SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 (X)
Amendment No. 4 (X)
WT INVESTMENT TRUST I
(Formerly Kiewit Investment Trust)
(Exact Name of Registrant as Specified in Charter)
1100 North Market Street, Wilmington, DE 19890-0001
(Address of Principal Executive Offices (Zip Code)
Registrant's Telephone Number, Including Area Code (800) 254-3948
Robert J. Christian, Wilmington Trust Company,
1100 North Market Street, Wilmington, DE 19890-0001
(Name and Address of Agent for Service of Process)
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Please Send Copy of Communications to:
Joseph V. Del Raso, Esq.
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103
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WT INVESTMENT TRUST I
LARGE CAP GROWTH SERIES
WT LARGE CAP GROWTH SERIES
LARGE CAP CORE SERIES
SMALL CAP CORE SERIES
LARGE CAP VALUE SERIES
MID CAP VALUE SERIES
SMALL CAP VALUE SERIES
INTERNATIONAL MULTI-MANAGER SERIES
SHORT/INTERMEDIATE BOND SERIES
INTERMEDIATE BOND SERIES
MUNICIPAL BOND SERIES
PREMIER MONEY MARKET SERIES
PRIME MONEY MARKET SERIES
U.S. GOVERNMENT SERIES
TAX-EXEMPT SERIES
FORM N-1A, 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.
(a) INVESTMENT OBJECTIVES.
The LARGE CAP GROWTH SERIES, the WT LARGE CAP GROWTH SERIES and the SMALL CAP
CORE SERIES each seek superior long-term growth of capital. The LARGE CAP CORE
SERIES, the LARGE CAP VALUE SERIES, the MID CAP VALUE SERIES and the SMALL CAP
VALUE SERIES each seek to achieve long-term capital appreciation. The
INTERNATIONAL MULTI-MANAGER SERIES seeks superior long-term capital
appreciation. The SHORT/INTERMEDIATE BOND SERIES and the INTERMEDIATE BOND
SERIES each seek a high total return, consistent with high current income. The
MUNICIPAL BOND SERIES seeks a high level of income exempt from federal income
tax, consistent with the preservation of capital. The PRIME MONEY MARKET SERIES,
the U.S. GOVERNMENT Series and PREMIER MONEY MARKET SERIES each seek a high
level of current income consistent with the preservation of capital and
liquidity. The TAX-EXEMPT SERIES seeks as high a level of interest income exempt
from federal income tax as is consistent with preservation of principal. The
investment objectives for each Series except Large Cap Core Series may not be
changed without shareholder approval. The Prime Money Market, U.S. Government,
Premier Money Market and Tax-Exempt Series are money market funds and intend to
maintain a stable $1 share price, although this may not be possible under
certain circumstances. There is no guarantee that a Series will achieve its
investment objective.
For purposes of these investment objectives, "superior" long-term growth of
capital means to exceed the long-term growth of capital from an investment in
the securities comprising the S&P 500 Index (for the Large Cap Growth , WT Large
Cap Growth, Large Cap Core and Large Cap Value Series); the Russell 2000 Index,
(for the Small Cap Core, and the Small Cap Value Series); and the Russell Mid
Cap Index (for the Mid Cap Value Series), the Morgan Stanley Capital
International Europe, Australasia and Far East Index (for the International
Multi-Manager Series).
(b) IMPLEMENTATION OF INVESTMENT OBJECTIVES.
EQUITY SERIES
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The LARGE CAP GROWTH SERIES and WT LARGE CAP GROWTH SERIES are managed in an
identical manner. Each Series invests, under normal market conditions, at least
65% of its total assets in the following equity (or related) securities:
o common stocks of U.S. corporations that are judged by the adviser to have
strong growth characteristics and, with respect to at least 65% of the Series'
total assets, have a market capitalization of $2 billion or higher at the time
of purchase;
o options on, or securities convertible (such as convertible preferred stock and
convertible bonds) into, the common stock of U.S. corporations described
above;
o options on indexes of the common stock of U.S. corporations described above;
and
o contracts for either the future delivery, or payment in respect of the future
market value, of certain indexes of the common stock of U.S. corporations
described above, and options upon such futures contracts.
The adviser of each Series looks for high quality, sustainable growth stocks
while paying careful attention to valuation. Research is bottom-up, emphasizing
business fundamentals, including financial statement analysis and industry and
competitor evaluations. The adviser selects stocks it believes exhibit
consistent, above-average earnings growth, superior quality and attractive
risk/reward characteristics. These dominant companies are expected to generate
consistent earnings growth in a variety of economic environments.
The adviser also seeks to provide a greater margin of safety and stability in
each Series. Superior earnings growth is expected to translate ultimately into
superior compounding of returns. Additionally, several valuation tools are used
to avoid over-paying for growth or chasing "hot" stocks. Over time, the adviser
believes these favorable characteristics will produce superior returns with less
risk than many growth styles.
The adviser's research team analyzes a broad universe of over 2,000 companies.
Industry specialists search for high-quality companies growing at roughly double
the market's average. Approximately 150 stocks pass these initial screens and
are subject to thorough research. Dominant market share, strong financials, the
power to price, significant free cash flow and shareholder-oriented management
are critical variables.
Final purchase candidates are selected by the adviser's investment committee
based on attractive risk/reward characteristics and diversification guidelines.
Certain industries may be over or under-weighted by the adviser based upon
favorable growth rates or valuation parameters.
The adviser attempts to maintain portfolio continuity by purchasing sustainable
growth companies that are less sensitive to short-term economic trends than
cyclical, low quality companies. The adviser generally sells stocks when the
risk/reward characteristics of a stock turn negative, company fundamentals
deteriorate, or the stock underperforms the market or its peer group. The latter
device is employed to minimize mistakes and protect capital.
Each Series combines three distinct components, each of which is intended to
enhance returns and add balance.
LARGE CAP GROWTH STOCKS (over $5 billion in total market cap) - Up to 100%, but
not less than 65%, of each Series' total assets:
o Mature, predictable businesses
o Capital appreciation and income
o Highest liquidity
MEDIUM CAP GROWTH STOCKS (between $1 and $5 billion in total market cap) - Up to
20% of each Series' total assets:
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o Superior long-term potential
o Strong niche or franchise
o Seasoned management
SPECIAL SITUATIONS GROWTH OPPORTUNITIES - Up to 20% of each Series' total
assets:
o Stable return, independent of the market
o Unusually favorable risk/reward characteristics
o Typically involve corporate restructuring
In order to respond to adverse market, economic, political or other conditions,
each Series may assume a temporary defensive position and invest without limit
in commercial paper and other money market instruments that are rated investment
grade. The result of this action may be that a Series will be unable to achieve
its investment objective.
The LARGE CAP CORE SERIES invests, under normal market conditions, at least 65%
of its total assets in the following equity (or related) securities:
o securities of U.S. corporations that are judged by the adviser to have strong
growth and valuation characteristics;
o options on, or securities convertible (such as convertible preferred stock and
convertible bonds) into, the common stock of U.S. corporations described
above;
o receipts or American Depositary Receipts ("ADRs"), which are typically issued
by a U.S. bank or trust company as evidence of ownership of underlying
securities issued by a foreign corporation; and
o cash reserves and money market instruments (including securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities,
repurchase agreements, certificates of deposit and bankers' acceptances issued
by banks or savings and loan associations, and commercial paper).
The Large Cap Core Series is a diversified portfolio of U.S. equity (or related)
securities, including common stocks, preferred stocks and securities convertible
into common stock of companies with market capitalizations of at least $2
billion. Dividend income is an incidental consideration compared to growth in
capital in the selection of securities. The adviser seeks securities that
possess strong growth and value characteristics based on the evaluation of the
issuer's background, industry position, historical returns and the experience
and qualifications of the management team. The adviser may rotate the Series'
holdings among various market sectors based on economic analysis of the overall
business cycle.
As a temporary defensive investment policy, the Large Cap Core Series may invest
up to 100% of its assets in money market instruments and other short-term debt
instruments, rated investment grade or higher at the time of purchase, and may
hold a portion of its assets in cash. The result of this action may be that the
Series will be unable to achieve its investment objective.
The SMALL CAP CORE SERIES invests, under normal market conditions, at least 65%
of its total assets in the following equity (or related) securities:
o common stocks of U.S. corporations that are judged by the adviser to have
strong growth characteristics or to be undervalued in the marketplace relative
to underlying profitability and have a market capitalization of less than $2
billion at the time of purchase;
o options on, or securities convertible (such as convertible preferred stock and
convertible bonds) into, the common stock of U.S. corporations described
above;
o options on indexes of the common stock of U.S. corporations described above;
and
o contracts for either the future delivery, or payment in respect of the future
market value, of certain indexes of the common stock of U.S. corporations
described above, and options upon such futures contracts.
The Small Cap Core Series is a diversified portfolio of small cap U.S. equity
(or related) securities with a market capitalization of $2 billion or less at
the time of purchase. To achieve the Series' objective of long-term growth of
capital, the Series' adviser employs a combined growth and value investment
approach.
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The adviser uses proprietary quantitative research techniques to find
companies with long-term growth potential or that seem undervalued. After
analyzing those companies, the adviser invests the Series' assets in the stocks
of companies with the most attractive combination of long-term earnings, growth
and valuation. Securities will be sold to make room for new companies with
superior growth, valuation and projected return characteristics or to preserve
capital where the original assessment of the company's growth prospects and
earnings power has not proven optimistic.
In the Series' efforts to achieve its investment objective, it seeks to
outperform the Russell 2000 Index (assuming a similar investment in the
securities comprising this index would reinvest dividends and capital gains
distributions). The Russell 2000 Index is a passive index of the smallest 2000
stocks in the Russell 3000 Index of the 3000 largest stocks in the U.S. as
measured by market capitalization.
The INTERNATIONAL MULTI-MANAGER SERIES invests, at all times, at least 85% of
its total assets in the following equity (or related) securities:
o common stocks of foreign issuers;
o preferred stocks and/or debt securities that are convertible securities of
such foreign issuers; and o open or closed-end investment companies (mutual
funds) that invest primarily in the equity securities of issuers in countries
where it is impossible or impractical to invest directly.
The International Multi-Manager Series is a diversified portfolio of equity
securities (including convertible securities) of issuers located outside of the
United States. The Series may use forward currency contracts, options, futures
contracts and options on futures contracts to attempt to hedge actual or
anticipated investment security positions. Three sub-advisers, Clemente Capital,
Inc., Invista Capital Management Inc., and Scudder Kemper Investments, Inc.,
manage the assets of the Series. The adviser allocates the Series' assets among
each sub-adviser in roughly equal portions and then allows each sub-adviser to
use its own investment approach and strategy to achieve the Series' objective.
Clemente's investment approach begins with a global outlook, identifying the
major forces (i.e., political events, social developments, trade and capital
flows) affecting the global environment and then identifying the themes (i.e.,
corporate restructuring, infrastructure spending, consumer's coming of age) that
are responding to the major forces. The third step is to decide which countries
or sectors will benefit from these themes and then seek companies with favorable
growth characteristics in those countries or sectors. The next steps are to
research and identify specific holdings and ongoing monitoring and evaluation of
the Series. Series holdings are sold when shares reach the target price, the
fundamentals of a company have deteriorated or when new companies with superior
growth and valuation characteristics have been identified.
Invista's investment approach focuses on identifying opportunities through a
fundamentally sound, economic value driven process applied evenly across all
international markets. Candidates for purchase are companies whose current price
is substantially below investment value as determined by Invista's estimate of
future free cash flows. Once this evaluation process is applied, purchases are
made among those companies that provide optimal combinations of valuation,
growth and risk. Series holdings are sold when the relative attractiveness of a
security is not as great as additions proposed by a member of the investment
team.
Scudder Kemper's investment approach involves a top-down/bottom-up approach with
a focus on fundamental research. Investment ideas are generated by regional
analysts, global industry analysts and portfolio managers through the
integration of three analytical disciplines; global themes (identification of
sectors and industries likely to gain or lose during specific phases of a
theme's cycle); country analysis (quantitative assessment of each country's
fundamental and political characteristics combined with an objective,
quantitative analysis of market and economic data); and company analysis
(identification of company opportunities by searching for unique attributes such
as franchise or monopoly, above average growth potential, innovation or
scarcity). Series holdings are sold when the analysts indicate that the
underlying fundamentals are no longer strong.
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The Series utilizes this multiple sub-adviser arrangement to reduce volatility
through multiple investment approaches, a strategy used by many institutional
investors. For example, a particular investment approach used by a sub-adviser
may be successful in a bear (falling) market, while another investment approach
used by a different sub-adviser may be more successful in a bull (rising)
market. The multiple investment approach is designed to soften the impact of a
single sub-adviser's performance in a market cycle during which that
sub-adviser's investment approach is less successful. Because each sub-adviser
has different investment approaches, the performance of one or more of the
sub-advisers is expected to offset the impact of any other sub-adviser's poor
performance, regardless of the market cycle. Unfortunately, this also works the
opposite way. The successful performance of a sub-adviser will be diminished by
the less successful performances of the other sub-advisers. There can be no
guarantee that the expected advantages of the multiple adviser technique will be
achieved.
In the Series' efforts to achieve its investment objective, it seeks to
outperform the Morgan Stanley Capital International Europe, Australasia & Far
East ("EAFE") Index (assuming a similar investment in the securities comprising
this index would reinvest dividends and capital gains distributions). The EAFE
Index is an unmanaged index comprised of the stocks of approximately 1100
companies, screened for liquidity, cross ownership and industry representation
and listed on major stock exchanges in Europe, Australasia and the Far East.
THE VALUE SERIES: The Large Cap Value, Mid Cap Value and Small Cap Value Series
seek to invest in stocks that are less expensive than comparable companies, as
determined by price/earnings ratios, cash flows or other measures. Value
investing therefore may reduce risk while offering potential for capital
appreciation as a stock gains favor among other investors and its price rises.
The Series are managed using investment ideas that the adviser has used for over
twenty-five years. The Series' adviser relies on selecting individual stocks and
does not try to predict when the stock market might rise or fall. It seeks out
those stocks that are undervalued and, in some cases, neglected by financial
analysts. The adviser evaluates the degree of analyst recognition by monitoring
the number of analysts who follow the company and recommend its purchase or sale
to investors.
The adviser starts by identifying early change in a company's operations,
finances or management. The adviser is attracted to companies which will look
different tomorrow - operationally, financially, managerially - when compared to
yesterday. This type of dynamic change often creates confusion and
misunderstandings and may lead to a drop in the company's stock price. Examples
of change include mergers, acquisitions, divestitures, restructuring, change of
management, new market/product/means of production/distribution, regulatory
change, etc. Once change is identified, the adviser evaluates the company on
several levels. It analyzes:
o Financial models based principally upon projected cash flows
o The price of the company's stock in the context of what the market is willing
to pay for stock of comparable companies and what a strategic buyer would pay
for the whole company
o The extent of management's ownership interest in the company
o The company's market by corroborating its observations and assumptions by
meeting with management, customers and suppliers
The adviser also evaluates the degree of recognition of the business by the
investors by monitoring the number of sell side analysts who closely follow the
company and the nature of the shareholder base. Before deciding to purchase a
stock, the adviser conducts an extensive amount of business due diligence to
corroborate its observations and assumptions.
The identification of change comes from a variety of sources including the
private capital network which the adviser has established among its clients,
historical investments and intermediaries. The adviser also makes extensive use
of clipping services and regional brokers and bankers to identify elements of
change.
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The investment professionals regularly meet companies around the country
and sponsor more than 200 company/management meetings in its New York office.
By reviewing historical relationships and understanding the characteristics of a
business, the adviser establishes valuation parameters using relative ratios or
target prices. In its overall assessment, the adviser seeks stocks that it
believes have a greater upside potential than downside risk over an 18 to
24-month holding period.
An important function of the adviser is to set a price target, that is, the
price at which the stock will be sold when there has been no fundamental change
in the investment case. The adviser constantly monitors the companies held by
the Series to determine if there have been any fundamental changes in the
reasons that prompted the initial purchase of the stock. If significant changes
for the better have not materialized, the stock will be sold. The initial
investment case for stock purchase, which has been documented, is examined by
the adviser's investment professionals. A final decision on selling the stock is
made after all such factors are analyzed.
The LARGE CAP VALUE SERIES invests, under normal conditions, at least 65% of its
total assets in the following equity (or related) securities:
o common stocks of U.S. corporations that are judged by the adviser to be
undervalued in the marketplace relative to underlying profitability and have a
market capitalization of $10 billion or higher at the time of purchase; o
options on, or securities convertible (such as convertible preferred stock and
convertible bonds) into, the common stock of U.S. corporations described
above;
o options on indexes of the common stock of U.S. corporations described above;
o contracts for either the future delivery, or payment in respect of the future
market value, of certain indexes of the common stock of U.S. corporations
described above, and options upon such futures contracts; and
o without limit in commercial paper and other money market instruments rated in
one of the two highest rating categories by a nationally recognized
statistical rating organization ("NRSRO"), in response to adverse market
conditions, as a temporary defensive position. The result of this action may
be that the Series will be unable to achieve its investment objective.
The Large Cap Value Series is a diversified portfolio of large cap U.S. equity
(or related) securities that are deemed by the adviser to be undervalued as
compared to the company's profitability potential.
The MID CAP VALUE SERIES invests, under normal conditions, at least 65% of its
total assets in the following equity (or related) securities:
o common and preferred stocks of U.S. corporations that are judged by the
adviser to be undervalued in the marketplace relative to underlying
profitability and have a market capitalization between $1 and $10 billion at
the time of purchase;
o securities convertible (such as convertible preferred stock and convertible
bonds) into, the common stock of U.S. corporations described above;
o warrants; and
o without limit in commercial paper and other money market instruments rated in
one of the two highest rating categories by a NRSRO, in response to adverse
market conditions, as a temporary defensive position. The result of this
action may be that the Series will be unable to achieve its investment
objective.
The Mid Cap Value Series is a diversified portfolio of medium cap U.S. equity
(or related) securities that are deemed by the adviser to be undervalued as
compared to the company's profitability potential.
The SMALL CAP VALUE SERIES invests, under normal conditions, at least 65% of its
total assets in the following equity (or related) securities:
o common and preferred stocks of U.S. corporations that are judged by the
adviser to be undervalued in
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the marketplace relative to underlying profitability and have a market
capitalization of $1 billion or less at the time of purchase;
o securities convertible (such as convertible preferred stock and convertible
bonds) into, the common stock of U.S. corporations described above;
o warrants; and
o without limit in commercial paper and other money market instruments rated in
one of the two highest rating categories by a NRSRO, in response to adverse
market conditions, as a temporary defensive position. The result of this
action may be that the Series will be unable to achieve its investment
objective.
The Small Cap Value Series is a diversified portfolio of large cap U.S. equity
(or related) securities that are deemed by the adviser to be undervalued as
compared to the company's profitability potential.
ALL EQUITY SERIES. The frequency of portfolio transactions and a Series'
turnover rate will vary from year to year depending on the market. Increased
turnover rates incur the cost of additional brokerage commissions and may cause
recognition of greater capital gains. Series turnover rate is normally expected
to be less than 100% for each of the Series.
Each Series also may use other strategies and engage in other investment
practices, which are described in detail in Part B.
FIXED INCOME SERIES
The SHORT/INTERMEDIATE BOND SERIES:
o will invest at least 85% of its total assets in various types of investment
grade fixed income securities;
o may invest up to 10% of its total assets in investment grade fixed income
securities of foreign issuers;
o will, as a matter of fundamental policy, maintain a short-to-intermediate
average duration (2 1/2 to 4 years); and
o the average dollar-weighted duration of securities held by the
Short/Intermediate Bond Series will normally fall within a range of 2 1/2 to 4
years.
The INTERMEDIATE BOND SERIES:
o will invest at least 85% of its total assets in various types of investment
grade fixed income securities;
o may invest up to 10% of its total assets in investment grade fixed income
securities of foreign issuers;
o will, as a matter of fundamental policy, maintain an intermediate average
duration (4 to 7 years); and
o the average dollar-weighted duration of securities held by the Intermediate
Bond Series will normally fall within a range of 4 to 7 years.
