganization,
refinancing, merger, consolidation or recapitalization or sale of
assets of any corporation, and receive and hold under the terms
of this Agreement in the separate account for a Portfolio such
certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery;
4. Make or cause to be made such transfers or exchanges of the
assets specifically allocated to the separate account of a
Portfolio and take such other steps as shall be stated in such
Written Instruction for the purpose of effectuating any duly
authorized plan of liquidation, reorganization, merger,
consolidation or recapitalization of the Portfolios;
5. Deliver Securities owned by a Portfolio upon sale of such
Securities for the account of that Portfolio pursuant to Section
5;
6. Deliver Securities owned by a Portfolio upon the receipt of
payment in connection with any repurchase agreement related to
such Securities entered into by that Portfolio;
7. Deliver Securities owned by a Portfolio to the issuer thereof or
its agent when such Securities are called, redeemed, retired or
otherwise become payable; provided, however, that in any such
case the monies or other consideration is to be delivered to the
Custodian. The Custodian also shall have the responsibility to
each Portfolio for monitoring or ascertaining any call,
redemption or retirement dates with respect to the put bonds
which are owned by that Portfolio and held by the Custodian or
its nominee;
8. Deliver Securities owned by a Portfolio to the issuer thereof, or
its agent, for transfer into the name of that Portfolio or into
the name of any nominee or nominees of the Custodian or into the
name or nominee name of any agent or any sub-custodian appointed
pursuant to Section 11(g) hereof; or for exchange for a different
number of bonds, certificates or other evidence representing the
same aggregate face amount or number of units; provided, however,
that in any such case, the new Securities are to be delivered to
the Custodian;
9. Deliver Securities owned by a Portfolio to the broker for
examination in accordance with "street delivery" custom;
10. Deliver Securities owned by a Portfolio in accordance with the
provisions of any agreement among a Portfolio, the Custodian and
any broker-dealer or any similar organization or organizations
relating to compliance with the rules of any options clearing
entity or securities or commodities exchange, regarding escrow or
other arrangements in connection with transactions by the
Portfolio;
11. Deliver Securities owned by a Portfolio in accordance with the
provisions of any agreement among that Portfolio, the Custodian
and an individual or organization registered under the Commodity
Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract Market,
or any similar organization or organizations, regarding account
deposits in connection with transactions by that Portfolio;
12. Deliver Securities owned by a Portfolio for delivery in
connection with any loans of securities made by that Portfolio,
but only against receipt of adequate collateral as agreed upon
from time to time by the Custodian and that Portfolio, which may
be in the form of monies or obligations issued by the United
States government, its agencies or instrumentalities;
13. Deliver Securities owned by a Portfolio for delivery as security
in connection with any borrowings by that Portfolio requiring a
pledge of that Portfolio's assets, but only against receipt of
amounts borrowed;
14. Deliver Securities owned by a Portfolio upon receipt of a Written
Instruction from that Portfolio for delivery to the Transfer
Agent or to the holders of Shares of that Portfolio in connection
with distributions in kind, as may be described from time to time
in that Portfolio's Prospectus, in satisfaction of requests by
holders of Shares for repurchase or redemption;
15. Deliver Securities as collateral in connection with short sales
of securities by a Portfolio;
16. Deliver Securities for any purpose expressly permitted by and in
accordance with procedures described in a Portfolio's Prospectus
or resolution adopted by the Trust's Board of Trustees signed by
an Authorized Person and certified by the Secretary of the Trust;
and
17. Deliver Securities owned by a Portfolio for any other proper
business purpose, but only upon receipt of, in addition to a
Written Instruction, a certified copy of a resolution of the
Board of Trustees signed by an Authorized Person and certified by
the Secretary of the Trust, specifying the Securities to be
delivered, setting forth the purpose for which such delivery is
to be made, declaring such purpose to be a proper business
purpose, and naming the person or persons to whom delivery of
such Securities shall be made.
(h) Endorsement and Collection of Checks, Etc. The Custodian is hereby
authorized to endorse and collect all checks, drafts or other orders
for the payment of money received by the Custodian for the account of a
Portfolio; provided, however, that the Custodian shall not be liable
for any monies, whether or not represented by check, draft, or other
instrument for the payment of money, received by it on behalf of that
Portfolio, until the Custodian actually receives and collects such
monies directly or by the final crediting of the account representing
that Portfolio's interest in the Book-Entry System or a Depository.
5. Purchase and Sale of Investments of the Portfolios.
(a) Promptly after each purchase of Securities for a Portfolio, the
Trust shall deliver to the Custodian (i) with respect to each purchase
of Securities that are not Money Market Securities, a Written
Instruction, and (ii) with respect to each purchase of Money Market
Securities, either a Written Instruction or Oral Instruction, in either
case specifying with respect to each purchase: (1) the name of the
Portfolio to which such Securities are to be specifically allocated;
(2) the name of the issuer and the title of the Securities; (3) the
number of shares or the principal amount purchased, and accrued
interest, if any; (4) the date of purchase and settlement; (5) the
purchase price per unit; (6) the total amount payable upon such
purchase; (7) the name of the person from whom or the broker through
whom the purchase was made, if any; (8) whether or not such purchase is
to be settled through the Book-Entry System or a Depository; and (9)
whether the Securities purchased are to be deposited in the Book-Entry
System or a Depository. The Custodian shall receive the Securities
purchased by or for a Portfolio and upon receipt of such Securities
shall pay out of the monies held for the account of such Portfolio the
total amount payable upon such purchase, provided that the same
conforms to the total amount payable as set forth in such Written or
Oral Instruction.
(b) Promptly after each sale of Securities of a Portfolio, the Trust
shall deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, a Written
Instruction, and (ii) with respect to each sale of Money Market
Securities, either a Written Instruction or Oral Instruction, in either
case specifying with respect to such sale: (1) the name of the
Portfolio to which the Securities sold were specifically allocated; (2)
the name of the issuer and the title of the Securities; (3) the number
of shares or principal amount sold, and accrued interest, if any; (4)
the date of sale; (5) the sale price per unit; (6) the total amount
payable to such Portfolio upon such sale; (7) the name of the broker
through whom or the person to whom the sale was made; and (8) whether
or not such sale is to be settled through the Book-Entry System or a
Depository. The Custodian shall deliver or cause to be delivered the
Securities to the broker or other person designated by the Trust upon
receipt of the total amount payable to such Portfolio upon such sale,
provided that the same conforms to the total amount payable to such
Portfolio as set forth in such Written or Oral Instruction. Subject to
the foregoing, the Custodian may accept payment in such form as shall
be satisfactory to it, and may deliver Securities and arrange for
payment in accordance with the customs prevailing among dealers in
Securities.
6. Lending of Securities.
If any Portfolio is permitted by the terms of the Master Trust
Agreement and as disclosed in the Portfolio's Prospectus to lend
Securities specifically allocated to that Portfolio, within 24 hours
after each loan of Securities, the Trust shall deliver to the Custodian
a Written Instruction specifying with respect to each such loan: (a)
the name of the Portfolio to which the loaned Securities are
specifically allocated; (b) the name of the issuer and the title of the
Securities; (c) the number of shares or the principal amount loaned;
(d) the date of loan and delivery; (e) the total amount to be delivered
to the Custodian, and specifically allocated to such Portfolio against
the loan of the Securities, including the amount of cash collateral and
the premium, if any, separately identified; (f) the name of the broker,
dealer or financial institution to which the loan was made; and (g)
whether the Securities loaned are to be delivered through the
Book-Entry System or a Depository.
