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As filed with the Securities and Exchange Commission on December 31, 1998
File Nos. 333-42943 and 811-8567
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Post-Effective Amendment No. 2
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 3
SCHRODER SERIES TRUST II
Two Portland Square
Portland, Maine 04101
207-879-1900
Cheryl O. Tumlin, Esq.
Forum Administrative Services, LLC
Two Portland Square
Portland, Maine 04101
Copies to:
Carin Muhlbaum, Esq.
Schroder Capital Management International Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to Rule 485, paragraph (b)
[ ] on ________________ pursuant to Rule 485, paragraph (b)
[X] 60 days after filing pursuant to Rule 485, paragraph (a)(1)
[ ] on _________________ pursuant to Rule 485, paragraph (a)(1)
[ ] 75 days after filing pursuant to Rule 485, paragraph (a)(2)
[ ] on _________________ pursuant to Rule 485, paragraph (a)(2)
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Class A Shares of Schroder
All-Asia Fund, no par value. The series of the Registrant being
registered operates under a fund-of-funds structure, investing in two
series of Schroder Capital Funds, a separate registrant; this amendment
is also executed by Schroder Capital Funds.
<PAGE>
PROSPECTUS
SCHRODER ALL-ASIA FUND
CLASS A SHARES
March 1, 1999
This prospectus describes Schroder All-Asia Fund, a mutual fund offered by
Schroder Series Trust II. The Fund seeks long-term capital appreciation through
investment primarily in equity securities of companies domiciled or doing
business in established and emerging markets in Asia. The Fund is a
non-diversified mutual fund. The Trust offers Class A Shares of the Fund in this
prospectus.
Schroder Capital Management International Inc. ("Schroder") manages the Fund.
You can call the Trust at (800) 464-3108 to find out more about the Fund and
other funds in the Schroder family.
The prospectus explains what you should know about the Fund before you invest.
Please read it carefully.
NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY INFORMATION......................................................3
FEES AND EXPENSES........................................................6
RISKS AND INVESTMENT STRATEGIES..........................................8
HOW THE FUND'S SHARES ARE PRICED........................................13
HOW TO BUY SHARES.......................................................14
HOW TO SELL SHARES......................................................17
EXCHANGES...............................................................18
DIVIDENDS AND DISTRIBUTIONS.............................................18
TAXES 19
YEAR 2000 DISCLOSURE....................................................19
FINANCIAL HIGHLIGHTS....................................................19
<PAGE>
SUMMARY INFORMATION
This summary identifies the investment objective, principal investment
strategies, and principal risks of Schroder All-Asia Fund. The investment
objectives and policies of the Fund may, unless otherwise specifically stated,
be changed by the Trustees of the Trust without a vote of the shareholders. As a
matter of policy, the Trustees would not materially change the investment
objective of the Fund without shareholder approval.
THE FUND SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY INVESTING SUBSTANTIALLY
ALL OF ITS ASSETS IN SCHRODER ASIAN GROWTH FUND PORTFOLIO AND SCHRODER JAPAN
PORTFOLIO, WHICH ARE SEPARATELY MANAGED, NON-DIVERSIFIED INVESTMENT COMPANIES.
EACH PORTFOLIO'S INVESTMENT OBJECTIVE IS TO SEEK LONG-TERM CAPITAL APPRECIATION.
SCHRODER ASIAN GROWTH FUND PORTFOLIO FOCUSES ITS INVESTMENT IN ASIAN COUNTRIES
OTHER THAN JAPAN; SCHRODER JAPAN PORTFOLIO FOCUSES ITS INVESTMENT IN JAPAN.
SCHRODER WILL INCREASE OR DECREASE THE FUND'S EXPOSURE TO JAPAN BY INCREASING OR
DECREASING THE AMOUNT OF ITS ASSETS INVESTED IN SCHRODER JAPAN PORTFOLIO.
In reviewing the Fund's investment objective and policies below, you should
assume that the investment objective and policies of the Portfolios, taken
together, are the same in all material respects as those of the Fund. Schroder
is the investment adviser to the Fund and to each Portfolio.
On March 20, 1998, the Fund, which had no previous operating history, acquired
substantially all of the assets and liabilities of Schroder Asian Growth Fund,
Inc., which was a closed-end management investment company. After the narrative
describing the Fund is a chart showing the investment returns of Schroder Asian
Growth Fund, Inc. from its inception through March 20, 1998, and the Fund's
investment returns since its inception on March 23, 1998. Only full calendar
year performance is shown. NEITHER THE PERFORMANCE OF SCHRODER ASIAN GROWTH
FUND, INC. NOR THE FUND'S PAST PERFORMANCE IS NECESSARILY AN INDICATION OF THE
FUND'S FUTURE PERFORMANCE.
For a discussion of recent market and portfolio developments affecting the
Fund's performance, see the Fund's most recent financial reports. You can call
the Trust at (800) 464-3108 to request a free copy of the financial reports.
SCHRODER ALL-ASIA FUND
o INVESTMENT OBJECTIVE. To seek long-term capital appreciation through
investment primarily in equity securities of Asian companies.
<PAGE>
o PRINCIPAL INVESTMENTs. As a matter of fundamental policy, under
normal market conditions the Fund invests at least 65% of its total assets in
equity securities of Asian companies. "Asian companies" are: (1) companies that
are organized under the laws of China, Hong Kong SAR, India, Indonesia, Japan,
Korea, Malaysia, Pakistan, the Philippines, Singapore, Sri Lanka, Taiwan,
Thailand, or any other countries in the Asian region located south of the border
of the former Soviet Union, east of the borders of Afghanistan and Iran, north
of the Australian sub-continent, and west of the International Date Line and
that, in the future, permit investors to participate in their stock markets
(collectively, "Asian countries"); and (2) companies, wherever organized, that
Schroder determines at the time of investment either (1) derive at least 75% of
their revenues from goods produced or sold, investments made, or services
performed in Asian countries or (b) maintain at least 75% of their assets in
<PAGE>
Asian countries. The Fund invests in a variety of equity securities, including
common and preferred stocks, securities convertible into common and preferred
stocks, and warrants to purchase common and preferred stocks.
o INVESTMENT STRATEGIEs. The Fund normally invests directly in equity
securities of companies located in at least five Asian countries.
The Fund also may do the following:
0 Invest in equity interests in trusts, partnerships,
joint ventures, or similar enterprises, and American
or Global Depositary Receipts and other similar
instruments providing for indirect investment in
securities of foreign issuers.
0 Invest indirectly in equity securities by investing
in other investment companies or similar pooled
vehicles that invest primarily in equity securities
of Asian companies.
o PRINCIPAL RISKS.
0 INVESTMENT IN ASIA. Because the Fund's investments
are concentrated in Asian countries, political,
economic, market and other factors affecting those
countries will determine the values of the Fund's
investments. Recent significant economic and
political volatility in certain Asian countries may
continue and could have an adverse effect on the
value of the Fund's investments in those countries.
0 INVESTMENTS IN MALAYSIA. The Fund's investments
include securities issued by Malaysian companies.
Currency restrictions imposed by the Malaysian
government will delay repatriation of the proceeds of
any sale of those securities by the Fund for a
significant period of time (currently, through
September 1999). Fund assets subject to those
restrictions would be unavailable to the Fund to meet
redemption requests or for reinvestment in other
securities; in addition, it may be difficult for the
Fund to determine the fair value of such securities
(or of the Malaysian currency in which they are
denominated) for purposes of computing the Fund's net
asset value.
0 FOREIGN SECURITIES. Investments in foreign securities
entail risks not present in domestic investments
including, among other things, risks related to
political or economic instability, currency exchange
and taxation.
0 EMERGING MARKETS. The Fund may invest in "emerging
market" countries whose securities markets may
experience heightened levels of volatility. The risks
of investing in emerging markets include greater
political and economic uncertainties than in foreign
developed markets, currency transfer restrictions, a
more limited number of potential buyers, and a
developing country's dependence on revenue from
particular commodities or international aid.
Additionally, the securities markets and legal
systems in emerging market countries may only be in a
developmental stage and may provide few, or none, of
the advantages or protections of markets or legal
systems available in more developed countries.
<PAGE>
Emerging market countries may experience extremely
high levels of inflation, which may adversely affect
those countries' economies and securities markets.
0 NON-DIVERSIFIED FUND. The Fund is a "non-diversified"
mutual fund, and may invest its assets in a more
limited number of issuers than may diversified
investment companies. To the extent the Fund focuses
on fewer issuers, its risk of loss increases if the
market value of a security declines or if an issuer
is not able to meet its obligations.
0 EQUITY SECURITIES. Another risk of investing in the
Fund is the risk that the value of the equity
securities in the portfolio will fall, or will not
appreciate as anticipated by Schroder, due to factors
that adversely affect particular companies or markets
in general.
0 SMALL COMPANIES. The Fund may invest in small
companies, which tend to be more vulnerable to
adverse developments than larger companies. Small
companies may have limited product lines, markets, or
financial resources, or may depend on a limited
management group. Their securities may infrequently
and in limited volumes. As a result, the prices of
these securities may fluctuate more than the prices
of securities of larger, more widely traded
companies. Also, there may be less publicly available
information about small companies or less market
interest in their securities as compared to larger
companies, and it may take longer for the prices of
the securities to reflect the full value of their
issuers' earnings potential or assets.
The bar chart and table below present performance information for the Fund's
predecessor, Schroder Asian Growth Fund, Inc. through March 20, 1998, and the
Fund's performance information since March 23, 1998.
[EDGAR REPRESENTATION OF GRAPH CHART]
Calendar Year Annual Return
- ------------- -------------
1998 __%
1997 -38.28%
1996 5.61%
1995 1.40%
1994 -8.42%
During the periods shown above, the highest quarterly return was____ % for the
quarter ended ___ , and the lowest was -25.81% for the quarter ended December
31, 1997. [NOTE: SUBJECT TO CHANGE BASED ON 4TH QUARTER OF 1998.] For the period
March 23, 1998 (the Fund's inception) through October 31, 1998, the Fund's total
return (unannualized) was -18.3%.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------- ---------------- ------------------------ ------------------------ -----------------------
AVERAGE ANNUAL TOTAL RETURNS SINCE LAST ONE YEAR LAST FIVE YEARS LIFE OF FUND
(FOR PERIODS ENDING DECEMBER INCEPTION OF (INCLUDES FUND'S (INCLUDES FUND'S (SINCE INCEPTION OF
31, 1998) FUND ON 3/23/98 PREDECESSOR THROUGH PREDECESSOR THROUGH FUND'S PREDECESSOR ON
3/20/98) 3/20/98) 12/30/93)
- --------------------------------- ---------------- ------------------------ ------------------------ -----------------------
- --------------------------------- ---------------- ------------------------ ------------------------ -----------------------
Schroder All-Asia Fund [___]% [___]% [___]% [___]%
- --------------------------------- ---------------- ------------------------ ------------------------ -----------------------
- --------------------------------- ---------------- ------------------------ ------------------------ -----------------------
*50% Morgan Stanley Capital [___]% [___]% [___]% [___]%
International Japan Index/50%
Morgan Stanley Capital
International All Country Asia
Free ex-Japan Index
- --------------------------------- ---------------- ------------------------ ------------------------ -----------------------
</TABLE>
* The Morgan Stanley Capital International (MSCI) Japan Index is an unmanaged
index that groups Japanese securities by industry and the most "investable"
stocks (as determined by size, long- and short-term volume, and free float). The
MSCI All Country Asia Free ex-Japan Index is also an unmanaged market
capitalization index constructed by aggregating the appropriate MSCI country
indices; it represents 12 developed and emerging markets of the Asia region but
excludes Japan. Both indices reflect actual buyable opportunities for the
non-domestic investor by taking into account local market restrictions on share
ownership by foreigners. The 50% MSCI Japan Index/50% MSCI All Country Asia Free
ex-Japan Index used by Schroder represents an average of the returns of each
Index and is intended to reflect an average allocation between the Portfolios in
which the Fund invests its assets.
FEES AND EXPENSES
THESE TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY IF YOU INVEST IN
CLASS A SHARES OF THE FUND.
SHAREHOLDER FEES (paid directly from your investment):
Maximum Sales Charge (Load) Imposed on Purchases (as a 5.25%
percentage of offering price)1
Maximum Deferred Sales Load None
Maximum Sales Load Imposed on Reinvested Dividends None
Redemption Fee None
Exchange Fee None
- -----------------
1 The maximum sales load applies to purchases of less than $25,000.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)1:
Management Fees 1.14%
Distribution (12b-1) Fees None
Other Expenses 0.99%
Total Annual Fund Operating Expenses 2.13%
Fee Waiver and/or Expense Limitation(2) 0.18%
Net Expenses(2) 1.95%
<PAGE>
- --------------------------
1 The expenses shown in the above table reflect expenses pursuant to the
contractual arrangements of Schroder Asian Growth Fund, Inc., the Fund's
closed-end predecessor, from November 1, 1997 to March 20, 1998, and the
expenses under the Fund's contractual arrangements since its commencement as an
open-end fund on March 23, 1998 through October 31, 1998.
Management Fees include amounts the Fund expects to pay to Schroder for asset
allocation and administrative services. The Fund pays asset allocation fees and
administration fees to Schroder at the annual rates of 0.20% and 0.05%,
respectively, of its average daily net assets. Management fees also include: the
Fund's pro rata portion of investment advisory fees paid by Schroder Asian
Growth Fund Portfolio and Schroder Japan Portfolio at the annual rates of 0.70%
and 0.55%, respectively, of their average daily net assets, and the Fund's pro
rata portion of administration fees paid to Schroder by those Portfolios at the
annual rate of 0.05% of their average daily net assets. The expenses shown in
the table have been calculated on the basis of an allocation of 60% investment
in Schroder Asian Growth Fund Portfolio and 40% investment in Schroder Japan
Portfolio. Allocations of the Fund's assets between the two Portfolios will
vary.
2 The Net Expenses shown above reflect the effect of contractually imposed
expense limitations and/or fee waivers in effect through October 31, 1999 on
Total Annual Fund Operating Expenses.
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in Class A Shares of the Fund for
the time periods indicated and then redeem all of your shares at the end of
those periods, and that you pay the maximum sales load of 5.25%. The Example
also assumes that your investment earns a 5% return each year and that the
Fund's total annual operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would be*:
1 year 3 years 5 years 10 years
------ ------- ------- --------
$216 $667 $1144 $2462
- --------------
<PAGE>
* Assuming that the Fund's operating expenses remain the same as the Net
Expenses shown above, based on the other assumptions described above, your costs
would be:
1 year 3 years 5 years 10 years
------ ------- ------- --------
$193 $597 $1026 $2222
OTHER INVESTMENT STRATEGIES AND RISKS
The Fund may not achieve its objective in all circumstances and you
could lose money by investing. The following provides more detail about the
Fund's principal risks and the circumstances which could adversely affect the
value of the Fund's shares or its total return.
RISKS OF INVESTING IN THE FUND
o INVESTMENT IN ASIa. Certain Asian markets have experienced
devaluation and/or significant volatility during the past several years.
Schroder cannot predict whether, when and to what extent the Asian markets will
recover. Additionally, the Fund may invest more than 25% of its total assets in
issuers located in any one Asian country. To the extent that the Fund focuses
its investments in any Asian countries, the Fund will be susceptible to adverse
political, economic and market developments in those countries.
o FOREIGN SECURITIES. Investments in foreign securities entail certain
risks. There may be a possibility of nationalization or expropriation of assets,
confiscatory taxation, political or financial instability, and diplomatic
developments that could affect the value of the Fund's investments in certain
foreign countries. Since foreign securities normally are denominated and traded
in foreign currencies, the values of the Fund's assets may be affected favorably
or unfavorably by currency exchange rates, currency exchange control
regulations, foreign withholding taxes, and restrictions or prohibitions on the
repatriation of foreign currencies. There may be less information publicly
available about a foreign issuer than about a U.S. issuer, and foreign issuers
are not generally subject to accounting, auditing, and financial reporting
standards and practices comparable to those in the United States. The securities
of some foreign issuers are less liquid and at times more volatile than
securities of comparable U.S. issuers. Foreign brokerage commissions and other
fees are also generally higher than in the United States. Foreign settlement
procedures and trade regulations may involve certain risks (such as delay in
payment or delivery of securities or in the recovery of the Fund's assets held
abroad) and expenses not present in the settlement of domestic investments.
<PAGE>
If the Fund purchases securities denominated in foreign currencies, a
change in the value of any such currency against the U.S. dollar will result in
a change in the U.S. dollar value of the Fund's assets and the Fund's income
available for distribution. In addition, although at times most of the Fund's
income may be received or realized in these currencies, the Fund will be
required to compute and distribute its income in U.S. dollars. As a result, if
the exchange rate for any such currency declines after the Fund's income has
been earned and translated into U.S. dollars but before payment, the Fund could
be required to liquidate portfolio securities to make such distributions.
Similarly, if an exchange rate declines between the time the Fund incurs
expenses in U.S. dollars and the time such expenses are paid, the amount of such
currency required to be converted into U.S. dollars in order to pay such
expenses in U.S. dollars will be greater than the equivalent amount in any such
currency of such expenses at the time they were incurred. The Fund may buy or
sell foreign currencies and options and futures contracts on foreign currencies
for hedging purposes in connection with its foreign investments.
Special tax considerations apply to foreign securities. In determining
whether to invest in foreign securities, Schroder considers the likely impact of
foreign taxes on the net investment return available to the Fund and its
shareholders. Income and/or gains received by the Fund from sources within
foreign countries may be reduced by withholding and other taxes imposed by such
countries. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes. Any such taxes paid by the Fund will reduce the
net income available for distribution to Fund shareholders.
Except as otherwise noted in this Prospectus, there is no limit on the
amount of the Fund's assets that may be invested in foreign securities.
o EMERGING MARKETs. The Fund intends to invest in securities of issuers
in Asian emerging market countries and may at times invest a substantial portion
of its assets in such securities. The prices of securities of issuers in
emerging market countries are subject to greater volatility than those of
issuers in more developed countries. Investments in emerging market countries
are subject to the same risks applicable to foreign investments generally,
although those risks may be increased due to conditions in such countries. For
example, the securities markets and legal systems in emerging market countries
may only be in a developmental stage and may provide few, or none, of the
advantages or protections of markets or legal systems available in more
developed countries. Although many of the securities in which the Fund may
invest are traded on securities exchanges, they may trade in limited volume, and
the exchanges may not provide all of the conveniences or protections provided by
securities exchanges in more developed markets. The Fund may also invest a
substantial portion of its assets in securities traded in the over-the-counter
markets in Asian countries and not on any exchange, which may affect the
liquidity of the investment and expose the Fund to the credit risk of its
counterparties in trading those investments. Emerging market countries may
experience extremely high rates of inflation, which may adversely affect those
countries' economies and securities markets.
o DEBT SECURITIEs. The Fund may invest in debt securities, which are
subject to the risk of fluctuation of market value in response to changes in
interest rates and the risk that the issuer may become unable or unwilling to
make timely payments of principal and interest. Additionally, the Fund may
invest in lower-quality, high-yielding debt securities, commonly known as junk
bonds. Lower-rated securities are predominantly speculative and tend to be more
susceptible than other debt securities to adverse changes in the financial
condition of the issuer, general economic conditions, or an unanticipated rise
in interest rates, which may affect an issuer's ability to pay interest and
principal. This would likely make the values of the securities held by the Fund
more volatile and could limit the Fund's ability to liquidate its securities.
Changes by recognized rating services in their ratings of any fixed-income
security and in the perceived ability of an issuer to make payments of interest
and principal also may affect the value of these investments.
o RISKS OF SMALLER CAPITALIZATION COMPANIES. The Fund may invest in
companies which are smaller and less well-known than larger, more widely held
companies. Small and mid-cap companies may offer greater opportunities for
capital appreciation than larger companies, but may also involve certain special
risks. They are more likely than larger companies to have limited product lines,
markets or financial resources, or to depend on a small, inexperienced
management group. Securities of smaller companies may trade less frequently and
in lesser volume than more widely held securities and their values may fluctuate
more sharply than other securities. They may also trade in the over-the-counter
market or on a regional exchange, or may otherwise have limited liquidity. These
securities may
<PAGE>
therefore be more vulnerable to adverse developments than securities of larger
companies and the Fund may have difficulty establishing or closing out their
securities positions in smaller companies at prevailing market prices. Also,
there may be less publicly available information about smaller companies or less
market interest in their securities as compared to larger companies, and it may
take longer for the prices of the securities to reflect the full value of their
issuers' earnings potential or assets.