The MUNICIPAL BOND SERIES:
o will, as a fundamental policy, invest substantially all (at least 80%) of its
net assets in a diversified portfolio of municipal securities that provide
interest that is exempt from federal income tax;
o may invest up to 20% of its net assets in other types of fixed income
securities that provide income that is subject to federal tax; and
o will, as a matter of fundamental policy, maintain an intermediate average
duration (4 to 8 years); and
o the average dollar-weighted duration of securities held by the Municipal Bond
Series will normally fall within a range of 4 to 8 years.
The Municipal Bond Series may not invest more than 25% of its total assets in
any one industry. Governmental issuers of municipal securities are not
considered part of any industry. The 25% limitation applies to municipal
securities backed by the assets and revenues of non-governmental users, such as
private operators of educational, hospital or housing facilities. However, the
investment adviser may decide that the yields available from concentrating in
obligations of a particular market sector or political subdivision justify the
risk that the performance of the Municipal Bond Series may be adversely affected
by such concentration. Under such market conditions, the Municipal Bond Series
may invest more than
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25% of its assets in sectors of the municipal securities market, such as health
care or housing, or in securities relating to one political subdivision, such as
a given state or U.S. territory. Under these conditions, the Municipal Bond
Series' vulnerability to any special risks that affects that sector or
jurisdiction could have an adverse impact on the value of an investment in the
Series. There are no limitations on the Municipal Bond Series' investment in any
one of the three general categories of municipal obligations: general obligation
bonds, revenue (or special) obligation bonds and private activity bonds.
SERIES COMPOSITION. The composition of each Series' holdings varies, depending
upon the investment adviser's analysis of the fixed income markets, the
municipal securities market and the expected trends in those markets. The
securities purchased by the Series may be purchased based upon their yield, the
income earned by the security, or their potential capital appreciation, the
potential increase in the security's value, or both. The investment adviser
seeks to protect the Series' principal value by reducing fluctuations in value
relative to those that may be experienced by fixed income funds with a longer
average duration. This strategy may reduce the level of income attained by the
Series. There is no guarantee that principal value can be protected during
periods of extreme interest volatility.
The Series invest only in securities that are rated, at the time of purchase, in
the top four categories by a rating agency such as Moody's Investors Service,
Inc. or Standard & Poor's. If the securities are not rated, then the adviser
must determine that they are of comparable quality.
Each Series also may use other strategies and engage in other investment
practices, which are described in detail in Part B. The investments and
strategies listed above and described throughout this prospectus are those that
we use under normal market conditions.
MONEY MARKET SERIES
The PRIME MONEY MARKET SERIES invests in:
o U.S. dollar-denominated obligations of major U.S. and foreign banks and their
branches located outside of the United States, of U.S. branches of foreign
banks, of foreign branches of foreign banks, of U.S. agencies of foreign banks
and wholly-owned banking subsidiaries of foreign banks;
o high quality commercial paper and corporate obligations;
o U.S. Government obligations;
o high quality municipal securities; and
o repurchase agreements that are fully collateralized by U.S. Government
obligations.
U.S. Government obligations are debt securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
The U.S. GOVERNMENT SERIES invests at least 65% of its total assets in:
o U.S. Government obligations; and
o repurchase agreements that are fully collateralized by such obligations.
The PREMIER MONEY MARKET SERIES invests in:
o U.S. dollar-denomination obligations of major U.S. and foreign banks and their
branches located outside of the United States, of U.S. branches of foreign
banks, of foreign branches of foreign banks, of U.S. agencies of foreign banks
and wholly-owned banking subsidiaries of foreign banks;
o commercial paper rated, at the time of purchase, in the highest category of
short-term debt ratings of any two nationally recognized statistical rating
organizations ("NRSRO");
o corporate obligations having a remaining maturity of 397 calendar days or
less, issued by corporations having outstanding comparable obligations that
are (a) rated in the two highest categories of any two NRSROs or (b) rated no
lower than the two highest long-term debt ratings categories by any NRSRO.
o U.S. Government obligations;
o high quality municipal securities; and
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o repurchase agreements that are fully collateralized by U.S. Government
obligations.
The TAX-EXEMPT SERIES invests in:
o high quality municipal obligations and municipal bonds;
o floating and variable rate obligations;
o participation interests;
o high quality tax-exempt commercial paper; and o high quality short-term
municipal notes.
The Tax-Exempt Series has adopted a policy that, under normal circumstances, at
least 80% of its annual income will be exempt from federal income tax.
Additionally, at least 80% of its annual income will not be a tax preference
item for purposes of the federal alternative minimum tax.
High quality securities include those that (1) are rated in one of the two
highest short-term rating categories by two NRSROs, such as S&P, Moody's and
Fitch IBCA (or by one NRSRO if only one NRSRO has issued a rating) or; (2) if
unrated are issued by an issuer with comparable outstanding debt that is rated
or are otherwise unrated and determined by the investment adviser to be of
comparable quality.
Each Series also may invest in other securities, use other strategies and engage
in other investment practices, which are described in detail in Part B.
(c) RISKS.
The following is a list of certain risks that may apply to an investment in a
Series, unless otherwise indicated. Further information about investment risks
is available in Part B:
o CREDIT RISK: The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation. (All Fixed Income and Money Market Series)
o CURRENCY RISK: The risk related to investments denominated in foreign
currencies. Foreign securities are usually denominated in foreign currency
therefore changes in foreign currency exchange rates can affect the net asset
value of the International Multi-Manager Series. (International Multi-Manager
Series)
o DERIVATIVES RISK: Some of the WT Equity Series' investments may be referred to
as "derivatives" because their value depends on, or derives from, the value of
an underlying asset, reference rate or index. These investments include
options, futures contracts and similar investments that may be used in hedging
and related income strategies. The market value of derivative instruments and
securities is sometimes more volatile than that of other investments, and each
type of derivative may pose its own special risks. As a fundamental policy, no
more than 15% of an Equity Series' total assets may at any time be committed
or exposed to derivative strategies. (WT Equity Series)
o FOREIGN SECURITY RISK: The risk of losses due to political, regulatory,
economic, social or other uncontrollable forces in a foreign country not
normally associated with investing in the U.S. markets. (International
Multi-Manager Series, the Large Cap Core Series, Short/Intermediate Bond
Series, Intermediate Bond Series and all Money Market Series)
o GROWTH-ORIENTED INVESTING RISK: The risk that an investment in a
growth-oriented portfolio, which invests in growth-oriented companies, will be
more volatile than the rest of the U.S. market as a whole. (Large Cap Growth,
WT Large Cap Growth, Large Cap Core and Small Cap Core Series)
o INTEREST RATE RISK: The risk of market losses attributable to changes in
interest rates. With fixed-rate securities, a rise in interest rates typically
causes a fall in values, while a fall in rates typically causes a rise in
values. The yield earned by a Series will vary with changes in interest rates.
(All Fixed Income and Money Market Series)
o LEVERAGE RISK: The risk associated with securities or practices (such as
when-issued and forward commitment transactions) that multiply small market
movements into larger changes in value. (All Fixed Income Series)
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o LIQUIDITY RISK: The risk that certain securities may be difficult or
impossible to sell at the time and the price that the seller would like. (All
Fixed Income Series)
o MARKET RISK: The risk that the market value of a security may move up and
down, sometimes rapidly and unpredictably. (All Series)
o OPPORTUNITY RISK: The risk of missing out on an investment opportunity because
the assets necessary to take advantage of it are tied up in less advantageous
investments. (All Equity and Fixed Income Series)
o PREPAYMENT RISK: The risk that a debt security may be paid off and proceeds
invested earlier than anticipated. Depending on market conditions, the new
investments may or may not carry the same interest rate. (All Fixed Income and
Money Market Series)
o SMALL CAP RISK: Small cap companies may be more vulnerable than larger
companies to adverse business or economic developments. Small cap companies
may also have limited product lines, markets or financial resources, may be
dependent on relatively small or inexperienced management groups and may
operate in industries characterized by rapid technological obsolescence.
Securities of such companies may be less liquid and more volatile than
securities of larger companies and therefore may involve greater risk than
investing in larger companies. (Small Cap Core Series)
o VALUATION RISK: The risk that a Series has valued certain of its securities at
a higher price than it can sell them. (All Equity and Fixed Income Series)
o VALUE INVESTING RISK: The risk that a portfolio's investment in companies
whose securities are believed to be undervalued, relative to their underlying
profitability, do not appreciate in value as anticipated. (Large Cap Value,
Mid Cap Value, Small Cap Value and Small Cap Core Series)
o YEAR 2000 COMPLIANCE RISK: Like other organizations around the world, the
Series could be adversely affected if the computer systems used by their
various service providers (or the market in general) do not properly operate
after January 1, 2000. The Series are taking steps to address the Year 2000
issue with respect to the computer systems that they rely on. There can be no
assurance, however, that these steps will be sufficient to avoid a temporary
service disruption or any adverse impact on the Series.
Additionally, if a company in which a Series is invested is adversely affected
by Year 2000 problems, it is likely that the price of that company's
securities will also be adversely affected. A decrease in one or more of a
Series' holdings may have a similar impact on the price of the Series' shares.
Each Series' adviser or sub-adviser will rely on public filings and other
statements made by companies about their Year 2000 readiness. Issuers in
countries outside the U.S. present a greater Year 2000 readiness risk because
they may not be required to make the same level of disclosure about Year 2000
readiness as is required in the U.S. The adviser is not able to audit any
company and its major suppliers to verify their Year 2000 readiness.
ITEM 6. MANAGEMENT, ORGANIZATION, AND CAPITAL STRUCTURE.
(a) MANAGEMENT.
The Board of Trustees for each Series supervises the management, activities and
affairs of the Series and has approved contracts with various financial
organizations to provide, among other services, the day-to-day management
required by a Series and its shareholders.
(a)(1) INVESTMENT ADVISERS AND SUB-ADVISERS.
WILMINGTON TRUST COMPANY, the investment adviser for the Large Cap Core Series,
Small Cap Core Series, International Multi-Manager Series, Short/Intermediate
Bond Series, Intermediate Bond Series and Municipal Bond Series, is located at
1100 North Market Street, Wilmington, Delaware 19890. WTC is a wholly owned
subsidiary of Wilmington Trust Corporation, which is a publicly held bank
holding company. WTC, subject to the supervision of the Board of Trustees,
directs the investments of these Series in accordance with their respective
investment objectives, policies and limitations. For the International
Multi-Manager Series, WTC allocates the Series' assets equally among the
sub-advisers and then oversees
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their investment activities. In addition to serving as investment adviser for
the Series, WTC is engaged in a variety of investment advisory activities,
including the management of other mutual funds and collective investment
vehicles.
Under an advisory agreement, the Large Cap Core Series pays a monthly advisory
fee to WTC at the annual rate of 0.70% of the Series' first $1 billion of
average daily net assets; 0.65% of the Series' next $1 billion of average daily
net assets; and 0.60% of the Series' average daily net assets over $2 billion.
The Small Cap Core Series pays WTC a monthly advisory fee at the annual rate of
0.60% of the Series' first $1 billion of average daily net assets; 0.55% of the
Series' next $1 billion of average daily net assets; and 0.50% of the Series'
average daily net assets over $2 billion. The International Multi-Manager Series
pays WTC a monthly advisory fee at the annual rate of 0.65% of the Series'
average daily net assets. For the twelve months ended June 30, 1999, WTC
received the following fees (after fee waivers), as a percentage of each Series'
average daily net assets:
WT Large Cap Growth Series 0.45%
Large Cap Value Series 0.44%
Small Cap Core Series 0.48%
International Multi-Manager Series 0.50%
For the period from October 20, 1998 to June 30, 1999, WTC received advisory
fees, after fee waivers, of 0.70% from the Large Cap Core Series (formerly the
Broad Market Equity Series). The Series' previous adviser, Kiewit Investment
Management Corp., received advisory fees of 0.70% for the period from July 1,
1998 to October 19, 1998.
Under an advisory agreement, each of Short/Intermediate Bond Series,
Intermediate Bond Series and Municipal Bond Series pays a monthly fee to WTC at
the annual rate of 0.35% of the Series' first $1 billion of average daily net
assets; 0.30% of the Series' next $1 billion of average daily net assets; and
0.25% of the Series' average daily net assets over $2 billion. For the twelve
months ended June 30, 1999, WTC received the following advisory fees (after fee
waivers) as a percentage of each Series' average daily net assets for investment
advisory services:
Short/Intermediate Bond Series 0.22%
Intermediate Bond Series 0.24%
Municipal Bond Series 0.14%
CRAMER ROSENTHAL MCGLYNN, LLC, 707 Westchester Avenue, White Plains, New York
10604, serves as the investment adviser to the Large Cap Value Series, the Mid
Cap Value Series and the Small Cap Value Series. Subject to the supervision of
the Board of Trustees, CRM makes investment decisions for these Series. CRM and
its predecessors have managed investments in small and medium capitalization
companies for more than twenty-five years. As of September 30, 1999, CRM had
over $4 billion of assets under management.
Under the advisory agreement, the Large Cap Value Series pays a monthly advisory
fee to CRM at the annual rate of 0.55% of its first 1 billion of average daily
net assets; 0.50% of the Series' next $1 billion of average daily net assets;
and 0.45% of the Series' average daily net assets over $2 billion. The Mid Cap
Value Series and the Small Cap Value Series each pay CRM a monthly advisory fee
of 0.75% of the Series' first $1 billion of average daily net assets; 0.70% of
the Series' next $1 billion of average daily net assets; and 0.65% of the
Series' average daily net assets over $2 billion. For the twelve months ended
June 30, 1999, CRM received advisory fees, after waivers, of 0.00% for the Large
Cap Value Series, 0.30% for Mid Cap Value Series and 0.75% for Small Cap Value
Series, as a percentage of the Series' average daily net assets.
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ROXBURY CAPITAL MANAGEMENT, LLC, 100 Wilshire Boulevard, Suite 600, Santa
Monica, California 90401, serves as the investment adviser for the Large Cap
Growth Series and WT Large Cap Growth Series. Roxbury is engaged in a variety of
investment advisory activities, including the management of separate accounts
and, as of August 31, 1999, had assets under management of $7,532,276,106.
Under their respective advisory agreements, each of Large Cap Growth Series and
WT Large Cap Growth Series pays a monthly advisory fee to Roxbury at the annual
rate of 0.55% of the Series' first $1 billion of average daily net assets; 0.50%
of the Series next $1 billion of average daily net assets; and 0.45% of the
Series' average daily net assets.
Rodney Square Management Corporation, the investment adviser of Prime Money
Market Series, U.S. Government Series, Premier Money Market Series and
Tax-Exempt Series, is located at 1100 North Market Street, Wilmington, Delaware
19890. RSMC is a wholly owned subsidiary of Wilmington Trust Company, which is
wholly owned by Wilmington Trust Corporation. RSMC also provides asset
management services to collective investment funds maintained by WTC. In the
past, RSMC has provided asset management services to individuals, personal
trusts, municipalities, corporations and other organizations.
Each of the U.S. Government Series, the Prime Money Market Series, and the
Tax-Exempt Series pays a monthly fee to RSMC at the annual rate of 0.47% of the
Series' first $1 billion of average daily net assets; 0.43% of the Series' next
$500 million of average daily net assets; 0.40% of the Series' next $500 million
of average daily net assets; and 0.37% of the Series' average daily net assets
in excess of $2 billion, as determined at the close of business on each day
throughout the month. The Premier Money Market Series pays a monthly fee to RSMC
at the annual rate of 0.20%. Out of its fees, RSMC makes payments to PFPC Inc.
for the provision of administration, accounting and transfer agency services and
to PFPC Trust Company for provision of custodial services.
Prior to November 1, 1999, WTC served as investment adviser to the Premier Money
Market Series. For the period from October 20, 1998 to June 30, 1999, the
Premier Money Market Series paid WTC 0.20% of the Series' average daily net
assets for investment advisory services. The Series' previous investment
adviser, Kiewit Investment Management Corp., received advisory fees of 0.20% for
the period from July 1, 1998 to October 19, 1998.
SUB-ADVISERS -- The International Multi-Manager Series has three sub-advisers,
Clemente Capital Inc., Invista Capital Management, Inc. and Scudder Kemper
Investments, Inc. Clemente, located at Carnegie Hall Tower, 152 West 57th
Street, 25th Floor, New York, New York 10019, registered as an investment
adviser in 1979. Clemente manages in excess of $500 million in assets. Leopoldo
M. Clemente, President and Chief Investment Officer serves as portfolio manager
for the portion of the International Multi-Manager Series' assets under
Clemente's management. Mr. Clemente has been responsible for portfolio
management and security selection for the past eight years.
Invista, located at 1800 Hub Tower, 699 Walnut Street, Des Moines, Iowa 50309,
is a registered investment adviser organized in 1984. Invista is an indirect,
wholly owned subsidiary of Principal Mutual Life Insurance Company. Invista
manages in excess of $26 billion in assets, of which approximately $3.8 billion
are in foreign equities in separately managed accounts and mutual funds for
public funds, corporations, endowments and foundations, insurance companies and
individuals. Scott D. Opsal, CFA, Executive Vice President and lead portfolio
manager of international equities for Invista, is the portfolio manager for the
portion of the International Multi-Manager Series under Invista's management.
Mr. Opsal joined Invista at its inception in 1985 and assumed his current
responsibilities in 1993. Before 1993, his responsibilities included security
analysis and portfolio management activities for various U.S. equity portfolios,
managing the firm's convertible securities and overseeing Invista's index fund
and derivatives positions. Kurtis D. Spieler, CFA, Vice President and manager of
the firm's dedicated emerging market portfolios, is Mr. Opsal's backup. Mr.
Spieler has been Invista's emerging markets portfolio manager since joining
Invista in 1995.
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Scudder Kemper, located at 345 Park Avenue, New York, New York 10154, was
founded as America's first independent investment counselor and has served as
investment adviser, administrator and distributor of mutual funds since 1928.
Scudder Kemper manages in excess of $200 billion in assets, with approximately
$30 billion of those assets in foreign investments in separately managed
accounts for pension funds, foundations, educational institutions and government
entities and in open-end and closed-end investment companies. Irene T. Cheng
serves as the lead portfolio manager for the portion of the International
Multi-Manager Series' assets under Scudder Kemper's management. Ms. Cheng has
been in the asset management business for over nine years and joined Scudder
Kemper as a portfolio manager in 1993.
(a)(2) PORTFOLIO MANAGERS.
E. MATTHEW BROWN, Vice President, leads a "growth" team and is responsible for
the day-to-day management of the Large Cap Core Series. Mr. Brown joined WTC in
October of 1996. Prior to joining WTC, he served as Chief Investment Officer of
PNC Bank, Delaware, from 1993 through 1996. Mr. Brown also is responsible for
co-management of the Small Cap Core Series.
THOMAS P. NEALE, CFA, Vice President, Equity Research Division, is a member of
the "growth" team and is responsible for the co-management of the Small Cap Core
Series. Mr. Neale joined Wilmington Trust in 1986 as an Institutional
Multi-Manager Portfolio Manager. Currently he specializes in managing taxable
accounts for Delaware holding companies and has equity research responsibilities
following the insurance and brokerage industries.
ROBERT J. CHRISTIAN, Chief Investment Officer of WTC, or his delegate, is
primarily responsible for monitoring the day-to-day investment activities of the
sub-advisers to the International Multi-Manager Series. Mr. Christian has been a
Director of Wilmington Management Corporation since February 1996, and was
Chairman and Director of PNC Equity Advisors Company, and President and Chief
Investment Officer of PNC Asset Management Group, Inc. from 1994 to 1996. He was
Chief Investment Officer of PNC Bank, N.A. from 1992 to 1996 and Director of
Provident Capital Management from 1993 to 1996.
The day-to-day management of the Large Cap Value Series, the Mid Cap Value
Series and the Small Cap Value Series is shared by a team of individuals
employed by the CRM. Ronald H. McGlynn and Jay B. Abramson are responsible for
the overall management of these Series. In addition, Michael A. Prober is part
of the team responsible for the management of Mid Cap Value Series; Scott L.
