UAM FUNDS INC II/, 485BXT, 1999-09-23

UAM FUNDS INC II/
485BXT, 1999-09-23

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<PAGE>

Securities Act File No. 333-44193
Investment Company Act of 1940 File No. 811-08605

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Post-Effective Amendment No. 11 [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 13 [X]

UAM FUNDS, INC. II
(Exact Name of Registrant as specified in Charter)

c/o UAM Fund Services, Inc.
211 Congress Street, 4/th/ Floor
Boston, Massachusetts, 02110
Registrant's Telephone Number (617) 542-5440
(Address of Principal Executive Offices)

Michael E. DeFao, Esq.
Secretary
UAM Fund Services, Inc.
211 Congress Street, 4/th/ Floor
Boston, Massachusetts, 02110
(Name and Address of Agent for Service)

COPIES TO:
Audrey C. Talley, Esq.
Drinker, Biddle & Reath, LLP
One Logan Square
18/th/ and Cherry Streets
Philadelphia, PA
19103-6996

It is proposed that this filing become effective (check appropriate box):
[ ] Immediately upon filing pursuant to Paragraph (b)
[X] on September 28, 1999 pursuant to Paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a) (1)
[ ] 75 days after filing pursuant to Paragraph (a)(2)
[ ] on (date) pursuant to Paragraph (a)(2) of Rule 485

If appropriate, check the following box:

[X] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>

PART A
UAM FUNDS, INC. II

The prospectus of the following fund is included in this Post-Effective
Amendment No. 11.

. Analytic Defensive Equity Fund Institutional Class Shares
. Analytic Enhanced Equity Fund Institutional Class Shares
. Analytic International Fund Institutional Class Shares
. Analytic Master Fixed Income Fund Institutional Class Shares
. Analytic Short-Term Government Fund Institutional Class Shares
<PAGE>

UAM Funds
Funds for the Informed Investor(SM)

Analytic Funds
Institutional Class Prospectus September 28, 1999

Analytic Enhanced Equity Fund
Analytic Defensive Equity Fund
Analytic International Fund
Analytic Master Fixed Income Fund
Analytic Short-Term Government Fund

[LOGO OF UAM FUNDS APPEARS HERE]

The Securities and Exchange Commission (SEC) has not approved or disapproved
these securities or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.
<PAGE>

Table Of Contents

<TABLE>
<S> <C>
Fund Summary ............................................................. 1

What are the Objectives of the Funds? ................................. 1
What are the Principal Investment Strategies of the Funds? ............ 1
What are the Principal Risks of the Funds? ............................ 3
How have the Funds Performed? ......................................... 4
What are the Fees and Expenses of the Funds? .......................... 7

Investing with the UAM Funds ............................................. 8

Buying Shares ......................................................... 8
Redeeming Shares ...................................................... 9
Exchanging Shares ..................................................... 9
Transaction Policies .................................................. 9

Account Policies ........................................................ 13

Small Accounts ........................................................ 13
Distributions ......................................................... 13
Federal Taxes ......................................................... 13

Fund Details ............................................................ 15

Principal Investments and Risks of the Funds .......................... 15
Other Investment Practices and Strategies ............................. 21
Year 2000 ............................................................. 22
Investment Management ................................................. 22
Shareholder Servicing Arrangements .................................... 23

Financial Highlights .................................................... 25

Enhanced Equity Fund .................................................. 25
Defensive Equity Fund ................................................. 26
Master Fixed Income Fund .............................................. 26
Short-Term Government Fund ............................................ 27
</TABLE>
<PAGE>

Fund Summary

WHAT ARE THE OBJECTIVES OF THE FUNDS?
- -------------------------------------------------------------------------------

Listed below are the investment objectives of the Analytic Funds. The
funds cannot guarantee they will meet their investment objectives. Except
for the International Fund, a fund may not change its investment objective
without shareholder approval. The International Fund may change its in-
vestment objective without shareholder approval.

Enhanced Equity Fund

The Enhanced Equity Fund seeks above-average total returns through invest-
ments in equity securities.

Defensive Equity Fund

The Defensive Equity Fund seeks to obtain a greater long-term total return
and smaller fluctuations in quarterly total return from a diversified,
hedged common stock portfolio than would be realized from the same portfo-
lio unhedged.

International Fund

The International Fund seeks above-average total returns through invest-
ments in equity securities of companies located in economies outside the
United States.

Master Fixed Income Fund

The Master Fixed Income Fund seeks above-average total returns through in-
vestments in a diversified bond portfolio consisting primarily of U.S.
government, corporate, and mortgage-related fixed income securities.

Short-Term Government Fund

The Short-Term Government Fund seeks to provide a high level of income
consistent with both low fluctuations in market value and low credit risk.

WHAT ARE THE PRINCIPAL INVESTMENT STRATEGIES OF THE FUNDS?
- -------------------------------------------------------------------------------

This section summarizes the principal investment strategies of the funds.
For more information see "PRINCIPAL INVESTMENTS AND RISKS OF THE FUNDS."

1
<PAGE>

Enhanced Equity, Defensive Equity and International Funds

Enhanced Equity Fund

The Enhanced Equity Fund invests primarily in publicly traded equity secu-
rities of corporations whose securities are traded in the U.S. The fund
usually invests in medium to large companies (typically companies with
market capitalizations over $2 billion).

Defensive Equity Fund

The Defensive Equity Fund invests primarily in common stocks on which op-
tions are traded on national securities exchanges. The fund may also use
options to hedge its investments. By combining stocks and options, the ad-
viser tries to create a well-diversified and significantly hedged
portfolio.

International Fund

The International Fund normally invests at least 65% of its total assets
in equity securities of medium to large companies located outside the
United States. The fund does not intend to invest in securities of emerg-
ing markets.

Investment Process

The adviser selects equity securities for these three funds using a pro-
prietary system that ranks the stocks according to a mathematical model.
Using its system, the adviser believes it can assemble a portfolio of se-
curities that is style and sector neutral to achieve a level of diversifi-
cation and risk similar to that of its benchmark. A fund is "style neu-
tral" if it is similar to its benchmark in terms of exposure to quantifi-
able characteristics such as average market capitalization. A fund is
"sector neutral" when its exposure to specified economic sectors (such as
technology or utilities) is similar to that of its benchmark. The adviser
also believes that by using its system a fund can consistently outperform
traditional strategies that focus on a single style, such as value or
growth.

Each fund may also use derivatives, such as futures contracts, for a vari-
ety of purposes, including maintaining full market exposure.

Master Fixed Income Fund

The Master Fixed Income Fund invests primarily in high-grade debt securi-
ties. The fund expects to maintain a duration consistent with the interme-
diate sector of the bond market.

2
<PAGE>

Short-Term Government Fund

The Short-Term Government Fund normally invests at least 80% of its total
assets in U.S. government securities. The fund expects to invest in debt
securities with maturities of three years or less.

WHAT ARE THE PRINCIPAL RISKS OF THE FUNDS?
- -------------------------------------------------------------------------------

This section summarizes the principal risks associated with investing in
the funds. For more information see "PRINCIPAL INVESTMENTS AND RISKS OF
THE FUNDS."

Risks Common to All Mutual Funds

As with all mutual funds, at any time your investment in a fund may be
worth more or less than the price that you originally paid for it. You may
lose money by investing in a fund because:

. The value of the securities it owns changes, sometimes rapidly and un-
predictably.

. It is not successful in reaching its goal because of its strategy or
because it did not implement its strategy properly.

. Unforeseen occurrences in the securities markets negatively affect it.

Enhanced Equity, Defensive Equity and International Funds

Since these funds invest mainly in equity securities, their principal
risks are those of investing in equity securities, which may include sud-
den, unpredictable drops in value or long periods of decline in value. Eq-
uity securities may lose value because of factors affecting the securities
markets generally, an entire industry or a particular company.

The funds may also use derivatives, which may be volatile and may magnify
their gains or losses, causing the funds to make or lose substantially
more money than they invested. The funds attempt to moderate these risks
by using derivatives to gain full market exposure or to hedge their in-
vestments.

International Fund

The International Fund invests heavily in foreign equity securities, which
can be riskier and more volatile than domestic securities. Adverse politi-
cal and economic developments or changes in the value of foreign currency
can make it harder for the fund to sell its securities and could reduce
the value of your shares. Differences in tax and accounting standards and
difficulties in obtaining information about foreign companies can nega-
tively affect investment decisions.

3
<PAGE>

Master Fixed Income and Short-Term Government Funds

Since the funds invest in debt securities, the value of their investments
could fall because:

. Of market conditions and economic and political events.

. Interest rates rise, which tends to cause the value of debt securities
to fall.

. A security's credit rating worsens or its issuer becomes unable to
honor its financial obligations.

HOW HAVE THE FUNDS PERFORMED?
- -------------------------------------------------------------------------------

The bar charts and tables below illustrate how the performance of the
funds has varied from year to year and provide some indication of the
risks of investing in the funds. The bar charts show the investment re-
turns of each fund for each calendar year during the periods indicated.
The table following each bar chart compares each fund's average annual re-
turns for the periods indicated to those of a broad-based securities mar-
ket index. There is no bar chart or table for the International Fund be-
cause it does not have a full calendar year of operations. Past perfor-
mance does not guarantee future results.

Enhanced Equity Fund

Calendar Year Returns

[GRAPH APPEARS HERE]

35.36% 22.95% 29.86% 37.82%
- ------------------------------------------------------------------------
- -0.37%
1994 1995 1996 1997 1998

<TABLE>
<CAPTION>
Return Quarter Ended
---------------------------------------
<S> <C> <C>
Highest Quarter 20.49% 12/31/98
---------------------------------------
Lowest Quarter -8.00% 9/30/98
</TABLE>

Average Annual Returns For Periods Ended 12/31/98

<TABLE>
<CAPTION>
1 Year 5 Years Since 6/30/93
----------------------------------------------------
<S> <C> <C> <C>
Enhanced Equity Fund 37.82% 24.33% 22.76%
----------------------------------------------------
S&P 500 Index 28.60% 24.05% 22.81%
</TABLE>

4
<PAGE>

Defensive Equity Fund

Calendar Year Returns

[GRAPH APPEARS HERE]

17.74% 1.54% 13.29% 6.17% 6.73% 2.47% 21.52% 15.66% 19.11% 28.89%
---------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998

<TABLE>
<CAPTION>
Return Quarter Ended
---------------------------------------
<S> <C> <C>
Highest Quarter 16.32% 12/31/98
---------------------------------------
Lowest Quarter -7.38% 9/30/90
</TABLE>

Average Annual Returns for Periods Ended 12/31/98

<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------------------------------------------------
<S> <C> <C> <C>
Defensive Equity Fund 28.89% 17.21% 13.01%
------------------------------------------------
S&P 500 Index 28.60% 24.05% 19.19%
</TABLE>

Master Fixed Income Fund

Calendar Year Returns

[GRAPH APPEARS HERE]

-1.04% 16.43% 5.69% 10.04% 3.80%
---------------------------------------------------
1994 1995 1996 1997 1998

<TABLE>
<CAPTION>
Return Quarter Ended
---------------------------------------
<S> <C> <C>
Highest Quarter 5.40% 6/30/95
---------------------------------------
Lowest Quarter -2.76% 3/31/94
</TABLE>

5
<PAGE>

Average Annual Returns For Periods Ended 12/31/98

<TABLE>
<CAPTION>
1 Year 5 Years Since 6/30/93
-------------------------------------------------------------------------
<S> <C> <C> <C>
Master Fixed Income Fund 3.80% 6.82% 6.87%
-------------------------------------------------------------------------
Lehman Brothers Government/ Corporate Bond
Index 9.47% 7.30% 7.07%
-------------------------------------------------------------------------
Lehman Brothers Intermediate Government/
Corporate Bond Index 8.42% 6.59% 6.44%
</TABLE>

Short-Term Government Fund

Calendar Year Returns

[GRAPH APPEARS HERE]

0.00% 10.65% 5.28% 5.54% 7.10%
-----------------------------------------------
1994 1995 1996 1997 1998

<TABLE>
<CAPTION>
Return Quarter Ended
---------------------------------------
<S> <C> <C>
Highest Quarter 3.84% 9/30/98
---------------------------------------
Lowest Quarter -0.97% 3/31/94
</TABLE>

Average Annual Returns For Periods Ended 12/31/98

<TABLE>
<CAPTION>
1 Year 5 Years Since 6/30/93
-----------------------------------------------------------------------
<S> <C> <C> <C>
Short-Term Government Fund 7.10% 5.66% 5.53%
-----------------------------------------------------------------------
Merrill Lynch 1 to 3 Year Treasury Index 7.00% 5.98% 5.76%
</TABLE>

6
<PAGE>

WHAT ARE THE FEES AND EXPENSES OF THE FUNDS?
- -------------------------------------------------------------------------------

Annual Fund Operating Expenses (Expenses that are Deducted From the Assets of
a Fund)

This table describes the fees and expenses that you may pay if you buy and
hold shares of a fund.

<TABLE>
<CAPTION>
Enhanced Defensive
Equity Equity Int'l Master Fixed Short-Term
Fund Fund Fund Income Fund Gov't Fund
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Management Fees 0.60% 0.60% 1.00% 0.45% 0.30%
-------------------------------------------------------------------
Other Expenses+ 0.67% 0.60% 0.93% 2.74% 2.43%
-------------------------------------------------------------------
Total Expenses*+ 1.27% 1.20% 1.93% 3.19% 2.73%
</TABLE>

+ The funds have estimated their "Other Expenses" and "Total Expenses"
for the fiscal year ended 12/31/99. The International Fund based its
estimates on the assumption that its average daily net assets were $25
million.

* Estimated Fees and Expenses The funds expect the percentages stated in
the table above to be higher than the expenses you are expected to pay.
Due to certain expense limits by the adviser and expense offsets, in-
vestors in the fund are expected to pay the total operating expenses
listed in the table below. Each fund expects its fee waiver/expense re-
imbursement arrangement to remain in effect for the current fiscal
year; however, the adviser, at its option, may end such arrangements at
any time.

Example

This example can help you to compare the cost of investing in a fund to
the cost of investing in other mutual funds. The example assumes you in-
vest $10,000 in the fund for the periods shown and then redeem all of your
shares at the end of those periods. The example also assumes that you
earned a 5% return on your investment each year and that you paid the to-
tal expenses stated above (which do not reflect any expense limitations)
throughout the period of your investment. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------
<S> <C> <C> <C> <C>
Enhanced Equity Fund $129 $403 $ 697 $1,534
------------------------------------------------------------
Defensive Equity Fund $122 $381 $ 660 $1,455
------------------------------------------------------------
International Fund $196 $606 N/A N/A
------------------------------------------------------------
Master Fixed Income Fund $322 $983 $1,669 $3,494
------------------------------------------------------------
Short-Term Government Fund $276 $847 $1,445 $3,061
</TABLE>

7
<PAGE>

Investing with the UAM Funds

BUYING SHARES
- --------------------------------------------------------------------------------

To open an account To buy more shares
---------------------------------------------------------------------------
By Mail Send a check or money Send a check and, if pos-
order and your account sible, the "Invest by
application to the UAM Mail" stub that accompa-
Funds. Make checks pay- nied your statement to the
able to "UAM Funds" UAM Funds. Be sure your
(the UAM Funds will not check identifies clearly
accept third-party your name, account number
checks). and the UAM Fund into
which you want to invest.

---------------------------------------------------------------------------
By Wire Call toll free 1-877- Call toll free 1-877-826-
826-5465 for an account 5465 to get a wire control
number and wire control number and wire your money
number and then send to the UAM Funds.
your completed account
application to the UAM
Funds.

Wiring Instructions
United Missouri Bank
ABA # 101000695
UAM Funds
DDA Acct. # 9870964163
Ref: portfolio name/account number/
account name/wire control number

---------------------------------------------------------------------------
By Automatic Investment Plan (Via ACH)
You may not open an ac- To set up a plan, mail a
count via ACH. completed application to
the UAM Funds. To cancel
or change a plan, write to
the UAM Funds. Allow up to
15 days to create the plan
and 3 days to cancel or
change it.

---------------------------------------------------------------------------
Minimum Investments$2,500--regular account $100
$500--IRAs
$250--spousal IRAs

UAM Funds
PO Box 419081
Kansas City, MO 64141-6081
(Toll free) 1-877-UAM-LINK (826-5465)
www.uam.com

8
<PAGE>

REDEEMING SHARES
- -------------------------------------------------------------------------------

By Mail Send a letter signed by all registered parties on the ac-
count to the UAM Funds specifying:

. The UAM Fund.

. The account number.

. The dollar amount or number of shares you wish to re-
deem.

Certain shareholders may need to include additional docu-
ments to redeem shares. Please see the Statement of Addi-
tional Information (SAI) if you need more information.

---------------------------------------------------------------------------
By Telephone You must first establish the telephone redemption privi-
lege (and, if desired, the wire redemption privilege) by
completing the appropriate sections of the account appli-
cation.

Call toll free 1-877-826-5465 to redeem your shares. Based
on your instructions, the UAM Funds will mail your pro-
ceeds to you or wire them to your bank.

---------------------------------------------------------------------------
By Systematic Withdrawal Plan (Via ACH)
If your account balance is at least $10,000, you may
transfer as little as $100 per month from your UAM Funds
account to your financial institution.

To participate in this service, you must complete the ap-
propriate sections of the account application and mail it
to the UAM Funds.

EXCHANGING SHARES
- -------------------------------------------------------------------------------

At no charge, you may exchange shares of one UAM Fund for shares of the
same class of any other UAM Fund by writing to or calling the UAM Funds.
Before exchanging your shares, read the prospectus of the UAM Fund for
which you want to exchange, which you may obtain from the UAM Funds. You
may not exchange shares represented by certificates over the telephone.
You may only exchange shares between accounts with identical registrations
(i.e., the same names and addresses).

TRANSACTION POLICIES
- -------------------------------------------------------------------------------

Calculating Your Share Price

You may buy, sell or exchange shares of a UAM Fund at a price equal to its
net asset value (NAV) next computed after it receives and accepts your

9
<PAGE>

order. The funds calculate their NAVs as of the close of trading on the
New York Stock Exchange (NYSE) (generally 4:00 p.m. Eastern Time) each day
the NYSE is open. Therefore, to receive the NAV on any given day, the UAM
Funds must accept your order before the close of trading on the NYSE that
day. Otherwise, you will receive the NAV that is calculated at the close
of trading on the following business day. The UAM Funds are open for busi-
ness on the same days as the NYSE, which is closed on weekends and certain
holidays.

Securities that are traded on foreign exchanges may trade on days when the
UAM Funds do not calculate their NAVs. Consequently, the value of the UAM
Funds may change on days when you are unable to purchase or redeem shares.

Buying or Selling Shares through a Financial Intermediary

You may buy or sell shares of the UAM Funds through a financial intermedi-
ary (such as a financial planner or adviser). Generally, to buy or sell
shares at the NAV of any given day your financial intermediary must re-
ceive your order before the close of trading on the NYSE that day. Your
financial intermediary is responsible for transmitting all purchase and
redemption requests, investment information, documentation and money to
the UAM Funds on time.

Certain financial intermediaries have agreements with the UAM Funds that
allow them to enter confirmed purchase or redemption orders on behalf of
clients and customers. Under this arrangement, the financial intermediary
must send your payment to the UAM Funds by the time they price their
shares on the following business day. If your financial intermediary fails
to do so, it may be responsible for any resulting fees or losses.

Calculating NAV

The UAM Funds calculate their NAVs by adding the total value of their as-
sets, subtracting their liabilities and then dividing the result by the
number of shares outstanding. The UAM Funds use market prices to value
their investments. Investments that do not have readily available market
prices are valued at fair value, according to guidelines established by
the UAM Funds. The UAM Funds may also value securities at fair value when
events occur that make established valuation methods (such as stock ex-
change closing prices) unreliable. The UAM Funds may use a pricing service
to value some of their assets, such as debt securities.

10
<PAGE>

In-Kind Transactions

Under certain conditions and at the UAM Funds' discretion, you may pay for
shares of a UAM Fund with securities instead of cash. In addition, the UAM
Funds may pay all or part of your redemption proceeds with securities in-
stead of cash.

Payment of Redemption Proceeds

The UAM Funds will pay for all shares redeemed within seven days after
they receive a redemption request in proper order. If you redeem shares
that were purchased by check, you will not receive your redemption pro-
ceeds until the check has cleared, which may take up to 15 days from the
purchase date. You may avoid these delays by paying for shares with a cer-
tified check, bank check or money order.

Signature Guarantee

You must have your signature guaranteed when (1) you want the proceeds
from your redemption sent to a person or address different from that reg-
istered on the account, or (2) you request a transfer of your shares.

You may obtain a signature guarantee from most banks, savings institu-
tions, securities dealers, national securities exchanges, registered secu-
rities associations, clearing agencies and other guarantor institutions. A
notary public cannot guarantee a signature.

Telephone Transactions

The UAM Funds will employ reasonable procedures to confirm that instruc-
tions communicated by telephone are genuine. The UAM Funds will not be re-
sponsible for any loss, liability, cost or expense for following instruc-
tions received by telephone that it reasonably believes to be genuine.

11
<PAGE>

Rights Reserved by the UAM Funds

Purchases

At any time and without notice, the UAM Funds may:

. Stop offering shares.

. Reject any purchase order.

. Bar an investor engaged in a pattern of excessive trading from buying
shares. (Excessive trading can hurt performance by disrupting manage-
ment and by increasing expenses.)

Redemptions

At any time, the UAM Funds may change or eliminate any of the redemption
methods described above, except redemption by mail. The UAM Funds may sus-
pend your right to redeem if:

. Trading on the NYSE is restricted.

. The SEC allows the UAM Funds to delay redemptions.

Exchanges

The UAM Funds may:

. Modify or cancel the exchange program at any time on 60 days' written
notice to shareholders.

. Reject any request for an exchange.

. Limit or cancel a shareholder's exchange privilege, especially when an
investor is engaged in a pattern of excessive trading.

12
<PAGE>

Account Policies

SMALL ACCOUNTS
- -------------------------------------------------------------------------------

The UAM Funds may redeem your shares without your permission if the value
of your account falls below 50% of the required minimum initial invest-
ment. This provision does not apply:

. To retirement accounts and certain other accounts.

. When the value of your account falls because of market fluctuations
and not your redemptions.

The UAM Funds will notify you before liquidating your account and allow
you 60 days to increase the value of your account.

DISTRIBUTIONS
- -------------------------------------------------------------------------------

Normally, the Enhanced Equity and Defensive Equity Funds distribute their
net investment income quarterly. The International Fund normally distrib-
utes its net investment income annually. The Master Fixed Income and
Short-Term Government Funds accrue dividends daily and pay them monthly to
shareholders. In addition, the funds distribute their net capital gains
once a year. The UAM Funds will automatically reinvest dividends and dis-
tributions in additional shares of the fund, unless you elect on your ac-
count application to receive them in cash.

FEDERAL TAXES
- -------------------------------------------------------------------------------

The following is a summary of the federal income tax consequences of in-
vesting in these funds. You may also have to pay state and local taxes on
your investment. You should always consult your tax advisor for specific
guidance regarding the tax effect of your investment in the UAM Funds.

Taxes on Distributions

The distributions of the funds will generally be taxable to shareholders
as ordinary income or capital gains (which may be taxable at different
rates depending on the length of time the fund held the relevant assets).
You will be subject to income tax on these distributions regardless of
whether they are paid in cash or reinvested in additional shares. Once a
year UAM Funds will send you a statement showing the types and total
amount of distributions you received during the previous year.

13
<PAGE>

You should note that if you purchase shares just before a distribution,
the purchase price would reflect the amount of the upcoming distribution.
In this case, you would be taxed on the entire amount of the distribution
received, even though, as an economic matter, the distribution simply con-
stitutes a return of your investment. This is known as "buying into a div-
idend" and should be avoided.

Taxes on Exchanges and Redemptions

When you exchange or redeem shares in any UAM Fund, you may recognize a
capital gain or loss for federal tax purposes. This gain or loss will be
based on the difference between your tax basis in the shares (the cost of
your shares) and the amount you receive for them. To aid in computing your
tax basis, you should keep your account statements for the periods during
which you held shares.

The one major exception to these tax principles is that distributions on,
and sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable, but they may be taxable
at some time in the future.

To the extent a UAM Fund invests in foreign securities, it may be subject
to foreign withholding taxes with respect to dividends or interest the
fund received from sources in foreign countries. The UAM Funds may elect
to treat some of those taxes as a distribution to shareholders, which
would allow shareholders to offset some of their U.S. federal income tax.

Backup Withholding

By law, the UAM Funds must withhold 31% of your distributions and proceeds
if you have not provided complete, correct taxpayer information.

14
<PAGE>

Fund Details

PRINCIPAL INVESTMENTS AND RISKS OF THE FUNDS
- -------------------------------------------------------------------------------

This section briefly describes the principal investment strategies the
funds may employ in seeking their objectives. For more information con-
cerning these investment practices and their associated risks, please read
the "FUND SUMMARY" and the statement of additional information (SAI). You
can find information on each fund's recent strategies and holdings its
annual/semi-annual report. Each fund may change these strategies without
shareholder approval.

Enhanced Equity, Defensive Equity and International Funds

Enhanced Equity Fund

The Enhanced Equity Fund normally invests at least 65% of its total assets
in equity securities of corporations whose securities are traded in the
U.S. While the fund may invest in companies of any size, it usually in-
vests in medium to large companies (typically companies with market capi-
talizations over $2 billion). The fund selects investments using the pro-
prietary investment process of the adviser described below.

Defensive Equity Fund

Through its proprietary investment process, the adviser attempts to create
a well-diversified and significantly hedged portfolio by investing in a
combination of stocks, debt securities and options. Typically, the fund
invests at least 65% of its total assets, and at least 80% of its total
assets (taken at current value) excluding cash, cash equivalents and U.S.
government securities, in equity securities.