OTHER INVESTMENT STRATEGIES AND TECHNIQUES
In addition to the principal investment strategies described in the
Summary Information section above, the Fund may at times use the strategies and
techniques described below, which involve certain special risks. This prospectus
does not attempt to disclose all of the various investment techniques and types
of securities that Schroder might use in managing the Fund. As in any mutual
fund, investors must rely on the professional investment judgment and skill of
the Fund's adviser.
o FOREIGN CURRENCY EXCHANGE TRANSACTIONS. Changes in currency exchange
rates will affect the U.S. dollar value of Fund assets, including securities
denominated in foreign currencies. Exchange rates between the U.S. dollar and
other currencies fluctuate in response to forces of supply and demand in the
foreign exchange markets. These forces are affected by the international balance
of payments and other political, economic and financial conditions, which may be
difficult to predict. The Fund may engage in currency exchange transactions to
protect against unfavorable fluctuations in exchange rates.
In particular, the Fund may enter into foreign currency exchange
transactions to protect against a change in exchange rates that may occur
between the date on which the Fund contracts to trade a security and the
settlement date ("transaction hedging") or in anticipation of placing a trade
("anticipatory hedging"); to "lock in" the U.S. dollar value of interest and
dividends to be paid in a foreign currency; or to hedge against the possibility
that a foreign currency in which portfolio securities are denominated or quoted
may suffer a decline against the U.S. dollar ("position hedging").
From time to time, the Fund's currency hedging transactions may call
for the delivery of one foreign currency in exchange for another foreign
currency and may at times involve currencies in which its portfolio securities
are not then denominated ("cross hedging"). The Fund may also engage in "proxy"
hedging, whereby the Fund would seek to hedge the value of portfolio holdings
denominated in one currency by entering into an exchange contract on a second
currency, the valuation of which Schroder believes correlates to the value of
the first currency.
The Fund may buy or sell currencies in "spot" or forward transactions.
"Spot" transactions are executed contemporaneously on a cash basis at the
then-prevailing market rate. A forward currency contract is an obligation to
purchase or sell a specific currency at a future date (which may be any fixed
number of days from the date of the contract agreed upon by the parties) at a
price set at the time of the contract. Forward contracts do not eliminate
fluctuations in the underlying prices of securities and expose the Fund to the
risk that the counterparty is unable to perform.
The Fund incurs foreign exchange expenses in converting assets from one
currency to another. Although there is no limit to the amount of the Fund's
assets that may be invested in foreign currency exchange and foreign currency
forward contracts, the Fund may engage in foreign currency exchange transactions
only for hedging purposes. Suitable foreign currency hedging transactions may
<PAGE>
not be available in all circumstances and there can be no assurance that the
Fund will utilize hedging transactions at any time.
O SECURITIES LOANS, REPURCHASE AGREEMENTS, AND FORWARD COMMITMENTS. The
Fund may lend portfolio securities to broker-dealers up to one-third of the
Fund's total assets. The Fund may also enter into repurchase agreements without
limit. These transactions must be fully collateralized at all times, but involve
some risk to the Fund if the other party should default on its obligation and
the Fund is delayed or prevented from recovering the collateral. The Fund may
also enter into contracts to purchase securities for a fixed price at a future
date beyond customary settlement time, which may increase its overall investment
exposure and involves a risk of loss if the value of the securities declines
prior to the settlement date.
o INVESTMENT IN OTHER INVESTMENT COMPANIES. The Fund may invest in
other investment companies or pooled vehicles, including closed-end funds, that
are advised by Schroder or its affiliates or by unaffiliated parties. When
investing in another investment company, the Fund may pay a premium above such
investment company's net asset value per share. As a shareholder in an
investment company, the Fund would bear its ratable share of the investment
company's expenses, including advisory and administrative fees, and would at the
same time continue to pay its own fees and expenses.
o DERIVATIVE INVESTMENTS. Instead of investing directly in the types of
portfolio securities described in the Summary Information, the Fund may buy or
sell a variety of "derivative" investments to gain exposure to particular
securities or markets, in connection with hedging transactions, and to increase
total return. These may include options, futures, and indices, for example.
Derivatives involve the risk that they may not work as intended due to
unanticipated developments in market conditions or other causes. Also,
derivatives often involve the risk that the other party to the transaction will
be unable to meet its obligations or that the Fund will be unable to close out
the position at any particular time or at an acceptable price.
O PORTFOLIO TURNOVER. The length of time the Fund has held a particular
security is not generally a consideration in investment decisions. The
investment policies of the Fund may lead to frequent changes in the Fund's
investments, particularly in periods of volatile market movements. A change in
the securities held by the Fund is known as "portfolio turnover." Portfolio
turnover generally involves some expense to the Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. Such sales may increase the
amount of capital gains (and, in particular, short-term gains) realized by the
Fund, on which shareholders pay tax.
o TEMPORARY DEFENSIVE STRATEGIES. At times, Schroder may judge that
conditions in the securities markets make pursuing the Fund's basic investment
strategy inconsistent with the best interests of its shareholders. At such
times, Schroder may temporarily use alternate investment strategies primarily
designed to reduce fluctuations in the value of the Fund's assets. In
implementing these "defensive" strategies, the Fund would invest in high-quality
debt securities, cash, or money market instruments to any extent Schroder
considers consistent with such defensive strategies. It is impossible to predict
when, or for how long, the Fund will use these alternate strategies. One risk of
taking such temporary defensive positions is that the Fund may not achieve its
investment objectives.
<PAGE>
MANAGEMENT OF THE FUND
The Trust is governed by a Board of Trustees which has retained
Schroder to manage the investments of the Fund. Subject to the control of the
Trustees, Schroder also manages the Fund's other affairs and business. Schroder
has served as investment adviser to the Fund since inception.
Each of Schroder Asian Growth Fund Portfolio and Schroder Japan
Portfolio is managed under the direction of a board of trustees of Schroder
Capital Funds. Schroder has served as investment adviser to each of the
Portfolios since inception.
Schroder has been an investment manager since 1962, and currently
serves as investment adviser to the Fund, the Portfolios, and a broad range of
institutional investors. Schroder's address is 787 Seventh Avenue, 34th floor,
New York, New York 10019, and its telephone number is (212) 641-3900.
o MANAGEMENT FEES. The Portfolios pay management fees to Schroder at
the following annual rates (based on the average net assets of each Portfolio
taken separately): SCHRODER ASIAN GROWTH FUND PORTFOLIO -- 0.70%; SCHRODER JAPAN
PORTFOLIO -- 0.55%. The Fund, because of its investment in the Portfolios, bears
a proportionate part of the management fees (and other expenses) paid by each
Portfolio (based on the percentage of the Portfolio's assets attributable to the
Fund).
The Trust has entered into an investment advisory and asset allocation
agreement with Schroder under which Schroder is entitled to receive a monthly
investment advisory fee for asset allocation services at the annual rate of
0.20% of the Fund's average daily net assets with respect to assets invested in
the Portfolios (or another registered investment company). Schroder does not
receive an additional investment advisory fee directly from the Fund for any of
the Fund's assets invested in the Portfolios.. The investment advisory and asset
allocation agreement also provides that Schroder would manage the Fund's assets
directly if the Fund were to cease investing substantially all of its assets in
the Portfolios. In that event, the Fund would pay Schroder a monthly fee at an
annual rate of 0.90% of the Fund's average daily net assets managed by Schroder
directly at the Fund level. The investment advisory and asset allocation
agreement is the same in all material respects as the advisory agreements under
which Schroder acts as investment adviser to the Portfolios. Schroder will not
receive any fees under the agreement so long as the Fund continues to invest
substantially all of its assets in the Portfolios or in another investment
company.
o EXPENSE LIMITATIONS AND WAIVERs. In order to limit the Fund's
expenses, Schroder has voluntarily agreed to reduce its compensation (and, if
necessary, to pay certain other Fund expenses) until October 31, 1999 to the
extent that the Fund's total operating expenses attributable to its Class A
Shares exceed an annual rate of 1.95%.
o PORTFOLIO MANAGERs. Schroder's investment decisions for the Fund (or
for the Portfolios) are generally made by an investment manager or an investment
team, with the assistance of an investment committee. The following portfolio
managers have had primary responsibility for making investment decisions for the
Portfolios or the Fund, as the case may be, since the years shown below. Their
recent professional experience is also shown.
<PAGE>
<TABLE>
<S> <C> <C> <C>
- --------------------------- ------------------------ ------------------- -------------------------------------------- ----------
Fund/Portfolio Portfolio Manager Since Recent Professional Experience
- --------------------------- ------------------------ ------------------- -------------------------------------------- ----------
- --------------------------- ------------------------ ------------------- -------------------------------------------- ----------
Schroder All-Asia Louise Croset 1997 Employed as an investment professional at
Fund/Schroder Asian Schroder since 1993. Ms. Croset is also a
Growth Fund Trustee and President of the Trust, and a
Portfolio/Schroder Japan Senior Vice President and a Director of
Portfolio Schroder.
- --------------------------- ------------------------ ------------------- -------------------------------------------- ----------
- --------------------------- ------------------------ ------------------- -------------------------------------------- ----------
Heather Crighton Inception (1993) Employed as an investment professional at
Schroder since 1992. Ms. Crighton is also
a Vice President of the Trust, and a
Director and a First Vice President of
Schroder.
- --------------------------- ------------------------ ------------------- -------------------------------------------- ----------
- --------------------------- ------------------------ ------------------- -------------------------------------------- ----------
Donald M. Farquharson 1998 Employed as an investment professional at
Schroder since 1988. Mr. Farquharson is a
First Vice President of Schroder.
- --------------------------- ------------------------ ------------------- -------------------------------------------- ----------
</TABLE>
HOW THE FUND'S SHARES ARE PRICED
The Fund calculates the net asset value of its Class A Shares by
dividing the total value of its assets attributable to its Class A Shares, less
its liabilities attributable to those shares, by the number of Class A Shares
outstanding. Shares are valued as of the close of trading on the New York Stock
Exchange (normally 4:00 p.m., Eastern time) each day the Exchange is open.
Generally, securities that are listed on recognized stock exchanges are valued
at the last reported sale price, on the day the securities are valued (the
"Valuation Day"), on the primary exchange on which the securities are
principally traded. Listed securities traded on recognized stock exchanges for
which there were no sales on the Valuation Day are valued at the last sale price
on the preceding trading day or at closing mid-market prices. Securities traded
in over-the-counter markets are valued at the most recent reported mid-market
price. The Fund values all other securities and assets at their fair values as
determined by Schroder. All assets and liabilities of the Fund denominated in
foreign currencies are valued in U.S. dollars based on the exchange rate last
quoted by a major bank prior to the time when the net asset value of the Fund's
shares is calculated. Because certain of the securities in which the Fund may
invest may trade on days when the Fund does not price its Class A Shares, the
net asset value of the Fund's Class A Shares may change on days when
shareholders will not be able to purchase or redeem their Class A Shares.
HOW TO BUY SHARES
You may purchase Class A Shares of the Fund directly from the Trust by
completing an Account Application and sending payment by check or wire as
described below. You may obtain an Account Application from the Trust or from
Boston Financial Data Services, Inc. (BFDS), the Trust's Transfer Agent, P.O.
Box 8507, Boston, Massachusetts 02266-8507, or by calling (800) 464-3108.
<PAGE>
You also may purchase Class A Shares of the Fund through broker-dealers
and other financial institutions (Service Organizations). Service Organizations
may charge you a fee for processing orders to purchase or sell shares. If you
would like to purchase Class A Shares of the Fund through your account at a
Service Organization, you should contact that Service Organization directly for
appropriate instructions.
Class A Shares of the Fund are sold at their net asset value next
determined after the Trust receives your order, plus an initial sales charge. No
sales charge applies to the reinvestment of dividends or distributions. In order
for you to receive the Fund's next determined net asset value, the Trust must
receive your order before the close of trading on the New York Stock Exchange.
INVESTMENT MINIMUMS
The minimum investment for initial and additional purchases of Class A
Shares investment is set forth in the following table:
-------------------------------------- ----------------- -------------------
Initial Additional
Investment Investments
-------------------------------------- ----------------- -------------------
-------------------------------------- ----------------- -------------------
Regular Accounts $2,500 $250
-------------------------------------- ----------------- -------------------
-------------------------------------- ----------------- -------------------
Traditional IRAs $2,000 $250
-------------------------------------- ----------------- -------------------
The Trust is authorized to reject any purchase order.
PURCHASES BY CHECK
You may purchase shares of the Fund by mailing a check (in U.S. dollars)
payable to the Fund. Third-party checks will not be accepted.
For initial purchases, your check must be accompanied by a completed
Account Application in proper form. The Trust may request additional
documentation to evidence the authority of the person or entity making the
purchase request.
You should mail your check and your completed Account Application to:
Schroder All-Asia Fund -- Class A Shares Schroder Series Trust
II Boston Financial Data Services, Inc.
P.O. Box 8507
Boston, Massachusetts 02266-8507
Your payments should clearly indicate the shareholder's name and account number,
if applicable.
<PAGE>
PURCHASES BY BANK WIRE
If you make your initial investment by wire, your order must be
preceded by a completed Account Application. Upon receipt of the Application,
the Trust will assign you an account number and your account will become active.
Wire orders received prior to the close of trading on the New York Stock
Exchange (normally 4:00 p.m., Eastern Time) on each day the Exchange is open for
trading will be processed at the net asset value determined as of that day.
Wire orders received after that time will be processed at the net asset value
determined thereafter.
Investors and Service Organizations (on behalf of their customers) may
transmit purchase payments by Federal Reserve Bank wire directly to the Fund as
follows:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA
ABA No.: 011000028
Ref.: Schroder All-Asia Fund -- Class A Shares
DDA No.: 9904-650-0
Account of: (shareholder name)
Account No.: (shareholder account number)
The wire order must specify the name of the Fund, the shares' class (i.e., Class
A Shares), the account name and number, address, confirmation number, amount to
be wired, name of the wiring bank, and name and telephone number of the person
to be contacted in connection with the order.
SALES CHARGES
The offering price of the Fund's Class A Shares is the net asset value
next determined after the Trust receives your order plus an initial sales charge
assessed as follows:
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------- ---------------------------- ----------------------
Sales Charge As a
Percentage of
Broker-Dealers'
Reallowance As a
Percentage of
Offering Price
- ---------------------------------------------------------------- ----------------------------
- ---------------------------------------------------------------- ------------- --------------
Offering Net
Amount of Purchase Price Amount
Invested*
- ---------------------------------------------------------------- ------------- -------------- ----------------------
- ---------------------------------------------------------------- ------------- -------------- ----------------------
Less than $25,000 5.25% 5.54% 5.00%
- ---------------------------------------------------------------- ------------- -------------- ----------------------
- ---------------------------------------------------------------- ------------- -------------- ----------------------
At least $25,000 but less than $50,000 4.75% 4.99% 4.50%
- ---------------------------------------------------------------- ------------- -------------- ----------------------
- ---------------------------------------------------------------- ------------- -------------- ----------------------
At least $50,000 but less than $100,000 4.00% 4.17% 3.75%
- ---------------------------------------------------------------- ------------- -------------- ----------------------
- ---------------------------------------------------------------- ------------- -------------- ----------------------
At least $100,000 but less than $250,000 3.00% 3.09% 2.75%
- ---------------------------------------------------------------- ------------- -------------- ----------------------
- ---------------------------------------------------------------- ------------- -------------- ----------------------
At least $250,000 but less than $1,000,000 2.00% 2.04% 1.80%
- ---------------------------------------------------------------- ------------- -------------- ----------------------
- ---------------------------------------------------------------- ------------- -------------- ----------------------
$1,000,000 and over 1.00% 1.01% 1.00%
- ---------------------------------------------------------------- ------------- -------------- ----------------------
</TABLE>
- ------------
* Rounded to the nearest one-hundredth percent.
<PAGE>
REDUCED INITIAL SALES CHARGES
If you notify BFDS or your Service Organization, you may include the
Class A Shares you already own (valued at the maximum offering price) in
calculating the price applicable to your current purchase. Additionally, you may
obtain reduced sales charges based on cumulative purchases by executing a
Statement of Intention to invest $25,000 or more in the Fund's Class A Shares
within a 13-month period. To do so, complete the Statement of Intention form
that is part of the Account Application, or call BFDS at (800) 464-3108 to
obtain a form.
Certain classes of investors may purchase Class A Shares of the Fund at
net asset value without any sales charge. Additionally, you may be eligible to
purchase Class A Shares at net asset value without any sales charge if you are
investing the proceeds from a redemption of the Fund's Class A Shares or shares
of another open-end investment company on which you paid an initial sales
charge, and you make your investment within 60 days of that redemption. Call the
Trust at (800) 464-3108 to find out whether you are eligible to purchase Class
Shares without any sales charge.
To qualify for a reduced sales charge, you or your Service Organization
must notify BFDS at the time of purchase of your intention to qualify and must
provide BFDS with sufficient information to verify that your purchase qualifies
for a reduced sales charge. Reduced sales charges may be modified or terminated
at any time and are subject to confirmation of your holdings. For purposes of
calculating your eligibility for sales charge break points, you will be credited
with the number of Class A Shares you hold as a result of the conversion of
Schroder Asian Growth Fund, Inc., the Fund's predecessor.
BROKER-DEALERS' REALLOWANCE. Schroder Fund Advisors Inc. (Schroder
Advisors), the Fund's distributor, may pay a broker-dealers' reallowance to
selected broker-dealers purchasing Class A Shares as principal or agent, which
may include Service Organizations. Normally, Schroder Advisors reallows
discounts to selected broker-dealers in the amounts indicated in the table
above. In addition, Schroder Advisors may elect to reallow the entire sales
charge to selected broker-dealers for all sales for which orders are placed with
BFDS. The broker-dealers' reallowance may be changed from time to time.
In addition, from time to time and at its own expense, Schroder
Advisors may provide compensation, including financial assistance, to dealers in
connection with conferences, sales or training programs for their employees,
seminars for the public, advertising campaigns or other dealer-sponsored special
events. Schroder and/or Schroder Advisors may make additional payments (out of
their respective resources) to selected broker-dealers or other Service
Organizations. This compensation may be made available only to certain dealers
or other financial intermediaries who have sold or are expected to sell
significant amounts of Class A Shares or who charge an asset based fee to their
clients (whether or not they have a fiduciary relationship with their clients).
OTHER PURCHASE INFORMATION
Class A Shares of the Fund may be purchased for cash or in exchange for
securities held by the investor, subject to the determination by Schroder that
the securities are acceptable. (For purposes of determining whether securities
will be acceptable, Schroder will consider, among other things, whether they are
liquid securities of a type consistent with the investment objectives and
policies of the Fund and have a readily ascertainable value.) If the Fund
receives securities from an investor in exchange for
<PAGE>
shares of the Fund, the Fund will under some circumstances have the same tax
basis in the securities as the investor had prior to the exchange (and the
Fund's gain for tax purposes would be calculated with regard to the investor's
tax basis). Any gain on the sale of those securities would be subject to
distribution as capital gain to all of the Fund's shareholders. Schroder
reserves the right to reject any particular investment. Securities accepted by
Schroder will be valued in the same manner as are the Trust's portfolio
securities as of the time of the next determination of the Fund's net asset
value. All dividend, subscription, or other rights which are reflected in the
market price of accepted securities at the time of valuation become the property
of the Fund and must be delivered to the Fund upon receipt by the investor. A
gain or loss for federal income tax purposes may be realized by investors upon
the exchange. Investors interested in purchases through exchange should call the
Trust at (800) 464-3108.
HOW TO SELL SHARES
You may sell your Class A Shares back to the Fund on any business day
by sending a letter of instruction or stock power form to the Trust, or by
calling BFDS at (800) 464-3108. The price you will receive is the net asset
value next determined after receipt of your redemption request in good order. A
redemption request is in good order if it includes the exact name in which the
shares are registered, the investor's account number, and the number of shares
or the dollar amount of shares to be redeemed, and, for written requests, if it
is signed exactly in accordance with the registration form. If you hold your
Class A Shares in certificate form, you must submit the certificates and sign
the assignment form on the back of the certificates. Signatures must be
guaranteed by a bank, broker/dealer, or certain other financial institutions.
You may redeem your Class A Shares by telephone only if you elected the
telephone redemption privilege option on your Account Application or otherwise
in writing. Shares for which certificates have been issued may not be redeemed
by telephone. The Trust may require additional documentation from shareholders
that are corporations, partnerships, agents, fiduciaries, or surviving joint
owners.
