<PAGE>
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SCHRODER ALL-ASIA FUND
--------------------------------------------------------------------------------
May 25, 2000
Dear Shareholder:
We are pleased to present the semi-annual report to shareholders for the
Schroder All-Asia Fund for the six months ended April 30, 2000.
The first half of fiscal 2000 was a period of great change for Schroders. On
January 18, 2000, Schroders plc announced the sale of its investment banking
business to Salomon Smith Barney. It is expected that the sale of the investment
bank will prove to have several positive implications for the Schroder
Investment Management companies. First, the sale provides ample capital
available for investment in our business. In addition, investment management is
now the dominant focus of the entire Schroders organization.
The Asian markets experienced volatility during the past six months.
Supported by the quickening pace of global economic growth and vigilant U.S.
monetary policy, many Asian markets posted strong gains, only to see some of
those gains lost by the end of the period. Although the Japanese economy
reaccelerated early in 2000, following the steep drop in GDP that occurred in
the latter part of last year, the market remains fragile. In Malaysia and
Taiwan, economic progress has continued, as exports remained robust in the face
of strong global demand. Economic data from both Hong Kong and China surprised
on the upside. In general, the North Asian markets -- particularly Taiwan and
Hong Kong -- far outperformed the South Asian emerging markets.
Going forward, the Fund structure will be simplified by transitioning from a
two-tier master/feeder structure to a single-tier stand-alone fund. The Fund
will continue to pursue its investment objective through investments across
Japan and the developed and emerging Asian markets.
This report includes performance information, the schedule of investments,
comments from the portfolio manager, and other relevant information for the
Fund. We encourage you to read the report, and thank you for making Schroders
part of your investment program.
Sincerely,
/s/ Alexandra Poe
Alexandra Poe
PRESIDENT
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<PAGE>
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SCHRODER ALL-ASIA FUND
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MANAGEMENT DISCUSSION AND ANALYSIS (AS OF APRIL 30, 2000)
PERFORMANCE
The Schroder All-Asia Fund's Class A shares returned 13.02% for the six
months ended April 30, 2000, not including the deduction of the maximum
applicable sales charge. Assuming the maximum applicable sales charge of 5.25%
had been paid on an investment made at the start of the six-month period, the
Fund's return for Class A shares would have been 7.05%. The Fund outpaced the
50% MSCI Japan Index/50% MSCI All Country Free ex-Japan Index, which returned
6.17% over the same period. The MSCI All Country Asia Free ex-Japan Index
returned 8.83% and the Lipper Pacific Basin average returned 11.92% during the
period.
Stock selection was the key to outperformance -- especially in Hong Kong,
Korea, Singapore, and Malaysia, which more than offset weakness in India and
Japan. The Fund also benefited from its overweight positions in Hong Kong and
Malaysia and its underweight positions in Japan and India.
MARKET BACKGROUND
For the six months to April 30, 2000, Asian markets were volatile. Although
the markets finished the period slightly ahead, they relinquished some of their
earlier gains. For most of the six-month period, the "new economy" stocks in
Asia (ex-Japan) outperformed, while Japanese Internet software-related stocks
suffered corrections that in some cases were quite sharp. The outperformance of
the North Asian markets -- particularly Taiwan and Hong Kong -- was marked
relative to that of South Asian emerging markets. In general, emerging markets
in Asia lost some ground, following the outperformance toward the end of 1999.
Interest rate concerns hurt the Korean market, and Taiwan was volatile ahead of
the Presidential Elections.
The Hong Kong market continued to favor "new economy" stocks, with
technology, media and mobile telecommunication companies leading the way.
Economic data from both Hong Kong and China continued to surprise on the upside.
Even though economic data remained supportive in Singapore, market
participants favored Malaysia, where valuations were more attractive. Malaysia's
strong economic recovery and abundant liquidity bolstered the market.
PORTFOLIO REVIEW
Within the Fund's portfolio, we added to our holdings in Japan, reducing the
Fund's relative underweighting in Japanese stocks versus the benchmark. The
Japanese economy showed signs of recovery, although the yen's comparative
strength remained a threat. We targeted stocks that are positioned to benefit
from the economy's gradual recovery and where evidence of restructuring should
reinforce any profit rebound. Although we remained cautious, we increased the
Fund's banking position through the purchase of SUMITOMO BANK, as we regarded
its merger with Sakura Bank positively. In our Japanese holdings, we emphasized
electronic hardware and component companies, which continued to show strong
growth and solid earnings visibility. We switched the holding in NTT DOCOMO,
Japan's largest cellular operator, into the parent company NTT, where valuations
appeared more supportive.
We maintained strong confidence in our allocation in Hong Kong. Economic
data in both Hong Kong and China reflected the economic turnaround, with GDP
rising 8.7% year over year in the fourth quarter of 1999 in Hong Kong, and CPI
turning positive in China in February for the first time since March 1998.
Admittance to the World Trade Organization (WTO) should be viewed as a long-term
positive for China, benefiting both trade and foreign direct investment. With
some stocks appearing to be fully valued, we reduced positions, including CHINA
TELECOM and HUTCHISON WHAMPOA. Strong performance from their cellular phone
investments and positive
--------------------------------------------------------------------------------
2
<PAGE>
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SCHRODER ALL-ASIA FUND
--------------------------------------------------------------------------------
developments in Internet strategy led to significant gains. At the end of the
period, we were focused on banks, real estate, Internet stocks, and cellular
telecoms, while remaining cautious in exposure to utilities and fixed line
telecoms.
We also remain very optimistic about Singapore and Malaysia. In Singapore,
positive economic data and ongoing corporate restructuring continued. We
concentrated our bank positions, favoring DBS GROUP, which divested its noncore
asset DBS LAND, and sold UOB. We increased our technology exposure by purchasing
contract manufacturers, NATSTEEL ELECTRONICS and VENTURE MANUFACTURING. Sales
included SINGAPORE TELECOM, where early deregulation of the market is expected
to impact earnings significantly. In Malaysia, although the strong performance
toward the end of the period left valuations looking somewhat stretched compared
with the rest of the region, over the medium to long term, we remain positive,
as we expect strong economic recovery to lead to earnings upgrades. Moreover,
the Malaysian currency appears to be undervalued on most measures, and liquidity
is abundant.
Within the emerging markets, we raised the Fund's exposure to Korea and
Taiwan. Memory chip manufacturers, such as SAMSUNG ELECTRONICS, outperformed as
the outlook for chip prices improved. In Taiwan, the market was volatile ahead
of the Presidential elections, but rebounded when Chen Shui-bian of the
Democratic Progress Party (DPP) was elected, defeating the ruling party's
Kuomintang (KMT) candidate.
OUTLOOK
The longer-term outlook for the markets remains positive. Economic growth is
running ahead of expectations, with private consumption and investment,
especially in Japan, providing upside surprises. These factors, set against a
backdrop of global growth, are positive for the Asia (ex-Japan) region.
Going forward, there are risks and opportunities. First, concern remains
over global growth and whether it has, or will, peak soon. Although we expect
global growth to peak this year, Asia is likely to benefit from rising global
technology spending, particularly from Europe and Japan. Asia is also benefiting
from more outsourcing of electronics manufacturing to the region, and we expect
this trend to continue. In Hong Kong and China, although we expect earnings to
be revised up going forward, some "new economy" stocks look fully valued, and
the market remains vulnerable to any extended NASDAQ correction.
Second, concern over U.S. interest rates persists. Rising U.S. interest
rates do have an impact on Asian rates, particularly those in Hong Kong, given
its currency board system. In this regard, Japan is comparatively immune to
higher U.S. interest rates, with the yen's strength having tightened monetary
conditions there. The Bank of Japan is therefore likely to keep rate increases
on hold, although rising bond issuance should put upward pressure on yields.