The fund may use options to protect the values of its investments against
changes resulting from market conditions (hedging). The adviser bases its
hedging decisions on estimates of the fair value and expected contribution
made by the position to the overall expected return of the portfolio.

The fund expects to obtain total return from the following sources:

. Net realized capital gains and changes in unrealized capital apprecia-
tion, if any.

. Dividends and interest income received from investments of the fund.

. Net profits from futures and options.

15
<PAGE>

International Fund

The fund normally invests at least 65% of its total assets in equity secu-
rities of companies located outside the United States. The fund does not
intend to invest in securities of emerging markets. The fund may also en-
gage in over the-counter swap contracts and foreign currency exchange con-
tracts to protect the fund against a change in the price of a security and
changes in foreign exchange rates. While the fund may invest in companies
of any size, it usually invests in medium to large companies. The adviser
selects investments for the fund using the proprietary investment process
of the adviser described below.

Investment Process

The adviser uses a proprietary system that it believes can assemble a
portfolio of securities that is style neutral and sector neutral, and con-
sistently outperforms traditional strategies that focus on a single style,
such as value or growth. A fund is "style neutral" if it is similar to its
benchmark in terms of exposure to quantifiable characteristics such as av-
erage market capitalization. A fund is "sector neutral" when its exposure
to specified economic sectors (such as technology or utilities) is similar
to that of its benchmark. The adviser begins the stock selection process
by using a proprietary system to rank stocks according to their one-month
expected return. The adviser's system is based on a sophisticated mathe-
matical model with several variables that the adviser believes determine a
stock's intrinsic (or true) value, such as its relative valuation, price
momentum, company fundamentals, liquidity and risk.

Based on its rankings, the adviser then uses an optimization process to
select securities that will:

. Maximize expected returns for the fund.

. Minimize expected volatility relative to its benchmark.

. Diversify the assets of the fund among the various countries, indus-
tries, sectors, and individual securities.

The adviser also monitors the stocks held by the fund on a real-time basis
using its proprietary portfolio management system for developments in
terms of news events (such as lawsuits or takeover bids) and significant
changes in fundamental factors. The adviser sells securities only when it
believes the incremental return from the sale exceeds the associated
transaction costs.

Each fund may use futures contracts for a variety of purposes, including:

. Reducing transaction costs;

. Managing cash flows; and

16
<PAGE>

. Maintaining full market exposure, which, in the case of the Enhanced
Equity and Defensive Equity Funds, means adjusting the characteristics
of their investments to more closely approximate those of its bench-
mark. In the case of the International Fund, maintaining full market
exposure means adjusting its exposure to the various countries repre-
sented in its benchmark.

Equity Securities

Equity securities represent an ownership interest, or the right to acquire
an ownership interest, in an issuer. Different types of equity securities
provide different voting and dividend rights and priority in case of the
bankruptcy of the issuer. Equity securities include common stocks, pre-
ferred stocks, convertible securities, rights and warrants.

Equity securities may lose value because of factors affecting the securi-
ties markets generally, such as adverse changes in economic conditions,
the general outlook for corporate earnings, interest rates or investor
sentiment. These circumstances may lead to long periods of poor perfor-
mance, such as during a "bear market." Equity securities may also lose
value because of factors affecting an entire industry, such as increases
in production costs, or factors directly related to that company, such as
decisions made by its management.

Foreign Securities

Each of these funds may invest directly in equity securities of companies
located outside the United States and in American Depositary Receipts
(ADRs), European Depositary Receipts (EDRs) and other similar global in-
struments. However, Enhanced Equity and Defensive Equity Fund may only in-
vest up to 20% of their assets in such securities. ADRs are certificates
evidencing ownership of shares of a foreign issuer that are issued by de-
pository banks and generally trade on an established market in the United
States or elsewhere. EDRs are similar to ADRs, except that European Banks
or trust companies typically issue them. Although ADRs and EDRs are alter-
natives to directly purchasing the underlying foreign securities in their
national markets and currencies, they continue to be subject to many of
the risks associated with investing directly in foreign securities.

Foreign equity and fixed income securities, foreign currencies, and secu-
rities issued by U.S. entities with substantial foreign operations may
involve significant risks in addition to the risks inherent in U.S. in-
vestments.

17
<PAGE>

Local political, economic, regulatory or social instability, military ac-
tion or unrest, or adverse diplomatic developments may affect the value of
foreign investments. A foreign government may act adversely to the inter-
ests of U.S. investors. Such actions may include expropriation or nation-
alization of assets, confiscatory taxation and other restrictions on U.S.
investment.

The funds may purchase non-U.S. securities, which involves risks associ-
ated with such securities not denominated in and not paying cash flows in
U.S. dollars. The funds intend to mitigate those risks by engaging in such
currency hedging transactions as the manager deems necessary, including
hedging the foreign currency value of the securities back into U.S. dol-
lars and translating any gains, losses, income or expenses back into U.S.
dollars. These currency hedging transactions may include foreign exchange
transactions, as well as foreign currency futures, currency options, and
currency swap contracts. A fund may, however, at its discretion choose to
leave certain foreign assets unhedged if, in the opinion of the fund's
management team, the anticipated movement in currencies favors such a po-
sition.

Since a fund's net asset value is denominated in U.S. dollars, changes in
foreign currency rates and in exchange control regulations may positively
or negatively affect the value of its securities. In January 1999, certain
European nations began to use the new European common currency, called the
Euro. The nations that use the Euro have the same monetary policy regard-
less of their domestic economy, which could have adverse effects on those
economies. In addition, difficulties in converting to the Euro could nega-
tively affect foreign investments.

Foreign stock markets, while growing in volume and sophistication, are
generally not as developed as those are in the United States. Securities
of some foreign issuers may be less liquid and more volatile than securi-
ties of comparable U.S. issuers. In addition, the costs associated with
foreign investments, including withholding taxes, brokerage commissions
and custodial costs, are generally higher than the costs associated with
U.S. investments.

Foreign countries generally have different legal systems and different
regulations concerning financial disclosure, accounting and auditing stan-
dards than the United States. This could make corporate financial informa-
tion more difficult to obtain or understand and less reliable than infor-
mation about U.S. companies.

18
<PAGE>

Derivatives

Generally, a derivative is a transaction whose value is "derived' from the
value of an underlying asset, interest rate, exchange rate, stock index or
other measures. The funds may use derivatives such as options, futures,
swaps, and foreign currency exchange contracts. A futures contract is an
agreement between two parties whereby one party is obligated to buy and
the other is obligated to sell a security at an agreed upon price and
time. Swap transactions obligate two parties to exchange, or swap, a se-
ries of cash flows at specified dates. Foreign currency exchange contracts
involve an obligation to purchase or sell a specific amount of currency at
a future date at a specific price.

There are various factors that affect the fund's ability to achieve its
objectives with derivatives. Successful use of a derivative depends on the
degree to which prices of the underlying assets correlate with price move-
ments in the derivatives it buys or sells. A fund could be negatively af-
fected if the change in market value of its securities fails to correlate
perfectly with the values of the derivatives it purchased or sold.

The lack of a liquid secondary market for a derivative may prevent the
fund from closing its derivative positions and could adversely impact its
ability to achieve its objectives and to realize profits or limit losses.

The funds do not expect their use of derivatives to result in leverage.
However, since derivatives may be purchased for a fraction of their value,
a relatively small price movement in a derivative may result in an immedi-
ate and substantial loss or gain to the fund. Derivatives are often more
volatile than other investments and the fund may lose more in the deriva-
tive than it originally invested in it.

Master Fixed Income and Short-Term Government Funds

Master Fixed Income Fund

Normally, The Master Fixed Income Fund invests at least 65% of its total
assets in U.S. dollar denominated investment-grade securities. Investment-
grade debt securities are debt securities that a nationally recognized
statistical rating agency, such as Moody's Investors Service or Standard &
Poor's Rating Group, has rated in its top three rating categories at the
time of purchase. The fund expects to maintain a duration consistent with
the intermediate sector of the bond market.

Short-Term Government Fund

To minimize credit risk, the Short-Term Government Fund will normally in-
vest at least 80% of its total assets in U.S. government securities. The

19
<PAGE>

fund may invest the remainder of its assets in investment-grade debt secu-
rities. To minimize fluctuations in market value, the fund expects to in-
vest in debt securities with maturities of three years or less.

Investment Process

The adviser constructs each fund to match its benchmark with respect to
duration, maturity and quality. In addition, the adviser tries to add
value over the benchmark by using a disciplined quantitative approach to
forecast short-term interest rates and shifts in the yield curve of U.S.
Treasury securities.

Debt Securities

A debt security is an interest bearing security that corporations and gov-
ernments use to borrow money from investors. The issuer of a debt security
promises to pay interest at a stated rate, which may be variable or fixed,
and to repay the amount borrowed at maturity (dates when debt securities
are due and payable). Debt securities include securities issued by corpo-
rations and the U.S. government and its agencies, mortgage-backed and as-
set-backed securities (securities that are backed by pools of loans or
mortgages assembled for sale to investors), commercial paper and certifi-
cates of deposit.

The concept of duration is useful in assessing the sensitivity of an in-
come fund to interest rate movements, which are the main source of risk
for almost all income funds. Duration measures price volatility by esti-
mating the change in price of a debt security for a 1% change in its
yield. For example, a duration of five years means the price of a debt se-
curity will change about 5% for every 1% change in its yield. Thus, the
higher the duration, the more volatile the security.

The price of a debt security generally moves in the opposite direction
from interest rates (i.e., if interest rates go up the price of the bond
will go down, and vice versa). Some types of debt securities are more af-
fected by changes in interest rates than others. For example, changes in
rates may cause people to pay off or refinance the loans underlying mort-
gage-backed and asset-backed securities earlier or later than expected,
which would shorten or lengthen the maturity of the security. This behav-
ior can negatively affect the performance of a fund by shortening or
lengthening its average maturity and, thus, reducing its effective dura-
tion. The unexpected timing of mortgage-backed and asset-backed prepay-
ments caused by changes in interest rates may also cause the fund to rein-
vest its assets at lower rates, reducing the yield of the fund.

20
<PAGE>

The credit rating or financial condition of an issuer may affect the value
of a debt security. Generally, the lower the quality rating of a security,
the greater the risks that the issuer will fail to pay interest fully and
return principal in a timely manner. To compensate investors for assuming
more risk, issuers with lower credit ratings usually offer their investors
higher "risk premium" in the form of higher interest rates than they would
find with a safer security, such as a U.S. Treasury security. However,
since the interest rate is fixed on a debt security at the time it is pur-
chased, investors reflect changes in confidence regarding the certainty of
interest and principal by adjusting the price they are willing to pay for
the security. This will affect the yield-to-maturity of the security. If
an issuer defaults or becomes unable to honor its financial obligations,
the security may lose some or all of its value.

OTHER INVESTMENT PRACTICES AND STRATEGIES
- -------------------------------------------------------------------------------

In addition to the principal investments described above, the funds may
invest in foreign securities and may deviate from their investment strate-
gies from time to time. They may also employ investment practices that are
not described in this prospectus, such as repurchase agreements, when-is-
sued and forward commitment transactions, lending of securities, borrowing
and other techniques. For information concerning these investment prac-
tices and their risks, you should read the SAI.

Foreign Securities

Master Fixed Income and Short-Term Government Funds may each invest up to
20% of its total assets in foreign securities. As described above foreign
securities can be riskier and more volatile than domestic securities. For
more information, see "Foreign Securities" under the heading "PRINCIPAL
INVESTMENTS AND RISKS OF THE FUNDS" and the SAI.

Short-Term Investing

At times, the adviser may decide to suspend temporarily the normal invest-
ment activities of a fund by investing up to 100% of its assets in a vari-
ety of securities, such as U.S. government and other high quality and
short-term debt obligations. The adviser may temporarily adopt a defensive
position to reduce changes in the value of a fund's shares that may result
from adverse market, economic, political or other developments.

When the adviser pursues a temporary defensive strategy, a fund may not
profit from favorable developments that it would have otherwise profited

21
<PAGE>

from if it were pursuing its normal strategies. Likewise, these strategies
may prevent a fund from achieving its stated objectives.

Portfolio Turnover

The funds may buy and sell investments relatively often because the funds
may need to adjust their holdings in response to market volatility. Such a
strategy often involves higher expenses, including brokerage commissions,
and may increase the amount of capital gains (and, in particular, short-
term gains) realized by a fund. Shareholders must pay tax on such capital
gains.

YEAR 2000
- -------------------------------------------------------------------------------

Many computer programs in use today cannot distinguish the year 2000 from
the year 1900 because of the way they encode and calculate dates. Conse-
quently, these programs may not be able to perform necessary functions and
could disrupt the operations of the UAM Funds or financial markets in gen-
eral. The year 2000 issue affects all companies and organizations, includ-
ing those that provide services to the UAM Funds and those in which the
UAM Funds invest. Foreign issuers may be more vulnerable than those lo-
cated in the United States to negative effects from year-2000 related
problems.

The UAM Funds and their advisers, administrator, distributor and transfer
agent are taking steps they believe are reasonably necessary to address
any Fund related year 2000-related computer problems. They are actively
working on necessary changes to their own computer systems to prepare for
the year 2000 and expect that their systems will be adapted before that
date. They are also requesting information on each service provider's
state of readiness and contingency plan. However, at this time the degree
to which the year 2000 issue will affect the UAM Funds' investments or op-
erations cannot be predicted. Any negative consequences could adversely
affect your investment in the UAM Funds.

INVESTMENT MANAGEMENT
- -------------------------------------------------------------------------------

Investment Adviser

Analytic Investors, Inc., a California corporation located at 700 South
Flower St., Suite 2400, Los Angeles, CA 90017, is the investment adviser
to each of the funds. The adviser manages and supervises the investment of
each fund's assets on a discretionary basis. The adviser, an affiliate of
United Asset Management Corporation, was founded in 1970 as one of

22
<PAGE>

the first independent investment counsel firms specializing in the crea-
tion and continuous management of optioned equity and optioned debt port-
folios for fiduciaries and other long-term investors. The adviser serves
pensions and profit-sharing plans, endowments, foundations, corporate in-
vestment portfolios, mutual savings banks and insurance companies.

Before March 31, 1999, Pilgrim Baxter & Associates, Ltd. was the funds'
investment adviser, and Analytic Investors was the sub-adviser to each
fund other than the International Fund. The funds will pay Analytic In-
vestors at the same rates they paid Pilgrim Baxter, which are set forth in
the table below and are expressed as a percentage of average net assets.
In addition, Analytic Investors has voluntarily agreed to limit the total
expenses of each fund to the amounts listed in the table below. To main-
tain these expense limits, the adviser may waive a portion of its manage-
ment fee and/or reimburse certain expenses of the funds (excluding inter-
est, taxes, brokerage and extraordinary expenses). Each fund expects its
fee waiver/expense reimbursement arrangement to remain in effect for the
current fiscal year; however, the adviser, at its option, may end such ar-
rangements at any time.

<TABLE>
<CAPTION>
Short-Term
Enhanced Defensive Int'l Master Fixed Gov't
Equity Fund Equity Fund Fund Income Fund Fund
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Management fees 0.60% 0.60% 1.00% 0.45% 0.30%
------------------------------------------------------------------------
Expenses Limit 0.99% 0.99% 1.30% 0.80% 0.60%
</TABLE>

Portfolio Managers

Teams of the adviser's investment professionals have primary responsibil-
ity for the day-to-day management of the funds. For more information on
the composition of those teams, including biographies of some of their
members, please see the SAI.

SHAREHOLDER SERVICING ARRANGEMENTS
- -------------------------------------------------------------------------------

Brokers, dealers, banks, trust companies and other financial representa-
tives may receive compensation from the UAM Funds or their service provid-
ers for providing a variety of services. This section briefly describes
how financial representatives may get paid.

For providing certain services to their clients, financial representatives
may be paid a fee based on the assets of the UAM Funds that are attribut-
able to the financial representative. These services may include record
keeping, transaction processing for shareholders' accounts and certain
shareholder services not currently offered to shareholders that deal di-
rectly with the UAM Funds. In addition, your financial representatives

23
<PAGE>

may charge you other account fees for buying or redeeming shares of the
UAM Funds or for servicing your account. Your financial representative
should provide you with a schedule of its fees and services.

The UAM Funds may pay all or part of the fees paid to financial represent-
atives. Periodically, the board of the UAM Funds reviews these arrange-
ments to ensure that the fees paid are appropriate to the services per-
formed. The UAM Funds do not pay these service fees on shares purchased
directly. In addition, the adviser and its affiliates may, at their own
expense, pay financial representatives for these services.

The adviser and its affiliates may, at their own expense, pay financial
representatives for distribution and marketing services performed with re-
spect to the UAM Funds.

The adviser may pay its affiliated companies distribution and marketing
services performed with respect to the UAM Funds.

24
<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand the fi-
nancial performance of the funds. The financial highlights table comes
from the financial statements of each fund and reflects the financial re-
sults for a single fund share. The total returns in the table represent
the rate that an investor would have earned on an investment in the funds
(assuming reinvestment of all dividends and distributions).
PricewaterhouseCoopers LLP has audited the information presented below for
the year ended December 31, 1998 and the financial statements of the funds
for the year then ended. The information below for the four years ended
December 31, 1997, has been restated to reflect the conversion ratio de-
scribed in the footnotes to the tables. Deloitte & Touche LLP audited that
information and the related financial statements before the information
was restated. PricewaterhouseCoopers LLP audited the table below to verify
that the information was converted properly. The 1998 financial statements
and the unqualified opinion of PricewaterhouseCoopers LLP are included in
the 1998 annual report of the funds, which is available upon request.

ENHANCED EQUITY FUND+
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
June 30,
Fiscal Year Ended 1999
December 31, (Unaudited) 1998 1997 1996 1995 1994
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $10.90 $8.43 $7.43 $7.95 $6.04 $6.23
-----------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income 0.05 0.06 0.09 0.13 0.14 0.17
Net Gains or Losses on
Securities (Realized
and Unrealized) 1.68 3.07 2.12 1.69 1.98 (0.19)
-----------------------------------------------------------------------------
Total From Investment
Operations 1.73 3.13 2.21 1.82 2.12 (0.02)
-----------------------------------------------------------------------------
Less Distributions
Dividends (From Net
Investment Income) -- (0.06) (0.09) (0.13) (0.14) (0.17)
Distributions (From
Capital Gains) -- (0.59) (1.10) (2.20) (0.07) --
In Excess of Net
Investment Income -- (0.01) (0.01) -- -- --
In Excess of Net
Realized Gains -- -- (0.01) (0.01) -- --
-----------------------------------------------------------------------------
Total Distributions -- (0.66) (1.21) (2.34) (0.21) (0.17)
-----------------------------------------------------------------------------
Net Asset Value, End of
Year $12.63 $10.90 $8.43 $7.43 $7.95 $6.04
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Total Return 15.87%** 37.82% 29.86% 22.95% 35.36% (0.37)%
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(Thousands) $49,501 $33,889 $7,331 $3,519 $2,318 $1,511
Ratio of Expenses to
Average Net Assets 1.10%* 1.26% 1.00% 0.91% 0.50% 0.24%
Ratio of Net Investment
Income to Average Net
Assets 1.00% 0.78% 1.17% 1.53% 2.02% 3.24%
Portfolio Turnover Rate 149% 297.36% 189.39% 179.47% 10.15% 24.75%
</TABLE>

You can find the text for the footnotes for this fund under the Financial
Highlights Table for Short-Term Government Fund.

25
<PAGE>

DEFENSIVE EQUITY FUND#
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
June 30,
Fiscal Year Ended 1999
December 31, (Unaudited) 1998 1997 1996 1995 1994
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $11.77 $ 12.41 $ 13.71 $ 12.64 $ 10.60 $ 11.40
-----------------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income 0.04 0.05 0.12 0.19 0.23 0.30
Net Gains or Losses on
Securities (Realized
and Unrealized) 1.97 3.05 2.49 1.78 2.04 (0.02)
-----------------------------------------------------------------------------------
Total From Investment
Operations 2.01 3.10 2.61 1.97 2.27 0.28
-----------------------------------------------------------------------------------
Less Distributions
Dividends (From Net
Investment Income) -- (0.05) (0.12) (0.19) (0.23) (0.30)
Distributions (From
Capital Gains) -- (3.69) (3.79) (0.71) -- (0.78)
-----------------------------------------------------------------------------------
Total Distributions -- (3.74) (3.91) (0.90) (0.23) (1.08)
-----------------------------------------------------------------------------------
Net Asset Value, End of
Year $13.78 $ 11.77 $ 12.41 $ 13.71 $ 12.64 $ 10.60
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Total Return 17.08%** 28.89% 19.11% 15.66% 21.52% 2.47%
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(Thousands) $66,690 $56,021 $46,286 $52,484 $42,648 $48,254
Ratio of Expenses to
Average Net Assets 1.11% 1.38% 1.30% 1.23% 1.22% 1.10%
Ratio of Net Investment
Income to Average Net
Assets 0.72% 0.40% 0.75% 1.43% 1.87% 3.45%
Portfolio Turnover Rate 161% 299.28% 75.41% 43.17% 32.37% 48.71%
</TABLE>

MASTER FIXED INCOME FUND+
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended
June 30,
Fiscal Year Ended 1999
December 31, (Unaudited) 1998 1997 1996 1995 1994
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $9.81 $10.00 $11.62 $ 11.78 $ 10.75 $ 11.61
---------------------------------------------------------------------------------
Income from Investment
Operations
Net Investment Income 0.23 0.51 0.67 0.66 0.69 0.72
Net Gains or Losses on
Securities (Realized
and Unrealized) (0.45) (0.14) 0.46 (0.01) 1.03 (0.85)
---------------------------------------------------------------------------------
Total From Investment
Operations (0.22) 0.37 1.13 0.65 1.72 (0.13)
---------------------------------------------------------------------------------
Less Distributions
Dividends (From Net
Investment Income) (0.23) (0.51) (0.67) (0.66) (0.69) (0.72)
Distributions (From
Capital Gains) -- (0.05) (1.98) (0.14) -- (0.01)
In Excess of Net
Realized Gain -- -- (0.10) (0.01) -- --
---------------------------------------------------------------------------------
Total Distributions (0.23) (0.56) (2.75) (0.81) (0.69) (0.73)
---------------------------------------------------------------------------------
Net Asset Value, End of
Year $9.36 $ 9.81 $10.00 $ 11.62 $ 11.78 $ 10.75
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Total Return (2.21)%** 3.80% 10.04% 5.69% 16.43% (1.04)%
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(Thousands) $5,749 $4,954 $5,712 $28,926 $24,868 $ 6,155
Ratio of Expenses to
Average Net Assets 0.93%* 1.07% 0.90% 0.72% 0.69% 0.60%
Ratio of Net Investment
Income to Average Net
Assets 4.97%* 5.06% 5.60% 5.66% 5.99% 7.16%
Portfolio Turnover Rate 10% 98.26% 39.98% 21.95% 31.82% 44.30%
</TABLE>

You can find the footnotes for these funds on the next page.

26
<PAGE>

SHORT-TERM GOVERNMENT FUND+
- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Six Months
Ended
June 30,
Fiscal Year Ended 1999
December 31, (Unaudited) 1998 1997 1996 1995 1994
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $10.10 $ 9.97 $ 9.99 $10.14 $ 9.70 $ 10.19
--------------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income 0.29 0.56 0.56 0.63 0.57 0.49
Net Gains or Losses on
Securities (Realized
and Unrealized) (0.20) 0.14 (0.02) (0.10) 0.44 (0.49)
--------------------------------------------------------------------------------
Total From Investment
Operations 0.09 0.70 0.54 0.53 1.01 0.00
--------------------------------------------------------------------------------
Less Distributions
Dividends (From Net
Investment Income) (0.28) (0.56) (0.56) (0.67) (0.57) (0.49)
In Excess of Net
Investment Income -- (0.01) -- -- -- --
Return of Capital -- -- -- (0.01) -- --
--------------------------------------------------------------------------------
Total Distributions (0.28) (0.57) (0.56) (0.68) (0.57) (0.49)
--------------------------------------------------------------------------------
Net Asset Value, End of
Year $9.91 $10.10 $ 9.97 $ 9.99 $ 10.14 $ 9.70
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total Return 0.85%** 7.10% 5.54% 5.28% 10.65% 0.00%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Year
(Thousands) $4,665 $5,259 $2,978 $1,008 $27,880 $24,481
Ratio of Expenses to
Average Net Assets 0.78%* 0.84% 0.60% 0.56% 0.50% 0.45%
Ratio of Net Investment
Income to Average Net
Assets 5.77%* 5.43% 5.57% 5.99% 5.76% 5.37%
Portfolio Turnover Rate 37% 25.19% 33.50% 31.48% 10.15% 3.21%
</TABLE>

* Annualized
** Not annualized
Amounts designated as "--" are either $0 or have been rounded to $0.
+ The information set forth in these tables for the periods prior to July
27, 1998 is the financial data of the Enhanced Equity Fund, Master
Fixed Income Fund and Short-Term Government Fund, each a series of a
predecessor company, The Analytic Series Fund, Inc. Analytic Enhanced
Equity Fund, Analytic Master Fixed Income Fund and Analytic Short-Term
Government acquired the assets and assumed the liabilities of the En-
hanced Equity Fund, Master Fixed Income Fund and Short-Term Government
Fund of the Analytic Series Fund, Inc. on July 27, 1998. The net asset
value at the beginning of each period and the changes in net asset val-
ues including the net asset values at the end of each period through
the date of reorganization have been restated to reflect the conversion
ratios on the date of reorganization as follows: 0.61425 for the Ana-
lytic Enhanced Equity Fund, 1.1312 for the Analytic Master Fixed Income
Fund and 1.0162 for the Analytic Short-Term Government Fund.
# The information set forth in this table for the periods prior to August
31, 1998 is the financial data of the Defensive Equity Portfolio of An-
alytic Optioned Equity Fund, Inc. Analytic Defensive Equity Fund ac-
quired the assets and assumed the liabilities of the Defensive Equity
Portfolio of Analytic Optioned Equity Fund, Inc. on August 31, 1998.
The net asset values at the beginning of each period and the changes in
net asset values including the net asset values at the end of each pe-
riod through the date of reorganization have been restated to reflect
the conversion ratio of 0.95328 on the date of reorganization for the
Analytic Defensive Equity Fund.