In an effort to prevent unauthorized or fraudulent redemption requests
by telephone, BFDS will follow reasonable procedures to confirm that telephone
instructions are genuine. BFDS and the Trust generally will not be liable for
any losses due to unauthorized or fraudulent redemption requests, but either or
both may be liable if they do not follow these procedures.
The Trust will pay you for your redemptions as promptly as possible and
in any event within seven days after the request for redemption is received in
writing in good order. (The Trust generally sends payment for shares the
business day after a request is received.) Under unusual circumstances, the
Trust may suspend redemptions or postpone payment for more than seven days, as
permitted by law. The Trust will only redeem shares for which it has received
payment.
If your account balance falls below a minimum amount set by the
Trustees (presently $2,000) of the Fund, the Trust may choose to redeem your
shares in the Fund and pay you for them. You will receive at least 30 days
written notice before the Trust redeems your shares, and you may purchase
additional shares at any time to avoid a redemption. The Trust may also redeem
shares if you own shares of the Fund above a maximum amount set by the Trustees.
There is currently no maximum, but the Trustees may establish one at any time,
which could apply to both present and future shareholders.
<PAGE>
The Fund may suspend the right of redemption during any period when:
(1) trading on the New York Stock Exchange is restricted or the New York Stock
Exchange is closed; (2) the SEC has by order permitted such suspension; or (3)
an emergency (as defined by the SEC rules) exists making disposal of portfolio
investments or determination of the Fund's net asset value not reasonably
practicable.
EXCHANGES
You can exchange your Class A Shares of the Fund for Advisor Shares of
any other fund in the Schroder family at any time at their respective net asset
values, as long as your investment meets the investment minimum and account
balance minimum of the Fund whose Advisor Shares you are purchasing. To exchange
shares, please call (800) 464-3108.
DIVIDENDS AND DISTRIBUTIONS
The Fund distributes any net investment income and any net realized
capital gain at least annually. Distributions from net capital gain are made
after applying any available capital loss carryovers.
YOU CAN CHOOSE FROM FOUR DISTRIBUTION OPTIONS:
-- Reinvest all distributions in additional Class A Shares of the
Fund;
-- Receive distributions from net investment income in cash while
reinvesting capital gains distributions in additional Class A
Shares of the Fund;
-- Receive distributions from net investment income in additional
Class A Shares of the Fund while receiving capital gain
distributions in cash; or
-- Receive all distributions in cash.
You can change your distribution option by notifying BFDS in writing.
If you do not select an option when you open your account, all distributions by
the Fund will be reinvested in Class A Shares of the Fund. You will receive a
statement confirming reinvestment of distributions in additional Fund shares
promptly following the period in which the reinvestment occurs.
TAXES
o TAXES ON DIVIDENDS AND DISTRIBUTIONs. For federal income tax
purposes, distributions of investment income are taxable as ordinary income.
Taxes on distributions of capital gains are determined by how long the Fund
owned the investments that generated the gains, rather than how long you have
owned your shares. Distributions are taxable to you even if they are paid from
income or gains earned by the Fund before you invested (and thus were included
in the price you paid for your shares). Distributions of gains from investments
that the Fund owned for more than 12 months will be taxable as
<PAGE>
capital gains. Distributions of gains from investments that the Fund owned for
12 months or less will be taxable as ordinary income. Distributions are taxable
whether you received them in cash or reinvested them in additional shares of the
Fund.
o TAXES WHEN YOU SELL OR EXCHANGE YOUR SHAREs. Any gain resulting from
the sale or exchange of your shares in the Fund will also generally be subject
to federal income or capital gains tax, depending on your holding period.
o THE PORTFOLIOs. Neither Portfolio is required to pay federal income tax
because each is classified as a partnership for federal income tax purposes. All
interest, dividends, gains and losses of a Portfolio will be deemed to have been
"passed through" to the Fund in proportion to the Fund's holdings in the
Portfolio, regardless of whether such interest, dividends, gains or losses have
been distributed by the Portfolio. Each Portfolio intends to conduct its
operations so that the Fund, if it invests all of its assets in the Portfolios,
may qualify as a regulated investment company.
o CONSULT YOUR TAX ADVISOR ABOUT OTHER POSSIBLE TAX CONSEQUENCES. This
is a summary of certain federal tax consequences of investing in the Fund. You
should consult your tax advisor for more information on your own tax situation,
including possible state and local taxes.
YEAR 2000 DISCLOSURE
The Fund receives services from its investment adviser, administrator,
subadministrator, distributor, transfer agent, custodian and other providers
which rely on the smooth functioning of their respective systems and the systems
of others to perform those services. It is generally recognized that certain
systems in use today may not perform their intended functions adequately after
the Year 1999 because of the inability of the software to distinguish the Year
2000 from the Year 1900. Schroder is taking steps that it believes are
reasonably designed to address this potential "Year 2000" problem and to obtain
satisfactory assurances that comparable steps are being taken by the Fund's
other major service providers. There can be no assurance, however, that these
steps will be sufficient to avoid any adverse impact on the Fund from this
problem.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
financial performance of the Fund for the past 5 years or since the Fund
commenced operations. Certain information reflects financial results for a
single Fund share. The total returns represent the rate that an investor would
have earned or lost on an investment in Class A Shares of the Fund, assuming
reinvestment of all dividends and distributions. This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with the Fund's
financial statements, are included in the Fund's annual report to shareholders.
The annual report is available upon request.
<PAGE>
Schroder All-Asia Fund - Class A Shares
<TABLE>
<S> <C> <C> <C> <C> <C>
For the Period
December 30, 1993
For the Year Ended October 31 to October 31, 1994
----------------------------- --------------------
1998 1997 1996 1995
Net Asset Value, Beginning of Period
Income From Investment Operations
Net Investment Income
Net Gains or Losses on Securities
(both realized and unrealized) Total
From Investment Operations Less
Distributions Dividends (from net
investment income) Distributions
(from capital gains) Returns of Capital
Total Distributions
Net Asset Value, End of Period
Total Return
......................................................................................
Ratios/Supplemental Data
Net Assets, End of Period
Ratio of Expenses to Average Net Assets
Ratio of Net Income to Average Net Assets
Portfolio Turnover Rate
</TABLE>
<PAGE>
================================================================================
FUNDS AVAILABLE THROUGH SCHRODER FUND ADVISORS INC.
PLEASE CALL FOR COMPLETE INFORMATION AND TO OBTAIN THE RELEVANT PROSPECTUS.
PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST.
<TABLE>
<S><C> <C>
SCHRODER CAPITAL FUNDS (DELAWARE) (800) 290-9826 SCHRODER SERIES TRUST (800) 464-3108
SCHRODER INTERNATIONAL FUND SCHRODER LARGE CAPITALIZATION EQUITY FUND
SCHRODER EMERGING MARKETS FUND SCHRODER SMALL CAPITALIZATION VALUE FUND
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND SCHRODER MIDCAP VALUE FUND
SCHRODER INTERNATIONAL BOND FUND SCHRODER SHORT-TERM INVESTMENT FUND
SCHRODER U.S. DIVERSIFIED GROWTH FUND SCHRODER INVESTMENT GRADE INCOME FUND
SCHRODER U.S. SMALLER COMPANIES FUND
SCHRODER MICRO CAP FUND
</TABLE>
SCHRODER SERIES TRUST II (800) 464-3108
SCHRODER ALL-ASIA FUND
================================================================================
<PAGE>
[Back Cover] [Logo]
SCHRODER SERIES TRUST II
SCHRODER ALL-ASIA FUND
Schroder All-Asia Fund's statement of additional information (SAI) and annual
and semi-annual reports to shareholders include additional information about the
Fund. The SAI and the financial statements included in the Fund's most recent
annual report to shareholders are incorporated by reference into this
prospectus, which means they are part of this prospectus for legal purposes. The
Fund's annual report discusses the market conditions and investment strategies
that significantly affected the Fund's performance during its last fiscal year.
You may get free copies of these materials, request other information about the
Fund, or make shareholder inquiries by calling (800) 464-3108.
You may review and copy information about the Trust and the Fund, including the
SAI, at the Securities and Exchange Commission's public reference room in
Washington, D.C. You may call the Commission at (800) SEC-0330 for information
about the operation of the public reference room. You may also access reports
and other information about the Trust and the Fund on the Commission's Internet
site at WWW.SEC.GOV. You may get copies of this information, with payment of a
duplication fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009. You may need to refer to the Trust's file number
under the Investment Company Act, which is 811-08567.
Schroder Series Trust II CLASS A SHARES
P.O. Box 8507
Boston, MA 02266-8507 PROSPECTUS
(800) 464-3108
March 1, 1999
File No. 811-08567
<PAGE>
SCHRODER SERIES TRUST II
SCHRODER ALL-ASIA FUND
FORM N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION
MARCH 1, 1999
This Statement of Additional Information (SAI) is not a prospectus and is only
authorized for distribution when accompanied or preceded by a Prospectus for
Schroder All-Asia Fund, as amended or supplemented from time to time. This SAI
relates to the Fund's Class A Shares, which are offered through a Prospectus
dated March 1, 1999. This SAI contains information which may be useful to
investors but which is not included in the Prospectus. Investors may obtain free
copies of the Prospectus by calling the Trust at 1-800-464-3108.
Certain disclosure has been incorporated by reference into this SAI from the
Fund's annual report. For a free copy of the annual report, please call
1-800-464-3108.
<PAGE>
TABLE OF CONTENTS
TRUST HISTORY..............................................................1
CAPITALIZATION AND SHARE CLASSES...........................................1
MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS..................1
INVESTMENT RESTRICTIONS...................................................16
TRUSTEES AND OFFICERS.....................................................19
SCHRODER AND ITS AFFILIATES...............................................22
INVESTMENT ADVISORY AGREEMENT.............................................22
DISTRIBUTOR...............................................................25
EXPENSES..................................................................28
DETERMINATION OF NET ASSET VALUE..........................................30
SALES AT NET ASSET VALUE..................................................31
REDEMPTIONS IN KIND.......................................................32
TAXES.....................................................................32
PRINCIPAL HOLDERS OF SECURITIES...........................................34
PERFORMANCE INFORMATION...................................................34
CUSTODIAN.................................................................37
INDEPENDENT AUDITORS......................................................37
SHAREHOLDER LIABILITY.....................................................37
FINANCIAL STATEMENTS......................................................37
<PAGE>
SCHRODER SERIES TRUST II
STATEMENT OF ADDITIONAL INFORMATION
TRUST HISTORY
Schroder Series Trust II was organized as a Delaware business trust on
December 5, 1997. The Trust's Trust Instrument, which is governed by Delaware
law, is on file with the Secretary of State of the State of Delaware.
FUND CLASSIFICATION
The Trust currently offers shares of beneficial interest of Schroder
All-Asia Fund, which are offered pursuant to the Prospectus and this SAI. The
Fund is a "non-diversified" investment company under the 1940 Act, and therefore
may invest its assets in a more limited number of issuers than may diversified
investment companies. To the extent the Fund invests a significant portion of
its assets in the securities of a particular issuer, it will be subject to an
increased risk of loss if the market value of the issuer's securities declines.
CAPITALIZATION AND SHARE CLASSES
The Trust has an unlimited number of shares of beneficial interest that
may, without shareholder approval, be divided into an unlimited number of series
of such shares, which, in turn, may be divided into an unlimited number of
classes of such shares. The Trust currently consists of one series, the Fund.
The Fund has one class of shares, Class A Shares.
The Fund may suspend the sale of shares at any time and may refuse any
order to purchase shares. Under unusual circumstances, the Trust may suspend
redemption of Fund shares, or postpone redemption payments for more than seven
days, as permitted by law. If your account balance falls below a minimum amount
set by the Trustees (presently $2,000), the Trust may choose to redeem your
shares in the Fund and pay you for them. You will receive at least 30 days'
written notice before the Trust redeems your shares, and you may purchase
additional shares at any time to avoid a redemption. The Trust may also redeem
shares if you own Fund shares above a maximum amount set by the Trustees. There
is currently no maximum, but the Trustees may establish one at any time, which
could apply to both present and future shareholders.
Shares entitle their holders to one vote per share, with fractional
shares voting proportionally. Shares have noncumulative voting rights. Although
the Trust is not required to hold annual meetings of its shareholders,
shareholders have the right to call a meeting to elect or remove Trustees or to
take other actions as provided in the Trust Instrument. Shares have no
preemptive or subscription rights, and are transferable. Shares are entitled to
dividends as declared by the Trustees, and if the Fund were liquidated, each
class of shares of the Fund (if there were more than one class) would receive
the net assets of the Fund attributable to the class. The Trust may suspend the
sale of shares at any time and may refuse any order to purchase shares.
MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS
<PAGE>
In addition to the principal investment strategies and the principal
risks of the Fund described in the Prospectus, the Fund may employ other
investment practices and may be subject to additional risks, which are described
below.
CERTAIN DERIVATIVE INSTRUMENTS
Derivative instruments are financial instruments whose value depends
upon, or is derived from, the value of an underlying asset, such as a security,
index or currency. As described below, the Fund may engage in a variety of
transactions involving the use of derivative instruments, including options and
futures contracts on securities and securities indices and options on futures
contracts. These transactions may be used by the Fund for hedging purposes or,
to the extent permitted by applicable law, to increase its current return. The
Fund may also engage in derivative transactions involving foreign currencies.
See "Foreign Currency Transactions."
OPTIONS
The Fund may purchase and sell covered put and call options on its
portfolio securities to enhance investment performance and to protect against
changes in market prices.
COVERED CALL OPTIONS. The Fund may write covered call options on its
securities to realize a greater current return through the receipt of premiums
than it would realize on its securities alone. Such option transactions may also
be used as a limited form of hedging against a decline in the price of
securities owned by the Fund.
A call option gives the holder the right to purchase, and obligates the
writer to sell, a security at the exercise price at any time before the
expiration date. A call option is "covered" if the writer, at all times while
obligated as a writer, either owns the underlying securities (or comparable
securities satisfying the cover requirements of the securities exchanges), or
has the right to acquire such securities through immediate conversion of
securities.
In return for the premium received when it writes a covered call
option, the Fund gives up some or all of the opportunity to profit from an
increase in the market price of the securities covering the call option during
the life of the option. The Fund retains the risk of loss should the price of
such securities decline. If the option expires unexercised, the Fund realizes a
gain equal to the premium, which may be offset by a decline in price of the
underlying security. If the option is exercised, the Fund realizes a gain or
loss equal to the difference between the Fund's cost for the underlying security
and the proceeds of the sale (exercise price minus commissions) plus the amount
of the premium.
The Fund may terminate a call option that it has written before it
expires by entering into a closing purchase transaction. The Fund may enter into
closing purchase transactions in order to free itself to sell the underlying
security or to write another call on the security, realize a profit on a
previously written call option, or protect a security from being called in an
unexpected market rise. Any profits from a closing purchase transaction may be
offset by a decline in the value of the underlying security. Conversely, because
increases in the market price of a call option will generally reflect increases
in the
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market price of the underlying security, any loss resulting from a
closing purchase transaction is likely to be offset in whole or in part by
unrealized appreciation of the underlying security owned by the Fund.
COVERED PUT OPTIONS. The Fund may write covered put options in order to
enhance its current return. Such options transactions may also be used as a
limited form of hedging against an increase in the price of securities that the
Fund plans to purchase. A put option gives the holder the right to sell, and
obligates the writer to buy, a security at the exercise price at any time before
the expiration date. A put option is "covered" if the writer segregates cash and
high-grade short-term debt obligations or other permissible collateral equal to
the price to be paid if the option is exercised.
In addition to the receipt of premiums and the potential gains from
terminating such options in closing purchase transactions, the Fund also
receives interest on the cash and debt securities maintained to cover the
exercise price of the option. By writing a put option, the Fund assumes the risk
that it may be required to purchase the underlying security for an exercise
price higher than its then current market value, resulting in a potential
capital loss unless the security later appreciates in value.
The Fund may terminate a put option that it has written before it
expires by a closing purchase transaction. Any loss from this transaction may be
partially or entirely offset by the premium received on the terminated option.
PURCHASING PUT AND CALL OPTIONS. The Fund may also purchase put options
to protect portfolio holdings against a decline in market value. This protection
lasts for the life of the put option because the Fund, as a holder of the
option, may sell the underlying security at the exercise price regardless of any
decline in its market price. In order for a put option to be profitable, the
market price of the underlying security must decline sufficiently below the
exercise price to cover the premium and transaction costs that the Fund must
pay. These costs will reduce any profit the Fund might have realized had it sold
the underlying security instead of buying the put option.
The Fund may purchase call options to hedge against an increase in the
price of securities that the Fund wants ultimately to buy. Such hedge protection
is provided during the life of the call option since the Fund, as holder of the
call option, is able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the premium and
transaction costs. These costs will reduce any profit the Fund might have
realized had it bought the underlying security at the time it purchased the call
option.
The Fund may also purchase put and call options to enhance its current
return. The Fund may also buy and sell combinations of put and call options on
the same underlying security to earn additional income.
OPTIONS ON FOREIGN SECURITIES. The Fund may purchase and sell options
on foreign securities if in Schroder's opinion the investment characteristics of
such options, including the risks of investing in such options, are consistent
with the Fund's investment objectives. It is expected that risks related to such
options will not differ materially from risks related to options on U.S.
securities. However, position limits and other rules of foreign exchanges may
differ from those in the U.S. In addition, options markets in some countries,
many of which are relatively new, may be less liquid than comparable markets in
the U.S.
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RISKS INVOLVED IN THE SALE OF OPTIONS. Options transactions involve
certain risks, including the risks that Schroder will not forecast interest rate
or market movements correctly, that the Fund may be unable at times to close out
such positions, or that hedging transactions may not accomplish their purpose
because of imperfect market correlations. The successful use of these strategies
depends on the ability of Schroder to forecast market and interest rate
movements correctly.
An exchange-listed option may be closed out only on an exchange that
provides a secondary market for an option of the same series. Although the Fund
will enter into an option position only if Schroder believes that a liquid
secondary market exists, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option or at any particular time. If
no secondary market were to exist, it would be impossible to enter into a
closing transaction to close out an option position. As a result, the Fund may
be forced to continue to hold, or to purchase at a fixed price, a security on
which it has sold an option at a time when Schroder believes it is inadvisable
to do so.
Higher than anticipated trading activity or order flow or other
unforeseen events might cause The Options Clearing Corporation or an exchange to
institute special trading procedures or restrictions that might restrict the
Fund's use of options. The exchanges have established limitations on the maximum
number of calls and puts of each class that may be held or written by an
investor or group of investors acting in concert. It is possible that the Fund
and other clients of Schroder may be considered such a group. These position
limits may restrict the Fund's ability to purchase or sell options on particular
securities.
As described below, the Fund generally expects that its options
transactions will be conducted on recognized exchanges. In certain instances,
however, the Fund may purchase and sell options in the over-the-counter markets.
Options that are not traded on national securities exchanges may be closed out
only with the other party to the option transaction. For that reason, it may be
more difficult to close out over-the-counter options than exchange-traded
options. Options in the over-the-counter market may also involve the risk that
securities dealers participating in such transactions would be unable to meet
their obligations to the Fund. Furthermore, over-the-counter options are not
subject to the protection afforded purchasers of exchange-traded options by The
Options Clearing Corporation. The Fund will, however, engage in over-the-counter
options transactions only when appropriate exchange-traded options transactions
are unavailable and when, in the opinion of Schroder, the pricing mechanism and
liquidity of the over-the-counter markets are satisfactory and the participants
are responsible parties likely to meet their contractual obligations. The Fund
will treat over-the-counter options (and, in the case of options sold by the
Fund, the underlying securities held by the Fund) as illiquid investments as
required by applicable law.
Government regulations, particularly the requirements for qualification
as a "regulated investment company" under the Internal Revenue Code, may also
restrict the Trust's use of options.
FUTURES CONTRACTS
In order to hedge against the effects of adverse market changes, the
Fund may buy and sell futures contracts on U.S. Government securities and other
debt securities in which the Fund may invest, and on indices of debt securities.
In addition, the Fund may purchase and sell stock index futures to
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hedge against changes in stock market prices. The Fund may also, to the extent
permitted by applicable law, buy and sell futures contracts and options on
futures contracts to increase the Fund's current return. All such futures and
related options will, as may be required by applicable law, be traded on
exchanges that are licensed and regulated by the Commodity Futures Trading
Commission (the "CFTC"). Depending upon the change in the value of the
underlying security or index when the Fund enters into or terminates a futures
contract, the Fund may realize a gain or loss.
