As filed with the Securities and Exchange Commission on
April 15, 1999
File No. 811-07603
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 7 |X|
STANDISH, AYER & WOOD MASTER PORTFOLIO
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(Exact Name of Registrant as Specified in Charter)
P.O. Box 501
George Town, Grand Cayman
Cayman Island, B.W.I.
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(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (809) 949-2001
Richard S. Wood
Standish, Ayer & Wood, Inc.
One Financial Center
Boston, Massachusetts 02109
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(Name and Address of Agent for Service)
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EXPLANATORY NOTES
This Amendment No. 7 to the Registration Statement on Form N-1A (the
"Amendment") has been filed by the Registrant pursuant to Section 8(b) of the
Investment Company Act of 1940, as amended (the "1940 Act"), and Rule 8b-16
thereunder. However, beneficial interests in the series of the Registrant are
not registered under the Securities Act of 1933, as amended (the "1933 Act"),
because such interests will be issued solely in transactions that are exempt
from registration under the 1933 Act. Investments in the Registrant's series may
only be made by investment companies, insurance company separate accounts,
common or commingled trust funds or similar organizations or entities that are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
The Amendment does not constitute an offer to sell, or the solicitation of an
offer to buy, any beneficial interests in any series of the Registrant.
This Amendment relates only to the Standish Equity Portfolio, Standish
Small Capitalization Equity Portfolio and Standish Small Capitalization Equity
Portfolio II and does not affect the registration of any other series of the
Registrant.
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EXPLANATORY NOTE
Throughout this Part A and Part B of Standish Equity Portfolio (the
"Portfolio"), a series of Standish, Ayer & Wood Master Portfolio (the "Portfolio
Trust"), specified information concerning the Portfolio and the Portfolio Trust
is incorporated by reference from the most recently effective post-effective
amendment to the Registration Statement on Form N-1A (File Nos. 33-8214 and
811-4813) of Standish, Ayer & Wood Investment Trust (the "Trust") that relates
to and includes the prospectus and statement of additional information of
Standish Equity Fund (the "Fund"). Further, to the extent that information
concerning the Portfolio and/or the Portfolio Trust is so incorporated and the
Trust files, pursuant to Rule 497 under the Securities Act of 1933, as amended
(the "1933 Act"), a revised prospectus or statement of additional information of
the Fund or a supplement to the Fund's prospectus or statement of additional
information that amends such incorporated information, then the amended
information contained in such Rule 497 filing is also incorporated herein by
reference. The Fund's current prospectus and statement of additional
information, as amended, revised or supplemented from time to time, are referred
to herein as the "Prospectus" and "SAI," respectively.
Dated April 15, 1999
STANDISH, AYER & WOOD MASTER PORTFOLIO
STANDISH EQUITY PORTFOLIO
PART A
THIS PART A DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE
SOLICITATION OF AN OFFER TO BUY, ANY BENEFICIAL INTERESTS IN
STANDISH EQUITY PORTFOLIO.
The Portfolio's Part B, of even date herewith, is incorporated by
reference into this Part A.
Responses to Items 1 through 3, 5 and 9 have been omitted pursuant to
paragraph 2(b) of Instruction B of the General Instructions to Form N-1A.
ITEM 4. INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED
RISKS.
The Portfolio Trust incorporates by reference the information concerning
the Portfolio's investment objective, policies and restrictions from the
following sections of the Prospectus: "Risk/Return Summary," "The Funds'
Investments and Related Risks," and "Fund Details - Master/feeder Structure."
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The Portfolio's securities trades, pricing and accounting services and
other operations could be adversely affected if the computer systems of the
advisers, distributor, custodian and transfer agent were unable to recognize
dates after 1999. The cost of addressing the year 2000 issue may adversely
effect the issues of individual securities held by the Portfolio. The advisers
and other service providers have told the Portfolio that they are taking action
to prevent, and do not expect the Portfolio to suffer from, material year 2000
problems.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE.
MANAGEMENT
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's management from "The Investment Advisers"
in the Prospectus.
Administrator of the Portfolio. IBT Trust Company (Cayman) Ltd., P.O. Box
501, Grand Cayman, Cayman Islands, BWI, serves as the administrator to the
Portfolio (the "Portfolio Administrator") pursuant to a written administration
agreement with the Portfolio Trust on behalf of the Portfolio. The Portfolio
Administrator provides the Portfolio Trust with office space for managing its
affairs, and with certain clerical services and facilities. The Portfolio's
administration agreement can be terminated by either party on not more than 60
days' written notice.
ORGANIZATION
The Portfolio Trust is a no-load, open-end management investment company
which was organized as a master trust fund under the laws of the State of New
York on January 18, 1996. Beneficial interests in the Portfolio Trust are
divided into separate sub-trusts or series, each having distinct investment
objectives and policies, one of which, the Portfolio, is described herein.
Beneficial interests in the Portfolio are issued solely in transactions that are
exempt from registration under the 1933 Act. Investments in the Portfolio Trust
may only be made by investment companies, insurance company separate accounts,
common or commingled trust funds or similar organizations or entities that are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This Registration Statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any "security" within the meaning of the 1933
Act.
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CAPITAL STRUCTURE
The Portfolio Trust incorporates by reference information concerning the
master-feeder structure from "Fund Details - Master/feeder structure" in the
Prospectus.
The Portfolio Trust was organized as a trust under the laws of the State
of New York on January 18, 1996. Under the Declaration of Trust, the Trustees
are authorized to issue beneficial interests in separate series of the Portfolio
Trust. Each investor is entitled to a vote in proportion to the amount of its
investment in the Portfolio. Investments in the Portfolio may not be
transferred, but an investor may withdraw all or any portion of his investment
at any time at net asset value. Investors in the Portfolio (e.g., investment
companies, insurance company separate accounts and common and commingled trust
funds) will not be liable for the obligations of the Portfolio although they
will bear the risk of loss of their entire respective interests in the
Portfolio. However, there is a risk that interest-holders in the Portfolio may
be held personally liable as partners for the Portfolio's obligations. Because
the Portfolio Trust's Declaration of Trust disclaims interest-holder liability
and provides for indemnification against such liability, the risk of an investor
in the Portfolio incurring financial loss on account of such liability is
limited to circumstances in which both inadequate insurance existed and the
Portfolio itself was unable to meet its obligations.
The Portfolio Trust reserves the right to create and issue any number of
series, in which case investments in each series would participate equally in
earnings and assets of the particular series.
Investments in the Portfolio have no pre-emptive or conversion rights and
are fully paid and non-assessable, except as set forth above. The Portfolio
Trust is not required and has no current intention to hold annual meetings of
investors, but the Portfolio Trust will hold special meetings of investors when
in the judgment of the Trustees it is necessary or desirable to submit matters
for an investor vote. Changes in fundamental policies will be submitted to
investors for approval. Investors have under certain circumstances (e.g., upon
application and submission of certain specified documents to the Trustees by a
specified percentage of the aggregate value of the Portfolio Trust's outstanding
interests) the right to communicate with other investors in connection with
requesting a meeting of investors for the purpose of removing one or more
Trustees. Investors also have the right to remove one or more Trustees without a
meeting by a declaration in writing by a specified number of investors. Upon
liquidation of a Portfolio, investors would be entitled to share pro rata in the
net assets of the Portfolio available for distribution to investors.
As of the date of this Part A, the Fund beneficially owned substantially
all of the then outstanding interests in the Portfolio and therefore controlled
the Portfolio.
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Inquiries concerning the Portfolio should be made by contacting the
Portfolio at the Portfolio Trust's registered office in care of the Portfolio
Administrator, P.O. Box 501, Cardinal Avenue, George Town, Grand Cayman, Cayman
Islands, British West Indies.
Please see Item 7 for a discussion of the Portfolio's dividend policy.
ITEM 7. SHAREHOLDER INFORMATION
PRICING OF SECURITIES BEING OFFERED
The Portfolio Trust incorporates by reference information concerning the
calculation of the Portfolio's net asset value from "Investment and Account
Information - Valuation of shares" in the Prospectus.
The net asset value of the Portfolio is computed in U.S. dollars each day
on which the New York Stock Exchange ("NYSE") is open for trading ("Business
Day") (and on such other days as are deemed necessary in order to comply with
Rule 22c-1 under the 1940 Act). Currently, the NYSE is not open on weekends, New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. This
determination is made as of the close of regular trading on the NYSE which is
normally 4:00 p.m., New York time (the "Valuation Time"). If the NYSE closes
early, the Portfolio accelerates calculation of NAV and transaction deadlines to
that time.
The Portfolio's portfolio securities are valued at the last sale prices,
on the valuation date, on the exchange or national securities market on which
they are primarily traded. Securities not listed on an exchange or national
securities market, or securities for which there were no reported transactions,
are valued at the last quoted bid prices. Securities for which quotations are
not readily available and all other assets are valued at fair value as
determined in good faith by the Adviser in accordance with procedures approved
by the Trustees of the Portfolio Trust. Money market instruments with less than
sixty days remaining to maturity when acquired by the Portfolio are valued on an
amortized cost basis unless the Trustees determine that amortized cost does not
represent fair value. If the Portfolio acquires a money market instrument with
more than sixty days remaining to its maturity, it is valued at current market
value until the sixtieth day prior to maturity and will then be valued at
amortized cost based upon the value on such date unless the Trustees determine
during such sixty-day period that amortized cost does not represent fair value.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each Business Day. At each Valuation Time on each such Business
Day, the value of each investor's beneficial interest in the Portfolio will be
determined by
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multiplying the net asset value of the Portfolio by the percentage, effective
for that day, that represents that investor's share of the aggregate beneficial
interests in the Portfolio. Any additions or withdrawals, which are to be
effected on that day, will then be effected. The investor's percentage of the
aggregate beneficial interests in the Portfolio will then be recomputed as the
percentage equal to the fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the Valuation Time, on such
Business Day plus or minus, as the case may be, the amount of any additions to
or withdrawals from the investor's investment in the Portfolio effected on such
Business Day, and (ii) the denominator of which is the aggregate net asset value
of the Portfolio as of the Valuation Time, on such Business Day plus or minus,
as the case may be, the amount of the net additions to or withdrawals from the
aggregate investments in the Portfolio by all investors in the Portfolio. The
percentage so determined will then be applied to determine the value of the
investor's interest in the Portfolio as of the Valuation Time, on the following
Business Day.
PURCHASE OF SECURITIES BEING OFFERED
Beneficial interests in the Portfolio are issued solely in transactions
that are exempt from registration under the 1933 Act. See "Management,
Organization and Capital Structure" above.
An investment in the Portfolio may be made without a sales load by certain
eligible investors. All investments are made at the net asset value next
determined after an order and payment for the investment is received by the
Portfolio or its agent by the designated cutoff time for each accredited
investor. There is no minimum initial or subsequent investment in the Portfolio.
However, because the Portfolio intends to be as fully invested at all times as
is reasonably practicable in order to enhance the yield on its assets,
investments must be made in federal funds (i.e., monies credited to the account
of the Portfolio Trust's custodian bank by a Federal Reserve Bank). The
Portfolio Trust reserves the right to cease accepting investments in the
Portfolio at any time or to reject any investment order.