Promptly after each termination of a loan of Securities
specifically allocated to a Portfolio, the Trust shall deliver to the
Custodian a Written Instruction specifying with respect to each such
loan termination and return of Securities: (a) the name of the
Portfolio to which such loaned Securities are specifically allocated;
(b) the name of the issuer and the title of the Securities to be
returned; (c) the number of shares or the principal amount to be
returned; (d) the date of termination; (e) the total amount to be
delivered by the Custodian (including the cash collateral for such
Securities minus any offsetting credits as described in said Written
Instruction); (f) the name of the broker, dealer or financial
institution from which the Securities will be returned; and (g) whether
such return is to be effected through the Book-Entry System or a
Depository. The Custodian shall receive all Securities returned from
the broker, dealer or financial institution to which such Securities
were loaned and upon receipt thereof shall pay, out of the monies
specifically allocated to such Portfolio, the total amount payable upon
such return of Securities as set forth in the Written Instruction.
Securities returned to the Custodian shall be held as they were prior
to such loan.
7. Payment of Dividends or Distributions.
(a) The Trust shall furnish to the Custodian the vote of the Board of
Trustees of the Trust certified by the Secretary (i) authorizing the
declaration of distributions with respect to a Portfolio on a specified
periodic basis and authorizing the Custodian to rely on an Oral
Instruction or a Written Instruction specifying the date of the
declaration of such distribution, the date of payment thereof, the
record date as of which shareholders entitled to payment shall be
determined, the amount payable per Share to the shareholders of record
as of the record date and the total amount payable to the Transfer
Agent on the payment date, or (ii) setting forth the date of
declaration of any distribution by a Portfolio, the date of payment
thereof, the record date as of which shareholders entitled to payment
shall be determined, the amount payable per share to the shareholders
of record as of the record date and the total amount payable to the
Transfer Agent on the payment date.
(b) Upon the payment date specified in such vote, an Oral Instruction
or a Written Instruction, as the case may be, the Custodian shall pay
out the monies specifically allocated to and held for the account of
the appropriate Portfolio the total amount payable to the Transfer
Agent of that Portfolio.
8. Sale and Redemption of Shares of the Portfolios.
(a) Whenever the Trust shall sell any Shares of a Portfolio, the Trust
shall deliver or cause to be delivered to the Custodian a Written
Instruction duly specifying:
1. The name of the Portfolio whose Shares were sold;
2. The name and number of Shares sold, trade date,
and price; and
3. The amount of monies to be received by the Custodian for the
sale of such Shares and specifically allocated to such
Portfolio.
The Custodian understands and agrees that a Written
Instruction may be furnished subsequent to the purchase of Shares of a
Portfolio and that the information contained therein will be derived
from the sales of Shares specifically allocated to that Portfolio as
reported to the Trust by the Transfer Agent.
(b) Upon receipt of such monies from the Transfer Agent, the Custodian
shall credit such monies to the separate account of the Portfolio
specified in subparagraph (1) of paragraph (a) of this Section 8.
(c) Upon issuance of any Shares of a Portfolio in accordance with the
foregoing provisions of this Section 8, the Custodian shall pay, out of
all the monies specifically allocated and held for the account of such
Portfolio, all original issue or other taxes required to be paid in
connection with such issuance upon the receipt of a Written Instruction
specifying the amount to be paid.
(d) Except as provided hereafter, whenever any Shares of a Portfolio
are redeemed, the Trust shall cause the Transfer Agent to promptly
furnish to the Custodian a Written Instruction, specifying:
1. The name of the Portfolio whose Shares were redeemed;
2. The number of Shares redeemed; and
3. The amount to be paid for the Shares redeemed.
The Custodian further understands that the information
contained in any such Written Instruction will be derived from the
redemption of Shares specifically allocated to that Portfolio as
reported to the Trust by the Transfer Agent.
(e) Upon receipt from the Transfer Agent of advice setting forth the
number of Shares of a Portfolio received by the Transfer Agent for
redemption and that such Shares are valid and in good form for
redemption, the Custodian shall make payment to the Transfer Agent out
of the monies specifically allocated to and held for the account of the
Portfolio specified as provided in subparagraph (1) of paragraph (d) of
this Section 8.
(f) Notwithstanding the above provisions regarding the redemption of
Shares of a Portfolio, whenever such Shares are redeemed pursuant to
any check redemption privilege which may from time to time be offered
by the Portfolio, the Custodian, unless otherwise instructed by a
Written Instruction shall, upon receipt of advice from the Portfolio or
its agent stating that the redemption is in good form for redemption in
accordance with the check redemption procedure, honor the check
presented as part of such check redemption privilege out of the monies
specifically allocated to the Portfolio in such advice for such
purpose.
9. Indebtedness.
(a) The Trust will cause to be delivered to the Custodian by any bank
(excluding the Custodian) from which the Trust borrows money for
temporary administrative or emergency purposes using Securities as
collateral for such borrowings, a notice or undertaking in the form
currently employed by any such bank setting forth the amount which such
bank will loan to the Trust against delivery of a stated amount of
collateral. The Trust shall promptly deliver to the Custodian a Written
Instruction stating with respect to each such borrowing: (1) the name
of the Portfolio for which the borrowing is to be made; (2) the name of
the bank; (3) the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached promissory note, duly
endorsed by the Trust, or other loan agreement; (4) the time and date,
if known, on which the loan is to be entered into (the "borrowing
date"); (5) the date on which the loan becomes due and payable; (6) the
total amount payable to the Trust for the separate account of the
Portfolio on the borrowing date; (7) the market value of Securities to
be delivered as collateral for such loan, including the name of the
issuer, the title and the number of shares or the principal amount of
any particular Securities; (8) whether the Custodian is to deliver such
collateral through the Book-Entry System or a Depository; and (9) a
statement that such loan is in conformance with the 1940 Act and the
Portfolio's Prospectus.
(b) Upon receipt of the Written Instruction referred to in subparagraph
(a) of this Section 9, the Custodian shall deliver on the borrowing
date the specified collateral and the executed promissory note, if any,
against delivery by the lending bank of the total amount of the loan
payable, provided that the same conforms to the total amount payable as
set forth in the Written Instruction. The Custodian may, at the option
of the lending bank, keep such collateral in its possession, but such
collateral shall be subject to all rights therein given the lending
bank by virtue of any promissory note or loan agreement. The Custodian
shall deliver as additional collateral in the manner directed by the
Trust from time to time such Securities specifically allocated to such
Portfolio as may be specified in a Written Instruction to collateralize
further any transaction described in this Section 9. The Trust shall
cause all Securities released from collateral status to be returned
directly to the Custodian, and the Custodian shall receive from time to
time such return of collateral as may be tendered to it. In the event
that the Trust fails to specify in a Written Instruction all of the
information required by this Section 9, the Custodian shall not be
under any obligation to deliver any Securities and will promptly
notify the Trust of such deficient Written Instruction and the
information that is required by this Section 9 that is missing.
Collateral returned to the Custodian shall be held hereunder as it was
prior to being used as collateral.
10. Persons Having Access to Assets of the Portfolios.
(a) No Trustee, officer, employee or agent of the Trust, and no
officer, director, trustee, employee or agent of the Portfolios'
investment adviser, of any investment sub-adviser of a Portfolio, or
of the Portfolios' administrator or sub-administrator, shall have
physical access to the assets of a Portfolio held by the Custodian or
be authorized or permitted to withdraw any investments of a Portfolio,
nor shall the Custodian deliver any assets of a Portfolio to any such
person. No officer, director, employee or agent of the Custodian who
holds any similar position with the Portfolios' investment adviser,
with any sub-adviser of the Portfolios or with the Portfolios'
administrator or sub-administrator shall have access to the assets of
a Portfolio.