FUTURES ON DEBT SECURITIES AND RELATED OPTIONS. A futures contract on a
debt security is a binding contractual commitment which, if held to maturity,
will result in an obligation to make or accept delivery, during a particular
month, of securities having a standardized face value and rate of return. By
purchasing futures on debt securities -- assuming a "long" position -- the Fund
will legally obligate itself to accept the future delivery of the underlying
security and pay the agreed price. By selling futures on debt securities --
assuming a "short" position -- it will legally obligate itself to make the
future delivery of the security against payment of the agreed price. Open
futures positions on debt securities will be valued at the most recent
settlement price, unless that price does not, in the judgment of persons acting
at the direction of the Trustees as to the valuation of the Fund's assets,
reflect the fair value of the contract, in which case the positions will be
valued by the Trustees or such persons.
Positions taken in the futures markets are not normally held to
maturity, but are instead liquidated through offsetting transactions that may
result in a profit or a loss. While futures positions taken by the Fund will
usually be liquidated in this manner, the Fund may instead make or take delivery
of the underlying securities whenever it appears economically advantageous to
the Fund to do so. A clearing corporation associated with the exchange on which
futures are traded assumes responsibility for such closing transactions and
guarantees that the Fund's sale and purchase obligations under closed-out
positions will be performed at the termination of the contract.
Hedging by use of futures on debt securities seeks to establish more
certainly than would otherwise be possible the effective rate of return on
portfolio securities. The Fund may, for example, take a "short" position in the
futures market by selling contracts for the future delivery of debt securities
held by the Fund (or securities having characteristics similar to those held by
the Fund) in order to hedge against an anticipated rise in interest rates that
would adversely affect the value of the Fund's portfolio securities. When
hedging of this character is successful, any depreciation in the value of
portfolio securities may substantially be offset by appreciation in the value of
the futures position.
On other occasions, the Fund may take a "long" position by purchasing
futures on debt securities. This would be done, for example, when the Fund
expects to purchase particular securities when it has the necessary cash, but
expects the rate of return available in the securities markets at that time to
be less favorable than rates currently available in the futures markets. If the
anticipated rise in the price of the securities should occur (with its
concomitant reduction in yield), the increased cost to the Fund of purchasing
the securities may be offset, at least to some extent, by the rise in the value
of the futures position taken in anticipation of the subsequent securities
purchase.
Successful use by the Fund of futures contracts on debt securities is
subject to Schroder's ability to predict correctly movements in the direction of
interest rates and other factors affecting markets for debt securities. For
example, if the Fund has hedged against the possibility of an increase in
interest rates which would adversely affect the market prices of debt securities
held by it and the prices of such
<PAGE>
securities increase instead, the Fund will lose part or all of the benefit of
the increased value of its securities which it has hedged because it will have
offsetting losses in its futures positions. In addition, in such situations, if
the Fund has insufficient cash, it may have to sell securities to meet daily
maintenance margin requirements. The Fund may have to sell securities at a time
when it may be disadvantageous to do so.
The Fund may purchase and write put and call options on certain debt
futures contracts, as they become available. Such options are similar to options
on securities except that options on futures contracts give the purchaser the
right, in return for the premium paid, to assume a position in a futures
contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the period of
the option. As with options on securities, the holder or writer of an option may
terminate his position by selling or purchasing an option of the same series.
There is no guarantee that such closing transactions can be effected. The Fund
will be required to deposit initial margin and maintenance margin with respect
to put and call options on futures contracts written by it pursuant to brokers'
requirements, and, in addition, net option premiums received will be included as
initial margin deposits. See "Margin Payments" below. Compared to the purchase
or sale of futures contracts, the purchase of call or put options on futures
contracts involves less potential risk to the Fund because the maximum amount at
risk is the premium paid for the options plus transactions costs. However, there
may be circumstances when the purchase of call or put options on a futures
contract would result in a loss to the Fund when the purchase or sale of the
futures contracts would not, such as when there is no movement in the prices of
debt securities. The writing of a put or call option on a futures contract
involves risks similar to those risks relating to the purchase or sale of
futures contracts.
INDEX FUTURES CONTRACTS AND OPTIONS. The Fund may invest in debt index
futures contracts and stock index futures contracts, and in related options. A
debt index futures contract is a contract to buy or sell units of a specified
debt index at a specified future date at a price agreed upon when the contract
is made. A unit is the current value of the index. A stock index futures
contract is a contract to buy or sell units of a stock index at a specified
future date at a price agreed upon when the contract is made. A unit is the
current value of the stock index.
Depending on the change in the value of the index between the time when
the Fund enters into and terminates an index futures transaction, the Fund may
realize a gain or loss. The following example illustrates generally the manner
in which index futures contracts operate. The Standard & Poor's 100 Stock Index
is composed of 100 selected common stocks, most of which are listed on the New
York Stock Exchange. The S&P 100 Index assigns relative weightings to the common
stocks included in the Index, and the Index fluctuates with changes in the
market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures contract specifies that no delivery of the actual stocks making up
the index will take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the difference between
the contract price and the actual level of the stock index at the expiration of
the contract. For example, if the Fund enters into a futures contract to buy 100
units of the S&P 100 Index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $184 on that future date, the Fund will gain
$400 (100 units x gain of $4). If the Fund enters into a futures contract to
sell 100 units of the stock index at a specified future date at a contract price
of $180 and the S&P 100 Index is at $182 on that future date, the Fund will lose
$200 (100 units x loss of $2).
<PAGE>
The Fund may purchase or sell futures contracts with respect to any
securities indices. Positions in index futures may be closed out only on an
exchange or board of trade that provides a secondary market for such futures.
In order to hedge the Fund's investments successfully using futures
contracts and related options, the Fund must invest in futures contracts with
respect to indices or sub-indices the movements of which will, in Schroder's
judgment, have a significant correlation with movements in the prices of the
Fund's securities.
Options on index futures contracts are similar to options on securities
except that options on index futures contracts give the purchaser the right, in
return for the premium paid, to assume a position in an index futures contract
(a long position if the option is a call and a short position if the option is a
put) at a specified exercise price at any time during the period of the option.
Upon exercise of the option, the holder would assume the underlying futures
position and would receive a variation margin payment of cash or securities
approximating the increase in the value of the holder's option position. If an
option is exercised on the last trading day prior to the expiration date of the
option, the settlement will be made entirely in cash based on the difference
between the exercise price of the option and the closing level of the index on
which the futures contract is based on the expiration date. Purchasers of
options who fail to exercise their options prior to the exercise date suffer a
loss of the premium paid.
As an alternative to purchasing and selling call and put options on
index futures contracts, the Fund that may purchase and sell index futures
contracts may purchase and sell call and put options on the underlying indices
themselves to the extent that such options are traded on national securities
exchanges. Index options are similar to options on individual securities in that
the purchaser of an index option acquires the right to buy (in the case of a
call) or sell (in the case of a put), and the writer undertakes the obligation
to sell or buy (as the case may be), units of an index at a stated exercise
price during the term of the option. Instead of giving the right to take or make
actual delivery of securities, the holder of an index option has the right to
receive a cash "exercise settlement amount". This amount is equal to the amount
by which the fixed exercise price of the option exceeds (in the case of a put)
or is less than (in the case of a call) the closing value of the underlying
index on the date of the exercise, multiplied by a fixed "index multiplier".
The Fund may purchase or sell options on stock indices in order to
close out its outstanding positions in options on stock indices that it has
purchased. The Fund may also allow such options to expire unexercised.
Compared to the purchase or sale of futures contracts, the purchase of
call or put options on an index involves less potential risk to the Fund because
the maximum amount at risk is the premium paid for the options plus transactions
costs. The writing of a put or call option on an index involves risks similar to
those risks relating to the purchase or sale of index futures contracts.
The Fund may also purchase warrants, issued by banks and other
financial institutions, whose values are based on the values from time to time
of one or more securities indices.
MARGIN PAYMENTS. When the Fund purchases or sells a futures contract,
it is required to deposit with its custodian an amount of cash, U.S. Treasury
bills, or other permissible collateral equal to a small
<PAGE>
percentage of the amount of the futures contract. This amount is known as
"initial margin". The nature of initial margin is different from that of margin
in security transactions in that it does not involve borrowing money to finance
transactions. Rather, initial margin is similar to a performance bond or good
faith deposit that is returned to the Fund upon termination of the contract,
assuming the Fund satisfies its contractual obligations.
Subsequent payments to and from the broker occur on a daily basis in a
process known as "marking to market". These payments are called "variation
margin" and are made as the value of the underlying futures contract fluctuates.
For example, when the Fund sells a futures contract and the price of the
underlying debt security rises above the delivery price, the Fund's position
declines in value. The Fund then pays the broker a variation margin payment
equal to the difference between the delivery price of the futures contract and
the market price of the securities underlying the futures contract. Conversely,
if the price of the underlying security falls below the delivery price of the
contract, the Fund's futures position increases in value. The broker then must
make a variation margin payment equal to the difference between the delivery
price of the futures contract and the market price of the securities underlying
the futures contract.
When the Fund terminates a position in a futures contract, a final
determination of variation margin is made, additional cash is paid by or to the
Fund, and the Fund realizes a loss or a gain. Such closing transactions involve
additional commission costs.
SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS
LIQUIDITY RISKS. Positions in futures contracts may be closed out only
on an exchange or board of trade that provides a secondary market for such
futures. Although the Fund intends to purchase or sell futures only on exchanges
or boards of trade where there appears to be an active secondary market, there
is no assurance that a liquid secondary market on an exchange or board of trade
will exist for any particular contract or at any particular time. If there is
not a liquid secondary market at a particular time, it may not be possible to
close a futures position at such time and, in the event of adverse price
movements, the Fund would continue to be required to make daily cash payments of
variation margin. However, in the event financial futures are used to hedge
portfolio securities, such securities will not generally be sold until the
financial futures can be terminated. In such circumstances, an increase in the
price of the portfolio securities, if any, may partially or completely offset
losses on the financial futures.
In addition to the risks that apply to all options transactions, there
are several special risks relating to options on futures contracts. The ability
to establish and close out positions in such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain that
such a market will develop. Although the Fund generally will purchase only those
options for which there appears to be an active secondary market, there is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. In the event no such market exists
for particular options, it might not be possible to effect closing transactions
in such options with the result that the Fund would have to exercise the options
in order to realize any profit.
HEDGING RISKS. There are several risks in connection with the use by
the Fund of futures contracts and related options as a hedging device. One risk
arises because of the imperfect correlation between movements in the prices of
the futures contracts and options and movements in the underlying
<PAGE>
securities or index or in the prices of the Fund's securities that are the
subject of a hedge. Schroder will, however, attempt to reduce this risk by
purchasing and selling, to the extent possible, futures contracts and related
options on securities and indices the movements of which will, in its judgment,
correlate closely with movements in the prices of the underlying securities or
index and the Fund's portfolio securities sought to be hedged.
Successful use of futures contracts and options by the Fund for hedging
purposes is also subject to Schroder's ability to predict correctly movements in
the direction of the market. It is possible that, where the Fund has purchased
puts on futures contracts to hedge its portfolio against a decline in the
market, the securities or index on which the puts are purchased may increase in
value and the value of securities held in the portfolio may decline. If this
occurred, the Fund would lose money on the puts and also experience a decline in
value in its portfolio securities. In addition, the prices of futures, for a
number of reasons, may not correlate perfectly with movements in the underlying
securities or index due to certain market distortions. First, all participants
in the futures market are subject to margin deposit requirements. Such
requirements may cause investors to close futures contracts through offsetting
transactions that could distort the normal relationship between the underlying
security or index and futures markets. Second, the margin requirements in the
futures markets are less onerous than margin requirements in the securities
markets in general, and as a result the futures markets may attract more
speculators than the securities markets do. Increased participation by
speculators in the futures markets may also cause temporary price distortions.
Due to the possibility of price distortion, even a correct forecast of general
market trends by Schroder may still not result in a successful hedging
transaction over a very short time period.
LACK OF AVAILABILITY. Because the markets for certain options and
futures contracts and other derivative instruments in which the Fund may invest
(including markets located in foreign countries) are relatively new and still
developing and may be subject to regulatory restraints, the Fund's ability to
engage in transactions using such instruments may be limited. Suitable
derivative transactions may not be available in all circumstances and there is
no assurance that the Fund will engage in such transactions at any time or from
time to time. The Fund's ability to engage in hedging transactions may also be
limited by certain regulatory and tax considerations.
OTHER RISKS. The Fund will incur brokerage fees in connection with its
futures and options transactions. In addition, while futures contracts and
options on futures will be purchased and sold to reduce certain risks, those
transactions themselves entail certain other risks. Thus, while the Fund may
benefit from the use of futures and related options, unanticipated changes in
interest rates or stock price movements may result in a poorer overall
performance for the Fund than if it had not entered into any futures contracts
or options transactions. Moreover, in the event of an imperfect correlation
between the futures position and the portfolio position which is intended to be
protected, the desired protection may not be obtained and the Fund may be
exposed to risk of loss.
FORWARD COMMITMENTS
The Fund may enter into contracts to purchase securities for a fixed
price at a future date beyond customary settlement time ("forward commitments")
if the Fund holds, and maintains until the settlement date in a segregated
account, cash or liquid securities in an amount sufficient to meet the purchase
price, or if the Fund enters into offsetting contracts for the forward sale of
other securities it owns. Forward
<PAGE>
commitments may be considered securities in themselves, and involve a risk of
loss if the value of the security to be purchased declines prior to the
settlement date, which risk is in addition to the risk of decline in the value
of the Fund's other assets. Where such purchases are made through dealers, the
Fund relies on the dealer to consummate the sale. The dealer's failure to do so
may result in the loss to the Fund of an advantageous yield or price.
Although the Fund will generally enter into forward commitments with
the intention of acquiring securities for its portfolio or for delivery pursuant
to options contracts it has entered into, the Fund may dispose of a commitment
prior to settlement if Schroder deems it appropriate to do so. The Fund may
realize short-term profits or losses upon the sale of forward commitments.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. A repurchase agreement
is a contract under which the Fund acquires a security for a relatively short
period (usually not more than one week) subject to the obligation of the seller
to repurchase and the Fund to resell such security at a fixed time and price
(representing the Fund's cost plus interest). It is the Trust's present
intention to enter into repurchase agreements only with member banks of the
Federal Reserve System and securities dealers meeting certain criteria as to
creditworthiness and financial condition established by the Trustees of the
Trust, and only with respect to obligations of the U.S. government or its
agencies or instrumentalities or other high quality short-term debt obligations.
Repurchase agreements may also be viewed as loans made by the Fund which are
collateralized by the securities subject to repurchase. Schroder will monitor
such transactions to ensure that the value of the underlying securities will be
at least equal at all times to the total amount of the repurchase obligation,
including the interest factor. If the seller defaults, the Fund could realize a
loss on the sale of the underlying security to the extent that the proceeds of
sale including accrued interest are less than the resale price provided in the
agreement including interest. In addition, if the seller should be involved in
bankruptcy or insolvency proceedings, the Fund may incur delay and costs in
selling the underlying security or may suffer a loss of principal and interest
if the Fund is treated as an unsecured creditor and required to return the
underlying collateral to the seller's estate.
<PAGE>
WHEN-ISSUED SECURITIES
The Fund may from time to time purchase securities on a "when-issued"
basis. Debt securities are often issued on this basis. The price of such
securities, which may be expressed in yield terms, is fixed at the time a
commitment to purchase is made, but delivery and payment for the when-issued
securities take place at a later date. Normally, the settlement date occurs
within one month of the purchase. During the period between purchase and
settlement, no payment is made by the Fund and no interest accrues to the Fund.
To the extent that assets of the Fund are held in cash pending the settlement of
a purchase of securities, the Fund would earn no income. While the Fund may sell
its right to acquire when-issued securities prior to the settlement date, the
Fund intends actually to acquire such securities unless a sale prior to
settlement appears desirable for investment reasons. At the time the Fund makes
the commitment to purchase a security on a when-issued basis, it will record the
transaction and reflect the amount due and the value of the security in
determining the Fund's net asset value. The market value of the when-issued
securities may be more or less than the purchase price payable at the settlement
date. The Fund will establish a segregated account in which it will maintain
cash and U.S. government securities or other liquid securities at least equal in
value to commitments for when-issued securities. Such segregated securities
either will mature or, if necessary, be sold on or before the settlement date.
LOANS OF FUND PORTFOLIO SECURITIES
The Fund may lend its portfolio securities, provided: (1) the loan is
secured continuously by collateral consisting of U.S. government securities,
cash, or cash equivalents adjusted daily to have market value at least equal to
the current market value of the securities loaned; (2) the Fund may at any time
call the loan and regain the securities loaned; (3) the Fund will receive any
interest or dividends paid on the loaned securities; and (4) the aggregate
market value of the Fund's portfolio securities loaned will not at any time
exceed one-third of the total assets of the Fund. In addition, it is anticipated
that the Fund may share with the borrower some of the income received on the
collateral for the loan or that it will be paid a premium for the loan. Before
the Fund enters into a loan, Schroder considers all relevant facts and
circumstances, including the creditworthiness of the borrower. The risks in
lending portfolio securities, as with other extensions of credit, consist of
possible delay in recovery of the securities or possible loss of rights in the
collateral should the borrower fail financially. Although voting rights or
rights to consent with respect to the loaned securities pass to the borrower,
the Fund retains the right to call the loans at any time on reasonable notice,
and it will do so in order that the securities may be voted by the Fund if the
holders of such securities are asked to vote upon or consent to matters
materially affecting the investment. The Fund will not lend portfolio securities
to borrowers affiliated with the Fund.
FOREIGN SECURITIES
The Fund may invest without limit in securities principally traded in
foreign markets. The Fund may also invest without limit in Eurodollar
certificates of deposit and other certificates of deposit issued by United
States branches of foreign banks and foreign branches of United States banks.
Investments in foreign securities may involve risks and considerations
different from or in addition to investments in domestic securities. There may
be less information publicly available about a foreign company than about a U.S.
company, and foreign companies are not generally subject to accounting,
auditing, and financial reporting standards and practices comparable to those in
the United
<PAGE>
States. The securities of some foreign companies are less liquid and at times
more volatile than securities of comparable U.S. companies. Foreign brokerage
commissions and other fees are also generally higher than in the United States.
Foreign settlement procedures and trade regulations may involve certain risks
(such as delay in payment or delivery of securities or in the recovery of the
Fund's assets held abroad) and expenses not present in the settlement of
domestic investments. Also, because foreign securities are normally denominated
and traded in foreign currencies, the values of the Fund's assets may be
affected favorably or unfavorably by currency exchange rates and exchange
control regulations, and the Fund may incur costs in connection with conversion
between currencies.
In addition, with respect to certain foreign countries, there is a
possibility of nationalization or expropriation of assets, imposition of
currency exchange controls, adoption of foreign governmental restrictions
affecting the payment of principal and interest, imposition of withholding or
confiscatory taxes, political or financial instability, and adverse political,
diplomatic or economic developments which could affect the values of investments
in those countries. In certain countries, legal remedies available to investors
may be more limited than those available with respect to investments in the
United States or other countries and it may be more difficult to obtain and
enforce a judgment against a foreign issuer. Also, the laws of some foreign
countries may limit the Fund's ability to invest in securities of certain
issuers located in those countries.
Special tax considerations apply to foreign securities. In determining
whether to invest in securities of foreign issuers, Schroder will consider the
likely impact of foreign taxes on the net yield available to the Fund and its
shareholders. Income received by the Fund from sources within foreign countries
may be reduced by withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. It is impossible to determine the effective rate of
foreign tax in advance since the amount of the Fund's assets to be invested in
various countries is not known, and tax laws and their interpretations may
change from time to time and may change without advance notice. Any such taxes
paid by the Fund will reduce its net income available for distribution to
shareholders.
FOREIGN CURRENCY TRANSACTIONS
The Fund may engage in currency exchange transactions to protect
against uncertainty in the level of future foreign currency exchange rates and
to increase current return. The Fund may engage in both "transaction hedging"
and "position hedging".
When it engages in transaction hedging, the Fund enters into foreign
currency transactions with respect to specific receivables or payables of the
Fund generally arising in connection with the purchase or sale of its portfolio
securities. The Fund will engage in transaction hedging when it desires to "lock
in" the U.S. dollar price of a security it has agreed to purchase or sell, or
the U.S. dollar equivalent of a dividend or interest payment in a foreign
currency. By transaction hedging, the Fund will attempt to protect against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the applicable foreign currency during the period between the
date on which the security is purchased or sold or on which the dividend or
interest payment is declared, and the date on which such payments are made or
received.