Elsewhere, strong external surpluses are supportive of local currencies.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF THE DATES SPECIFIED, AND MAY NOT REFLECT THE VIEWS OF THE
PORTFOLIO MANAGERS ON THE DATE THIS REPORT IS FIRST PUBLISHED OR ANY TIME
THEREAFTER. THESE VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF EACH FUND IN
UNDERSTANDING THEIR INVESTMENTS IN THE FUND AND DO NOT CONSTITUTE INVESTMENT
ADVICE; INVESTORS SHOULD CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR
INDIVIDUAL INVESTMENT PROGRAMS. CERTAIN SECURITIES DESCRIBED IN THIS REPORT MAY
NO LONGER BE HELD BY THE FUND AND THEREFORE NO LONGER APPEAR IN THE SCHEDULE OF
INVESTMENTS AS OF APRIL 30, 2000.
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3
<PAGE>
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SCHRODER ALL-ASIA FUND
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PORTFOLIO CHARACTERISTICS AS OF APRIL 30, 2000
COUNTRY WEIGHTINGS (a)
<TABLE>
<CAPTION>
COUNTRY % OF NET ASSETS
<S> <C>
-------------------------------------------------------------------
Japan 35.1%
Hong Kong 16.1
Taiwan 10.3
Korea 9.8
Malaysia 9.0
Singapore 8.2
India 6.1
Thailand 1.8
Indonesia 0.9
Phillipines 0.6
Cash Equivalents and Other Net Assets 2.1
----------
Total 100.0%
==========
</TABLE>
TOP TEN HOLDINGS (a)
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
-------------------------------------------------------------------
Samsung Electronics 4.7%
Taiwan Semiconductor Manufacturing 4.2
Hutchison Whampoa 2.8
Cheung Kong (Holdings) 2.5
Nippon Telegraph & Telephone 2.2
DBS Group Holdings 2.2
Nan Ya Plastic 2.1
Reliance Insustries 2.0
Toyota Motor 1.6
Matsushita Electric Industrial 1.6
----------
Total 25.9%
==========
</TABLE>
-------------------
(a) Expressed as a percentage of the combined Schedules of Investments of
Schroder Asian Growth Fund Portfolio and Schroder Japan Portfolio.
PERFORMANCE INFORMATION - (b)
<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS INCEPTION ONE YEAR FIVE YEARS INCEPTION
ENDED ENDED TO DATE ENDED ENDED TO DATE
MARCH 31, MARCH 31, MARCH 31, APRIL 30, APRIL 30, APRIL 30,
2000 2000 2000 (D) 2000 2000 2000 (D)
---------- ---------- -------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Schroder All-Asia Fund--
Class A Shares......... 55.75% 0.94%(c) -1.59% 24.39% -0.65%(c) -3.03%
</TABLE>
(b) Performance information reflects the deduction of a 5.25% sales charge at
the beginning of the period.
(c) Average annual total return.
(d) Average annual total return from commencement of Fund operations (December
31, 1993).
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL BOTH FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN
INVESTOR'S ORIGINAL COST.
--------------------------------------------------------------------------------
4
<PAGE>
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SCHRODER ALL-ASIA FUND
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in Portfolios (Notes 1 and 2):
Schroder Asian Growth Fund Portfolio $ 26,008,312
Schroder Japan Portfolio 14,372,267
Other receivables 2,702
Receivable from Investment Adviser (Note 3) 2,885
------------
Total Assets 40,386,166
------------
LIABILITIES:
Payable for Fund shares redeemed 631,211
Administration fee payable (Note 3) 1,725
Shareholder servicing fees payable (Note 4) 8,642
Advisory fee payable (Note 3) 6,915
Accrued expenses and other liabilities 162,198
------------
Total Liabilities 810,691
------------
Net Assets $ 39,575,475
============
COMPONENTS OF NET ASSETS:
Paid-in capital $119,237,004
Undistributed (distributions in excess of)
net investment income (133,896)
Accumulated net realized gain (loss) (88,010,055)
Net unrealized appreciation (depreciation) on
investments 8,482,422
------------
Net Assets $ 39,575,475
============
SHARES OF BENEFICIAL INTEREST 3,257,793
============
NET ASSET VALUE PER SHARE* $ 12.15
============
OFFERING PRICE PER SHARE** $ 12.82
============
</TABLE>
--------------
<TABLE>
<C> <S>
* Redemption price per share is equal to net asset value.
** Based on maximum sales charge of 5.25%.
</TABLE>
The accompanying notes are an integral part of the financial statements.
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5
<PAGE>
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SCHRODER ALL-ASIA FUND
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED APRIL 30, 2000 (UNAUDITED)
<TABLE>
<S> <C>
NET INVESTMENT INCOME (LOSS) ALLOCATED FROM THE PORTFOLIOS
(NOTE 1):
Dividend income $ 317,864
Interest income 17,461
Net expenses (260,282)
Foreign taxes witheld (125,625)
-----------
Total Income (Loss) (50,582)
-----------
EXPENSES:
Asset allocation (Note 3) 46,698
Shareholder servicing fees (Note 4) 58,372
Administration (Note 3) 11,675
Subadministration (Note 3) 18,822
Professional fees 21,911
Printing 4,984
Trustees fees 5,546
Transfer agency fees 26,313
Registration fees 8,472
-----------
Total Expenses 202,793
Expenses borne by Investment Adviser (Note 3) (7,925)
-----------
Total Net Expenses 194,868
-----------
NET INVESTMENT INCOME (LOSS) (245,450)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on investments sold (a) 4,372,022
Net realized gain (loss) on foreign currency
transactions (109,887)
-----------
Net realized gain (loss) on
investments and foreign currency
transactions 4,262,135
-----------
Change in net unrealized appreciation (depreciation)
of investments 2,068,596
Change in net unrealized appreciation (depreciation)
of foreign currency transactions (504)
-----------
Net change in unrealized
appreciation (depreciation) on
investments and foreign currency
transactions 2,068,092
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT AND
FOREIGN CURRENCY TRANSACTIONS 6,330,227
-----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $ 6,084,777
===========
</TABLE>
--------------
<TABLE>
<C> <S>
(a) Includes capital gains tax paid for sales of securities of
Indian issues in the amount of $52,623.
</TABLE>
The accompanying notes are an integral part of the financial statements.