REDEMPTION OF SECURITIES BEING OFFERED
An investor in the Portfolio may withdraw all or any portion of its
investment at the net asset value next determined after receipt by the Portfolio
or its agent, by the close of trading (normally 4:00 p.m. Eastern Time) on the
NYSE or, as of such earlier times at which the Portfolio's net asset value is
calculated on each Business Day, by a withdrawal request in proper form. The
proceeds of a withdrawal will be paid by the Portfolio in federal funds normally
on the Business Day the withdrawal is effected, but in any event within five
Business Days following receipt of the request. The Portfolio reserves the right
to pay redemptions in kind. Investments in the Portfolio may not be transferred.
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The right of any investor to receive payment with respect to any
withdrawal may be suspended or the payment of the withdrawal proceeds postponed
during any period in which the NYSE is closed (other than weekends or holidays)
or trading on such exchange is restricted, or, to the extent otherwise permitted
by the 1940 Act, if an emergency exists.
DIVIDENDS AND DISTRIBUTIONS
The net income of the Portfolio shall consist of (i) all income accrued,
less the amortization of any premium, on the assets of the Portfolio, less (ii)
all actual and accrued expenses of the Portfolio determined in accordance with
generally accepted accounting principles ("Net Income"). Interest income
includes discount earned (including both original issue and market discount) on
discount paper accrued ratably to the date of maturity and any net realized
gains or losses on the assets of the Portfolio. All the Net Income of the
Portfolio is allocated pro rata among the investors in the Portfolio. The Net
Income is accrued daily and reflected in each investor's interest in the
Portfolio.
TAX CONSEQUENCES
Under the anticipated method of operation of the Portfolio, it is expected
that the Portfolio will not be subject to any U.S. federal or state income tax.
However, any investor in the Portfolio that is subject to U.S. federal income
taxation will take into account its share (as determined in accordance with the
governing instrument of the Portfolio) of the Portfolio's items of income, gain,
loss, deduction and credit in determining its income tax liability, if any. The
determination of such share will be made in a manner that is intended to comply
with the Internal Revenue Code of 1986, as amended (the "Code"), and applicable
tax regulations.
It is intended that the Portfolio's assets, income and distributions will
be managed in such a way that any investor in the Portfolio that is otherwise
eligible to be treated as a regulated investment company should be able to
satisfy the requirements of Subchapter M of the Code, assuming that the investor
invests all of its investment securities (as such term is used in the 1940 Act)
in the Portfolio.
ITEM 8. DISTRIBUTION ARRANGEMENTS.
MULTIPLE CLASS AND MASTER-FEEDER FUNDS
The Portfolio Trust incorporates by reference information concerning the
master-feeder structure from "Fund Details - Master/feeder structure" in the
Prospectus.
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Dated April 15, 1999
STANDISH, AYER & WOOD MASTER PORTFOLIO
STANDISH EQUITY PORTFOLIO
PART B
ITEM 10. COVER PAGE AND TABLE OF CONTENTS.
This Part B expands upon and supplements the information contained in Part
A of Standish Equity Portfolio (the "Portfolio"), a separate investment series
of Standish, Ayer & Wood Master Portfolio (the "Portfolio Trust"). This Part B
should be read in conjunction with such Part A. NEITHER PART A NOR THIS PART B
CONSTITUTES AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY, ANY
BENEFICIAL INTERESTS IN THE STANDISH EQUITY PORTFOLIO.
PAGE
Portfolio History ............................................... B-1
Description of the Portfolio and Its Investments and Risks ...... B-1
Management of the Portfolio ..................................... B-2
Control Persons and Principal Holders of Securities ............. B-3
Investment Advisory and Other Services .......................... B-3
Brokerage Allocation and Other Practices ........................ B-3
Capital Stock and Other Securities .............................. B-4
Purchase, Redemption and Pricing of Securities Being Offered .... B-4
Taxation of the Portfolio ....................................... B-4
Underwriters .................................................... B-7
Calculation of Performance Data ................................. B-7
Financial Statements ............................................ B-7
ITEM 11. PORTFOLIO HISTORY.
Not applicable.
ITEM 12. DESCRIPTION OF THE PORTFOLIO AND ITS INVESTMENTS AND RISKS.
Part A contains additional information about the investment objective and
policies of the Portfolio. This Part B should be read only in conjunction with
Part A. This section contains supplemental information concerning the types of
securities and other instruments in which the Portfolio may invest, the
investment policies and
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portfolio strategies that the Portfolio may utilize and certain risks attendant
to those investments, policies and strategies.
The Portfolio Trust incorporates by reference the information concerning
the Portfolio's investment objective, policies and restrictions from the
following sections of the SAI: "Investment Objectives and Policies" and
"Investment Restrictions."
ITEM 13. MANAGEMENT OF THE PORTFOLIO.
Trustees and Officers of the Portfolio Trust. The Trustees of the
Portfolio Trust are identical to the Trustees of the Trust. The officers of the
Portfolio Trust are Messrs. Clayson, Ladd, Wood, Hollis and Martins, and Mdmes.
Banfield, Chase, Herrmann and Kneeland, who hold the same office with the
Portfolio Trust as with the Trust. The Portfolio Trust incorporates by reference
the information concerning the management of the Portfolio and the Portfolio
Trust from "Management" in the SAI.
Compensation of Trustees and Officers. The Portfolio Trust pays no
compensation to the Trustees of the Portfolio Trust that are affiliated with the
Adviser or to the Portfolio Trust's officers. None of the Trustees or officers
have engaged in any financial transactions with the Portfolio Trust or the
Adviser during the fiscal year ended September 30, 1998.
The following table sets forth all compensation paid to the Portfolio
Trust's Trustees as of the Portfolio's fiscal year ended September 30, 1998:
Pension or
Retirement
Aggregate Benefits Accrued Total Compensation
Compensation as Part of from
from the Portfolio's Portfolio and Other
Name of Trustee Portfolio Expenses Funds in Complex*
--------------- --------- -------- -----------------
D. Barr Clayson $0 $0 $0
Samuel C. Fleming 3,607 0 57,375
Benjamin M. Friedman 3,607 0 57,375
John H. Hewitt 3,774 0 62,375
Edward H. Ladd 0 0 0
Caleb Loring, III 3,607 0 57,375
Richard S. Wood 0 0 0
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* As of the date of this Part B there were 22 registered investment
companies (or series thereof) in the fund complex, seven of which were
series of the Portfolio Trust. Total compensation is based on historical
data for the year ended December 31, 1997.
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
As of the date of this Part B, the Trustees and officers of the Portfolio
Trust as a group beneficially owned (i.e., had voting and/or investment power)
less than 1% of the then outstanding interests of the Portfolio. As of the date
of this Part B, the Standish Equity Fund beneficially owned substantially all of
the then outstanding interests of the Portfolio and therefore controlled the
Portfolio. Accordingly, the Fund may be able to take actions with respect to the
Trust (i.e., elect Trustees or approve an advisory agreement) without the
approval of other investors in the Portfolio. The Standish Equity Fund is a
separate diversified series of the Standish, Ayer & Wood Investment Trust, an
open-end investment company, located at One Financial Center, Boston, MA 02111.
Registered investment companies investing in the Portfolio have informed
the Portfolio that whenever such an investor is requested to vote on matters
pertaining to the fundamental policies of the Portfolio, the investment company
will hold a meeting of shareholders and will cast its votes as instructed by the
company's shareholders.
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's investment advisory and other services
from "Management" in the SAI.
Custodian. Investors Bank & Trust Company, 200 Clarendon Street, Boston,
Massachusetts 02116, serves as custodian of all cash and securities of the
Portfolio.
Independent Accountants. PricewaterhouseCoopers LLP, 160 Federal Street,
Boston, MA 02110, serves as independent accountants for the Portfolio Trust and
will audit the Portfolio's financial statements annually.
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's brokerage allocation and other practices
from "Portfolio Transactions" in the SAI.
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ITEM 17. CAPITAL STOCK AND OTHER SECURITIES.
The Portfolio Trust incorporates by reference the section entitled "The
Portfolio and Its Investors" in the SAI.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED.
Beneficial interests in the Portfolio are issued solely in transactions
that are exempt from registration under the Securities Act of 1933. See
"Management, Organization and Capital Structure," "Shareholder Information -
Purchase of Securities Being Offered" and "Redemption of Securities Being
Offered" in Part A.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's pricing of interests being offered from
"Determination of Net Asset Value" in the SAI.
The Portfolio intends to pay redemption proceeds in cash for all interests
redeemed but, under certain conditions, the Portfolio may make payment wholly or
partly in portfolio securities. The Portfolio will select such securities in a
manner it considers equitable, regardless of the composition of the Portfolio's
portfolio at the time of the redemption in-kind. Portfolio securities paid upon
withdrawal or reduction of an interest-holder's investment in the Portfolio will
be valued at their then current market value. The Portfolio Trust has elected to
be governed by the provisions of Rule 18f-1 under the 1940 Act which limits the
Portfolio's obligation to make cash redemption payments to any investor during
any 90-day period to the lesser of $250,000 or 1% of the Portfolio's net asset
value at the beginning of such period. An investor may incur brokerage costs in
converting portfolio securities received upon redemption to cash. The Portfolio
intends that it will not redeem an investor's interest in-kind except in
circumstances in which the particular investor is permitted to redeem in-kind or
in the event that the particular investor completely withdraws its interest in
the Portfolio.
ITEM 19. TAXATION OF THE PORTFOLIO.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's tax status from "Taxation" in the SAI.
There are certain tax issues that will be relevant to only certain of the
investors, such as investors who contribute assets rather than cash to the
Portfolio. It is intended that such contributions of assets will not be taxable,
provided certain requirements are met. Such investors are advised to consult
their own tax advisors as to the tax consequences of an investment in the
Portfolio.
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Non-U.S. Investors
The following is a discussion of the principal U.S. federal income tax
consequences of an investment in the Portfolio by an entity that is organized or
established under Non-U.S. laws and that is or would be properly classified as a
corporation under the entity classification principles of U.S. tax law (a
"Foreign Investor"). This discussion assumes that, without considering the
effect, if any, of an investment in the Portfolio, the Foreign Investor will not
be engaged in a trade or business in the U.S. and that the Foreign Investor will
not have any activities in or connections with the U.S. other than its
investment in the Portfolio. This discussion also assumes that the Portfolio
will be classified as a partnership for U.S. federal income tax purposes.
The Portfolio intends to operate so that Foreign Investors in the
Portfolio would not be considered to be engaged in a trade or business in the
U.S. solely as a result of investing in the Portfolio, under special U.S.
federal income tax provisions applicable to certain entities the principal
business of which is trading in stocks or securities for their own account.
Consequently, it is anticipated that a Foreign Investor in the Portfolio will
generally not incur any U.S. taxes in respect of the ownership or disposition of
its interest in the Portfolio, including upon the allocation or distribution to
it of the ordinary income and capital gains realized by the Portfolio, with the
exception described in the next sentence. Foreign Investors may be subject to
nonresident alien withholding tax (which would be withheld by the Portfolio or
its agent and paid to U.S. tax authorities) at the rate of 30% (or a reduced
rate if an income tax treaty rate reduction is available) on certain amounts
that are from U.S. sources and are treated as ordinary income allocated to them
by the Portfolio, except to the extent a U.S. withholding tax exemption may be
available. Such an exemption will generally be available principally for (i)
interest income that qualifies as "portfolio interest" under U.S. tax law, (ii)
other interest from certain short-term debt obligations or bank deposits, and
(iii) interest and dividends that are treated as non-U.S. source income under
the Internal Revenue Code of 1986, as amended (the "Code") (e.g., in general,
interest or dividends paid with respect to the Portfolio's investments in stock
or securities of non-U.S. companies or non-U.S. governmental entities, which may
be subject to withholding or other taxes imposed by the countries in which such
issuers are located). Such an exemption will not, however, be available for
dividend income the Portfolio receives with respect to its investments in stock
of U.S. corporations, certain U.S.-source interest that does not qualify as
interest described in clauses (i) or (ii) of the previous sentence, and possibly
certain other income. U.S. withholding taxes could also apply to gains
attributable to any interests held by the Portfolio in U.S. real property other
than interests held solely as a creditor, but the Portfolio anticipates that it
will generally not hold the types of interest in U.S. real property to which
these withholding taxes apply.