Scher and Christopher Fox are part of the team responsible for the management of
Small Cap Value Series; and Kevin M. Chin and Adam L. Starr are part of the team
responsible for the management of the Large Cap Value Series. Each portfolio
manager's business experience and educational background is as follows:
RONALD H. MCGLYNN President and Chief Executive Officer since 1983 and Co-Chief
Investment Officer of CRM. He has been with CRM for twenty-five years and is
responsible for investment policy, portfolio management and investment research.
JAY B. ABRAMSON, CPA Executive Vice President since 1989 and Director of
Research and Co-Chief Investment Officer of CRM. He has been with CRM for twelve
years and is responsible for investment research and portfolio management. Mr.
Abramson received a B.S.E. and J.D. from the University of Pennsylvania Wharton
School and Law School, respectively, and is a Certified Public Accountant.
MICHAEL A. PROBER Vice President of CRM since 1993 where he is responsible for
investment research. Prior to joining CRM in 1993, he worked in corporate
finance and commercial banking at Chase Manhattan Bank and as a Research Analyst
for Alpha Capital Venture Partners. Mr. Prober received a B.B.A. from the
University of Michigan and an M.M. from the Northwestern University J.L. Kellogg
Graduate School of Management.
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SCOTT L. SCHER, CFA Vice President of CRM since 1995 where he is responsible for
investment research. Prior to joining CRM in 1995, he worked as an
analyst/portfolio manager at The Prudential from 1988. Mr. Scher received a B.A.
from Harvard College, a M.B.A. from Columbia Business School and is a Chartered
Financial Analyst.
KEVIN M. CHIN is a Vice President at Cramer Rosenthal McGlynn, LLC. Kevin joined
CRM in 1989. He is responsible for investment research. Formerly, Kevin was a
Financial Analyst for the Mergers and Acquisitions Department of Morgan Stanley
and a risk arbitraguer with The First Boston Corporation. He received a BS from
Columbia University School of Engineering and Applied Science.
CHRISTOPHER S. FOX, CFA joined CRM in 1999 as a Vice President and has over
fifteen years experience in the Investment business. In 1995 Chris co-founded
Schaenen Fox Capital Management, LLC, a hedged fund with small cap value
investments. He previously was at Schaenen Wood & Associates, Inc. as Vice
President and Senior Manager/Analyst; Chemical Bank's Private Banking Division
as a portfolio manager and analyst; and Drexel Burnham Lambert, Inc. as a
financial analyst.
ADAM L. STARR joined CRM in 1999 as a Vice President and is responsible for
investment research. Prior to CRM, he was a Partner and Portfolio Manager at
Weiss, Peck & Greer, LLC. Previously, he was an Analyst and Portfolio Manager at
Charter Oak Partners and First Manhattan Company. Adam earned an MBA from
Columbia University. The day-to-day management of the Large Cap Growth Series is
the responsibility of Roxbury's Investment Committee. The Investment Committee
meets regularly to make investment decisions for the Series and relies on
Roxbury's research team.
ERIC K. CHEUNG, Vice President and Manager of the Fixed Income Management
Division, Clayton M. Albright, III, Vice President of the Fixed Income
Management Division and Dominick J. D'Eramo, CFA, Vice President of the Fixed
Income Management Division, all of the Asset Management Department of WTC, are
primarily responsible for the day-to-day management of the Short/Intermediate
Bond Series and the Intermediate Bond Series. From 1978 until 1986, Mr. Cheung
was the Portfolio Manager for fixed income assets of the Meritor Financial
Group. In 1986, Mr. Cheung joined WTC. In 1991, he became the Division Manager
for all fixed income products. Mr. Albright has been employed at WTC since 1976.
In 1987, he joined the Fixed Income Management Division and since then has
specialized in the management of intermediate and long-term fixed income
portfolios. Mr. D'Eramo began his career with WTC in 1986 as a fixed income
trader and was promoted to portfolio manager in 1990.
LISA MORE, Assistant Vice President of Credit Research and Municipal Trading
within the Fixed Income Management Divisions of Asset Management Department of
WTC is primarily responsible for the day-to-day management of the Municipal Bond
Series. Mrs. More has been employed at WTC since 1988. In 1990, she joined the
Fixed Income Division specializing in the management of municipal income
portfolios.
(A)(3) LEGAL PROCEEDINGS.
None.
(B) CAPITAL STOCK.
Inapplicable.
ITEM 7. SHAREHOLDER INFORMATION.
(A) PRICING OF FUND SHARES.
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(a)(1-2) The Equity and Fixed Income Series value their assets based on current
market values when such values are available. These prices normally are supplied
by a pricing service. Fixed income securities maturing within 60 days of the
valuation date are valued at amortized cost. Any assets held by a Series that
are denominated in foreign currencies are valued daily in U.S. dollars at the
foreign currency exchange rates that are prevailing at the time that PFPC
determines the daily net asset value. To determine the value of those
securities, PFPC may use a pricing service that takes into account not only
developments related to specific securities, but also transactions in comparable
securities. Securities that do not have a readily available current market value
are valued in good faith under the direction of the Board of Trustees.
PFPC determines the NAV per share of each Equity and Fixed Income Series as of
the close of regular trading on the New York Stock Exchange (currently 4:00
p.m., Eastern time), on each Business Day (a day that the Exchange, the Transfer
Agent and the Philadelphia branch of the Federal Reserve Bank are open for
business). The NAV is calculated by adding the value of all securities and other
assets in a Series, deducting its liabilities and dividing the balance by the
number of outstanding shares in that Series.
MONEY MARKET SERIES
Each Money Market Series uses its best effort to maintain its $1 constant share
price and values its securities at cost. This involves valuing a security
initially at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of fluctuating interest rates on
the market value of the security. All cash, receivables and current payables are
carried at their face value. Other assets, if any, are valued at fair value as
determined in good faith by, or under the direction of, the Board of Trustees.
PFPC determines the NAV per share of each Series as of 12:00 p.m. Eastern time
for the Tax-Exempt Series and as of 2:00 p.m. Eastern Time for the U.S.
Government Series, the Prime Money Market Series, and the Premier Money Market
Series, on each Business Day (a day that the New York Stock Exchange, the
Transfer Agent and the Philadelphia branch of the Federal Reserve Bank are open
for business). The NAV is calculated by adding the value of all securities and
other assets in a Series, deducting its liabilities and dividing the balance by
the number of outstanding shares in that Series.
(a)(3) Shares will not be priced on those days when the Series' offices are
closed. As of the date of this prospectus, those days are:
New Year's Day Memorial Day Veterans Day
Martin Luther King, Jr. Day Independence Day Thanksgiving Day
President's Day Labor Day Christmas Day
Good Friday Columbus Day
(B) PURCHASE OF FUND SHARES.
The Trust's shares have not been registered under the Securities Act of 1933,
which means that its shares may not be sold publicly. However, the Trust may
sell its shares through private placements pursuant to available exemptions from
registration under that Act.
Shares of the Trust may be sold only to: affiliates of WTC; subsidiaries of the
parent company of WTC; certain joint venture partners of affiliates of WTC; and
other institutional investors. Shares of the Series are sold at net asset value
without a sales charge. Shares are purchased at the net asset value next
determined after the Trust receives the order in proper form. All investments
are credited to the shareholder's account in the form of full and fractional
shares of the Series calculated to three decimal places. In the interest of
economy and convenience, certificates for shares will be issued only upon
written request.
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The minimum initial investment in a Series is $1,000,000. There is no minimum
for subsequent investments.
The Trust distributes its own shares.
IN KIND PURCHASES
- -----------------
If accepted by the Trust, shares of each Series may be purchased in exchange for
securities which are eligible for acquisition by such Series as described in
this registration statement. Securities to be exchanged which are accepted by
the Trust and Trust shares to be issued therefore will be valued, as set forth
under "Pricing of Fund Shares" in Item 7(a), at the time of the next
determination of net asset value after such acceptance. All dividends, interest,
subscription, or other rights pertaining to such securities shall become the
property of the Series whose shares are being acquired and must be delivered to
the Trust by the investor upon receipt from the issuer.
The Trust will not accept securities in exchange for shares of a Series unless:
(1) current market quotations are readily available for such securities; (2) the
investor represents and agrees that all securities offered to be exchanged are
not subject to any restrictions upon their sale by the Series under the
Securities Act of 1933 or under the laws of the country in which the principal
market for such securities exists, or otherwise; (3) at the discretion of the
Series, the value of any such security (except U.S. Government securities) being
exchanged together with other securities of the same issuer owned by the Series
will not exceed 5% of the net assets of the Series immediately after the
transaction; and (4) the Series acquires the securities for investment and not
for resale. In addition, nearly all of the securities accepted in an exchange
must be, at the time of the exchange, eligible to be included in the Series
whose shares are issued. (See Item 4(b)) Investors interested in such exchanges
should contact the adviser.
(C) REDEMPTION OF FUND SHARES.
As stated above in response to Item 7(b), "Purchase of Fund Shares," the Trust's
shares have not been registered under the Securities Act of 1933, which means
that its shares are restricted securities which may not be sold unless
registered or pursuant to an available exemption from that Act.
Redemptions are processed on any day on which the specific Series is open for
business and are effected at the Series' net asset value next determined after
the Series receives a redemption request in good form.
Redemption payments in cash will ordinarily be made within seven days after
receipt of the redemption request in good form. However, the right of redemption
may be suspended or the date of payment postponed in accordance with the 1940
Act. The amount received upon redemption may be more or less than the amount
paid for the shares depending upon the fluctuations in the market value of the
assets owned by the Series.
If the Board of Trustees determines that it would be detrimental to the best
interests of the remaining shareholders of any Series to make a particular
payment wholly or partly in cash, a Series may pay the redemption price in whole
or in part by a distribution of portfolio securities from the Series of the
shares being redeemed in lieu of cash in accordance with Rule 18f-1 under the
Investment Company Act of 1940. Investors may incur brokerage charges and other
transaction costs selling securities that were received in payment of
redemptions.
Although the redemption payments will ordinarily be made within seven days after
receipt, payment to investors redeeming shares which were purchased by check
will not be made until the Trust can verify that the payments for the purchase
have been, or will be, collected, which may take up to fifteen days or more.
Investors may avoid this delay by submitting a certified check along with the
purchase order.
(D) DIVIDENDS AND DISTRIBUTIONS.
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It is not expected that any Series will make cash or property distributions.
Rather, each investor can redeem part or all of its shares in a Series. As
explained below in (e), each investor will be required to report separately on
its own U.S. federal income tax return its distributive share (as determined in
accordance with the governing instruments of the Series) of a Series' income,
gains, losses, deductions and credits. Each investor will be required to report
its distributive share regardless of whether it has received a corresponding
distribution of cash or property from a Series.
(E) TAX CONSEQUENCES.
Each Series of the Trust is intended to be taxable as a partnership for U.S.
federal income tax purposes.
The Series are series of a trust organized under Delaware law. The Series will
not be subject to any U.S. federal income tax. Instead, each investor will be
required to report separately on its own U.S. federal income tax return its
distributive share (as determined in accordance with the governing instruments
of the Series) of a Series' income, gains, losses, deductions and credits. Each
investor will be required to report its distributive share regardless of whether
it has received a corresponding distribution of cash or property from a Series.
An allocable share of a tax-exempt investor's income will be "unrelated business
taxable income" ("UBTI") only to the extent that a Series borrows money to
acquire property or invests in assets that produce UBTI or to the extent a
tax-exempt investor borrows money to make an investment in the Series. In
addition to U.S. federal income taxes, investors in the Series may also be
subject to state and local taxes on their distributive share of a Series'
income.
While the Series are not classified as "regulated investment companies" under
Subchapter M of the Code, the Series' assets, income and distributions will be
managed in such a way that an investor in the Series will be able to satisfy the
requirements of Subchapter M of the Code, assuming that the investor invested
all of its assets in a Series for such Series' entire fiscal year.
There are certain other tax issues that will be relevant to only certain of the
investors; for instance, investors that are segregated asset accounts and
investors who contribute assets rather than cash to the Series. It is intended
that 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 Series. Also, a Series may be required
to withhold taxes on distributions to foreign investors. Foreign investors
should contact their own tax advisors for more information with respect to any
applicable withholding on distributions from a Series.
Redemptions of shares in a Series may be taxable. In general, a redemption of
shares is taxable to the extent such cash or property received by the redeeming
investor exceeds such investor's tax basis in its shares.
It is not expected that any Series will make distributions of cash or property.
Instead, at the close of each fiscal year investors will be advised of their
allocable share of a Series' income, gains, losses deductions and credits for
U.S. federal income tax purposes.
If a Series of the Trust purchases shares in certain foreign investment
entities, called "passive foreign investment companies" ("PFIC"), the investors
in Series may be subject to U.S. federal income tax and a related interest
charge on a portion of any "excess distribution" or gain from the disposition of
such shares even if such income is distributed to investors in the Series and
whether or not such investors are subject to tax.
Certain Series of the Trust may be subject to foreign withholding taxes on
income from certain of their foreign securities.
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The Series' taxable year-end will normally be June 30. Although, as described
above, the Series will not be subject to U.S. federal income tax, they will file
appropriate U.S. federal income tax returns.
ITEM 8. DISTRIBUTION ARRANGEMENTS.
Inapplicable.
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PART B: INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
ITEM 10. COVER PAGE AND TABLE OF CONTENTS.
Inapplicable.
ITEM 11. FUND HISTORY.
WT Investment Trust I (the "Trust") is a diversified, open-end management
investment company organized as a Delaware business trust on January 23, 1997.
The name of the Trust was changed from Kiewit Investment Trust to WT Investment
Trust I on October 20, 1998.
The Trust has established the following Series described in this Statement of
Additional Information: Prime Money Market, Premier Money Market, U.S.
Government, Tax-Exempt, Short/Intermediate Bond, Intermediate Bond, Municipal
Bond, Large Cap Growth, WT Large Cap Growth, Large Cap Core, Small Cap Core,
International Multi-Manager, Large Cap Value, Mid Cap Value and Small Cap Value
Series.
ITEM 12. DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS.
(a) CLASSIFICATION. The Trust is a diversified, open-end management investment
company.
MONEY MARKET SERIES
(b) INVESTMENT STRATEGIES AND RISKS. The following information supplements the
information concerning each Money Market Series' investment objective, policies
and limitations found in Item 4 of Part A.
The "Money Market Series" are the Prime Money Market, the Premier Money Market,
the U.S. Government and the Tax-Exempt Series. Each has adopted a fundamental
policy requiring it to maintain a constant net asset value of $1.00 per share,
although this may not be possible under certain circumstances. Each Series
values its portfolio securities on the basis of amortized cost (see "Purchase,
Redemption and Pricing of Shares") pursuant to Rule 2a-7 under the Investment
Company Act of 1940 (the "1940 Act"). As conditions of that Rule, the Board of
Trustees has established procedures reasonably designed to stabilize each
Series' price per share at $1.00 per share. Each Series maintains a
dollar-weighted average portfolio maturity of 90 days or less; purchases only
instruments with effective maturities of 397 days or less; and invests only in
securities which are of high quality as determined by major rating services or,
in the case of instruments which are not rated, of comparable quality as
determined by the investment adviser, Rodney Square Management Corporation,
under the direction of and subject to the review of the Board of Trustees.
BANK OBLIGATIONS. The Prime Money Market and the Premier Money Market Series may
invest in U.S. dollar-denominated obligations of major banks, including
certificates of deposit, time deposits and bankers' acceptances of major U.S.
and foreign banks and their branches located outside of the United States, of
U.S. branches of foreign banks, of foreign branches of foreign banks, of U.S.
agencies of foreign banks and of wholly owned banking subsidiaries of such
foreign banks located in the United States.
Obligations of foreign branches of U.S. banks and U.S. branches of wholly owned
subsidiaries of foreign banks may be general obligations of the parent bank, of
the issuing branch or subsidiary, or both, or may be limited by the terms of a
specific obligation or by governmental regulation. Because such obligations are
issued by foreign entities, they are subject to the risks of foreign investing.
A brief description of some typical types of bank obligations follows:
o BANKERS' ACCEPTANCES. The Prime Money Market, the Premier Money Market and the
Tax-Exempt Series may invest in bankers' acceptances, which are credit
instruments evidencing the obligation of a bank to pay a draft that has been
drawn on it by a customer. These
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instruments reflect the obligation of both the bank and the drawer to pay the
face amount of the instrument upon maturity.
o CERTIFICATES OF DEPOSIT. The Prime Money Market, the Premier Money Market and
the Tax-Exempt Series may invest in certificates evidencing the indebtedness
of a commercial bank to repay funds deposited with it for a definite period of
time (usually from 14 days to one year) at a stated or variable interest rate.
Variable rate certificates of deposit provide that the interest rate will
fluctuate on designated dates based on changes in a designated base rate (such
as the composite rate for certificates of deposit established by the Federal
Reserve Bank of New York).
o TIME DEPOSITS. The Prime Money Market and the Premier Money Market Series may
invest in time deposits, which are bank deposits for fixed periods of time.
CERTIFICATES OF PARTICIPATION. The Tax-Exempt Series may invest in certificates
of participation, which give the investor an undivided interest in the municipal
obligation in the proportion that the investor's interest bears to the total
principal amount of the municipal obligation.
CORPORATE BONDS, NOTES AND COMMERCIAL PAPER. The Prime Money Market and the
Premier Money Market Series may invest in corporate bonds, notes and commercial
paper. These obligations generally represent indebtedness of the issuer and may
be subordinated to other outstanding indebtedness of the issuer. Commercial
paper consists of short-term unsecured promissory notes issued by corporations
in order to finance their current operations. The Series will only invest in
commercial paper rated, at the time of purchase, in the highest category by a
nationally recognized statistical rating organization ("NRSRO"), such as Moody's
or S&P or, if not rated, determined by the adviser to be of comparable quality.
The Series may invest in asset-backed commercial paper subject to Rule 2a-7
restrictions on investment in asset-backed securities, which include a
requirement that the security must have received a rating from a NRSRO.
FOREIGN SECURITIES. At the present time, portfolio securities of the Prime Money
Market and the Premier Money Market Series that are purchased outside the United
States are maintained in the custody of foreign branches of U.S. banks. To the
extent that the Series may maintain portfolio securities in the custody of
foreign subsidiaries of U.S. banks, and foreign banks or clearing agencies in
the future, those sub-custodian arrangements are subject to regulations under
the 1940 Act that govern custodial arrangements with entities incorporated or
organized in countries outside of the United States.
ILLIQUID SECURITIES. Each Money Market Series may not invest more than 10% of
the value of its net assets in securities that at the time of purchase have
legal or contractual restrictions on resale or are otherwise illiquid. Illiquid
securities are securities that cannot be disposed of within seven days at
approximately the value at which they are being carried on a Series' books.
The Board of Trustees has the ultimate responsibility for determining whether
specific securities are liquid or illiquid. The Board has delegated the function
of making day to day determinations of liquidity to the adviser, pursuant to
guidelines approved by the Board. The adviser will monitor the liquidity of
securities held by a Series and report periodically on such decisions to the
Board.
INVESTMENT COMPANY SECURITIES. The Money Market Series may invest in the
securities of other money market mutual funds, within the limits prescribed by
the 1940 Act. These limitations currently provide, in part, that a Series may
not purchase shares of an investment company if (a) such a purchase would cause
the Series to own in the aggregate more than 3% of the total outstanding voting
stock of the investment company or (b) such a purchase would cause the Series to
have more than 5% of its total assets invested in the investment company or (c)
more than 10% of the Series' total assets to be invested in the aggregate in all
investment companies. As a shareholder in an investment company, the Series
would bear its pro rata portion of the investment company's expenses, including
advisory fees, in addition to its own expenses.
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The Series' investments of their assets in the corresponding Series pursuant to
the master/feeder structure are excepted from the above limitations.