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6
<PAGE>
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SCHRODER ALL-ASIA FUND
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the
Period Ended For the
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
-------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment (loss) income $ (245,450) $ (214,273)
Net realized gain (loss) on investments and
foreign currency transactions 4,262,135 1,508,901
Change in net unrealized appreciation
(depreciation) of investments and foreign
currency 2,068,092 17,589,351
------------- ------------
Net increase (decrease) in net assets resulting
from operations 6,084,777 18,883,979
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (67,142)
------------- ------------
CAPITAL SHARE TRANSACTIONS:
Sales of Shares 1,777,666 7,506,851
Redemptions of shares (13,502,191) (23,895,566)
------------- ------------
Net increase (decrease) from capital share
transactions (11,724,525) (16,388,715)
------------- ------------
Net increase (decrease) in net assets (5,639,748) 2,428,122
------------- ------------
NET ASSETS, BEGINNING OF PERIOD $ 45,215,223 $ 42,787,101
------------- ------------
NET ASSETS, END OF PERIOD $ 39,575,475 $ 45,215,223
============= ============
Undistributed (distributions in excess of) net investment
income $ (133,896) $ 111,554
============= ============
OTHER INFORMATION
SHARE TRANSACTIONS
Sales of shares 140,914 828,540
Reinvestment of shares -- 306
Redemption of shares (1,087,510) (2,781,938)
------------- ------------
Net increase (decrease) in shares (946,596) (1,953,092)
============= ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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7
<PAGE>
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SCHRODER ALL-ASIA FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--CLASS A SHARES
Selected per share data and ratios for a Class A share outstanding
throughout each period: (a)
<TABLE>
<CAPTION>
For the Six Months For the Year Ended
ended ------------------------------------------------------------------------
April 30, 2000 October 31, October 31, October 31, October 31, October 31,
(Unaudited) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 10.75 $ 6.95 $ 9.34 $ 13.15 $ 12.62 $ 13.84
------- ------- ------- -------- -------- --------
Investment Operations (b)
Net Investment Income (Loss) (0.07) (0.05) 0.02 (0.05) (0.03) 0.02
Net Realized and Unrealized Gain
(Loss) on Investments and
Foreign Currency Transactions 1.47 3.86 (2.57) (3.66) 0.56 (1.24)
------- ------- ------- -------- -------- --------
Total from Investment Operations 1.40 3.81 (2.55) (3.71) 0.53 (1.22)
------- ------- ------- -------- -------- --------
Distributions From
Net Investment Income -- (0.01) -- (0.09) -- --
------- ------- ------- -------- -------- --------
Tender offer costs charged to
paid-in-capital in excess of
par -- -- -- (0.01) -- --
------- ------- ------- -------- -------- --------
Redemption Fee -- -- 0.16 -- -- --
------- ------- ------- -------- -------- --------
Net Asset Value, End of Period $ 12.15 $ 10.75 $ 6.95 $ 9.34 $ 13.15 $ 12.62
======= ======= ======= ======== ======== ========
Market Value, End of Period N/A N/A N/A $ 8.50 $ 12.00 $ 11.13
======= ======= ======= ======== ======== ========
Total investment return based on:
Market Value (c) N/A N/A N/A (28.62%) 7.87% (7.29%)
======= ======= ======= ======== ======== ========
Net Asset Value (c) 13.02%(e) 54.92%(e) (25.59%)(e) (28.43%) 4.20% (8.82%)
======= ======= ======= ======== ======== ========
Ratios and Supplementary Data:
Net Assets at End of Period (in
thousands) $39,575 $45,215 $42,788 $150,406 $257,840 $247,490
Ratios to Average Net Assets: (b)
Expenses including
reimbursement/waiver of fees 1.95%(f) 1.95% 1.90% 1.78% 1.57% 1.65%
Expenses excluding
reimbursement/ waiver of fees 1.98%(f) 2.27% 2.13% 1.78% 1.57% 1.65%
Net investment income (loss)
including reimbursement/waiver (1.05%)(f) (0.49%) 0.28% (0.31%) (0.19%) 0.12%
Portfolio Turnover Rate N/A(d) N/A(d) N/A(d) 39% 35% 67%
</TABLE>
--------------------
<TABLE>
<C> <S>
(a) The Fund converted from Schroder Asian Growth Fund, Inc., a
closed-end fund, on March 20 1998 (See Note 1). For
information prior to March 20, 1998, data refers to shares
of Schroder Asian Growth Fund.
(b) Includes the Fund's proportionate share of income, expenses
and gains/losses of the underlying Portfolios, Schroder
Asian Growth Fund Portfolio and Schroder Japan Portfolio,
which commenced operations March 23, 1998.
(c) Total returns would have been lower had certain expenses not
been reduced during the periods shown (See Note 3). Total
return calculations for a period of less than one year are
not annualized.
(d) The Fund invests all of its investable assets in Schroder
Asian Growth Fund Portfolio and Schroder Japan Portfolio and
did not have any direct portfolio turnover for the periods
after March 23, 1998. For the periods shown, the portfolio
turnover rates of Schroder Asian Growth Fund Portfolio were
28%, 73% and 100% and of Schroder Japan Portfolio were 21%,
16% and 36%, respectively (See Note 1).
(e) Total returns do not reflect sales charges.
(f) Annualized.
</TABLE>
The accompanying notes are an integral part of the financial statements.
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8
<PAGE>
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SCHRODER ALL-ASIA FUND
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NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
NOTE 1. ORGANIZATION
Schroder Series Trust II (the "Trust") was organized as a Delaware
business trust on December 5, 1997. The Trust, which is registered as an
open-end, management investment company under the Investment Company Act of
1940, as amended (the "Act"), currently has one investment portfolio, Schroder
All-Asia Fund (the "Fund"). The Fund is a non-diversified portfolio that was
converted, as of March 20, 1998, from Schroder Asian Growth Fund, Inc., a
closed-end fund that commenced operations on December 30, 1993. Under its
Trust Instrument, the Trust is authorized to issue an unlimited number of the
Fund's Class A Shares of beneficial interest without par value.
MASTER-FEEDER ARRANGEMENT
The Fund currently seeks to achieve its investment objective by investing
all its investable assets in Schroder Asian Growth Fund Portfolio and Schroder
Japan Portfolio (each, individually a "Portfolio", and, collectively, the
"Portfolios"). The Portfolios are separately managed, non-diversified
portfolios of Schroder Capital Funds ("Schroder Core"), each of which has the
same investment objective as the Fund and, in combination, substantially
similar investment policies as the Fund. This is commonly referred to as a
master-feeder arrangement. Schroder Core also is registered as an open-end,
management investment company. The Fund may withdraw its investment from the
Portfolios at any time if the Trust's Board of Trustees determines that it is
in the best interest of the Fund and its shareholders to do so. As described
in Note 7 below, the Trustees have determined that, on or about June 30, 2000,
the Fund will begin investing directly in portfolio securities, rather than
through the Portfolios.
The Fund accounts for its investments in each Portfolio as a partnership
investment and records daily its share of the Portfolios' income, expenses and
realized and unrealized gain or loss. The Portfolios' financial statements are
included elsewhere in this report and should be read in conjunction with the
Fund's financial statements. As of April 30, 2000 the Fund owned 99.73% and
99.49%, respectively, of the Schroder Asian Growth Fund Portfolio and the
Schroder Japan Portfolio and is deemed, for purposes of the Act, to control
the Portfolios.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by
the Trust which are in conformity with generally accepted accounting
principles:
VALUATION OF INVESTMENTS
The Trust determines the net asset value per share of the Fund as of the
close of trading on the New York Stock Exchange on each Fund business day.
Valuation of securities held in each Portfolio is discussed in the Notes to
the Financial Statements of the Portfolios.
INVESTMENT INCOME AND EXPENSES
The Fund records daily its pro rata share of the Portfolios' income,
expenses and realized and unrealized gain and loss. In addition, the Fund
incurs its own expenses on an accrual basis.
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9
<PAGE>
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SCHRODER ALL-ASIA FUND
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income and net capital gains, if any, are distributed to
shareholders at least annually and are recorded on the ex-dividend date.
Distributions are based on amounts calculated in accordance with applicable
federal income tax regulations, which may differ from generally accepted
accounting principles. These differences are due primarily to differing
treatments of income and gain on various investment securities held by the
Portfolios, timing differences and differing characterizations of
distributions made by the Fund.
FEDERAL INCOME TAXES
It is the policy of the Trust for the Fund to qualify as a "regulated
investment company" by complying with the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended. By so qualifying, the Fund will not
be subject to federal income taxes to the extent that, among other things, it
distributes substantially all of its taxable income, including capital gains,
for the fiscal year. In addition, as a result of distributing substantially
all of its net investment income during each calendar year, capital gains and
certain other amounts, if any, the Fund will not be subject to a federal
excise tax.