(b) Nothing in this Section 10 shall prohibit any trustee, officer,
employee or agent of the Trust, or any officer, director, trustee,
employee or agent of a Portfolio's investment adviser, of any
investment sub-adviser of a Portfolio or of the Portfolios'
administrator or sub-administrator, from giving an Oral Instruction or
a Written Instruction to the Custodian or executing a Certificate so
long as it does not result in delivery of or access to assets of the
Trust prohibited by paragraph (a) of this Section 10.
11. Concerning the Custodian.
(a) Qualification. The Custodian represents and warrants to the Trust
that the Custodian is qualified under Section 17(f) of the 1940 Act and
the rules and regulations thereunder to be a custodian for the
securities and similar investments of the Trust, as a registered
investment company, and of the Portfolios, as series of a registered
investment company.
(b) Standard of Conduct. Except as otherwise provided herein, neither
the Custodian nor its nominee shall be liable for any loss or damage,
including counsel fees, resulting from its action or omission to act or
otherwise, except for any such loss or damage arising out of its own
negligence or willful misconduct. The Custodian may, with respect to
questions of law, apply for and obtain the advice and opinion of
counsel to the Trust or of its own counsel, at the expense of the
Trust, and shall be fully protected with respect to anything done or
omitted by it in good faith in conformity with such advice or opinion.
The Custodian shall be liable to the Trust for any loss or damage
resulting from the use of the Book-Entry System or a Depository arising
by reason of any negligence, misfeasance or misconduct on the part of
the Custodian or any of its employees or agents.
(c) Limit of Duties. Without limiting the generality of the foregoing,
the Custodian shall be under no duty or obligation to inquire into, and
shall not be liable for:
1. The validity of the issue of any Securities purchased by a
Portfolio, the legality of the purchase thereof, or the propriety of
the amount paid therefor;
2. The legality of the sale of any Securities by a Portfolio or the
propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor;
4. The legality of the redemption of any Shares, or the propriety of
the amount to be paid therefor;
5. The legality of the declaration or payment of any distribution of
a Portfolio;
6. The legality of any borrowing for temporary or emergency
administrative purposes.
(d) No Liability Until Receipt. The Custodian shall not be liable for,
or considered to be the Custodian of, any monies, whether or not
represented by any check, draft, or other instrument for the payment of
money, received by it on behalf of a Portfolio until the Custodian
actually receives and collects such monies directly or by the final
crediting of the account representing the Trust's or such Portfolio's
interest in the Book-Entry System or a Depository. The Custodian shall
exercise reasonable diligence in pursuing payment on any such
instrument, or any dividend, interest or other receivable of the Trust.
(e) Amounts Due from Transfer Agent. The Custodian shall not be under
any duty or obligation to take action to effect collection of any
amount due to a Portfolio from the Transfer Agent nor to take any
action to effect payment or distribution by the Transfer Agent of any
amount paid by the Custodian to the Transfer Agent in accordance with
this Agreement.
(f) Collection Where Payment Refused. The Custodian shall not be under
any duty or obligation to take action to effect collection of any
amount, if the Securities upon which such amount is payable are in
default, or if payment is refused after due demand or presentation,
unless and until (a) it shall be directed to take such action by a
Certificate and (b) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any such
action.
(g) Appointment of Agents and Sub-Custodians. The Custodian may appoint
one or more banking institutions, including but not limited to banking
institutions located in foreign countries (provided that each such
institution shall constitute an "Eligible Foreign Custodian" within the
meaning of Rule 17f-5 under the 1940 Act), to act as Depository or
Depositories or as Sub-Custodian or as Sub-Custodians of Securities
and monies at any time owned by a Portfolio, upon terms and conditions
specified in a Certificate. The Custodian shall use reasonable care in
selecting a Depository and/or Sub-Custodian located in a country other
than the United States ("Foreign Sub-Custodian"), and shall oversee
the maintenance of any Securities or monies of a Portfolio by any
Foreign Sub-Custodian. The Custodian shall not appoint any Foreign
Sub-Custodian on behalf of the Trust until the Board of Trustees of
the Trust, if required by Rule 17f-5 or Rule 17f-4, under the 1940 Act,
shall have made the determinations and approved the written contract
with such Foreign Sub-Custodian. In addition, the Custodian shall hold
the Trust harmless from, and indemnify the Trust against, any loss that
occurs as a result of the failure of any Foreign Sub-Custodian to
exercise reasonable care with respect to the safekeeping of Securities
and monies of any Portfolio. Notwithstanding the generality of the
foregoing, however, the Custodian shall not be liable for any losses
resulting from or caused by events or circumstances beyond its
reasonable control, including but not limited to, losses resulting from
nationalization, expropriation, devaluation, revaluation, confiscation,
seizure, cancellation, destruction or similar action by any
governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental
authority or currency restrictions, exchange controls, taxes, levies or
other charges affecting the Trust's property; or acts of war,
terrorism, insurrection or revolution; or any other similar act or
event beyond the Custodian's control.
The Custodian shall maintain such records as shall be
necessary to identify the assets of each Portfolio held by each Foreign
Sub-Custodian. The Custodian shall furnish to the Trust such periodic
reports as the Trust shall reasonably request with respect to the
assets of each Portfolio held by each Foreign Sub-Custodian, and shall
furnish to the Trust such notices of transfers of securities, deposits
or other assets to or from each Portfolio's account by each Foreign
Sub-Custodian as the Trust shall request.
The Custodian shall advise the Trust promptly if it learns
that any Foreign Sub-Custodian no longer constitutes an "Eligible
Foreign Custodian" and of any failure by any Foreign Sub-Custodian to
observe any material term or condition of its appointment. If the Board
of Trustees of the Trust determines that a Portfolio's assets should be
withdrawn from a Foreign Sub-Custodian pursuant to Rule 17f-5 under
the 1940 Act, the Custodian shall withdraw the Portfolio's assets from
the care of such Foreign Sub-Custodian as soon as reasonably
practicable, and in any event within 180 days of the date of such
determination by the Board of Trustees of the Trust.
The Custodian may authorize one or more of the Foreign
Sub-Custodians to use the facilities of one or more foreign central
securities depositories or clearing agencies as may hereafter be
approved by resolution of the Trustees of the Trust; provided that any
such organization shall constitute an "Eligible Foreign Custodian."
In the event that any Foreign Sub-Custodian fails to perform
any of its obligations under the terms of its appointment, the
Custodian shall use its best efforts to cause such Foreign
Sub-Custodian to perform such obligations. At the written request of
the Trust, the Custodian shall use its best efforts to assert and
collect any claim for liability for any loss or damage incurred by a
Portfolio arising out of the failure of any such Foreign Sub-Custodian
to perform such obligations.
(h) No Duty to Ascertain Authority. The Custodian shall not be under
any duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the Trust and specifically allocated to
a Portfolio are such as may properly be held by the Trust and
specifically allocated to such Portfolio under the provisions of the
Master Trust Agreement and the Prospectus.