The Fund may purchase or sell a foreign currency on a spot (or cash)
basis at the prevailing spot rate in connection with transaction hedging. The
Fund may also enter into contracts to purchase or sell
<PAGE>
foreign currencies at a future date ("forward contracts") and purchase and sell
foreign currency futures contracts.
For transaction hedging purposes, the Fund may also purchase
exchange-listed and over-the-counter call and put options on foreign currency
futures contracts and on foreign currencies. A put option on a futures contract
gives the Fund the right to assume a short position in the futures contract
until expiration of the option. A put option on currency gives the Fund the
right to sell a currency at an exercise price until the expiration of the
option. A call option on a futures contract gives the Fund the right to assume a
long position in the futures contract until the expiration of the option. A call
option on currency gives the Fund the right to purchase a currency at the
exercise price until the expiration of the option. The Fund will engage in
over-the-counter transactions only when appropriate exchange-traded transactions
are unavailable and when, in Schroder's opinion, the pricing mechanism and
liquidity are satisfactory and the participants are responsible parties likely
to meet their contractual obligations.
When it engages in position hedging, the Fund enters into foreign
currency exchange transactions to protect against a decline in the values of the
foreign currencies in which securities held by the Fund are denominated or are
quoted in their principal trading markets or an increase in the value of
currency for securities which the Fund expects to purchase. In connection with
position hedging, the Fund may purchase put or call options on foreign currency
and foreign currency futures contracts and buy or sell forward contracts and
foreign currency futures contracts. The Fund may also purchase or sell foreign
currency on a spot basis.
The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved will not
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the values of
those securities between the dates the currency exchange transactions are
entered into and the dates they mature.
It is impossible to forecast with precision the market value of the
Fund's portfolio securities at the expiration or maturity of a forward or
futures contract. Accordingly, it may be necessary for the Fund to purchase
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the security or securities being hedged is less
than the amount of foreign currency the Fund is obligated to deliver and if a
decision is made to sell the security or securities and make delivery of the
foreign currency. Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security or
securities of the Fund if the market value of such security or securities
exceeds the amount of foreign currency the Fund is obligated to deliver.
To offset some of the costs to the Fund of hedging against fluctuations
in currency exchange rates, the Fund may write covered call options on those
currencies.
Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities that the Fund owns or intends to purchase or
sell. They simply establish a rate of exchange which one can achieve at some
future point in time. Additionally, although these techniques tend to minimize
the risk of loss due to a decline in the value of the hedged currency, they tend
to limit any potential gain which might result from the increase in the value of
such currency. Also, suitable foreign currency hedging transactions may not be
available in all circumstances and there can be no assurance that the Fund will
utilize hedging transactions at any time or from time to time.
<PAGE>
The Fund may also seek to increase its current return by purchasing and
selling foreign currency on a spot basis, and by purchasing and selling options
on foreign currencies and on foreign currency futures contracts, and by
purchasing and selling foreign currency forward contracts.
CURRENCY FORWARD AND FUTURES CONTRACTS. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract as agreed by the parties, at a price set at the time of the contract.
In the case of a cancelable forward contract, the holder has the unilateral
right to cancel the contract at maturity by paying a specified fee. The
contracts are traded in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades. A foreign currency futures contract is a standardized contract
for the future delivery of a specified amount of a foreign currency at a future
date at a price set at the time of the contract. Foreign currency futures
contracts traded in the United States are designed by and traded on exchanges
regulated by the CFTC, such as the New York Mercantile Exchange.
Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the maturity date
of a forward contract may be any fixed number of days from the date of the
contract agreed upon by the parties, rather than a predetermined date in a given
month. Forward contracts may be in any amounts agreed upon by the parties rather
than predetermined amounts. Also, forward foreign exchange contracts are traded
directly between currency traders so that no intermediary is required. A forward
contract generally requires no margin or other deposit.
At the maturity of a forward or futures contract, the Fund may either
accept or make delivery of the currency specified in the contract, or at or
prior to maturity enter into a closing transaction involving the purchase or
sale of an offsetting contract. Closing transactions with respect to forward
contracts are usually effected with the currency trader who is a party to the
original forward contract. Closing transactions with respect to futures
contracts are effected on a commodities exchange; a clearing corporation
associated with the exchange assumes responsibility for closing out such
contracts.
Positions in foreign currency futures contracts and related options may
be closed out only on an exchange or board of trade which provides a secondary
market in such contracts or options. Although the Fund will normally purchase or
sell foreign currency futures contracts and related options only on exchanges or
boards of trade where there appears to be an active secondary market, there is
no assurance that a secondary market on an exchange or board of trade will exist
for any particular contract or option or at any particular time. In such event,
it may not be possible to close a futures or related option position and, in the
event of adverse price movements, the Fund would continue to be required to make
daily cash payments of variation margin on its futures positions.
FOREIGN CURRENCY OPTIONS. Options on foreign currencies operate
similarly to options on securities, and are traded primarily in the
over-the-counter market, although options on foreign currencies have recently
been listed on several exchanges. Such options will be purchased or written only
when Schroder believes that a liquid secondary market exists for such options.
There can be no assurance that a liquid secondary market will exist for a
particular option at any specific time. Options on foreign currencies are
affected by all of those factors which influence exchange rates and investments
generally.
<PAGE>
The value of a foreign currency option is dependent upon the value of
the foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors may
be disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.
There is no systematic reporting of last sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely basis.
Available quotation information is generally representative of very large
transactions in the interbank market and thus may not reflect relatively smaller
transactions (less than $1 million) where rates may be less favorable. The
interbank market in foreign currencies is a global, around-the-clock market. To
the extent that the U.S. options markets are closed while the markets for the
underlying currencies remain open, significant price and rate movements may take
place in the underlying markets that cannot be reflected in the U.S.
options markets.
FOREIGN CURRENCY CONVERSION. Although foreign exchange dealers do not
charge a fee for currency conversion, they do realize a profit based on the
difference (the "spread") between prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to the Fund at
one rate, while offering a lesser rate of exchange should the Fund desire to
resell that currency to the dealer.
ZERO-COUPON SECURITIES
Zero-coupon securities in which the Fund may invest are debt
obligations which are generally issued at a discount and payable in full at
maturity, and which do not provide for current payments of interest prior to
maturity. Zero-coupon securities usually trade at a deep discount from their
face or par value and are subject to greater market value fluctuations from
changing interest rates than debt obligations of comparable maturities which
make current distributions of interest. As a result, the net asset value of
shares of the Fund investing in zero-coupon securities may fluctuate over a
greater range than shares of other mutual funds investing in securities making
current distributions of interest and having similar maturities.
Zero-coupon securities may include U.S. Treasury bills issued directly
by the U.S. Treasury or other short-term debt obligations, and longer-term bonds
or notes and their unmatured interest coupons which have been separated by their
holder, typically a custodian bank or investment brokerage firm. A number of
securities firms and banks have stripped the interest coupons from the
underlying principal (the "corpus") of U.S. Treasury securities and resold them
in custodial receipt programs with a number of different names, including
Treasury Income Growth Receipts ("TIGRS") and Certificates of Accrual on
Treasuries ("CATS"). CATS and TIGRS are not considered U.S. government
securities. The underlying U.S. Treasury bonds and notes themselves are held in
book-entry form at the Federal Reserve Bank or, in the case of bearer securities
(i.e., unregistered securities which are owned ostensibly by the bearer or
holder thereof), in trust on behalf of the owners thereof.
In addition, the Treasury has facilitated transfers of ownership of
zero-coupon securities by accounting separately for the beneficial ownership of
particular interest coupons and corpus payments on
<PAGE>
Treasury securities through the Federal Reserve book-entry record-keeping
system. The Federal Reserve program as established by the Treasury Department is
known as "STRIPS" or "Separate Trading of Registered Interest and Principal of
Securities." Under the STRIPS program, the Fund will be able to have its
beneficial ownership of U.S. Treasury zero-coupon securities recorded directly
in the book-entry record-keeping system in lieu of having to hold certificates
or other evidences of ownership of the underlying U.S. Treasury securities.
When debt obligations have been stripped of their unmatured interest
coupons by the holder, the stripped coupons are sold separately. The principal
or corpus is sold at a deep discount because the buyer receives only the right
to receive a future fixed payment on the security and does not receive any
rights to periodic cash interest payments. Once stripped or separated, the
corpus and coupons may be sold separately. Typically, the coupons are sold
separately or grouped with other coupons with like maturity dates and sold in
such bundled form. Purchasers of stripped obligations acquire, in effect,
discount obligations that are economically identical to the zero-coupon
securities issued directly by the obligor.
TEMPORARY DEFENSIVE STRATEGIES
As described in the Prospectus, Schroder may at times judge that
conditions in the securities markets make pursuing the Fund's basic investment
strategies inconsistent with the best interests of its shareholders and may
temporarily use alternate investment strategies primarily designed to reduce
fluctuations in the value of the Fund's assets. In implementing these
"defensive" strategies, the Fund would invest in high-quality debt securities,
cash, or money market instruments to any extent Schroder considers consistent
with such defensive strategies. It is impossible to predict when, or for how
long, the Fund will use these alternate strategies.
INVESTMENT RESTRICTIONS
The Trust has adopted the following fundamental and non-fundamental
investment restrictions for the Fund. The Fund's fundamental investment
restrictions may not be changed without the affirmative vote of a "majority of
the outstanding voting securities" of the Fund, which is defined in the 1940 Act
to mean the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares and (2) 67% or more of the shares present at a meeting if
more than 50% of the outstanding shares are represented at the meeting in person
or by proxy. The non-fundamental investment policies described in the Prospectus
and this SAI are not fundamental and may be changed by the Trustees, without
shareholder approval. As a matter of policy, the Trustees would not materially
change the Fund's investment objective without shareholder approval.
THE PORTFOLIOS IN WHICH SCHRODER ALL-ASIA FUND INVESTS HAVE
SUBSTANTIALLY THE SAME INVESTMENT RESTRICTIONS AS THE FUND. IN REVIEWING THE
DESCRIPTION OF THE FUND'S INVESTMENT RESTRICTIONS BELOW, YOU SHOULD ASSUME THAT
THE INVESTMENT RESTRICTIONS OF THE PORTFOLIOS ARE THE SAME IN ALL MATERIAL
RESPECTS AS THOSE OF THE FUND.
FUNDAMENTAL RESTRICTIONS
The Fund will not:
<PAGE>
1. INDUSTRY CONCENTRATION
purchase any securities which would cause 25% or more of the
value of its total assets, taken at market value at the time
of such purchase, to be invested in securities of one or more
issuers conducting their principal business activities in the
same industry, provided that there is no limitation with
respect to investment in obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities. For
purposes of this restriction, a foreign government is deemed
to be an "industry."
2. BORROWING AND SENIOR SECURITIES
borrow money except that the Fund may borrow from banks up to
33 1/3% of its total assets (including the amount borrowed)
for temporary or emergency purposes or to meet redemption
requests. The Fund may not issue any class of securities which
is senior to the Fund's shares of beneficial interest;
provided, however, that none of the following shall be deemed
to create senior securities: (1) any borrowing permitted by
this restriction or any pledge or encumbrance to secure such
borrowing; (2) any collateral arrangements with respect to
options, futures contracts, options on futures contracts or
other financial instruments; or (3) any purchase, sale or
other permitted transaction in options, forward contracts,
futures contracts, options on futures contracts or other
financial instruments. (The following are not treated as
borrowings to the extent they are fully collateralized: (1)
the delayed delivery of purchased securities (such as the
purchase of when-issued securities); (2) reverse repurchase
agreements; (3) dollar-roll transactions; and (4) the lending
of securities.)
3. REAL ESTATE
purchase or sell real estate, real estate mortgage loans or
real estate limited partnership interests (other than
securities secured by real estate or interests therein or
securities issued by companies that invest in real estate or
interests therein)
4. LENDING
make loans to other parties, except that the Fund may: (a)
purchase and hold debt instruments (including bonds,
debentures or other obligations and certificates of deposit,
bankers' acceptances and fixed time deposits) in accordance
with its investment objective and policies, (b) enter into
repurchase agreements with respect to portfolio securities,
and (c) make loans of portfolio securities.
5. COMMODITIES
purchase or sell commodities or commodity contracts, including
futures contracts and options thereon, except that the Fund
may purchase or sell financial futures contracts and related
options, and futures contracts, forward contracts, and options
with respect to foreign currencies, and may enter into swaps
or other financial transactions.
<PAGE>
6. UNDERWRITING
underwrite (as that term is defined in the Securities
Act of 1933, as amended) securities issued by other persons
except to the extent that, in connection with the disposition
of its portfolio securities, it may be deemed to be an
underwriter.
7. EXERCISING CONTROL OF ISSUERS
invest for the purpose of exercising control over the
management of any company.
8. SHORT SALES AND PURCHASING ON MARGIN
make short sales of securities or maintain a short position;
or
purchase securities on margin (except for delayed delivery or
when-issued transactions or such short-term credits as are
necessary for the clearance of transactions and for hedging
purposes and margin deposits in connection with transactions
in futures contracts, options on futures contracts, options on
securities and securities indices, and currency transactions)
and other financial transactions.
Notwithstanding any other investment policy or restriction to the contrary, the
Fund may seek to achieve its investment objective by investing some or all of
its assets in the securities of one or more investment companies to the extent
permitted by the 1940 Act or an applicable exemptive order under such Act;
provided that, except to the extent the Fund invests in other investment
companies pursuant to Section 12(d)(1)(A) of the 1940 Act, the Fund treats the
assets of the investment companies in which it invests as its own. (The
foregoing investment policy is fundamental.)
NONFUNDAMENTAL LIMITATIONS
The Fund will not:
1. NON-DIVERSIFICATION
Under these additional restrictions, the Fund may not
invest more than 25% of its total assets in
obligations of any one issuer other than U.S.
Government securities and, with respect to 50% of its
total assets, the Fund may not invest more than 5% of
its total assets in the securities of any one issuer
(except U.S. Government securities). Thus, the Fund
may invest up to 25% of its total assets in the
securities of each of any two issuers.
<PAGE>
2. LIQUIDITY
The Fund may not invest more than 15% of its net assets in:
(1) securities that cannot be disposed of within seven days at
their then-current value; (2) repurchase agreements not
entitling the holder to payment of principal within seven
days; and (3) securities subject to restrictions on the sale
of the securities to the public without registration under the
Securities Act of 1933, as amended ("restricted securities")
that are not readily marketable. The Fund may treat certain
restricted securities as liquid pursuant to guidelines adopted
by the Board.
3. LENDING
The Fund may not lend a security if, as a result, the amount
of loaned securities would exceed an amount equal to one third
of the Fund's total assets.
-------------------
All percentage limitations on investments (other than limitations on
borrowing and illiquid securities) will apply at the time of investment and
shall not be considered violated unless an excess or deficiency occurs or exists
immediately after and as a result of such investment.
TRUSTEES AND OFFICERS
The Trustees of the Trust are responsible for the general oversight of
the Trust's business. Subject to such policies as the Trustees may determine,
Schroder furnishes a continuing investment program for each Fund and makes
investment decisions on its behalf. Subject to the control of the Trustees,
Schroder also manages the Fund's other affairs and business.
The Trustees and executive officers of the Trust and their principal
occupations during the last five years are set forth below.
(*) I. Peter Sedgwick, Chairman and Trustee. 62. 33 Gutter Lane, London,
England. Group Managing Director, Schroders plc. Chairman and Director, Schroder
Capital Management International Inc. and Schroder Capital Management
International Ltd. Chief Executive and Director, Schroder Investment Management
Ltd. Director, various offshore funds for which a member of the Schroder group
of companies serves as manager.
(*) David M. Salisbury, Vice Chairman and Trustee. 46. 33 Gutter Lane,
London, England. Chairman, Schroder Capital Management International Inc. and
Schroder Capital Management International Ltd. Director, Schroders plc.
Peter E. Guernsey, Trustee, 77. c/o the Trust, Two Portland Square,
Portland, Maine. Trustee, Schroder Capital Funds, Schroder Capital Funds II,
Schroder Capital Funds (Delaware), and Schroder Series Trust. Formerly, Senior
Vice President, Marsh & McLennan, Inc.
<PAGE>
John I. Howell, Trustee. 82. c/o the Trust, Two Portland Square, Portland,
Maine. Trustee, Schroder Capital Funds, Schroder Capital Funds II, Schroder
Capital Funds (Delaware), and Schroder Series Trust. Director, American
International Life Assurance Company of New York. Private consultant since 1987.
William L. Means, Trustee. 59. c/o the Trust, Two Portland Square,
Portland, Maine. Trustee, Schroder Capital Funds (Delaware). Formerly, Chief
Investment Officer, Alaska Permanent Fund Corporation.
(*) Louise Croset, Trustee and President of the Trust. 42. 33 Gutter Lane,
London, England. Senior Vice President and Director of Schroder Capital
Management International Inc.
Mark J. Smith, Vice President of the Trust. 35. 33 Gutter Lane, London,
England. Director and Senior Vice President, Schroder Capital Management
International Limited and Schroder Capital Management International Inc.
Director, Schroder Investment Management Ltd., Schroder Fund Advisors Inc., and
Schroder Japanese Warrant Fund Ltd. Trustee, Schroder Capital Funds, Schroder
Capital Funds II, Schroder Capital Funds (Delaware), and Schroder Series Trust.
Heather F. Crighton, Vice President of the Trust. 32. 33 Gutter Lane,
London, England. Vice President of Schroder Capital Management International
Inc. and Schroder Capital Management International Ltd.
Donald H.M. Farquharson, Vice President of the Trust. 35. 33 Gutter Lane,
London, England. First Vice President and Assistant Director of Schroder Capital
Management International Inc.
Fergal Cassidy, Treasurer and Chief Financial Officer of the Trust. 29. 787
Seventh Avenue, 34th Floor, New York, New York. Vice President and Treasurer,
Schroder Capital Management Inc. Vice President and Comptroller, Schroder
Capital Management International Inc. Treasurer and Chief Financial Officer,
Schroder Fund Advisors Inc. Assistant Treasurer, Schroder Series Trust.
Formerly, Senior Accountant, Concurrency Management Corp.
Margaret H. Douglas-Hamilton, Secretary of the Trust. 57. 787 Seventh
Avenue, 34th Floor, New York, New York. Vice President of Schroder Capital Funds
(Delaware). Senior Vice President and General Counsel of Schroders U.S. Holdings
Inc. Director and Secretary of Schroder Capital Management Inc.
Alan Mandel, Assistant Treasurer of the Trust. 41. 787 Seventh Ave., New
York, New York. First Vice President of Schroder Capital Management
International Inc. since September 1998. Formerly, Director of Mutual Fund
Administration for Salomon Brothers Asset Management; Chief Financial Officer
and Vice President of Mutual Capital Management.
Catherine A. Mazza, Vice President and Assistant Secretary of the Trust.
39. 787 Seventh Avenue, 34th Floor, New York, New York. First Vice President,
Schroder Capital Management International Inc. and Schroder Capital Management
Inc. President, Schroder Fund Advisors Inc. Vice President, Schroder Capital
Funds, Schroder Capital Funds II, Schroder Capital Funds (Delaware), and
Schroder Series Trust. Formerly, Vice President, Alliance Capital Management
L.P.
Carin Muhlbaum, Assistant Secretary of the Trust. 36. Vice President of
Schroder Capital Management International Inc. since 1998. Formerly, an
investment management attorney with Seward & Kissel and prior thereto, with
Gordon Altman Butowsky Weitzen Shalov & Wein.
Alexandra Poe, Assistant Secretary of the Trust. 38. 787 Seventh Avenue,
34th Floor, New York, New York. Vice President, Schroder Capital Management
International Inc. Senior Vice President, Secretary, and General Counsel,
Schroder Fund Advisors Inc. Vice President and Secretary,
Nicholas Rossi, Assistant Secretary of the Trust. 35. 787 Seventh Avenue,
New York, New York. Associate of Schroder Capital Management International Inc.
since October 1997 and Assistant Vice President of Schroder Fund Advisors Inc.
since March 1998. Formerly, Mutual Fund Specialist, Wilkie Farr & Gallagher;
Fund Administrator, Furman Selz LLC since 1992.
<PAGE>
Schroder Capital Funds, Schroder Capital Funds II, Schroder Capital Funds
(Delaware), and Schroder Series Trust. Formerly, Attorney, Gordon, Altman,
Butowsky, Weitzen, Shalov & Wein; Vice President and Counsel, Citibank, N.A.