27
<PAGE>

Portfolio Codes

The reference information below will be helpful to you when you contact
the UAM Funds to purchase or exchange shares, check daily NAVs or get ad-
ditional information.

<TABLE>
<CAPTION>
Trading CUSIP Fund
Symbol Number Codes
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Enhanced Equity Fund ANEEX 90255P206 791
---------------------------------------------------------------------------------------
Defensive Equity Fund ANDEX 90255P107 794
---------------------------------------------------------------------------------------
International Fund None 90255P503 795
---------------------------------------------------------------------------------------
Master Fixed Income Fund ANFIX 90255P305 792
---------------------------------------------------------------------------------------
Short-Term Government Fund ANSTX 90255P404 793
</TABLE>
<PAGE>

Analytic Funds

For investors who want more information about the funds, the following
documents are available upon request.

Annual Reports

The annual report of the funds provides additional information about their
investments. In the annual report, you will also find a discussion of the
market conditions and investment strategies that significantly affected
the performance of the Analytic Funds during the last fiscal year.

Statement of Additional Information

The SAI contains additional detailed information about the funds and is
incorporated by reference into (legally part of) this prospectus. Invest-
ors can receive free copies of these materials, request other information
about the UAM Funds and make shareholder inquiries by writing to or call-
ing:

UAM Funds
PO Box 419081
Kansas City, MO 64141-6081
(Toll free) 1-877-UAM-LINK (826-5465)
www.uam.com

For a fee, you can get the reports of the funds and SAI by writing to the
SEC's Public Reference Section, Washington, D.C. 20459-6009, or by calling
the SEC at 1-800-SEC-0330. You can get copies of this information for free
on the SEC's Internet site at http://www.sec.gov.

The funds' Investment Company Act of 1940 file number is 811-08605.

[UAM LOGO APPEARS HERE]
<PAGE>

PART B
UAM FUNDS, INC. II

The Statement of Additional Information of the following fund is included in
this Post-Effective Amendment No. 11.

UAM Funds, Inc. II
PO Box 419081
Kansas City, MO 64141-6081
(Toll free) 1-877-UAM-LINK (826-5465)

Analytic Funds
Analytic Enhanced Equity Fund
Analytic Defensive Equity Fund
Analytic International Fund
Analytic Master Fixed Income Fund
Analytic Short-Term Government Fund

Institutional Class Shares

Statement of Additional Information
September 28, 1999

This statement of additional information is not a prospectus. However, you
should read it in conjunction with the prospectus of the funds dated September
28, 1999, as supplemented from time to time. You may obtain the fund's
prospectuses by contacting the fund at the address listed above.
<PAGE>

Table Of Contents

<TABLE>
<CAPTION>
<S> <C>
I: Portfolio Summaries I-1
Analytic Defensive Equity Fund................................................. I-2
What Investment Strategies May The Portfolio Use?............................ I-2
What Are The Investment Policies Of The Portfolio?........................... I-2
Who Is The Investment Adviser Of The Portfolio?.............................. I-3
How Much Does The Portfolio Pay For Administrative Services?................. I-5
Who are the Principal Holders of the Securities of the Portfolio?............ I-5
What Was The Portfolio's Performance As Of Its Most Recent Fiscal Year End?.. I-6
What Were The Expenses Of The Portfolio?..................................... I-6
Analytic Enhanced Equity Fund.................................................. I-7
What Investment Strategies May The Portfolio Use?............................ I-7
What Are The Investment Policies Of The Portfolio?........................... I-7
Who Is The Investment Adviser Of The Portfolio?.............................. I-9
How Much Does The Portfolio Pay For Administrative Services?................. I-10
Who are the Principal Holders of the Securities of the Portfolio?............ I-10
What Was The Portfolio's Performance As Of Its Most Recent Fiscal Year End?.. I-10
What Were The Expenses Of The Portfolio?..................................... I-11
Analytic International Fund.................................................... I-12
What Investment Strategies May The Portfolio Use?............................ I-12
What Are The Investment Policies Of The Portfolio?........................... I-12
Who Is The Investment Adviser Of The Portfolio?.............................. I-14
How Much Does The Portfolio Pay For Administrative Services?................. I-14
Analytic Master Fixed Income Fund.............................................. I-16
What Investment Strategies May The Portfolio Use?............................ I-16
What Are The Investment Policies Of The Portfolio?........................... I-16
Who Is The Investment Adviser Of The Portfolio?.............................. I-18
How Much Does The Portfolio Pay For Administrative Services?................. I-19
Who are the Principal Holders of the Securities of the Portfolio?............ I-19
What Was The Portfolio's Performance As Of Its Most Recent Fiscal Year End?.. I-19
What Were The Expenses Of The Portfolio?..................................... I-20
Analytic Short-Term Government Fund............................................ I-21
What Investment Strategies May The Portfolio Use?............................ I-21
What Are The Investment Policies Of The Portfolio?........................... I-21
Who Is The Investment Adviser Of The Portfolio?.............................. I-23
How Much Does The Portfolio Pay For Administrative Services?................. I-23
Who are the Principal Holders of the Securities of the Portfolio?............ I-24
What Was The Portfolio's Performance As Of Its Most Recent Fiscal Year End?.. I-24
What Were The Expenses Of The Portfolio?..................................... I-24
II: The UAM Funds in Detail II-1
Description of Permitted Investments........................................... II-2
Debt Securities.............................................................. II-2
Derivatives.................................................................. II-8
Equity Securities............................................................ II-16
Foreign Securities........................................................... II-17
Investment Companies......................................................... II-21
Repurchase Agreements........................................................ II-21
Restricted Securities........................................................ II-21
Securities Lending........................................................... II-22
Short Sales.................................................................. II-22
When-Issued, Forward Commitment and Delayed Delivery Transactions............ II-23
Management Of The Fund......................................................... II-24
Investment Advisory and Other Services......................................... II-25
Investment Adviser........................................................... II-25
</TABLE>
<PAGE>

<TABLE>
<S> <C>
Distributor.................................................................. II-26
Administrative Services...................................................... II-26
Custodian.................................................................... II-28
Independent Public Accountant................................................ II-28
Brokerage Allocation and Other Practices....................................... II-28
Selection of Brokers......................................................... II-28
Simultaneous Transactions.................................................... II-28
Brokerage Commissions........................................................ II-29
Capital Stock and Other Securities............................................. II-29
The Fund..................................................................... II-29
Description Of Shares And Voting Rights...................................... II-29
Dividends and Capital Gains Distributions.................................... II-30
Purchase, Redemption and Pricing of Shares..................................... II-30
Net Asset Value Per Share.................................................... II-30
Purchase of Shares........................................................... II-31
Redemption of Shares......................................................... II-32
Exchange Privilege........................................................... II-34
Transfer Of Shares........................................................... II-34
Performance Calculations....................................................... II-34
Total Return................................................................. II-34
Yield........................................................................ II-35
Comparisons.................................................................. II-35
Financial Statements........................................................... II-36
III: Glossary III-1
IV: Appendix A -- Description of Securities and Ratings IV-1
Moody's Investors Service, Inc................................................. IV-2
Preferred Stock Ratings...................................................... IV-2
Debt Ratings - Taxable Debt & Deposits Globally.............................. IV-2
Short-Term Prime Rating System - Taxable Debt & Deposits Globally............ IV-3
Standard & Poor's Ratings Services............................................. IV-4
Preferred Stock Ratings...................................................... IV-4
Long-Term Issue Credit Ratings............................................... IV-4
Short-Term Issue Credit Ratings.............................................. IV-5
Duff & Phelps Credit Rating Co................................................. IV-6
Long-Term Debt and Preferred Stock........................................... IV-6
Short-Term Debt.............................................................. IV-7
Fitch IBCA Ratings............................................................. IV-7
International Long-Term Credit Ratings....................................... IV-7
V: Appendix B - Comparisons V-1
VI: Portfolio Management Teams VI-1
</TABLE>
<PAGE>

I: Portfolio Summaries

I-1
<PAGE>

Analytic Defensive Equity Fund

WHAT INVESTMENT STRATEGIES MAY THE PORTFOLIO USE?
- --------------------------------------------------------------------------------

The portfolio may use the securities and investment strategies listed below in
seeking its objective. This SAI describes each of these investments/strategies
and their risks in Part II under "Description of Permitted Investments." The
investments that are italicized are principal strategies and you can find more
information on these techniques in the prospectus of the portfolio. You can
find more information concerning the limits on the ability of the portfolio to
use these investments in "What Are the Investment Policies of the Portfolio?"

. Equity securities (at least 65% of its total assets, and at least 80%
excluding cash, cash equivalents and U.S. government securities).

. Options to protect against a change in the price of an investment the
portfolio owns or anticipates buying in the future (a practice known as
hedging).

. Futures to manage cash flows, to reduce transactions costs or to maintain
full exposure of the markets, which, in the case of the portfolio, means
adjusting the characteristics of its investments to more closely
approximate those of its benchmark.

. Short-term debt securities for temporary defensive purposes, to earn a
return on uninvested assets or to meet redemptions.

. Investment company securities.

. Repurchase agreements.

. Restricted securities.

. Securities lending.

. When-issued securities.

WHAT ARE THE INVESTMENT POLICIES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

The portfolio will determine percentages (with the exception of a limitation
relating to borrowing) immediately after and as a result of the portfolio's
acquisition of such security or other asset. Accordingly, the portfolio will
not consider changes in values, net assets or other circumstances when
determining whether the investment complies with its investment limitations.

Fundamental Policies

The following investment limitations are fundamental, which means the
portfolio cannot change them without approval by the vote of a majority of the
outstanding voting securities of portfolio, as defined by the 1940 Act. The
portfolio will not:

. Make loans except that the portfolio, in accordance with its investment
objective and policies, may (a) purchase debt obligations, (b) enter into
repurchase agreements and (c) lend its portfolio securities.

. Act as an underwriter of securities of other issuers, except as it may be
deemed to be an underwriter under the 1933 Act in connection with the
purchase and sale of portfolio securities.

. Purchase or sell commodities or commodity contracts, except that the
portfolio, in accordance with its investment objective and policies, may:
(i) invest in readily marketable securities of issuers which invest or
engage in such activities; and (ii) enter into forward contracts, futures
contracts and options thereon.

. Purchase or sell real estate, or real estate partnership interests, except
that this limitation shall not prevent the portfolio from investing
directly or indirectly in readily marketable securities of issuers which
can

I-2
<PAGE>

invest in realestate, institutions that issue mortgages, or real estate
investment trusts which deal with real estate or interests therein.

. Issue senior securities (as defined in the 1940 Act) except as permitted in
connection with the portfolio's policies on borrowing and pledging, or as
permitted by rule, regulation or order of the SEC.

. Purchase more than 10% of the voting securities of any one issuer or
purchase securities of any one issuer if, at the time of purchase, more
than 5% of its total assets will be invested in that issuer except up to
25% of its assets may be invested without regard to these limits. For
purposes of this investment limitation, the term "issuer" does not include
obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities and repurchase agreements collateralized by such
obligations.

. Invest 25% or more of its total assets at the time of purchase in
securities of issuers (other than obligations issued or guaranteed by the
U.S. government, its agencies or instrumentalities and repurchase
agreements collateralized by such obligations) whose principal business
activities are in the same industry. For purposes of this investment
limitation, state and municipal governments and their agencies and
authorities are not deemed to be industries; utility companies will be
divided according to their services (e.g., gas, gas transmission, electric,
electric and gas, and telephone), and financial service companies will be
classified according to end use of their service (e.g., automobile finance,
bank finance, and diversified finance).

. Borrow money (other than pursuant to reverse repurchase agreements) except
for temporary or emergency purposes and then only in amounts up to (a) 10%
of its total assets. The temporary borrowing will include, for example,
borrowing to facilitate the orderly sale of portfolio securities to
accommodate substantial redemption requests if they should occur, to
facilitate the settlement of securities transactions, and is not for
investment purposes. All borrowings in excess of 5% of the portfolio's
total assets will be repaid before making additional investments. The
foregoing percentages will apply at the time of each purchase of a
security.

Non-Fundamental Policies

The following limitations are non-fundamental, which means the portfolio may
change them without shareholder approval. The portfolio will not:

. Pledge more than 10% of its total assets, except that the portfolio may
pledge assets to the extent permitted by the 1940 Act in order to (i)
secure permitted borrowings or (ii) as may be necessary in connection with
the portfolio's use of options and futures contracts.

. Purchase or hold the securities of an issuer if, at the time thereof, any
such purchase or holding would cause more than 15% of the portfolio's net
assets to be invested in illiquid securities. This limitation does not
include any Rule 144A security that has been determined by, or pursuant to
procedures established by, the board, based on trading markets for such
security, to be liquid.

. Purchase or sell puts, calls, straddles, spreads, and any combination
thereof except that a portfolio may, in accordance with its investment
objective and policies, write covered call options with respect to any of
its portfolio securities, write covered put options and enter into closing
purchase transactions with respect to such options, engage in put and call
option transactions and engage in interest rate and stock index futures
contracts and related options transactions.

. Purchase securities of open-end or closed-end investment companies, except
to the extent permitted by the 1940 Act.

. Invest in companies for the purpose of exercising control.

. Purchase securities on margin, except that the portfolio may: (i) obtain
short-term credits as necessary for the clearance of security transactions;
and (ii) establish margin accounts as may be necessary in connection with
the portfolio's use of options and futures contracts.

I-3
<PAGE>

. Invest in interests in oil, gas or other mineral leases, exploration or
development programs, except that this shall not prevent a portfolio from
investing in readily marketable securities of issuers that invest or engage
in oil, gas or other mineral leases, exploration or development programs or
issuers secured by interest in such activities.

. Invest more than 5% of the value of its total assets in securities of
issuers which have a record of less than three years continuous operation,
including in such three years the operation of any predecessor company or
companies, partnership or individual proprietorship if the company whose
securities are to be purchased by the portfolio has come into existence as
a result of a distribution, merger, consolidation, reorganization or the
purchase of all or substantially all of the assets of such predecessor.

. Purchase or retain the securities of any issuer if, to the knowledge of the
portfolio, any of the officers or directors of the portfolio or its
investment adviser owns individually more than one-half of one percent of
the securities of such issuer and together own more than 5% of the
securities of such issuer.

. Make short sales of securities or maintain a short position, unless at all
times when a short position is open, the portfolio owns an equal amount of
such securities or owns securities convertible into or exchangeable for
securities, without payment of additional consideration (except upon
exercise of covered call options on such securities with a strike price no
higher than the price at which the securities were sold short or, if
higher, if the difference between the strike price and the price at which
the securities were sold short is maintained in U.S. government securities
in a segregated account with the portfolio's custodian or a broker), which
are at least equal in an amount to and of the same issue as the securities
sold short and such securities are not subject to outstanding call options,
and unless not more than 10% of the portfolio's net assets (taken at
current value) are held as collateral for such sales at any one time.

. Invest more than 10% of the value of its total assets in securities
restricted as to disposition under the Federal securities laws.

. Participate on a joint or a joint and several basis in any trading account
in securities.

. Sell or buy options which are not listed for trading on a national
securities exchange if, as a result, more than 5% of the portfolio's net
assets would be at risk in connection with all such unlisted options.

. Sell any covered put stock option if, as a result, the portfolio would then
have more than 50% of its total assets at current value subject to being
invested upon the exercise of put options.

. Make short sales "against the box," except for the purpose of deferring
realization of gain or loss for Federal income tax purposes and/or to
receive interest on the proceeds of such sales when made in connection with
convertible securities. Such sales will not be made of securities subject
to outstanding options.

WHO IS THE INVESTMENT ADVISER OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

Analytic Investors, Inc., located at 700 S. Flower Street, Suite 2400, Los
Angeles, CA 90017,is the investment adviser to the fund. For its services, the
portfolio pays its adviser a fee equal to 0.60% of the fund's average daily
net assets. Due to the effect of fee waivers by the adviser, the actual
percentage of average net assets that the portfolio pays in any given year may
be different from the rate set forth in its contract with the adviser. For
more information concerning the adviser, see "Investment Advisory and Other
Services" in Part II of this SAI.

What is the History of the Adviser?

The adviser was founded in 1970 as Analytic Investment Management, Inc., one
of the first independent investment counsel firms specializing in the creation
and continuous management of optioned equity and optioned debt funds for
fiduciaries and other long term investors. It is one of the oldest investment
management firms in this specialized area. In 1985 it became a wholly-owned
affiliate of UAM (NYSE:UAM). UAM is an investment management holding company,
with 51 affiliated management firms, managing more than $206 billion in
assets. In January 1996, Analytic Investment Management, Inc. acquired and
merged

I-4
<PAGE>

with TSA Capital Management which emphasizes U.S. and global tactical asset
allocation, currency management, quantitative equity and fixed income
management, as well as option and yield curve strategies.

What is the Adviser's Philosophy?

The adviser utilizes state of the art quantitative investment management
techniques to deliver superior investment performance. We believe that the use
of such techniques allows us to fulfill our clients' objectives through
rational, systematic identification of market opportunities, while minimizing
the impact of human emotions which often dominate investment decision making.
The firm has based its investment decisions on quantitative techniques for
more than 25 years.

What is the Adviser's Investment Process and Style?

The Analytic Defensive Equity Fund is a stock fund which combines a
quantitative approach to stock selection with a unique hedging style. As the
name suggests, the goal of the Fund is to allow shareholders to enjoy
substantial protection against a declining stock market while still allowing
for the shareholder to participate to a large degree in a rising stock market.
The core strategy of the Fund is based on a belief that there are five primary
elements that drive an individual stock's performance: 1) Relative Valuation,
2) Growth Potential, 3) Historical Return Momentum, 4) Liquidity and 5) Risk.
The valuation process examines dozens of financial measures within these five
elements. We accept, however, that the predictive power of each of these
financial measures has changed over time and will continue to change into the
future. As a result, Analytic Investors has developed a unique weighting
process for each of these financial measures which allows our approach to
adapt to constantly changing market conditions. The adaptive approach
increases the weight of those variables that have contributed most heavily to
recent performance and decreases the weight to those measures that have lost
their predictive capacity. The stock selection process commences by developing
rankings for all the companies in the Equity Universe based on the combined
attractiveness of the five elements. This requires extensive analysis and
necessitates the assistance of a computer model to simultaneously evaluate all
the data for each stock. Once the stocks are ranked, a highly diversified
portfolio is constructed by selecting that combination of stocks which
represents the best potential return while maintaining a risk profile that is
similar to the Equity Universe. Individual security positions are limited to a
maximum of a 3% active position relative to their respective weights in the
Equity Universe. Once established, this portfolio is strategically hedged to
reduce the risk to the overall portfolio when individual stocks become
excessively volatile.

HOW MUCH DOES THE PORTFOLIO PAY FOR ADMINISTRATIVE SERVICES?
- --------------------------------------------------------------------------------

In exchange for administrative services, the portfolio pays a fee to UAMFSI
calculated at the annual rate of:

. $14,500 for the first operational class; plus

. $3,000 for each additional class; plus

. 0.06% of the aggregate net assets of the portfolio.

The portfolio also pays a fee to UAMFSI for sub-administration and other
services provided by SEI. The fee, which UAMFSI pays to SEI, is calculated at
the annual rate of:

. $35,500 for the first operational class; plus

. $5,000 for each additional operational class; plus

. 0.030% of their pro rata share of the combined assets of the fund.

WHO ARE THE PRINCIPAL HOLDERS OF THE SECURITIES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

As of August 31, 1999, the following persons or organizations held of record
or beneficially 5% or more of the shares of the portfolio:

I-5
<PAGE>

<TABLE>
<CAPTION>
Name and Address of Shareholder Percentage of Shares Owned
-------------------------------------------------------------------------------------------
<S> <C>
Charles Schwab & Co., Inc. 25.74%
Special Custody Account
For Benefit of Customers
101 Montgomery Street
San Francisco, CA 94104-4122
-------------------------------------------------------------------------------------------
LaSalle National Bank 8.06%
Metz Banking Pension Trust
DTD July 1, 1997
C/O Mutual Funds 18th Floor
135 LaSalle Street
Chicago, Illinois 60603-4105
-------------------------------------------------------------------------------------------
National Financial Services Corp. 5.19%
FBO Exclusive Benefit of Our Customer
Attn: Mutual Funds
200 Liberty Street
New York, NY 10281-1003
</TABLE>

WHAT WAS THE PORTFOLIO'S PERFORMANCE AS OF ITS MOST RECENT FISCAL YEAR END?
- --------------------------------------------------------------------------

The portfolio measures its performance by calculating its yield and total
return. Yield and total return figures are based on historical earnings and
are not intended to indicate future performance. The portfolio calculates
its current yield and average annual total return information according to
the methods required by the SEC. For more information concerning the
performance of the portfolio, including the way it calculates its
performance figures, see "Performance Calculations" in Part II of this SAI.

Average Annual Total Return For Periods Ended December 31, 1998

<TABLE>
<CAPTION>
1 Year 5 Years Shorter of 10 Years or Since Inception
------------------------------------------------------------------------
<S> <C> <C>
28.89% 17.21% 13.01%
</TABLE>

WHAT WERE THE EXPENSES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Fiscal Year Ended Investment Advisory Fees Investment Advisory Fees Administrator Fee+ Brokerage Commissions
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 $253,110 $105,594 $ 80,296 $258,118
------------------------------------------------------------------------------------------------------------------------------
1997 $389,998 0 $115,544 $159,674
------------------------------------------------------------------------------------------------------------------------------
1996 $363,576 0 $126,424 $149,614
</TABLE>

* From August 31, 1998 to December 31, 1998, Pilgrim Baxter was the
investment adviser to the portfolio and Analytic Investors, Inc. was the
portfolio's sub-adviser. During that period, any fees paid to Analytic
Investors were paid from Pilgrim Baxter advisory fees. Before August 31,
1998 Analytic Investors was the investment adviser to the portfolio.

+ From August 31, 1998, to December 31, 1998 PBHG Fund Services, Inc. was
the administrator to the portfolio. From May 15, 1997 to August 31, 1998,
UAM Fund Services, Inc. was the administrator to the portfolio. Before May
15,1997, Analytic Investors was the administrator to the portfolio.

I-6
<PAGE>

Analytic Enhanced Equity Fund

WHAT INVESTMENT STRATEGIES MAY THE PORTFOLIO USE?
- --------------------------------------------------------------------------------

The portfolio may use the securities and investment strategies listed below in
seeking its objective. This SAI describes each of these
investments/strategies and their risks in Part II under "Description of
Permitted Investments." The investments that are italicized are principal
strategies and you can find more information on these techniques in the
prospectus of the portfolio. You can find more information concerning the
limits on the ability of the portfolio to use these investments in "What Are
the Investment Policies of the Portfolio?"

. Equity securities (at least 65% of its total assets, and at least 80%
excluding cash, cash equivalents and U.S. government securities).

. Futures to manage cash flows, to reduce transactions costs or to maintain
full market exposure, which, in the case of this portfolio, means adjusting
the characteristics of its investments to more closely approximate those
of its benchmark.

. Short-term debt securities for temporary defensive purposes, to earn a
return on uninvested assets or to meet redemptions.

. Investment company securities.

. Repurchase agreements.

. Restricted securities.

. Securities lending.

. When-issued securities.

WHAT ARE THE INVESTMENT POLICIES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

Fundamental Policies

. Act as an underwriter of securities of other issuers, except as it may be
deemed to be an underwriter under the 1933 Act in connection with the
purchase and sale of portfolio securities.

. Purchase or sell commodities or commodity contracts, except that a
portfolio, in accordance with its investment objective and policies, may:
(i) invest in readily marketable securities of issuers which invest or
engage in such activities; and (ii) enter into forward contracts, futures
contracts and options thereon.

. Purchase or sell real estate, or real estate partnership interests, except
that this limitation shall not prevent a portfolio from investing directly
or indirectly in readily marketable securities of issuers which can invest
in real estate, institutions that issue mortgages, or real estate
investment trusts which deal with real estate or interests therein.

I-7
<PAGE>

. Borrow money (other than pursuant to reverse repurchase agreements) except
for temporary or emergency purposes and then only in amounts up to 15% of
the total assets of the portfolio. The temporary borrowing will include,
for example, borrowing to facilitate the orderly sale of portfolio
securities to accommodate substantial redemption requests if they should
occur, to facilitate the settlement of securities transactions, and is not
for investment purposes. All borrowings in excess of 5% of a portfolio's
total assets will be repaid before making additional investments. The
foregoing percentages will apply at the time of each purchase of a
security.

Non-Fundamental Policies

The following limitations are non-fundamental, which means the portfolio may
change them without shareholder approval. The portfolio will not:

. Pledge more than 10% of its total assets, except that each portfolio may
pledge assets to the extent permitted by the 1940 Act in order to (i)
secure permitted borrowings or (ii) as may be necessary in connection with
the portfolio's use of options and futures contracts.

. Purchase securities of open-end or closed-end investment companies, except
to the extent permitted by the 1940 Act.

. Invest in companies for the purpose of exercising control.

. Purchase securities on margin, except that each portfolio may: (i) obtain
short-term credits as necessary for the clearance of security transactions;
and (ii) establish margin accounts as may be necessary in connection with
the portfolio's use of options and futures contracts.