As of October 31, 1999, the Fund had a net tax basis capital loss
carryforward for Federal income tax purposes that may be applied against
taxable gains until its expiration as follows:
<TABLE>
<CAPTION>
Amount Expiring
----------- ----------
<S> <C>
$ 1,039,460 10/31/2003
26,048,489 10/31/2004
64,861,903 10/31/2006
</TABLE>
NOTE 3. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS
The Fund currently invests all its investable assets in the Portfolios,
which retain Schroder Investment Management North America Inc. ("SIMNA") to
act as investment adviser pursuant to an Investment Advisory Agreement. The
Fund, because of its investment in the Portfolios, bears a proportionate share
of the investment advisory fees (and other expenses) paid by each Portfolio to
SIMNA. See Notes to the Financial Statements of each Portfolio. SIMNA also
serves as investment adviser to the Fund under an investment advisory and
asset allocation agreement with the Trust. Under this agreement, SIMNA is
entitled to receive a monthly fee for asset allocation services at an annual
rate of 0.20% of the Fund's average daily net assets with respect to assets
invested in the Portfolios.
The administrator of the Fund is Schroder Fund Advisors Inc. ("Schroder
Advisors"), a wholly owned subsidiary of SIMNA. For its services, Schroder
Advisors is entitled to receive compensation at an annual rate, payable
monthly, of 0.05% of the Fund's average daily net assets. In addition, the
Fund has entered into a Sub-Administration Agreement with State Street Bank
and Trust Company ("State Street") and Schroder Advisors. Under the Agreement,
State Street is entitled to receive an annual fee from the Fund of $25,000,
payable monthly. The Fund also bears a proportionate share of administrative
fees paid by the Portfolios. See the Notes to Financial Statements of each
Portfolio.
In order to limit the Fund's expenses, SIMNA is contractually obligated,
until October 31, 2000, to reduce its compensation (and, if necessary, to pay
certain expenses of the Fund) to the extent that the Fund's net total
operating expenses attributable to Class A shares exceed the annual rate of
1.95% of the Fund's average daily net assets attributable to such shares.
For the period ended April 30, 2000 Schroder Advisors retained sales
commissions in the amount of $834.
--------------------------------------------------------------------------------
10
<PAGE>
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SCHRODER ALL-ASIA FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
NOTE 4. SHAREHOLDER SERVICING PLAN
The Fund adopted a Shareholder Service Plan (the "Plan") for the Class A
Shares under which Schroder Advisors, or other shareholder servicing
organizations, provide administrative support services to shareholders of the
Fund's Class A Shares. For providing for, or arranging for, the provision of
those shareholder services, Schroder Advisors receives compensation monthly at
an annual rate of up to 0.25% of the average daily net assets of the Fund
attributable to its Class A Shares. Schroder Advisors may pay shareholder
servicing organizations for those services at an annual rate of up to 0.25%.
NOTE 5. BENEFICIAL INTEREST
As of April 30, 2000 the Fund had 3 shareholders each owning beneficially
or of record more than 5% of the Fund, totaling 43.40% of the Fund's
outstanding Class A shares.
NOTE 6. PORTFOLIO INVESTMENT RISK
For complete risk disclosure, please refer to the Fund's current
prospectus.
NOTE 7. SUBSEQUENT EVENTS
The Trustees of the Trust have determined that, on or about June 30, 2000,
the Fund will begin investing directly in portfolio securities, rather than
through Schroder Asian Growth Fund Portfolio and Schroder Japan Portfolio.
Following that date, in accordance with the Fund's current investment advisory
agreement, the Fund will pay SIMNA a monthly fee at the annual rate of 0.90%
of the Fund's average daily net assets, which is higher than the contractual
advisory fee rate payable by either Portfolio (0.70% per annum for Schroder
Asian Growth Portfolio and 0.55% per annum for Schroder Japan Portfolio).
SIMNA will no longer receive the asset allocation fee it currently receives
from the Fund, which is 0.20% per annum of the Fund's average daily net
assets. In addition, the Fund's administration agreement with Schroder
Advisors will be amended such that Schroder Advisors will receive compensation
at the annual rate of 0.10% (increased from 0.05%) of the Fund's average daily
net assets. SIMNA will no longer receive advisory or administrative fees from
either Portfolio.
--------------------------------------------------------------------------------
11
<PAGE>
--------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND PORTFOLIO
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------- -----------
<C> <S> <C>
COMMON STOCKS - 97.5%
HONG KONG - 25.1%
109,000 ASM Pacific Technology $ 386,238
73,000 Bank of East Asia 157,922
114,400 Cable & Wireless HKT 270,248
96,000 Cathay Pacific Airways 170,703
84,000 Cheung Kong (Holdings) 1,002,955
82,000 China Telecom (Hong Kong) (1) 586,919
72,000 Dao Heng Bank Group 332,778
500,000 E-New Media (1) 80,242
369,000 Global Tech (Holdings) 421,634
69,000 Henderson Land Development 302,080
79,000 Hutchison Whampoa 1,146,106
76,000 Li & Fung 296,624
69,000 Sun Hung Kai Properties 540,379
700 Sunevision Holdings (1) 912
543,000 TCL International Holdings 327,655
47,000 Television Broadcast 321,319
94,000 Wharf Holdings 194,903
-----------
6,539,617
-----------
INDIA - 9.4%
9,000 Associated Cement (1) 28,656
30,400 Bajaj Auto 247,901
26,600 Bharat Petroleum 106,416
8,500 Hindustan Lever 466,295
37,500 Hindustan Petroleum 96,078
8,000 ITC 104,434
26,500 Larsen & Toubro 141,738
54,500 Mahanagar Telephone Nigam 280,951
4,200 NIIT 194,818
101,000 Reliance Industries 796,782
-----------
2,464,069
-----------
INDONESIA - 1.5%
76,500 PT Gudang Garam Tbk 120,666
122,000 PT Indofood Sukses Makmur (1) 83,132
31,000 PT Indosat (Persero) Tbk 40,976
318,500 PT Telekomunikasi Indonesia 138,658
-----------
383,432
-----------
KOREA - 15.2%
37,438 Kookmin Bank 404,839
16,800 Korea Electric Power 492,018
<CAPTION>
SHARES VALUE
--------------------- -----------
<C> <S> <C>
KOREA (CONCLUDED)
5,900 Korea Telecom ADR $ 217,072
3,490 Pohang Iron & Steel 280,489
7,019 Samsung Electronics 1,897,515
24,000 Shinhan Bank 230,330
7,460 SK Telecom 451,919
-----------
3,974,182
-----------
MALAYSIA - 14.0%
179,000 Arab-Malaysian Finance (1) 256,730
258,000 Gamuda 342,876
66,500 Genting 267,756
481,000 Island & Peninsular 407,594
144,000 Malayan Banking 598,751
31,000 Malaysian Pacific Industries 346,719
124,000 Malaysian Resources (1) 114,866
73,000 Resorts World 236,295
87,000 Telekom Malaysia 302,217
161,000 Tenaga Nasiona 533,855
92,000 United Engineers (Malaysia) 237,269
-----------
3,644,928
-----------
PHILIPPINES - 1.0%
189,000 Ayala 43,034
78,800 Manila Electric "B" Shares 141,247
3,940 Philippine Long Distance
Telephone 70,623
-----------
254,904
-----------
SINGAPORE - 12.7%
3,000 Chartered Semiconductor (1) 25,828
58,000 City Developments 263,260
34,000 Datacraft Asia 255,000
65,758 DBS Group Holdings (1) 905,047
158,000 DBS Land 223,938
63,000 Keppel Telecommunications &
Transportation 83,019
21,000 NatSteel Electronics 120,531
119,000 Neptune Orient Lines (1) 106,633
19,000 Sembcorp Logistics (1) 117,956
26,000 Singapore Airlines 269,527
27,344 Singapore Press Holdings 534,889
50,000 St Assembly Test Services (1) 210,842
16,000 Venture Manufacturing
(Singapore) 187,415
-----------
3,303,885
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
12
<PAGE>
--------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND PORTFOLIO
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------- -----------
<C> <S> <C>
TAIWAN - 16.0%
220,800 Acer $ 461,509
33,635 Asustek Computer 372,385
79,000 Compeq Manufacturing 436,028
110,000 Macronix International 332,304
405,065 Nan Ya Plastic 866,497
264,170 Taiwan Semiconductor
Manufacturing 1,699,615
-----------
4,168,338
-----------
THAILAND - 2.6%
16,000 Advanced Info Service (1) 187,376
3,000 Siam Cement 69,321
294,736 TelecomAsia (1) 299,969
124,000 Thai Farmers Bank (1) 130,239
-----------
686,905
-----------
Total Common Stocks
(Cost $18,742,360) 25,420,260
-----------
<CAPTION>
SHARES VALUE
--------------------- -----------
<C> <S> <C>
PREFERRED STOCK - 0.2%
THAILAND - 0.2%
64,000 Siam Commercial Bank (1)
(Cost $83,744) $ 51,255
-----------
SHORT TERM INVESTMENT - 2.7%
721,678 SSgA U.S. Government Money
Market Fund 5.677% (2)
(Cost $721,678) 721,678
-----------
</TABLE>
<TABLE>
<S> <C>
Total Investments
(Cost $19,547,782) - 100.4% 26,193,193
Liabilities in Excess of Other Assets -
(0.4%) (115,504)
-----------
Total Net Assets - 100% $26,077,689
===========
</TABLE>
------------------
<TABLE>
<C> <S>
(1) Denotes non-income producing security.