Thomas G. Sheehan, Assistant Treasurer and Assistant Secretary of the
Trust. 44. Two Portland Square, Portland, Maine. Relationship Manager and
Counsel, Forum Financial Services, Inc. since 1993. Formerly, Special Counsel,
U.S. Securities and Exchange Commission, Division of Investment Management,
Washington, D.C.
Cheryl O. Tumlin, Assistant Treasurer and Assistant Secretary of the Trust.
32. Two Portland Square, Portland, Maine. Assistant Counsel, Forum
Administrative Services, LLC since July 1996. Formerly, attorney with the U.S.
Securities and Exchange Commission, Division of Market Regulation since 1995 and
prior thereto, attorney with Robinson Siverman Pearce Aronsohn & Berman since
1991.
(*) Interested Trustee of the Trust within the meaning of the 1940 Act.
Except as otherwise noted, the principal occupations of the Trustees and
officers for the last five years have been with the employers shown above,
although in some cases they have held different positions with such employers or
their affiliates.
TRUSTEE COMPENSATION
Trustees who are not "interested persons" (as defined in the 1940 Act) of
the Trust, Schroder, or Schroder Fund Advisors Inc. receive an annual retainer
of $11,000 for their services as Trustees of all open-end investment companies
distributed by Schroder Fund Advisors Inc., and $1,250 per meeting attended in
person or $500 per meeting attended by telephone. Members of an Audit Committee
for one or more of such investment companies receive an additional $1,000 per
year. Payment of the annual retainer is allocated among the various investment
companies based on their relative net assets. Payment of meeting fees is
allocated only among those investment companies to which the meeting relates.
The following table sets forth information regarding compensation paid for
the fiscal year ended October 31, 1998 to the disinterested Trustees.
COMPENSATION TABLE
- -------------------------------------------------------------------------
(2) (3)
AGGREGATE TOTAL COMPENSATION
(1) COMPENSATION FROM TRUST AND
FROM TRUST FUND COMPLEX PAID TO
NAME OF TRUSTEES*
TRUSTEE
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Peter E. Guernsey $ $
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
John I. Howell $ $
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
William L. Means $ $
- -------------------------------------------------------------------------
<PAGE>
* The Total Compensation listed in column (3) for each
Trustee includes compensation for services as a Trustee of
Schroder Capital Funds ("SCF"), Schroder Capital Funds II
("SCF II"), Schroder Capital Funds (Delaware) ("SCFD"), and
Schroder Series Trust ("SST"). The Trust, SCF, SCF II,
SCFD, and SST are considered part of the same "Fund
Complex" for these purposes.
As of October 31, 1998, the Trustees of the Trust as a group owned less
than 1% of the outstanding shares of each Fund.
The Trust's Trust Instrument provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust, except if it is determined in the manner specified in the Trust
Instrument that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust or that such
indemnification would relieve any officer or Trustee of any liability to the
Trust or its Shareholders by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of his or her duties. The Trust, at its
expense, provides liability insurance for the benefit of its Trustees and
officers.
SCHRODER AND ITS AFFILIATES
Schroder has served as the investment adviser for the Fund and the
Portfolios since their inception. Schroder is a wholly-owned subsidiary of
Schroder U.S. Holdings Inc., which engages through its subsidiary firms in the
investment banking, asset management, and securities businesses. Affiliates of
Schroder U.S. Holdings Inc. (or their predecessors) have been investment
managers since 1927. Schroder itself has been an investment manager since 1962,
and served as investment manager for approximately $___ billion as of December
31, 1998. Schroder U.S. Holdings Inc. is an indirect, wholly-owned U.S.
subsidiary of Schroders plc, a publicly owned holding company organized under
the laws of England. Schroders plc and its affiliates engage in international
merchant banking and investment management businesses, and as of December 31,
1998, had under management assets of approximately $____ billion.
Schroder Fund Advisors Inc., an affiliate of Schroder that serves as the
Trust's distributor, is a wholly-owned subsidiary of Schroder Capital Management
International Inc. Schroder Capital Management International Inc. is also a
wholly-owned subsidiary of Schroder U.S. Holdings Inc.
INVESTMENT ADVISORY AGREEMENT
Under an Investment Advisory Agreement between the Trust and Schroder (the
"Advisory Agreement"), Schroder, at its expense, provides the Fund with
investment advisory services and advises and assists the officers of the Trust
in taking such steps as are necessary or appropriate to carry out the decisions
of its Trustees regarding the conduct of business of the Trust and each Fund.
The fees to be paid under the Advisory Agreement are set forth in the
Prospectus. As long as the Fund invests all of its assets in the Portfolios (or
another investment company), Schroder is not entitled to receive any advisory
fees pursuant to the Advisory Agreement. In the event that the Fund did not
invest all of its assets in the Portfolios or another investment company,
Schroder would be entitled to receive advisory fees monthly
<PAGE>
at the annual rate of 0.90% of the Fund's average daily net assets managed by
Schroder directly at the Fund level.
Under the Advisory Agreement, Schroder is required to regularly provide the
Fund with investment research, advice, and supervision and furnishes
continuously investment programs consistent with the investment objectives and
policies of the Fund, and determines what securities shall be purchased, what
securities shall be held or sold, and what portion of the Fund's assets shall be
held uninvested, subject always to the provisions of the Trust's Trust
Instrument and By-laws, and of the 1940 Act, and to the Fund's investment
objectives, policies, and restrictions, and subject further to such policies and
instructions as the Trustees may from time to time establish.
Schroder makes available to the Trust, without expense to the Trust, the
services of such of its directors, officers, and employees as may duly be
elected Trustees or officers of the Trust, subject to their individual consent
to serve and to any limitations imposed by law. Schroder pays the compensation
and expenses of officers and executive employees of the Trust. Schroder also
provides investment advisory research and statistical facilities and all
clerical services relating to such research, statistical, and investment work.
Schroder pays the Trust's office rent.
Under the Advisory Agreement, the Trust is responsible for all its other
expenses, including clerical salaries not related to investment activities; fees
and expenses incurred in connection with membership in investment company
organizations; brokers' commissions; payment for portfolio pricing services to a
pricing agent, if any; legal expenses; auditing expenses; accounting expenses;
taxes and governmental fees; fees and expenses of the transfer agent and
investor servicing agent of the Trust; the cost of preparing share certificates
or any other expenses, including clerical expenses, incurred in connection with
the issue, sale, underwriting, redemption, or repurchase of shares; the expenses
of and fees for registering or qualifying securities for sale; the fees and
expenses of the Trustees of the Trust who are not affiliated with Schroder; the
cost of preparing and distributing reports and notices to shareholders; public
and investor relations expenses; and fees and disbursements of custodians of the
Fund's assets. The Trust is also responsible for its expenses incurred in
connection with litigation, proceedings, and claims and the legal obligation it
may have to indemnify its officers and Trustees with respect thereto.
Schroder's compensation under the Advisory Agreement may be reduced in any
year if the Fund's expenses exceed the limits on investment company expenses
imposed by any statute or regulatory authority of any jurisdiction in which
shares of the Fund are qualified for offer or sale.
The Advisory Agreement may be terminated without penalty by vote of the
Trustees, by the shareholders of the Fund, or by Schroder on 60 days' written
notice. The Advisory Agreement also terminates without payment of any penalty in
the event of its assignment. In addition, the Advisory Agreement may be amended
only by a vote of the shareholders of the Fund, and the Advisory Agreement
provides that it will continue in effect from year to year only so long as such
continuance is approved at least annually with respect to the Fund by vote of
either the Trustees or the shareholders of the Fund, and, in either case, by a
majority of the Trustees who are not "interested persons" of Schroder. In each
of the foregoing cases, the vote of the shareholders is the affirmative vote of
a "majority of the outstanding voting securities" as defined in the Investment
<PAGE>
Company Act of 1940.
THE PORTFOLIOS
The Fund currently invests all of its assets in the Portfolios, which
together have substantially the same investment objective and substantially the
same investment policies as the Fund. The Fund may withdraw its investment from
either Portfolio at any time if the Trust's Board of Trustees determines that it
is in the best interests of the Fund and its shareholders to do so. In that
event, the Fund would pay Schroder 0.90% of the Fund's average daily net assets
managed by Schroder directly at the Fund level.
Schroder is the investment advisor to the Portfolios pursuant to an
investment advisory agreement (the "Portfolio Advisory Agreement") between
Schroder and Schroder Capital Funds, on behalf of the Portfolios. The Portfolio
Advisory Agreement provides that Schroder is entitled to receive monthly
advisory fees at the annual rates of 0.70% and 0.55%, respectively, of Schroder
Asian Growth Fund Portfolio and Schroder Japan Portfolio. The Portfolio Advisory
Agreement is the same in all material respects as the Investment Advisory
Agreement between the Trust on behalf of the Fund and Schroder. The Fund bears a
proportionate part of the management fees paid by each Portfolio (based on the
percentage of each Portfolio's assets attributable to the Fund).
RECENT MANAGEMENT FEES. Of the total management fees paid by the Portfolios
to Schroders, the portion borne indirectly by the Fund during the three most
recent fiscal years is set forth in the following table. The fees listed in the
table reflect reductions pursuant to expense limitations in effect during such
periods.
<TABLE>
<S> <C> <C>
- ------------------------------ ---------------------------- ---------------------------
Management Fees Paid for Management Fees Paid for Management Fees Paid for
Fiscal Year Ended 10/31/98* Fiscal Year Ended 10/31/97 Fiscal Year Ended
(closed-end fund) 10/31/96 (closed-end fund)
- ------------------------------ ---------------------------- ---------------------------
- ------------------------------ ---------------------------- ---------------------------
$610,561 $2,597,793 $
- ------------------------------ ---------------------------- ---------------------------
</TABLE>
*Prior to March 20, 1998, the Fund had a similar investment advisory
agreement with Schroder which provided for a monthly fee at the annual rate of
(1) 1.00% of the Fund's average weekly net assets up to and including $300
million, and (2) 0.85% of the Fund's average weekly net assets in excess of $300
million. The Fund paid or accrued fees to Schroder of $536,538 for the period
prior to the March 20, 1998 conversion of the Fund from a closed-end fund.
FEE WAIVERS
Schroder voluntarily waived its fees in the following amounts during the
three most recent fiscal years pursuant to voluntary expense limitations and/or
waivers in effect during such periods. The portion of the amounts waived with
respect to the management fees indirectly borne by the Fund are as follows:
- ------------------------------
Fees Waived During Fiscal
Year Ended 10/31/98
- ------------------------------
<PAGE>
- ------------------------------
$74,023
- ------------------------------
ADMINISTRATIVE SERVICES
On behalf of the Fund, the Trust has entered into an administration
agreement with Schroder Fund Advisors Inc., under which Schroder Fund Advisors
Inc. provides management and administrative services necessary for the operation
of the Fund, including: (1) preparation of shareholder reports and
communications; (2) regulatory compliance, such as reports to and filings with
the SEC and state securities commissions; and (3) general supervision of the
operation of the Fund, including coordination of the services performed by its
investment adviser, transfer agent, custodian, independent accountants, legal
counsel and others. Schroder Fund Advisors Inc. is a wholly owned subsidiary of
Schroder and is a registered broker-dealer organized to act as administrator and
distributor of mutual funds.
For providing administrative services Schroder Fund Advisors Inc. is
entitled to receive a monthly fee at the annual rate of 0.05% of the Fund's
average daily net assets. The administration agreement is terminable with
respect to the Fund without penalty, at any time, by the Trustees upon 60 days'
written notice to Schroder Fund Advisors Inc. or by Schroder Fund Advisors Inc.
upon 60 days' written notice to the Trust.
The Trust has entered into a subadministration agreement with FAdS. Under
its agreement, FAdS assists Schroder Fund Advisors Inc. with certain of its
responsibilities under the administration agreement, including shareholder
reporting and regulatory compliance. For providing its services, FAdS is
entitled to receive a monthly fee from the Fund at the annual rate of 0.05% of
the Fund's average daily net assets. The subadministration agreement is
terminable with respect to the Fund without penalty, at any time, by the Trust
upon 60 days' written notice to FAdS or by FAdS upon 60 days' written notice to
the Trust.
Schroder Fund Advisors Inc. and FAdS provide similar services to each
Portfolio, for which each is entitled to a monthly fee at the annual rate of
0.05% of each Portfolio's average daily net assets.
During the three most recent fiscal years, the Fund paid the following
fees to Schroder Fund Advisors Inc. and FAdS pursuant to the administration
agreement and the subadministration agreement. The fees listed in the following
table reflect reductions pursuant to fee waivers and expense limitations in
effect during such periods.
<TABLE>
<S> <C> <C>
- ------------------------------ ---------------------------- ---------------------------
Administrative Fees Paid for Administrative Fees Paid for Administrative Fees Paid for
Fiscal Year Ended 10/31/98* Fiscal Year Ended 10/31/97 Fiscal Year Ended 10/31/96
- ------------------------------ ---------------------------- ---------------------------
- ------------------------------ ---------------------------- ---------------------------
Schroder Fund Advisors Inc. Princeton Administrators, Princeton Administrators
$152,641 L.P. $575,461 L.P. $
FAdS $18,506
- ------------------------------ ---------------------------- ---------------------------
</TABLE>
<PAGE>
Prior to March 20, 1998, the Fund retained Princeton Administrators,
L.P. ("Princeton") as administrator. Pursuant to its administration agreement
with the Fund, Princeton received a monthly fee equal to the greater of (a)
$150,000 per annum or (b) an annual rate of (1) 0.25% of the Fund's average
weekly net assets up to and including $300 million, and (2) 0.22% of the Fund's
average weekly net assets in excess of $300 million. The Fund paid or accrued
fees to Princeton of $134,135 for the period November 1, 1998 through March 20,
1998.
DISTRIBUTOR
Pursuant to a Distribution Agreement with the Trust, Schroder Fund
Advisors Inc. (the "Distributor"), 787 Seventh Avenue, New York, New York 10019,
serves as the distributor for the Trust's continually offered shares. The
Distributor pays all of its own expenses in performing its obligations under the
Distribution Agreement. The Distributor is not obligated to sell any specific
amount of shares of the Fund. See "Administrative Services" for ownership
information regarding the Distributor.
SHAREHOLDER SERVICING PLAN FOR CLASS A SHARES. The Fund has also adopted
a Shareholder Servicing Plan (the "Service Plan") for its Class A Shares. Under
the Service Plan, the Fund pays fees to the Distributor at an annual rate of up
to 0.25% of the average daily net assets of the Fund attributable to its Class A
Shares. The Distributor may enter into shareholder service agreements with
Service Organizations pursuant to which the Service Organizations provide
administrative support services to their customers who are Fund shareholders.
In return for providing these support services, a Service Organization
may receive payments from the Distributor at a rate not exceeding 0.25% of the
average daily net assets of the Class A Shares of the Fund for which the Service
Organization is the Service Organization of record. These administrative
services may include, but are not limited to, the following functions:
establishing and maintaining accounts and records relating to clients of the
Service Organization; answering shareholder inquiries regarding the manner in
which purchases, exchanges, and redemptions of Class A Shares of the Trust may
be effected and other matters pertaining to the Trust's services; providing
necessary personnel and facilities to establish and maintain shareholder
accounts and records; assisting shareholders in arranging for processing
purchase, exchange, and redemption transactions; arranging for the wiring of
funds; guaranteeing shareholder signatures in connection with redemption orders
and transfers and changes in shareholder-designated accounts; integrating
periodic statements with other customer transactions; and providing such other
related services as the shareholder may request. Some Service Organizations may
impose additional conditions or fees, such as requiring clients to invest more
than the minimum amounts required by the Trust for initial or subsequent
investments or charging a direct fee for services. Such fees would be in
addition to any amounts which might be paid to the Service Organization by the
Distributor.
Please contact your Service Organization for details.
The following table shows the aggregate amounts paid by the Trust to the
Distributor under the Service Plan during the three most recent fiscal years.
All of such amounts were, in turn, repaid by the Distributor to Service
Organizations.
<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------ ---------------------------- ---------------------------
Fees Paid Pursuant to Fees Paid Pursuant to Fees Paid Pursuant to
Service Plan During Fiscal Service Plan During Fiscal Service Plan During
Year Ended 10/31/98 Year Ended 10/31/97 Fiscal Year Ended 10/31/96
- ------------------------------ ---------------------------- ---------------------------
- ------------------------------ ---------------------------- ---------------------------
$ $ $
- ------------------------------ ---------------------------- ---------------------------
</TABLE>
FUND ACCOUNTING
Forum Accounting Services, LLC ("Forum Accounting"), an affiliate of
FAdS, performs fund accounting services for the Fund pursuant to an agreement
with the Trust. Under the Accounting Agreement, Forum Accounting prepares and
maintains the books and records of the Fund that are required to be maintained
under the 1940 Act, calculates the net asset value per share of the Fund,
calculates dividends and capital gain distributions, and prepares periodic
reports to shareholders and the SEC.
For its services to the Fund, Forum Accounting is entitled to receive
from the Trust a fee of $36,000 per year plus $12,000 per year for each class of
each Fund above one. Forum Accounting is entitled to an additional $24,000 per
year for global and international funds, and an additional $12,000 per year with
respect to tax-free money market funds, funds with more than 25% of their total
assets invested in asset-backed securities, funds that have more than 100
security positions, and funds that have a monthly turnover rate of 10% or more.
The tables below show the amount of fees paid by the Fund to Forum
Accounting during the three most recent fiscal years (or such shorter time the
Fund has been operational).
- ------------------------------
Accounting Fees Paid During
Fiscal Year Ended 10/31/98
- ------------------------------
- ------------------------------
$7,290
- ------------------------------
EXPENSES
The Fund bears all costs of its operations other than expenses
specifically assumed by Schroder, Schroder Fund Advisors Inc. or FAdS. The costs
borne by the Fund include legal and accounting expenses; Trustees' fees and
expenses; insurance premiums; custodian and transfer agent fees and expenses;
expenses of registering and qualifying the Fund's shares for sale with the SEC
and with various state securities commissions; expenses of obtaining quotations
on portfolio securities and pricing of the Fund's shares; expenses of
maintaining the Trust's and the Fund's legal existence and of shareholders'
meetings; and expenses of preparation and distribution to existing shareholders
of reports, proxies and prospectuses. For assets invested in a Portfolio, the
Fund also bears its ratable share of the Portfolio's expenses, including any
investment advisory shares payable to Schroder. From
<PAGE>
time to time, Schroder, Schroder Fund Advisors Inc. or FAdS may waive
voluntarily all or a portion of its fees.
BROKERAGE ALLOCATION AND OTHER PRACTICES
Schroder may place portfolio transactions with broker-dealers which
furnish, without cost, certain research, statistical, and quotation services of
value to Schroder and its affiliates in advising the Trust and other clients,
provided that it shall always seek best price and execution with respect to
transactions. Certain investments may be appropriate for the Trust and for other
clients advised by Schroder. Investment decisions for the Trust and other
clients are made with a view to achieving their respective investment objectives
and after consideration of such factors as their current holdings, availability
of cash for investment, and the size of their investments generally. Frequently,
a particular security may be bought or sold for only one client or in different
amounts and at different times for more than one but less than all clients.
Likewise, a particular security may be bought for one or more clients when one
or more other clients are selling the security. In addition, purchases or sales
of the same security may be made for two or more clients of Schroder on the same
day. In such event, such transactions will be allocated among the clients in a
manner believed by Schroder to be equitable to each. In some cases, this
procedure could have an adverse effect on the price or amount of the securities
purchased or sold by the Trust. Purchase and sale orders for the Trust may be
combined with those of other clients of Schroder in the interest of achieving
the most favorable net results for the Trust.
BROKERAGE AND RESEARCH SERVICES. Transactions on U.S. stock exchanges
and other agency transactions involve the payment by the Trust of negotiated
brokerage commissions. Such commissions vary among different brokers. Also, a
particular broker may charge different commissions according to such factors as
the difficulty and size of the transaction. Transactions in foreign securities
often involve the payment of fixed brokerage commissions, which are generally
higher than those in the United States, and therefore certain portfolio
transaction costs may be higher than the costs for similar transactions executed
on U.S. securities exchanges. There is generally no stated commission in the
case of securities traded in the over-the-counter markets, but the price paid by
the Trust usually includes an undisclosed dealer commission or mark-up. In
underwritten offerings, the price paid by the Trust includes a disclosed, fixed
commission or discount retained by the underwriter or dealer.