I-8
<PAGE>

. Invest more than 5% of the value of its net assets in securities of issuers
which have a record of less than three years continuous operation,
including in such three years the operation of any predecessor company or
companies, partnership or individual proprietorship if the company whose
securities are to be purchased by the portfolio has come into existence as
a result of a distribution, merger, consolidation, reorganization or the
purchase of all or substantially all of the assets of such predecessor.

WHO IS THE INVESTMENT ADVISER OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

Analytic Investors, Inc., located at 700 S. Flower Street, Suite 2400, Los
Angeles, CA 90017,is the investment adviser to the fund. For its services, the
fund pays its adviser a fee equal to 0.60% of the fund's average daily net
assets. Due to the effect of fee waivers by the adviser, the actual
percentage of average net assets that the portfolio pays in any given year may
be different from the rate set forth in its contract with the adviser. For
more information concerning the adviser, see "Investment Advisory and Other
Services" in Part II of this SAI.

What is the History of the Adviser?

What is the Adviser's Philosophy?

What is the Adviser's Investment Process and Style?

The adviser believes the characteristics that drive stock prices can be
systematically identified and measured. There are five primary elements used
to determine a stock's attractiveness: 1) relative valuation 2) growth
potential 3) historical return momentum 4) liquidity 5) risk. The valuation
process examines dozens of financial measures within these five elements. The
adviser accepts, however, that the predictive power of each of these financial
measures has changed over time and will continue to change into the future.
As a result, the adviser has developed a unique weighting process for each of
these financial measures, which allows our approach to adapt to constantly
changing market conditions. The adaptive approach increases the weight of
those variables that have contributed most heavily to recent performance and
decreases the weight to those measures that have lost their predictive
capacity. The enhanced equity process commences by developing rankings for
all the companies in the equity universe based on the combined attractiveness
of the five elements. This requires extensive analysis and necessitates the
assistance of a computer model to simultaneously evaluate all the data for
each stock. Once the stocks are ranked, a highly diversified portfolio is
constructed by selecting that combination of stocks which represents the best
potential return while maintaining a risk profile that is similar to the
equity universe. In the process, our quantitative approach greatly reduces
the exposures to firm size, market style, and economic sector biases. This is
referred to as being size neutral, style neutral and sector neutral. The
portfolio is monitored daily, and re-balanced monthly

I-9
<PAGE>

to ensure optimum performance. Individual security positions are limited to a
maximum of a 3% active position relative to their respective weights in the
equity universe. The portfolio seeks to be fully invested at all times.

HOW MUCH DOES THE PORTFOLIO PAY FOR ADMINISTRATIVE SERVICES?
- --------------------------------------------------------------------------------

In exchange for administrative services, the portfolio pays a fee to UAMFSI
calculated at the annual rate of:

. $14,500 for the first operational class; plus

. $3,000 for each additional class; plus

. 0.04% of the aggregate net assets of the portfolio.

The portfolio also pays a fee to UAMFSI for sub-administration and other
services provided by SEI. The fee, which UAMFSI pays to SEI, is calculated at
the annual rate of:

. $35,500 for the first operational class; plus

. $5,000 for each additional operational class; plus

. 0.030% of their pro rata share of the combined assets of the fund.

WHO ARE THE PRINCIPAL HOLDERS OF THE SECURITIES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

As of August 31, 1999, the following persons or organizations held of record
or beneficially 5% or more of the shares of the portfolio:

<TABLE>
<CAPTION>
Name and Address of Shareholder Percentage of Shares Owned
-------------------------------------------------------------------------------------------------------
<S> <C>
Charles Schwab & Co., Inc. 49.32%
Special Custody Account
For Benefit of Customers
101 Montgomery Street
San Francisco, CA 94104-4122
-------------------------------------------------------------------------------------------------------
Norwest Bank Minnesota, NA 10.39%
FBO Community Hosp AC 13503605
P.O. Box 1533
Minneapolis, MN 55840
-------------------------------------------------------------------------------------------------------
Analytic TSA Global Asset Management, Inc. 5.72%
Inv Mgr for Prison Law Office
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
-------------------------------------------------------------------------------------------------------
National Financial Services Corp. 9.75%
FBO Exclusive Benefit of Our Customer
Attn: Mutual Funds
200 Liberty Street
New York, NY 10281-1003
</TABLE>

WHAT WAS THE PORTFOLIO'S PERFORMANCE AS OF ITS MOST RECENT FISCAL YEAR END?
- --------------------------------------------------------------------------------

The portfolio measures its performance by calculating its yield and total
return. Yield and total return figures are based on historical earnings and
are not intended to indicate future performance. The portfolio calculates its
current yield and average annual total return information according to the
methods required by the SEC. For more information concerning the performance
of the portfolio, including the way it calculates its performance figures, see
"Performance Calculations" in Part II of this SAI.

I-10
<PAGE>

Average Annual Total Return For Periods Ended December 31, 1998

<TABLE>
<CAPTION>
Shorter of 10 Years or Since
1 Year 5 Years Inception Inception Date
----------------------------------------------------------------------------------
<S> <C> <C> <C>
37.82% 24.33% 22.76% 6/30/93
</TABLE>

WHAT WERE THE EXPENSES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Investment Advisory Investment Advisory Brokerage
Fiscal Year Ended Fees Paid* Fees Waived* Administrator Fee+ Commissions
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 $40,830 $66,917 $48,987 $64,668
----------------------------------------------------------------------------------------------------------
1997 $ 0 $40,662 $21,124 $16,005
----------------------------------------------------------------------------------------------------------
1996 $ 3,860 $50,426 $ 7,140 $24,710
</TABLE>

* From July 27, 1998 to December 31, 1998, Pilgrim Baxter was the
investment adviser and Analytic Investors, Inc. was the portfolio's sub-
adviser. During that period, any fees paid to Analytic Investors were paid
from Pilgrim Baxter advisory fees. Before August 27, 1998 Analytic
Investors was the investment adviser to the portfolio.

+ From July 27, 1998, to December 31, 1998 PBHG Fund Services, Inc. was the
administrator to the portfolio. From May 15, 1997 to July 27, 1998, 1998,
UAM Fund Services, Inc. was the administrator to the portfolio. Before May
15, 1997, Analytic Investors was the administrator to the portfolio.

I-11
<PAGE>

Analytic International Fund

WHAT INVESTMENT STRATEGIES MAY THE PORTFOLIO USE?
- --------------------------------------------------------------------------------
The portfolio may use the securities and investment strategies listed below
in seeking its objective. This SAI describes each of these
investments/strategies and their risks in Part II under "Description of
Permitted Investments." The investments that are italicized are principal
strategies and you can find more information on these techniques in the
prospectus of the portfolio. You can find more information concerning the
limits on the ability of the portfolio to use these investments in "What
Are the Investment Policies of the Portfolio?"

. Equity Securities (at least 65% of its total assets).

. Foreign Securities

. Futures to manage cash flows, to reduce transaction costs or to maintain
full market exposure, which, in the case of this portfolio, means
adjusting its exposure to the various countries represented in its
benchmark.

. Foreign currency exchange contracts to protect against a change in the
price of an investment the portfolio owns or anticipates buying in the
future (a practice known as hedging).

. Swaps to gain full exposure in a cost efficient method to markets where
it would otherwise have difficulty investing (speculation).

. Debt securities in either domestic or foreign markets.

. Short-term debt securities for temporary defensive purposes, to earn a
return on uninvested assets or to meet redemptions.

. Investment company securities.

. Repurchase agreements.

. Restricted securities.

. Securities lending.

. When-issued securities.

WHAT ARE THE INVESTMENT POLICIES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

The portfolio will determine percentages (with the exception of a
limitation relating to borrowing) immediately after and as a result of the
portfolio's acquisition of such security or other asset. Accordingly, the
portfolio will not consider changes in values, net assets or other
circumstances when determining whether the investment complies with its
investment limitations.

Fundamental Policies

The following investment limitations are fundamental, which means the
portfolio cannot change them without approval by the vote of a majority of
the outstanding voting securities of the portfolio, as defined by the 1940
Act. The portfolio will not:

. Make any investment that is inconsistent with its classification as a
diversified investment management company under the 1940 Act.

I-12
<PAGE>

. Concentrate its investments in securities of issuers primarily engaged
in any particular industry (other securities issued or guaranteed by the
United States government or its agencies or instrumentalities or when
the portfolio adopts a temporary defensive position).

. Issue senior securities, except as permitted by the 1940 Act.

. Invest in physical commodities or contracts on physical commodities.

. Purchase or sell real estate or real estate limited partnerships,
although it may purchase and sell securities of companies which deal in
real estate and may purchase and sell securities which are secured by
interests in real estate.

. Make loans except (i) by that the acquisition of investment securities
or other investment instruments in accordance with the portfolio's
prospectus and statement of additional information shall not be deemed
to be the making of a loan; and (ii) that the portfolio may lend its
portfolio securities in accordance with applicable law and the
guidelines set forth in the portfolio's prospectus and statement of
additional information, as they may be amended from time to time.

. Underwrite the securities of other issuers.

. Borrow money, except to the extent permitted by applicable law and the
guidelines set forth in the portfolio's prospectus and statement of
additional information, as they may be amended from time to time.

Non-Fundamental Policies

The following limitations are non-fundamental, which means the portfolio
may change them without shareholder approval. The portfolio will not:

. Purchase on margin or sell short except that the portfolio may purchase
futures as described in the prospectus and this SAI.

. Invest more than 10% of its total assets in the securities of other
investment companies.

. Invest more than 5% of its total assets in the securities of any one-
investment company.

. Acquire more than 3% of the voting securities of any other investment
company.

. Invest more than an aggregate of 15% of its net assets in securities
that are subject to legal or contractual restrictions on resale
(restricted securities) or securities for which there are no readily
available markets (illiquid securities).

Borrowing

The portfolio may borrow from banks and enter into reverse repurchase
agreements in an amount up to 33 1/3% of its total assets, taken at market
value. The portfolio may also borrow an additional 5% of its total assets
from banks or others for temporary or emergency purposes, such as the
redemption of portfolio shares. The portfolio may purchase additional
securities so long as borrowings do not exceed 5% of its total assets. The
portfolio may obtain such short-term credit as may be necessary for the
clearance of purchases and sales of portfolio securities. The portfolio may
purchase securities on margin and engage in short sales to the extent
permitted by applicable law.

Asset Coverage

The fund will cover its derivatives according to guidelines established by
the SEC so as to avoid creating a "senior security" (as defined in the 1940
Act) in connection with use of such instruments. Accordingly, the fund will
either own the securities underlying the derivative or will segregate with
its custodian cash or liquid securities in an amount at all times equal to
the fund's commitment with respect to these instruments or contracts.
Assets that are segregated for purposes of proving cover need not be
physically segregated in a separate account provided that the custodian
notes on its books that such securities are segregated.

I-13
<PAGE>

WHO IS THE INVESTMENT ADVISER OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

Analytic Investors, Inc., located at 700 S. Flower Street, Suite 2400, Los
Angeles, CA 90017,is the investment adviser to the fund. For its services,
the fund pays its adviser a fee equal to 0.60% of the fund's average daily
net assets. Due to the effect of fee waivers by the adviser, the actual
percentage of average net assets that the portfolio pays in any given year
may be different from the rate set forth in its contract with the adviser.
For more information concerning the adviser, see "Investment Advisory and
Other Services" in Part II of this SAI.

What is the History of the Adviser?

The adviser was founded in 1970 as Analytic Investment Management, Inc.,
one of the first independent investment counsel firms specializing in the
creation and continuous management of optioned equity and optioned debt
funds for fiduciaries and other long term investors. It is one of the
oldest investment management firms in this specialized area. In 1985 it
became a wholly-owned affiliate of UAM (NYSE:UAM). UAM is an investment
management holding company, with 51 affiliated management firms, managing
more than $206 billion in assets. In January 1996, Analytic Investment
Management, Inc. acquired and merged with TSA Capital Management which
emphasizes U.S. and global tactical asset allocation, currency management,
quantitative equity and fixed income management, as well as option and
yield curve strategies.

What is the Adviser's Philosophy?

The adviser utilizes state of the art quantitative investment management
techniques to deliver superior investment performance. We believe that the
use of such techniques allows us to fulfill our clients' objectives through
rational, systematic identification of market opportunities, while
minimizing the impact of human emotions which often dominate investment
decision making. The firm has based its investment decisions on
quantitative techniques for more than 25 years.

What is the Adviser's Investment Process and Style?

The adviser believes the characteristics that drive stock prices can be
systematically identified and measured. There are several basic elements
used to determine a stock's attractiveness, including relative valuation,
growth potential, historical return momentum, liquidity, and risk. The
valuation process examines dozens of financial measures within these five
elements. The adviser accepts, however, that the predictive power of each
of these financial measures has changed over time and will continue to
change into the future. As a result, the adviser has developed a unique
weighting process for each of these financial measures, which allows our
approach to adapt to constantly changing market conditions. The adaptive
approach increases the weight of those variables that have contributed most
heavily to recent performance and decreases the weight to those measures
that have lost their predictive capacity. The International Equity process
commences by developing rankings for all the companies in the International
Equity Universe based on the combined attractiveness of the basic elements.
This requires extensive analysis and necessitates the assistance of a
computer model to simultaneously evaluate all the data for each stock. Once
the stocks are ranked, a highly diversified portfolio is constructed by
selecting that combination of stocks which represents the best potential
return while maintaining a risk profile that is similar to the
International Equity Universe. In the process, our quantitative approach
greatly reduces the portfolio's exposure, relative to the International
Equity Universe, to firm size, market style, country risk and economic
sector biases. This is referred to as being size neutral, style neutral and
sector neutral. The portfolio is monitored daily, and re-balanced monthly
to ensure optimum performance. Individual security positions are limited to
a maximum of a 3% active position relative to their respective weights in
the International Equity Universe. The portfolio seeks to be fully invested
at all times.

HOW MUCH DOES THE PORTFOLIO PAY FOR ADMINISTRATIVE SERVICES?
- --------------------------------------------------------------------------------

In exchange for administrative services, the portfolio pays a fee to UAMFSI
calculated at the annual rate of:

. $14,500 for the first operational class; plus

. $3,000 for each additional class; plus

I-14
<PAGE>

. 0.04% of the aggregate net assets of the portfolio.

The portfolio also pays a fee to UAMFSI for sub-administration and other
services provided by SEI. The fee, which UAMFSI pays to SEI, is calculated
at the annual rate of:

. $35,500 for the first operational class; plus

. $5,000 for each additional operational class; plus

. 0.030% of their pro rata share of the combined assets of the fund.

I-15
<PAGE>

Analytic Master Fixed Income Fund

WHAT INVESTMENT STRATEGIES MAY THE PORTFOLIO USE?
- --------------------------------------------------------------------------------

. Debt securities (at least 65% of its total assets in high-grade debt
securities).

. Futures and options.

. Short-term debt securities for temporary defensive purposes, to earn a
return on uninvested assets or to meet redemptions.

. Investment company securities.

. Repurchase agreements.

. Restricted securities.

. Securities lending.

. When-issued securities.

WHAT ARE THE INVESTMENT POLICIES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

Fundamental Policies

The following investment limitations are fundamental, which means the
portfolio cannot change them without approval by the vote of a majority of the
outstanding voting securities of the portfolio, as defined by the 1940 Act.
The portfolio will not:

. Act as an underwriter of securities of other issuers, except as it may be
deemed to be an underwriter under the 1933 Act in connection with the
purchase and sale of portfolio securities.

I-16
<PAGE>

Non-Fundamental Policies

The following limitations are non-fundamental, which means the portfolio may
change them without shareholder approval. The portfolio will not:

. Purchase securities of open-end or closed-end investment companies, except
to the extent permitted by the 1940 Act.

. Invest in companies for the purpose of exercising control.

I-17
<PAGE>

WHO IS THE INVESTMENT ADVISER OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

What is the History of the Adviser?

What is the Adviser's Philosophy?

What is the Adviser's Investment Process and Style?

The Master Fixed Income Fund is an intermediate term bond fund that seeks to
outperform other intermediate term bond funds through three sources of value:
(1) Analyzing shifts in the yield curve; (2) Tactically increasing and
decreasing the allocation of the Fund to the corporate bond sector; and (3)
Utilizing a unique method of creating "synthetic" corporatebonds. Analytic
believes that through careful quantitative analysis these three methods can
add value without significantly increasing the volatility of the Fund above
that of the intermediate-term bond market.

The core strategy of the fund begins with the selection of a diversified mix
of Treasuries, agencies, mortgage-related bonds, and high-grade corporate
bonds. Additional value is found in the corporate sector through the creation
of synthetic high-grade corporate instruments using Analytic's option
valuation model. The usefulness of this procedure is in its ability to make
available to the Fund a far broader array of corporate bond choices than can
typically be found in the traditional corporate bond market. This broader
array of choices offered by the creation of synthetic bonds includes (1) bonds
free from the callability feature that so often adds unnecessary risk to the
use of traditional corporate bonds; (2) bonds that have a level of credit
quality that can be higher or lower than the credit quality of existing
corporate bonds; (3) bonds associated with corporations that don't typically
offer corporate bonds. The Fund varies exposure to the synthetic bond market
depending on the availability of mispriced offerings, as identified by
Analytic's real-time, proprietary valuation approach.

I-18
<PAGE>

Finally, the Fund uses a sophisticated approach to assess the shape of the
yield curve and to find arbitrage opportunities to provide additional value.

HOW MUCH DOES THE PORTFOLIO PAY FOR ADMINISTRATIVE SERVICES?
- --------------------------------------------------------------------------------

In exchange for administrative services, the portfolio pays a fee to UAMFSI
calculated at the annual rate of:

. $14,500 for the first operational class; plus

. $3,000 for each additional class; plus

. 0.04% of the aggregate net assets of the portfolio.

The portfolio also pays a fee to UAMFSI for sub-administration and other
services provided by SEI. The fee, which UAMFSI pays to SEI, is calculated at
the annual rate of:

. $35,500 for the first operational class; plus

. $5,000 for each additional operational class; plus

. 0.030% of their pro rata share of the combined assets of the fund.

WHO ARE THE PRINCIPAL HOLDERS OF THE SECURITIES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

As of August 31, 1999, the following persons or organizations held of record
or beneficially 5% or more of the shares of the portfolio:

<TABLE>
<CAPTION>
Name and Address of Shareholder Percentage of Shares Owned
----------------------------------------------------------------------------------------------------
<S> <C>
Tucker Anthony, Inc. 14.30%
VMEP NHC Pension
Attn Stephen T. Monahan
4 Landmark Square
Stamford, CT 06901-2502
----------------------------------------------------------------------------------------------------
Analytic TSA Global Asset Management, Inc. 12.83%
FBO Mountain Grove Cemetery Ass
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
----------------------------------------------------------------------------------------------------
SEI Trust Co Cust 11.08%
IRA R/O R Borzilleri
Attn Stephen T. Monahan
4 Landmark Square
Stamford, CT 06901-2502
----------------------------------------------------------------------------------------------------
Analytic TSA Global Asset Management, Inc. 9.57%
Inv Mgr for Prison Law Office
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
----------------------------------------------------------------------------------------------------
SEI Trust Co Cust 6.45%
IRA R/O Greg McMurran
2116 Westwood Avenue
Santa Ana, CA 92706-1924
</TABLE>

WHAT WAS THE PORTFOLIO'S PERFORMANCE AS OF ITS MOST RECENT FISCAL YEAR END?
- --------------------------------------------------------------------------------

The portfolio measures its performance by calculating its yield and total
return. Yield and total return figures are based on historical earnings and
are not intended to indicate future performance. The portfolio calculates its
current yield and average annual total return information according to the
methods required by the SEC. For more information concerning the performance
of the portfolio, including the way it calculates its performance figures, see
"Performance Calculations" in Part II of this SAI.

I-19
<PAGE>

Performance Information For Periods Ended December 31, 1999

<TABLE>
<CAPTION>
Average Annual Total Return
-------------------------------------------------------------------
Shorter of 10 Years or
1 Year 5 Years Since Inception 30-Day Yield Inception Date
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3.80% 6.82% 6.87% 3.81% 6/30/93
</TABLE>

WHAT WERE THE EXPENSES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Investment Advisory Fees Investment Advisory Fees
Fiscal Year Ended Paid* Waived* Administrator Fee+ Brokerage Commissions
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 $11,870 $10,391 $33,890 $27,405
- --------------------------------------------------------------------------------------------------------------------------------
1997 $65,462 $40,662 $55,769 $43,983
- --------------------------------------------------------------------------------------------------------------------------------
1996 $70,152 $50,426 $57,248 $27,017
</TABLE>

* From July 27, 1998 to December 31, 1998, Pilgrim Baxter was the investment
adviser and Analytic Investors, Inc. was the portfolio's sub-adviser. During
that period, any fees paid to Analytic Investors were paid from Pilgrim Baxter
advisory fees. Before August 27, 1998 Analytic Investors was the investment
adviser to the portfolio.

+ From July 27, 1998, to December 31, 1998 PBHG Fund Services, Inc. was the
administrator to the portfolio. From May 15, 1997 to July 27, 1998, 1998, UAM
Fund Services, Inc. was the administrator to the portfolio. Before May
15,1997, Analytic Investors was the administrator to the portfolio.

I-20
<PAGE>

Analytic Short-Term Government Fund

WHAT INVESTMENT STRATEGIES MAY THE PORTFOLIO USE?
- --------------------------------------------------------------------------------

The portfolio may use the securities and investment strategies listed below in
seeking its objective. This SAI describes each of these
investments/strategies and their risks in Part II under "Description of
Permitted Investments." The investments that are italicized are principal
strategies and you can find more information on these techniques in the
prospectus of the portfolio. You can find more information concerning the
limits on the ability of the portfolio to use these investments in "What Are
the Investment Policies of the Portfolio?"

. Securities of the United States government (at least 65% of its total
assets in high-grade debt securities).

. Futures and options.

. Short-term debt securities for temporary defensive purposes, to earn a
return on uninvested assets or to meet redemptions.

. Investment company securities.

. Repurchase agreements.

. Restricted securities.

. Securities lending.

. When-issued securities.

WHAT ARE THE INVESTMENT POLICIES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

Fundamental Policies

The following investment limitations are fundamental, which means the
portfolio cannot change them without approval by the vote of a majority of the
outstanding voting securities of the portfolio, as defined by the 1940 Act.
The portfolio will not:

. Make loans except that each portfolio, in accordance with its investment
objective and policies, may (a) purchase debt obligations, (b) enter into
repurchase agreements and (c) lend its portfolio securities.

. Act as an underwriter of securities of other issuers, except as it may be
deemed to be an underwriter under the 1933 Act in connection with the
purchase and sale of portfolio securities.

I-21
<PAGE>

Non-Fundamental Policies

The following limitations are non-fundamental, which means the portfolio may
change them without shareholder approval. The portfolio will not:

. Purchase securities of open-end or closed-end investment companies, except
to the extent permitted by the 1940 Act.

. Invest in companies for the purpose of exercising control.

I-22
<PAGE>

WHO IS THE INVESTMENT ADVISER OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

What is the History of the Adviser?

What is the Adviser's Philosophy?

What is the Adviser's Investment Process and Style?

The fund is a fixed income fund that invests primarily in high-grade debt
instruments of short maturities, three years or less. While the fund invests
more than half its assets in US Treasury and Agency securities, the portfolio
management team enhances performances through three sources of value: (1)
Selected use of short-term corporate securities; (2) A sophisticated approach
to finding and exploiting yield curve arbitrage opportunities; and (3)
Tactical investments in short-term interest rate differentials between major
global economies.

HOW MUCH DOES THE PORTFOLIO PAY FOR ADMINISTRATIVE SERVICES?
- --------------------------------------------------------------------------------

In exchange for administrative services, the portfolio pays a fee to UAMFSI
calculated at the annual rate of:

. $14,500 for the first operational class; plus

. $3,000 for each additional class; plus

. 0.04% of the aggregate net assets of the portfolio.

I-23
<PAGE>

The portfolio also pays a fee to UAMFSI for sub-administration and other
services provided by SEI. The fee, which UAMFSI pays to SEI, is calculated at
the annual rate of:

. $35,500 for the first operational class; plus

. $5,000 for each additional operational class; plus

. 0.030% of their pro rata share of the combined assets of the fund.

WHO ARE THE PRINCIPAL HOLDERS OF THE SECURITIES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

As of August 31, 1999, the following persons or organizations held of record
or beneficially 5% or more of the shares of the portfolio:

<TABLE>
<CAPTION>
Name and Address of Shareholder Percentage of Shares Owned
----------------------------------------------------------------------------------------------
<S> <C>
Analytic TSA Global Asset Management, Inc. 47.98%
FBO Southern Baptist Foundation
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
----------------------------------------------------------------------------------------------
Analytic TSA Global Asset Management, Inc. 14.90%
Inv Mgr for Prison Law Office
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
----------------------------------------------------------------------------------------------
Analytic TSA Global Asset Management, Inc. 11.45%
FBO Mountain Grove Cemetery Ass
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
</TABLE>

WHAT WAS THE PORTFOLIO'S PERFORMANCE AS OF ITS MOST RECENT FISCAL YEAR END?
- --------------------------------------------------------------------------------

The portfolio measures its performance by calculating its yield and total
return. Yield and total return figures are based on historical earnings and
are not intended to indicate future performance. The portfolio calculates its
current yield and average annual total return information according to the
methods required by the SEC. For more information concerning the performance
of the portfolio, including the way it calculates its performance figures, see
"Performance Calculations" in Part II of this SAI.