(2) Interest rate shown is 7-day yield as of
April 30, 2000.
ADR - American Depository Receipts.
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
13
<PAGE>
--------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND PORTFOLIO
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(Note 2) $26,193,193
Foreign currency (Cost $107,417) 107,336
Dividends receivable 58,916
Interest receivable 2,899
Deferred organizational costs 2,199
Prepaid expenses 1,764
Due from Investment Adviser (Note 3) 13,075
-----------
Total Assets 26,379,382
-----------
LIABILITIES:
Payable for securities purchased 201,809
Advisory fee payable (Note 3) 15,988
Administration fee payable (Note 3) 1,150
Accrued expenses and other liabilities 82,746
-----------
Total Liabilities 301,693
-----------
Net Assets $26,077,689
===========
Cost of Securities $19,547,782
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
14
<PAGE>
--------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND PORTFOLIO
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend income $ 235,602
Interest income 31,975
Foreign taxes (54,441)
----------
Total Investment Income 213,136
----------
EXPENSES:
Investment advisory fees (Note 3) 112,506
Administrative fees (Note 3) 8,036
Subadministration fees (Note 3) 16,232
Custodian fees 78,308
Professional fees 21,293
Printing expenses 4,984
Trustees fees 2,392
Amortization of organizational expenses 379
Insurance 252
----------
Total Expenses 244,382
Expenses reimbursed by Investment Adviser (Note 3) (57,944)
----------
Net Expenses 186,438
----------
NET INVESTMENT INCOME (LOSS) 26,698
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on investments sold 4,024,113
Net realized gain (loss) on foreign currency
transactions (30,831)
----------
Net realized gain (loss) on
investments and foreign currency
transactions 3,993,282
----------
Change in net unrealized appreciation (depreciation)
on investments 2,000,637
Change in net unrealized appreciation (depreciation)
on foreign currency transactions 31,265
----------
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 2,031,902
----------
NET GAIN (LOSS) 6,025,184
----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $6,051,882
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
15
<PAGE>
--------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND PORTFOLIO
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the
Six Months Ended For the
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) $ 26,698 $ 99,411
Net realized gain (loss) on investments and
foreign currency transactions 3,993,282 1,842,004
Change in net unrealized appreciation
(depreciation) on investments and foreign
currency transactions 2,031,902 10,059,885
------------ ------------
Net increase (decrease) in net assets resulting
from operations 6,051,882 12,001,300
------------ ------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions 1,449,150 8,033,360
Withdrawals (11,084,150) (12,905,279)
------------ ------------
Net decrease (increase) from transactions in
investors' beneficial interest (9,635,000) (4,871,919)
------------ ------------
Total increase (decrease) (3,583,118) 7,129,381
NET ASSETS
Beginning of period 29,660,807 22,531,426
------------ ------------
End of period $ 26,077,689 $ 29,660,807
============ ============
</TABLE>
--------------
FINANCIAL HIGHLIGHTS
Portfolio data for the following periods:
<TABLE>
<CAPTION>
For The Six Months
Ended For The Year For the Period
April 30, 2000 Ended Ended
(Unaudited) October 31, 1999 October 31, 1998 (a)
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses, including waiver of fees 1.16%(b) 1.16% 1.16%(b)
Expenses, excluding waiver of fees 1.52%(b) 1.34% 1.27%(b)
Net investment income, including
waiver of fees 0.17%(b) 0.37% 2.51%(b)
Portfolio Turnover Rate 28%(c) 73% 100%(c)
</TABLE>
--------------
<TABLE>
<C> <S>
(a) For the period March 23, 1998 (Commencement of Operations)
through October 31, 1998.
(b) Annualized.
(c) Not annualized.
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
16
<PAGE>
--------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND PORTFOLIO
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
NOTE 1. ORGANIZATION
Schroder Capital Funds ("Schroder Core") was organized as a Delaware
business trust on September 7, 1995. Schroder Core, which is registered as an
open-end, management investment company under the Investment Company Act of
1940, as amended (the "Act"), currently has two investment portfolios.
Included in this report is Schroder Asian Growth Fund Portfolio (the
"Portfolio"), which is a non-diversified portfolio that received assets from
Schroder Asian Growth Fund, Inc. in that Fund's master-feeder structure
conversion and commenced operations on March 23, 1998. Under its Trust
Instrument, Schroder Core is authorized to issue an unlimited number of
interests without par value. Interests in the Portfolio are sold without any
sales charges in private placement transactions to qualified investors,
including open-end, management investment companies.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally
accepted accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of increase and decrease in net assets
from operations during the fiscal period. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies followed by
the Portfolio which are in conformity with generally accepted accounting
principles.
VALUATION OF INVESTMENTS
Portfolio securities listed on recognized stock exchanges are valued at
the last reported sales price on the exchange on which the securities are
principally traded. Listed securities traded on recognized stock exchanges
where last sale prices are not available are valued at the mean of the closing
bid and ask prices ("mid-market price"), or, if none, the last sale price on
the preceding trading day. Securities traded in over-the-counter markets are
valued at the most recent reported mid-market price. Short-term investments
having a maturity of 60 days or less, are valued at amortized cost, which
approximates market value unless the investment adviser believes another
valuation is more appropriate. Prices used for valuation generally are
provided by independent pricing services. Other securities and assets for
which market quotations are not readily available are valued at fair value as
determined in accordance with procedures approved by the Schroder Core Board
of Trustees.
REPURCHASE AGREEMENTS
When entering into repurchase agreements, it is each Portfolio's policy
that the Portfolio take into its possession, through its custodian, the
underlying collateral and monitor the collateral's value at the time the
agreement is entered into and on a daily basis during the term of the
repurchase agreement to ensure that it equals or exceeds the repurchase price.
In the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
INVESTMENT TRANSACTIONS
Investment security transactions are recorded as of trade date. Realized
gains and losses on sales of investments are determined on the basis of
identified cost.