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If the Portfolio were considered to be engaged in a U.S. trade or business
for U.S. federal income tax purposes, any Foreign Investor in the Portfolio
would also be considered to be engaged in a U.S. trade or business and would be
subject to U.S. federal income tax on its allocable share of any income of the
Portfolio which is considered to be effectively connected with such U.S. trade
or business ("Effectively Connected Income"). The tax on Effectively Connected
Income would be imposed on a net basis at the rates applicable to U.S. taxpayers
generally (and the after-tax amount of such income could also be subject to a
separate branch profits tax at a 30% rate). The Portfolio would be required to
withhold tax from the portion of its Effectively Connected Income which is
allocable to Foreign Investors at the highest rates applicable to U.S. taxpayers
(whether or not distributions are made by the Portfolio to such Foreign
Investors during the taxable year). To the extent the income of the Portfolio
constitutes Effectively Connected Income, a Foreign Investor may also be subject
to U.S. federal income tax on some or all of the gain it recognizes on the
disposition of its interest in the Portfolio. The Portfolio intends to operate
in a manner that will not result in any significant portion of the Portfolio's
income being treated as Effectively Connected Income, although it is possible
that the Portfolio could receive some Effectively Connected Income to the
extent, if any, it invests in a partnership or trust that earns such income or
holds certain interests in U.S. real property.
The U.S. nonresident alien withholding taxes which may be applicable to a
Foreign Investor's allocable share of some of the Portfolio's income might in
some cases be reduced or eliminated under a tax treaty between the U.S. and the
foreign country of which the Foreign Investor is a resident, if that country has
an income tax treaty with the U.S., the Foreign Investor qualifies for benefits
under that treaty, the treaty applies to investments made through partnership
entities like the Portfolio, and any other applicable requirements can be
satisfied. Prospective Foreign Investors should consult their tax advisors
regarding the potential applicability to them of an income tax treaty and the
procedures for qualifying for treaty benefits.
Massachusetts Taxation
A Foreign Investor or U.S. investor that is properly classified as a
corporation under U.S. federal and Massachusetts tax principles (collectively,
an "Investor") might be required to pay Massachusetts corporate excise tax if
the Investor or the Portfolio has sufficient activities in or contacts with the
Commonwealth of Massachusetts ("tax nexus") to be subject to Massachusetts
taxing jurisdiction. The Portfolio intends to conduct its operations so that it
should not have tax nexus with Massachusetts and, consequently, an Investor that
is not otherwise subject to Massachusetts taxation should not become subject to
Massachusetts taxation solely by virtue of investing in the Portfolio. It should
be noted that, under present Massachusetts tax law, an Investor that qualifies
as a RIC under the federal income tax provisions incorporated in Massachusetts
law will not be required to pay any Massachusetts income or
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Massachusetts corporate excise or franchise tax even if tax nexus with
Massachusetts does exist as a result of investing in the Portfolio.
ITEM 20. UNDERWRITERS.
Not applicable.
ITEM 21. CALCULATION OF PERFORMANCE DATA.
Not applicable.
ITEM 22. FINANCIAL STATEMENTS.
Investors will receive the Portfolio's unaudited semi-annual reports and
annual reports audited by PricewaterhouseCoopers, LLP the Portfolio's
independent accountants. The financial statements of Standish Equity Portfolio,
Standish Small Capitalization Equity Portfolio and Standish Small Capitalization
Equity Portfolio II, each a series of Standish, Ayer & Wood Master Portfolio
(the "Registrant"), are incorporated by reference from the Annual Reports to
interest holders for the year ended September 30, 1998 which are attached to and
incorporated by reference into Parts B included herewith. (The Annual Reports to
Shareholders were filed electronically on November 24, 1998; file no. 811-07603;
accession numbers 0001005477-98-003397, 0001005477-98-003398 and
0001005477-98-003399).
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EXPLANATORY NOTE
Throughout this Part A and Part B of Standish Small Capitalization Equity
Portfolio (the "Portfolio"), a series of Standish, Ayer & Wood Master Portfolio
(the "Portfolio Trust"), specified information concerning the Portfolio and the
Portfolio Trust is incorporated by reference from the most recently effective
post-effective amendment to the Registration Statement on Form N-1A (File Nos.
33-8214 and 811- 4813) of Standish, Ayer & Wood Investment Trust (the "Trust")
that relates to and includes the prospectus and statement of additional
information of Standish Small Capitalization Equity Fund (the "Fund"). Further,
to the extent that information concerning the Portfolio and/or the Portfolio
Trust is so incorporated and the Trust files, pursuant to Rule 497 under the
Securities Act of 1933, as amended (the "1933 Act"), a revised prospectus or
statement of additional information of the Fund or a supplement to the Fund's
prospectus or statement of additional information that amends such incorporated
information, then the amended information contained in such Rule 497 filing is
also incorporated herein by reference. The Fund's current prospectus and
statement of additional information, as amended, revised or supplemented from
time to time, are referred to herein as the "Prospectus" and "SAI,"
respectively.
Dated April 15, 1999
STANDISH, AYER & WOOD MASTER PORTFOLIO
STANDISH SMALL CAPITALIZATION EQUITY PORTFOLIO
PART A
THIS PART A DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN
OFFER TO BUY, ANY BENEFICIAL INTERESTS IN STANDISH SMALL CAPITALIZATION EQUITY
PORTFOLIO.
The Portfolio's Part B, of even date herewith, is incorporated by
reference into this Part A.
Responses to Items 1 through 3, 5 and 9 have been omitted pursuant to
paragraph 2(b) of Instruction B of the General Instructions to Form N-1A.
ITEM 4. INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED
RISKS.
The Portfolio Trust incorporates by reference the information concerning
the Portfolio's investment objective, policies and restrictions from the
following sections
A-1
<PAGE>
of the Prospectus: "Risk/Return Summary," "The Funds' Investments and Related
Risks," and "Fund Details - Master/feeder Structure."
The Portfolio's securities trades, pricing and accounting services and
other operations could be adversely affected if the computer systems of the
advisers, distributor, custodian and transfer agent were unable to recognize
dates after 1999. The cost of addressing the year 2000 issue may adversely
effect the issues of individual securities held by the Portfolio. The advisers
and other service providers have told the Portfolio that they are taking action
to prevent, and do not expect the Portfolio to suffer from, material year 2000
problems.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE.
MANAGEMENT
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's management from "The Investment Advisers"
in the Prospectus.
Administrator of the Portfolio. IBT Trust Company (Cayman) Ltd., P.O. Box
501, Grand Cayman, Cayman Islands, BWI, serves as the administrator to the
Portfolio (the "Portfolio Administrator") pursuant to a written administration
agreement with the Portfolio Trust on behalf of the Portfolio. The Portfolio
Administrator provides the Portfolio Trust with office space for managing its
affairs, and with certain clerical services and facilities. The Portfolio's
administration agreement can be terminated by either party on not more than 60
days' written notice.
ORGANIZATION
The Portfolio Trust is a no-load, open-end management investment company
which was organized as a master trust fund under the laws of the State of New
York on January 18, 1996. Beneficial interests in the Portfolio Trust are
divided into separate sub-trusts or series, each having distinct investment
objectives and policies, one of which, the Portfolio, is described herein.
Beneficial interests in the Portfolio are issued solely in transactions that are
exempt from registration under the 1933 Act. Investments in the Portfolio Trust
may only be made by investment companies, insurance company separate accounts,
common or commingled trust funds or similar organizations or entities that are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This Registration Statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any "security" within the meaning of the 1933
Act.
A-2
<PAGE>
CAPITAL STRUCTURE
The Portfolio Trust incorporates by reference information concerning the
master-feeder structure from "Fund Details - Master/feeder structure" in the
Prospectus.
The Portfolio Trust was organized as a trust under the laws of the State
of New York on January 18, 1996. Under the Declaration of Trust, the Trustees
are authorized to issue beneficial interests in separate series of the Portfolio
Trust. Each investor is entitled to a vote in proportion to the amount of its
investment in the Portfolio. Investments in the Portfolio may not be
transferred, but an investor may withdraw all or any portion of his investment
at any time at net asset value. Investors in the Portfolio (e.g., investment
companies, insurance company separate accounts and common and commingled trust
funds) will not be liable for the obligations of the Portfolio although they
will bear the risk of loss of their entire respective interests in the
Portfolio. However, there is a risk that interest-holders in the Portfolio may
be held personally liable as partners for the Portfolio's obligations. Because
the Portfolio Trust's Declaration of Trust disclaims interest-holder liability
and provides for indemnification against such liability, the risk of an investor
in the Portfolio incurring financial loss on account of such liability is
limited to circumstances in which both inadequate insurance existed and the
Portfolio itself was unable to meet its obligations.
The Portfolio Trust reserves the right to create and issue any number of
series, in which case investments in each series would participate equally in
earnings and assets of the particular series.
Investments in the Portfolio have no pre-emptive or conversion rights and
are fully paid and non-assessable, except as set forth above. The Portfolio
Trust is not required and has no current intention to hold annual meetings of
investors, but the Portfolio Trust will hold special meetings of investors when
in the judgment of the Trustees it is necessary or desirable to submit matters
for an investor vote. Changes in fundamental policies will be submitted to
investors for approval. Investors have under certain circumstances (e.g., upon
application and submission of certain specified documents to the Trustees by a
specified percentage of the aggregate value of the Portfolio Trust's outstanding
interests) the right to communicate with other investors in connection with
requesting a meeting of investors for the purpose of removing one or more
Trustees. Investors also have the right to remove one or more Trustees without a
meeting by a declaration in writing by a specified number of investors. Upon
liquidation of a Portfolio, investors would be entitled to share pro rata in the
net assets of the Portfolio available for distribution to investors.
As of the date of this Part A, the Fund beneficially owned substantially
all of the then outstanding interests in the Portfolio and therefore controlled
the Portfolio.
A-3
<PAGE>
Inquiries concerning the Portfolio should be made by contacting the
Portfolio at the Portfolio Trust's registered office in care of the Portfolio
Administrator, P.O. Box 501, Cardinal Avenue, George Town, Grand Cayman, Cayman
Islands, British West Indies.
Please see Item 7 for a discussion of the Portfolio's dividend policy.
ITEM 7. SHAREHOLDER INFORMATION
PRICING OF SECURITIES BEING OFFERED
The Portfolio Trust incorporates by reference information concerning the
calculation of the Portfolio's net asset value from "Investment and Account
Information - Valuation of shares" in the Prospectus.
The net asset value of the Portfolio is computed in U.S. dollars each day
on which the New York Stock Exchange ("NYSE") is open for trading ("Business
Day") (and on such other days as are deemed necessary in order to comply with
Rule 22c-1 under the 1940 Act). Currently, the NYSE is not open on weekends, New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. This
determination is made as of the close of regular trading on the NYSE which is
normally 4:00 p.m., New York time (the "Valuation Time"). If the NYSE closes
early, the Portfolio accelerates calculation of NAV and transaction deadlines to
that time.