Performance Information For Periods Ended December 31, 1999

<TABLE>
<CAPTION>
Average Annual Total Return
-------------------------------------------------------------------
Shorter of 10 Years or
1 Year 5 Years Since Inception 30-Day Yield Inception Date
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7.10% 5.66% 5.53% 3.80% 6/30/93
</TABLE>

WHAT WERE THE EXPENSES OF THE PORTFOLIO?
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Investment Advisory Fees Investment Advisory Fees
Fiscal Year Ended Paid* Waived* Administrator Fee+ Brokerage Commissions
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 $ 5,656 $ 5,012 $32,639 $2,737
------------------------------------------------------------------------------------------------------------------------------
1997 $ 0 $ 2,791 $24,891 $ 0
------------------------------------------------------------------------------------------------------------------------------
1996 $36,314 $40,090 $54,386 $ 0
</TABLE>

* From July 27, 1998 to December 31, 1998, Pilgrim Baxter was the investment
adviser and Analytic Investors, Inc. was the portfolio's sub-adviser. During
that period, any fees paid to Analytic Investors were paid from Pilgrim Baxter
advisory fees. Before July 27, 1998 Analytic Investors was the investment
adviser to the portfolio.

+ From July 27, 1998, to December 31, 1998 PBHG Fund Services, Inc. was the
administrator to the portfolio. From May 15, 1997 to July 27, 1998, 1998, UAM
Fund Services, Inc. was the administrator to the portfolio. Before May
15, 1997, Analytic Investors was the administrator to the portfolio.

I-24
<PAGE>

II: The UAM Funds in Detail

II-1
<PAGE>

Description of Permitted Investments

DEBT SECURITIES
- -------------------------------------------------------------------------------
Corporations and governments use debt securities to borrow money from
investors. Most debt securities promise a variable or fixed rate of return and
repayment of the amount borrowed at maturity. Some debt securities, such as
zero-coupon bonds, do not pay current interest and are purchased at a discount
from their face value. Debt securities may include, among other things, all
types of bills, notes, bonds, mortgage-backed securities or asset-backed
securities.

Types of Debt Securities

U.S. Government Securities

U.S. government securities are securities that the United States Treasury has
issued (treasury securities) and securities that a federal agency or a
government-sponsored entity has issued (agency securities). Treasury
securities include treasury notes, which have initial maturities of one to ten
years and treasury bonds, which have initial maturities of at least ten years
and certain types of mortgage-backed securities that are described under
"Mortgage-Backed and Other Asset-Backed Securities." This SAI discusses
mortgage-backed treasury and agency securities in detail in the section called
"Mortgage-Backed and Other Asset-Backed Securities."

The full faith and credit of the U.S. government supports treasury securities.
Unlike treasury securities, the full faith and credit of the United States
government generally do not back agency securities. Agency securities are
typically supported in one of three ways:

. by the right of the issuer to borrow from the United States Treasury;

. by the discretionary authority of the United States government to buy the
obligations of the agency; or

. by the credit of the sponsoring agency.

While U.S. government securities are guaranteed as to principal and interest,
their market value is not guaranteed. U.S. government securities are subject
to the same interest rate and credit risks as other fixed income securities.
However, since U.S. government securities are of the highest quality, the
credit risk is minimal. The U.S. government does not guarantee the net asset
value of the assets of the portfolio.

Corporate Bonds

Corporations issue bonds and notes to raise money for working capital or for
capital expenditures such as plant construction, equipment purchases and
expansion. In return for the money loaned to the corporation by investors, the
corporation promises to pay investors interest, and repay the principal amount
of the bond or note.

Mortgage-Backed Securities

Mortgage-backed securities are interests in pools of mortgage loans that
various governmental, government-related and private organizations assemble as
securities for sale to investors. Unlike most debt securities, which pay
interest periodically and repay principal maturity specified call dates,
mortgage-backed securities make monthly payments that consist of both interest
and principal payments. In effect, these payments are a "pass-through" of the
monthly payments made by the individual borrowers on their mortgage loans, net
of any fees paid to the issuer or guarantor of such securities. Since
homeowners usually have the option of paying either part or all of the loan
balance before maturity, the effective maturity of a mortgage backed security
is often shorter than is stated.

II-2
<PAGE>

Governmental entities, private insurers and the mortgage poolers may insure or
guaranty the timely payment of interest and principal of these pools through
various forms of insurance or guarantees, including individual loan, title,
pool and hazard insurance and letters of credit. The adviser will consider
such insurance and guarantees and the creditworthiness of the issuers thereof
in determining whether a mortgage-related security meets its investment
quality standards. It is possible that the private insurers or guarantors will
not meet their obligations under the insurance policies or guarantee
arrangements.

Although the market for such securities is becoming increasingly liquid,
securities issued by certain private organizations may not be readily
marketable.

Government National Mortgage Association (GNMA)

GNMA is the principal governmental guarantor of mortgage-related securities.
GNMA is a wholly owned corporation of the U.S. government and it falls within
the Department of Housing and Urban Development. Securities issued by GNMA are
treasury securities, which means the faith and credit of the U.S. government
backs them. GNMA guarantees the timely payment of principal and interest on
securities issued by institutions approved by GNMA and backed by pools of FHA-
insured or VA-guaranteed mortgages. GNMA does not guarantee the market value
or yield of mortgage-backed securities or the value of portfolio shares. To
buy GNMA securities, the portfolio may have to pay a premium over the maturity
value of the underlying mortgages, which the portfolio may lose if prepayment
occurs.

Federal National Mortgage Association (FNMA)

FNMA is a government-sponsored corporation owned entirely by private
stockholders. FNMA is regulated by the Secretary of Housing and Urban
development. FNMA purchases conventional mortgages from a list of approved
sellers and service providers, including state and federally-chartered savings
and loan associations, mutual savings banks, commercial banks and credit
unions and mortgage bankers. Securities issued by FNMA are agency securities,
which means FNMA, but not the U.S. government, guarantees their timely payment
of principal and interest.

Federal Home Loan Mortgage Corporation (FHLMC)

FHLMC is a corporate instrumentality of the U.S. government whose stock is
owned by the twelve Federal Home Loan Banks. Congress created FHLMC in 1970 to
increase the availability of mortgage credit for residential housing. FHLMC
issues Participation Certificates (PCs) which represent interests in
conventional mortgages from its national portfolio. Like FNMA, FHLMC
guarantees the timely payment of interest and ultimate collection of
principal, but PCs are not backed by the full faith and credit of the U.S.
government.

Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers

Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create
pass-through pools of conventional mortgage loans. In addition to guaranteeing
the mortgage-related security, such issuers may service and/or have originated
the underlying mortgage loans. Pools created by these issuers generally offer
a higher rate of interest than pools created by GNMA, FNMA & FHLMC because
they are not guaranteed by a government agency.

Risks of Mortgage-Backed Securities

Yield characteristics of mortgage-backed securities differ from those of
traditional debt securities in a variety of ways, the most significant
differences are mortgage-backed securities:

. payments of interest and principal are more frequent (usually monthly);

. they usually have adjustable interest rates; and

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<PAGE>

. they may pay off their entire principal substantially earlier than their
final distribution dates so that the price of the security will generally
decline when interest rates rise.

In addition to risks associated with changes in interest rates described in
"Factors Affecting the Value of Debt Securities," a variety of economic,
geographic, social and other factors, such as the sale of the underlying
property, refinancing or foreclosure, can cause investors to repay the loans
underlying a mortgage-backed security sooner than expected. If the prepayment
rates increase, the portfolio may have to reinvest its principal at a rate of
interest that is lower than the rate on existing mortgage-backed securities.

Other Asset-Backed Securities

These securities are interests in pools of a broad range of assets other than
mortgage, such as automobile loans, computer leases and credit card
receivables. Like mortgage-backed securities, these securities are pass-
through. In general, the collateral supporting these securities is of shorter
maturity than mortgage loans and is less likely to experience substantial
prepayments with interest rate fluctuations.

Asset-backed securities present certain risks that are not presented by
mortgage-backed securities. Primarily, these securities may not have the
benefit of any security interest in the related assets, which raises the
possibility that recoveries on repossessed collateral may not be available to
support payments on these securities. For example, credit card receivables are
generally unsecured and the debtors are entitled to the protection of a number
of state and federal consumer credit laws, many of which allow debtors to
reduce their balances by offsetting certain amounts owed on the credit cards.
Most issuers of asset-backed securities backed by automobile receivables
permit the servicers of such receivables to retain possession of the
underlying obligations. If the servicer were to sell these obligations to
another party, there is a risk that the purchaser would acquire an interest
superior to that of the holders of the related asset-backed securities. Due to
the quantity of vehicles involved and requirements under state laws, asset-
backed securities backed by automobile receivables may not have a proper
security interest in all of the obligations backing such receivables.

To lessen the effect of failures by obligors on underlying assets to make
payments, the entity administering the pool of assets may agree to ensure the
receipt of payments on the underlying pool occurs in a timely fashion
("liquidity protection"). In addition, asset-backed securities may obtain
insurance, such as guarantees, policies or letters of credit obtained by the
issuer or sponsor from third parties, for some or all of the assets in the
pool ("credit support"). Delinquency or loss more than that anticipated or
failure of the credit support could adversely affect the return on an
investment in such a security.

The portfolio may also invest in residual interests in asset-backed
securities, which is the excess cash flow remaining after making required
payments on the securities and paying related administrative expenses. The
amount of residual cash flow resulting from a particular issue of asset-backed
securities depends in part on the characteristics of the underlying assets,
the coupon rates on the securities, prevailing interest rates, the amount of
administrative expenses and the actual prepayment experience on the underlying
assets.

Collateralized Mortgage Obligations (CMOs)

CMOs are hybrids between mortgage-backed bonds and mortgage pass-through
securities. Similar to a bond, CMOs usually pay interest and prepay principal
semiannually. While whole mortgage loans may collateralize CMOs, portfolios of
mortgage-backed securities guaranteed by GNMA, FHLMC, or FNMA and their income
streams more typically collateralize them.

A REMIC is a CMO that qualifies for special tax treatment under the Internal
Revenue Code of 1986, as amended, and invests in certain mortgages primarily
secured by interests in real property and other permitted investments.

CMOs are structured into multiple classes, each bearing a different stated
maturity. Each class of CMO or REMIC certificate, often referred to as a
"tranche," is issued at a specific interest rate and must be fully retired by
its final distribution date. Generally, all classes of CMOs or REMIC
certificates pay or accrue interest monthly. Investing in the lowest tranche
of CMOs and REMIC certificates involves risks similar to those associated with
investing in equity securities.

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<PAGE>

Short-Term Investments

To earn a return on uninvested assets, meet anticipated redemptions, or for
temporary defensive purposes, a portfolio may invest a portion of its assets
in the short-term securities listed below, U.S. government securities and
Investment-grade corporate debt securities. Unless otherwise specified, a
short-term debt security has a maturity of one year or less.

Bank Obligations

The portfolio will only invest in a security issued by a commercial bank if
the bank:

. has total assets of at least $1 billion, or the equivalent in other
currencies;

. is a U.S. bank and a member of the Federal Deposit Insurance Corporation;
and

. is a foreign branch of a U.S. bank and the adviser believes the security is
of an investment quality comparable with other debt securities that the
portfolio may purchase.

Time Deposits

Time deposits are non-negotiable deposits, such as savings accounts or
certificates of deposit, held by a financial institution for a fixed term with
the understanding that the depositor can withdraw its money only by giving
notice to the institution. However, there may be early withdrawal penalties
depending upon market conditions and the remaining maturity of the obligation.
The portfolio may only purchase time deposits maturing from two business days
through seven calendar days.

Certificates of Deposit

Certificates of deposit are negotiable certificates issued against funds
deposited in a commercial bank or savings and loan association for a definite
period of time and earning a specified return.

Banker's Acceptance

A banker's acceptance is a time draft drawn on a commercial bank by a
borrower, usually in connection with an international commercial transaction
(to finance the import, export, transfer or storage of goods).

Commercial Paper

Commercial paper is a short-term obligation with a maturity ranging from 1 to
270 days issued by banks, corporations and other borrowers. Such investments
are unsecured and usually discounted. A portfolio may invest in commercial
paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by Moody's, or, if not
rated, issued by a corporation having an outstanding unsecured debt issue
rated A or better by Moody's or by S&P. See Appendix A for a description of
commercial paper ratings.

Yankee Bonds

Yankee bonds are dollar-denominated bonds issued inside the United States by
foreign entities. Investment in these securities involve certain risks which
are not typically associated with investing in domestic securities. See
"FOREIGN SECURITIES".

Zero Coupon Bonds

These securities make no periodic payments of interest, but instead are sold
at a discount from their face value. When held to maturity, their entire
income, which consists of accretion of discount, comes from the difference
between the issue price and their value at maturity. The amount of the
discount rate varies depending on factors including the time remaining until
maturity, prevailing interest rates, the security's liquidity and the issuer's
credit quality. The market value of zero coupon securities may exhibit greater
price volatility than ordinary debt securities because a stripped security
will have a longer duration than an ordinary

II-5
<PAGE>

debt security with the same maturity. The portfolio's investments in pay-in-
kind, delayed and zero coupon bonds may require it to sell certain of its
portfolio securities to generate sufficient cash to satisfy certain income
distribution requirements.

These securities may include treasury securities that have had their interest
payments ("coupons") separated from the underlying principal ("corpus") by
their holder, typically a custodian bank or investment brokerage firm. Once
the holder of the security has stripped or separated corpus and coupons, it
may sell each component separately. The principal or corpus is then 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
interest (cash) payments. Typically, the coupons are sold separately or
grouped with other coupons with like maturity dates and sold bundled in such
form. The underlying treasury security is 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. Purchasers of stripped obligations
acquire, in effect, discount obligations that are economically identical to
the zero coupon securities that the Treasury sells itself.

The United States Treasury has facilitated transfers of ownership of zero
coupon securities by accounting separately for the beneficial ownership of
particular interest coupon and corpus payments on Treasury securities through
the Federal Reserve book-entry record keeping system. Under a Federal Reserve
program known as "STRIPS" or "Separate Trading of Registered Interest and
Principal of Securities," the portfolio can record its beneficial ownership of
the coupon or corpus directly in the book-entry record-keeping system.

Terms to Understand

Maturity

Every debt security has a stated maturity date when the issuer must repay the
amount it borrowed (principal) from investors. Some debt securities, however,
are callable, meaning the issuer can repay the principal earlier, on or after
specified dates (call dates). Debt securities are most likely to be called
when interest rates are falling because the issuer can refinance at a lower
rate, similar to a homeowner refinancing a mortgage. The effective maturity of
a debt security is usually its nearest call date.

A portfolio that invests in debt securities has no real maturity. Instead, it
calculates its weighted average maturity. This number is an average of the
stated maturity of each debt security held by the portfolio, with the maturity
of each security weighted by the percentage of the assets of the portfolio it
represents.

Duration

Duration is a calculation that seeks to measure the price sensitivity of a
debt security, or a portfolio that invests in debt securities, to changes in
interest rates. It measures sensitivity more accurately than maturity because
it takes into account the time value of cash flows generated over the life of
a debt security. Future interest payments and principal payments are
discounted to reflect their present value and then are multiplied by the
number of years they will be received to produce a value expressed in years --
the duration. Effective duration takes into account call features and sinking
fund prepayments that may shorten the life of a debt security.

An effective duration of 4 years, for example, would suggest that for each 1%
reduction in interest rates at all maturity levels, the price of a security is
estimated to increase by 4%. An increase in rates by the same magnitude is
estimated to reduce the price of the security by 4%. By knowing the yield and
the effective duration of a debt security, one can estimate total return based
on an expectation of how much interest rates, in general, will change. While
serving as a good estimator of prospective returns, effective duration is an
imperfect measure.

Factors Affecting the Value of Debt Securities

The total return of a debt instrument is composed of two elements: the
percentage change in the security's price and interest income earned. The
yield to maturity of a debt security estimates its total return only if the
price of the debt security remains unchanged during the holding period and
coupon interest is reinvested at

II-6
<PAGE>

the same yield to maturity. The total return of a debt instrument, therefore,
will be determined not only by how much interest is earned, but also by how
much the price of the security and interest rates change.

Interest Rates

The price of a debt security generally moves in the opposite direction from
interest rates (i.e., if interest rates go up, the value of the bond will go
down, and vice versa).

Prepayment Risk

This risk effects mainly mortgage-backed securities. Unlike other debt
securities, falling interest rates can hurt mortgage-backed securities, which
may cause your share price to fall. Lower rates motivate people to pay off
mortgage-backed and asset-backed securities earlier than expected. The
portfolio may then have to reinvest the proceeds from such prepayments at
lower interest rates, which can reduce its yield. The unexpected timing of
mortgage and asset-backed prepayments caused by the variations in interest
rates may also shorten or lengthen the average maturity of the portfolio. If
left unattended, drifts in the average maturity of the portfolio can have the
unintended effect of increasing or reducing the effective duration of the
portfolio, which may adversely affect the expected performance of the
portfolio.

Extension Risk

The other side of prepayment risk occurs when interest rates are rising.
Rising interest rates can cause a portfolio's average maturity to lengthen
unexpectedly due to a drop in mortgage prepayments. This would increase the
sensitivity of a portfolio to rising rates and its potential for price
declines. Extending the average life of a mortgage-backed security increases
the risk of depreciation due to future increases in market interest rates. For
these reasons, mortgage-backed securities may be less effective than other
types of U.S. government securities as a means of "locking in" interest rates.

Credit Rating

Coupon interest is offered to investors of debt securities as compensation for
assuming risk, although short-term treasury securities, such as 3-month
treasury bills, are considered "risk free." Corporate securities offer higher
yields than treasury because their payment of interest and complete repayment
of principal is less certain. The credit rating or financial condition of an
issuer may affect the value of a debt security. Generally, the lower the
quality rating of a security, the greater the risks that the issuer will fail
to pay interest and return principal. To compensate investors for taking on
increased risk, issuers with lower credit ratings usually offer their
investors a higher "risk premium" in the form of higher interest rates above
comparable treasuries securities.

Changes in investor confidence regarding the certainty of interest and
principal payments of a corporate debt security will result in an adjustment
to this "risk premium." Since an issuer's outstanding debt carries a fixed
coupon, adjustments to the risk premium must occur in the price, which effects
the yield to maturity of the bond. If an issuer defaults or becomes unable to
honor its financial obligations, the bond may lose some or all of its value

A security rated within the four highest rating categories by a rating agency
is called investment-grade because its issuer is more likely to pay interest
and repay principal than an issuer of a lower rated bond. Adverse economic
conditions or changing circumstances, however, may weaken the capacity of the
issuer to pay interest and repay principal. If a security is not rated or is
rated under a different system, the adviser may determine that it is of
investment-grade. The adviser may retain securities that are downgraded, if it
believes that keeping those securities is warranted.

Debt securities rated below investment-grade (junk bonds) are highly
speculative securities that are usually issued by smaller, less credit worthy
and/or highly leveraged (indebted) companies. A corporation may issue a junk
bond because of a corporate restructuring or other similar event. Compared
with investment-grade bonds, junk bonds carry a greater degree of risk and are
less likely to make payments of interest and principal. Market developments
and the financial and business condition of the corporation issuing these
securities

II-7
<PAGE>

influences their price and liquidity more than changes in interest rates, when
compared to investment-grade debt securities. Insufficient liquidity in the
junk bond market may make it more difficult to dispose of junk bonds and may
cause the portfolio to experience sudden and substantial price declines. A
lack of reliable, objective data or market quotations may make it more
difficult to value junk bonds accurately.

Rating agencies are organizations that assign ratings to securities based
primarily on the rating agency's assessment of the issuer's financial
strength. The portfolios currently use ratings compiled by Moody's Investor
Services ("Moody's"), Standard and Poor's Ratings Services ("S&P"), Duff &
Phelps Rating Co. and Fitch IBCA. Credit ratings are only an agency's opinion,
not an absolute standard of quality, and they do not reflect an evaluation of
market risk. Appendix A contains further information concerning the ratings of
certain rating agencies and their significance.

The adviser may use ratings produced by ratings agencies as guidelines to
determine the rating of a security at the time the portfolio buys it. A rating
agency may change its credit ratings at any time. The adviser monitors the
rating of the security and will take appropriate actions if a rating agency
reduces the security's rating. The portfolio is not obligated to dispose of
securities whose issuers subsequently are in default or which are downgraded
below the above-stated ratings.

DERIVATIVES
- --------------------------------------------------------------------------------
Derivatives are financial instruments whose value is based on an underlying
asset, such as a stock or a bond, an underlying economic factor, such as an
interest rate or a market benchmark, such as an index. A portfolio may use
derivatives to gain exposure to various markets in a cost efficient manner, to
reduce transaction costs or to remain fully invested. A portfolio may also try
to minimize its loss by investing in derivatives to protect it from broad
fluctuations in market prices, interest rates or foreign currency exchange
rates. Investing in derivatives for these purposes is known as "hedging." When
hedging is successful, the portfolio will have offset any depreciation in the
value of its portfolio securities by the appreciation in the value of the
derivative position. Although techniques other than the sale and purchase of
derivatives could be used to control the exposure of the portfolio to market
fluctuations, the use of derivatives may be a more effective means of hedging
this exposure.

Types of Derivatives

Forward Foreign Currency Exchange Contracts

A forward foreign currency contract involves an obligation to purchase or sell
a specific amount of currency at a future date or date range at a specific
price. 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.
Forward foreign currency exchange contracts differ from foreign currency
futures contracts in certain respects. Unlike futures contracts, forward
contracts:

. Do not have standard maturity dates or amounts (i.e., the parties to the
contract may fix the maturity date and the amount).

. Are traded in the inter-bank markets conducted directly between currency
traders (usually large commercial banks) and their customers, as opposed to
futures contracts which are traded in only on exchanges regulated by the
CFTC.

. Do not require an initial margin deposit.

. May be closed by entering into a closing transaction with the currency
trader who is a party to the original forward contract, as opposed to a
commodities exchange.

Foreign Currency Hedging Strategies

A "settlement hedge" or "transaction hedge" is designed to protect the
portfolio against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is

II-8
<PAGE>

made or received. Entering into a forward contract for the purchase or sale of
the amount of foreign currency involved in an underlying security transaction
for a fixed amount of U.S. dollars "locks in" the U.S. dollar price of the
security. The portfolio may also use forward contracts to purchase or sell a
foreign currency when it anticipates purchasing or selling securities
denominated in foreign currency, even if it has not yet selected the specific
investments.

The portfolio may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. Such a hedge,
sometimes referred to as a "position hedge," would tend to offset both
positive and negative currency fluctuations, but would not offset changes in
security values caused by other factors. The portfolio could also hedge the
position by selling another currency expected to perform similarly to the
currency in which the portfolio's investment is denominated. This type of
hedge, sometimes referred to as a "proxy hedge," could offer advantages in
terms of cost, yield, or efficiency, but generally would not hedge currency
exposure as effectively as a direct hedge into U.S. dollars. Proxy hedges may
result in losses if the currency used to hedge does not perform similarly to
the currency in which the hedged securities are denominated.

Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities that the portfolio owns or intends to
purchase or sell. They simply establish a rate of exchange that one can
achieve at some future point in time. Additionally, these techniques tend to
minimize the risk of loss due to a decline in the value of the hedged currency
and to limit any potential gain that might result from the increase in value
of such currency.

The portfolio may enter into forward contracts to shift its investment
exposure from one currency into another. Such transactions may call for the
delivery of one foreign currency in exchange for another foreign currency,
including currencies in which its securities are not then denominated. This
may include shifting exposure from U.S. dollars to a foreign currency, or from
one foreign currency to another foreign currency. This type of strategy,
sometimes known as a "cross-hedge," will tend to reduce or eliminate exposure
to the currency that is sold, and increase exposure to the currency that is
purchased. Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause the portfolio to assume the risk of
fluctuations in the value of the currency it purchases. Cross hedging
transactions also involve the risk of imperfect correlation between changes in
the values of the currencies involved.

It is difficult to forecast with precision the market value of portfolio
securities at the expiration or maturity of a forward or futures contract.
Accordingly, the portfolio may have to purchase additional foreign currency on
the spot market if the market value of a security it is hedging is less than
the amount of foreign currency it is obligated to deliver. Conversely, the
portfolio may have to sell on the spot market some of the foreign currency it
received upon the sale of a security if the market value of such security
exceeds the amount of foreign currency it is obligated to deliver.

Futures

A futures contract is an agreement between two parties whereby one party sells
and the other party agrees to buy a specified amount of a financial instrument
at an agreed upon price and time. The financial instrument underlying the
contract may be a stock, stock index, bond, bond index, interest rate, foreign
exchange rate or other similar instrument. Agreeing to buy the underlying
financial information is called buying a futures contract or taking a long
position in the contract. Likewise, agreeing to sell the underlying financial
instrument is called selling a futures contract or taking a short position in
the contract.

Futures contracts are traded in the United States on commodity exchanges or
boards of trade -- known as "contract markets" -- approved for such trading
and regulated by the Commodity Futures Trading Commission, a federal agency.
These contract markets standardize the terms, including the maturity date and
underlying financial instrument, of all futures contracts.

Unlike other securities, the parties to a futures contract do not have to pay
for or deliver the underlying financial instrument until some future date (the
delivery date). Contract markets require both the purchaser and seller to
deposit "initial margin" with a futures broker, known as a futures commission
merchant, when they enter into the contract. Initial margin deposits are
typically equal to a percentage of the contract's value. After they open a
futures contract, the parties to the transaction must compare the purchase
price of the

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<PAGE>

contract to its daily market value. If the value of the futures contract
changes in such a way that a party's position declines, that party must make
additional "variation margin" payments so that the margin payment is adequate.
On the other hand, the value of the contract may change in such a way that
there is excess margin on deposit, possibly entitling the party that has a
gain to receive all or a portion of this amount. This process is known as
"marking to the market."