INVESTMENT INCOME
Dividend income is recorded on the ex-dividend date except that certain
foreign dividends are recorded as the Portfolio is informed of the ex-dividend
date. Dividend income is recorded net of unrecoverable
--------------------------------------------------------------------------------
17
<PAGE>
--------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND PORTFOLIO
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
withholding tax. Interest income is recorded on an accrual basis. Foreign
dividend and interest income amounts and realized capital gains or losses are
converted to U.S. dollar equivalents using foreign exchange rates in effect at
the date of the transactions.
EXPENSE ALLOCATION
Schroder Core accounts separately for the assets and liabilities and
operation of each of its Portfolios. Expenses that are directly attributable
to more than one Portfolio are allocated among the respective Portfolios in
proportion to each Portfolio's net assets.
FEDERAL INCOME TAXES
The Portfolio is not required to pay federal income taxes on its net
investment income and net capital gain because it is treated as a partnership
for federal income tax purposes. All interest, dividends, gain and loss of the
Portfolio are deemed to have been "passed through" to the Portfolio's interest
holders in proportion to their holdings in the Portfolio regardless of whether
such interest, dividends or gain have been distributed by the Portfolio.
Under the applicable foreign tax law, a withholding tax may be imposed on
interest, dividends, and capital gains at various rates. The Portfolio
provides for taxes on realized gains on securities sold in India and Thailand
and unrealized appreciation on securities held in India.
DEFERRED ORGANIZATION COSTS
Costs incurred by the Portfolio in connection with its organization are
amortized on a straight-line basis over a five-year period.
FOREIGN CURRENCY
Foreign currency amounts are translated into U.S. dollars at the mean of
the bid and asked prices of such currencies against U.S. dollars as follows:
(i) assets and liabilities at the rate of exchange at the end of the
respective period; and (ii) purchases and sales of securities and income and
expenses at the rate of exchange prevailing on the dates of such transactions.
The portion of the results of operations arising from changes in the exchange
rates and the portion due to fluctuations arising from changes in the market
prices of securities are not isolated. Such fluctuations are included with the
net realized and unrealized gain or loss on investments.
The Portfolio may enter into transactions to purchase or sell forward
foreign currencies to protect the U.S. dollar value of the underlying
portfolio of securities against the effect of possible adverse movements in
foreign exchange rates. Principal risks associated with such transactions
include the movement in value of the foreign currency relative to the U.S.
dollar and the ability of the counterparty to perform. Fluctuations in the
value of such forward currency transactions are recorded daily as unrealized
gain or loss; realized gain or loss includes net gain or loss on transactions
that have terminated by settlement or by the Portfolio entering into
offsetting commitments.
NOTE 3. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS
SIMNA is the investment adviser to the Portfolio. Pursuant to an
Investment Advisory Agreement, SIMNA is entitled to receive compensation at an
annual rate, payable monthly, of 0.70% of the Portfolio's average daily net
assets.
The administrator of the Portfolio is Schroder Fund Advisors Inc.
("Schroder Advisors"), a wholly owned subsidiary of SIMNA. Schroder Advisors
is entitled to receive compensation at an annual rate, payable monthly, of
0.05% of the Portfolio's average daily net assets. In addition, Schroder Core
has entered into a Sub-Administration Agreement with State Street Bank and
Trust Company ("State Street") and Schroder
--------------------------------------------------------------------------------
18
<PAGE>
--------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND PORTFOLIO
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
Advisors. Under that Agreement, the Portfolio, together with other mutual
funds managed by SIMNA and certain related entities, pays fees to State Street
based on the combined average daily net assets of all of the funds in the
Schroder complex, according to the following annual rates: 0.06% of the first
$1.7 billion of such assets, 0.04% of the next $1.7 billion of such assets,
and 0.02% of such assets in excess of $3.4 billion, subject to certain minimum
requirements.
In order to limit the Portfolio's expenses, SIMNA and Schroder Advisors
have voluntarily agreed to reduce their compensation (and, if necessary, to
pay certain expenses of the Portfolio) to the extent that the Portfolio's net
expenses exceed 1.16% of the Portfolio's average daily net assets.
NOTE 4. INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of non-government investments by the
Portfolio, excluding short-term securities for the period ended April 30, 2000
were $3,140,082 and $4,780,825, respectively.
At April 30, 2000 the identified cost for federal income tax purposes of
investments owned by the Portfolio was $19,547,782 with a net unrealized
appreciation of $6,645,411. Gross unrealized appreciation and depreciation
were $8,137,046 and $1,491,635, respectively. The aggregate cost of each
Portfolio's investments was substantially the same for book and federal income
tax purposes at April 30, 2000.
NOTE 5. CONCENTRATION OF RISK
The Portfolio's investments in companies domiciled in Asian countries
other than Japan, including countries with limited or developing markets, may
cause the Portfolio to be more susceptible to political, social and economic
events adversely affecting the Asian countries in which it invests than
portfolios not so concentrated in a single region.
As of April 30, 2000, Schroder All-Asia Fund owned 99.73% of the
Portfolio.
NOTE 6. SUBSEQUENT EVENTS
Please see Note 7 to the financial statements for Schroder All-Asia Fund,
included elsewhere in this report.
--------------------------------------------------------------------------------
19
<PAGE>
--------------------------------------------------------------------------------
SCHRODER JAPAN PORTFOLIO
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------- -----------
<C> <S> <C>
COMMON STOCKS - 98.2%
APPLIANCES & HOUSEHOLD DURABLES - 8.7%
24,000 Matsushita Electric Industrial $ 635,135
5,420 Sony 622,337
-----------
1,257,472
-----------
AUTOMOBILES - 4.5%
13,000 Toyota Motor 645,961
-----------
BANKING - 2.9%
56,000 Asahi Bank 269,451
12,000 Sumitomo Bank 150,012
-----------
419,463
-----------
BROADCASTING & PUBLISHING - 0.6%
9,000 Chubu-Nippon Broadcasting 83,528
-----------
CONSTRUCTION & HOUSING - 2.9%
24,000 Daiwa House Industry 159,894
28,000 Sanki Engineering 108,299
17,000 Sekisui House 155,730
-----------
423,923
-----------
DATA PROCESSING & REPRODUCTION - 5.5%
10,000 Canon 457,104
12,000 Fujitsu 339,775
-----------
796,879
-----------
ELECTRICAL & ELECTRONICS - 6.5%
31,000 Hitachi 370,032
4,000 Mitsumi Electric 165,076
15,000 Omron 408,063
-----------
943,171
-----------
ELECTRONIC COMP. & INSTRUMENTS - 13.4%
1,300 Mabuchi Motor 143,146
3,000 Murata Manufacturing 582,947
3,000 Nichicon 80,502
1,400 Rohm 468,949
4,000 TDK 535,571
15,000 Yamatake 121,586
-----------
1,932,701
-----------
<CAPTION>
SHARES VALUE
--------------------- -----------
<C> <S> <C>
ENERGY SOURCES - 1.5%
29,000 Nippon Mitsubishi Oil $ 100,359
32,000 Showa Shell Sekiyu 122,882
-----------
223,241
-----------
FINANCIAL SERVICES - 5.5%
6,800 Credit Saison 111,056
20,000 Nomura Securities 503,370
2,200 Promise 178,123
-----------
792,549
-----------
FOREST PRODUCTS & PAPER - 3.5%
30,000 Nippon Paper Industries 189,874