The Portfolio's portfolio securities are valued at the last sale prices,
on the valuation date, on the exchange or national securities market on which
they are primarily traded. Securities not listed on an exchange or national
securities market, or securities for which there were no reported transactions,
are valued at the last quoted bid prices. Securities for which quotations are
not readily available and all other assets are valued at fair value as
determined in good faith by the Adviser in accordance with procedures approved
by the Trustees of the Portfolio Trust. Money market instruments with less than
sixty days remaining to maturity when acquired by the Portfolio are valued on an
amortized cost basis unless the Trustees determine that amortized cost does not
represent fair value. If the Portfolio acquires a money market instrument with
more than sixty days remaining to its maturity, it is valued at current market
value until the sixtieth day prior to maturity and will then be valued at
amortized cost based upon the value on such date unless the Trustees determine
during such sixty-day period that amortized cost does not represent fair value.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each Business Day. At each Valuation Time on each such Business
Day, the value of each investor's beneficial interest in the Portfolio will be
determined by
A-4
<PAGE>
multiplying the net asset value of the Portfolio by the percentage, effective
for that day, that represents that investor's share of the aggregate beneficial
interests in the Portfolio. Any additions or withdrawals, which are to be
effected on that day, will then be effected. The investor's percentage of the
aggregate beneficial interests in the Portfolio will then be recomputed as the
percentage equal to the fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the Valuation Time, on such
Business Day plus or minus, as the case may be, the amount of any additions to
or withdrawals from the investor's investment in the Portfolio effected on such
Business Day, and (ii) the denominator of which is the aggregate net asset value
of the Portfolio as of the Valuation Time, on such Business Day plus or minus,
as the case may be, the amount of the net additions to or withdrawals from the
aggregate investments in the Portfolio by all investors in the Portfolio. The
percentage so determined will then be applied to determine the value of the
investor's interest in the Portfolio as of the Valuation Time, on the following
Business Day.
PURCHASE OF SECURITIES BEING OFFERED
Beneficial interests in the Portfolio are issued solely in transactions
that are exempt from registration under the 1933 Act. See "Management,
Organization and Capital Structure" above.
An investment in the Portfolio may be made without a sales load by certain
eligible investors. All investments are made at the net asset value next
determined after an order and payment for the investment is received by the
Portfolio or its agent by the designated cutoff time for each accredited
investor. There is no minimum initial or subsequent investment in the Portfolio.
However, because the Portfolio intends to be as fully invested at all times as
is reasonably practicable in order to enhance the yield on its assets,
investments must be made in federal funds (i.e., monies credited to the account
of the Portfolio Trust's custodian bank by a Federal Reserve Bank). The
Portfolio Trust reserves the right to cease accepting investments in the
Portfolio at any time or to reject any investment order.
REDEMPTION OF SECURITIES BEING OFFERED
An investor in the Portfolio may withdraw all or any portion of its
investment at the net asset value next determined after receipt by the Portfolio
or its agent, by the close of trading (normally 4:00 p.m. Eastern Time) on the
NYSE or, as of such earlier times at which the Portfolio's net asset value is
calculated on each Business Day, by a withdrawal request in proper form. The
proceeds of a withdrawal will be paid by the Portfolio in federal funds normally
on the Business Day the withdrawal is effected, but in any event within five
Business Days following receipt of the request. The Portfolio reserves the right
to pay redemptions in kind. Investments in the Portfolio may not be transferred.
A-5
<PAGE>
The right of any investor to receive payment with respect to any
withdrawal may be suspended or the payment of the withdrawal proceeds postponed
during any period in which the NYSE is closed (other than weekends or holidays)
or trading on such exchange is restricted, or, to the extent otherwise permitted
by the 1940 Act, if an emergency exists.
DIVIDENDS AND DISTRIBUTIONS
The net income of the Portfolio shall consist of (i) all income accrued,
less the amortization of any premium, on the assets of the Portfolio, less (ii)
all actual and accrued expenses of the Portfolio determined in accordance with
generally accepted accounting principles ("Net Income"). Interest income
includes discount earned (including both original issue and market discount) on
discount paper accrued ratably to the date of maturity and any net realized
gains or losses on the assets of the Portfolio. All the Net Income of the
Portfolio is allocated pro rata among the investors in the Portfolio. The Net
Income is accrued daily and reflected in each investor's interest in the
Portfolio.
TAX CONSEQUENCES
Under the anticipated method of operation of the Portfolio, it is expected
that the Portfolio will not be subject to any U.S. federal or state income tax.
However, any investor in the Portfolio that is subject to U.S. federal income
taxation will take into account its share (as determined in accordance with the
governing instrument of the Portfolio) of the Portfolio's items of income, gain,
loss, deduction and credit in determining its income tax liability, if any. The
determination of such share will be made in a manner that is intended to comply
with the Internal Revenue Code of 1986, as amended (the "Code"), and applicable
tax regulations.
It is intended that the Portfolio's assets, income and distributions will
be managed in such a way that any investor in the Portfolio that is otherwise
eligible to be treated as a regulated investment company should be able to
satisfy the requirements of Subchapter M of the Code, assuming that the investor
invests all of its investment securities (as such term is used in the 1940 Act)
in the Portfolio.
ITEM 8. DISTRIBUTION ARRANGEMENTS.
MULTIPLE CLASS AND MASTER-FEEDER FUNDS
The Portfolio Trust incorporates by reference information concerning the
master-feeder structure from "Fund Details - Master/feeder structure" in the
Prospectus.
A-6
<PAGE>
Dated April 15, 1999
STANDISH, AYER & WOOD MASTER PORTFOLIO
STANDISH SMALL CAPITALIZATION EQUITY PORTFOLIO
PART B
ITEM 10. COVER PAGE AND TABLE OF CONTENTS.
This Part B expands upon and supplements the information contained in Part
A of Standish Small Capitalization Equity Portfolio (the "Portfolio"), a
separate investment series of Standish, Ayer & Wood Master Portfolio (the
"Portfolio Trust"). This Part B should be read in conjunction with such Part A.
NEITHER PART A NOR THIS PART B CONSTITUTES AN OFFER TO SELL, OR THE SOLICITATION
OF AN OFFER TO BUY, ANY BENEFICIAL INTERESTS IN THE STANDISH SMALL
CAPITALIZATION EQUITY PORTFOLIO.
PAGE
Portfolio History ............................................... B-1
Description of the Portfolio and Its Investments and Risks ...... B-1
Management of the Portfolio ..................................... B-2
Control Persons and Principal Holders of Securities ............. B-3
Investment Advisory and Other Services .......................... B-3
Brokerage Allocation and Other Practices ........................ B-3
Capital Stock and Other Securities .............................. B-4
Purchase, Redemption and Pricing of Securities Being Offered .... B-4
Taxation of the Portfolio ....................................... B-4
Underwriters .................................................... B-7
Calculation of Performance Data ................................. B-7
Financial Statements ............................................ B-7
ITEM 11. PORTFOLIO HISTORY.
Not applicable.
ITEM 12. DESCRIPTION OF THE PORTFOLIO AND ITS INVESTMENTS AND RISKS.
Part A contains additional information about the investment objective and
policies of the Portfolio. This Part B should be read only in conjunction with
Part A. This section contains supplemental information concerning the types of
securities and
B-1
<PAGE>
other instruments in which the Portfolio may invest, the investment policies and
portfolio strategies that the Portfolio may utilize and certain risks attendant
to those investments, policies and strategies.
The Portfolio Trust incorporates by reference the information concerning
the Portfolio's investment objective, policies and restrictions from the
following sections of the SAI: "Investment Objectives and Policies" and
"Investment Restrictions."
ITEM 13. MANAGEMENT OF THE PORTFOLIO.
Trustees and Officers of the Portfolio Trust. The Trustees of the
Portfolio Trust are identical to the Trustees of the Trust. The officers of the
Portfolio Trust are Messrs. Clayson, Ladd, Wood, Hollis and Martins, and Mdmes.
Banfield, Chase, Herrmann and Kneeland, who hold the same office with the
Portfolio Trust as with the Trust. The Portfolio Trust incorporates by reference
the information concerning the management of the Portfolio and the Portfolio
Trust from "Management" in the SAI.
Compensation of Trustees and Officers. The Portfolio Trust pays no
compensation to the Trustees of the Portfolio Trust that are affiliated with the
Adviser or to the Portfolio Trust's officers. None of the Trustees or officers
have engaged in any financial transactions with the Portfolio Trust or the
Adviser during the fiscal year ended September 30, 1998.
The following table sets forth all compensation paid to the Portfolio
Trust's Trustees as of the Portfolio's fiscal year ended September 30, 1998:
Pension or
Retirement
Aggregate Benefits Accrued Total Compensation
Compensation as Part of from
from the Portfolio's Portfolio and Other
Name of Trustee Portfolio Expenses Funds in Complex*
--------------- --------- -------- -----------------
D. Barr Clayson $0 $0 $0
Samuel C. Fleming 3,802 0 57,375
Benjamin M. Friedman 3,802 0 57,375
John H. Hewitt 4,012 0 62,375
Edward H. Ladd 0 0 0
Caleb Loring, III 3,802 0 57,375
Richard S. Wood 0 0 0
B-2
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- --------------------
* As of the date of this Part B there were 22 registered investment
companies (or series thereof) in the fund complex, seven of which were
series of the Portfolio Trust. Total compensation is based on historical
data for the year ended December 31, 1997.
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
As of the date of this Part B, the Trustees and officers of the Portfolio
Trust as a group beneficially owned (i.e., had voting and/or investment power)
less than 1% of the then outstanding interests of the Portfolio. As of the date
of this Part B, the Standish Small Capitalization Equity Fund beneficially owned
substantially all of the then outstanding interests of the Portfolio and
therefore controlled the Portfolio. Accordingly, the Fund may be able to take
actions with respect to the Trust (i.e., elect Trustees or approve an advisory
agreement) without the approval of other investors in the Portfolio. The
Standish Small Capitalization Equity Fund is a separate diversified series of
the Standish, Ayer & Wood Investment Trust, an open-end investment company,
located at One Financial Center, Boston, MA 02111.
Registered investment companies investing in the Portfolio have informed
the Portfolio that whenever such an investor is requested to vote on matters
pertaining to the fundamental policies of the Portfolio, the investment company
will hold a meeting of shareholders and will cast its votes as instructed by the
company's shareholders.
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's investment advisory and other services
from "Management" in the SAI.
Custodian. Investors Bank & Trust Company, 200 Clarendon Street, Boston,
Massachusetts 02116, serves as custodian of all cash and securities of the
Portfolio.
Independent Accountants. PricewaterhouseCoopers LLP, 160 Federal Street,
Boston, MA 02110, serves as independent accountants for the Portfolio Trust and
will audit the Portfolio's financial statements annually.
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's brokerage allocation and other practices
from "Portfolio Transactions" in the SAI.
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<PAGE>
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES.
The Portfolio Trust incorporates by reference the section entitled "The
Portfolio and Its Investors" in the SAI.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED.
Beneficial interests in the Portfolio are issued solely in transactions
that are exempt from registration under the Securities Act of 1933. See
"Management, Organization and Capital Structure," "Shareholder Information -
Purchase of Securities Being Offered" and "Redemption of Securities Being
Offered" in Part A.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's pricing of interests being offered from
"Determination of Net Asset Value" in the SAI.