MUNICIPAL SECURITIES. The Prime Money Market, the Premier Money Market and the
Tax-Exempt Series each may invest in debt obligations issued by states,
municipalities and public authorities ("Municipal Securities") to obtain funds
for various public purposes. Yields on Municipal Securities are the product of a
variety of factors, including the general conditions of the money market and of
the municipal bond and municipal note markets, the size of a particular
offering, the maturity of the obligation and the rating of the issue. Although
the interest on Municipal Securities may be exempt from federal income tax,
dividends paid by a Series to its shareholders may not be tax-exempt. A brief
description of some typical types of municipal securities follows:
o GENERAL OBLIGATION SECURITIES are backed by the taxing power of the issuing
municipality and are considered the safest type of municipal bond.
o REVENUE OR SPECIAL OBLIGATION SECURITIES are backed by the revenues of a
specific project or facility - tolls from a toll bridge, for example.
o BOND ANTICIPATION NOTES normally are issued to provide interim financing until
long-term financing can be arranged. The long-term bonds then provide money
for the repayment of the Notes.
o TAX ANTICIPATION NOTES finance working capital needs of municipalities and are
issued in anticipation of various seasonal tax revenues, to be payable for
these specific future taxes.
o REVENUE ANTICIPATION NOTES are issued in expectation of receipt of other kinds
of revenue, such as federal revenues available under the Federal Revenue
Sharing Program.
o INDUSTRIAL DEVELOPMENT BONDS ("IDBs") and Private Activity Bonds ("PABs") are
specific types of revenue bonds issued on or behalf of public authorities to
finance various privately operated facilities such as solid waste facilities
and sewage plants. PABs generally are such bonds issued after April 15, 1986.
These obligations are included within the term "municipal bonds" if the
interest paid on them is exempt from federal income tax in the opinion of the
bond issuer's counsel. IDBs and PABs are in most case revenue bonds and thus
are not payable from the unrestricted revenues of the issuer. The credit
quality of the IDBs and PABs is usually directly related to the credit
standing of the user of the facilities being financed, or some form of credit
enhancement such as a letter of credit.
o TAX-EXEMPT COMMERCIAL PAPER AND SHORT-TERM MUNICIPAL NOTES provide for
short-term capital needs and usually have maturities of one year or less. They
include tax anticipation notes, revenue anticipation notes and construction
loan notes.
o CONSTRUCTION LOAN NOTES are sold to provide construction financing. After
successful completion and acceptance, many projects receive permanent
financing through the Federal Housing Administration by way of "Fannie Mae"
(the Federal National Mortgage Association) or "Ginnie Mae" (the Government
National Mortgage Association).
o PUT BONDS are municipal bonds which give the holder the right to sell the bond
back to the issuer or a third party at a specified price and exercise date,
which is typically well in advance of the bond's maturity date.
REPURCHASE AGREEMENTS. The Money Market Series may invest in repurchase
agreements. A repurchase agreement is a transaction in which a Series purchases
a security from a bank or recognized securities dealer and simultaneously
commits to resell that security to a bank or dealer at an agreed date and price
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reflecting a market rate of interest, unrelated to the coupon rate or the
maturity of the purchased security. While it is not possible to eliminate all
risks from these transactions (particularly the possibility of a decline in the
market value of the underlying securities, as well as delays and costs to the
Series if the other party to the repurchase agreement becomes bankrupt), it is
the policy of a Series to limit repurchase transactions to primary dealers and
banks whose creditworthiness has been reviewed and found satisfactory by the
adviser. Repurchase agreements maturing in more than seven days are considered
illiquid for purposes of a Series' investment limitations.
SECURITIES LENDING. The Money Market Series may from time to time lend their
portfolio securities to brokers, dealers and financial institutions. Such loans
by a Series will in no event exceed one-third of that Series' total assets and
will be secured by collateral in the form of cash or securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities, which will
be maintained in an amount equal to the current market value of the loaned
securities at all times the loan is outstanding. Each Series will make loans of
securities only to firms deemed credit worthy by the adviser.
STANDBY COMMITMENTS. The Money Market Series may invest in standby commitments.
It is expected that stand-by commitments will generally be available without the
payment of any direct or indirect consideration. However, if necessary and
advisable, the Series may pay for standby commitments either separately in cash
or by paying a higher price for the obligations acquired subject to such a
commitment (thus reducing the yield to maturity otherwise available for the same
securities). Standby commitments purchased by the Series will be valued at zero
in determining net asset value and will not affect the valuation of the
obligations subject to the commitments. Any consideration paid for a standby
commitment will be accounted for as unrealized depreciation and will be
amortized over the period the commitment is held by a Series.
U.S. GOVERNMENT OBLIGATIONS. The Money Market Series may invest in debt
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Although all obligations of agencies and instrumentalities
are not direct obligations of the U.S. Treasury, payment of the interest and
principal on these obligations is generally backed directly or indirectly by the
U.S. Government. This support can range from securities supported by the full
faith and credit of the United States (for example, securities of the Government
National Mortgage Association), to securities that are supported solely or
primarily by the creditworthiness of the issuer, such as securities of the
Federal National Mortgage Association, Federal Home Loan Mortgage Corporation,
Tennessee Valley Authority, Federal Farm Credit Banks and the Federal Home Loan
Banks. In the case of obligations not backed by the full faith and credit of the
United States, a Series must look principally to the agency or instrumentality
issuing or guaranteeing the obligation for ultimate repayment and may not be
able to assert a claim against the United States itself in the event the agency
or instrumentality does not meet its commitments.
VARIABLE AND FLOATING RATE SECURITIES. The Money Market Series may invest in
variable and floating rate securities. The terms of variable and floating rate
instruments provide for the interest rate to be adjusted according to a formula
on certain pre-determined dates. Certain of these obligations also may carry a
demand feature that gives the holder the right to demand prepayment of the
principal amount of the security prior to maturity. An irrevocable letter of
credit or guarantee by a bank usually backs the demand feature. Series
investments in these securities must comply with conditions established by the
SEC under which they may be considered to have remaining maturities of 397 days
or less.
WHEN-ISSUED SECURITIES. The Money Market Series may buy when-issued securities
or sell securities on a delayed-delivery basis. This means that delivery and
payment for the securities normally will take place approximately 15 to 90 days
after the date of the transaction. The payment obligation and the interest rate
that will be received are each fixed at the time the buyer enters into the
commitment. During the period between purchase and settlement, the purchaser
makes no payment and no interest accrues to the purchaser. However, when a
security is sold on a delayed-delivery basis, the seller does not participate in
further gains or losses with respect to the security. If the other party to a
when-issued or delayed-delivery
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transaction fails to transfer or pay for the securities, the Series could miss a
favorable price or yield opportunity or could suffer a loss.
A Series will make a commitment to purchase when-issued securities only with the
intention of actually acquiring the securities, but the Series may dispose of
the commitment before the settlement date if it is deemed advisable as a matter
of investment strategy. A Series may also sell the underlying securities before
they are delivered, which may result in gains or losses. A separate account for
each Series is established at the custodian bank, into which cash and/or liquid
securities equal to the amount of when-issued purchase commitments is deposited.
If the market value of the deposited securities declines additional cash or
securities will be placed in the account on a daily basis to cover the Series'
outstanding commitments.
When a Series purchases a security on a when-issued basis, the security is
recorded as an asset on the commitment date and is subject to changes in market
value generally, based upon changes in the level of interest rates. Thus, upon
delivery, the market value of the security may be higher or lower than its cost,
and this may increase or decrease the Series' net asset value. When payment for
a when-issued security is due, a Series will meet its obligations from
then-available cash flow, the sale of the securities held in the separate
account, the sale of other securities or from the sale of the when-issued
securities themselves. The sale of securities to meet a when-issued purchase
obligation carries with it the potential for the realization of capital gains or
losses.
(c) FUND POLICIES. Except as otherwise provided, the Money Market Series have
adopted the investment limitations set forth below. Limitations which are
designated as fundamental policies may not be changed without the affirmative
vote of the lessor of (i) 67% or more of the shares of a Series present at a
shareholders meeting if holders of more than 50% of the outstanding shares of
the Series are present in person or by proxy or (ii) more than 50% of the
outstanding shares of a Series. If any percentage restriction on investment or
utilization of assets is adhered to at the time an investment is made, a later
change in percentage resulting from a change in the market values of a Series'
assets or redemptions of shares will not be considered a violation of the
limitation.
Each Series will not as a matter of fundamental policy:
1. purchase the securities of any one issuer if, as a result, more than 5% of
the Series' total assets would be invested in the securities of such issuer, or
the Series would own or hold 10% or more of the outstanding voting securities of
that issuer, provided that (1) each Series may invest up to 25% of its total
assets without regard to these limitations; and (2) these limitations do not
apply to securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities;
2. purchase the securities of any issuer if, as a result, more than 25% of the
Series' total assets would be invested in the securities of one or more issuers
having their principal business activities in the same industry, provided, that
each of the Prime Money Market and Premier Money Market Series may invest more
than 25% of its total assets in the obligations of banks;
3. borrow money, except (1) from a bank for temporary or emergency purposes (not
for leveraging or investment) or (2) by engaging in reverse repurchase
agreements if the Series' borrowings do not exceed an amount equal to 33 1/3% of
the current value of its assets taken at market value, less liabilities other
than borrowings;
4. make loans to other persons, except by (1) purchasing debt securities in
accordance with its investment objective, policies and limitations; (2) entering
into repurchase agreements; or (3) engaging in securities loan transactions
limited to 33 1/3% of the value of the Series' total assets;
5. underwrite any issue of securities, except to the extent that the Series may
be considered to be
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acting as underwriter in connection with the disposition of any portfolio
security;
6. purchase or sell real estate, provided that the Series may invest in
obligations secured by real estate or interests therein or obligations issued by
companies that invest in real estate or interests therein;
7. purchase or sell physical commodities or contracts, provided that currencies
and currency-related contracts will not be deemed physical commodities; or
8. issue senior securities, except as appropriate to evidence indebtedness that
the Series is permitted to incur, provided that the Series' use of options,
futures contracts and options thereon or currency-related contracts will not be
deemed to be senior securities for this purpose.
With respect to the exclusion from the investment limitation described in number
2 above, the Trust has been advised that it is the SEC staff's current position,
that the exclusion may be applied only to U.S. bank obligations; the Prime Money
Market and Premier Money Market Series, however, will consider both foreign and
U.S. bank obligations within this exclusion.
The following non-fundamental policies apply to each Money Market Series unless
otherwise indicated, and the Board of Trustees may change them without
shareholder approval.
Each Series will not:
1. make short sales of securities except short sales against the box;
2. purchase securities on margin except for the use of short-term credit
necessary for the clearance of purchases and sales of portfolio securities;
3. purchase portfolio securities if its outstanding borrowings exceed 5% of the
value of its total assets, and if at any time the Series' bank borrowings exceed
its fundamental borrowing limitations due to a decline in net assets, such
borrowings will be promptly (within 3 days) reduced to the extent necessary to
comply with such limitations;
4. make loans of portfolio securities unless such loans are fully collateralized
by cash, securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, or any combination of cash and securities, marked to market
daily; or
5. with respect to the U.S. Government, Prime Money Market and Premier Money
Market Series only, purchase the securities of any one issuer if as a result
more than 5% of the Series' total assets would be invested in the securities of
such issuer, provided that this limitation does not apply to securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities.
(d) TEMPORARY DEFENSIVE MEASURES.
Inapplicable.
(e) PORTFOLIO TURNOVER.
Inapplicable.
BOND SERIES
(b) INVESTMENT STRATEGIES AND RISKS. The following information supplements the
information concerning
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each Bond Series' investment objective, policies and limitations found in Item 4
of Part A.
The "Bond Series" are the Short/Intermediate Bond, the Intermediate Bond and the
Municipal Bond Series. Wilmington Trust Company, the investment adviser for the
Bond Series, employs an investment process that is disciplined, systematic and
oriented toward a quantitative assessment and control of volatility. The Bond
Series' exposure to credit risk is moderated by limiting their investments to
securities that, at the time of purchase, are rated investment grade by a
nationally recognized statistical rating organization such as Moody's, S&P, or,
if unrated, are determined by the adviser to be of comparable quality. See
"Appendix B - Description of Ratings." Ratings, however, are not guarantees of
quality or of stable credit quality. Not even the highest rating constitutes
assurance that the security will not fluctuate in value or that a Series will
receive the anticipated yield on the security. WTC continuously monitors the
quality of the Series' holdings, and should the rating of a security be
downgraded or its quality be adversely affected, WTC will determine whether it
is in the best interest of the affected Series to retain or dispose of the
security.
The effect of interest rate fluctuations in the market on the principal value of
the Bond Series is moderated by limiting the average dollar-weighted duration of
their investments -- in the case of the Short/Intermediate Bond Series to a
range of 2 1/2 to 4 years, in the case of the Intermediate Bond Series to a
range of 4 to 7 years, and in the case of the Municipal Bond Series to a range
of 4 to 8 years. Investors may be more familiar with the term "average effective
maturity" (when, on average, the fixed income securities held by the Series will
mature), which is sometimes used to express the anticipated term of the Series'
investments. Generally, the stated maturity of a fixed income security is longer
than it's projected duration. Under normal market conditions, the average
effective maturity, in the case of the Short/Intermediate Bond Series, is
expected to fall within a range of approximately 3 to 5 years, in the case of
the Intermediate Bond Series, within a range of approximately 7 to 12 years, and
in the case of the Municipal Bond Series, within a range of approximately 5 to
10 years. In the event of unusual market conditions, the average dollar-weighted
duration of the Series may fall within a broader range. Under those
circumstances, the Short/Intermediate Bond and the Intermediate Bond Series may
invest in fixed income securities with an average dollar-weighted duration of 1
to 6 years and 2 to 10 years, respectively.
WTC's goal in managing the Short/Intermediate Bond and the Intermediate Bond
Series is to gain additional return by analyzing the market complexities and
individual security attributes which affect the returns of fixed income
securities. The Bond Series are intended to appeal to investors who want a
thoughtful exposure to the broad fixed income securities market and the high
current returns that characterize the short-term to intermediate-term sector of
that market.
Given the average duration of the holdings of the Bond Series and the current
interest rate environment, the Series should experience smaller price
fluctuations than those experienced by longer-term bond and municipal bond funds
and a higher yield than fixed-price money market and tax-exempt money market
funds. Of course, the Series will likely experience larger price fluctuations
than money market funds and a lower yield than longer-term bond and municipal
bond funds. Given the quality of the Series' holdings, which must be investment
grade (rated within the top four categories) or comparable to investment grade
securities at the time of purchase, the Series will accept lower yields in order
to avoid the credit concerns experienced by funds that invest in lower quality
fixed income securities. In addition, although the Municipal Bond Series expects
to invest substantially all of its net assets in municipal securities that
provide interest income that is exempt from federal income tax, it may invest up
to 20% of its net assets in other types of fixed income securities that provide
federally taxable income.
The composition of each Series' holdings varies depending upon WTC's analysis of
the fixed income markets and the municipal securities markets (for the Municipal
Bond Series), including analysis of the most attractive segments of the yield
curve, the relative value of the different market sectors, expected trends in
those markets and supply versus demand pressures. Securities purchased by the
Series may be purchased on the basis of their yield or potential capital
appreciation or both. By maintaining each Series' specified average duration,
WTC seeks to protect the Series' principal value by reducing fluctuations in
value relative to those that may be experienced by bond funds with longer
average durations. This strategy
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may reduce the level of income attained by the Series. Of course, there is no
guarantee that principal value can be protected during periods of extreme
interest rate volatility.
WTC may make frequent changes in the Series' investments, particularly during
periods of rapidly fluctuating interest rates. These frequent changes would
involve transaction costs to the Series and could result in taxable capital
gains.
ASSET-BACKED SECURITIES. The Bond Series may purchase interests in pools of
obligations, such as credit card or automobile loan receivables, purchase
contracts and financing leases. Such securities are also known as "asset-backed
securities," and the holders thereof may be entitled to receive a fixed rate of
interest, a variable rate that is periodically reset to reflect the current
market rate or an auction rate that is periodically reset at auction.
Asset-backed securities are typically supported by some form of credit
enhancement, such as cash collateral, subordinated tranches, a letter of credit,
surety bond or limited guaranty. Credit enhancements do not provide protection
against changes in the market value of the security. If the credit enhancement
is exhausted or withdrawn, security holders may experience losses or delays in
payment if required payments of principal and interest are not made with respect
to the underlying obligations. Except in very limited circumstances, there is no
recourse against the vendors or lessors that originated the underlying
obligations.
Asset-backed securities are likely to involve unscheduled prepayments of
principal that may affect yield to maturity, result in losses, and may be
reinvested at higher or lower interest rates than the original investment. The
yield to maturity of asset-backed securities that represent residual interests
in payments of principal or interest in fixed income obligations is particularly
sensitive to prepayments.
The value of asset-backed securities may change because of changes in the
market's perception of the creditworthiness of the servicing agent for the pool
of underlying obligations, the originator of those obligations or the financial
institution providing credit enhancement.
BANK OBLIGATIONS. The Bond Series may invest in the same U.S. dollar-denominated
obligations of major banks as the Money Market Series. (See "Bank Obligations"
above)
CORPORATE BONDS, NOTES AND COMMERCIAL PAPER. The Bond Series may invest in
corporate bonds, notes and commercial paper. These obligations generally
represent indebtedness of the issuer and may be subordinated to other
outstanding indebtedness of the issuer. Commercial paper consists of short-term
unsecured promissory notes issued by corporations in order to finance their
current operations. The Series will only invest in commercial paper rated, at
the time of purchase, in the highest category by a nationally recognized
statistical rating organization, such as Moody's or S&P or, if not rated,
determined by WTC to be of comparable quality.
FIXED INCOME SECURITIES WITH BUY-BACK FEATURES. Fixed income securities with
buy-back features enable the Bond Series to recover principal upon tendering the
securities to the issuer or a third party. Letters of credit issued by domestic
or foreign banks often supports these buy-back features. In evaluating a foreign
bank's credit, WTC considers whether adequate public information about the bank
is available and whether the bank may be subject to unfavorable political or
economic developments, currency controls or other governmental restrictions that
could adversely affect the bank's ability to honor its commitment under the
letter of credit. The Municipal Bond Series will not acquire municipal
securities with buy-back features if, in the opinion of counsel, the existence
of a buy-back feature would alter the tax-exempt nature of interest payments on
the underlying securities and cause those payments to be taxable to that Series
and its shareholders.
Buy-back features include standby commitments, put bonds and demand features.
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o STANDBY COMMITMENTS. The Bond Series may acquire standby commitments
from broker-dealers, banks or other financial intermediaries to enhance
the liquidity of portfolio securities. A standby commitment entitles a
Series to same day settlement at amortized cost plus accrued interest,
if any, at the time of exercise. The amount payable by the issuer of
the standby commitment during the time that the commitment is
exercisable generally approximates the market value of the securities
underlying the commitment. Standby commitments are subject to the risk
that the issuer of a commitment may not be in a position to pay for the
securities at the time that the commitment is exercised.
Ordinarily, a Series will not transfer a standby commitment to a third
party, although the Series may sell securities subject to a standby
commitment at any time. A Series may purchase standby commitments
separate from or in conjunction with the purchase of the securities
subject to the commitments. In the latter case, the Series may pay a
higher price for the securities acquired in consideration for the
commitment.
o PUT BONDS. A put bond (also referred to as a tender option or third
party bond) is a bond created by coupling an intermediate or long-term
fixed rate bond with an agreement giving the holder the option of
tendering the bond to receive its par value. As consideration for
providing this tender option, the sponsor of the bond (usually a bank,
broker-dealer or other financial intermediary) receives periodic fees
that equal the difference between the bond's fixed coupon rate and the
rate (determined by a remarketing or similar agent) that would cause
the bond, coupled with the tender option, to trade at par. By paying
the tender offer fees, a Series in effect holds a demand obligation
that bears interest at the prevailing short-term rate.
In selecting put bonds for the Bond Series, WTC takes into
consideration the creditworthiness of the issuers of the underlying
bonds and the creditworthiness of the providers of the tender option
features. A sponsor may withdraw the tender option feature if the
issuer of the underlying bond defaults on interest or principal
payments, the bond's rating is downgraded or, in the case of a
municipal bond, the bond loses its tax-exempt status.
o DEMAND FEATURES. Many variable rate securities carry demand features that
permit the holder to demand repayment of the principal amount of the
underlying securities plus accrued interest, if any, upon a specified number
of days' notice to the issuer or its agent. A demand feature may be
exercisable at any time or at specified intervals. Variable rate securities
with demand features are treated as having a maturity equal to the time
remaining before the holder can next demand payment of principal. The issuer
of a demand feature instrument may have a corresponding right to prepay the
outstanding principal of the instrument plus accrued interest, if any, upon
notice comparable to that required for the holder to demand payment.