(i) Reliance on Certificates and Instructions. The Custodian
shall be entitled to rely upon any Certificate, notice or other
instrument in writing received from the Trust by the Custodian and
reasonably believed by the Custodian to be genuine and to be signed by
two officers of the Trust. The Custodian shall be entitled to rely upon
any Written Instruction or Oral Instruction actually received by the
Custodian pursuant to the applicable Sections of this Agreement and
reasonably believed by the Custodian to be genuine and to be given by
an Authorized Person. The Trust agrees to forward to the Custodian a
Written Instruction from an Authorized Person confirming such Oral
Instruction in such manner so that such Written Instruction are
received by the Custodian, whether by hand delivery, telex or
otherwise, by the close of business on the same day that such Oral
Instruction is given to the Custodian. The Trust agrees that the fact
that such confirming instructions are not received by the Custodian
shall in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the Trust. The
Trust agrees that the Custodian shall incur no liability to the Trust
in acting upon an Oral Instruction given to the Custodian hereunder
concerning such transactions provided such instructions reasonably
appear to have been received from a duly Authorized Person.
(j) Overdrafts. In the event that the Custodian is directed by Written
Instruction (or Oral Instruction confirmed in writing in accordance
with Section 11(i) hereof) to make any payment or transfer of monies on
behalf of any Portfolio for which there would be, at the close of
business on the date of such payment or transfer, insufficient monies
held by the Custodian on behalf of the Portfolio, the Custodian may, in
its sole discretion and as permitted by applicable law, provide an
overdraft (an "Overdraft") to the Portfolio in an amount sufficient to
allow the completion of such payment or transfer. Any Overdraft
provided hereunder: (a) shall be payable on the next Business Day,
unless otherwise agreed by such Portfolio and the Custodian; (b) shall
accrue interest from the date of the Overdraft to the date of payment
in full by such Portfolio at a rate agreed upon in writing, from time
to time, by the Custodian and such Portfolio. The Custodian and the
Portfolio acknowledge that the purpose of such Overdraft is to
temporarily finance the purchase of Securities for prompt delivery in
accordance with the terms hereof, to meet unanticipated or unusual
redemption, to allow the settlement of foreign exchange contracts or to
meet other emergency expenses not reasonably foreseeable by such
Portfolio. In the event that the Custodian becomes aware that an
Overdraft may occur in time to prevent the Overdraft, the Custodian
will promptly notify the Portfolio, to the extent practicable, and
cooperate with the Portfolio, to the extent possible, in the
Portfolio's attempt to avoid the Overdraft. The Custodian shall
promptly notify such Portfolio in writing (an "Overdraft Notice") of
any Overdraft by facsimile transmission or in such other manner as such
Portfolio and the Custodian may agree in writing. The Portfolio shall
be liable to pay the charge for the Overdraft to the extent that the
Portfolio is responsible for causing such Overdraft and the Custodian
shall be liable to pay the charge for the Overdraft to the extent that
the Custodian is responsible for causing such Overdraft. To secure
payment of any Overdraft, the Portfolio hereby grants to the Custodian
a continuing security interest in and right of setoff against the
Securities and monies in such Portfolio's account from time to time in
the full amount of such Overdraft. Should the Portfolio fail to pay
promptly any amounts owed hereunder, the Custodian shall be entitled to
use available monies in such Portfolio's account and to liquidate
Securities in the account as is necessary to meet such Portfolio's
obligations under the Overdraft; provided, that the Portfolio shall be
entitled to choose which Securities shall be liquidated. In any such
case, and without limiting the foregoing, the Custodian shall be
entitled, to the extent permitted by applicable law, to take such other
action(s) or exercise such other options, powers and rights as the
Custodian now or hereafter has as a secured creditor under the
Massachusetts Uniform Commercial Code or any other applicable law.
(k) Inspection of Books and Records. The books and records of the
Custodian shall be open to inspection and audit at reasonable times by
officers and auditors employed by the Trust and by the appropriate
employees of the Securities and Exchange Commission.
The Custodian shall provide the Trust with any report obtained
by the Custodian on the system of internal accounting control of the
Book-Entry System or a Depository and with such reports on its own
systems of internal accounting control as the Trust may reasonably
request from time to time.
12. Term and Termination.
(a) This Agreement shall be effective as of the date first set forth
above (the "Effective Date") and shall continue in effect thereafter
until such time as this Agreement may be terminated in accordance with
the provisions hereof.
(b) Either of the parties hereto may terminate this Agreement with
respect to any Portfolio by giving to the other party a notice in
writing specifying the date of such termination, which shall be not
less than 60 days after the date of receipt of such notice. In the
event such notice is given by the Trust, it shall be accompanied by a
certified vote or votes of the Board of Trustees of the Trust, electing
to terminate this Agreement with respect to any Portfolio and
designating a successor custodian or custodians, which shall be a
person qualified to so act under the 1940 Act.
(c) In the event that the Custodian is no longer qualified as provided
in Section 11(a) hereof, the Custodian shall immediately give notice to
the Trust as provided herein and this Agreement shall automatically
terminate as to all of the Portfolios as soon as it is practicable for
all the Securities and monies of the Trust and the Portfolios to be
delivered to the Trust or to a new custodian as provided below and upon
such delivery.
In the event notice of termination is given by the Custodian
or this Agreement is automatically terminated as provided above, as the
case may be, the Trust shall, on or before the termination date,
deliver to the Custodian a certified vote or votes of the Board of
Trustees of the Trust, designating a successor custodian or custodians.
In the absence of such designation by the Trust, the Custodian may
designate a successor custodian, which shall be a person qualified to
so act under the 1940 Act. If the Trust fails to designate a successor
custodian for such Portfolio or Portfolios and the Custodian does not
designate a successor custodian for such Portfolio or Portfolios, the
Trust shall upon the date specified in the notice of termination of
this Agreement or upon the date of automatic termination of this
Agreement as provided above and upon the delivery by the Custodian of
all Securities (other than Securities held in the Book-Entry System
which cannot be delivered to the Trust) and monies then owned by such
Portfolio, be deemed to be its own custodian and the Custodian shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement, other than the duty with respect to Securities held in the
Book-Entry System which cannot be delivered to the Trust.
(d) If the Trust or the Custodian designates a successor custodian for
the Portfolio or Portfolios, upon the date set forth in such notice
under paragraph (c) of this Section 12 or upon the date of automatic
termination of this Agreement, as provided above, as the case may be,
this Agreement shall terminate to the extent specified in such notice,
and the Custodian shall upon receipt of a notice of acceptance by the
successor custodian on that date (i) deliver directly to the successor
custodian all Securities and monies then held by the Custodian and
specifically allocated to the Portfolio or Portfolios specified, after
deducting all fees, expenses and other amounts for the payment or
reimbursement of which it shall then be entitled with respect to such
Portfolio or Portfolios; and (ii) will otherwise cooperate in the
transfer of its duties and responsibilities to the successor custodian
hereunder.
13. Limitation of Liability.
The Trust and the Custodian agree that the obligations of the
Trust under this Agreement shall not be binding upon any of the
Trustees, shareholders, nominees, officers, employees or agents,
whether past, present or future, of the Trust, individually, but are
binding only upon the assets and property of the Trust and the
Portfolios covered under this Agreement, as provided in the Master
Trust Agreement. The execution and delivery of this Agreement have been
authorized by the Trustees of the Trust, and signed by an authorized
officer of the Trust, acting as such, and neither such authorization by
such Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them or any shareholder of the Trust
individually or to impose any liability on any of them or any
shareholder of the Trust personally, but shall bind only the assets and
property of the Trust and the Portfolios covered under this Agreement
as provided in the Master Trust Agreement.
14. Miscellaneous.
(a) Annexed hereto as Appendix A is a certification signed by two of
the present officers of the Trust setting forth the names and the
signatures of the present Authorized Persons. The Trust agrees to
furnish to the Custodian a new certification in similar form in the
event that any such present Authorized Person ceases to be such an
Authorized Person or in the event that other or additional Authorized
Persons are elected or appointed. Until such new certification shall be
received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon Oral Instruction or signatures of the
present Authorized Persons as set forth in the last delivered
certification.