The Portfolio intends to pay redemption proceeds in cash for all interests
redeemed but, under certain conditions, the Portfolio may make payment wholly or
partly in portfolio securities. The Portfolio will select such securities in a
manner it considers equitable, regardless of the composition of the Portfolio's
portfolio at the time of the redemption in-kind. Portfolio securities paid upon
withdrawal or reduction of an interest-holder's investment in the Portfolio will
be valued at their then current market value. The Portfolio Trust has elected to
be governed by the provisions of Rule 18f-1 under the 1940 Act which limits the
Portfolio's obligation to make cash redemption payments to any investor during
any 90-day period to the lesser of $250,000 or 1% of the Portfolio's net asset
value at the beginning of such period. An investor may incur brokerage costs in
converting portfolio securities received upon redemption to cash. The Portfolio
intends that it will not redeem an investor's interest in-kind except in
circumstances in which the particular investor is permitted to redeem in-kind or
in the event that the particular investor completely withdraws its interest in
the Portfolio.
ITEM 19. TAXATION OF THE PORTFOLIO.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's tax status from "Taxation" in the SAI.
There are certain tax issues that will be relevant to only certain of the
investors, such as investors who contribute assets rather than cash to the
Portfolio. It is intended that such contributions of assets will not be taxable,
provided certain requirements are met. Such investors are advised to consult
their own tax advisors as to the tax consequences of an investment in the
Portfolio.
B-4
<PAGE>
Non-U.S. Investors
The following is a discussion of the principal U.S. federal income tax
consequences of an investment in the Portfolio by an entity that is organized or
established under Non-U.S. laws and that is or would be properly classified as a
corporation under the entity classification principles of U.S. tax law (a
"Foreign Investor"). This discussion assumes that, without considering the
effect, if any, of an investment in the Portfolio, the Foreign Investor will not
be engaged in a trade or business in the U.S. and that the Foreign Investor will
not have any activities in or connections with the U.S. other than its
investment in the Portfolio. This discussion also assumes that the Portfolio
will be classified as a partnership for U.S. federal income tax purposes.
The Portfolio intends to operate so that Foreign Investors in the
Portfolio would not be considered to be engaged in a trade or business in the
U.S. solely as a result of investing in the Portfolio, under special U.S.
federal income tax provisions applicable to certain entities the principal
business of which is trading in stocks or securities for their own account.
Consequently, it is anticipated that a Foreign Investor in the Portfolio will
generally not incur any U.S. taxes in respect of the ownership or disposition of
its interest in the Portfolio, including upon the allocation or distribution to
it of the ordinary income and capital gains realized by the Portfolio, with the
exception described in the next sentence. Foreign Investors may be subject to
nonresident alien withholding tax (which would be withheld by the Portfolio or
its agent and paid to U.S. tax authorities) at the rate of 30% (or a reduced
rate if an income tax treaty rate reduction is available) on certain amounts
that are from U.S. sources and are treated as ordinary income allocated to them
by the Portfolio, except to the extent a U.S. withholding tax exemption may be
available. Such an exemption will generally be available principally for (i)
interest income that qualifies as "portfolio interest" under U.S. tax law, (ii)
other interest from certain short-term debt obligations or bank deposits, and
(iii) interest and dividends that are treated as non-U.S. source income under
the Internal Revenue Code of 1986, as amended (the "Code") (e.g., in general,
interest or dividends paid with respect to the Portfolio's investments in stock
or securities of non-U.S. companies or non-U.S. governmental entities, which may
be subject to withholding or other taxes imposed by the countries in which such
issuers are located). Such an exemption will not, however, be available for
dividend income the Portfolio receives with respect to its investments in stock
of U.S. corporations, certain U.S.-source interest that does not qualify as
interest described in clauses (i) or (ii) of the previous sentence, and possibly
certain other income. U.S. withholding taxes could also apply to gains
attributable to any interests held by the Portfolio in U.S. real property other
than interests held solely as a creditor, but the Portfolio anticipates that it
will generally not hold the types of interest in U.S. real property to which
these withholding taxes apply.
B-5
<PAGE>
If the Portfolio were considered to be engaged in a U.S. trade or business
for U.S. federal income tax purposes, any Foreign Investor in the Portfolio
would also be considered to be engaged in a U.S. trade or business and would be
subject to U.S. federal income tax on its allocable share of any income of the
Portfolio which is considered to be effectively connected with such U.S. trade
or business ("Effectively Connected Income"). The tax on Effectively Connected
Income would be imposed on a net basis at the rates applicable to U.S. taxpayers
generally (and the after-tax amount of such income could also be subject to a
separate branch profits tax at a 30% rate). The Portfolio would be required to
withhold tax from the portion of its Effectively Connected Income which is
allocable to Foreign Investors at the highest rates applicable to U.S. taxpayers
(whether or not distributions are made by the Portfolio to such Foreign
Investors during the taxable year). To the extent the income of the Portfolio
constitutes Effectively Connected Income, a Foreign Investor may also be subject
to U.S. federal income tax on some or all of the gain it recognizes on the
disposition of its interest in the Portfolio. The Portfolio intends to operate
in a manner that will not result in any significant portion of the Portfolio's
income being treated as Effectively Connected Income, although it is possible
that the Portfolio could receive some Effectively Connected Income to the
extent, if any, it invests in a partnership or trust that earns such income or
holds certain interests in U.S. real property.
The U.S. nonresident alien withholding taxes which may be applicable to a
Foreign Investor's allocable share of some of the Portfolio's income might in
some cases be reduced or eliminated under a tax treaty between the U.S. and the
foreign country of which the Foreign Investor is a resident, if that country has
an income tax treaty with the U.S., the Foreign Investor qualifies for benefits
under that treaty, the treaty applies to investments made through partnership
entities like the Portfolio, and any other applicable requirements can be
satisfied. Prospective Foreign Investors should consult their tax advisors
regarding the potential applicability to them of an income tax treaty and the
procedures for qualifying for treaty benefits.
Massachusetts Taxation
A Foreign Investor or U.S. investor that is properly classified as a
corporation under U.S. federal and Massachusetts tax principles (collectively,
an "Investor") might be required to pay Massachusetts corporate excise tax if
the Investor or the Portfolio has sufficient activities in or contacts with the
Commonwealth of Massachusetts ("tax nexus") to be subject to Massachusetts
taxing jurisdiction. The Portfolio intends to conduct its operations so that it
should not have tax nexus with Massachusetts and, consequently, an Investor that
is not otherwise subject to Massachusetts taxation should not become subject to
Massachusetts taxation solely by virtue of investing in the Portfolio. It should
be noted that, under present Massachusetts tax law, an Investor that qualifies
as a RIC under the federal income tax provisions incorporated in Massachusetts
law will not be required to pay any Massachusetts income or
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<PAGE>
Massachusetts corporate excise or franchise tax even if tax nexus with
Massachusetts does exist as a result of investing in the Portfolio.
ITEM 20. UNDERWRITERS.
Not applicable.
ITEM 21. CALCULATION OF PERFORMANCE DATA.
Not applicable.
ITEM 22. FINANCIAL STATEMENTS.
Investors will receive the Portfolio's unaudited semi-annual reports and
annual reports audited by PricewaterhouseCoopers LLP, the Portfolio's
independent accountants. The financial statements of Standish Equity Portfolio,
Standish Small Capitalization Equity Portfolio and Standish Small Capitalization
Equity Portfolio II, each a series of Standish, Ayer & Wood Master Portfolio
(the "Registrant"), are incorporated by reference from the Annual Reports to
interest holders for the year ended September 30, 1998 which are attached to and
incorporated by reference into Parts B included herewith. (The Annual Reports to
Shareholders were filed electronically on November 24, 1998; file no. 811-07603;
accession numbers 0001005477-98-003397, 0001005477-98-003398 and
0001005477-98-003399).
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EXPLANATORY NOTE
Throughout this Part A and Part B of Standish Small Capitalization Equity
Portfolio II (the "Portfolio"), a series of Standish, Ayer & Wood Master
Portfolio (the "Portfolio Trust"), specified information concerning the
Portfolio and the Portfolio Trust is incorporated by reference from the most
recently effective post-effective amendment to the Registration Statement on
Form N-1A (File Nos. 33-8214 and 811- 4813) of Standish, Ayer & Wood Investment
Trust (the "Trust") that relates to and includes the prospectus and statement of
additional information of Standish Small Capitalization Equity Fund II (the
"Fund"). Further, to the extent that information concerning the Portfolio and/or
the Portfolio Trust is so incorporated and the Trust files, pursuant to Rule 497
under the Securities Act of 1933, as amended (the "1933 Act"), a revised
prospectus or statement of additional information of the Fund or a supplement to
the Fund's prospectus or statement of additional information that amends such
incorporated information, then the amended information contained in such Rule
497 filing is also incorporated herein by reference. The Fund's current
prospectus and statement of additional information, as amended, revised or
supplemented from time to time, are referred to herein as the "Prospectus" and
"SAI," respectively.
Dated April 15, 1999
STANDISH, AYER & WOOD MASTER PORTFOLIO
STANDISH SMALL CAPITALIZATION EQUITY PORTFOLIO II
PART A
THIS PART A DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN
OFFER TO BUY, ANY BENEFICIAL INTERESTS IN STANDISH SMALL CAPITALIZATION EQUITY
PORTFOLIO II.
The Portfolio's Part B, of even date herewith, is incorporated by
reference into this Part A.
Responses to Items 1 through 3, 5 and 9 have been omitted pursuant to
paragraph 2(b) of Instruction B of the General Instructions to Form N-1A.
ITEM 4. INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND RELATED
RISKS.
The Portfolio Trust incorporates by reference the information concerning
the Portfolio's investment objective, policies and restrictions from the
following sections
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of the Prospectus: "Risk/Return Summary," "The Funds' Investments and Related
Risks," and "Fund Details - Master/feeder Structure."
The Portfolio's securities trades, pricing and accounting services and
other operations could be adversely affected if the computer systems of the
advisers, distributor, custodian and transfer agent were unable to recognize
dates after 1999. The cost of addressing the year 2000 issue may adversely
effect the issues of individual securities held by the Portfolio. The advisers
and other service providers have told the Portfolio that they are taking action
to prevent, and do not expect the Portfolio to suffer from, material year 2000
problems.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE.
MANAGEMENT
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's management from "The Investment Advisers"
in the Prospectus.
Administrator of the Portfolio. IBT Trust Company (Cayman) Ltd., P.O. Box
501, Grand Cayman, Cayman Islands, BWI, serves as the administrator to the
Portfolio (the "Portfolio Administrator") pursuant to a written administration
agreement with the Portfolio Trust on behalf of the Portfolio. The Portfolio
Administrator provides the Portfolio Trust with office space for managing its
affairs, and with certain clerical services and facilities. The Portfolio's
administration agreement can be terminated by either party on not more than 60
days' written notice.
ORGANIZATION
The Portfolio Trust is a no-load, open-end management investment company
which was organized as a master trust fund under the laws of the State of New
York on January 18, 1996. Beneficial interests in the Portfolio Trust are
divided into separate sub-trusts or series, each having distinct investment
objectives and policies, one of which, the Portfolio, is described herein.
Beneficial interests in the Portfolio are issued solely in transactions that are
exempt from registration under the 1933 Act. Investments in the Portfolio Trust
may only be made by investment companies, insurance company separate accounts,
common or commingled trust funds or similar organizations or entities that are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This Registration Statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any "security" within the meaning of the 1933
Act.