Schroder places all orders for the purchase and sale of portfolio
securities and buys and sells securities through a substantial number of brokers
and dealers. In so doing, it uses its best efforts to obtain the best price and
execution available. In seeking the best price and execution, Schroder considers
all factors it deems relevant, including price, the size of the transaction, the
nature of the market for the security, the amount of the commission, the timing
of the transaction (taking into account market prices and trends), the
reputation, experience, and financial stability of the broker-dealer involved,
and the quality of service rendered by the broker-dealer in other transactions.
It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive research, statistical, and quotation services from broker-dealers
that execute portfolio transactions for the clients of such advisers. Consistent
with this practice, Schroder receives research, statistical, and quotation
services from many
<PAGE>
broker-dealers with which it places the Trust's portfolio transactions. These
services, which in some cases may also be purchased for cash, include such
matters as general economic and security market reviews, industry and company
reviews, evaluations of securities, and recommendations as to the purchase and
sale of securities. Some of these services are of value to Schroder and its
affiliates in advising various of their clients (including the Trust or a
Portfolio), although not all of these services are necessarily useful and of
value in managing the Fund or a Portfolio. The investment advisory fee paid by
the Fund or the Portfolios is not reduced because Schroder and its affiliates
receive such services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, as
amended, and by the Advisory Agreements and the Portfolio Advisory Agreement,
Schroder may cause the Fund or the Portfolios to pay a broker that provides
brokerage and research services to Schroder an amount of disclosed commission
for effecting a securities transaction for the Fund or the Portfolios in excess
of the commission which another broker would have charged for effecting that
transaction. Schroder's authority to cause the Fund or the Portfolios to pay any
such greater commissions is also subject to such policies as the Trustees (or
the Trustees of Schroder Capital Funds, in the case of the Portfolio) may adopt
from time to time.
To the extent permitted by law, the Fund or the Portfolios may engage in
brokerage transactions with Schroder & Co. Inc. ("Schroder & Co."), an affiliate
of Schroder, to effect securities transactions on the New York Stock Exchange
only or Schroder Securities Limited and its affiliates (collectively, "Schroder
Securities"), affiliates of Schroder, to effect securities transactions on
various foreign securities exchanges on which Schroder Securities has trading
privileges. Consistent with regulations under the 1940 Act, the Fund and the
Portfolios have adopted procedures which are reasonably designed to provide that
any commissions or other remuneration the Fund or the Portfolios pay to Schroder
& Co. and Schroder Securities do not exceed the usual and customary broker's
commission. In addition, the Fund and the Portfolios will adhere to the rule,
under the Securities Exchange Act of 1934, governing floor trading. This rule
permits the Fund and the Portfolios to effect, but not execute, exchange listed
securities transactions with Schroder & Co. Schroder & Co. pays a portion of the
brokerage commissions it receives from the Fund or a Portfolios to the brokers
executing the transactions. Also, due to securities law limitations, the Fund or
the Portfolios may be required to limit purchases of securities in a public
offering if Schroder & Co. or Schroder Securities or one of their affiliates is
a member of the syndicate for that offering.
Neither the Fund nor either Portfolio has any understanding or
arrangement to direct any specific portion of its brokerage to Schroder & Co. or
Schroder Securities, and none will direct brokerage to Schroder & Co. or
Schroder Securities in recognition of research services.
The following table shows the aggregate brokerage commissions paid for
the three most recent fiscal years with respect to the Fund. The amounts listed
represent aggregate brokerage commissions paid by the Portfolios.
<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------ ---------------------------- ---------------------------
Brokerage Commissions Paid Brokerage Commissions Paid Brokerage Commissions
During Fiscal Year Ended During Fiscal Year Ended Paid During Fiscal Year
10/31/98 10/31/97 Ended 10/31/96
- ------------------------------ ---------------------------- ---------------------------
- ------------------------------ ---------------------------- ---------------------------
$ $ $
- ------------------------------ ---------------------------- ---------------------------
</TABLE>
In the fiscal year ended October 31, 1998, Schroder, on behalf of the
Trust, placed agency and underwritten transactions having an approximate
aggregate dollar value of $________, (___% of the Trust's aggregate agency and
underwritten transactions, on which approximately $_______ of commissions were
paid) with brokers and dealers (other than Schroder & Co. and Schroder
Securities) whose research, statistical, and quotation services Schroder
considered to be particularly useful to it and its affiliates. However, many of
such transactions were placed with such brokers and dealers without regard to
the furnishing of such services.
The following table shows the aggregate brokerage commissions paid to
Schroder & Co. and Schroder Securities for the three most recent fiscal years,
as well as the percentage such commissions represented of all transactions on
which the Fund paid brokerage commissions during such fiscal year. The amounts
listed represent aggregate brokerage commissions paid by the Portfolios.
<TABLE>
<S> <C> <C>
- ------------------------------ ---------------------------- ---------------------------
Brokerage Commissions Paid Brokerage Commissions Paid Brokerage Commissions
During Fiscal Year Ended During Fiscal Year Ended Paid During Fiscal Year
10/31/98 10/31/97 Ended 10/31/96
- ------------------------------ ---------------------------- ---------------------------
- ------------------------------ ---------------------------- ---------------------------
Schroder & Co. $ (%) Schroder & Co. $ (%) Schroder & Co. $ (%)
Schroder Securities $ (%) Schroder Securities $ (%) Schroder Securities $ (%)
- ------------------------------ ---------------------------- ---------------------------
</TABLE>
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of shares of each Fund is
determined daily as of the close of trading on the New York Stock Exchange
(normally 4:00 p.m., Eastern Time) on each day the Exchange is open for trading.
Any assets or liabilities initially expressed in terms of foreign currencies are
translated into U.S. dollars at the prevailing market rates as quoted by one or
more banks or dealers on the afternoon of valuation. The New York Stock Exchange
is normally closed on the following national holidays: New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving, and Christmas.
The Trustees have established procedures for the valuation of the Fund's
securities, as follows: Equity securities listed or traded on a domestic or
foreign stock exchange are valued at their latest sale prices on such exchange
on that day prior to the time when the assets are valued. In the absence of
sales that day, such securities are valued at the mid-market prices. (Where the
securities are traded on more than one exchange, they are valued on the exchange
that Schroder designates as the primary market.) Unlisted securities for which
over-the-counter market quotations are readily available are valued at the
latest available mid-market prices prior to the time of valuation. Securities
that do not
<PAGE>
have readily available market quotations are valued at fair value pursuant to
procedures established by the Trustees. Debt securities having a maturity of
more than 60 days are valued at the mid-market prices determined by a portfolio
pricing service or obtained from active market makers on the basis of reasonable
inquiry. Short-term debt securities having a remaining maturity of 60 days or
less are valued at cost, adjusted for amortization of premiums and accretion of
discounts.
If any securities held by the Fund are restricted as to resale, their
fair value is generally determined as the amount which the Trust could
reasonably expect to realize from an orderly disposition of such securities over
a reasonable period of time. The valuation procedures applied in any specific
instance are likely to vary from case to case. However, consideration is
generally given to the financial position of the issuer and other fundamental
analytical data relating to the investment and to the nature of the restrictions
on disposition of the securities (including any registration expenses that might
be borne by the Trust in connection with such disposition). In addition,
specific factors are also generally considered, such as the cost of the
investment, the market value of any unrestricted securities of the same class
(both at the time of purchase and at the time of valuation), the size of the
holding, the prices of any recent transactions or offers with respect to such
securities, and any available analysts' reports regarding the issuer.
Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of the New
York Stock Exchange. The values of these securities used in determining the net
asset value of the Trust's shares are computed as of such times. Also, because
of the amount of time required to collect and process trading information as to
large numbers of securities issues, the values of certain securities (such as
convertible bonds and U.S. Government Securities) are determined based on market
quotations collected earlier in the day at the latest practicable time prior to
the close of the Exchange. Occasionally, events affecting the value of such
securities may occur between such times and the close of the Exchange which will
not be reflected in the computation of the Trust's net asset value. If events
materially affecting the value of such securities occur during such period, then
these securities will be valued at their fair value, in the manner described
above.
The proceeds received by the Fund for each issue or sale of its shares,
and all income, earnings, profits, and proceeds thereof, subject only to the
rights of creditors, will be specifically allocated to the Fund, and constitute
the underlying assets of the Fund. The underlying assets of the Fund will be
segregated on the Trust's books of account, and will be charged with the
liabilities in respect of the Fund and with a share of the general liabilities
of the Trust. The Fund's assets will be further allocated among its constituent
classes of shares on the Trust's books of account.
SALES AT NET ASSET VALUE
As noted in the Prospectus, certain investors may purchase Class A
Shares at net asset value without imposition of sales charges. The following
classes of investors qualify to do so: (1) trustees or other fiduciaries
purchasing shares for employee benefit plans which are sponsored by
organizations with at least 100 employees; (2) current or retired Trustees,
directors, and officers of the investment companies for which Schroder serves as
investment adviser; employees or retired employees of Schroder or its
affiliates; the spouses, children, siblings, and parents of the persons listed
in this clause (2); and trusts primarily for the benefit of such persons; (3)
registered representatives or full-time
<PAGE>
employees of broker-dealers that have entered into dealer or shareholder
servicing agreements with Schroder Fund Advisors Inc., and the spouses,
children, siblings, and parents of such persons; and full-time employees of
financial institutions that directly, or indirectly through their affiliates,
have entered into dealer agreements with Schroder Fund Advisors Inc. (or that
otherwise have an arrangement with respect to sales of Fund shares with a
broker-dealer that has entered into a dealer agreement with Schroder Fund
Advisors Inc.) and the spouses, children, siblings, and parents of such
employees; (4) companies exchanging shares with or selling assets to the Fund
pursuant to a merger, acquisition, or exchange offer (or similar transaction);
(5) registered investment advisers and bank trust departments exercising
discretionary investment authority with respect to the assets invested in the
Fund; (6) persons participating in a "wrap account" or similar fee-based program
sponsored and maintained by a registered broker-dealer which has entered into an
agreement with Schroder Fund Advisors Inc.; (7) clients of administrators of
tax-qualified employee benefit plans which have entered into agreements with
Schroder Fund Advisors Inc.; and (8) retirement plan participants who borrow
from their retirement accounts by redeeming shares of the Fund and subsequently
repay such loans by purchasing Fund shares.
REDEMPTIONS IN KIND
The Trust has agreed to redeem shares of the Fund solely in cash up to
the lesser of $250,000 or 1% of the Fund's net assets during any 90-day period
for any one shareholder. In consideration of the best interests of the remaining
shareholders, the Trust may pay certain redemption proceeds exceeding this
amount in whole or in part by a distribution in kind of securities held by the
Fund in lieu of cash. The Trust does not expect to redeem shares in kind under
normal circumstances. If your shares are redeemed in kind, you should expect to
incur transaction costs upon the disposition of the securities received in the
distribution.
TAXES
The Fund intends to qualify each year and elect to be taxed as a
regulated investment company under Subchapter M of the United States Internal
Revenue Code of 1986, as amended (the "Code").
As a regulated investment company qualifying to have its tax liability
determined under Subchapter M, the Fund will not be subject to federal income
tax on any of its net investment income or net realized capital gains that are
distributed to shareholders.
In order to qualify as a "regulated investment company," the Fund must,
among other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other dispositions of stock, securities, or foreign currencies, and other income
(including gains from options, futures, or forward contracts) derived with
respect to its business of investing in such stock, securities, or currencies,
and (b) diversify its holdings so that, at the close of each quarter of its
taxable year, (i) at least 50% of the value of its total assets consists of
cash, cash items, U.S. Government Securities, and other securities limited
generally with respect to any one issuer to not more than 5% of the total assets
of the Fund and not more than 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its assets is invested in the
securities of any issuer (other than U.S. Government Securities).
<PAGE>
If the Fund fails to distribute in a calendar year substantially all of
its ordinary income for such year and substantially all of its capital gain net
income for the one-year period ending October 31 (or later if the Fund is
permitted so to elect and so elects), plus any retained amount from the prior
year, that Fund will be subject to a 4% excise tax on the undistributed amounts.
A dividend paid to shareholders by the Fund in January of a year generally is
deemed to have been paid by the Fund on December 31 of the preceding year, if
the dividend was declared and payable to shareholders of record on a date in
October, November, or December of that preceding year. The Fund intends
generally to make distributions sufficient to avoid imposition of the 4% excise
tax. In order to receive the favorable tax treatment accorded regulated
investment companies and their shareholders, moreover, the Fund must in general
distribute with respect to each taxable year at least 90% of the sum of its
taxable net investment income, its net tax-exempt income, and, the excess, if
any, of net short-term capital gains over net long-term capital losses for such
year.
The Fund's distributions will be taxable to you as ordinary income to
the extent derived from the Fund's investment income and net short-term gains
(that is, net gains from capital assets held for no more than one year).
Distributions designated by the Fund as deriving from net gains on capital
assets held for more than one year will be taxable to you as long-term capital
gains (generally subject to a 20% tax rate), regardless of how long you have
held the shares. Distributions will be taxable to you as described above whether
received in cash or in shares through the reinvestment of distributions. Early
in each year the Trust will notify each shareholder of the amount and tax status
of distributions paid to the shareholder by the Fund for the preceding year.
Upon the disposition of shares of the Fund (whether by sale, exchange,
or redemption), a shareholder will realize a gain or loss. Such gain or loss
will be capital gain or loss if the shares are capital assets in the
shareholder's hands, and will be long-term or short-term generally depending
upon the shareholder's holding period for the shares. Long-term capital gains
will generally be taxed at a federal income tax rate of 20%. Any loss realized
by a shareholder on a disposition of shares held by the shareholder for six
months or less will be treated as a long-term capital loss to the extent of any
distributions of capital gain dividends received by the shareholder with respect
to such shares. In general, any loss realized upon a taxable disposition of
shares will be treated as long-term capital loss if the shares have been held
for more than one year, and otherwise as short-term capital loss. With respect
to investment income and gains received by the Fund from sources outside the
United States, such income and gains may be subject to foreign taxes which are
withheld at the source. The effective rate of foreign taxes in which the Fund
will be subject depends on the specific countries in which its assets will be
invested and the extent of the assets invested in each such country and,
therefore, cannot be determined in advance.
The Fund's ability to use options, futures, and forward contracts and
other hedging techniques, and to engage in certain other transactions, may be
limited by tax considerations. The Fund's transactions in
foreign-currency-denominated debt instruments and its hedging activities will
likely produce a difference between its book income and its taxable income. This
difference may cause a portion of the Fund's distributions of book income to
constitute returns of capital for tax purposes or require the Fund to make
distributions exceeding book income in order to permit the Trust to continue to
qualify, and be taxed under Subchapter M of the Code, as a regulated investment
company. The tax consequences of certain hedging transactions have been modified
by the Taxpayer Relief Act of 1997.
<PAGE>
Under federal income tax law, a portion of the difference between the
purchase price of zero-coupon securities in which the Fund has invested and
their face value ("original issue discount") is considered to be income to the
Fund each year, even though the Fund will not receive cash interest payments
from these securities. This original issue discount (imputed income) will
comprise a part of the net investment income of the Fund which must be
distributed to shareholders in order to maintain the qualification of the Fund
as a regulated investment company and to avoid federal income tax at the level
of the Fund.
This discussion of the federal income tax and state tax treatment of the
Trust and its shareholders is based on the law as of the date of this SAI.
PRINCIPAL HOLDERS OF SECURITIES
As of December 29, 1998, the Trustees of the Trust and, except a noted
below, the officers of the Trust, as a group owned less than 1% of the
outstanding shares of either class of each Fund.
The following table lists those shareholders that owned 5% or more of
the shares of each Fund as of December 29, 1998, and therefore are controlling
persons of such Fund. Because these shareholders hold a substantial number of
shares, they may be able to require that the Trust hold special shareholder
meetings and may be able to determine the outcome of any shareholder vote.
<TABLE>
<S> <C> <C>
NUMBER OF % OF SHARES
A SHARES OF FUND
CLASS OWNED
SCHRODER ALL-ASIA FUND
- --------------------------------------------------- ----------------- --- ------------------
Merrill Lynch Pierce Fenner & Smith
101 Hudson Street
Jersey City, New Jersey 07302-3915 34.92%
1,958,170.247
Paine Webber Incorporated
1000 Harbor Blvd.
Weehawken, New Jersey 07087-6970 5.23%
293,245.000
</TABLE>
PERFORMANCE INFORMATION
Average annual total return of a class of shares of the Fund for one-,
five-, and ten-year periods (or for such shorter periods as shares of that class
of shares of the Fund have been offered) is determined by calculating the actual
dollar amount of investment return on a $1,000 investment in that class of
shares at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount. Total return for a
period of one year or less is equal to the actual return during that period.
Total return calculations assume reinvestment of all Fund distributions at net
asset value on their respective reinvestment dates. Total return may be
presented for other periods.
<PAGE>
ALL PERFORMANCE DATA IS BASED ON PAST INVESTMENT RESULTS AND DOES NOT
PREDICT FUTURE PERFORMANCE. The Fund is the successor to Schroder Asian Growth
Fund, Inc., a closed-end management investment company that commenced operations
on December 23, 1993. Total return data relating to the Fund includes data
relating to Schroder Asian Growth Fund, Inc. for periods prior to the
commencement of the Fund's operations. The Fund's investment performance will be
affected by a number of factors, including its investment objective and
policies, fees, expenses, applicable sales charges, the size of the Fund, cash
flows into and out of the Fund, and market conditions. Investment performance
for a mutual fund also often reflects the risks associated with the fund's
investment objectives and policies. Quotations of total return for any period
when an expense limitation is in effect will be greater than if the limitation
had not been in effect. These factors should be considered when comparing the
investment results of the Fund's Class A shares to those of various classes of
other mutual funds and other investment vehicles. The Fund's performance may be
compared to various indices.
Although the investment objectives and policies of Schroder Asian Growth
Fund Inc. were substantially the same of those of the Fund, there can be no
assurance that the investment performance of Schroder Asian Growth Fund, Inc. is
indicative of the investment performance the Fund will achieve, and differences
among the factors outlined above and other factors will affect the performance
of the Fund relative to the historical performance of Schroder Asian Growth
Fund, Inc. For example:
o As an open-end investment company, the Fund must invest
most of its assets in liquid securities in order to
meet possible shareholder redemption requests.
Schroder's investment decisions for the Fund may at
times be affected by the cash flows, or anticipated
cash flows, into or out of the Fund. As a closed-end
company, Schroder Asian Growth Fund, Inc. was not
subject to this factor.
o The performance data listed in the table below reflects
the deduction at the beginning of each period of an
initial sales load of 5.25%, the maximum sales load
applicable to the Fund, and does not reflect the
underwriting discount applicable to the initial
offering of shares by Schroder Asian Growth Fund, Inc.
o The operating expenses incurred by Schroder Asian
Growth Fund, Inc. for the period prior to its
reorganization into the Fund were less than those the
Fund expects to incur during its current fiscal year.
For example, total fund operating expenses of Schroder
Asian Growth Fund, Inc. for its fiscal year ended
October 31, 1997 were 1.78%; the Fund's total fund
operating expenses for the current fiscal year will be
1.95% (or, in the absence of applicable fee waivers,
are currently expected to be 2.49%). The performance
information of Schroder Asian Growth Fund, Inc. has not
been restated to reflect differences in the operating
expenses incurred by it and those expected to be
incurred by the Fund. If Schroder Asian Growth Fund,
Inc. had incurred operating expenses at the same rate
as the Fund is expected to incur expenses during the
current fiscal year, its total return would have been
lower than that shown above.
<PAGE>
The table below sets forth the total return of Class A Shares of the
Fund for most recent fiscal year (which includes data relating to Schroder Asian
Growth Fund, Inc. for period prior to March 23, 1998, the Fund's inception date)
and for the period from the commencement of the Schroder Asian Growth Fund,
Inc.'s operations until October 31, 1998. The table also sets forth total return
information for the Fund's Class A Shares since inception of the Fund.