(b) Annexed hereto as Appendix B is a certification signed by two of
the present officers of the Trust setting forth the names and the
signatures of the present officers of the Trust. The Trust agrees to
furnish to the Custodian a new certification in similar form in the
event any such present officer ceases to be an officer of the Trust or
in the event that other or additional officers are elected or
appointed. Until such new certification shall be received, the
Custodian shall be fully protected in acting under the provisions of
this Agreement upon the signature of the officers as set forth in the
last delivered certification.
(c) The Custodian shall provide the Trust and/or its investment
advisers and investment sub-advisers such reports on securities and
cash positions, transaction fails, aging of receivables and other
relevant data as the Trust or its investment advisers and investment
sub-advisers may reasonably require and shall reconcile any differences
with the records of such pricing and bookkeeping agent. The Custodian
will also timely provide the Trust's pricing and bookkeeping agent with
such information in the Custodian's possession as the pricing and
bookkeeping agent may reasonably require.
(d) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Custodian, shall be sufficiently
given if addressed to the Custodian and mailed or delivered to it at
its offices first set forth above; or at such other place or in such
other manner as the Custodian may from time to time designate in
writing.
(e) Any notice or other instrument in writing, authorized or required
by this Agreement to be given to the Trust, shall be sufficiently given
if addressed to the Trust and mailed or delivered to it at its
principal office and place of business first set forth above; or at
such other place or in such other manner as the Trust may from time to
time designate in writing.
(f) This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the same formality
as this Agreement, as may be permitted or required by the 1940 Act.
(g) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Trust
without the written consent of the Custodian, or by the Custodian
without the written consent of the Trust authorized or approved by a
vote of the Board of Trustees of the Trust, and any attempted
assignment without such written consent shall be null and void.
(h) The Trust represents that a copy of the Master Trust Agreement is
on file with the Secretary of the Commonwealth of Massachusetts and
with the Boston City Clerk.
(i) This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts.
(j) The captions of the Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
(k) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but such counterparts
shall, together, constitute only one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective representatives duly authorized as
of the day and year first above written.
SIERRA ASSET MANAGEMENT PORTFOLIOS
By /s/ F. Brian Cerini
------------------------------
Name: F. Brian Cerini
Title: President
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By /s/ Christopher Healy
------------------------------
Name: Christopher Healy
Title: Vice-President
<PAGE>
APPENDIX A
We, F. Brian Cerini, President, and Keith B. Pipes, Executive
Vice President, Treasurer and Secretary, of Sierra Asset Management Portfolios,
a business trust organized under the laws of the Commonwealth of Massachusetts
(the "Trust"), do hereby certify that:
The following individuals have been duly authorized as
Authorized Persons to give Oral Instructions and Written Instructions on behalf
of the Trust.
Name Position Signature
- ---- -------- ---------
F. Brian Cerini President /s/ F. Brian Cerini
-----------------------
Keith B. Pipes Executive Vice /s/ Keith B. Pipes
President, Treasurer -----------------------
and Secretary
Michael D. Goth Senior Vice President /s/ Michael D. Goth
-----------------------
Stephen C. Scott Senior Vice President /s/ Stephen C. Scott
-----------------------
Craig M. Miller Assistant Treasurer /s/ Craig M. Miller
-----------------------
/s/ F. Brian Cerini /s/ Keith B. Pipes
- ------------------- --------------------
F. Brian Cerini Keith B. Pipes
President Executive Vice
President, Secretary
and Treasurer
Dated: July 19, 1996
<PAGE>
APPENDIX B
We, F. Brian Cerini, President, and Keith B. Pipes, Executive
Vice President, Treasurer and Secretary, of Sierra Asset Management Portfolios,
a business trust organized under the laws of the Commonwealth of Massachusetts
(the "Trust"), do hereby certify that:
The following individuals serve in the following positions
with the Trust and each individual has been duly elected or appointed to each
such position and qualified therefor in conformity with the Trust's Master Trust
Agreement and the signatures set forth opposite their respective names are their
true and correct signatures:
Name Position Signature
- ---- -------- ---------
F. Brian Cerini President /s/ F. Brian Cerini
-----------------------
Keith B. Pipes Executive Vice /s/ Keith B. Pipes
President, Treasurer -----------------------
and Secretary
Michael D. Goth Senior Vice President /s/ Michael D. Goth
-----------------------
Stephen C. Scott Senior Vice President /s/ Stephen C. Scott
-----------------------
Craig M. Miller Assistant Treasurer /s/ Craig M. Miller
-----------------------
Richard W. Grant Assistant Secretary /s/ Richard W. Grant
-----------------------
Therese M. Hogan Assistant Secretary, /s/ Therese M. Hogan
Blue Sky -----------------------
/s/ F. Brian Cerini /s/ Keith B. Pipes
- ------------------- --------------------
F. Brian Cerini Keith B. Pipes
President Executive Vice
President, Secretary
and Treasurer
Dated: July 19, 1996
<PAGE>
SCHEDULE A
BOSTON SAFE DEPOSIT AND TRUST COMPANY
CUSTODY FEE SCHEDULE
A. Account Maintenance Charge
Per Month per account $100.00
B. Earnings Allowance
Earnings credits will be provided on 90% of idle U.S. dollar balances at an
annualized rate equal to the 90 day U.S. Treasury Bill rate for the period.
If the earnings credit exceeds the total custody bill in a given month, the
excess earnings credit will be carried forward and can be used to offset
future custody bills. If the earnings credit is less than the custody bill
in a given month plus any previous excess earnings credit, then an invoice
will be due for that amount. Earnings credits will be used exclusively to
offset custody bills.
GLOBAL CUSTODY FEE SCHEDULE
C. Global Safekeeping:
1. EUROCLEAR/CEDEL/FIRST CHICAGO CLEARING CORP.:
The Trust shall pay the Custodian the following
transaction charge for assets held through
Euroclear/Cedel at the end of each month:
$30 per transaction
2. Global Safekeeping - Group I, Group II, Group III,
Group IV, Group V and Group VI Markets:
The Trust shall pay the Custodian the following transaction
charges with respect to the Group listed below.
Group I Transactions $35.00 per transaction
Group II Transactions $40.00 per transaction
Group III Transactions $50.00 per transaction
Group IV Transactions $60.00 per transaction
Group V Transactions $70.00 per transaction
Group VI Transactions $85.00 per transaction
*Third Party F/X $20.00 per FX
- --------
* A Third Party F/X is one in which Boston Safe is not
the currency broker. This charge will be assessed
only on transactions where funds are actually
transferred.
Reimbursable out-of-pocket expenses will be added to each monthly
invoice and will include, but not be limited to, such customary items
as telephone, wire charges ($5.00 per wire), stamp duties, securities
registration, postage, courier services and duplication charges.