27,000 Oji Paper 169,388
7,300 Toppan Forms 151,983
-----------
511,245
-----------
HEALTH & PERSONAL CARE - 7.3%
8,000 Banyu Pharmaceutical 176,180
2,000 Santen Pharmaceutical 44,230
7,000 Takeda Chemical Industries 460,528
7,000 Yamanouchi Pharmaceutical 369,847
-----------
1,050,785
-----------
INDUSTRIAL COMPONENTS - 4.3%
18,000 Bridgestone 390,575
17,000 Sumitomo Electric Industries 226,359
-----------
616,934
-----------
INSURANCE - 2.4%
10,000 Tokio Marine & Fire Insurance 97,528
61,000 Yasuda Fire & Marine Insurance 246,661
-----------
344,189
-----------
LEISURE & TOURISM - 0.7%
12,000 Japan Airport Terminal 98,934
-----------
MACHINERY & ENGINEERING - 1.5%
10,000 Amano 75,968
2,000 Fuji Machine Mfg. 138,982
-----------
214,950
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
20
<PAGE>
--------------------------------------------------------------------------------
SCHRODER JAPAN PORTFOLIO
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
--------------------- -----------
<C> <S> <C>
MERCHANDISING - 2.1%
6,200 Aoyamma Trading $ 80,948
3,000 Ito-Yokado 219,022
-----------
299,970
-----------
METALS-STEEL - 1.2%
262,000 Sumitomo Metal Industries (1) 169,702
-----------
MULTI-INDUSTRY - 2.5%
36,000 Sakata Inx 86,276
62,000 Teijin 277,094
-----------
363,370
-----------
REAL ESTATE - 3.0%
20,900 Airport Facilties 80,257
66,000 KOA Fire & Marine Insurance 174,051
32,000 TOC 186,543
-----------
440,851
-----------
RECREATION OTHER CONSUMER GOODS - 3.3%
12,000 Fuji Photo Film 480,792
-----------
TELECOMMUNICATIONS - 6.3%
73 Nippon Telegraph & Telephone 905,141
-----------
TEXTILE & APPAREL - 0.7%
8,000 Onward Kashiyama 103,487
-----------
<CAPTION>
SHARES VALUE
--------------------- -----------
<C> <S> <C>
TRANSPORTATION - ROAD & RAIL - 2.2%
53 East Japan Railway $ 313,866
-----------
WHOLESALE & INTERNATIONAL TRADE - 5.2%
4,000 Glory 65,216
35,000 Mitsubishi 304,428
52,000 Mitsui & Company 385,411
-----------
755,055
-----------
Total Common Stocks
(cost $12,328,375) 14,188,159
-----------
SHORT TERM INVESTMENT - 0.4%
55,616 SSgA U.S. Government Money
Market Fund, 5.677% (2)
(cost $55,616) 55,616
-----------
</TABLE>
<TABLE>
<S> <C>
Total Investments - 98.6%
(cost $12,383,991) 14,243,775
Other Assets Less Liabilities - 1.4% 202,728
-----------
Total Net Assets - 100% $14,446,503
===========
</TABLE>
------------------
<TABLE>
<C> <S>
(1) Denotes non-income producing security.
(2) Interest rate shown is 7-day yield as of
April 30, 2000.
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
21
<PAGE>
--------------------------------------------------------------------------------
SCHRODER JAPAN PORTFOLIO
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (Note 2) $14,243,775
Cash 192,217
Foreign Currency (Cost $4,232) 4,121
Dividends receivable 41,224
Interest receivable 618
Deferred organizational costs 2,579
Prepaid expenses 1,823
Due from Investment Adviser (Note 3) 10,320
-----------
Total Assets 14,496,677
-----------
LIABILITIES:
Advisory fee payable (Note 3) 6,602
Administration fee payable (Note 3) 610
Accrued expenses and other liabilities 42,962
-----------
Total Liabilities 50,174
-----------
Net Assets $14,446,503
===========
Cost of Securities $12,383,991
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
22
<PAGE>
--------------------------------------------------------------------------------
SCHRODER JAPAN PORTFOLIO
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend income $ 60,239
Interest income 4,540
Foreign taxes withheld (9,036)
--------
Total Investment Income 55,743
--------
EXPENSES:
Investment advisory fees (Note 3) 41,444
Administrative fees (Note 3) 3,768
Subadministration Fees (Note 3) 7,624
Custodian fees 39,708
Professional fees 22,967
Printing expenses 4,984
Trustees fees 1,175
Amortization of organizational expenses 379
--------
Total Expenses 122,049
Expenses reimbursed by Investment Adviser (Note 3) (47,449)
--------
Net Expenses 74,600
--------
NET INVESTMENT INCOME (LOSS) (18,857)
--------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on investments sold 243,567
Net realized gain (loss) on foreign currency
transactions (34,991)
--------
Net realized gain (loss) on
investments and foreign currency
transactions 208,576
--------
Change in net unrealized appreciation (depreciation)
on investments (34,345)
Change in net unrealized depreciation (appreciation)
on foreign currency transactions 110,543
--------
Net change in unrealized
appreciation (depreciation) on
investments and foreign currency
transactions 76,198
--------
NET GAIN (LOSS) 284,774
--------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $265,917
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
23
<PAGE>
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SCHRODER JAPAN PORTFOLIO
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the
Six Months Ended For the
April 30, 2000 Year Ended
(Unaudited) October 31, 1999
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) $ (18,857) $ (43,291)
Net realized gain (loss) on investments and
foreign currency transactions 208,576 (186,103)
Change in net unrealized appreciation
(depreciation) on investments and foreign
currency transactions 76,198 7,511,355
----------- ------------
Net increase (decrease) in net assets resulting
from operations 265,917 7,281,961
----------- ------------
TRANSACTIONS IN INVESTORS' BENEFICIAL INTEREST:
Contributions 5,516,150 4,226,057
Withdrawals (7,028,554) (16,498,593)
----------- ------------
Net increase (decrease) from transactions in
investors' beneficial interest (1,512,404) (12,272,536)
----------- ------------
Total increase (decrease) (1,246,487) (4,990,575)
NET ASSETS
Beginning of period 15,692,990 20,683,565
----------- ------------
End of period $14,446,503 $ 15,692,990
=========== ============
</TABLE>
--------------
FINANCIAL HIGHLIGHTS
Portfolio data for the following periods:
<TABLE>
<CAPTION>
For The Six Months
Ended For The Year For the Period
April 30, 2000 Ended Ended
(Unaudited) October 31, 1999 October 31, 1998 (a)
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets:
Expenses, including waiver of fees 0.99%(b) 0.99% 0.99%(b)
Expenses, excluding waiver of fees 1.62%(b) 1.15% 1.24%(b)
Net investment income (loss)
including waiver of fees (0.25%)(b) (0.25%) 0.55%(b)
Portfolio Turnover Rate 21%(c) 16% 36%(c)
</TABLE>
--------------
<TABLE>
<C> <S>
(a) For the period March 23, 1998 (Commencement of Operations)
through October 31, 1998.
(b) Annualized.
(c) Not annualized.
</TABLE>
The accompanying notes are an integral part of the financial statements.
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24
<PAGE>
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SCHRODER JAPAN PORTFOLIO
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000 (UNAUDITED)
NOTE 1. ORGANIZATION
Schroder Capital Funds ("Schroder Core") was organized as a Delaware
business trust on September 7, 1995. Schroder Core, which is registered as an
open-end, management investment company under the Investment Company Act of
1940, as amended (the "Act"), currently has two investment portfolios.
Included in this report is Schroder Japan Portfolio (the "Portfolio"), which
is a non-diversified portfolio that received assets from Schroder Asian Growth
Fund, Inc. in that Fund's master-feeder structure conversion and commenced
operations on March 23, 1998. Under its Trust Instrument, Schroder Core is
authorized to issue an unlimited number of interests without par value.
Interests in the Portfolio are sold without any sales charges in private
placement transactions to qualified investors, including open-end, management
investment companies.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally
accepted accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of increase and decrease in net assets
from operations during the fiscal period. Actual results could differ from
those estimates.