Although the actual terms of a futures contract calls for the actual delivery
of and payment for the underlying security, in many cases the parties may
close the contract early by taking an opposite position in an identical
contract. If the offsetting purchase price is less than the original purchase
price, the party closing the contract would realize a gain; if it is more, it
would realize a loss. The opposite is also true for a sale, that is, if the
offsetting sale price is more than the original sale price, the party closing
the contract would realize a gain; if it is less, it would realize a loss.

The portfolio will incur commission expenses in both opening and closing
futures positions.

Options

An option is a contract between two parties for the purchase and sale of a
financial instrument for a specified price (known as the "strike price" or
"exercise price") at any time during the option period. Unlike a futures
contract, an option grants a right (not an obligation) to buy or sell a
financial instrument. Generally, a seller of an option can grant a buyer two
kinds of rights: a "call" (the right to buy the security) or a "put" (the
right to sell the security). Options have various types of underlying
instruments, including specific securities, indices of securities prices,
foreign currencies, interest rates and futures contracts. Options may be
traded on an exchange (exchange-traded-options) or may be customized
agreements between the parties (over-the-counter or "OTC options"). Like
futures, a financial intermediary, known as a clearing corporation,
financially backs exchange-traded options. However, OTC options have no such
intermediary and are subject to the risk that the counter-party will not
fulfill its obligations under the contract.

Purchasing Put and Call Options

When the portfolio purchases a put option, it buys the right to sell the
instrument underlying the option at a fixed strike price. In return for this
right, the portfolio pays the current market price for the option (known as
the "option premium"). The portfolio may purchase put options to offset or
hedge against a decline in the market value of its securities ("protective
puts") or to benefit from a decline in the price of securities that it does
not own. The portfolio would ordinarily realize a gain if, during the option
period, the value of the underlying securities decreased below the exercise
price sufficiently to cover the premium and transaction costs. However, if the
price of the underlying instrument does not fall enough to offset the cost of
purchasing the option, a put buyer would lose the premium and related
transaction costs.

Call options are similar to put options, except that the portfolio obtains the
right to purchase, rather than sell, the underlying instrument at the option's
strike price. The portfolio would normally purchase call options in
anticipation of an increase in the market value of securities it owns or wants
to buy. The portfolio would ordinarily realize a gain if, during the option
period, the value of the underlying instrument exceeded the exercise price
plus the premium paid and related transaction costs. Otherwise, the portfolio
would realize either no gain or a loss on the purchase of the call option.

The purchaser of an option may terminate its position by:

. Allowing it to expire and losing its entire premium;

. Exercising the option and either selling (in the case of a put option) or
buying (in the case of a call option) the underlying instrument at the
strike price; or

. Closing it out in the secondary market at its current price.

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<PAGE>

Selling (Writing) Put and Call Options

When the portfolio writes a call option it assumes an obligation to sell
specified securities to the holder of the option at a specified price if the
option is exercised at any time before the expiration date. Similarly, when
the portfolio writes a put option it assumes an obligation to purchase
specified securities from the option holder at a specified price if the option
is exercised at any time before the expiration date. The portfolio may
terminate its position in an exchange-traded put option before exercise by
buying an option identical to the one it has written. Similarly, it may cancel
an over-the-counter option by entering into an offsetting transaction with the
counter-party to the option.

The portfolio could try to hedge against an increase in the value of
securities it would like to acquire by writing a put option on those
securities. If security prices rise, the portfolio would expect the put option
to expire and the premium it received to offset the increase in the security's
value. If security prices remain the same over time, the portfolio would hope
to profit by closing out the put option at a lower price. If security prices
fall, the portfolio may lose an amount of money equal to the difference
between the value of the security and the premium it received. Writing covered
put options may deprive the portfolio of the opportunity to profit from a
decrease in the market price of the securities it would like to acquire.

The characteristics of writing call options are similar to those of writing
put options, except that call writers expect to profit if prices remain the
same or fall. The portfolio could try to hedge against a decline in the value
of securities it already owns by writing a call option. If the price of that
security falls as expected, the portfolio would expect the option to expire
and the premium it received to offset the decline of the security's value.
However, the portfolio must be prepared to deliver the underlying instrument
in return for the strike price, which may deprive it of the opportunity to
profit from an increase in the market price of the securities it holds.

The portfolio is permitted only to write covered options. The portfolio can
cover a call option by owning, at the time of selling the option:

. The underlying security (or securities convertible into the underlying
security without additional consideration), index, interest rate, foreign
currency or futures contract;

. A call option on the same security or index with the same or lesser
exercise price;

. A call option on the same security or index with a greater exercise price
and segregating cash or liquid securities in an amount equal to the
difference between the exercise prices;

. Cash or liquid securities equal to at least the market value of the
optioned securities, interest rate, foreign currency or futures contract;
or

. In the case of an index, the portfolio of securities that corresponds to
the index.

The portfolio can cover a put option by, at the time of selling the option:

. Entering into a short position in the underlying security;

. Purchasing a put option on the same security, index, interest rate, foreign
currency or futures contract with the same or greater exercise price;

. Purchasing a put option on the same security, index, interest rate, foreign
currency or futures contract with a lesser exercise price and segregating
cash or liquid securities in an amount equal to the difference between the
exercise prices; or

. Maintaining the entire exercise price in liquid securities.

Options on Securities Indices

Options on securities indices are similar to options on securities, except
that the exercise of securities index options requires cash settlement
payments and does not involve the actual purchase or sale of securities. In
addition, securities index options are designed to reflect price fluctuations
in a group of securities or segment of the securities market rather than price
fluctuations in a single security.

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Options on Futures

An option on a futures contract provides the holder with the right to buy a
futures contract (in the case of a call option) or sell a futures contract (in
the case of a put option) at a fixed time and price. Upon exercise of the
option by the holder, the contract market clearing house establishes a
corresponding short position for the writer of the option (in the case of a
call option) or a corresponding long position (in the case of a put option).
If the option is exercised, the parties will be subject to the futures
contracts. In addition, the writer of an option on a futures contract is
subject to initial and variation margin requirements on the option position.
Options on futures contracts are traded on the same contract market as the
underlying futures contract.

The buyer or seller of an option on a futures contract may terminate the
option early by purchasing or selling an option of the same series (i.e., the
same exercise price and expiration date) as the option previously purchased or
sold. The difference between the premiums paid and received represents the
trader's profit or loss on the transaction.

The portfolio may purchase put and call options on futures contracts instead
of selling or buying futures contracts. The portfolio may buy a put option on
a futures contract for the same reasons it would sell a futures contract. It
also may purchase such put options in order to hedge a long position in the
underlying futures contract. The portfolio may buy call options on futures
contracts for the same purpose as the actual purchase of the futures
contracts, such as in anticipation of favorable market conditions.

The portfolio may write a call option on a futures contract to hedge against a
decline in the prices of the instrument underlying the futures contracts. If
the price of the futures contract at expiration were below the exercise price,
the portfolio would retain the option premium, which would offset, in part,
any decline in the value of its portfolio securities.

The writing of a put option on a futures contract is similar to the purchase
of the futures contracts, except that, if market price declines, the portfolio
would pay more than the market price for the underlying instrument. The
premium received on the sale of the put option, less any transaction costs,
would reduce the net cost to the portfolio.

Swaps, Caps, Collars and Floors

Swap Agreements

A swap is a financial instrument that typically involves the exchange of cash
flows between two parties on specified dates (settlement dates), where the
cash flows are based on agreed-upon prices, rates, indices, etc. The nominal
amount on which the cash flows are calculated is called the notional amount.
Swaps are individually negotiated and structured to include exposure to a
variety of different types of investments or market factors, such as interest
rates, foreign currency rates, mortgage securities, corporate borrowing rates,
security prices or inflation rates.

Swap agreements may increase or decrease the overall volatility of the
investments of the portfolio and its share price. The performance of swap
agreements may be affected by a change in the specific interest rate,
currency, or other factors that determine the amounts of payments due to and
from the portfolio. If a swap agreement calls for payments by the portfolio,
the portfolio must be prepared to make such payments when due. In addition, if
the counter-party's creditworthiness declined, the value of a swap agreement
would be likely to decline, potentially resulting in losses.

Generally, swap agreements have a fixed maturity date that will be agreed upon
by the parties. The agreement can be terminated before the maturity date only
under limited circumstances, such as default by one of the parties or
insolvency, among others, and can be transferred by a party only with the
prior written consent of the other party. The portfolio may be able to
eliminate its exposure under a swap agreement either by assignment or by other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party. If the counter-party is unable to
meet its obligations under the contract, declares bankruptcy, defaults or
becomes insolvent, the portfolio may not be able to recover the money it
expected to receive under the contract.

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A swap agreement can be a form of leverage, which can magnify a portfolio's
gains or losses. In order to reduce the risk associated with leveraging, a
portfolio will cover its current obligations under swap agreements according
to guidelines established by the SEC. If the portfolio enters into a swap
agreement on a net basis, it will segregate assets with a daily value at least
equal to the excess, if any, of the portfolio's accrued obligations under the
swap agreement over the accrued amount the portfolio is entitled to receive
under the agreement. If the portfolio enters into a swap agreement on other
than a net basis, it will segregate assets with a value equal to the full
amount of the portfolio's accrued obligations under the agreement.

Equity Swaps -- In a typical equity index swap, one party agrees to pay
another party the return on a stock, stock index or basket of stocks in return
for a specified interest rate. By entering into an equity index swap, for
example, the index receiver can gain exposure to stocks making up the index of
securities without actually purchasing those stocks. Equity index swaps
involve not only the risk associated with investment in the securities
represented in the index, but also the risk that the performance of such
securities, including dividends, will not exceed the return on the interest
rate that the portfolio will be committed to pay.

Interest Rate Swaps -- Interest rate swaps are financial instruments that
involve the exchange on one type of interest rate for another type of interest
rate cash flow on specified dates in the future. Some of the different types
of interest rate swaps are "fixed-for floating rate swaps," "termed basis
swaps" and "index amortizing swaps." Fixed-for floating rate swap involve the
exchange of fixed interest rate cash flows for floating rate cash flows.
Termed basis swaps entail cash flows to both parties based on floating
interest rates, where the interest rate indices are different. Index
amortizing swaps are typically fixed-for floating swaps where the notional
amount changes if certain conditions are met.

Like a traditional investment in a debt security, a portfolio could lose money
by investing in an interest rate swap if interest rates change adversely. For
example, if the portfolio enters into a swap where it agrees to exchange a
floating rate of interest for a fixed rate of interest, the portfolio may have
to pay more money than it receives. Similarly, if the portfolio enters into a
swap where it agrees to exchange a fixed rate of interest for a floating rate
of interest, the portfolio may receive less money than it has agreed to pay.

Currency Swaps -- A currency swap is an agreement between two parties in which
one party agrees to make interest rate payments in one currency and the other
promises to make interest rate payments in another currency. A portfolio may
enter into a currency swap when it has one currency and desires a different
currency. Typically the interest rates that determine the currency swap
payments are fixed, although occasionally one or both parties may pay a
floating rate of interest. Unlike an interest rate swap, however, the
principal amounts are exchanged at the beginning of the contract and returned
at the end of the contract. Changes in foreign exchange rates and changes in
interest rates, as described above may negatively affect currency swaps.

Caps, Collars and Floors

Caps and floors have an effect similar to buying or writing options. In a
typical cap or floor agreement, one party agrees to make payments only under
specified circumstances, usually in return for payment of a fee by the other
party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specified interest rate exceeds an
agreed-upon level. The seller of an interest rate floor is obligated to make
payments to the extent that a specified interest rate falls below an agreed-
upon level. An interest rate collar combines elements of buying a cap and
selling a floor.

Combined Positions

The portfolio may purchase and write options in combination with each other,
or in combination with futures or forward contracts, to adjust the risk and
return characteristics of the overall position. For example, the portfolio
could construct a combined position whose risk and return characteristics are
similar to selling a futures contract by purchasing a put option and writing a
call option on the same underlying instrument. Alternatively, the portfolio
could write a call option at one strike price and buy a call option at a lower
price to reduce the risk of the written call option in the event of a
substantial price increase. Because combined options positions involve
multiple trades, they result in higher transaction costs and may be more
difficult to open and close out.

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Risks of Derivatives

While transactions in derivatives may reduce certain risks, these transactions
themselves entail certain other risks. For example, unanticipated changes in
interest rates, securities prices or currency exchange rates may result in a
poorer overall performance of the portfolio than if it had not entered into
any derivatives transactions. Derivatives may magnify the portfolio's gains
or losses, causing it to make or lose substantially more than it invested.

When used for hedging purposes, increases in the value of the securities the
portfolio holds or intends to acquire should offset any losses incurred with a
derivative. Purchasing derivatives for purposes other than hedging could
expose the portfolio to greater risks.

Correlation of Prices

The portfolio's ability to hedge its securities through derivatives depends on
the degree to which price movements in the underlying index or instrument
correlate with price movements in the relevant securities. In the case of poor
correlation, the price of the securities the portfolio is hedging may not move
in the same amount, or even in the same direction as the hedging instrument.
The adviser will try to minimize this risk by investing only in those
contracts whose behavior it expects to resemble the portfolio securities it is
trying to hedge. However, if the portfolio's prediction of interest and
currency rates, market value, volatility or other economic factors is
incorrect, the portfolio may lose money, or may not make as much money as it
expected.

Derivative prices can diverge from the prices of their underlying instruments,
even if the characteristics of the underlying instruments are very similar to
the derivative. Listed below are some of the factors that may cause such a
divergence.

. current and anticipated short-term interest rates, changes in volatility of
the underlying instrument, and the time remaining until expiration of the
contract;

. a difference between the derivatives and securities markets, including
different levels of demand, how the instruments are traded, the imposition
of daily price fluctuation limits or trading of an instrument stops; and

. differences between the derivatives, such as different margin requirements,
different liquidity of such markets and the participation of speculators in
such markets.

Derivatives based upon a narrower index of securities, such as those of a
particular industry group, may present greater risk than derivatives based on
a broad market index. Since narrower indices are made up of a smaller number
of securities, they are more susceptible to rapid and extreme price
fluctuations because of changes in the value of those securities.

While currency futures and options values are expected to correlate with
exchange rates, they may not reflect other factors that affect the value of
the investments of the portfolio. A currency hedge, for example, should
protect a yen-denominated security from a decline in the yen, but will not
protect the portfolio against a price decline resulting from deterioration in
the issuer's creditworthiness. Because the value of the portfolio's foreign-
denominated investments changes in response to many factors other than
exchange rates, it may not be possible to match the amount of currency options
and futures to the value of the portfolio's investments precisely over time.

Lack of Liquidity

Before a futures contract or option is exercised or expires, the portfolio can
terminate it only by entering into a closing purchase or sale transaction.
Moreover, a portfolio may close out a futures contract only on the exchange
the contract was initially traded. Although a portfolio intends to purchase
options and futures only where there appears to be an active market, there is
no guarantee that such a liquid market will exist. If there is no secondary
market for the contract, or the market is illiquid, the portfolio may not be
able to close out its position. In an illiquid market, the portfolio may:

. have to sell securities to meet its daily margin requirements at a time
when it is disadvantageous to do so;

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<PAGE>

. have to purchase or sell the instrument underlying the contract;

. not be able to hedge its investments; and

. not be able realize profits or limit its losses.

Derivatives may become illiquid (i.e., difficult to sell at a desired time and
price) under a variety of market conditions. For example:

. an exchange may suspend or limit trading in a particular derivative
instrument, an entire category of derivatives or all derivatives, which
sometimes occurs because of increased market volatility;

. unusual or unforeseen circumstances may interrupt normal operations of an
exchange;

. the facilities of the exchange may not be adequate to handle current
trading volume;

. equipment failures, government intervention, insolvency of a brokerage firm
or clearing house or other occurrences may disrupt normal trading activity;
or

. investors may lose interest in a particular derivative or category of
derivatives.

Management Risk

If the adviser incorrectly predicts stock market and interest rate trends, the
portfolio may lose money by investing in derivatives. For example, if the
portfolio were to write a call option based on its adviser's expectation that
the price of the underlying security would fall, but the price were to rise
instead, the portfolio could be required to sell the security upon exercise at
a price below the current market price. Similarly, if the portfolio were to
write a put option based on the adviser's expectation that the price of the
underlying security would rise, but the price were to fall instead, the
portfolio could be required to purchase the security upon exercise at a price
higher than the current market price.

Volatility and Leverage

The prices of derivatives are volatile (i.e., they may change rapidly,
substantially and unpredictably) and are influenced by a variety of factors,
including

. actual and anticipated changes in interest rates;

. fiscal and monetary policies; and

. national and international political events.

Most exchanges limit the amount by which the price of a derivative can change
during a single trading day. Daily trading limits establish the maximum
amount that the price of a derivative may vary from the settlement price of
that derivative at the end of trading on the previous day. Once the price of
a derivative reaches this value, a portfolio may not trade that derivative at
a price beyond that limit. The daily limit governs only price movements
during a given day and does not limit potential gains or losses. Derivative
prices have occasionally moved to the daily limit for several consecutive
trading days, preventing prompt liquidation of the derivative.

Because of the low margin deposits required upon the opening of a derivative
position, such transactions involve an extremely high degree of leverage.
Consequently, a relatively small price movement in a derivative may result in
an immediate and substantial loss (as well as gain) to the portfolio and it
may lose more than it originally invested in the derivative.

If the price of a futures contract changes adversely, the portfolio may have
to sell securities at a time when it is disadvantageous to do so to meet its
minimum daily margin requirement. The portfolio may lose its margin deposits
if a broker-dealer with whom it has an open futures contract or related option
becomes insolvent or declares bankruptcy.

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EQUITY SECURITIES
- -------------------------------------------------------------------------------

Types of Equity Securities

Common Stocks

Common stocks represent units of ownership in a company. Common stocks
usually carry voting rights and earn dividends. Unlike preferred stocks,
which are described below, dividends on common stocks are not fixed but are
declared at the discretion of the company's board of directors.

Preferred Stocks

Preferred stocks are also units of ownership in a company. Preferred stocks
normally have preference over common stock in the payment of dividends and the
liquidation of the company. However, in all other resects, preferred stocks
are subordinated to the liabilities of the issuer. Unlike common stocks,
preferred stocks are generally not entitled to vote on corporate matters.
Types of preferred stocks include adjustable-rate preferred stock, fixed
dividend preferred stock, perpetual preferred stock, and sinking fund
preferred stock. Generally, the market values of preferred stock with a fixed
dividend rate and no conversion element varies inversely with interest rates
and perceived credit risk.

Convertible Securities

Convertible securities are debt securities and preferred stocks that are
convertible into common stock at a specified price or conversion ratio. In
exchange for the conversion feature, many corporations will pay a lower rate
of interest on convertible securities than debt securities of the same
corporation. Their market price tends to go up if the stock price moves up.

Convertible securities are subject to the same risks as similar securities
without the convertible feature. The price of a convertible security is more
volatile during times of steady interest rates than other types of debt
securities.

Rights and Warrants

A right is a privilege granted to exiting shareholders of a corporation to
subscribe to shares of a new issue of common stock before it is issued.
Rights normally have a short life, usually two to four weeks, are freely
transferable and entitle the holder to buy the new common stock at a lower
price than the public offering price. Warrants are securities that are
usually issued together with a debt security or preferred stock and that give
the holder the right to buy proportionate amount of common stock at a
specified price. Warrants are freely transferable and are traded on major
exchanges. Unlike rights, warrants normally have a life that measured in
years and entitle the holder to buy common stock of a company at a price that
is usually higher than the market price at the time the warrant is issued.
Corporations often issue warrants to make the accompanying debt security more
attractive.

An investment in warrants and rights may entail greater risks than certain
other types of investments. Generally, rights and warrants do not carry the
right to receive dividends or exercise voting rights with respect to the
underlying securities, and they do not represent any rights in the assets of
the issuer. In addition, their value does not necessarily change with the
value of the underlying securities, and they cease to have value if they are
not exercised on or before their expiration date. Investing in rights and
warrants increases the potential profit or loss to be realized from the
investment as compared with investing the same amount in the underlying
securities.

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Risks of Investing in Equity Securities

General Risks of Investing in Stocks

While investing in stocks allows a portfolio to participate in the benefits of
owning a company, the portfolio must accept the risks of ownership. Unlike
bondholders, who have preference to a company's earnings and cash flow,
preferred stockholders, followed by common stockholders in order of priority,
are entitled only to the residual amount after a company meets its other
obligations. For this reason, the value of a company's stock will usually
react more strongly to actual or perceived changes in the company's financial
condition or prospects than its debt obligations. Stockholders of a company
that fares poorly can lose money.

Stock markets tend to move in cycles with short or extended periods of rising
and falling stock prices. The value of a company's stock may fall because of:

. Factors that directly relate to that company, such as decisions made by its
management or lower demand for the company's products or services;

. Factors affecting an entire industry, such as increases in production
costs; and

. Changes in financial market conditions that are relatively unrelated to the
company or its industry, such as changes in interest rates, currency
exchange rates or inflation rates.

Because preferred stock is generally junior to debt securities and other
obligations of the issuer, deterioration in the credit quality of the issuer
will cause greater changes in the value of a preferred stock than in a more
senior debt security with similar stated yield characteristics.

Small and Medium-Sized Companies

A small or medium-sized company is a company whose market capitalization falls
with the range specified in the prospectus of the portfolio. Investors in
small and medium-sized companies typically take on greater risk and price
volatility than they would by investing in larger, more established companies.
This increased risk may be due to the greater business risks of their small or
medium size, limited markets and financial resources, narrow product lines and
frequent lack of management depth. The securities of small and medium
companies are often traded in the over-the-counter market and might not be
traded in volumes typical of securities traded on a national securities
exchange. Thus, the securities of small and medium capitalization companies
are likely to be less liquid, and subject to more abrupt or erratic market
movements, than securities of larger, more established companies.

Technology Companies

Stocks of technology companies have tended to be subject to greater volatility
than securities of companies that are not dependent upon or associated with
technological issues. Technology companies operate in various industries.
Since these industries frequently share common characteristics, an event or
issue affecting one industry may significantly influence other, related
industries. For example, technology companies may be strongly affected by
worldwide scientific or technological developments and their products and
services may be subject to governmental regulation or adversely affected by
governmental policies.

FOREIGN SECURITIES
- -------------------------------------------------------------------------------

Types of Foreign Securities

Foreign securities are debt and equity securities that are traded in markets
outside of the United States. The markets in which these securities are
located can be developed or emerging. People can invest in foreign securities
in a number of ways:

. They can invest directly in foreign securities denominated in a foreign
currency;

. They can invest in American Depositary Receipts; and

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. They can invest in investment funds.

American Depositary Receipts (ADRs)

American Depositary Receipts (ADRs) are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by depository banks
and generally trade on an established market in the United States or
elsewhere. A custodian bank or similar financial institution in the issuer's
home country holds the underlying shares in trust. The depository bank may not
have physical custody of the underlying securities at all times and may charge
fees for various services, including forwarding dividends and interest and
corporate actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However, ADRs
continue to be subject to many of the risks associated with investing directly
in foreign securities.

Emerging Markets

An "emerging country" is generally country that the International Bank for
Reconstruction and Development (World Bank) and the International Finance
Corporation would consider to be an emerging or developing country. Typically,
emerging markets are in countries that are in the process of
industrialization, with lower gross national products (GNP) than more
developed countries. There are currently over 130 countries that the
international financial community generally considers to be emerging or
developing countries, approximately 40 of which currently have stock markets.
These countries generally include every nation in the world except the United
States, Canada, Japan, Australia, New Zealand and most nations located in
Western Europe.

Investment Funds

Some emerging countries currently prohibit direct foreign investment in the
securities of their companies. Certain emerging countries, however, permit
indirect foreign investment in the securities of companies listed and traded
on their stock exchanges through investment funds that they have specifically
authorized. The portfolio may invest in these investment funds subject to the
provisions of the 1940 Act. If a portfolio invests in such investment funds,
its shareholders will bear not only their proportionate share of the expenses
of the portfolio (including operating expenses and the fees of the adviser),
but also will bear indirectly bear similar expenses of the underlying
investment funds. In addition, these investment funds may trade at a premium
over their net asset value.

Risks of Foreign Securities

Foreign securities, foreign currencies, and securities issued by U.S. entities
with substantial foreign operations may involve significant risks in addition
to the risks inherent in U.S. investments.

Political and Economic Factors

Local political, economic, regulatory, or social instability, military action
or unrest, or adverse diplomatic developments may affect the value of foreign
investments. Listed below are some of the more important political and
economic factors that could negatively affect a portfolio's investments.

. The economies of foreign countries may differ from the economy of the
United States in such areas as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency, budget deficits
and national debt;

. Foreign governments sometimes participate to a significant degree, through
ownership interests or regulation, in their respective economies. Actions
by these governments could significantly influence the market prices of
securities and payment of dividends;

. The economies of many foreign countries are dependent on international
trade and their trading partners and they could be severely affected if
their trading partners were to enact protective trade barriers and economic
conditions;

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<PAGE>

. The internal policies of a particular foreign country may be less stable
than in the United States. Other countries face significant external
political risks, such as possible claims of sovereignty by other countries
or tense and sometimes hostile border clashes; and

. A foreign government may act adversely to the interests of U.S. investors,
including expropriation or nationalization of assets, confiscatory taxation
and other restrictions on U.S. investment. A country may restrict or
control foreign investments in its securities markets. These restrictions
could limit ability of a portfolio to invest a particular country or make
it very expensive for the portfolio to invest in that country. Some
countries require prior governmental approval, limit the types or amount of
securities or companies in which a foreigner can invest. Other countries
may restrict the ability of foreign investors to repatriate their
investment income and capital gains.

Information and Supervision

There is generally less publicly available information about foreign companies
than companies based in the United States. For example, there are often no
reports and ratings published about foreign companies comparable to the ones
written about United States companies. Foreign companies are typically not
subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable United States
companies. The lack of comparable information makes investment decisions
concerning foreign countries more difficult and less reliable than domestic
companies.