SCHEDULE A
(continued)
COUNTRY GROUPS
GROUP I GROUP II GROUP III GROUP IV
- ------- -------- --------- --------
Australia Belgium Austria Argentina
Canada Denmark Finland Czech Republic
Germany France Hong Kong Philippines
Japan Ireland Israel Sri Lanka
Italy Malaysia Taiwan
Netherlands Mexico Turkey
New Zealand Norway
South Africa South Korea
Spain Singapore
Sweden Thailand
Switzerland
United Kingdom
GROUP V GROUP VI
- ------- --------
Indonesia Bangladesh
Luxembourg Brazil
Peru China-Shanghai
Portugal China Shenzhen
Colombia
Greece
Hungary
India
Jordan
Pakistan
Poland
Venezuela
SIERRA ASSET MANAGEMENT PORTFOLIOS
By /s/ F. Brian Cerini
------------------------------
Name: F. Brian Cerini
Title: President
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By /s/ Christopher Healy
------------------------------
Name: Christopher Healy
Title: Vice-President
<PAGE>
SCHEDULE B
OUT-OF-POCKET CHARGES
The Trust will pay to the Custodian as soon as possible after the end
of each month all out-of-pocket expenses, including but not limited to, postage,
wire charges ($5.00), courier expense, registration fees, stamp duties, telex
charges, custom reporting or custom programing, internal/external tax, legal or
consulting costs, and proxy voting expenses, reasonably incurred in connection
with the assets of each Portfolio of the Trust.
SIERRA ASSET MANAGEMENT PORTFOLIOS
By /s/ F. Brian Cerini
------------------------------
Name: F. Brian Cerini
Title: President
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By /s/ Christopher Healy
------------------------------
Name: Christopher Healy
Title: Vice-President
Dated: July 19, 1996
<PAGE>
SCHEDULE C
SIERRA ASSET MANAGEMENT PORTFOLIOS
COVERED UNDER THIS CUSTODY AGREEMENT
Income Portfolio
Value Portfolio
Balanced Portfolio
Growth Portfolio
Capital Growth Portfolio
SIERRA ASSET MANAGEMENT PORTFOLIOS
By /s/ F. Brian Cerini
------------------------------
Name: F. Brian Cerini
Title: President
BOSTON SAFE DEPOSIT AND TRUST COMPANY
By /s/ Christopher Healy
------------------------------
Name: Christopher Healy
Title: Vice-President
Dated: July 19, 1996
<PAGE>
Exhibit 9(a)
ADMINISTRATION AGREEMENT
JULY 23, 1996
Sierra Fund Administration Corporation
9301 Corbin Avenue, Suite 333
Northridge, California 91324
Ladies and Gentlemen:
The Sierra Asset Management Portfolios (the "Trust"), a business trust
organized under the laws of the Commonwealth of Massachusetts, confirms its
agreements with Sierra Fund Administration Corporation ("Sierra
Administration"), a corporation organized under the laws of the State of
California, regarding administration services to be provided by Sierra
Administration in connection with each of the investment portfolios offered from
time to time by the Trust (individually, a "Portfolio" and together, the
"Portfolios"). Sierra Administration agrees to provide services upon the
following terms and conditions:
1. Investment Description; Appointment
-----------------------------------
The Trust desires to employ the Trust's capital by investing and
reinvesting (a) in investments of the kind and in accordance with the
limitations specified in (i) the Trust's Agreement and Declaration of Trust
dated March 26, 1996, as amended (the "Trust Agreement"), and (ii) the
prospectus(es) (the "Prospectus") and statement(s) of additional information
(the "Statement") relating to the Portfolios contained in the Trust's
Registration Statement on Form N-1A filed with the Securities and Exchange
Commission (the "Registration Statement") and (b) in such manner and to such
extent as may from time to time be approved by the Trust's Board of Trustees.
Copies of the Prospectus, the Statement and the Trust Agreement have been
submitted to Sierra Administration. The Trust desires to employ and hereby
appoints Sierra Administration to act as the Portfolios' administrator. Sierra
Administration accepts this appointment and agrees to furnish the services
described herein for the compensation set forth below.
2. Services as Administrator
-------------------------
Subject to the supervision and direction of the Board of Trustees of
the Trust, Sierra Administration is responsible for all administrative functions
with respect to the Trust and will (a) assist in supervising all aspects of the
operations of the Trust except those performed by the Trust's investment adviser
under its investment advisory agreement; (b) supply the Trust with office
facilities (which may be in Sierra Administration's own offices), statistical
and research data, data processing services, clerical, accounting and
bookkeeping services (including, but not limited to, the calculation of (i) the
net asset values of shares of the Trust, (ii) distribution fees), internal
auditing and legal services, internal executive and administrative services, and
stationary and office supplies; (c) prepare reports to the Trust's shareholders
and materials for the Board of Trustees of the Trust; (d) prepare tax returns
and reports to and filings with the Securities and Exchange Commission and state
Blue Sky authorities; (e) cooperate with the Trust's transfer agent for the
purpose of establishing the implementing procedures to ensure that the Trust's
transfer agency and shareholder relations functions are efficiently carried out;
and (f) provide such other similar services as the Trust may reasonably request
to the extent permitted under application statutes, rules and regulations. The
services to be performed by Sierra Administration hereunder may be delegated by
it, in whole or in part, to one or more sub-administrators provided that any
delegation of duties to a sub-administrator shall not relieve Sierra
Administration of its responsibilities hereunder. Notwithstanding anything to
the contrary in this Agreement, Sierra Administration shall not be responsible
for the performance of any duties which are required to be performed by the
Trust's transfer agent.
3. Compensation
------------
(a) In consideration of services rendered pursuant to this Agreement,
the Trust will pay Sierra Administration on the first business day of each month
a fee for the previous month at an annual rate of 0.50% of the average daily net
assets of each Portfolio; out of which fee Sierra Administration shall pay
expenses as described in Section 4 including, without limitation, fees to any
sub-administrator and the custodian. The fee for the period from the date of
this Agreement to the end of the first calendar month of the term of this
Agreement shall be prorated according to the proportion that such period bears
to the full monthly period.
(b) Upon any termination of this Agreement before the end of any month,
the fee for such part of a month shall be prorated according to the proportion
which such period bears to the full monthly period and shall be payable upon the
date of termination of this Agreement. For the purpose of determining fees
payable to Sierra Administration, the value of each Fund's net assets shall be
computed at the times and in the manner specified in the Prospectus and/or the
Statement relating to the Portfolio as from time to time in effect.
4. Expenses
--------
Sierra Administration will bear all expenses in connection with the
performance of its services under this Agreement, including, without limitation,
payment of the fee to any sub-administrator and custodian described in Paragraph
3 above. The Trust will bear certain other expenses to be incurred in its
operation, including: organizational expenses; taxes, interest, brokerage fees
and commissions, if any; fees of trustees of the Trust who are not officers,
directors, or employees of Sierra Investment Services Corporation, each
sub-administrator or any of their affiliates; transfer agent fees; Securities
and Exchange Commission fees and state Blue Sky qualification fees;
out-of-pocket expenses of custodians, transfer and dividend disbursing agents
and the Trust's sub-administrator and transaction charges of custodians;
insurance premiums; outside auditing and legal expenses; costs of maintenance of
the Trust's existence; costs attributable to investor services, including,
without limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders; costs of shareholders'
reports and meetings of the shareholders of the Trust and of the officers or
Board of Trustees of the Trust; and any extraordinary expenses. In addition,
each Portfolio pays a distribution fee pursuant to terms of a Distribution Plan
adopted under Rule 12b-1 of the Investment Company Act of 1940, as amended (the
"1940 Act").
5. Standard of Care
----------------
Sierra Administration shall exercise its best judgment in rendering the
services listed in Paragraph 2 above. Sierra Administration shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Portfolios in connection with the matters to which this Agreement relates,
except (a) a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages shall
be limited to the period and the amount set forth in Section 36(b)(3) of the
1940 Act), or (b) a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
6. Term of Agreement
-----------------
This Agreement shall become effective as of the date set forth above
and shall continue for an initial two-year term and shall continue automatically
from year-to-year thereafter unless terminated in accordance with the following
sentence. This Agreement is terminable at any time, without penalty, on 60 days'
written notice by the Board of Trustees of the Trust, or upon 90 days' written
notice by Sierra Administration.