A-2
<PAGE>
CAPITAL STRUCTURE
The Portfolio Trust incorporates by reference information concerning the
master-feeder structure from "Fund Details - Master/feeder structure" in the
Prospectus.
The Portfolio Trust was organized as a trust under the laws of the State
of New York on January 18, 1996. Under the Declaration of Trust, the Trustees
are authorized to issue beneficial interests in separate series of the Portfolio
Trust. Each investor is entitled to a vote in proportion to the amount of its
investment in the Portfolio. Investments in the Portfolio may not be
transferred, but an investor may withdraw all or any portion of his investment
at any time at net asset value. Investors in the Portfolio (e.g., investment
companies, insurance company separate accounts and common and commingled trust
funds) will not be liable for the obligations of the Portfolio although they
will bear the risk of loss of their entire respective interests in the
Portfolio. However, there is a risk that interest-holders in the Portfolio may
be held personally liable as partners for the Portfolio's obligations. Because
the Portfolio Trust's Declaration of Trust disclaims interest-holder liability
and provides for indemnification against such liability, the risk of an investor
in the Portfolio incurring financial loss on account of such liability is
limited to circumstances in which both inadequate insurance existed and the
Portfolio itself was unable to meet its obligations.
The Portfolio Trust reserves the right to create and issue any number of
series, in which case investments in each series would participate equally in
earnings and assets of the particular series.
Investments in the Portfolio have no pre-emptive or conversion rights and
are fully paid and non-assessable, except as set forth above. The Portfolio
Trust is not required and has no current intention to hold annual meetings of
investors, but the Portfolio Trust will hold special meetings of investors when
in the judgment of the Trustees it is necessary or desirable to submit matters
for an investor vote. Changes in fundamental policies will be submitted to
investors for approval. Investors have under certain circumstances (e.g., upon
application and submission of certain specified documents to the Trustees by a
specified percentage of the aggregate value of the Portfolio Trust's outstanding
interests) the right to communicate with other investors in connection with
requesting a meeting of investors for the purpose of removing one or more
Trustees. Investors also have the right to remove one or more Trustees without a
meeting by a declaration in writing by a specified number of investors. Upon
liquidation of a Portfolio, investors would be entitled to share pro rata in the
net assets of the Portfolio available for distribution to investors.
As of the date of this Part A, the Fund beneficially owned substantially
all of the then outstanding interests in the Portfolio and therefore controlled
the Portfolio.
A-3
<PAGE>
Inquiries concerning the Portfolio should be made by contacting the
Portfolio at the Portfolio Trust's registered office in care of the Portfolio
Administrator, P.O. Box 501, Cardinal Avenue, George Town, Grand Cayman, Cayman
Islands, British West Indies.
Please see Item 7 for a discussion of the Portfolio's dividend policy.
ITEM 7. SHAREHOLDER INFORMATION
PRICING OF SECURITIES BEING OFFERED
The Portfolio Trust incorporates by reference information concerning the
calculation of the Portfolio's net asset value from "Investment and Account
Information - Valuation of shares" in the Prospectus.
The net asset value of the Portfolio is computed in U.S. dollars each day
on which the New York Stock Exchange ("NYSE") is open for trading ("Business
Day") (and on such other days as are deemed necessary in order to comply with
Rule 22c-1 under the 1940 Act). Currently, the NYSE is not open on weekends, New
Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. This
determination is made as of the close of regular trading on the NYSE which is
normally 4:00 p.m., New York time (the "Valuation Time"). If the NYSE closes
early, the Portfolio accelerates calculation of NAV and transaction deadlines to
that time.
The Portfolio's portfolio securities are valued at the last sale prices,
on the valuation date, on the exchange or national securities market on which
they are primarily traded. Securities not listed on an exchange or national
securities market, or securities for which there were no reported transactions,
are valued at the last quoted bid prices. Securities for which quotations are
not readily available and all other assets are valued at fair value as
determined in good faith by the Adviser in accordance with procedures approved
by the Trustees of the Portfolio Trust. Money market instruments with less than
sixty days remaining to maturity when acquired by the Portfolio are valued on an
amortized cost basis unless the Trustees determine that amortized cost does not
represent fair value. If the Portfolio acquires a money market instrument with
more than sixty days remaining to its maturity, it is valued at current market
value until the sixtieth day prior to maturity and will then be valued at
amortized cost based upon the value on such date unless the Trustees determine
during such sixty-day period that amortized cost does not represent fair value.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each Business Day. At each Valuation Time on each such Business
Day, the value of each investor's beneficial interest in the Portfolio will be
determined by
A-4
<PAGE>
multiplying the net asset value of the Portfolio by the percentage, effective
for that day, that represents that investor's share of the aggregate beneficial
interests in the Portfolio. Any additions or withdrawals, which are to be
effected on that day, will then be effected. The investor's percentage of the
aggregate beneficial interests in the Portfolio will then be recomputed as the
percentage equal to the fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of the Valuation Time, on such
Business Day plus or minus, as the case may be, the amount of any additions to
or withdrawals from the investor's investment in the Portfolio effected on such
Business Day, and (ii) the denominator of which is the aggregate net asset value
of the Portfolio as of the Valuation Time, on such Business Day plus or minus,
as the case may be, the amount of the net additions to or withdrawals from the
aggregate investments in the Portfolio by all investors in the Portfolio. The
percentage so determined will then be applied to determine the value of the
investor's interest in the Portfolio as of the Valuation Time, on the following
Business Day.
PURCHASE OF SECURITIES BEING OFFERED
Beneficial interests in the Portfolio are issued solely in transactions
that are exempt from registration under the 1933 Act. See "Management,
Organization and Capital Structure" above.
An investment in the Portfolio may be made without a sales load by certain
eligible investors. All investments are made at the net asset value next
determined after an order and payment for the investment is received by the
Portfolio or its agent by the designated cutoff time for each accredited
investor. There is no minimum initial or subsequent investment in the Portfolio.
However, because the Portfolio intends to be as fully invested at all times as
is reasonably practicable in order to enhance the yield on its assets,
investments must be made in federal funds (i.e., monies credited to the account
of the Portfolio Trust's custodian bank by a Federal Reserve Bank). The
Portfolio Trust reserves the right to cease accepting investments in the
Portfolio at any time or to reject any investment order.
REDEMPTION OF SECURITIES BEING OFFERED
An investor in the Portfolio may withdraw all or any portion of its
investment at the net asset value next determined after receipt by the Portfolio
or its agent, by the close of trading (normally 4:00 p.m. Eastern Time) on the
NYSE or, as of such earlier times at which the Portfolio's net asset value is
calculated on each Business Day, by a withdrawal request in proper form. The
proceeds of a withdrawal will be paid by the Portfolio in federal funds normally
on the Business Day the withdrawal is effected, but in any event within five
Business Days following receipt of the request. The Portfolio reserves the right
to pay redemptions in kind. Investments in the Portfolio may not be transferred.
A-5
<PAGE>
The right of any investor to receive payment with respect to any
withdrawal may be suspended or the payment of the withdrawal proceeds postponed
during any period in which the NYSE is closed (other than weekends or holidays)
or trading on such exchange is restricted, or, to the extent otherwise permitted
by the 1940 Act, if an emergency exists.
DIVIDENDS AND DISTRIBUTIONS
The net income of the Portfolio shall consist of (i) all income accrued,
less the amortization of any premium, on the assets of the Portfolio, less (ii)
all actual and accrued expenses of the Portfolio determined in accordance with
generally accepted accounting principles ("Net Income"). Interest income
includes discount earned (including both original issue and market discount) on
discount paper accrued ratably to the date of maturity and any net realized
gains or losses on the assets of the Portfolio. All the Net Income of the
Portfolio is allocated pro rata among the investors in the Portfolio. The Net
Income is accrued daily and reflected in each investor's interest in the
Portfolio.
TAX CONSEQUENCES
Under the anticipated method of operation of the Portfolio, it is expected
that the Portfolio will not be subject to any U.S. federal or state income tax.
However, any investor in the Portfolio that is subject to U.S. federal income
taxation will take into account its share (as determined in accordance with the
governing instrument of the Portfolio) of the Portfolio's items of income, gain,
loss, deduction and credit in determining its income tax liability, if any. The
determination of such share will be made in a manner that is intended to comply
with the Internal Revenue Code of 1986, as amended (the "Code"), and applicable
tax regulations.
It is intended that the Portfolio's assets, income and distributions will
be managed in such a way that any investor in the Portfolio that is otherwise
eligible to be treated as a regulated investment company should be able to
satisfy the requirements of Subchapter M of the Code, assuming that the investor
invests all of its investment securities (as such term is used in the 1940 Act)
in the Portfolio.
ITEM 8. DISTRIBUTION ARRANGEMENTS.
MULTIPLE CLASS AND MASTER-FEEDER FUNDS
The Portfolio Trust incorporates by reference information concerning the
master-feeder structure from "Fund Details - Master/feeder structure" in the
Prospectus.
A-6
<PAGE>
Dated April 15, 1999
STANDISH, AYER & WOOD MASTER PORTFOLIO
STANDISH SMALL CAPITALIZATION EQUITY PORTFOLIO II
PART B
ITEM 10. COVER PAGE AND TABLE OF CONTENTS.
This Part B expands upon and supplements the information contained in Part
A of Standish Small Capitalization Equity Portfolio II (the "Portfolio"), a
separate investment series of Standish, Ayer & Wood Master Portfolio (the
"Portfolio Trust"). This Part B should be read in conjunction with such Part A.
NEITHER PART A NOR THIS PART B CONSTITUTES AN OFFER TO SELL, OR THE SOLICITATION
OF AN OFFER TO BUY, ANY BENEFICIAL INTERESTS IN THE STANDISH SMALL
CAPITALIZATION EQUITY PORTFOLIO II.
PAGE
Portfolio History ............................................... B-1
Description of the Portfolio and Its Investments and Risks ...... B-1
Management of the Portfolio ..................................... B-2
Control Persons and Principal Holders of Securities ............. B-3
Investment Advisory and Other Services .......................... B-3
Brokerage Allocation and Other Practices ........................ B-3
Capital Stock and Other Securities .............................. B-4
Purchase, Redemption and Pricing of Securities Being Offered .... B-4
Taxation of the Portfolio ....................................... B-4
Underwriters .................................................... B-7
Calculation of Performance Data ................................. B-7
Financial Statements ............................................ B-7
ITEM 11. PORTFOLIO HISTORY.
Not applicable.
ITEM 12. DESCRIPTION OF THE PORTFOLIO AND ITS INVESTMENTS AND RISKS.
Part A contains additional information about the investment objective and
policies of the Portfolio. This Part B should be read only in conjunction with
Part A. This section contains supplemental information concerning the types of
securities and
B-1
<PAGE>
other instruments in which the Portfolio may invest, the investment policies and
portfolio strategies that the Portfolio may utilize and certain risks attendant
to those investments, policies and strategies.
The Portfolio Trust incorporates by reference the information concerning
the Portfolio's investment objective, policies and restrictions from the
following sections of the SAI: "Investment Objectives and Policies" and
"Investment Restrictions."
ITEM 13. MANAGEMENT OF THE PORTFOLIO.
Trustees and Officers of the Portfolio Trust. The Trustees of the
Portfolio Trust are identical to the Trustees of the Trust. The officers of the
Portfolio Trust are Messrs. Clayson, Ladd, Wood, Hollis and Martins, and Mdmes.