Stock Exchange and Market Risk

The adviser anticipates that in most cases an exchange or over-the-counter
(OTC) market located outside of the United States will be the best available
market for foreign securities. Foreign stock markets, while growing in volume
and sophistication, are generally not as developed as the markets in the
United States. Foreign stocks markets tend to differ from those in the United
States in a number of ways:

. They are generally not as developed or efficient as, and more volatile,
than those in the United States;

. They have substantially less volume;

. Their securities tend to be less liquid and to experience rapid and erratic
price movements;

. Commissions on foreign stocks are generally higher and subject to set
minimum rates, as opposed to negotiated rates;

. Foreign security trading, settlement and custodial practices are often less
developed than those in U.S. markets; and

. They may have different settlement practices, which may cause delays and
increase the potential for failed settlements.

Foreign Currency Risk

While, the portfolio's net asset value is denominated in United States
dollars, the securities of foreign companies are frequently denominated in
foreign currencies. Thus, a change in a the value of a foreign currency
against the United States dollar will result in a corresponding change in
value of the securities held by a portfolio. Some of the factors that may
impair the investments denominated in a foreign currency are:

. It may be expensive to convert foreign currencies into United States
dollars and vice versa;

. Complex political and economic factors may significantly affect the values
of various currencies, including United States dollars, and their exchange
rates ;

. Government intervention may increase risks involved in purchasing or
selling foreign currency options, forward contracts and futures contracts,
since exchange rates may not be free to fluctuate in response to other
market forces;

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<PAGE>

. There may be no systematic reporting of last sale information for foreign
currencies or 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
round-lot transactions in the inter-bank market and thus may not reflect
exchange rates for smaller odd-lot transactions (less than $1 million)
where rates may be less favorable; and

. The inter-bank market in foreign currencies is a global, around-the-clock
market. To the extent that a market is closed while the markets for the
underlying currencies remain open, certain markets may not always reflect
significant price and rate movements.

Taxes

Certain foreign governments levy withholding taxes on dividend and interest
income. Although in some countries the portfolio may recover a portion of
these taxes, the portion it cannot recover will reduce the income the
portfolio receives from its investments. The portfolio does not expect such
foreign withholding taxes to have a significant impact on performance.

Emerging Markets

Investing in emerging markets may magnify the risks of foreign investing.
Security prices in emerging markets can be significantly more volatile than
those in more developed markets, reflecting the greater uncertainties of
investing in less established markets and economies. In particular, countries
with emerging markets may:

. Have relatively unstable governments;

. Present greater risks of nationalization of businesses, restrictions on
foreign ownership and prohibitions on the repatriation of assets; and

. Offer less protection of property rights than more developed countries.

. Have economies that are based on only a few industries, may be highly
vulnerable to changes in local or global trade conditions, and may suffer
from extreme and volatile debt burdens or inflation rates.

. Local securities markets may trade a small number of securities and may be
unable to respond effectively to increases in trading volume, potentially
making prompt liquidation of holdings difficult or impossible at times.

The Euro

The single currency for the European Economic and Monetary Union ("EMU"), the
Euro, is scheduled to replace the national currencies for participating member
countries over a period that began on January 1, 1999 and ends in July 2002.
At the end of that period, use of the Euro will be compulsory and countries in
the EMU will no longer maintain separate currencies in any form. Until then,
however, each country and issuers within each country are free to choose
whether to use the Euro.

On January 1, 1999, existing national currencies became denominations of the
Euro at fixed rates according to practices prescribed by the European Monetary
Institute and the Euro became available as a book-entry currency. On or about
that date, member states began conducting financial market transactions in
Euros and redenominating many investments, currency balances and transfer
mechanisms into Euros. The portfolio also anticipates pricing, trading,
settling and valuing investments whose nominal values remain in their existing
domestic currencies in Euros. Accordingly, the portfolio expects the
conversion to the Euro to impact investments in countries that will adopt the
Euro in all aspects of the investment process, including trading, foreign
exchange, payments, settlements, cash accounts, custody and accounting. Some
of the uncertainties surrounding the conversion to the Euro include:

. Will the payment and operational systems of banks and other financial
institutions be ready by the scheduled launch date?

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<PAGE>

. Will the conversion to the Euro have legal consequences on outstanding
financial contracts that refer to existing currencies rather than Euro?

. How will existing currencies be exchanged into Euro?

. Will suitable clearing and settlement payment systems for the new currency
be created?

INVESTMENT COMPANIES
- -------------------------------------------------------------------------------
A portfolio may buy and sell shares of other investment companies. Such
investment companies may pay management and other fees that are similar to the
fees currently paid by a portfolio. Like other shareholders, each portfolio
would pay its proportionate share those fees. Consequently, shareholders of a
portfolio would pay not only the management fees of the portfolio, but also
the management fees of the investment company in which the portfolio invests.

The SEC has granted an order that allows a portfolio to invest the greater of
5% of its total assets or $2.5 million in the UAM DSI Money Market Portfolio,
provided that the investment is:

. For cash management purposes;

. Consistent with a portfolio's investment policies and restrictions; and

. The adviser to the investing portfolio waives any fees it earns on the
assets of the portfolio that are invested in the UAM DSI Money Market
Portfolio.

The investing portfolio will bear expenses of the UAM DSI Money Market
Portfolio on the same basis as all of its other shareholders.

REPURCHASE AGREEMENTS
- -------------------------------------------------------------------------------
In a repurchase agreement, an investor agrees to buy a security (underlying
security) from a securities dealer or bank that is a member of the Federal
Reserve System (counter-party). At the time, the counter-party agrees to
repurchase the underlying security for the same price, plus interest.
Repurchase agreements are generally for a relatively short period (usually not
more than 7 days). The portfolios normally use repurchase agreements to earn
income on assets that are not invested.

When it enters into a repurchase agreement, a portfolio will:

. Pay for the underlying securities only upon physically receiving them or
upon evidence of their receipt in book-entry form; and

. Require the counter party to add to the collateral whenever the price of
the repurchase agreement rises above the value of the underlying security
(i.e., it will require the borrower "mark to the market" on a daily basis).

If the seller of the security declares bankruptcy or otherwise becomes
financially unable to buy back the security, a portfolio's right to sell the
security may be restricted. In addition, the value of the security might
decline before a portfolio can sell it and a portfolio might incur expenses in
enforcing its rights.

RESTRICTED SECURITIES
- -------------------------------------------------------------------------------
A portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified
institutional investors under Rule 144A of the Securities Act of 1933. Under
the supervision of the Fund's board, the adviser determines the liquidity of
such investments by considering all relevant factors. Provided that a dealer
or institutional trading market in such securities exists, these restricted
securities are not treated as illiquid securities for purposes of the
portfolio's investment limitations. The price realized from the sales of
these securities could be more or less than those originally paid by a
portfolio or less than what may be considered the fair value of such
securities.

II-21
<PAGE>

SECURITIES LENDING
- -------------------------------------------------------------------------------
A portfolio may lend a portion of its total assets to broker- dealers or other
financial institutions. It may then reinvest the collateral it receives in
short-term securities and money market funds. When a portfolio lends its
securities, it will follow the following guidelines:

. The borrower must provide collateral at least equal to the market value of
the securities loaned;

. The collateral must consist of cash, an irrevocable letter of credit issued
by a domestic U.S. bank or securities issued or guaranteed by the U. S.
government;

. The borrower must add to the collateral whenever the price of the
securities loaned rises (i.e., the borrower "marks to the market" on a
daily basis);

. It must be able to terminate the loan at any time;

. It must receive reasonable interest on the loan (which may include the
portfolio investing any cash collateral in interest bearing short-term
investments); and

. It must determine that the borrower is an acceptable credit risk.

These risks are similar to the ones involved with repurchase agreements. When
the portfolio lends securities, there is a risk that the borrower fails
financially become financially unable to honor its contractual obligations.
If this happens, the portfolio could:

. Lose its rights in the collateral and not be able to retrieve the
securities it lent to the borrower; and

. Experience delays in recovering its securities.

SHORT SALES
- -------------------------------------------------------------------------------

Description of Short Sales

Selling a security short is when an investor sells a security it does not own.
To sell a security short an investor must borrow the security from someone
else to deliver to the buyer. The investor then replaces the security it
borrowed by purchasing it at the market price at or before the time of
replacement. Until it replaces the security, the investor repays the person
that lent it the security for any interest or dividends that may have accrued
during the period of the loan.

Investors typically sell securities short to:

. Take advantage of an anticipated decline in prices.

. Protect a profit in a security it already owns.

A portfolio can lose money if the price of the security it sold short
increases between the date of the short sale and the date on which the
portfolio replaces the borrowed security. Likewise, a portfolio can profit if
the price of the security declines between those dates.

To borrow the security, a portfolio also may be required to pay a premium,
which would increase the cost of the security sold. A portfolio will incur
transaction costs in effecting short sales. A portfolio's gains and losses
will be decreased or increased, as the case may be, by the amount of the
premium, dividends, interest, or expenses the portfolio may be required to pay
in connection with a short sale.

The broker will retain the net proceeds of the short sale, to the extent
necessary to meet margin requirements, until the short position is closed out.

Short Sales Against the Box

In addition, a portfolio may engage in short sales "against the box". In a
short sale against the box, the portfolio agrees to sell at a future date a
security that it either contemporaneously owns or has the right to

II-22
<PAGE>

acquire at no extra cost. A portfolio will incur transaction costs to open,
maintain and close short sales against the box.

Restrictions on Short Sales
A portfolio will not short sell a security if:

. After giving effect to such short sale, the total market value of all
securities sold short would exceed 25% of the value of the portfolio net
assets.

. The market value of the securities of any single issuer that have been sold
short by the portfolio would exceed the two percent (2%) of the value of
the portfolio's net assets.

. Such securities would constitute more than two percent (2%) of any class of
the issuer's securities.

Whenever a portfolio sells a security short, its custodian segregates an
amount of cash or liquid securities equal to the difference between (a) the
market value of the securities sold short at the time they were sold short and
(b) any cash or U.S. Government securities the portfolio is required to
deposit with the broker in connection with the short sale (not including the
proceeds from the short sale). The segregated assets are marked to market
daily in an attempt to ensure that the amount deposited in the segregated
account plus the amount deposited with the broker is at least equal to the
market value of the securities at the time they were sold short.

WHEN-ISSUED, FORWARD COMMITMENT AND DELAYED DELIVERY TRANSACTIONS
- -------------------------------------------------------------------------------
A when-issued security is one whose terms are available and for which a market
exists, but which have not been issued. In a forward delivery transaction, a
portfolio contracts to purchase securities for a fixed price at a future date
beyond customary settlement time. "Delayed delivery" refers to securities
transactions on the secondary market where settlement occurs in the future. In
each of these transactions, the parties fix the payment obligation and the
interest rate that they will receive on the securities at the time the parties
enter the commitment; however, they do not pay money or deliver securities
until a later date. Typically, no income accrues on securities a portfolio
has committed to purchase before the securities are delivered, although the
portfolio may earn income on securities it has in a segregated account. A
portfolio will only enter into these types of transactions with the intention
of actually acquiring the securities, but may sell them before the settlement
date.

A portfolio uses when-issued, delayed-delivery and forward delivery
transactions to secure what it considers an advantageous price and yield at
the time of purchase. When a portfolio engages in when-issued, delayed-
delivery and forward delivery transactions, it relies on the other party to
consummate the sale. If the other party fails to complete the sale, a
portfolio may miss the opportunity to obtain the security at a favorable price
or yield.

When purchasing a security on a when-issued, delayed delivery, or forward
delivery basis, the portfolio assumes the rights and risks of ownership of the
security, including the risk of price and yield changes. At the time of
settlement, the market value of the security may be more or less than the
purchase price. The yield available in the market when the delivery takes
place also may be higher than those obtained in the transaction itself.
Because a portfolio does not pay for the security until the delivery date,
these risks are in addition to the risks associated with its other
investments.

A portfolio will segregate cash and liquid securities equal in value to
commitments for the when-issued, delayed-delivery or forward delivery
transaction. A portfolio will segregate additional liquid assets daily so
that the value of such assets is equal to the amount of its commitments.

II-23
<PAGE>

Management Of The Fund

The governing board manages the business of the Fund. The governing board
elects officers to manage the day-to-day operations of the Fund and to execute
policies the board has formulated. The Fund pays each board member who is not
also an officer or affiliated person (independent board member) a $150
quarterly retainer fee per active portfolio per quarter and a $2,000 meeting
fee. In addition, the Fund reimburses each independent board member for
travel and other expenses incurred while attending board meetings. The $2,000
meeting fee and expense reimbursements are aggregated for all of the board
members and allocated proportionately among the portfolios of the UAM Funds
Complex. The Fund does not pay board members that are affiliated with the fund
for their services as board members. UAM, its affiliates or SEI pay the Fund's
officers.

The following table lists the board members and officers of the Fund and
provides information regarding their present positions, date of birth,
address, principal occupations during the past five years, aggregate
compensation received from the Fund and total compensation received from the
UAM Funds Complex. The UAM Funds Complex is currently comprised of 48
portfolios. Those people with an asterisk beside their name are "interested
persons" of the Fund as that term is defined in the 1940 Act. Mr. English does
have an investment advisory relationship with Investment Counselors of
Maryland, an investment adviser to one of the portfolios in the UAM Funds
Complex. However, the Fund does not believe that the relationship is a
material business relationship, and, therefore, does not consider him to be an
"interested person" of the Fund. If these circumstances change, the Board
will determine whether any action is required to change the composition of the
Board.

<TABLE>
<CAPTION>
Total
Name, Address, DOB Position Principal Occupations During the Past 5 years Aggregate Compensation
with Fund Compensation From UAM
from Fund as Funds Complex
of 4/30/99 as of 12/31/98
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr. Board President of Squam Investment Management Company, $ 8,094 $ 39,900
College Road -- RFD 3 Member Inc. and Great Island Investment Company, Inc.;
Meredith, NH 03253 President of Bennett Management Company from 1988
1/26/29 to 1993.
- ----------------------------------------------------------------------------------------------------------------------------------
Nancy J. Dunn Board Financial Officer of World Wildlife Fund since $ 8,094 $ 40,575
1250 24th St., NW Member January 1999; Vice President for Finance and
Washington, DC 20037 Administration and Treasurer of Radcliffe College
8/14/51 from 1991 to 1999.
- ----------------------------------------------------------------------------------------------------------------------------------
William A. Humenuk Board Executive Vice President and Chief Administrative $ 8,094 $ 40,936
100 King Street West Member Officer of Philip Services Corp.; Formerly, a
P.O. Box 2440, LCD-1 Partner in the Philadelphia office of the law firm
Hamilton Ontario, Dechert Price & Rhoads and a Director of Hofler
Canada L8N-4J6 Corp.
4/21/42
- ----------------------------------------------------------------------------------------------------------------------------------
Philip D. English Board President and Chief Executive Officer of $ 8,094 $ 40,702
16 West Madison Street Member Broventure Company, Inc.; Chairman of the Board of
Baltimore, MD 21201 Chektec Corporation and Cyber Scientific, Inc.
8/5/48
- ----------------------------------------------------------------------------------------------------------------------------------
James P. Pappas* Board President of UAM Investment Services, Inc. since 0 0
211 Congress Street Member March 1999; Vice President UAM Trust Company since
Boston, MA 02110 January 1996; Principal of UAM Fund Distributors,
2/24/53 Inc. since December 1995; Vice President of UAM
Investment Services, Inc. from January 1996 to
March 1999 and a Director and Chief Operating
Officer of CS First Boston Investment Management
from 1993-1995.
- ----------------------------------------------------------------------------------------------------------------------------------
Norton H. Reamer* Board Chairman, Chief Executive Officer and a Director 0 0
One International Place Member; of United Asset Management Corporation; Director,
Boston, MA 02110 President Partner or Trustee of each of the Investment
3/21/35 and Companies of the Eaton Vance Group of Mutual Funds.
Chairman
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

II-24
<PAGE>

<TABLE>
<S> <C> <C> <C> <C>
Peter M. Whitman, Jr.* Board President and Chief Investment Officer of Dewey 0 0
One Financial Center Member Square Investors Corporation since 1988; Director
Boston, MA 02111 and Chief Executive Officer of H.T. Investors,
7/1/43 Inc., formerly a subsidiary of Dewey Square.
- ----------------------------------------------------------------------------------------------------------------------------------
William H. Purk Executive Vice President and Chief Financial 0 0
One International Place Officer of United Asset Management Corporation.
Boston, MA 02110
9/19/47
- ----------------------------------------------------------------------------------------------------------------------------------
Gary L. French Treasurer President of UAMFSI and UAMFDI; Treasurer of the 0 0
211 Congress Street Fidelity Group of Mutual Funds from 1991 to 1995;
Boston, MA 02110 held various other offices with Fidelity
7/4/51 Investments from November 1990 to March 1995.
- ----------------------------------------------------------------------------------------------------------------------------------
Michael E. DeFao Secretary Vice President and General Counsel of UAMFSI and 0 0
211 Congress Street UAMFDI; Associate Attorney of Ropes & Gray (a law
Boston, MA 02110 firm) from 1993 to 1995.
2/28/68
- ----------------------------------------------------------------------------------------------------------------------------------
Robert R. Flaherty Assistant Vice President of UAMFSI; Manager of Fund 0 0
211 Congress Street Treasurer Administration and Compliance of CGFSC from 1995
Boston, MA 02110 to 1996; Senior Manager of Deloitte & Touche LLP
9/18/63 from 1985 to 1995,
- ----------------------------------------------------------------------------------------------------------------------------------
Robert J. DellaCroce Assistant Director, Mutual Fund Operations - SEI Investments;
SEI Investments Treasurer Senior Manager at Arthur Anderson prior to 1994.
One Freedon Valley Rd.
Oaks, PA 19456
12/17/63
</TABLE>

Investment Advisory and Other Services

INVESTMENT ADVISER
- -------------------------------------------------------------------------------

Control Of Adviser

Each adviser is a subsidiary of UAM. UAM is a holding company incorporated in
Delaware in December 1980 for the purpose of acquiring and owning firms
engaged primarily in institutional investment management. Since its first
acquisition in August 1983, UAM has acquired or organized more than 50 UAM
Affiliated Firms. UAM believes that permitting UAM Affiliated Firms to retain
control over their investment advisory decisions is necessary to allow them to
continue to provide investment management services that are intended to meet
the particular needs of their respective clients. Accordingly, after
acquisition by UAM, UAM Affiliated Firms continue to operate under their own
firm name, with their own leadership and individual investment philosophy and
approach. Each UAM Affiliated Firm manages its own business independently on a
day-to-day basis. Investment strategies employed and securities selected by
UAM Affiliated Firms are separately chosen by each of them. Several UAM
Affiliated Firms also act as investment advisers to separate series or
portfolios of the UAM Funds Complex.

Investment Advisory Agreement

This section summarizes some of the important provisions of each of the
portfolio's Investment Advisory Agreements. The Fund has filed each agreement
with the SEC as part of its registration statement on Form N-1A.

II-25
<PAGE>

Service Performed by Adviser

Each adviser:

. Manages the investment and reinvestment of the assets of the portfolios;

. Continuously reviews, supervises and administers the investment program of
the portfolios; and

. Determines what portion of portfolio's assets will be invested in
securities and what portion will consist of cash.

Limitation of Liability

In the absence of (1) willful misfeasance, bad faith, or gross negligence on
the part of the adviser in the performance of its obligations and duties
under the Advisory Agreement, (2) reckless disregard by the adviser of its
obligations and duties under the Advisory Agreement, or (3) a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation
for services, the adviser shall not be subject to any liability whatsoever to
the Fund, for any error of judgment, mistake of law or any other act or
omission in the course of, or connected with, rendering services under the
Advisory Agreement.

Continuing an Advisory Agreement

An Investment Advisory Agreement continues in effect for periods of one year
so long as such continuance is specifically approved at least annually by a:

. Majority of those Members who are not parties to the Investment Advisory
Agreement or interested persons of any such party;

. (2) (a) majority of the Members or (b) a majority of the shareholders of
the portfolio.

Terminating an Advisory Agreement

The Fund may terminate an Investment Advisory Agreement at any time, without
the payment of any penalty if:

. A majority of the portfolio's shareholders vote to do so; and

. It gives the adviser 60 days' written notice.

. The adviser may terminate the Advisory Agreements at any time, without the
payment of any penalty, upon 90 days' written notice to the Fund. An
Advisory Agreement will automatically and immediately terminate if it is
assigned.

DISTRIBUTOR
- --------------------------------------------------------------------------------

UAMFDI is the Fund's distributor. The Fund offers its shares continuously.
While UAMFDI will use its best efforts to sell shares of the Fund, it is not
obligated to sell any particular amount of shares. UAMFDI receives no
compensation for its services, and any amounts it may receive under a Service
and Distribution Plan are passed through in their entirety to third parties.
UAMFDI, an affiliate of UAM, is located at 211 Congress Street, Boston,
Massachusetts 02110.

ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------

Administrator

Pursuant to a Fund Administration Agreement with the Fund, UAMFSI manages,
administers and conducts the general business activities of the Fund. As a
part of its responsibilities, UAMFSI provides and oversees the provision by
various third parties of administrative, fund accounting, dividend disbursing
and transfer agent

II-26
<PAGE>

services for the Fund. UAMFSI, an affiliate of UAM, has its principal office
at 211 Congress Street, Boston, Massachusetts 02110.

UAMFSI will bear all expenses in connection with the performance of its
services under the Fund Administration Agreement. Other expenses to be
incurred in the operation of the Fund will be borne by the Fund or other
parties, including:

. Taxes, interest, brokerage fees and commissions;

. Salaries and fees of officers and members of the board who are not
officers, directors, shareholders or employees of an affiliate of UAM,
including UAMFSI, UAMFDI or the adviser;

. SEC fees and state Blue-Sky fees;

. EDGAR filing fees;

. Processing services and related fees;

. Advisory and administration fees;

. Charges and expenses of pricing and data services, independent public
accountants and custodians;

. Insurance premiums including fidelity bond premiums;

. Outside legal expenses;

. Costs of maintenance of corporate existence;

. Typesetting and printing of prospectuses for regulatory purposes and for
distribution to current shareholders of the Fund;

. Printing and production costs of shareholders' reports and corporate
meetings;

. Cost and expenses of Fund stationery and forms;

. Costs of special telephone and data lines and devices;

. Trade association dues and expenses; and

. Any extraordinary expenses and other customary Fund expenses.

The Fund Administration Agreement continues in effect from year to year if
the board specifically approves such continuance every year. The fund or
UAMFSI may terminate the Fund Administration Agreement, without penalty, on
not less than ninety (90) days' written notice. The Fund Administration
Agreement automatically terminates upon its assignment by UAMFSI without the
prior written consent of the Fund.

UAMFSI will from time to time employ other people to assist it in performing
its duties under the Fund Administration Agreement. Such people may be
officers and employees who are employed by both UAMFSI and the Fund. UAMFSI
will pay such people for such employment. The Fund will not incur any
obligations with respect to such people.

Sub-Administrator

UAMFSI has subcontracted some of the its administrative and fund accounting
services to SEI Investments Mutual funds Services (formerly SEI fund
Resources) under a Mutual Funds Service Agreement dated April 6, 1999. SEI is
located at One Freedom Valley Road Oaks, PA 19456.

Sub-Transfer Agent and Sub-Shareholder Servicing Agent

UAMFSI has subcontracted its transfer agent and dividend-disbursing agent
services to DST Systems, Inc. under an Agency Agreement between UAMFSI and
DST Systems Inc. DST Systems, Inc., is located at P.O. Box 419534, Kansas
City, Missouri 64141-6534.

II-27
<PAGE>

UAMSSC serves as sub-shareholder servicing agent for the Fund under an
agreement between UAMSSC and UAMFSI. The principal place of business of
UAMSSC is 825 Duportail Road, Wayne, Pennsylvania 19087.

Administrative Fees

Each portfolio pays UAMFSI and CGFSC for the administrative services they
provide. For more information concerning these fees, see "How Much does the
Portfolio Pay for Administrative Services?" in Part I of this SAI.

Shareholder Servicing Arrangements

UAM and any of its affiliates, may, at its own expense, compensate a Service
Agent or other person for marketing, shareholder servicing, record-keeping
and/or other services performed with respect to the Fund, the portfolio or
any class of shares of the portfolio. The person making such payments may do
so out of its revenues, its profits or any other source available to it. Such
services arrangements, when in effect, are made generally available to all
qualified service providers. The adviser may also compensate its affiliated
companies for referring investors to the portfolio.

CUSTODIAN
- --------------------------------------------------------------------------------

First Union National Bank (successor to CoreStates Bank, N.A.) 530 Walnut
Street Philadelphia, PA 19106, provides for the custody of the Company's
assets pursuant to the terms of a custodian agreement with the Company.

INDEPENDENT PUBLIC ACCOUNTANT
- --------------------------------------------------------------------------------

PricewaterhouseCoopers LLP, 2400 Eleven Penn Center, Philadelphia, PA 19103
serves as independent accountant for the Fun

Brokerage Allocation and Other Practices

SELECTION OF BROKERS
- --------------------------------------------------------------------------------

The Advisory Agreement authorizes the adviser to select the brokers or
dealers that will execute the purchases and sales of investment securities
for the portfolio. The Advisory Agreement also directs the adviser to use its
best efforts to obtain the best execution with respect to all transactions
for the portfolio. The adviser may select brokers based on research,
statistical and pricing services they provide to the adviser. Information and
research provided by a broker will be in addition to, and not instead of, the
services the adviser is required to perform under the Advisory Agreement. In
so doing, the portfolio may pay higher commission rates than the lowest rate
available when the adviser believes it is reasonable to do so in light of the
value of the research, statistical, and pricing services provided by the
broker effecting the transaction.