7. Service to Other Companies or Accounts
--------------------------------------
The Trust understands that Sierra Administration may act in the future
as administrator to other investment companies or series of investment
companies, and the Trust has no objection to Sierra Administration's so acting
in such capacity. The Trust understands that the persons employed by Sierra
Administration to assist in the performance of Sierra Administration's duties
under this Agreement will not devote their full time to such service and nothing
contained in this Agreement shall be deemed to limit or restrict the right of
Sierra Administration or any affiliate of Sierra Administration to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
8. Representations of the Trust and Sierra Administration
------------------------------------------------------
The Trust represents that (i) a copy of the Trust Agreement is on file
in the office of the Secretary of The Commonwealth of Massachusetts, (ii) the
appointment of Sierra Administration has been duly authorized and (iii) it has
acted and will continue to act in conformity with the 1940 Act and other
applicable laws. Sierra Administration represents that it is authorized to
perform the services described herein.
9. Limitation of Liability
-----------------------
The copy of the Trust Agreement is on file with the Secretary of The
Commonwealth of Massachusetts, and notice is hereby given that this instrument
is executed on behalf of the Trustees of the Trust as Trustees and not
individually and that the obligations of this instrument are not binding upon
any of the Trustees, officers or shareholders individually but are binding only
upon the assets and property of the Trust.
10. Entire Agreement
----------------
This Agreement constitutes the entire agreement between the parties
hereto.
11. Governing Law
-------------
This Agreement shall be governed in accordance with the laws of The
Commonwealth of Massachusetts.
If the foregoing accurately sets forth our agreement, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
SIERRA ASSET MANAGEMENT PORTFOLIOS
By /s/ F. Brian Cerini
----------------------------------
Name: F. Brian Cerini
Title: President
Accepted:
SIERRA FUND ADMINISTRATION
CORPORATION
By /s/ Keith B. Pipes
- ----------------------------------
Name: Keith B. Pipes
Title: Chief Financial Officer and Secretary
<PAGE>
EXHIBIT 13
PURCHASE AGREEMENT
Sierra Asset Management Portfolios (the "Trust"), a Massachusetts Business
Trust, and Sierra Fund Administration Corporation, a California Corporation
("Sierra Administration"), intending to be legally bound, hereby agree as
follow:
1. In order to provide the Trust with its initial capital, the Trust hereby
sells to Sierra Administration and Sierra Administration hereby purchases Class
A and Class B Shares of the Fund's Income, Value, Balanced, Growth and Capital
Growth Portfolios (individually, a "Portfolio" and collectively the
"Portfolios"), with no par value per share, as follows: 1,000 Class A and 1,000
Class B Shares of each Sierra Asset Management Portfolio at $10.00 per share.
The Trust hereby acknowledges receipt from Sierra Administration of $100,000 in
full payment for the shares.
2. Sierra Administration represents and warrants to the Trust that the Class
A and Class B Shares of each Portfolio are being acquired for investment and not
with a view to distribute thereof and that Sierra Administration has no present
intention to redeem or dispose of any of the Class A and Class B Shares.
3. Sierra Administration hereby agrees that it will not redeem any of the
Class A and Class B Shares prior to the time that the Trust has completed the
amortization of its organizational expenses. In the event that the Trust, or a
Portfolio of the Trust, liquidates before the deferred organizational expenses
are fully amortized, then the Class A and Class B Shares shall bear their
proportionate share of such unamortized organizational expenses.
IN WITNESS WHEREOF, the parties have executed this agreement as of the 18th
day of July, 1996.
Sierra Asset Management Portfolios
/s/ F. Brian Cerini
--------------------------------------
By: F. Brian Cerini
Title: President
Sierra Fund Administration Corporation
/s/ Craig M. Miller
--------------------------------------
By: Craig M. Miller
Title: Vice President and Controller
<PAGE>
Exhibit 24
SIERRA ASSET MANAGEMENT PORTFOLIOS
POWER OF ATTORNEY
F. Brian Cerini, whose signature appears below, does hereby constitute
and appoint Keith B. Pipes, Michael D. Goth and Richard W. Grant, and each of
them acting alone, his true and lawful attorney and agent, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorney and agent may deem necessary or
advisable or which may be required to enable Sierra Asset Management Portfolios
(the "Fund") to comply with the Securities Act of 1933, as amended (the "1933
Act") and the Investment Company Act of 1940, as amended (the "1940 Act"), and
any rules, regulations or requirements of the Securities and Exchange Commission
in respect thereof, in connection with the Fund's Registration Statement on Form
N-1A pursuant to the 1933 Act and the 1940 Act, together with any and all
amendments thereto, including specifically, but without limiting the generality
of the foregoing, the power and authority to sign, in the name and on behalf of
the undersigned as a trustee and officer of the Fund, such Registration
Statement and any and all such amendments filed with the Securities and Exchange
Commission under the 1933 Act and the 1940 Act, and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorney and agent shall do or cause to be done by virtue hereof.
/s/ F. Brian Cerini
--------------------------
F. Brian Cerini
Date: October 24, 1996
<PAGE>
SIERRA ASSET MANAGEMENT PORTFOLIOS
POWER OF ATTORNEY
Alfred E. Osborne, Jr., whose signature appears below, does hereby
constitute and appoint F. Brian Cerini, Keith B. Pipes, Michael D. Goth and
Richard W. Grant, and each of them acting alone, his true and lawful attorney
and agent, with power of substitution or resubstitution, to do any and all acts
and things and to execute any and all instruments which said attorney and agent
may deem necessary or advisable or which may be required to enable Sierra Asset
Management Portfolios (the "Fund") to comply with the Securities Act of 1933, as
amended (the "1933 Act") and the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the Fund's
Registration Statement on Form N-1A pursuant to the 1933 Act and the 1940 Act,
together with any and all amendments thereto, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign, in the name and on behalf of the undersigned as a trustee of the Fund,
such Registration Statement and any and all such amendments filed with the
Securities and Exchange Commission under the 1933 Act and the 1940 Act, and any
other instruments or documents related thereto, and the undersigned does hereby
ratify and confirm all that said attorney and agent shall do or cause to be done
by virtue hereof.
/s/ Alfred E. Osborne
--------------------------
Alfred E. Osborne, Jr.
Date: October 24, 1996
<PAGE>
SIERRA ASSET MANAGEMENT PORTFOLIOS
POWER OF ATTORNEY
Arthur H. Bernstein, whose signature appears below, does hereby
constitute and appoint F. Brian Cerini, Keith B. Pipes, Michael D. Goth and
Richard W. Grant, and each of them acting alone, his true and lawful attorney
and agent, with power of substitution or resubstitution, to do any and all acts
and things and to execute any and all instruments which said attorney and agent
may deem necessary or advisable or which may be required to enable Sierra Asset
Management Portfolios (the "Fund") to comply with the Securities Act of 1933, as
amended (the "1933 Act") and the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the Fund's
Registration Statement on Form N-1A pursuant to the 1933 Act and the 1940 Act,
together with any and all amendments thereto, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign, in the name and on behalf of the undersigned as a trustee of the Fund,
such Registration Statement and any and all such amendments filed with the
Securities and Exchange Commission under the 1933 Act and the 1940 Act, and any
other instruments or documents related thereto, and the undersigned does hereby
ratify and confirm all that said attorney and agent shall do or cause to be done
by virtue hereof.