Banfield, Chase, Herrmann and Kneeland, who hold the same office with the
Portfolio Trust as with the Trust. The Portfolio Trust incorporates by reference
the information concerning the management of the Portfolio and the Portfolio
Trust from "Management" in the SAI.
Compensation of Trustees and Officers. The Portfolio Trust pays no
compensation to the Trustees of the Portfolio Trust that are affiliated with the
Adviser or to the Portfolio Trust's officers. None of the Trustees or officers
have engaged in any financial transactions with the Portfolio Trust or the
Adviser during the fiscal year ended September 30, 1998.
The following table sets forth all compensation paid to the Portfolio
Trust's Trustees as of the Portfolio's fiscal year ended September 30, 1998:
Pension or
Retirement
Aggregate Benefits Accrued Total Compensation
Compensation as Part of from
from the Portfolio's Portfolio and Other
Name of Trustee Portfolio Expenses Funds in Complex*
--------------- --------- -------- -----------------
D. Barr Clayson $0 $0 $0
Samuel C. Fleming 1,027 0 57,375
Benjamin M. Friedman 1,027 0 57,375
John H. Hewitt 1,035 0 62,375
Edward H. Ladd 0 0 0
Caleb Loring, III 1,027 0 57,375
Richard S. Wood 0 0 0
B-2
<PAGE>
- --------------------
* As of the date of this Part B there were 22 registered investment
companies (or series thereof) in the fund complex, seven of which were
series of the Portfolio Trust. Total compensation is based on historical
data for the year ended December 31, 1997.
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
As of the date of this Part B, the Trustees and officers of the Portfolio
Trust as a group beneficially owned (i.e., had voting and/or investment power)
less than 1% of the then outstanding interests of the Portfolio. As of the date
of this Part B, the Standish Small Capitalization Equity Fund II beneficially
owned substantially all of the then outstanding interests of the Portfolio and
therefore controlled the Portfolio. Accordingly, the Fund may be able to take
actions with respect to the Trust (i.e., elect Trustees or approve an advisory
agreement) without the approval of other investors in the Portfolio. The
Standish Small Capitalization Equity Fund II is a separate diversified series of
the Standish, Ayer & Wood Investment Trust, an open-end investment company,
located at One Financial Center, Boston, MA 02111.
Registered investment companies investing in the Portfolio have informed
the Portfolio that whenever such an investor is requested to vote on matters
pertaining to the fundamental policies of the Portfolio, the investment company
will hold a meeting of shareholders and will cast its votes as instructed by the
company's shareholders.
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's investment advisory and other services
from "Management" in the SAI.
Custodian. Investors Bank & Trust Company, 200 Clarendon Street, Boston,
Massachusetts 02116, serves as custodian of all cash and securities of the
Portfolio.
Independent Accountants. PricewaterhouseCoopers LLP, 160 Federal Street,
Boston, MA 02110, serves as independent accountants for the Portfolio Trust and
will audit the Portfolio's financial statements annually.
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's brokerage allocation and other practices
from "Portfolio Transactions" in the SAI.
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<PAGE>
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES.
The Portfolio Trust incorporates by reference the section entitled "The
Portfolio and Its Investors" in the SAI.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED.
Beneficial interests in the Portfolio are issued solely in transactions
that are exempt from registration under the Securities Act of 1933. See
"Management, Organization and Capital Structure," "Shareholder Information -
Purchase of Securities Being Offered" and "Redemption of Securities Being
Offered" in Part A.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's pricing of interests being offered from
"Determination of Net Asset Value" in the SAI.
The Portfolio intends to pay redemption proceeds in cash for all interests
redeemed but, under certain conditions, the Portfolio may make payment wholly or
partly in portfolio securities. The Portfolio will select such securities in a
manner it considers equitable, regardless of the composition of the Portfolio's
portfolio at the time of the redemption in-kind. Portfolio securities paid upon
withdrawal or reduction of an interest-holder's investment in the Portfolio will
be valued at their then current market value. The Portfolio Trust has elected to
be governed by the provisions of Rule 18f-1 under the 1940 Act which limits the
Portfolio's obligation to make cash redemption payments to any investor during
any 90-day period to the lesser of $250,000 or 1% of the Portfolio's net asset
value at the beginning of such period. An investor may incur brokerage costs in
converting portfolio securities received upon redemption to cash. The Portfolio
intends that it will not redeem an investor's interest in-kind except in
circumstances in which the particular investor is permitted to redeem in-kind or
in the event that the particular investor completely withdraws its interest in
the Portfolio.
ITEM 19. TAXATION OF THE PORTFOLIO.
The Portfolio Trust incorporates by reference information concerning the
Portfolio's and the Portfolio Trust's tax status from "Taxation" in the SAI.
There are certain tax issues that will be relevant to only certain of the
investors, such as investors who contribute assets rather than cash to the
Portfolio. It is intended that such contributions of assets will not be taxable,
provided certain requirements are met. Such investors are advised to consult
their own tax advisors as to the tax consequences of an investment in the
Portfolio.
B-4
<PAGE>
Non-U.S. Investors
The following is a discussion of the principal U.S. federal income tax
consequences of an investment in the Portfolio by an entity that is organized or
established under Non-U.S. laws and that is or would be properly classified as a
corporation under the entity classification principles of U.S. tax law (a
"Foreign Investor"). This discussion assumes that, without considering the
effect, if any, of an investment in the Portfolio, the Foreign Investor will not
be engaged in a trade or business in the U.S. and that the Foreign Investor will
not have any activities in or connections with the U.S. other than its
investment in the Portfolio. This discussion also assumes that the Portfolio
will be classified as a partnership for U.S. federal income tax purposes.
The Portfolio intends to operate so that Foreign Investors in the
Portfolio would not be considered to be engaged in a trade or business in the
U.S. solely as a result of investing in the Portfolio, under special U.S.
federal income tax provisions applicable to certain entities the principal
business of which is trading in stocks or securities for their own account.
Consequently, it is anticipated that a Foreign Investor in the Portfolio will
generally not incur any U.S. taxes in respect of the ownership or disposition of
its interest in the Portfolio, including upon the allocation or distribution to
it of the ordinary income and capital gains realized by the Portfolio, with the
exception described in the next sentence. Foreign Investors may be subject to
nonresident alien withholding tax (which would be withheld by the Portfolio or
its agent and paid to U.S. tax authorities) at the rate of 30% (or a reduced
rate if an income tax treaty rate reduction is available) on certain amounts
that are from U.S. sources and are treated as ordinary income allocated to them
by the Portfolio, except to the extent a U.S. withholding tax exemption may be
available. Such an exemption will generally be available principally for (i)
interest income that qualifies as "portfolio interest" under U.S. tax law, (ii)
other interest from certain short-term debt obligations or bank deposits, and
(iii) interest and dividends that are treated as non-U.S. source income under
the Internal Revenue Code of 1986, as amended (the "Code") (e.g., in general,
interest or dividends paid with respect to the Portfolio's investments in stock
or securities of non-U.S. companies or non-U.S. governmental entities, which may
be subject to withholding or other taxes imposed by the countries in which such
issuers are located). Such an exemption will not, however, be available for
dividend income the Portfolio receives with respect to its investments in stock
of U.S. corporations, certain U.S.-source interest that does not qualify as
interest described in clauses (i) or (ii) of the previous sentence, and possibly
certain other income. U.S. withholding taxes could also apply to gains
attributable to any interests held by the Portfolio in U.S. real property other
than interests held solely as a creditor, but the Portfolio anticipates that it
will generally not hold the types of interest in U.S. real property to which
these withholding taxes apply.
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If the Portfolio were considered to be engaged in a U.S. trade or business
for U.S. federal income tax purposes, any Foreign Investor in the Portfolio
would also be considered to be engaged in a U.S. trade or business and would be
subject to U.S. federal income tax on its allocable share of any income of the
Portfolio which is considered to be effectively connected with such U.S. trade
or business ("Effectively Connected Income"). The tax on Effectively Connected
Income would be imposed on a net basis at the rates applicable to U.S. taxpayers
generally (and the after-tax amount of such income could also be subject to a
separate branch profits tax at a 30% rate). The Portfolio would be required to
withhold tax from the portion of its Effectively Connected Income which is
allocable to Foreign Investors at the highest rates applicable to U.S. taxpayers
(whether or not distributions are made by the Portfolio to such Foreign
Investors during the taxable year). To the extent the income of the Portfolio
constitutes Effectively Connected Income, a Foreign Investor may also be subject
to U.S. federal income tax on some or all of the gain it recognizes on the
disposition of its interest in the Portfolio. The Portfolio intends to operate
in a manner that will not result in any significant portion of the Portfolio's
income being treated as Effectively Connected Income, although it is possible
that the Portfolio could receive some Effectively Connected Income to the
extent, if any, it invests in a partnership or trust that earns such income or
holds certain interests in U.S. real property.
The U.S. nonresident alien withholding taxes which may be applicable to a
Foreign Investor's allocable share of some of the Portfolio's income might in
some cases be reduced or eliminated under a tax treaty between the U.S. and the
foreign country of which the Foreign Investor is a resident, if that country has
an income tax treaty with the U.S., the Foreign Investor qualifies for benefits
under that treaty, the treaty applies to investments made through partnership
entities like the Portfolio, and any other applicable requirements can be
satisfied. Prospective Foreign Investors should consult their tax advisors
regarding the potential applicability to them of an income tax treaty and the
procedures for qualifying for treaty benefits.
Massachusetts Taxation
A Foreign Investor or U.S. investor that is properly classified as a
corporation under U.S. federal and Massachusetts tax principles (collectively,
an "Investor") might be required to pay Massachusetts corporate excise tax if
the Investor or the Portfolio has sufficient activities in or contacts with the
Commonwealth of Massachusetts ("tax nexus") to be subject to Massachusetts
taxing jurisdiction. The Portfolio intends to conduct its operations so that it
should not have tax nexus with Massachusetts and, consequently, an Investor that
is not otherwise subject to Massachusetts taxation should not become subject to
Massachusetts taxation solely by virtue of investing in the Portfolio. It should
be noted that, under present Massachusetts tax law, an Investor that qualifies
as a RIC under the federal income tax provisions incorporated in Massachusetts
law will not be required to pay any Massachusetts income or
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Massachusetts corporate excise or franchise tax even if tax nexus with
Massachusetts does exist as a result of investing in the Portfolio.
ITEM 20. UNDERWRITERS.
Not applicable.
ITEM 21. CALCULATION OF PERFORMANCE DATA.
Not applicable.
ITEM 22. FINANCIAL STATEMENTS.
Investors will receive the Portfolio's unaudited semi-annual reports and
annual reports audited by PricewaterhouseCoopers LLP, the Portfolio's
independent accountants. The financial statements of Standish Equity Portfolio,
Standish Small Capitalization Equity Portfolio and Standish Small Capitalization
Equity Portfolio II, each a series of Standish, Ayer & Wood Master Portfolio
(the "Registrant"), are incorporated by reference from the Annual Reports to
interest holders for the year ended September 30, 1998 which are attached to and
incorporated by reference into Parts B included herewith. (The Annual Reports to
Shareholders were filed electronically on November 24, 1998; file no. 811-07603;
accession numbers 0001005477-98-003397, 0001005477-98-003398 and
0001005477-98-003399).
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STANDISH, AYER & WOOD MASTER PORTFOLIO
PART C
ITEM 23. EXHIBITS.