GUARANTEED INVESTMENT CONTRACTS. A guaranteed investment contract ("GIC") is a
general obligation of an insurance company. A GIC is generally structured as a
deferred annuity under which the purchaser agrees to pay a given amount of money
to an insurer (either in a lump sum or in installments) and the insurer promises
to pay interest at a guaranteed rate (either fixed or variable) for the life of
the contract. Some GICs provide that the insurer may periodically pay
discretionary excess interest over and above the guaranteed rate. At the GIC's
maturity, the purchaser generally is given the option of receiving payment or an
annuity. Certain GICs may have features that permit redemption by the issuer at
a discount from par value.
Generally, GICs are not assignable or transferable without the permission of the
issuer. As a result, the acquisition of GICs is subject to the limitations
applicable to each Series' acquisition of illiquid and restricted securities.
The holder of a GIC is dependent on the creditworthiness of the issuer as to
whether the issuer is able to meet its obligations. No Series intends to invest
more than 5% of its net assets in GICs.
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ILLIQUID SECURITIES. The Bond Series may not invest more than 15% of the value
of their net assets in securities that at the time of purchase have legal or
contractual restrictions on resale or are otherwise illiquid.
MONEY MARKET FUNDS. The Bond Series may invest in the securities of money market
mutual funds, within the limits prescribed by the 1940 Act, as previously
described for the Money Market Series under "Investment Company Securities."
MORTGAGE-BACKED SECURITIES. Mortgage-backed securities are securities
representing interests in a pool of mortgages secured by real property.
Government National Mortgage Association ("GNMA") mortgage-backed securities are
securities representing interests in pools of mortgage loans to residential home
buyers made by lenders such as mortgage bankers, commercial banks and savings
associations and are either guaranteed by the Federal Housing Administration or
insured by the Veterans Administration. Timely payment of interest and principal
on each mortgage loan is backed by the full faith and credit of the U.S.
Government.
The Federal National Mortgage Association ("FNMA") and Federal Home Loan
Mortgage Corporation ("FHLMC") both issue mortgage-backed securities that are
similar to GNMA securities in that they represent interests in pools of mortgage
loans. FNMA guarantees timely payment of interest and principal on its
certificates and FHLMC guarantees timely payment of interest and ultimate
payment of principal. FHLMC also has a program under which it guarantees timely
payment of scheduled principal as well as interest. FNMA and FHLMC guarantees
are backed only by those agencies and not by the full faith and credit of the
U.S. Government.
In the case of mortgage-backed securities that are not backed by the U.S.
Government or one of its agencies, a loss could be incurred if the collateral
backing these securities is insufficient. This may occur even though the
collateral is U.S. Government-backed.
Most mortgage-backed securities pass monthly payment of principal and interest
through to the holder after deduction of a servicing fee. However, other payment
arrangements are possible. Payments may be made to the holder on a different
schedule than that on which payments are received from the borrower, including,
but not limited to, weekly, bi-weekly and semiannually. The monthly principal
and interest payments also are not always passed through to the holder on a PRO
RATA basis. In the case of collateralized mortgage obligations ("CMOs"), the
pool is divided into two or more tranches and special rules for the disbursement
of principal and interest payments are established.
CMO residuals are derivative securities that generally represent interests in
any excess cash flow remaining after making required payments of principal and
interest to the holders of the CMOs described above. Yield to maturity on CMO
residuals is extremely sensitive to prepayments. In addition, if a series of a
CMO includes a class that bears interest at an adjustable rate, the yield to
maturity on the related CMO residual also will be extremely sensitive to the
level of the index upon which interest rate adjustments are based.
Stripped mortgage-backed securities ("SMBS") are derivative multi-class mortgage
securities and may be issued by agencies or instrumentalities of the U.S.
Government or by private mortgage lenders. SMBS usually are structured with two
classes that receive different proportions of the interest and/or principal
distributions on a pool of mortgage assets. A common type of SMBS will have one
class of holders receiving all interest payments -- "interest only" or "IO" --
and another class of holders receiving the principal repayments -- "principal
only" or "PO." The yield to maturity of IO and PO classes is extremely sensitive
to prepayments on the underlying mortgage assets.
MUNICIPAL SECURITIES. Municipal securities are debt obligations issued by or on
behalf of states, territories and possessions of the United States, the District
of Columbia and their sub-divisions, agencies and
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instrumentalities, the interest on which is, in the opinion of bond counsel,
exempt from federal income tax. These debt obligations are issued to obtain
funds for various public purposes, such as the construction of public
facilities, the payment of general operating expenses or the refunding of
outstanding debts. They may also be issued to finance various privately owned or
operated activities. The three general categories of municipal securities are
general obligation, revenue or special obligation and private activity municipal
securities. A brief description of typical municipal securities follows:
o GENERAL OBLIGATION SECURITIES are backed by the taxing power of
the issuing municipality and are considered the safest type of
municipal bond. The proceeds from general obligation securities
are used to fund a wide range of public projects, including the
construction or improvement of schools, highways and roads, and
water and sewer systems.
o REVENUE OR SPECIAL OBLIGATION SECURITIES are backed by the
revenues of a specific project or facility - tolls from a toll
bridge, for example. The proceeds from revenue or special
obligation securities are used to fund a wide variety of capital
projects, including electric, gas, water and sewer systems;
highways, bridges and tunnels; port and airport facilities;
colleges and universities; and hospitals. Many municipal issuers
also establish a debt service reserve fund from which principal
and interest payments are made. Further security may be available
in the form of the state's ability, without obligation, to make up
deficits in the reserve fund.
o MUNICIPAL LEASE OBLIGATIONS may take the form of a lease, an
installment purchase or a conditional sale contract issued by
state and local governments and authorities to acquire land,
equipment and facilities. Usually, the Series will purchase a
participation interest in a municipal lease obligation from a bank
or other financial intermediary. The participation interest gives
the holder a pro rata, undivided interest in the total amount of
the obligation.
Municipal leases frequently have risks distinct from those
associated with general obligation or revenue bonds. The interest
income from the lease obligation may become taxable if the lease
is assigned. Also, to free the municipal issuer from
constitutional or statutory debt issuance limitations, many leases
and contracts include non-appropriation clauses providing that the
municipality has no obligation to make future payments under the
lease or contract unless money is appropriated for that purpose by
the municipality on a yearly or other periodic basis. Finally, the
lease may be illiquid.
o RESOURCE RECOVERY BONDS are affected by a number of factors, which
may affect the value and credit quality of these revenue or
special obligations. These factors include the viability of the
project being financed, environmental protection regulations and
project operator tax incentives.
o PRIVATE ACTIVITY SECURITIES are specific types of revenue bonds
issued on behalf of public authorities to finance various
privately operated facilities such as educational, hospital or
housing facilities, local facilities for water supply, gas,
electricity, sewage or solid waste disposal, and industrial or
commercial facilities. The payment of principal and interest on
these obligations generally depends upon the credit of the private
owner/user of the facilities financed and, in certain instances,
the pledge of real and personal property by the private
owner/user. The interest income from certain types of private
activity securities may be considered a tax preference item for
purposes of the federal alternative minimum tax ("Tax Preference
Item").
Short-term municipal securities in which the Series may invest include Tax
Anticipation, Revenue Anticipation, Bond Anticipation and Construction Loan
Notes, which were previously described for the Money Market Series (See
"Municipal Securities" above).
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OPTIONS, FUTURES AND FORWARD CURRENCY CONTRACT STRATEGIES. Although the
Municipal Bond Series has no current intention of so doing, each of the Bond
Series may use options and futures contracts. The Short/Intermediate Bond and
the Intermediate Bond Series may use forward currency contracts.
PARTICIPATION INTERESTS. The Bond Series may invest in participation interests
in fixed income securities. A participation interest provides the certificate
holder with a specified interest in an issue of fixed income securities.
Some participation interests give the holders differing interests in the
underlying securities, depending upon the type or class of certificate
purchased. For example, coupon strip certificates give the holder the right to
receive a specific portion of interest payments on the underlying securities;
principal strip certificates give the holder the right to receive principal
payments and the portion of interest not payable to coupon strip certificate
holders. Holders of certificates of participation in interest payments may be
entitled to receive a fixed rate of interest, a variable rate that is
periodically reset to reflect the current market rate or an auction rate that is
periodically reset at auction. Asset-backed residuals represent interests in any
excess cash flow remaining after required payments of principal and interest
have been made.
More complex participation interests involve special risk considerations. Since
these instruments have only recently been developed, there can be no assurance
that any market will develop or be maintained for the instruments. Generally,
the fixed income securities that are deposited in trust for the holders of these
interests are the sole source of payments on the interests; holders cannot look
to the sponsor or trustee of the trust or to the issuers of the securities held
in trust or to any of their affiliates for payment.
Participation interests purchased at a discount may experience price volatility.
Certain types of interests are sensitive to fluctuations in market interest
rates and to prepayments on the underlying securities. A rapid rate of
prepayment can result in the failure to recover the holder's initial investment.
The extent to which the yield to maturity of a participation interest is
sensitive to prepayments depends, in part, upon whether the interest was
purchased at a discount or premium, and if so, the size of that discount or
premium. Generally, if a participation interest is purchased at a premium and
principal distributions occur at a rate faster than that anticipated at the time
of purchase, the holder's actual yield to maturity will be lower than that
assumed at the time of purchase. Conversely, if a participation interest is
purchased at a discount and principal distributions occur at a rate faster than
that assumed at the time of purchase, the investor's actual yield to maturity
will be higher than that assumed at the time of purchase.
Participation interests in pools of fixed income securities backed by certain
types of debt obligations involve special risk considerations. The issuers of
securities backed by automobile and truck receivables typically file financing
statements evidencing security interests in the receivables, and the servicers
of those obligations take and retain custody of the obligations. If the
servicers, in contravention of their duty to the holders of the securities
backed by the receivables, were to sell the obligations, the third party
purchasers could acquire an interest superior to the interest of the security
holders. Also, most states require that a security interest in a vehicle must be
noted on the certificate of title and the certificate of title may not be
amended to reflect the assignment of the lender's security interest. Therefore,
the recovery of the collateral in some cases may not be available to support
payments on the securities. Securities backed by credit card receivables are
generally unsecured, and both federal and state consumer protection laws may
allow set-offs against certain amounts owed.
The Municipal Bond Series will only invest in participation interests in
municipal securities, municipal leases or in pools of securities backed by
municipal assets if, in the opinion of counsel, any interest income on the
participation interest will be exempt from federal income tax to the same extent
as the interest on the underlying securities.
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<PAGE>
REPURCHASE AGREEMENTS. The Bond Series may invest in repurchase agreements,
which were previously described for the Money Market Portfolios (See "Repurchase
Agreements" above).
SECURITIES LENDING. The Bond Series may lend securities pursuant to agreements,
which require that the loans be continuously secured by collateral equal to 100%
of the market value of the loaned securities. Such collateral consists of cash,
securities of the U.S. Government or its agencies, or any combination of cash
and such securities. Such loans will not be made if, as a result, the aggregate
amount of all outstanding securities loans for a Series exceed one-third of the
value of the Series' total assets taken at fair market value. A Series will
continue to receive interest on the securities lent while simultaneously earning
interest on the investment of the cash collateral in U.S. Government securities.
However, a Series will normally pay lending fees to such broker-dealers and
related expenses from the interest earned on invested collateral. There may be
risks of delay in receiving additional collateral or risks of delay in recovery
of the securities and even loss of rights in the collateral should the borrower
of the securities fail financially. However, loans are made only to borrowers
deemed by the adviser to be of good standing and when, in the judgment of the
adviser, the consideration that can be earned currently from such securities
loans justifies the attendant risk. Either party upon reasonable notice to the
other party may terminate any loan. The Municipal Bond Series has no current
intention of lending its portfolio securities and would do so only under unusual
market conditions since the interest income that a Series receives from lending
its securities is taxable.
U.S. GOVERNMENT OBLIGATIONS. The Bond Series may invest in the same debt
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities as the Money Market Series. (See "U.S. Government
Obligations").
VARIABLE AND FLOATING RATE SECURITIES. The Bond Series may invest in variable
and floating rate securities. The terms of variable and floating rate
instruments provide for the interest rate to be adjusted according to a formula
on certain pre-determined dates. Certain of these obligations also may carry a
demand feature that gives the holder the right to demand prepayment of the
principal amount of the security prior to maturity. An irrevocable letter of
credit or guarantee by a bank usually backs the demand feature. Series
investments in these securities must comply with conditions established by the
SEC under which they may be considered to have remaining maturities of 397 days
or less.
Each of the Bond Series may also purchase inverse floaters that are floating
rate instruments whose interest rates bear an inverse relationship to the
interest rate on another security or the value of an index. Changes in the
interest rate on the other security or index inversely affect the interest rate
paid on the inverse floater, with the result that the inverse floater's price is
considerably more volatile than that of a fixed rate security. For example, an
issuer may decide to issue two variable rate instruments instead of a single
long-term, fixed rate bond. The interest rate on one instrument reflects
short-term interest rates, while the interest rate on the other instrument (the
inverse floater) reflects the approximate rate the issuer would have paid on a
fixed rate bond multiplied by two minus the interest rate paid on the short-term
instrument. Depending on market availability, the two variable rate instruments
may be combined to form a fixed rate bond. The market for inverse floaters is
relatively new.
WHEN-ISSUED SECURITIES. The Bond Series may buy when-issued securities or sell
securities on a delayed-delivery basis. This means that delivery and payment for
the securities normally will take place approximately 15 to 90 days after the
date of the transaction. The payment obligation and the interest rate that will
be received are each fixed at the time the buyer enters into the commitment.
During the period between purchase and settlement, the purchaser makes no
payment and no interest accrues to the purchaser. However, when a security is
sold on a delayed-delivery basis, the seller does not participate in further
gains or losses with respect to the security. If the other party to a
when-issued or delayed-delivery transaction fails to transfer or pay for the
securities, the Series could miss a favorable price or yield opportunity or
could suffer a loss.
B-13
<PAGE>
A Series will make a commitment to purchase when-issued securities only with the
intention of actually acquiring the securities, but the Series may dispose of
the commitment before the settlement date if it is deemed advisable as a matter
of investment strategy. A Series may also sell the underlying securities before
they are delivered, which may result in gains or losses. A separate account for
each Series is established at the custodian bank, into which cash and/or liquid
securities equal to the amount of when-issued purchase commitments is deposited.
If the market value of the deposited securities declines additional cash or
securities will be placed in the account on a daily basis to cover the Series'
outstanding commitments.
When a Series purchases a security on a when-issued basis, the security is
recorded as an asset on the commitment date and is subject to changes in market
value generally, based upon changes in the level of interest rates. Thus, upon
delivery, the market value of the security may be higher or lower than its cost,
and this may increase or decrease the Series' net asset value. When payment for
a when-issued security is due, a Series will meet its obligations from
then-available cash flow, the sale of the securities held in the separate
account, the sale of other securities or from the sale of the when-issued
securities themselves. The sale of securities to meet a when-issued purchase
obligation carries with it the potential for the realization of capital gains or
losses.
The Municipal Bond Series may purchase securities on a when-issued basis in
connection with the refinancing of an issuer's outstanding indebtedness
("refunding contracts"). These contracts require the issuer to sell and the
Series to buy municipal obligations at a stated price and yield on a settlement
date that may be several months or several years in the future. The offering
proceeds are then used to refinance existing municipal obligations. Although the
Municipal Bond Series may sell its rights under a refunding contract, the
secondary market for these contracts may be less liquid than the secondary
market for other types of municipal securities. The Series generally will not be
obligated to pay the full purchase price if it fails to perform under a
refunding contract. Instead, refunding contracts usually provide for payment of
liquidated damages to the issuer (currently 15-20% of the purchase price). The
Series may secure its obligation under a refunding contract by depositing
collateral or a letter of credit equal to the liquidated damages provision of
the refunding contract. When required by Securities and Exchange Commission
("SEC") guidelines, the Series will place liquid assets in a segregated
custodial account equal in amount to its obligations under outstanding refunding
contracts.
ZERO COUPON BONDS. The Bond Series may invest in zero coupon bonds of
governmental or private issuers that generally pay no interest to their holders
prior to maturity. Since zero coupon bonds do not make regular interest
payments, they allow an issuer to avoid the need to generate cash to meet
current interest payments and may involve greater credit risks than bonds paying
interest currently. Tax laws requiring the distribution of accrued discount on
the bonds, even though no cash equivalent thereto has been paid, may cause a
Series to liquidate investments in order to make the required distributions.
RISK FACTORS APPLICABLE TO THE MUNICIPAL BOND SERIES:
HEALTH CARE SECTOR. The health care industry is subject to regulatory action by
a number of private and governmental agencies, including federal, state and
local governmental agencies. A major source of revenues for the industry is
payments from the Medicare and Medicaid programs. As a result, the industry is
sensitive to legislative changes and reductions in governmental spending for
those programs. Numerous other factors may affect the industry, such as general
and local economic conditions; demand for services; expenses (including
malpractice insurance premiums) and competition among health care providers. In
the future, the following may adversely affect the industry: adoption of
legislation proposing a national health insurance program; medical and
technological advances which alter the demand for health services or the way in
which such services are provided; and efforts by employers, insurers and
governmental agencies to reduce the costs of health insurance and health care
services.
Health care facilities include life care facilities, nursing homes and
hospitals. The Municipal Bond Series may invest in bonds to finance these
facilities which are typically secured by the revenues from the
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<PAGE>
facilities and not by state or local government tax payments. Moreover, in the
case of life care facilities, since a portion of housing, medical care and other
services may be financed by an initial deposit, there may be a risk of default
in the payment of principal or interest on a bond issue if the facility does not
maintain adequate financial reserves for debt service.
HOUSING SECTOR. The Municipal Bond Series may invest in housing revenue bonds
which typically are issued by state, county and local housing authorities and
are secured only by the revenues of mortgages originated by those authorities
using the proceeds of the bond issues. Factors that may affect the financing of
multi-family housing projects include acceptable completion of construction,
proper management, occupancy and rent levels, economic conditions and changes in
regulatory requirements.
Since the demand for mortgages from the proceeds of a bond issue cannot be
precisely predicted, the proceeds may be in excess of demand, which would result
in early retirement of the bonds by the issuer. Since the cash flow from
mortgages cannot be precisely predicted, differences in the actual cash flow
from the assumed cash flow could have an adverse impact upon the issuer's
ability to make scheduled payments of principal and interest or could result in
early retirement of the bonds.
Scheduled principal and interest payments are often made from reserve or sinking
funds. These reserves are funded from the bond proceeds, assuming certain rates
of return on investment of the reserve funds. If the assumed rates of return are
not realized because of changes in interest rate levels or for other reasons,
the actual cash flow for scheduled payments of principal and interest on the
bonds may be inadequate.
ELECTRIC UTILITIES SECTOR. The electric utilities industry has experienced, and
may experience in the future: problems in financing large construction programs
in an inflationary period; cost increases and delays caused by environmental
considerations (particularly with respect to nuclear facilities); difficulties
in obtaining fuel at reasonable prices; the effects of conservation on the
demand for energy; increased competition from alternative energy sources; and
the effects of rapidly changing licensing and safety requirements.
PROPOSED LEGISLATION. From time to time, proposals have been introduced before
Congress for the purpose of restricting or eliminating the federal income tax
exemption for interest on debt obligations issued by states and their political
subdivisions. For example, federal tax law now limits the types and amounts of
tax-exempt bonds issuable for industrial development and other types of private
activities. These limitations may affect the future supply and yields of private
activity securities. Further proposals affecting the value of tax-exempt
securities may be introduced in the future. In addition, proposals have been
made, such as that involving the "flat tax," that could reduce or eliminate the
value of that exemption. If the availability of municipal securities for
investment or the value of the Municipal Bond Series' holdings could be
materially affected by such changes in the law, the Trustees would reevaluate
the Series' investment objective and policies or consider the Series'
dissolution.