TOTAL RETURN FOR PERIODS ENDED OCTOBER 31, 1998
<TABLE>
<S> <C> <C> <C> <C> <C>
- -------------------- ------------ ----------- ------------------------- ------------------ ----------------
SINCE INCEPTION
OF SCHRODER ASIAN INCEPTION DATE INCEPTION DATE
CLASS 1 YEAR 5 YEARS GROWTH FUND, INC. OF FUND OF CLASS
(12/23/93)
(ANNUALIZED)
- -------------------- ------------ ----------- ------------------------- ------------------ ----------------
- -------------------- ------------ ----------- ------------------------- ------------------ ----------------
Class A Shares -25.59% N/A% -14.45% 3/23/98 3/23/98
- -------------------- ------------ ----------- ------------------------- ------------------ ----------------
</TABLE>
From time to time, Schroder, FAdS or any of their affiliates that provide
services to the Fund may reduce their compensation or assume expenses of the
Fund in order to reduce the Fund's expenses, as described in the Trust's current
Prospectus. Any such waiver or assumption would increase the Fund's total return
for each class of shares during the period of the waiver or assumption.
THE PORTFOLIOS
Each of the Portfolios is a separate series of Schroder Capital Funds, an
open-end management investment company. Schroder Capital Funds is a business
trust organized under the laws of the State of Delaware.
The Fund's investment in the Portfolios is in the form of a
non-transferable beneficial interest. The Portfolios may have other investors,
each of whom will invest on the same conditions as the related Fund and will pay
a proportionate share of the Portfolio's expenses.
The Portfolios normally will not hold meetings of investors except as
required by the 1940 Act. Each investor in a Portfolio is entitled to vote in
proportion to its relative beneficial interest in the Portfolio. If the
Portfolio has investors other than the Fund, there can be no assurance that any
issue that receives a majority of the votes cast by Fund shareholders will
receive a majority of votes cast by all Portfolio shareholders. If other
investors hold a majority interest of a Portfolio, they could have voting
control of the Portfolio.
<PAGE>
The Portfolios do not sell their shares directly to the public. Another
investor (such as an investment company) in a Portfolio that might sell its
shares to the public would not be required to sell its shares at the same
offering price as the Fund, and could have different fees and expenses than the
Fund. Therefore, the Fund's shareholders may have different returns than
shareholders of another investment company that invests in the Portfolio.
The investors in each Portfolio, including the related Fund, have agreed to
indemnify Schroder Capital Funds, and such trust's trustees and officers,
against certain claims.
CERTAIN RISKS OF INVESTING IN THE PORTFOLIOS. The Fund's investment in the
Portfolios may be affected by the actions of other large investors in the
Portfolios, if any. For example, if a Portfolio has a large investor other than
the Fund and that investor redeems its interests in the Portfolio, the
Portfolio's remaining investors (including the Fund) might bear a larger portion
of the Portfolio's operating expenses. This would result in lower returns for
the Fund.
The Fund may withdraw its entire investment from the Portfolios at any
time, if the Trustees determine that it is in the best interests of the Fund and
its shareholders to do so. Such a withdrawal may result in a distribution in
kind of portfolio securities by a Portfolio, which could adversely affect the
liquidity of the Fund's assets. If the Fund converted those securities to cash,
it would likely incur brokerage fees or other transaction costs. In the event
that the Fund withdraws its entire investment from a Portfolio, the Fund's
inability to find a suitable replacement investment could have a significant
negative impact on the Fund's shareholders.
Each investor in a Portfolio, including the Fund, may be liable for all
obligations of the Portfolio. The risk that this would cause an investor
financial loss, however, is limited to circumstances in which the Portfolio
would be unable to meet its obligations. Schroder considers this risk to be
remote. Upon liquidation of the Portfolio, investors in the Portfolio (including
the Fund) would be entitled to share pro rata in the Portfolio's net assets
available for distribution to investors.
CUSTODIAN
The Chase Manhattan Bank, through its Global Custody Division located at
125 London Wall, London EC2Y 5AJ, United Kingdom, acts as custodian of the
assets of the Fund and the Portfolios. The custodian's responsibilities include
safeguarding and controlling the Fund's cash and securities, handling the
receipt and delivery of securities, and collecting interest and dividends on the
Fund's investments. The custodian does not determine the investment policies of
the Fund or decide which securities the Fund will buy or sell.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Boston Financial Data Services, Inc., P.O. Box 8507, Boston,
Massachusetts 02266-8507, is the Fund's transfer agent and dividend disbursing
agent.
<PAGE>
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP, the Trust's independent accountants, provide
audit services, tax return preparation services, and assistance and consultation
in connection with the Trust's various Securities and Exchange Commission
filings. Their address is One Post Office Square, Boston, Massachusetts 02109.
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, Massachusetts 02110-2624,
serves as counsel to the Trust.
SHAREHOLDER LIABILITY
Under Delaware law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Trust's
Trust Instrument disclaims shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each agreement,
obligation, or instrument entered into or executed by the Trust or the Trustees.
The Trust's Trust Instrument provides for indemnification out of the Fund's
property for all loss and expense of any shareholder held personally liable for
the obligations of the Fund. Thus the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Fund would be unable to meet its obligations.
FINANCIAL STATEMENTS
The fiscal year end of the Fund is October 31.
<PAGE>
The following Financial Statements required by Part B and the related
Report of Independent Public Accountants are incorporated herein by reference to
the Trust's Annual Report, dated October 31, 1998, which was filed
electronically with the Securities and Exchange Commission on [date] (Accession
Number:
- --------------).
<PAGE>
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
(a) Trust Instrument of Schroder Series Trust II (see Note 1).
(b) Not Applicable.
(c) See the following Articles and Sections in the Trust Instrument filed
as Exhibit (a): Article II, Sections 2.03, 2.04, 2.06, 2.08, 2.09,
2.10, 2.11, Article III, Section 3.08; Article VII; Article IX; and
Article X, Section 10.03.
(d) Investment Advisory Agreement between the Registrant and Schroder
Capital Management International Inc. dated as of December 9, 1997 (see
Note 2).
(e) Distribution Agreement between the Registrant and Schroder Fund
Advisors Inc. dated as of December 9, 1997 (see Note 2).
(f) Not Applicable.
(g) Global Custody Agreement between the Registrant and The Chase Manhattan
Bank dated as of December 9, 1997 (see Note 2).
(h) (1) Administration Agreement between the Registrant and Schroder Fund
Advisors Inc. dated as of December 9, 1997 (see Note 2).
(2) Subadministration Agreement between the Registrant and Forum
Administrative Services, LLC dated as of December 9, 1997 (see Note 2).
(3) Transfer Agency and Service Agreement between the Registrant and State
Street Bank and Trust Company dated as of March 20, 1998 (see Note 2).
(4) Fund Accounting Agreement between the Registrant and Forum Accounting
Services, LLC (see Note 2).
(i) Opinion and Consent of Smith, Katzenstein & Furlow, LLP, dated March
16, 1998 (see Note 2).
(j) Not Applicable.
(k) Not Applicable
(l) Agreement and Plan of Reorganization between Schroder Asian Growth
Fund, Inc. and the Registrant dated as of March 20, 1998 (see Note 2).
(m) Not Applicable.
(n) Not Applicable.
(o) Not Applicable.
Other Exhibits:
Power of Attorney for Hermann C. Schwab (see Note 1).
Power of Attorney for Clarence F. Michalis (see Note 1).
Power of Attorney for Mark J. Smith (see Note 1).
Power of Attorney for William L. Means (see Note 3).
Power of Attorney for Peter E. Guernsey (see Note 3).
Power of Attorney for John I. Howell (see Note 3).
Power of Attorney for I. Peter Sedgwick (see Note 3).
Power of Attorney for Fergal Cassidy (see Note 3).
Power of Attorney for Louise Croset (see Note 3).
Power of Attorney for David M. Salisbury (see Note 3).
<PAGE>
- ---------------
Note:
1. Exhibit incorporated by reference as filed in initial registration
statement via EDGAR on December 22, 1997, accession number
0001004402-97-000270.
2. Exhibit incorporated by reference as filed in Pre-Effective Amendment No. 1
via EDGAR on March 17, 1998, accession number 0001004402-98-000185.
3. Exhibit incorporated by reference as filed in Post-Effective Amendment No.
1 via EDGAR on August 3, 1998, accession number 0001004402-98-000422.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not Applicable.
ITEM 25. INDEMNIFICATION
Section 10.02 of the Registrant's Trust Instrument reads as follows:
(a) Subject to the exceptions and limitations contained in Subsection
10.02(b): (1) every Person who is, or has been, a Trustee or officer of the
Trust (hereinafter referred to as a "Covered Person") shall be indemnified by
the Trust to the fullest extent permitted by law against liability and against
all expenses reasonably incurred or paid in connection with any claim, action,
suit or proceeding in which he or she becomes involved as a party or otherwise
by virtue of his or her being or having been a Trustee or officer and against
amounts paid or incurred in the settlement thereof; and (2) the words "claim,"
"action," "suit," or "proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including appeals), actual or threatened
while in office or thereafter, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(1) who shall have been adjudicated by a court or body before which the
proceeding was brought: (A) to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office; or (B) not to have
acted in good faith in the reasonable belief that his or her action was in the
best interest of the Trust; or (2) in the event of a settlement, unless there
has been a determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office: (x) by the court or other body
approving the settlement; (y) by at least a majority of those Trustees who are
neither Interested Persons of the Trust nor are parties to the matter based upon
a review of readily available facts (as opposed to a full trial-type inquiry);
or (z) by written opinion of independent legal counsel based upon a review of
readily available facts (as opposed to a full trial-type inquiry); provided,
however, that any Shareholder may, by appropriate legal proceedings, challenge
any such determination by the Trustees or by independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, shall continue as to a Person who has ceased to be a
Covered Person and shall inure to the benefit of the heirs, executors and
administrators of such a Person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Covered Persons,
and other Persons may be entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
Subsection 10.02(a) of this Section 10.02 may be paid by the Trust or Series
from time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will be paid
over by him or her to the Trust or Series if it is ultimately determined that he
or she is not entitled to indemnification under this Section 10.02; provided,
however, that either: (1) such Covered Person shall have provided appropriate
security for such undertaking; (2) the Trust is insured against losses arising
out of any such advance payments; or (3) either a majority of the Trustees who
are neither Interested Persons
<PAGE>
of the Trust nor parties to the matter, or independent legal counsel in a
written opinion, shall have determined, based upon a review of readily available
facts (as opposed to a trial-type inquiry or full investigation), that there is
reason to believe that such Covered Person will be found entitled to
indemnification under Section 10.02.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Schroder Capital Management International, Inc. ("SCMI")
Following is a description of any business, profession, vocation or employment
of a substantial nature in which each investment adviser of the Registrant, and
each trustee or officer of any such investment adviser, is or has been, at any
time during the past two years, engaged for his or her own account or in the
capacity of trustee, officer or employee. The address of each company listed,
unless otherwise noted, is 787 Seventh Avenue, 34th Floor, New York, NY 10019.
Schroder Capital Management International Limited ("Schroder Ltd."), a United
Kingdom affiliate of SCMI, provides investment management services to
international clients located principally in the United Kingdom.
<TABLE>
<S> <C>
<C>
------------------------------------ ------------------------------------ ----------------------------------
Name Title Business Connections
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
David M. Salisbury Chairman, Director SCMI
------------------------------------ ----------------------------------
Chief Executive, Director Schroder Ltd.*
------------------------------------ ----------------------------------
Director Schroders plc.*
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Trustee and Officer Schroder Series Trust II
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Richard R. Foulkes Deputy Chairman, Director SCMI
------------------------------------ ----------------------------------
Deputy Chairman Schroder Ltd.*
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Officer Certain open end management
investment companies for which
SCMI and/or its affiliates
provide investment services
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
John A. Troiano Chief Executive, Director SCMI
------------------------------------
----------------------------------
Chief Executive, Director Schroder Ltd.*
------------------------------------ ----------------------------------
----------------------------------
Officer Certain open end management
investment companies for which
SCMI and/or its affiliates
provide investment services
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Sharon L. Haugh Executive Vice President, Director SCMI
----------------------------------
------------------------------------ ----------------------------------
Director, Chairman Schroder Fund Advisors Inc.
------------------------------------ ----------------------------------
Director Schroder Ltd.*
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Cairman, Director Schroder Capital Management Inc.
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Trustee Certain open end management
investment companies for which
SCMI and/or its affiliates
provide investment services
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Gavin D. L. Ralston Senior Vice President, Managing SCMI
Director
------------------------------------ ----------------------------------
Director Schroder Ltd.*
------------------------------------ ------------------------------------ ----------------------------------
<PAGE>
------------------------------------ ------------------------------------ ----------------------------------
Name Title Business Connections
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Mark J. Smith Senior Vice President, Director SCMI
------------------------------------ ----------------------------------
Senior Vice President, Director Schroder Ltd.*
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Director, Senior Vice President Schroder Fund Advisors Inc.
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Trustee and Officer Certain open end management
investment companies for which
SCMI and/or its affiliates
provide investment services
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Jane P. Lucas Senior Vice President, Director SCMI
------------------------------------ ----------------------------------
Director Schroder Fund Advisors Inc.
------------------------------------ ----------------------------------
Director Schroder Capital Management Inc.
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Officer Certain open end management
investment companies for which
SCMI and/or its affiliates
provide investment services
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
David R. Robertson Group Vice President SCMI
------------------------------------ ----------------------------------
Senior Vice President Schroder Fund Advisors Inc..
----------------------------------
------------------------------------
Director of Institutional Business Oppenheimer Funds, Inc.
resigned 2/98
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Michael M. Perelstein Senior Vice President, Director SCMI
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Senior Vice President, Director Schroders Ltd.*
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Managing Director MacKay Shields Financial
Corporation
resigned 11/96
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Robert G. Davy Senior Vice President, Director SCMI
------------------------------------ ----------------------------------
Director Schroder Ltd.*
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Officer Certain open end management
investment companies for which
SCMI and/or its affiliates
provide investment services
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Louise Croset Senior Vice President, Director SCMI
------------------------------------ ----------------------------------
Senior Vice President Schroder Ltd.*
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Trustee and Officer Schroder Series Trust II
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Abdallah Nauphal Group Vice President, Director SCMI
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Group Vice President, Director Schroder Capital Management Inc.
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Ellen B. Sullivan Group Vice President SCMI
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Director Schroder Capital Management Inc.
------------------------------------ ------------------------------------ ----------------------------------
<PAGE>
------------------------------------ ------------------------------------ ----------------------------------
Name Title Business Connections
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Catherine A. Mazza Group Vice President SCMI
------------------------------------ ----------------------------------
President, Director Schroder Fund Advisors Inc.
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Group Vice President Schroder Capital Management Inc.
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Trustee and Officer Certain open end
management investment companies
for which SCMI and/or its
affiliates provide investment
services.
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Heather Crighton First Vice President, Director SCMI
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
First Vice President, Director Schroder Ltd.*
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Ira Unschuld Group Vice President SCMI
------------------------------------ ----------------------------------
Officer Certain open end management
investment companies for
which SCMI and/or its
affiliates provide investment
services.
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Paul M. Morris Senior Vice President SCMI
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Director Schroder Capital Management Inc.
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
Principal, Senior Portfolio Manager Weiss, Peck & Greer LLC
resigned 12/96
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Susan B. Kenneally First Vice President, Director SCMI
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
First Vice President, Director Schroder Ltd.*
------------------------------------ ------------------------------------ ----------------------------------
------------------------------------ ------------------------------------ ----------------------------------
Jennifer A. Bonathan First Vice President, Director SCMI
------------------------------------ ----------------------------------
------------------------------------ ----------------------------------
First Vice President, Director Schroder Ltd.*
------------------------------------ ------------------------------------ ----------------------------------
</TABLE>
*Schroder Ltd. and Schroders plc. are located at 33 Gutter Lane, London EC2V
8AS, United Kingdom.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) Schroder Fund Advisors Inc., the Registrant's principal underwriter, also
serves as principal underwriter for:
Schroder Series Trust
Schroder Capital Funds (Delaware)
(b) Following is information with respect to each officer and director of
Schroder Fund Advisors, Inc. the Distributor of the shares of Schroder
Emerging Markets Fund Institutional Portfolio, Schroder International
Fund, Schroder Latin American Fund, Schroder Global Asset Allocation
Fund, Schroder U.S. Smaller Companies Fund, Schroder International
Smaller Companies Fund, Schroder U.S. Diversified Growth Fund, Schroder
Emerging Markets Fund, Schroder European Growth Fund, Schroder Asia
Fund, Schroder Japan Fund, Schroder United Kingdom Fund, Schroder Cash
Reserves Fund, Schroder International Bond Fund, Schroder Micro Cap
Fund and Schroder Greater China Fund (each, a series of the
Registrant):
<PAGE>
<TABLE>
<S> <C>
<C>
Name Position with Underwriter Position with Registrant
---- ------------------------- ------------------------
Catherine A. Mazza President, Director Vice President
Mark J. Smith Director. Trustee, President
Sharon L. Haugh Chairman and Director Trustee
Fergal Cassidy Treasurer and Chief Financial Officer Treasurer
Alexandra Poe General Counsel and Senior Vice President Vice President and Secretary
Jane P. Lucas Director. Vice president
Alan Mandel Senior Vice President Assistant Treasurer
</TABLE>
Business address for each is 787 Seventh Avenue, New York, New York
10019 except for Mark J. Smith, whose business address is 31 Gresham
St., London EC2V 7QA, United Kingdom.
(c) Not Applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained by Registrant
with respect to its series under Section 31(a) of the Investment Company Act of
1940, and the Rules thereunder, are maintained at the offices of Schroder
Capital Management International Inc. (investment management records) and
Schroder Fund Advisors Inc. (administrator and distributor records), 787 Seventh
Avenue, New York, New York 10019, except that certain items will be maintained
at the following locations:
(a) Forum Accounting Services, LLC, Two Portland Square, Portland, Maine 04101
(fund accounting records).
(b) Forum Administrative Services, LLC, Two Portland Square, Portland, Maine
04101 (corporate minutes and all other records required under the
Subadministration Agreement).
(c) Boston Financial Data Services, Inc., Two Heritage Drive, North Quincy,
Massachusetts 02171 (shareholder records).
ITEM 29. MANAGEMENT SERVICES
None.
ITEM 30. UNDERTAKINGS
Registrant undertakes to furnish each person to whom a prospectus is
delivered with a copy of Registrant's latest annual report to
shareholders, if any, relating to the series or class thereof to which
the Prospectus relates upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant has duly caused this
post-effective amendment number 2 to the Registrant's registration statement to
be signed on its behalf by the undersigned, duly authorized in the City of New
York, State of New York on 31st day of December, 1998.
SCHRODER SERIES TRUST II
By:/s/ Alexandra Poe
---------------------------
Alexandra Poe
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons on 31st
day of December, 1998.
(a) Principal Executive Officer
Louise Croset, President
By:/s/ Cheryl O. Tumlin
--------------------------
Cheryl O. Tumlin
Attorney-in-Fact*
(b) Principal Financial Officer
Fergal Cassidy, Treasurer
/s/ Fergal Cassidy
------------------------------
Fergal Cassidy
(c) A majority of the Trustees
I. Peter Sedgwick, Trustee and Chairman
Peter E. Guernsey, Trustee
John I. Howell, Trustee
William L. Means, Trustee
David M. Salisbury, Trustee
Louise Croset, Trustee
By: /s/ Cheryl O. Tumlin
-----------------------------
Cheryl O. Tumlin
Attorney-in-Fact*
* Pursuant to powers of attorney filed as Other Exhibits to this
Registration Statement.
<PAGE>
SIGNATURES
On behalf of Schroder Captital Funds, being duly authorized, I have duly caused
this amendment to the Registration Statement of Schroder Series Trust II to be
signed in the City of New York, State of New York on 31st day of December, 1998.
SCHRODER CAPITAL FUNDS
By: /s/ Alexandra Poe
------------------------
Alexandra Poe
Vice President and Secretary
This amendment to the Registration Statement of Schroder Capital Funds has been
signed below by the following persons in the capacities indicated on 31st day of
December, 1998.
(a) Principal Executive Officer
Mark J. Smith*, President
*By /s/ Cheryl O. Tumlin
---------------------------
Cheryl O. Tumlin
Attorney-in-Fact*
(b) Principal Financial Officer
Fergal Cassidy, Treasurer
/s/ Fergal Cassidy
-----------------------------
Fergal Cassidy
(c) A majority of the Trustees
Peter E. Guernsey, Trustee
John I. Howell, Trustee
Hermann C. Schwab, Trustee
Clarence F. Michalis, Trustee
Mark J. Smith, Trustee
Hon. David N. Dinkins, Trustee
Peter S. Knight, Trustee
Sharon L. Haugh, Trustee
By /s/ Cheryl O. Tumlin
----------------------------
Cheryl O. Tumlin
Attorney-in-Fact*
* Pursuant to powers of attorney filed as Other Exhibits to this
Registration Statement.