(a1). Declaration of Trust of the Registrant.(1)
(a2). Establishment and Designation of Series for Standish Small
Capitalization Equity Portfolio II.(2)
(a3). Establishment and Designation of Series for Standish Diversified
Income Portfolio.(4)
(a4). Establishment and Designation of Series for Standish Short Term
Asset Reserve Portfolio.(5)
(b1). By-Laws of the Registrant.(1)
(c). Not applicable.
(d1). Form of Investment Advisory Agreement between the Registrant, with
respect to Standish Fixed Income Portfolio, and Standish, Ayer &
Wood, Inc. ("Standish").(1)
(d2). Form of Investment Advisory Agreement between the Registrant, with
respect to Standish Equity Portfolio, and Standish.(1)
(d3). Form of Investment Advisory Agreement between the Registrant, with
respect to Standish Small Capitalization Equity Portfolio, and
Standish.(1)
(d4). Form of Investment Advisory Agreement between the Registrant, with
respect to Global Fixed Income Portfolio, and Standish International
Management Company, L.P. ("SIMCO").(1)
(d5). Investment Advisory Agreement between the Registrant with respect to
Standish Small Capitalization Equity Portfolio II and Standish.(2)
(d6). Investment Advisory Agreement between the Registrant with respect to
Standish Diversified Income Portfolio and SIMCO.(4)
(d7). Investment Advisory Agreement between the Registrant with respect to
Standish Short Term Asset Reserve Portfolio and SIMCO.(5)
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(e). Not applicable.
(f). Not applicable.
(g1). Master Custody Agreement between the Registrant and Investors Bank
& Trust Company.(1)
(g2). Amendment dated October 5, 1996 to Master Custody Agreement with
respect to Standish Small Capitalization Portfolio II.(2)
(g3). Form of Amendment dated June 2, 1997 to Master Custody Agreement
with respect to Standish Diversified Income Portfolio.(4)
(g4). Form of Amendment to Master Custody Agreement with respect to
Standish Short Term Asset Reserve Portfolio.(5)
(h1). Administration Agreement between the Registrant and IBT Trust
Company (Cayman) Ltd.(1)
(h2). Amendment dated October 5, 1996 to the Administration Agreement with
respect to Standish Small Capitalization Equity Portfolio II.(2)
(h3). Form of Amendment dated June 2, 1997 to the Administration Agreement
with respect to Standish Diversified Income Portfolio.(4)
(i). Not applicable.
(j). Consent of Independent Public Accountants.+
(k). Not applicable.
(l). Not applicable.
(m). Not applicable.
(n1). Financial Data Schedule of Standish Equity Portfolio.+
(n2). Financial Data Schedule of Standish Small Capitalization Equity
Portfolio.+
(n3). Financial Data Schedule of Standish Small Capitalization Equity
Portfolio II.+
(o). Not applicable.
C-2
<PAGE>
(p1). Power of Attorney (Richard S. Wood).(3)
(p2). Power of Attorney (Samuel C. Fleming, Benjamin M. Friedman, John H.
Hewitt, Edward H. Ladd, Caleb Loring III, Richard S. Wood and D.
Barr Clayson).(3)
(p3). Power of Attorney (Anne P. Herrmann).(3)
(p4). Power of Attorney (James E. Hollis III).(3)
(p5). Power of Attorney (Paul G. Martins).(5)
- ------------------------
+ Filed herewith
(1) Filed as an exhibit to Registrant's Registration Statement on Form N-1A
(File No. 811-07603) on April 25, 1996 and incorporated by reference
herein.
(2) Filed as an exhibit to Amendment No. 1 to the Registrant's Registration
Statement on Form N-1A (File No. 811-07603) on October 10, 1996 and
incorporated by reference herein.
(3) Filed as an exhibit to Amendment No. 2 to the Registrant's Registration
Statement on Form N-1A (File No. 811-07603) on April 30, 1997 and
incorporated by reference herein.
(4) Filed as an exhibit to Amendment No. 3 to the Registrant's Registration
Statement on Form N-1A (File No. 811-07603) on June 2, 1997 and
incorporated by reference herein.
(5) Filed as an exhibit to Amendment No. 4 to the Registrant's Registration
Statement on Form N-1A (File No. 811-07603) on December 29, 1997 and
incorporated by reference herein.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Not applicable.
ITEM 25. INDEMNIFICATION.
Reference is hereby made to Article V of the Registrant's Declaration of
Trust, previously filed as an Exhibit.
Under the Registrant's Declaration of Trust, any past or present Trustee
or officer of the Registrant 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 is otherwise
involved by reason of his being or having been a Trustee or officer of the
Registrant. The Declaration of
C-3
<PAGE>
Trust of the Registrant does not authorize indemnification where it is
determined, in the manner specified in the Declaration, that such Trustee or
officer has not acted in good faith in the reasonable belief that his actions
were in the best interest of the Registrant. Moreover, the Declaration does not
authorize indemnification where such Trustee or officer is liable to the
Registrant or its investors by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of his or her duties.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to Trustees, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by any such Trustee, officer or controlling person
against the Registrant in connection with the securities being registered, and
the Commission is still of the same opinion, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Standish, Ayer & Wood, Inc. and Standish International Management Company, L.P.:
The business and other connections of the officers and Directors of
Standish, the investment adviser to all series of the Registrant, other than
Standish Global Fixed Income Portfolio and Standish Diversified Income
Portfolio, are listed on the Form ADV of Standish as currently on file with the
Commission (File No. 801-584). The business and other connections of the
officers and partners and Standish Diversified Income Portfolio of SIMCO, the
investment adviser to Standish Global Fixed Income Portfolio are listed on the
Form ADV of SIMCO as currently on file with the Commission (File No.
801-639338). The following sections of each such Form ADV are incorporated
herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section IV, Business Background, of each Schedule D.
ITEM 27. PRINCIPAL UNDERWRITERS.
Not applicable.
C-4
<PAGE>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
The Registrant maintains the records required by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 inclusive thereunder at
its registered office, located in care of IBT Trust Company (Cayman) Ltd., The
Bank of Nova Scotia Building, George Town, Grand Cayman, Cayman Islands, British
West Indies. Certain records, including records relating to the Registrant's
shareholders and the physical possession of its securities, may be maintained
pursuant to Rule 31a-3 at the main offices of the Registrant's custodian.
ITEM 29. MANAGEMENT SERVICES.
Not applicable.
ITEM 30. UNDERTAKINGS.
Not applicable.
C-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, as
amended, the Registrant has duly caused this Amendment to its Registration
Statement on Form N-1A to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Dublin, Ireland on the 13th day of April, 1999.
STANDISH, AYER & WOOD MASTER
PORTFOLIO
By: *
----------------------------
Name: Richard S. Wood
Title: President
*By: /s/ Raymond O'Neill
--------------------------
Raymond O'Neill
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(j). Consent of Independent Public Accountants.
(n1). Financial Data Schedule of Standish Equity Portfolio.
(n2). Financial Data Schedule of Standish Small Capitalization Equity Portfolio.
(n3). Financial Data Schedule of Standish Small Capitalization Equity Portfolio
II.
Consent of Independent Accountants
To the Trustees of Standish, Ayer & Wood Master Portfolio:
We consent to the incorporation by reference, in Amendment No. 7 to the
Registration Statement on Form N-1A (1940 Act File Number 811-07603) of
Standish, Ayer & Wood Master Portfolio, our reports dated November 18, 1998, on
our audits of the financial statements and supplemental data of the Standish
Equity Portfolio, Standish Small Capitalization Equity Portfolio and Standish
Small Capitalization Equity Portfolio II, which reports are included in the
Annual Reports to the Shareholders for the periods stated therein. We also
consent to the reference to our Firm under the captions "Independent
Accountants" and "Financial Statements" in this Registration Statement.
PricewaterhouseCoopers LLP
Boston, Massachusetts
April 13, 1999
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Standish,
Ayer & Wood Investment Trust form N-SAR for the period ended September 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> Standish Equity Portfolio
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 223,688,393
<INVESTMENTS-AT-VALUE> 211,640,345
<RECEIVABLES> 2,455,817
<ASSETS-OTHER> 276,002
<OTHER-ITEMS-ASSETS> 47,341
<TOTAL-ASSETS> 214,419,505
<PAYABLE-FOR-SECURITIES> 5,972,352
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 835,330
<TOTAL-LIABILITIES> 6,807,682
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 233,456,836
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (25,845,013)
<NET-ASSETS> 207,611,823
<DIVIDEND-INCOME> 2,247,944
<INTEREST-INCOME> 602,428
<OTHER-INCOME> 0
<EXPENSES-NET> 1,315,751
<NET-INVESTMENT-INCOME> 1,534,621
<REALIZED-GAINS-CURRENT> 19,645,359
<APPREC-INCREASE-CURRENT> (46,208,987)
<NET-CHANGE-FROM-OPS> (25,029,007)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 37,469,818
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,017,136
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,315,751
<AVERAGE-NET-ASSETS> 203,530,051
<PER-SHARE-NAV-BEGIN> 0.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 0.00
<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Standish,
Ayer & Wood Investment Trust form N-SAR for the period ended September 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> Standish Small Capitalization Equity Portfolio
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 171,144,249
<INVESTMENTS-AT-VALUE> 153,590,852
<RECEIVABLES> 1,647,359
<ASSETS-OTHER> 281,709
<OTHER-ITEMS-ASSETS> 47,346
<TOTAL-ASSETS> 155,567,266
<PAYABLE-FOR-SECURITIES> 1,259,785
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 510,667
<TOTAL-LIABILITIES> 1,770,452
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 226,939,604
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (73,142,790)
<NET-ASSETS> 153,796,814
<DIVIDEND-INCOME> 100,114
<INTEREST-INCOME> 293,321
<OTHER-INCOME> 0
<EXPENSES-NET> 1,677,053
<NET-INVESTMENT-INCOME> (1,283,618)
<REALIZED-GAINS-CURRENT> 24,075,476
<APPREC-INCREASE-CURRENT> (86,183,360)
<NET-CHANGE-FROM-OPS> (63,391,502)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (120,367,508)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,363,260
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,677,053
<AVERAGE-NET-ASSETS> 226,880,316
<PER-SHARE-NAV-BEGIN> 0.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 0.00
<EXPENSE-RATIO> 0.74
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Standish,
Ayer & Wood Investment Trust form N-SAR for the period ended September 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> Standish Small Capitalization Equity Portfolio II
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 12,971,571
<INVESTMENTS-AT-VALUE> 11,848,939
<RECEIVABLES> 84,024
<ASSETS-OTHER> 152,395
<OTHER-ITEMS-ASSETS> 16,357
<TOTAL-ASSETS> 12,101,715
<PAYABLE-FOR-SECURITIES> 156,734
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22,073
<TOTAL-LIABILITIES> 178,807
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,045,540
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (1,122,632)
<NET-ASSETS> 11,922,908
<DIVIDEND-INCOME> 8,756
<INTEREST-INCOME> 25,400
<OTHER-INCOME> 0
<EXPENSES-NET> 59,878
<NET-INVESTMENT-INCOME> (25,722)
<REALIZED-GAINS-CURRENT> 36,810
<APPREC-INCREASE-CURRENT> (2,290,197)
<NET-CHANGE-FROM-OPS> (2,279,109)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5,626,418
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 61,698
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 143,441
<AVERAGE-NET-ASSETS> 10,299,349
<PER-SHARE-NAV-BEGIN> 0.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 0.00
<EXPENSE-RATIO> 0.58
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