(c) FUND POLICIES. Except as otherwise provided, the Bond Series have adopted
the investment limitations set forth below. Limitations which are designated as
fundamental policies may not be changed without the affirmative vote of the
lessor of (i) 67% or more of the shares of a Series present at a shareholders
meeting if holders of more than 50% of the outstanding shares of the Series are
present in person or by proxy or (ii) more than 50% of the outstanding shares of
a Series. If any percentage restriction on investment or utilization of assets
is adhered to at the time an investment is made, a later change in percentage
resulting from a change in the market values of a Series' assets or redemptions
of shares will not be considered a violation of the limitation.
Each Series will not as a matter of fundamental policy:
1. purchase the securities of any one issuer if, as a result, more than 5% of
the Series' total assets would be invested in the securities of such issuer, or
the Series would own or hold 10% or more of the outstanding voting securities of
that issuer, provided that (1) each Series may invest up to 25% of its total
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<PAGE>
assets without regard to these limitations; and (2) these limitations do not
apply to securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities;
2. purchase the securities of any issuer if, as a result, more than 25% of the
Series' total assets would be invested in the securities of one or more issuers
having their principal business activities in the same industry, provided that
this limitation does not apply to securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities (including repurchase agreements
fully collateralized by U.S. Government obligations) or to tax-exempt municipal
securities;
3. borrow money, provided that the Series may borrow money from banks for
temporary or emergency purposes (not for leveraging or investment) or by
engaging in reverse repurchase agreements if the Series' borrowings do not
exceed an amount equal to 33 1/3% of the current value of its assets taken at
market value, less liabilities other than borrowings;
4. make loans to other persons, except by (1) purchasing debt securities in
accordance with its investment objective, policies and limitations; (2) entering
into repurchase agreements; or (3) engaging in securities loan transactions
limited to 33 1/3% of the value of the Series' total assets;
5. underwrite any issue of securities, except to the extent that the Series may
be considered to be acting as underwriter in connection with the disposition of
any portfolio security;
6. purchase or sell real estate or real estate limited partnership interests,
provided that the Series may invest in obligations secured by real estate or
interests therein or obligations issued by companies that invest in real estate
or interests therein, including real estate investment trusts;
7. purchase or sell physical commodities or commodities contracts except
financial and foreign currency futures contracts and options thereon, options on
foreign currencies and forward currency contracts; or
8. issue senior securities, except as appropriate to evidence indebtedness that
the Series is permitted to incur, provided that futures, options and forward
currency transactions will not be deemed to be senior securities for purposes of
this limitation.
The following non-fundamental policies apply to each Series and may be changed
by the Board of Trustees without shareholder approval. Each Series will not:
1. pledge, mortgage or hypothecate its assets, except the Series may pledge
securities having a market value at the time of the pledge not exceeding 33 1/3%
of the value of its total assets to secure borrowings, and the Series may
deposit initial and variation margin in connection with transactions in futures
contracts and options on futures contracts;
2. make short sales of securities except short sales against the box;
3. purchase securities on margin except for the use of short-term credit
necessary for the clearance of purchases and sales of portfolio securities,
provided that the Series may make initial and variation margin deposits in
connection with permitted transactions in options or futures;
4. purchase portfolio securities if its outstanding borrowings exceed 5% of the
value of its total assets;
5. when engaging in options, futures and forward currency contract strategies, a
Series will either: (1) set aside cash or liquid securities in a segregated
account with the Fund's custodian in the prescribed amount; or (2) hold
securities or other options or futures contracts whose values are expected to
offset ("cover") its obligations thereunder. Securities, currencies or other
options or futures contracts used for
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<PAGE>
cover cannot be sold or closed out while the strategy is outstanding, unless
they are replaced with similar assets;
6. purchase or sell non-hedging futures contracts or related options if
aggregate initial margin and premiums required to establish such positions would
exceed 5% of the Series' total assets. For purposes of this limitation,
unrealized profits and unrealized losses on any open contracts are taken into
account, and the in-the-money amount of an option that is in-the-money at the
time of purchase is excluded; or
7. write put or call options having aggregate exercise prices greater than 25%
of the Series' net assets, except with respect to options attached to or
acquired with or traded together with their underlying securities and securities
that incorporate features similar to options.
(D) TEMPORARY DEFENSIVE POSITION.
Inapplicable
(E) PORTFOLIO TURNOVER. The Bond Series' turnover rates for the past 2 years,
(or since the date of inception, if applicable) were:
<TABLE>
<CAPTION>
- ------------------------------------- ----------------------------------- -----------------------------------
12 months ended 12 months ended
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
- ------------------------------------- ----------------------------------- -----------------------------------
<S> <C> <C>
Short/Intermediate Bond 34.40% 236.36%
- ------------------------------------- ----------------------------------- -----------------------------------
Intermediate Bond 36.22% N/A
- ------------------------------------- ----------------------------------- -----------------------------------
Municipal Bond 23.93% 28.56%
- ------------------------------------- ----------------------------------- -----------------------------------
</TABLE>
EQUITY SERIES
(b) INVESTMENT STRATEGIES AND RISKS. The following information supplements the
information concerning each Equity Series' investment objective, policies and
limitations found in Item 4 of Part A.
The "Equity Series" are the Large Cap Growth, the WT Large Cap Growth, the Large
Cap Core, the Small Cap Core, the International Multi-Manager, the Large Cap
Value, the Mid Cap Value and the Small Cap Value Series.
AMERICAN DEPOSITARY RECEIPTS (ADRS) AND EUROPEAN DEPOSITARY RECEIPTS (EDRS). The
International Multi-Manager and Large Cap Core Series each may invest in ADRs
and EDRs. ADRs and EDRs are securities, typically issued by a U.S. financial
institution or a non-U.S. financial institution in the case of an EDR (a
"depositary"). The institution has ownership interests in a security, or a pool
of securities, issued by a foreign issuer and deposited with the depositary.
ADRs and EDRs may be available through "sponsored" or "unsponsored" facilities.
A sponsored facility is established jointly by the issuer of the security
underlying the receipt and a depositary. An unsponsored facility may be
established by a depositary without participation by the issuer of the
underlying security. Holders of unsponsored depositary receipts generally bear
all the costs of the unsponsored facility. The depositary of an unsponsored
facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through, to the holders of the receipts, voting rights with respect to the
deposited securities.
CASH MANAGEMENT. The Small Cap Core and the International Multi-Manager Series
each may invest no more than 15% of its total assets in cash and cash
equivalents including high-quality money market instruments and money market
funds in order to manage cash flow in the Series. The other Equity Series
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are not subject to specific percentage limitations on such investments. Certain
of these instruments are described below.
o MONEY MARKET FUNDS. The Equity Series may invest in the securities of other
money market mutual funds, within the limits prescribed by the 1940 Act. The
International Multi-Manager Series may invest in securities of open-end and
closed-end investment companies that invest primarily in the equity securities
of issuers in countries where it is impossible or impractical to invest
directly. Such investments will be subject to the limits described above.
o U.S. GOVERNMENT OBLIGATIONS. The Equity Series may invest in the same debt
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities as the Money Market Series. (See "U.S. Government
Obligations" above)
o COMMERCIAL PAPER. The Equity Series may invest in commercial paper. Commercial
paper consists of short-term (up to 270 days) unsecured promissory notes
issued by corporations in order to finance their current operations. The
Series may invest only in commercial paper rated A-1 or higher by S&P or
Moody's or if not rated, determined by the adviser or sub-adviser to be of
comparable quality.
o BANK OBLIGATIONS. The Equity Series may invest in the same obligations of U.S.
banks as the Money Market Funds. (See "Bank Obligations" above)
CONVERTIBLE SECURITIES. Convertible securities have characteristics similar to
both fixed income and equity securities. Because of the conversion feature, the
market value of convertible securities tends to move together with the market
value of the underlying stock. As a result, a Series' selection of convertible
securities is based, to a great extent, on the potential for capital
appreciation that may exist in the underlying stock. The value of convertible
securities is also affected by prevailing interest rates, the credit quality of
the issuers and any call provisions.
The Equity Series may invest in convertible securities that are rated, at the
time of purchase, in the three highest rating categories by a nationally
recognized statistical rating organization ("NRSRO") such as Moody's or S&P, or
if unrated, are determined by the adviser or a sub-adviser, as applicable, to be
of comparable quality. In addition, the International Multi-Manager Series may
invest in non-convertible debt securities issued by foreign governments,
international agencies, and private foreign issuers that, at the time of
purchase, are rated A or better by a NRSRO, or, if not rated, are judged by the
adviser or one or more of the sub-advisers to be of comparable quality. Ratings
represent the rating agency's opinion regarding the quality of the security and
are not a guarantee of quality. Should the rating of a security be downgraded
subsequent to a Series' purchase of the security, the adviser or a sub-adviser,
as applicable, will determine whether it is in the best interest of the Series
to retain the security.
DEBT SECURITIES. Debt securities represent money borrowed that obligates the
issuer (e.g., a corporation, municipality, government, government agency) to
repay the borrowed amount at maturity (when the obligation is due and payable)
and usually to pay the holder interest at specific times.
HEDGING STRATEGIES. The Equity Series may engage in certain hedging strategies
that involve options, futures and, in the case of the International
Multi-Manager Series, forward currency exchange contracts.
ILLIQUID SECURITIES. Each of the Large Cap Value, Mid Cap Value and Small Cap
Value Series may invest no more than 10% of their net assets in securities that
at the time of purchase have legal or contractual restrictions on resale or are
otherwise illiquid. Each of the Large Cap Growth, WT Large Cap Growth, Large Cap
Core, Small Cap Core and International Multi-Manager Series may invest no more
than 15% of their net assets in securities that at the time of purchase have
legal or contractual restrictions on resale or are otherwise illiquid. If the
limitations on illiquid securities are exceeded, other than by a change in
B-18
<PAGE>
market values, the condition will be reported by the Series' investment adviser
to the Board of Trustees.
OPTIONS ON SECURITIES AND SECURITIES INDEXES. The Large Cap Growth, WT Large Cap
Growth, Large Cap Value and Small Cap Core Series each may purchase call options
on securities that WTC intends to include in the Series in order to fix the cost
of a future purchase or attempt to enhance return by, for example, participating
in an anticipated increase in the value of a security. The Series may purchase
put options to hedge against a decline in the market value of securities held in
the Series or in an attempt to enhance return. The Series may write (sell) put
and covered call options on securities in which they are authorized to invest.
The Series may also purchase put and call options, and write put and covered
call options on U.S. securities indexes. Stock index options serve to hedge
against overall fluctuations in the securities markets rather than anticipated
increases or decreases in the value of a particular security. Of the percentage
of the total assets of a Series that are invested in equity (or related)
securities, the Series may not invest more than 10% of such assets in covered
call options on securities and/or options on securities indices.
REPURCHASE AGREEMENTS. The Equity Series may invest in repurchase agreements,
which were previously described.
RESTRICTED SECURITIES. Restricted securities are securities that may not be sold
to the public without registration under the Securities Act of 1933 or an
exemption from registration. Each of the Equity Series may invest up to 15% of
its net assets in illiquid securities, subject to a Series' investment
limitations on the purchase of illiquid securities. Restricted securities,
including securities eligible for re-sale under 1933 Act Rule 144A, that are
determined to be liquid are not subject to this limitation. This determination
is to be made by the adviser or a sub-adviser pursuant to guidelines adopted by
the Board of Trustees. Under these guidelines, the adviser or a sub-adviser will
consider the frequency of trades and quotes for the security, the number of
dealers in, and potential purchasers for, the securities, dealer undertakings to
make a market in the security, and the nature of the security and of the
marketplace trades. In purchasing such restricted securities, the adviser or a
sub-adviser intends to purchase securities that are exempt from registration
under Rule 144A under the 1933 Act.
SECURITIES LENDING. The Equity Series may lend securities subject to the same
conditions applicable to the Bond Series. (See "Securities Lending" above).
(c) FUND POLICIES. Except as otherwise provided, the Equity Series have adopted
the investment limitations set forth below. Limitations which are designated as
fundamental policies may not be changed without the affirmative vote of the
lessor of (i) 67% or more of the shares of a Series present at a shareholders
meeting if holders of more than 50% of the outstanding shares of the Series are
present in person or by proxy or (ii) more than 50% of the outstanding shares of
a Series. If any percentage restriction on investment or utilization of assets
is adhered to at the time an investment is made, a later change in percentage
resulting from a change in the market values of a Series' assets or redemptions
of shares will not be considered a violation of the limitation.
Each Series will not as a matter of fundamental policy:
1. purchase the securities of any one issuer, if as a result, more than 5% of
the Series' total assets would be invested in the securities of such issuer, or
the Series would own or hold 10% or more of the outstanding voting securities of
that issuer, provided that (1) each Series may invest up to 25% of its total
assets without regard to these limitations; (2) these limitations do not apply
to securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities; and (3) for the WT Large Cap Growth, Large Cap Growth, Large
Cap Core, Small Cap Core and International Multi-Manager Series, repurchase
agreements fully collateralized by U.S. Government obligations will be treated
as U.S. Government obligations;
B-19
<PAGE>
2. purchase securities of any issuer if, as a result, more than 25% of the
Series' total assets would be invested in the securities of one or more issuers
having their principal business activities in the same industry, provided, that
(1) for the Large Cap Value, Small Cap Value and Mid Cap Value Series, this
limitation does not apply to investments in short-term obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities; and (2)
the Large Cap Growth, WT Large Cap Growth, Large Cap Core, Small Cap Core and
International Multi-Manager Series, this limitation does not apply to debt
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities;
3. borrow money, provided that (1) each of the Large Cap Value, Small Cap Value
and Mid Cap Value Series may borrow money for temporary or emergency purposes,
including the meeting of redemption requests, in amounts up to 33 1/3% of a
Series' assets; and (2) each of the Large Cap Growth, WT Large Cap Growth, Large
Cap Core, Small Cap Core and International Multi-Manager Series may borrow money
for temporary or emergency purposes, and then in an aggregate amount not in
excess of 10% of a Series' total assets;
4. make loans to other persons, except by (1) purchasing debt securities in
accordance with its investment objective, policies and limitations; (2) entering
into repurchase agreements; or (3) engaging in securities loan transactions;
5. underwrite any issue of securities, except to the extent that the Series may
be considered to be acting as underwriter in connection with the disposition of
any portfolio security;
6. purchase or sell real estate, provided that (1) the Large Cap Value, Small
Cap Value and Mid Cap Value Series additionally may not invest in any interest
in real estate except securities issued or guaranteed by corporate or
governmental entities secured by real estate or interests therein, such as
mortgage pass-throughs and collateralized mortgage obligations, or issued by
companies that invest in real estate or interests therein; (2) the Large Cap
Growth, WT Large Cap Growth, Large Cap Core, Small Cap Core and International
Multi-Manager Series each may invest in obligations secured by real estate or
interests therein or obligations issued by companies that invest in real estate
or interests therein, including real estate investment trusts;
7. purchase or sell physical commodities, provided that (1) the Large Cap Value,
Small Cap Value and Mid Cap Value Series additionally are restricted from
purchasing or selling contracts, options or options on contracts to purchase or
sell physical commodities and (2) the Large Cap Growth, WT Large Cap Growth,
Large Cap Core, Small Cap Core and International Multi-Manager Series each may
invest in purchase, sell or enter into financial options and futures, forward
and spot currency contracts, swap transactions and other derivative financial
instruments; or
8. issue senior securities, except to the extent permitted by the 1940 Act,
provided that each of the Large Cap Value, Small Cap Value and Mid Cap Value
Series may borrow money subject to its investment limitation on borrowing.
The following non-fundamental policies apply to each Series unless otherwise
indicated, and the Board of Trustees may change them without shareholder
approval. Each Series will not:
1. pledge, mortgage or hypothecate its assets except to secure indebtedness
permitted to be incurred by the Series, provided that (1) this limitation does
not apply to the Large Cap Growth, WT Large Cap Growth, Large Cap Core and Small
Cap Core Series; and (2) with respect to the Large Cap Value, Small Cap Value,
Mid Cap Value and International Multi-Manager Series, the deposit in escrow of
securities in connection with the writing of put and call options,
collateralized loans of securities and collateral arrangements with respect to
margin for future contracts are not deemed to be pledges or hypothecations for
this purpose;
B-20
<PAGE>
2. make short sales of securities except short sales against the box;
3. purchase securities on margin except for the use of short-term credit
necessary for the clearance of purchases and sales of portfolio securities,
provided that Large Cap Value, Small Cap Value and Mid Cap Value Series may make
initial and variation margin deposits in connection with permitted transactions
in options without violating this limitation;
4. purchase portfolio securities if its outstanding borrowings exceed 5% of the
value of its total assets, provided that (1) the Large Cap Value, Small Cap
Value and Mid Cap Value Series may not borrow for purposes other than meeting
redemptions in an amount exceeding 5% of the value of its total assets at the
time the borrowing is made.
(d) TEMPORARY DEFENSIVE POSITION.
Each of the Equity Series except Small Cap Core Series and International Multi
Manager Series is permitted to take a temporary defensive position by investing
without limit in commercial paper and other money market instruments rated in
one of the two highest ratings categories by a NRSRO.
(e) PORTFOLIO TURNOVER. Series turnover rates for the past 2 years, (or since
inception, if applicable) were:
- ---------------------------------- --------------------- ---------------------
12 MONTHS ENDED 12 MONTHS ENDED
JUNE 30, 1999 JUNE 30, 1998
- ---------------------------------- --------------------- ---------------------
Large Cap Growth 32.48% 39.04%
- ---------------------------------- --------------------- ---------------------
Large Cap Core 5.19% 93.08%
- ---------------------------------- --------------------- ---------------------
Small Cap Core 22.97% N/A
- ---------------------------------- --------------------- ---------------------
Large Cap Value 67.05% N/A
- ---------------------------------- --------------------- ---------------------
Mid Cap Value 118.00% N/A
- ---------------------------------- --------------------- ---------------------
Small Cap Value 64.00% 57.00%
- ---------------------------------- --------------------- ---------------------
International Multi-Manager 67.05% N/A
- ---------------------------------- --------------------- ---------------------
ITEM 13. MANAGEMENT OF THE FUND.
(a) BOARD OF DIRECTORS. The Board of Trustees supervises the Series'
activities and reviews contractual arrangements with the Series'
service providers.
(b) MANAGEMENT INFORMATION. The Trustees and officers are listed below. All
persons named as Trustees and officers also serve in a similar capacity
for WT Mutual Fund. An asterisk (*) indicates those Trustees who are
"interested persons".
<TABLE>
<CAPTION>
NAME, ADDRESS POSITION PRINCIPAL OCCUPATION OR EMPLOYMENT
AND AGE
<S> <C> <C>
Robert H. Arnold Trustee Since 1989, Co-Manager of R.H. Arnold & Co., Inc., an
152 W. 57th Street, 44th investment banking company
Floor
New York, NY 10019
55 years old
Eric Brucker Trustee Dean of the College of Business, Public Policy and Health
University of Maine at the University of Maine since September 1998. Dean of
Orono, ME 04469 the School of Management at the University of Michigan
58 years old from June 1992 to September 1998. Professor of
Economics, Trenton State College from September 1989 to
June 1992. Vice President for Academic Affairs, Trenton
State College from September 1989 to June 1991. Dean of
College of Business and Economics and Chairman of various
committees at the University of Delaware from 1976 to
September 1989.
*Robert J. Christian Trustee and Chief Investment Officer of WTC and Director of Rodney
Rodney Square North President Square Management Corporation since February 1996.
1100 N. Market Street Chairman and Director of PNC Equity Advisors Company and
Wilmington, DE 19890 President and Chief Investment Officer of PNC Asset
50 years old Management Group, Inc. from 1994-1996; Chief Investment
Officer of PNC Bank from 1992-1996.
Nicholas A. Giordano Trustee Financial Services Consultant 1997 to the present;
LaSalle University Interim President of LaSalle University from July 1, 1998
Philadelphia, PA 19141 to June 30, 1999; President and Chief Executive Officer
56 years old of the Philadelphia Stock Exchange from 1981 through
August 1997.
Louis Klein Jr. Trustee Self employed financial consultant from 1991 to the
80 Butternut Lane present. Has held the positions of Trustee, Manville
Stamford, CT 06903 Personal Injury Settlement Trust; Director, Riverwood
63 years old International Corporation; and Director, Manville
Corporation since 1991.