/s/ Arthur H. Bernstein
--------------------------
Arthur H. Bernstein
Date: October 24, 1996
<PAGE>
SIERRA ASSET MANAGEMENT PORTFOLIOS
POWER OF ATTORNEY
Edmond R. Davis, whose signature appears below, does hereby constitute
and appoint F. Brian Cerini, Keith B. Pipes, Michael D. Goth and Richard W.
Grant, and each of them acting alone, his true and lawful attorney and agent,
with power of substitution or resubstitution, to do any and all acts and things
and to execute any and all instruments which said attorney and agent may deem
necessary or advisable or which may be required to enable Sierra Asset
Management Portfolios (the "Fund") to comply with the Securities Act of 1933, as
amended (the "1933 Act") and the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the Fund's
Registration Statement on Form N-1A pursuant to the 1933 Act and the 1940 Act,
together with any and all amendments thereto, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign, in the name and on behalf of the undersigned as a trustee of the Fund,
such Registration Statement and any and all such amendments filed with the
Securities and Exchange Commission under the 1933 Act and the 1940 Act, and any
other instruments or documents related thereto, and the undersigned does hereby
ratify and confirm all that said attorney and agent shall do or cause to be done
by virtue hereof.
/s/ Edmond R. Davis
--------------------------
Edmond R. Davis
Date: October 24, 1996
<PAGE>
SIERRA ASSET MANAGEMENT PORTFOLIOS
POWER OF ATTORNEY
David E. Anderson, whose signature appears below, does hereby
constitute and appoint F. Brian Cerini, Keith B. Pipes, Michael D. Goth and
Richard W. Grant, and each of them acting alone, his true and lawful attorney
and agent, with power of substitution or resubstitution, to do any and all acts
and things and to execute any and all instruments which said attorney and agent
may deem necessary or advisable or which may be required to enable Sierra Asset
Management Portfolios (the "Fund") to comply with the Securities Act of 1933, as
amended (the "1933 Act") and the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the Fund's
Registration Statement on Form N-1A pursuant to the 1933 Act and the 1940 Act,
together with any and all amendments thereto, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign, in the name and on behalf of the undersigned as a trustee of the Fund,
such Registration Statement and any and all such amendments filed with the
Securities and Exchange Commission under the 1933 Act and the 1940 Act, and any
other instruments or documents related thereto, and the undersigned does hereby
ratify and confirm all that said attorney and agent shall do or cause to be done
by virtue hereof.
/s/ David E. Anderson
--------------------------
David E. Anderson
Date: October 24, 1996
<PAGE>
SIERRA ASSET MANAGEMENT PORTFOLIOS
POWER OF ATTORNEY
John W. English, whose signature appears below, does hereby constitute
and appoint F. Brian Cerini, Keith B. Pipes, Michael D. Goth and Richard W.
Grant, and each of them acting alone, his true and lawful attorney and agent,
with power of substitution or resubstitution, to do any and all acts and things
and to execute any and all instruments which said attorney and agent may deem
necessary or advisable or which may be required to enable Sierra Asset
Management Portfolios (the "Fund") to comply with the Securities Act of 1933, as
amended (the "1933 Act") and the Investment Company Act of 1940, as amended (the
"1940 Act"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the Fund's
Registration Statement on Form N-1A pursuant to the 1933 Act and the 1940 Act,
together with any and all amendments thereto, including specifically, but
without limiting the generality of the foregoing, the power and authority to
sign, in the name and on behalf of the undersigned as a trustee of the Fund,
such Registration Statement and any and all such amendments filed with the
Securities and Exchange Commission under the 1933 Act and the 1940 Act, and any
other instruments or documents related thereto, and the undersigned does hereby
ratify and confirm all that said attorney and agent shall do or cause to be done
by virtue hereof.
/s/ John W. English
--------------------------
John W. English
Date: October 24, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> Sierra SAM Income Portfolio CL-A
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 17,851,672
<INVESTMENTS-AT-VALUE> 18,067,639
<RECEIVABLES> 102,035
<ASSETS-OTHER> 2,455
<OTHER-ITEMS-ASSETS> 152,946
<TOTAL-ASSETS> 18,325,075
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 65,056
<TOTAL-LIABILITIES> 65,056
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14,064,135
<SHARES-COMMON-STOCK> 1,381,761
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 33
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9,057
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 215,967
<NET-ASSETS> 14,237,149
<DIVIDEND-INCOME> 93,529
<INTEREST-INCOME> 28
<OTHER-INCOME> 0
<EXPENSES-NET> 16,294
<NET-INVESTMENT-INCOME> 77,263
<REALIZED-GAINS-CURRENT> 9,057
<APPREC-INCREASE-CURRENT> 215,967
<NET-CHANGE-FROM-OPS> 302,287
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (60,923)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,462,106
<NUMBER-OF-SHARES-REDEEMED> (83,844)
<SHARES-REINVESTED> 2,499
<NET-CHANGE-IN-ASSETS> 18,240,019
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,090
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 47,738
<AVERAGE-NET-ASSETS> 3,013,927
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.22
<PER-SHARE-GAIN-APPREC> 0.30
<PER-SHARE-DIVIDEND> (0.22)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.30
<EXPENSE-RATIO> 0.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 012
<NAME> Sierra SAM Income Portfolio CL-B
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> NOV-30-1996
<INVESTMENTS-AT-COST> 17,851,672
<INVESTMENTS-AT-VALUE> 18,067,639
<RECEIVABLES> 102,035
<ASSETS-OTHER> 2,455
<OTHER-ITEMS-ASSETS> 152,946
<TOTAL-ASSETS> 18,325,075
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 65,056
<TOTAL-LIABILITIES> 65,056
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,970,827
<SHARES-COMMON-STOCK> 390,438
<SHARES-COMMON-PRIOR> 1,000
<ACCUMULATED-NII-CURRENT> 33
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9,057
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 215,967
<NET-ASSETS> 4,022,870
<DIVIDEND-INCOME> 93,529
<INTEREST-INCOME> 28
<OTHER-INCOME> 0
<EXPENSES-NET> 16,294
<NET-INVESTMENT-INCOME> 77,263
<REALIZED-GAINS-CURRENT> 9,057
<APPREC-INCREASE-CURRENT> 215,967
<NET-CHANGE-FROM-OPS> 302,287
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (16,307)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 398,945
<NUMBER-OF-SHARES-REDEEMED> (10,408)
<SHARES-REINVESTED> 901
<NET-CHANGE-IN-ASSETS> 18,240,019
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,090
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 47,738
<AVERAGE-NET-ASSETS> 928,469
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.20
<PER-SHARE-GAIN-APPREC> 0.30
<PER-SHARE-DIVIDEND> (0.20)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.30
<EXPENSE-RATIO> 1.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 021
<NAME> Sierra SAM Value Portfolio CL-A
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> NOV-30-1996
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<NUMBER> 022
<NAME> Sierra SAM Value Portfolio CL-B
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
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<NUMBER> 031
<NAME> Sierra SAM Balanced Portfolio CL-A
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 032
<NAME> Sierra SAM Balanced Portfolio CL-B
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 041
<NAME> Sierra SAM Growth Portfolio CL-A
<S> <C>
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
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<NAME> Sierra SAM Growth Portfolio CL-B
<S> <C>
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
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<NAME> Sierra SAM Capital Growth Portfolio CL-A
<S> <C>
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<TABLE> <S> <C>
<PAGE>
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<SERIES>
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<NAME> Sierra SAM Capital Growth Portfolio CL-B
<S> <C>
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