The following is a summary of significant accounting policies followed by
the Trust which are in conformity with generally accepted accounting
principles:
VALUATION OF INVESTMENTS
Portfolio securities listed on recognized stock exchanges are valued at
the last reported sales price on the exchange on which the securities are
principally traded. Listed securities traded on recognized stock exchanges
where last sale prices are not available are valued at the mean of the closing
bid and ask price ("mid-market price"), or, if none, the last sale price on
the preceding trading day. Securities traded in over-the-counter markets are
valued at the most recent reported mid-market price. Short-term investments
having a maturity of 60 days or less, are valued at amortized cost, which
approximates market value, unless the investment adviser believes another
valuation is more appropriate. Prices used for valuation generally are
provided by independent pricing services. Other securities and assets for
which market quotations are not readily available are valued at fair value as
determined in accordance with procedures approved by the Schroder Core Board
of Trustees.
REPURCHASE AGREEMENTS
When entering into repurchase agreements, it is each Portfolio's policy
that the Portfolio take into its possession, through its custodian, the
underlying collateral and monitor the collateral's value at the time the
agreement is entered into and on a daily basis during the term of the
repurchase agreement to ensure that it equals or exceeds the repurchase price.
In the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
INVESTMENT TRANSACTIONS
Investment security transactions are recorded as of trade date. Realized
gains and losses on sales of investments are determined on the basis of
identified cost.
INVESTMENT INCOME
Dividend income is recorded on the ex-dividend date except that certain
foreign dividends are recorded as the Portfolio is informed of the ex-dividend
date. Dividend income is recorded net of unrecoverable
--------------------------------------------------------------------------------
25
<PAGE>
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SCHRODER JAPAN PORTFOLIO
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
withholding tax. Interest income is recorded on an accrual basis. Foreign
dividend and interest income amounts and realized capital gains or losses are
converted to U.S. dollar equivalents using foreign exchange rates in effect at
the date of the transactions.
EXPENSE ALLOCATION
Schroder Core accounts separately for the assets and liabilities and
operation of each of its Portfolios. Expenses that are directly attributable
to more than one Portfolio are allocated among the respective Portfolios in
proportion to each Portfolio's net assets.
FEDERAL INCOME TAXES
The Portfolio is not required to pay federal income taxes on its net
investment income and net capital gain because it is treated as a partnership
for federal income tax purposes. All interest, dividends, gain and loss of the
Portfolio are deemed to have been "passed through" to the Portfolio's interest
holders in proportion to their holdings in the Portfolio regardless of whether
such interest, dividends or gain have been distributed by the Portfolio.
DEFERRED ORGANIZATION COSTS
Costs incurred by the Portfolio in connection with its organization are
amortized on a straight-line basis over a five-year period.
FOREIGN CURRENCY
Foreign currency amounts are translated into U.S. dollars at the mean of
the bid and asked prices of such currencies against U.S. dollars as follows:
(i) assets and liabilities at the rate of exchange at the end of the
respective period; and (ii) purchases and sales of securities and income and
expenses at the rate of exchange prevailing on the dates of such transactions.
The portion of the results of operations arising from changes in the exchange
rates and the portion due to fluctuations arising from changes in the market
prices of securities are not isolated. Such fluctuations are included with the
net realized and unrealized gain or loss on investments.
The Portfolio may enter into transactions to purchase or sell forward
foreign currencies to protect the U.S. dollar value of the underlying
portfolio of securities against the effect of possible adverse movements in
foreign exchange rates. Principal risks associated with such transactions
include the movement in value of the foreign currency relative to the U.S.
dollar and the ability of the counterparty to perform. Fluctuations in the
value of such forward currency transactions are recorded daily as unrealized
gain or loss; realized gain or loss includes net gain or loss on transactions
that have terminated by settlement or by the Portfolio entering into
offsetting commitments.
NOTE 3. INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENTS
SIMNA is the investment adviser to the Portfolio. Pursuant to an
Investment Advisory Agreement, SIMNA is entitled to receive compensation at an
annual rate, payable monthly, of 0.55% of the Portfolio's average daily net
assets.
The administrator of the Portfolio is Schroder Fund Advisors Inc.
("Schroder Advisors"), a wholly owned subsidiary of SIMNA. Schroder Advisors
is entitled to receive compensation at an annual rate, payable monthly, of
0.05% of the Portfolio's average daily net assets. In addition, Schroder Core
has entered into a Sub-Administration Agreement with State Street Bank and
Trust Company ("State Street") and Schroder Advisors. Under that Agreement,
the Portfolio, together with other mutual funds managed by SIMNA and certain
related entities, pays fees to State Street based on the combined average
daily net assets of all of the
--------------------------------------------------------------------------------
26
<PAGE>
--------------------------------------------------------------------------------
SCHRODER JAPAN PORTFOLIO
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
funds in the Schroder complex, according to the following annual rates: 0.06%
of the first $1.7 billion of such assets, 0.04% of the next $1.7 billion of
such assets, and 0.02% of such assets in excess of $3.4 billion, subject to
certain minimum requirements.
In order to limit the Portfolio's expenses, SIMNA and Schroder Advisors
have voluntarily agreed to reduce their compensation (and, if necessary, to
pay certain expenses of the Portfolio) to the extent that the Portfolio's net
expenses exceed 0.99% of the Portfolio's average daily net assets.
NOTE 4. TRANSACTIONS WITH AFFILIATES
BROKERAGE COMMISSIONS
Brokerage commissions received by affiliates of the Portfolio's investment
adviser from transactions conducted during the period ended April 30, 2000,
amounted to $65.
NOTE 5. INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of non-government investments by the
Portfolio, excluding short-term securities for the period ended April 30, 2000
were $3,140,082 and $4,780,825, respectively.
At April 30, 2000 the identified cost for federal income tax purposes of
investments owned by the Fund was $12,383,991 with a net unrealized
appreciation of $1,859,784. Gross unrealized appreciation and depreciation
were $3,642,382 and $1,782,598, respectively. The aggregate cost of the
Portfolio's investments was substantially the same for book and federal income
tax purposes at April 30, 2000.
NOTE 6. CONCENTRATION OF RISK
The Portfolio's investments in companies domiciled in Japan may cause the
Portfolio to be more susceptible to political, social and economic events
adversely affecting Japanese companies than portfolios not so concentrated.
As of April 30, 2000, Schroder All-Asia Fund owned 99.49% of the
Portfolio.
NOTE 7. SUBSEQUENT EVENTS
Please see Note 7 to the financial statements for Schroder All-Asia Fund,
included elsewhere in this report.
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27
<PAGE>
INVESTMENT ADVISER
Schroder Investment Management
North America Inc.
787 Seventh Avenue, 34(th) floor
New York, NY 10019
TRUSTEES
Sharon L. Haugh, CHAIRMAN
Catherine A. Mazza, VICE CHAIRMAN
Peter E. Guernsey
John I. Howell
William L. Means
ADMINISTRATOR & DISTRIBUTOR
Schroder Fund Advisors Inc.
787 Seventh Avenue, 34th Floor
New York, NY 10019
CUSTODIAN
State Street Bank and Trust Company
TRANSFER & SHAREHOLDER
SERVICING AGENT
Boston Financial Data Services, Inc.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
COUNSEL
Ropes & Gray
The information contained in this report is
intended for the general information of the
shareholders of the Trust. This report is not
authorized for distribution to prospective
investors unless preceded or accompanied
by a current Trust prospectus which contains
important information concerning the Trust.
Schroder All-Asia Fund
P.O. Box 8507
Boston, MA 02266
800-464-3108
[SCHRODER LOGO]
------------------------------------------
Schroder
All-Asia
Fund
SEMI-ANNUAL REPORT
April 30, 2000
(Unaudited)
SAAF0600SAR Schroder Series Trust II