Clement C. Moore, II Trustee Managing Partner, Mariemont Holdings, LLC, a commercial
10 Rockefeller Plaza real estate holding and development company since 1980.
New York, NY
55 years old
John J. Quindlen Trustee Retired. Senior Vice President-Finance of E.I. du Pont
313 Southwinds de Nemours and Company, Inc. (diversified chemicals) from
1250 W. Southwinds Blvd. 1984 to November 1993. Chief Financial Officer of E.I.
Vero Beach, FL 32963 du Pont de Nemours and Company, Inc. from 1984 to June
67 years old 1993. Presently, a director of St. Joe Paper Co.,
Trustee of Kalmar Pooled Investment Trust.
*William P. Richards Trustee Managing Director - Client Service and Portfolio
100 Wilshire Boulevard Communication, Roxbury Capital Management since 1998.
Suite 600 Formerly Senior Vice President and Partner, Van Deventer
Santa Monica, CA 90401 & Hoch, an investment management firm.
62 years old
*Eric K. Cheung Vice President Since 1991, Division Manager for all fixed income
43 years old products at Wilmington Trust Company.
B-22
<PAGE>
*Pat Colletti Treasurer Vice President and Director of Investment Accounting and
41 years old Administration of PFPC Inc. since April 1999.
Controller for the Reserve
Funds from 1986 to 1999.
*Gary M. Gardner Secretary Senior Vice President of PFPC Inc. since January 1994.
48 years old
<FN>
* Interested Person of the Fund as defined in Section 2(a)(19) of the 1940 Act.
(c) Inapplicable.
(d) COMPENSATION. The following chart provides certain information for the
fiscal year ended June 30, 1999 about the fees paid by WT Mutual Fund
and WT Trust to the Trustees:
</FN>
</TABLE>
B-23
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
- ---------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
TOTAL
PENSION OR COMPENSATION
AGGREGATE RETIREMENT FROM WT
COMPENSATION BENEFITS ACCRUED ESTIMATED ANNUAL FUND COMPLEX PAID TO
NAME OF FROM WT AS PART OF FUND BENEFITS UPON TRUSTEE
PERSON & POSITION MUTUAL FUND EXPENSES RETIREMENT
<S> <C> <C> <C> <C>
Robert H. Arnold $7,318 0 0 $14,637
Trustee
Lawrence B. Thomas (1) $7,318 0 0 $14,637
Trustee
Nicholas A. Giordano $7,318 0 0 $14,637
Trustee
Robert J. Christian 0 0 0 0
President and
Trustee
</TABLE>
(1) Mr. Thomas resigned as Trustee effective August 12, 1999.
(e) SALES LOADS. Inapplicable.
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
(a) CONTROL PERSONS. As of November 1, 1999, Peter Kiewit Sons' Inc., a Delaware
corporation with principal offices at 1000 Kiewit Plaza, Omaha, NE 68131, owns,
directly or indirectly, more than 25% of the voting securities of Wilmington
Premier Money Market Portfolio of WT Mutual Fund and, therefore, may be deemed
to control Premier Money Market Series through pass-through voting rights.
(b) PRINCIPAL HOLDERS. As of November 1, 1999, Wilmington Premier Money Market
Portfolio of WT Mutual Fund owns beneficially at least 5% of the outstanding
shares of Premier Money Market Series.
B-24
<PAGE>
As of November 1, 1999, Wilmington Short/Intermediate Bond Portfolio of WT
Mutual Fund owns beneficially at least 5% of the outstanding shares of
Short/Intermediate Bond Series.
As of November 1, 1999, Wilmington Large Cap Core Portfolio of WT Mutual Fund
owns beneficially at least 5% of the outstanding shares of Large Cap Core
Series.
(c) MANAGEMENT OWNERSHIP
On October 28, 1999, the Trustees and officers of the Trust, as a group, owned
beneficially, or may be deemed to have owned beneficially, less than 1% of the
outstanding shares of each Series.
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES.
(a) INVESTMENT ADVISERS.
RODNEY SQUARE MANAGEMENT CORPORATION. RSMC serves as the investment adviser to
the Prime Money Market, Premier Money Market, the U.S. Government and the
Tax-Exempt Series. RSMC is a Delaware corporation organized on September 17,
1981. It is a wholly owned subsidiary of WTC, a state-chartered bank organized
as a Delaware corporation in 1903. WTC is a wholly owned subsidiary of
Wilmington Trust Corporation, a publicly held bank holding company. RSMC may
occasionally consult, on an informal basis, with personnel of WTC's investment
departments.
Several affiliates of RSMC are also engaged in the investment advisory business.
Wilmington Trust FSB and Wilmington Brokerage Services Company, both wholly
owned subsidiaries of WTC, are registered investment advisers. In addition, WBSC
is a registered broker-dealer.
For its services as adviser, RSMC received the following fees:
12 months ended 12 months ended 12 months ended
6/30/99 6/30/98 6/30/97
------- ------- -------
Prime Money Market Series $7,672,029 $5,078,193 $4,055,663
U.S. Government Series 3,076,718 2,001,355 1,404,822
Tax-Exempt Series 2,047,289 1,246,730 1,103,443
WILMINGTON TRUST COMPANY. Wilmington Trust Company, the parent of RSMC, is a
state-chartered bank organized as a Delaware corporation in 1903. WTC is a
wholly owned subsidiary of Wilmington Trust Corporation, a publicly held bank
holding company. WTC is engaged in a variety of investment advisory activities,
including the management of collective investment pools, and has nearly a
century of experience managing the personal investments of high net-worth
individuals. WTC presently manages over $7 billion in fixed income assets and
approximately $15.5 billion in equity assets for clients.
WTC serves as the adviser to the Short/Intermediate Bond Series, the
Intermediate Bond Series, the Municipal Bond Series, the Large Cap Core Series,
the Small Cap Core Series and the International Multi-Manager Series.
For WTC's services as investment adviser to each Series, WTC received the
following fees:
<TABLE>
<CAPTION>
OCTOBER 20, 1998 TO 12 MONTHS ENDED 12 MONTHS ENDED 12 MONTHS ENDED
JUNE 30, 1999 6/30/99 6/30/98 6/30/97
------------- ------- ------- -------
B-25
<PAGE>
<S> <C> <C> <C> <C>
Premier Money Market Series $518,578 N/A N/A N/A
Short/Intermediate Bond Series $177,376 N/A N/A N/A
Large Cap Core Series $568,176 N/A N/A N/A
Intermediate Bond Series N/A $322,428 N/A N/A
Municipal Bond Series N/A $61,687 $86,841 $84,035
Large Cap Growth Series N/A $1,150,375 N/A $742,064
International Multi-Manager Series N/A $447,808 $755,902 N/A
</TABLE>
For its services as adviser, WTC waived the following fees:
<TABLE>
<CAPTION>
OCTOBER 20, 1998 TO 12 MONTHS ENDED 12 MONTHS ENDED 12 MONTHS ENDED
JUNE 30, 1999 6/30/99 6/30/98 6/30/97
------------- ------- ------- -------
<S> <C> <C> <C> <C>
Premier Money Market Series $281,704 N/A N/A N/A
Short/Intermediate Bond Series $98,480 N/A N/A N/A
Large Cap Core Series $94,401 N/A N/A N/A
Intermediate Bond Series N/A $103,995 N/A N/A
Municipal Bond Series N/A $36,996 $81,481 $84,035
Large Cap Growth Series N/A $201,147 $8,138 $0
International Multi-Manager Series N/A $102,850 N/A N/A
</TABLE>
Prior to October 19, 1998, Kiewit Investment Management Corp. served as
investment adviser to the Premier Money Market, Short/Intermediate Bond and
Large Cap Core Series. Pursuant to investment management agreements then in
effect, the following fees were payable to Kiewit.
<TABLE>
<CAPTION>
July 1, 1998 to the fiscal year ended the fiscal year ended
OCTOBER 19, 1998 JUNE 30, 1998 JUNE 30, 1997
---------------- --------------------- ---------------------
<S> <C> <C> <C>
Premier Money Market Series $228,204 $983,634 $833,621
Short/Intermediate Bond Series $78,062 $579,830 $544,147
Large Cap Core Series $250,050 $695,586 $517,000
</TABLE>
Kiewit Investment Management Corp. waived the following amounts:
<TABLE>
<CAPTION>
July 1, 1998 to the fiscal year ended the fiscal year ended
OCTOBER 19, 1998 JUNE 30, 1998 JUNE 30, 1997
---------------- --------------------- ---------------------
<S> <C> <C> <C>
Premier Money Market Series $123,952 $519,887 $334,909
Short/Intermediate Bond Series $43,340 $115,748 $92,541
Large Cap Core Series $40,225 $126,953 $109,204
</TABLE>
B-26
<PAGE>
CRAMER ROSENTHAL MCGLYNN, LLC. CRM serves as investment adviser to the Large Cap
Value, the Mid Cap Value and the Small Cap Series. CRM and its predecessors have
managed investments in small and medium capitalization companies for over 25
years. CRM is 76% owned (and therefore controlled) by Cramer, Rosenthal,
McGlynn, Inc. ("CRM") and its shareholders.
CRM is registered as an investment adviser with the SEC.
For its services as adviser, CRM received the following fees:
12 MONTHS ENDED 12 MONTHS ENDED 12 MONTHS ENDED
6/30/99 6/30/98 6/30/97
------- ------- -------
Large Cap Value Series $128,702 $6,174 N/A
Mid Cap Value Series $40,525 N/A N/A
Small Cap Value Series $985,563 1,434,005 N/A
For its services as adviser, CRM waived the following fees.
12 MONTHS ENDED 12 MONTHS ENDED 12 MONTHS ENDED
6/30/99 6/30/98 6/30/97
------- ------- -------
Large Cap Value Series $61,969 $6,174 N/A
Mid Cap Value Series $40,525 N/A N/A
Small Cap Value Series N/A N/A N/A
ROXBURY CAPITAL MANAGEMENT, LLC Roxbury serves as the investment adviser to the
Large Cap Growth Series and WT Large Cap Growth Series.
Each of the Large Cap Growth Series and WT Large Cap Growth Series pays a
monthly advisory fee to Roxbury at the annual rate of 0.55% of the Series' first
$1 billion of average daily net assets; .50% of the Series' next $1 billion of
average daily net assets; and .45% of the Series average daily net assets over
$2 billion.
THE SUB-ADVISERS FOR THE INTERNATIONAL MULTI-MANAGER SERIES ARE:
(1) Clemente Capital, Inc. is located at Carnegie Hall Tower, 152 West
57th Street, New York, New York 10019. Clemente has been a
registered investment adviser since 1979.
(2) Scudder Kemper Investments, Inc. is located at 345 Park Avenue,
New York, New York 10154. Scudder Kemper was founded as America's
first independent investment counselor and has served as
investment adviser, administrator and distributor of mutual funds
since 1928.
(3) Invista Capital Management, Inc., a registered investment adviser
since 1984, is located at 1800 Hub Tower, 699 Walnut Street, Des
Moines, Iowa 50309. Invista is an indirect, wholly owned
subsidiary of Principal Mutual Life Insurance Company.
SUB-ADVISORY AGREEMENTS. For services furnished pursuant to each Sub-Advisory
Agreement, WTC pays each sub-adviser a monthly portfolio management fee at an
annual rate of 0.50% of the average daily net assets under the sub-adviser's
management. For the fiscal year ended June 30, 1999, WTC paid sub-advisory fees
in the amounts of $113,601 to Clemente, $114,343 to Invista and $118,271 to
Scudder.
Each Sub-Advisory Agreement provides that the sub-adviser has discretionary
investment authority (including the selection of brokers and dealers for the
execution of the Series' portfolio transactions) with respect to the portion of
the Series' assets allocated to it by WTC, subject to the restrictions of the
1940
B-27
<PAGE>
Act, the Internal Revenue Code of 1986, as amended, applicable state securities
laws, applicable statutes and regulations of foreign jurisdictions, the Series'
investment objective, policies and restrictions and the instructions of the
Board of Trustees and WTC.
Each Sub-Advisory Agreement provides that the sub-adviser will not be liable for
any action taken, omitted or suffered to be taken except if such acts or
omissions are the result of willful misfeasance, bad faith, gross negligence or
reckless disregard of duty. Each Agreement continues in effect for two years and
then from year to year so long as continuance of each such Agreement is approved
at least annually (i) by the vote of a majority of the Independent Trustees at a
meeting called for the purpose of voting on such approval and (ii) by the vote
of a majority of the Trustees or by the vote of a majority of the outstanding
voting securities of the Series. Each Sub-Advisory Agreement terminates
automatically in the event of its assignment and is terminable on written notice
by the Fund (without penalty, by action of the Board of Trustees or by vote of a
majority of the Series' outstanding voting securities) or by WTC or the
sub-adviser. Each Agreement provides that written notice of termination must be
provided sixty days prior to the termination date, absent mutual agreement for a
shorter notice period.
(b) PRINCIPLE UNDERWRITER.
Inapplicable.
(c) SERVICES PROVIDED BY EACH INVESTMENT ADVISER AND FUND EXPENSES PAID BY
THIRD PARTIES.
ADVISORY SERVICES. Under the terms of advisory agreements, each adviser agrees
to: (a) direct the investments of each Series, subject to and in accordance with
the Series' investment objective, policies and limitations set forth in the
Prospectus and this Statement of Additional Information; (b) purchase and sell
for each Series, securities and other investments consistent with the Series'
objectives and policies; (c) supply office facilities, equipment and personnel
necessary for servicing the investments of the Series; (d) pay the salaries of
all personnel of the Series and the adviser performing services relating to
research, statistical and investment activities on behalf of the Series; (e)
make available and provide such information as the Series and/or its
administrator may reasonably request for use in the preparation of its
registration statement, reports and other documents required by any applicable
federal, foreign or state statutes or regulations; (f) make its officers and
employees available to the Trustees and officers of the Fund for consultation
and discussion regarding the management of each Series and its investment
activities. Additionally, each adviser agrees to create and maintain all
necessary records in accordance with all applicable laws, rules and regulations
pertaining to the various functions performed by it and not otherwise created
and maintained by another party pursuant to contract with the Fund. Each adviser
may at any time or times, upon approval by the Board of Trustees, enter into one
or more sub-advisory agreements with a sub-advisor pursuant to which the adviser
delegates any or all of its duties as listed.
The agreements provide that each adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by a Series in connection
with the matters to which the Agreement relates, except to the extent of a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its obligations and duties under the agreement.
The salaries of any officers and the interested Trustees of the Funds who are
affiliated with an adviser and the salaries of all personnel of each adviser
performing services for each Fund relating to research, statistical and
investment activities are paid by the adviser.
(d) SERVICE AGREEMENTS.
ADMINISTRATION AND ACCOUNTING SERVICES. Under separate Administration and
Accounting Services Agreements, PFPC Inc., 400 Bellevue Parkway, Wilmington,
Delaware 19809 performs certain administrative and accounting services for WT
Investment Trust I. These services include preparing shareholder reports,
providing statistical and research data, assisting the advisers in compliance
monitoring
B-28
<PAGE>
activities, and preparing and filing federal and state tax returns on behalf of
the Fund and the Trust. In addition, PFPC prepares and files various reports
with the appropriate regulatory agencies and prepares materials required by the
SEC or any state securities commission having jurisdiction over the Fund. The
accounting services performed by PFPC include determining the net asset value
per share of each Series and maintaining records relating to the securities
transactions of the Fund. The Administration and Accounting Services Agreements
provides that PFPC and its affiliates shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund or its Series,
except to the extent of a loss resulting from willful misfeasance, bad faith or
gross negligence on their part in the performance of their obligations and
duties under the Administration and Accounting Services Agreements.
For its administrative and accounting services, PFPC received the following
fees:
12 MONTHS ENDED FOR THE PERIOD
6/30/99 2/2/98 TO 6/30/98
------- -----------------
Prime Money Market Series $1,461,311 $522,138
U.S. Government Series $654,621 $250,138
Tax-Exempt Series $435,593 $141,809
Short/Intermediate Bond Series $92,602 $13,311
Intermediate Bond Series $92,122 N/A
Municipal Bond Series $17,625 $7,176
Large Cap Growth Series $209,159 $39,617
Large Cap Value Series $87,657 N/A
Small Cap Core Series $75,035 N/A
International Multi-Manager Series $68,894 N/A
Prior to February 2, 1998, RSMC provided administrative and accounting services
and was paid the following fees:
FOR THE PERIOD 12 MONTHS ENDED
7/1/97 TO 2/2/98 6/30/97
---------------- -------
Prime Money Market Series $658,454 $942,505
U.S. Government Series $245,039 $313,211
Tax-Exempt Series $170,197 $278,255
Short/Intermediate Bond Series $44,273 $75,310
Intermediate Bond Series N/A N/A
Municipal Bond Series $37,574 $62,977
Large Cap Growth Series $64,109 $109,402
Large Cap Value Series N/A N/A
Small Cap Core Series N/A N/A
International Multi-Manager Series N/A N/A
For its administrative and accounting services, PFPC received the following
fees:
12 MONTHS ENDED FOR THE PERIOD
6/30/99 1/5/98 TO 6/30/98
------- -----------------
Premier Money Market Series $179,591 $48,157
Short/Intermediate Bond Series $105,262 $13,601
Large Cap Core Series $117,964 $8,951
Prior to January 5, 1998, RSMC provided administrative and accounting services
and was paid the
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<PAGE>
following fees:
FOR THE PERIOD 12 MONTHS ENDED
7/1/97 TO 1/4/98 6/30/97
---------------- -------
Premier Money Market Series $49,952 $57,980
Short/Intermediate Bond Series $15,308 $67,133
Large Cap Core Series $10,893 $64,211
(e) OTHER INVESTMENT ADVICE.
See Item 15(a) above.
(f) DEALER REALLOWANCES.
Inapplicable.
(g) RULE 12B-1 PLANS.
Inapplicable.
(H) OTHER SERVICE PROVIDERS.
INDEPENDENT AUDITORS. Ernst & Young LLC, serves as the independent auditor,
providing services which include (1) auditing the annual financial statements
for the Series, (2) assistance and consultation in connection with SEC filings
and (3) preparation of the annual federal income tax returns filed on behalf of
each Series.
LEGAL COUNSEL. Pepper Hamilton LLP, 3000 Two Logan Square, 18th and Arch
Streets, Philadelphia, PA 19103, serves as counsel to the Trust.
CUSTODIAN. Wilmington Trust Company, 1100 Market Street, Wilmington, DE 19890,
serves as the Custodian.
TRANSFER AGENT. PFPC Inc., 400 Bellevue Parkway, Wilmington, DE 19890-0001,
serves as the Transfer Agent and Dividend Paying Agent.
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES
(a) BROKERAGE TRANSACTIONS. The advisers and sub-advisers place all portfolio
transactions on behalf of each Series. Debt securities purchased and sold by the
Series are generally traded on the dealer market on a net basis (i.e., without
commission) through dealers acting for their own account and not as brokers, or
otherwise involve transactions directly with the issuer of the instrument. This
means that a dealer (the securities firm or bank dealing with a Series) makes a
market for securities by offering to buy at one price and sell at a slightly
higher price. The difference between the prices is known as a spread. When
securities are purchased in underwritten offerings, they include a fixed amount
of compensation to the underwriter.
Some of the advisers' other clients have investment objectives and programs
similar to that of the Series. Occasionally, recommendations made to other
clients may result in their purchasing or selling securities simultaneously with
the Series. Consequently, the demand for securities being purchased or the
supply of securities being sold may increase, and this could have an adverse
effect on the price of those securities. It is the policy of the advisers not to
favor one client over another in making recommendations or in placing
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<PAGE>
orders. In the event of a simultaneous transaction, purchases or sales are
averaged as to price, transaction costs are allocated between a Series and other
clients participating in the transaction on a pro rata basis and purchases and
sales are normally allocated between the Series and the other clients as to
amount according to a formula determined prior to the execution of such
transactions.
12 MONTHS ENDED 12 MONTHS ENDED 12 MONTHS ENDED
6/30/99 6/30/98 6/30/97
------- ------- -------
Premier Money Market Series N/A N/A N/A
Prime Money Market Series N/A N/A N/A
U.S. Government Series N/A N/A N/A
Tax-Exempt Series N/A N/A N/A
Short/Intermediate Bond Series N/A N/A N/A
Intermediate Bond Series N/A N/A N/A
Municipal Bond Series N/A N/A N/A
Large Cap Growth Series $196,083 $378,000 $58,000
Large Cap Core Series $15,538 $115,000 $61,188
Small Cap Core Series $67,932 N/A N/A
Large Cap Value Series $234,362 N/A N/A
Mid Cap Value Series $52,621 $16,841 N/A
Small Cap Value Series $424,842 $397,058 $594,021
International Multi-Manager
Series $227,743 N/A N/A
(b) COMMISSIONS.
Inapplicable.
(c) BROKERAGE SELECTION.
The primary objective of the advisers and sub-advisers in placing orders on
behalf of the Series for the purchase and sale of securities is to obtain best
execution at the most favorable prices through responsible brokers or dealers
and, where the spread or commission rates are negotiable, at competitive rates.
In selecting a broker or dealer, each adviser considers, among other things: (i)
the price of the securities to be purchased or sold; (ii) the rate of the spread
or commission; (iii) the size and difficulty of the order; (iv) the nature and
character of the spread or commission for the securities to be purchased or
sold; (v) the reliability, integrity, financial condition, general execution and
operational capability of the broker or dealer; and (vi) the quality of any
research or statistical services provided by the broker or dealer to the Series
or to the advisers.
(d) DIRECTED BROKERAGE.
Inapplicable.
(e) REGULAR BROKER-DEALERS.
Inapplicable.
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES.
(a) CAPITAL STOCK. The Trust issues shares for each Series with a par value of
$.01 per share. The shares of each Series, when issued and paid for in
accordance with this registration statement, will be fully paid and
non-assessable shares, with equal, non-cumulative voting rights, except as
described below, and no preferences as to conversion, exchange, dividends,
redemptions or any other feature. Shareholders shall have the right to vote only
(i) for removal of Trustees, (ii) with respect to such additional matters
relating to the Trust as may be required by the applicable provisions of the
1940 Act, including Section 16(a) thereof, and (iii) on such other matters as
the Trustees may consider necessary or desirable. In addition, the shareholders
of each Series will be asked to vote on any proposal to change a fundamental
investment
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<PAGE>
policy (i.e. a policy that may be changed only with the approval of
shareholders) of that Series. All shares of the Trust entitled to vote on a
matter shall vote without differentiation between the separate Series on a
one-vote-per-share basis; provided however, if a matter to be voted on affects
only the interests of not all Series, then only the shareholders of such
affected Series shall be entitled to vote on the matter. If liquidation of the
Trust should occur, shareholders would be entitled to receive on a per class
basis the assets of the particular Series whose shares they own, as well as a
proportionate share of Trust assets not attributable to any particular class
then in existence. Ordinarily, the Trust does not intend to hold annual meetings
of shareholders, except as required by the 1940 Act or other applicable law. The
Trust's by-laws provide that meetings of shareholders shall be called for the
purpose of voting upon the question of removal of one or more Trustees upon the
written request of the holders of not less than 10% of the outstanding shares.
(B) OTHER SECURITIES.
Inapplicable.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SHARES.
(A) PURCHASE OF SHARES.
Inapplicable.
(B) FUND REORGANIZATIONS.
Inapplicable.
(C) OFFERING PRICE.
See Item 7(a) of Part A.
(D) REDEMPTION IN KIND.
The Trust has filed a notice of election pursuant to Rule 18f-1 under the 1940
Act (See Item 7(c) of Part A.
ITEM 19. TAXATION OF THE SERIES
See Item 7(e) of Part A.
ITEM 20. UNDERWRITERS.
Inapplicable.
ITEM 21. CALCULATION OF PERFORMANCE DATA.
The performance of a Series may be quoted in terms of its yield and its total
return in advertising and other promotional materials. Performance data quoted
represents past performance and is not intended to indicate future performance.
Performance of the Series will vary based on changes in market conditions and
the level of each Series' expenses. These performance figures are calculated in
the following manner:
Money Market Series:
A. Yield for a money market fund is the net annualized yield for a
specified 7 calendar days calculated at simple interest rates. Yield is
calculated by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of one share at
the beginning of the period, subtracting a hypothetical charge reflecting
deductions from shareholder accounts, and
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<PAGE>
dividing the difference by the value of the account at the beginning of the base
period to obtain the base period return. The yield is annualized by multiplying
the base period return by 365/7. The yield figure is stated to the nearest
hundredth of one percent.
B. Effective Yield is the net annualized yield for a specified 7
calendar days assuming reinvestment of income or compounding. Effective yield is
calculated by the same method as yield except the yield figure is compounded by
adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting
1 from the result, according to the following formula:
Effective yield = [(Base Period Return + 1) 365/7] - 1.
C. Tax-Equivalent Yield is the net annualized taxable yield
needed to produce a specified tax-exempt yield at a given tax rate based on a
specified 7-day period assuming a reinvestment of all dividends paid during such
period. Tax-equivalent yield is calculated by dividing that portion of the
Tax-Exempt Series' yield (computed as in the yield description above) which is
tax-exempt by 1 minus a stated income tax rate and adding the quotient to that
portion, if any, of the yield of the Tax-Exempt Series that is not tax-exempt.
The following table, which is based upon federal income tax rates in
effect on the date of this Statement of Additional Information, illustrates the
yields that would have to be achieved on taxable investments to produce a range
of hypothetical tax-equivalent yields:
TAX-EQUIVALENT YIELD TABLE
<TABLE>
<CAPTION>
Federal Marginal
INCOME TAX BRACKET TAX-EQUIVALENT YIELDS BASED ON TAX-EXEMPT YIELDS OF:
------------------ ----------------------------------------------------
2% 3% 4% 5% 6% 7% 8%
-- -- -- -- -- -- --
<S> <C> <C> <C> <C> <C> <C> <C>
28% 2.8 4.2 5.6 6.9 8.3 9.7 11.1
31% 2.9 4.3 5.8 7.2 8.7 10.1 11.6
36% 3.1 4.7 6.3 7.8 9.4 10.9 12.5
39.6% 3.3 5.0 6.6 8.3 9.9 11.6 13.2
</TABLE>
All Series:
A. Average Annual Total Return is the average annual compound rate of
return for the periods of one year, five years, ten years and the life of a
Series, where applicable, all ended on the last day of a recent calendar
quarter. Average annual total return quotations reflect changes in the price of
a Series' shares, if any, and assume that all dividends during the respective
periods were reinvested in Series shares. Average annual total return is
calculated by finding the average annual compound rates of return of a
hypothetical investment over such periods, according to the following formula
(average annual total return is then expressed as a percentage):
T = (ERV/P)1/n - 1
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<PAGE>
Where: P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value: ERV is the
value, at the end of the applicable period, of a hypothetical $1,000 investment
made at the beginning of the applicable period.
B. Yield Calculations. From time to time, an Equity or Bond Series may
advertise its yield. Yield for these Series is calculated by dividing the
Series' investment income for a 30-day period, net of expenses, by the average
number of shares entitled to receive dividends during that period according to
the following formula:
YIELD = 2[((a-b)/cd + 1)6-1]
where:
a = dividends and interest earned during the period;
b = expenses accrued for the period (net of reimbursements);
c = the average daily number of shares outstanding during the period that
were entitled to receive dividends; and
d = the maximum offering price per share on the last day of the period.
The result is expressed as an annualized percentage (assuming semiannual
compounding) of the maximum offering price per share at the end of the period.
Except as noted below, in determining interest earned during the period
(variable "a" in the above formula), pfpc calculates the interest earned on each
debt instrument held by a Series during the period by: (i) computing the
instrument's yield to maturity, based on the value of the instrument (including
actual accrued interest) as of the last business day of the period or, if the
instrument was purchased during the period, the purchase price plus accrued
interest; (ii) dividing the yield to maturity by 360; and (iii) multiplying the
resulting quotient by the value of the instrument (including actual accrued
interest). Once interest earned is calculated in this fashion for each debt
instrument held by the Series, interest earned during the period is then
determined by totaling the interest earned on all debt instruments held by the
Series.
For purposes of these calculations, the maturity of a debt instrument
with one or more call provisions is assumed to be the next date on which the
instrument reasonably can be expected to be called or, if none, the maturity
date. In general, interest income is reduced with respect to debt instruments
trading at a premium over their par value by subtracting a portion of the
premium from income on a daily basis, and increased with respect to debt
instruments trading at a discount by adding a portion of the discount to daily
income.
In determining dividends earned by any preferred stock or other equity
securities held by a Series during the period (variable "a" in the above
formula), PFPC accrues the dividends daily at their stated dividend rates.
Capital gains and losses generally are excluded from yield calculations.
Because yield accounting methods differ from the accounting methods
used to calculate net investment income for other purposes, a Series' yield may
not equal the dividend income actually paid to
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<PAGE>
investors or the net investment income reported with respect to the Series in
the Fund's financial statements.
Yield information may be useful in reviewing a Series' performance and
in providing a basis for comparison with other investment alternatives. However,
the Series' yields fluctuate, unlike investments that pay a fixed interest rate
over a stated period of time. Investors should recognize that in periods of
declining interest rates, the Series' yields will tend to be somewhat higher
than prevailing market rates, and in periods of rising interest rates, the
Series' yields will tend to be somewhat lower. Also, when interest rates are
falling, the inflow of net new money to the Series from the continuous sale of
their shares will likely be invested in instruments producing lower yields than
the balance of the Series' holdings, thereby reducing the current yields of the
Series. In periods of rising interest rates, the opposite can be expected to
occur.
Comparison of Series Performance. A comparison of the quoted performance offered
for various investments is valid only if performance is calculated in the same
manner. Since there are many methods of calculating performance, investors
should consider the effects of the methods used to calculate performance when
comparing performance of a Series with performance quoted with respect to other
investment companies or types of investments. For example, it is useful to note
that yields reported on debt instruments are generally prospective, contrasted
with the historical yields reported by a Series.
ITEM 22. FINANCIAL STATEMENTS.
The Series' audited financial statements for the fiscal year ended June 30,
1999, including notes thereto, are incorporated herein by reference to the
Trust's Annual Report to Shareholders as well as the Annual Reports of The
Rodney Square Strategic Equity Fund, The Rodney Square Strategic Fixed Income
Fund, The Rodney Square Fund, The Rodney Square Tax-Exempt Fund and The CRM
Funds.
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<PAGE>
PART C - OTHER INFORMATION
ITEM 23. EXHIBITS.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
(a) (i) Agreement and Declaration of Trust*
(ii) Certificate of Trust*
A. Certificate of Amendment to
Certificate of Trust dated October
20, 1998 is filed herewith
(b) By-Laws*
(c) None
(d) (i) Form of Advisory Agreement
between WT Investment Trust I, on
behalf of the Large Cap Core Series,
Small Cap Core Series,
Short/Intermediate Series,
Intermediate Bond Series, Municipal
Bond Series and International
Multi-Manager Series, and Wilmington
Trust Company filed herewith.
(ii) Form of Advisory Agreement between WT
Investment Trust I, on behalf of the Prime
Money Market Series, Premier Money Market
Series, U.S. Government Series and the Tax
Exempt Series, and Rodney Square Management
Corporation filed herewith.
(iii) Form of Advisory Agreement between WT
Investment Trust I, on behalf of the Large
Cap Value Series, Small Cap Value Series and
Mid Cap Series and Cramer Rosenthal McGlynn
LLC filed herewith.
(iv) Form of Advisory Agreement between WT
Investment Trust I, on behalf of the Large
Cap Growth Series and WT Large Cap Growth
Series, and Roxbury Capital Management LLC
filed herewith.
(v) Form of Sub-Advisory Agreement among WT
Investment Trust I, on behalf of the
International Multi-Manager Series,
Wilmington Trust Company and Clemente
Capital, Inc. filed herewith.
(vi) Form of Sub-Advisory Agreement among WT
Investment Trust I, on behalf of the
International Multi-Manager Series,
Wilmington Trust Company and Scudder, Kemper
Investments, Inc. filed herewith.
(vii) Form of Sub-Advisory Agreement among WT
Investment Trust I, on behalf of the
International Multi-Manager Series,
Wilmington Trust Company and Invista Capital
Management filed herewith.
(e) Inapplicable.
(f) None
<PAGE>
(g) (i) Custody Agreement with Wilmington Trust
Company* (ii) Form of Sub-Custody Agreement
with PFPC Trust Company and (iii) Form of
Custodian Agreement between WT Investment
Trust I on behalf of the International Multi-Manager
Series and Bankers Trust Company to be filed
herewith.
(h) (i) Form of Transfer Agency Agreement with PFPC
Inc. to be filed herewith.
(ii) Form of Administration and Accounting
Services Agreement with PFPC, Inc. to be
filed herewith.
(i) Inapplicable.
(j) Inapplicable.
(k) Inapplicable.
<PAGE>
(l) Inapplicable.
(m) Inapplicable.
(n) Inapplicable.
(o) Inapplicable.
* Previously filed with the Securities and Exchange Commission with
Amendment No. 1 on Form N1-A on February 28, 997 and incorporated
herein by reference.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND.
None.
ITEM 25. INDEMNIFICATION.
Reference is made to Article VII of the Registrant's Agreement and Declaration
of Trust (Exhibit 23(a)(1)) and to Article X of the Registrant's By-Laws
(Exhibit 23(b)), which are incorporated herein by reference. Pursuant to Rule
484 under the Securities Act of 1933, as amended, the Registrant furnishes the
following undertaking:
"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 such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the
B-2
<PAGE>
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue."
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS.
(i) Wilmington Trust Company ("WTC"), a Delaware corporation, serves as
investment adviser to the Large Cap Core, Small Cap Core,
Short/Intermediate, Intermediate Bond, Municipal Bond, and
International Multi Manager Series of the Fund. It currently manages
large institutional accounts and collective investment funds.
The directors and principal executive officers of WTC have held the following
positions of a substantial nature in the past two years:
Business or Other Connections of Principal Executive
NAME OFFICERS AND DIRECTORS OF WTC
- --------------------------------------------------------------------------------
Carolyn S. Burger Principal, CB Associates, Inc.; Director, PJM
Interconnection, L.L.C. & Rodel, Inc.
Ted T. Cecala Chairman and Chief Executive Officer, Wilmington
Trust Corporation and Wilmington Trust Company
Richard R. Collins Retired President and Chief Operating Officer,
American Life Insurance Company
Charles S. Crompton, Esq. Attorney, Partner, Potter Anderson & Corroon (law
firm)
H. Stewart Dunn, Jr., Esq. Attorney, Partner, Ivins, Phillips & Barker (law
firm)
Edward B. du Pont Private investor; Director, E. I. du Pont de Nemours
and Company, Incorporated; Retired Chairman,
Atlantic Aviation Corporation
R. Keith Elliott Director, Chairman, President and Chief Executive
Officer, Hercules Incorporated; Director, PECO
Energy and Computer Task Group
Robert V.A. Harra, Jr. President, Chief Operating Officer and Treasurer,
Wilmington Trust Corporation and Wilmington Trust
Company
Andrew B. Kirkpatrick Of Counsel to, Morris, Nichols, Arsht & Tunnell (law
firm)
Rex L. Mears President of Ray L. Mears & Sons, Inc. (farming
corporation)
Walter D. Mertz Retired Senior Vice President, Wilmington Trust
Corporation and Wilmington Trust Company; Associate
Director
Hugh E. Miller Retired Executive, Formerly Vice Chairman, ICI
Americas, Inc.; was with parent Imperial Chemicals
Industries PLC for 20 years until 1990 including
management positions in the United States and
Europe;
B-3
<PAGE>
Chairman and Director, MGI PHARMA, Inc.
Stacey J. Mobley Senior Vice President of Communications, E. I. Du
Pont de Nemours and Company, Incorporated
G. Burton Pearson Retired Senior Vice President of Wilmington Trust
Corporation and Wilmington Trust Company; Associate
Director
Leonard W. Quill Formerly Chairman and Chief Executive Officer,
Wilmington Trust Corporation and Wilmington Trust
Company
David P. Roselle President, University of Delaware
H. Rodney Sharp, III Retired Manager, E. I. Du Pont de Nemours and
Company; Director, E. I. Du Pont de Nemours and
Company
Thomas P. Sweeney, Esq. Attorney, Partner, Richards, Layton & Finger (law
firm)
Mary Jornlin Theisen Former New Castle County Executive
Robert W. Tunnell, Jr. Managing Partner of Tunnell Companies, L.P., owner
and developer of real estate
(II) Rodney Square Management Corporation ("RSMC"), a Delaware
corporation, serves as investment adviser to the Prime Money Market,
U.S. Government, Tax Exempt and Premier Money Market Series of the
Fund. RSMC is a wholly owned subsidiary of Wilmington Trust Company,
also a Delaware corporation, which in turn is wholly owned by
Wilmington Trust Corporation. Information as to the officers and
directors of RSMC is included in its Form ADV filed on March 11, 1987,
and most recently supplemented on March 3, 1999, with the Securities
and Exchange Commission File No. 801-22071 and is incorporated by
reference herein.
(III) Cramer Rosenthal McGlynn LLC ("CRM") serves as investment adviser to
the Large Cap Value, Small Cap Value and Mid Cap Value Series of the
Fund. Information as to the officers and directors of CRM is included
in its Form ADV filed with the Securities and Exchange Commission and
most recently supplemented on March 26, 1999. The Form ADV, File No.
801-55244 is incorporated by reference herein.
(IV) Roxbury Capital Management LLC ("Roxbury") serves as investment adviser
to the Large Cap Growth Series and WT Large Cap Growth Series of the
Fund. Information as to the officers and directors of Roxbury is
included in its Form ADV filed with the Securities and Exchange
Commission and most recently supplemented on April 12, 1999. The Form
ADV, File No. 801-55521 is incorporated by reference.
ITEM 27 Principal Underwriters.
Inapplicable.
ITEM 28. LOCATIONS OF ACCOUNTS AND RECORDS
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<PAGE>
All accounts and records are maintained by the Registrant, or on its behalf by
the Fund's administrator, transfer agent, dividend paying agent and accounting
services agent, PFPC, Inc., 400 Bellevue Parkway, Wilmington, DE 19809.
ITEM 29. MANAGEMENT SERVICES.
There are no management-related service contracts not discussed in Part A or
Part B.
ITEM 30. UNDERTAKINGS.
None.
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment No. 4 to the Registration Statement to
be signed on its behalf by the undersigned, duly authorized, in the city of
Wilmington, state of Delaware on the 29th day of October, 1999.
WT INVESTMENT TRUST
BY: /S/ ROBERT J. CHRISTIAN
Robert J. Christian, President
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<PAGE>
INDEX TO EXHIBITS
-----------------
23(a)(ii)A Certificate of Amendment to Certificate
of Trust
23(d)(i)-(vii) Forms of Advisory Agreements
23(g)(ii) Form of Sub-Custody Agreement with PFPC
Trust Company
23(g)(iii) Form of Custodian Agreement with Bankers
Trust Company
23(h)(i) Form of Transfer Agency Agreement with
PFPC Inc.
23(h)(ii) Form of Administration and Accounting
Services Agreement with PFPC
B-7
Exhibit 23(a)(ii)A
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF TRUST
Pursuant to Title 12, ss.3810(b) of the Delaware General Corporation Law, KIEWIT
INVESTMENT TRUST, a Delaware business trust (the "Trust") hereby executes the
following Certificate of Amendment:
1. The name of the Trust is KIEWIT INVESTMENT TRUST.
2. The Trust hereby amends and restates Article I of its Certificate of Trust to
read in its entirety as follows:
1. Name. The name of the business trust formed hereby is "WT INVESTMENT
TRUST I."
3. This Certificate of Amendment of the Certificate of Trust has been duly
adopted by a majority of the Trustees.
4. This Certificate of Amendment shall be effective upon filing.
IN WITNESS WHEREOF, the undersigned Trustee has executed this Certificate on
the 20th day of October, 1998.
By: /S/ LAWRENCE B. THOMAS
Lawrence B. Thomas, Trustee