It is not the practice of the Fund to allocate brokerage or effect principal
transactions with dealers based on sales of shares that a broker-dealer firm
makes. However, the Fund may place trades with qualified broker-dealers who
recommend the Fund or who act as agents in the purchase of Fund shares for
their clients.

SIMULTANEOUS TRANSACTIONS
- --------------------------------------------------------------------------------

The adviser makes investment decisions for the portfolio independently of
decisions made for its other clients. When a security is suitable for the
investment objective of more than one client, it may be prudent for the
adviser to engage in a simultaneous transaction, that is, buy or sell the
same security for more than one client.

II-28
<PAGE>

The adviser strives to allocate such transactions among its clients,
including the portfolio, in a fair and reasonable manner. Although there is
no specified formula for allocating such transactions, the Fund's governing
board periodically reviews the various allocation methods used by the
adviser.

BROKERAGE COMMISSIONS
- -------------------------------------------------------------------------------

Equity Securities

Generally, equity securities are bought and sold through brokerage
transactions for which commissions are payable. Purchases from underwriters
will include the underwriting commission or concession, and purchases from
dealers serving as market makers will include a dealer's mark-up or reflect a
dealer's mark-down.

Debt Securities

Debt securities are usually bought and sold directly from the issuer or an
underwriter or market maker for the securities. Generally, a portfolio will
not pay brokerage commissions for such purchases. When a debt security is
bought from an underwriter, the purchase price will usually include an
underwriting commission or concession. The purchase price for securities
bought from dealers serving as market makers will similarly include the
dealer's mark up or reflect a dealer's mark down. When the portfolio executes
transactions in the over-the-counter market, it will deal with primary market
makers unless prices that are more favorable are otherwise obtainable.

Capital Stock and Other Securities

THE FUND
- -------------------------------------------------------------------------------

The Fund was organized under the name "PBHG Advisor Funds, Inc." as a
Maryland corporation on January 9, 1998 and is registered as an open-end
management investment company under the 1940 Act. On April 6, 1999, the Fund
changed its name to "UAM Funds, Inc. II." The Fund's principal executive
office is located at 211 Congress Street, 4th Floor, Boston, MA 02110;
shareholders should direct all correspondence to the address listed on the
cover of this SAI.

Each portfolio is a diversified series of the Fund. Each share of a portfolio
represents an equal proportionate interest in that Fund.

DESCRIPTION OF SHARES AND VOTING RIGHTS
- -------------------------------------------------------------------------------

The Fund's Articles of Incorporation, as amended, provide that: (i) all
consideration received by the Fund for shares of any portfolio and all assets
in which such consideration is invested would belong to that portfolio and
would be subject to the liabilities related thereto; (ii) each share of stock
shall entitle the holder thereof to one vote for each dollar (and each
fractional dollar thereof) of net asset value (number of shares owned times
net asset value per share) of shares of stock outstanding in such holder's
name on the books of the Fund, and all shares of stock shall be voted in the
aggregate; provided, however, that to the extent series voting is required by
the 1940 Act or Maryland law, or otherwise directed by the board, as to any
such matter, shares of stock shall be voted by series; (iii) in the event of
the liquidation or dissolution of any series of stock of the Fund,
stockholders of such series shall be entitled to receive out of the assets of
such series available for distribution to stockholders the assets belonging
to such series; and the assets so distributable to the stockholders of such
series shall be distributed among such stockholders in proportion to the
number of shares of such series held by them and recorded on the books of the
Fund; and (iv) no holder of shares of stock of the Fund shall, as such
holders, have any preemptive rights to purchase or subscribe for any
additional shares of stock of the Fund or any other security of the Fund.

II-29
<PAGE>

The Fund will not hold annual meetings except when required to by the 1940
Act or other applicable law.

DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
- -------------------------------------------------------------------------------

Dividend and Distribution Options

There are three ways for shareholders to receive dividends and capital gains:

. Income dividends and capital gains distributions are reinvested in
additional shares at net asset value;

. Income dividends are paid in cash and capital gains distributions are
reinvested in additional shares at NAV; and

. Income dividends and capital gains distributions are paid in cash.

Unless the shareholder elects otherwise in writing, the fund will
automatically reinvest all dividends in additional shares of the portfolio at
NAV (as of the business day following the record date). Shareholders may
change their dividend and distributions option by writing to the fund at
least three days before the record date for income dividend or capital gain
distribution.

The fund sends account statements to shareholders whenever it pays an income
dividend or capital gains distribution.

Taxes on Distributions

Each portfolio intends to distribute substantially all of its net investment
income and net realized capital gains so as to avoid income taxes on its
dividends and distributions and the imposition of the federal excise tax on
undistributed income and capital gains. However, a portfolio cannot predict
the time or amount of any such dividends or distributions.

Each portfolio will be treated as a separate entity (and hence as a separate
"regulated investment company") for federal tax purposes. The capital
gains/losses of one portfolio will not be offset against the capital
gains/losses of another portfolio.

"Buying a Dividend"

Distributions by the portfolio reduce its NAV. A distribution that reduces
the NAV of the portfolio below its cost basis is taxable as described in the
prospectus of the portfolio, although from an investment standpoint, it is a
return of capital. If you buy shares of the portfolio on or just before the
"record date" (the date that establishes which shareholders will receive an
upcoming distribution) for a distribution, you will receive some of the money
you invested as a taxable distribution.

Purchase, Redemption and Pricing of Shares

NET ASSET VALUE PER SHARE
- -------------------------------------------------------------------------------

Calculating NAV

The purchase and redemption price of the shares of a portfolio is equal to
the NAV of the portfolio. The Fund calculates the NAV of a portfolio by
subtracting its liabilities from its total assets and dividing the result by
the total number of shares outstanding. For purposes of this calculation:

. Liabilities include accrued expenses and dividends payable; and

II-30
<PAGE>

. Total assets include the market value of the securities held by the
portfolio, plus cash and other assets plus income accrued but not yet
received.

Each portfolio normally calculates its NAV as of the close of trading on the
NYSE every day the NYSE is open for trading. The NYSE usually closes at 4:00
p.m. The NYSE is closed on the following days: New Year's Day, Dr. Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

How the Fund Values it Assets

Equity Securities

Equity securities listed on a securities exchange for which market quotations
are readily available are valued at the last quoted sale price of the day.
Price information on listed securities is taken from the exchange where the
security is primarily traded. Unlisted equity securities and listed
securities not traded on the valuation date for which market quotations are
readily available are valued neither exceeding the asked prices nor less than
the bid prices. Quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents. The converted value is based upon the
bid price of the foreign currency against U.S. dollars quoted by any major
bank or by a broker.

Debt Securities

Debt securities are valued according to the broadest and most representative
market, which will ordinarily be the over-the-counter market. Debt securities
may be valued based on prices provided by a pricing service when such prices
are believed to reflect the fair market value of such securities. Securities
purchased with remaining maturities of 60 days or less are valued at
amortized cost when the governing board determines that amortized cost
reflects fair value.

Other Assets

The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the governing board.

PURCHASE OF SHARES
- -------------------------------------------------------------------------------

Service Agents may enter confirmed purchase orders on behalf of their
customers. To do so, the Service Agent must receive your investment order
before the close of trading on the NYSE and must transmit it to the fund
before the close of its business day to receive that day's share price. The
fund must receive proper payment for the order by the time the portfolio
calculates its NAV on the following business day. Service Agents are
responsible to their customers and the Fund for timely transmission of all
subscription and redemption requests, investment information, documentation
and money.

Shareholders can buy full and fractional (calculated to three decimal places)
shares of a portfolio. The fund will not issue certificates for fractional
shares and will only issue certificates for whole shares upon the written
request of a shareholder.

The Fund may reduce or waive the minimum for initial and subsequent
investment for certain fiduciary accounts, such as employee benefit plans or
under circumstances, where certain economies can be achieved in sales of the
portfolio's shares.

In-Kind Purchases

At its discretion, the Fund may permit shareholders to purchase shares of the
portfolio with securities, instead of cash. If the Fund allows a shareholder
to make an in-kind purchase, it will value such securities according to the
policies described under "VALUATION OF SHARES" at the next determination of
net asset value after

II-31
<PAGE>

acceptance. The Fund will issue shares of the portfolio at the NAV of the
portfolio determined as of the same time.

The Fund will only acquire securities through an in-kind purchase for
investment and not for immediate resale. The Fund will only accept in-kind
purchases if the transaction meets the following conditions:

. The securities are eligible investments for the portfolio;

. The securities have readily available market quotations;

. The investor represents and agrees that the securities are liquid and that
there are no restrictions on their resale imposed by the 1933 Act or
otherwise;

. All dividends, interest, subscription, or other rights pertaining to such
securities become the property of the portfolio and are delivered to the
fund by the investor upon receipt from the issuer; and

. Immediately after the transaction is complete, the value of all securities
of the same issuer held by the portfolio cannot exceed 5% of the net
assets of the portfolio. This condition does not apply to U.S. government
securities.

Investors who are subject to Federal taxation upon exchange may realize a
gain or loss for federal income tax purposes depending upon the cost of
securities or local currency exchanged. Investors interested in such
exchanges should contact the adviser.

REDEMPTION OF SHARES
- -------------------------------------------------------------------------------

When you redeem, your shares may be worth more or less than the price you
paid for them depending on the market value of the investments held by the
portfolio.

By Mail

Requests to redeem shares must include:

. Share certificates, if issued;

. A letter of instruction or an assignment specifying the number of shares
or dollar amount the shareholder wishes to redeem signed by all registered
owners of the shares in the exact names in which they are registered;

. Any required signature guarantees (see "Signature Guarantees"); and

. Estates, trusts, guardianships, custodianships, corporations, pension and
profit sharing plans and other organizations must submit any other
necessary legal documents.

By Telephone

. Shareholders may not do the following by telephone:

. Change the name of the commercial bank or the account designated to
receive redemption proceeds. To change an account in this manner, you
must submit a written request signed by each shareholder, with each
signature guaranteed).

. Redeem shares represented by a certificate.

The fund and its UAMSSC will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, and they may be liable
for any losses if they fail to do so. These procedures include requiring the
investor to provide certain personal identification at the time an account is
opened and before effecting each transaction requested by telephone. In
addition, all telephone transaction requests will be recorded and investors
may be required to provide additional telecopied written instructions of such
transaction requests. The Fund or UAMSSC may be liable for any losses due to
unauthorized or fraudulent telephone instructions if the Fund or the UAMSSC
does not employ the procedures described above. Neither

II-32
<PAGE>

the Fund nor the UAMSSC will be responsible for any loss, liability, cost or
expense for following instructions received by telephone that it reasonably
believes to be genuine.

Redemptions-In-Kind

If the governing board determines that it would be detrimental to the best
interests of remaining shareholders of the Fund to make payment wholly or
partly in cash, the Fund may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by the portfolio in lieu of
cash in conformity with applicable rules of the SEC. Investors may incur
brokerage charges on the sale of portfolio securities received in payment of
redemptions.

However, the Fund has made an election with the SEC to pay in cash all
redemptions requested by any shareholder of record limited in amount during
any 90-day period to the lesser of $250,000 or 1% of the net assets of the
Fund at the beginning of such period. Such commitment is irrevocable without
the prior approval of the SEC. Redemptions in excess of the above limits may
be paid in whole or in part, in investment securities or in cash, as the
Board may deem advisable; however, payment will be made wholly in cash unless
the governing board believes that economic or market conditions exist which
would make such a practice detrimental to the best interests of the Fund. If
redemptions are paid in investment securities, such securities will be valued
as set forth under "Valuation of Shares." A redeeming shareholder would
normally incur brokerage expenses if these securities were converted to cash.

Signature Guarantees

The Fund requires signature guarantees for certain types of documents,
including.

. Written requests for redemption;

. Separate instruments for assignment ("stock power"), which should specify
the total number of shares to be redeemed; and

. On all stock certificates tendered for redemption.

The purpose of signature guarantees is to verify the identity of the person
who has authorized a redemption from your account and to protect your
account, the Fund and its sub-transfer agent from fraud.

The Fund will accept signature guarantees from any eligible guarantor
institution, as defined by the Securities Exchange Act of 1934 that
participates in a signature guarantee program. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations. You can get a complete definition of eligible
guarantor institutions by calling 1-877-826-5465. Broker-dealers guaranteeing
signatures must be a member of a clearing corporation or maintain net capital
of at least $100,000. Credit unions must be authorized to issue signature
guarantees.

Other Redemption Information

Normally, the Fund will pay for all shares redeemed under proper procedures
within seven days after it received your request. However, the Fund will pay
your redemption proceeds earlier as applicable law so requires.

The Fund may suspend redemption privileges or postpone the date of payment:

. When the NYSE and custodian bank are closed

. Trading on the NYSE is restricted.

. During any period when an emergency exists as defined by the rules of the
Commission as a result of which it is not reasonably practicable for the
portfolio to dispose of securities owned by it, or to fairly determine the
value of its assets.

. For such other periods as the Commission may permit.

II-33
<PAGE>

EXCHANGE PRIVILEGE
- -------------------------------------------------------------------------------

The exchange privilege is only available with respect to portfolios that are
qualified for sale in the shareholder's state of residence. Exchanges are
based on the respective net asset values of the shares involved. The
Institutional Class and Institutional Service Class shares of UAM Funds do
not charge a sales commission or charge of any kind for exchanges.

Neither the Fund nor any of its service providers will be responsible for the
authenticity of the exchange instructions received by telephone. The
governing board of the Fund may restrict the exchange privilege at any time.
Such instructions may include limiting the amount or frequency of exchanges
and may be for the purpose of assuring such exchanges do not disadvantage the
Fund and its shareholders.

TRANSFER OF SHARES
- -------------------------------------------------------------------------------

Shareholders may transfer shares of the portfolio to another person by making
a written request to the Fund. Your request should clearly identify the
account and number of shares you wish to transfer. All registered owners
should sign the request and all stock certificates, if any, which are subject
to the transfer. The signature on the letter of request, the stock
certificate or any stock power must be guaranteed in the same manner as
described under "Signature Guarantees." As in the case of redemptions, the
written request must be received in good order before any transfer can be
made.

Performance Calculations

A portfolio measures its performance by calculating its yield and total
return. Yield and total return figures are based on historical earnings and
are not intended to indicate future performance. The SEC has adopted rules
that require mutual funds to present performance quotations in a standard
manner. Mutual funds can present non-standard performance quotations only if
they also provide certain standardized performance information that they have
computed according to the requirements of the SEC. Current yield and average
annual compounded total return information are calculated using the method of
computing performance mandated by the SEC.

The performance is calculated separately for each Class of a portfolio.
Dividends paid by a portfolio with respect to each Class will be calculated
in the same manner at the same time on the same day and will be in the same
amount, except that service fees, distribution charges and any incremental
transfer agency costs relating to Service Class Shares will be borne
exclusively by that class.

TOTAL RETURN
- -------------------------------------------------------------------------------

Total return is the change in value of an investment in the portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A
cumulative or aggregate total return reflects actual performance over a
stated period. An average annual total return is a hypothetical rate of
return that, if achieved annually, would have produced the same cumulative
total return if performance had been constant over the entire period.

The fund calculates the average annual total return of a portfolio by finding
the average annual compounded rates of return over one, five and ten-year
periods that would equate an initial hypothetical $1,000 investment to its
ending redeemable value. The calculation assumes that all dividends and
distributions are reinvested when paid. The quotation assumes the amount was
completely redeemed at the end of each one, five and ten-year period and the
deduction of all applicable Fund expenses on an annual basis. Since
Institutional Service Class Shares bear additional service and distribution
expenses, their average annual total return will generally be lower than that
of the Institutional Class Shares.

The fund calculates these figures according to the following formula:

P (1 + T)n = ERV

II-34
<PAGE>

Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end of the 1,
5 or 10 year periods (or fractional portion thereof).

YIELD
- -------------------------------------------------------------------------------

Yield refers to the income generated by an investment in the portfolio over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all mutual funds. As
this differs from other accounting methods, the quoted yield may not equal
the income actually paid to shareholders.

The current yield is determined by dividing the net investment income per
share earned during a 30-day base period by the maximum offering price per
share on the last day of the period and annualizing the result. Expenses
accrued for the period include any fees charged to all shareholders during
the base period. Since Institutional Service Class shares bear additional
service and distribution expenses, their yield will generally be lower than
that of the Institutional Class Shares.

Yield is obtained using the following formula:

Yield = 2[((a-b)/(cd)+1)6-1]

Where:

a = dividends and interest earned during the period

b = expenses accrued for the period (net of reimbursements)

c = the average daily number of shares outstanding during the period
that were entitled to receive income distributions

d = the maximum offering price per share on the last day of the period.

COMPARISONS
- -------------------------------------------------------------------------------

The portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further
described in this SAI. This information may also be included in sales
literature and advertising.

To help investors better evaluate how an investment in the portfolio of the
Fund might satisfy their investment objective, advertisements regarding the
Fund may discuss various measures of Fund performance as reported by various
financial publications. Advertisements may also compare performance (as
calculated above) to performance as reported by other investments, indices
and averages. Please see Appendix B for publications, indices and averages
that may be used.

In assessing such comparisons of performance, an investor should keep in mind
that the composition of the investments in the reported indices and averages
is not identical to the composition of investments in the portfolio, that the
averages are generally unmanaged, and that the items included in the
calculations of such averages may not be identical to the formula used by the
portfolio to calculate its performance. In addition, there can be no
assurance that the portfolio will continue this performance as compared to
such other averages.

II-35
<PAGE>

Financial Statements

The following documents are included in 1998 Annual Report the Analytic
Funds:

. Financial statements for the fiscal year ended December 31, 1998.

. Financial highlights for the respective periods presented

. The report of PricewaterhouseCoopers LLP, which is as of and for the year
ended December 31, 1998.

The following documents are included in the 1999 Semi-Annual Report of the
Analytic Funds:

. Financial Statements for the Six Months Ended June 30, 1999 (unaudited)

. Financial Highlights for the respective periods presented.

Each of the above-referenced documents is incorporated by reference into this
SAI. However, no other parts of the Analytic Funds Annual Reports are
incorporated by reference herein. Shareholders may get copies of these
reports free of charge by calling the UAM Funds at the telephone number
appearing on the front page of this SAI.

II-36
<PAGE>

III: Glossary

III-I
<PAGE>

1933 Act means the Securities Act of 1933, as amended.

1934 Act means the Securities Exchange Act of 1934, as amended.

1940 Act means the Investment Company Act of 1940, as amended.

Adviser means the investment adviser of the portfolio.

All terms that this SAI does not otherwise define, have the same meaning in
the SAI as they do in the prospectus(es) of the portfolios.

Board member refers to a single member of the Fund's Board.

Board refers to the Fund's Board of Directors as a group.

SEI is SEI Investments Mutual Funds Services, the Fund's sub-administrator.

Fund refers to UAM Fund, Inc. II.

Governing Board, see Board.

NAV is the net asset value per share of a portfolio. You can find information
on how the fund calculates this number under "Purchase, Redemption and
Pricing of Shares."

NYSE is the New York Stock Exchange. Also known as "The Exchange" or "The Big
Board," the NYSE is located on Wall Street and is the largest exchange in the
United States.

Portfolio refers to a single series of the Fund, while portfolios refer to
all of the series of the Fund.

SEC is the Securities and Exchange Commission. The SEC is the federal agency
that administers most of the federal securities laws in the United States. In
particular, the SEC administers the 1933 Act, the 1940 Act and the 1934 Act.

UAM Funds Complex includes UAM Funds, Inc., UAM Funds Trust, UAM Funds Inc.
II and all of their portfolios.

UAM is United Asset Management Corporation.

UAMFDI is UAM Fund Distributors, Inc., the Fund's distributor.

UAMFSI is UAM Fund Services, Inc., the Fund's administrator.

UAMSSC is UAM Fund Shareholder Servicing Center, the Fund's sub-shareholder-
servicing agent.

III-2
<PAGE>

IV: Appendix A -- Description of Securities and Ratings

IV-1
<PAGE>

Moody's Investors Service, Inc.

PREFERRED STOCK RATINGS
- --------------------------------------------------------------------------------

aaa An issue which is rated "aaa" is considered to be a top-quality
preferred stock. This rating indicates good asset protection and
the least risk of dividend impairment within the universe of
preferred stock.

aa An issue which is rated "aa" is considered a high-grade preferred
stock. This rating indicates that there is a reasonable assurance
the earnings and asset protection will remain relatively well
maintained in the foreseeable future.

a An issue which is rated "a" is considered to be an upper-medium
grade preferred stock. While risks are judged to be somewhat
greater than in the "aaa" and "aa" classification, earnings and
asset protection are, nevertheless, expected to be maintained at
adequate levels.

baa An issue which is rated "baa" is considered to be a medium-grade
preferred stock, neither highly protected nor poorly secured.
Earnings and asset protection appear adequate at present but may
be questionable over any great length of time.

ba An issue which is rated "ba" is considered to have speculative
elements and its future cannot be considered well assured.
Earnings and asset protection may be very moderate and not well
safeguarded during adverse periods. Uncertainty of position
characterizes preferred stocks in this class.

b An issue which is rated "b" generally lacks the characteristics
of a desirable investment. Assurance of dividend payments and
maintenance of other terms of the issue over any long periods of
time may be small.

caa An issue which is rated "caa" is likely to be in arrears on
dividend payments. This rating designation does not purport to
indicate the future status of payments.

ca An issue which is rated "ca" is speculative in a high degree and
is likely to be in arrears on dividends with little likelihood of
eventual payments.

c This is the lowest rated class of preferred or preference stock.
Issues so rated can thus be regarded as having extremely poor
prospects of ever attaining any real investment standing.

Note: Moody's applies numerical modifiers 1, 2, and 3 in each rating
classification: the modifier 1 indicates that the security ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range
ranking and the modifier 3 indicates that the issue ranks in the lower end of
its generic rating category.

DEBT RATINGS - TAXABLE DEBT & DEPOSITS GLOBALLY
- --------------------------------------------------------------------------------

Aaa Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are
generally referred to as "gilt-edged." Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such
issues.

Aa Bonds which are rated Aa are judged to be of high quality by all
standards. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or
there may be other elements present which make the long-term
risks appear somewhat larger than the Aaa securities.

A Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium grade
obligations. Factors giving security to principal and interest
are considered adequate, but elements may be present which
suggest a susceptibility to impairment sometime in the future.

IV-2
<PAGE>

Baa Bonds which are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor
poorly secured). Interest payments and principal security
appear adequate for the present but certain protective elements
may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.

Ba Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured.
Often the protection of interest and principal payments may be
very moderate, and thereby not well safeguarded during both
good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over
any long period of time may be small.

Caa Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with
respect to principal or interest.

Ca Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default
or have other marked shortcomings.

C Bonds which are rated C are the lowest rated class of bonds,
and issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.

Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; modifier 2
indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of that generic rating category.

SHORT-TERM PRIME RATING SYSTEM - TAXABLE DEBT & DEPOSITS GLOBALLY
- --------------------------------------------------------------------------------

Moody's short-term debt ratings are opinions of the ability of issuers to
repay punctually senior debt obligations. These obligations have an original
maturity not exceeding one year, unless explicitly noted.

Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:

Prime-1 Issuers rated Prime-1 (or supporting institution) have a
superior ability for repayment of senior short-term debt
obligations. Prime-1 repayment ability will often be evidenced
by many of the following characteristics:

. High rates of return on funds employed.

. Conservative capitalization structure with moderate reliance on debt and
ample asset protection.

. Broad leading market positions in well-established industries.

. margins in earnings coverage of fixed financial charges and high internal
cash generation.

. Well-established access to a range of financial markets and assured
sources of alternate liquidity.

Prime-2 Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term debt
obligations. This will normally be evidenced by many of the
characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.

Prime 3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term
obligation. The effect of industry characteristics and market
compositions may be more pronounced. Variability in earnings
and profitability may result in changes in the level of debt
protection measurements and may require relatively high
financial leverage. Adequate alternate liquidity is maintained.

Not Prime Issuers rated Not Prime do not fall within any of the Prime
rating categories.

IV-3
<PAGE>

Standard & Poor's Ratings Services

PREFERRED STOCK RATINGS
- --------------------------------------------------------------------------------

AAA This is the highest rating that may be assigned by Standard
& Poor's to a preferred stock issue and indicates an
extremely strong capacity to pay the preferred stock
obligations.

AA A preferred stock issue rated AA also qualifies as a high-
quality, fixed-income security. The capacity to pay
preferred stock obligations is very strong, although not as
overwhelming as for issues rated AAA.

A An issue rated A is backed by a sound capacity to pay the
preferred stock obligations, although it is somewhat more
susceptible to the adverse effects of changes in
circumstances and economic conditions.

BBB An issue rated BBB is regarded as backed by an adequate
capacity to pay the preferred stock obligations. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more
likely to lead to a weakened capacity to make payments for a
preferred stock in this category than for issues in the A
category.

BB, B, CCC Preferred stock rated BB, B, and CCC are regarded, on
balance, as predominantly speculative with respect to the
issuer's capacity to pay preferred stock obligations. BB
indicates the lowest degree of speculation and CCC the
highest. While such issues will likely have some quality and
protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.

CC The rating CC is reserved for a preferred stock issue that
is in arrears on dividends or sinking fund payments, but
that is currently paying.

C A preferred stock rated C is a nonpaying issue.

D A preferred stock rated D is a nonpaying issue with the
issuer in default on debt instruments.

N.R. This indicates that no rating has been requested, that there
is insufficient information on which to base a rating, or
that Standard & Poor's does not rate a particular type of
obligation as a matter of policy.

Plus (+) or To provide more detailed indications of preferred stock
minus (-) quality, ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing
within the major rating categories.

LONG-TERM ISSUE CREDIT RATINGS
- --------------------------------------------------------------------------------

Issue credit ratings are based, in varying degrees, on the following
considerations:

Likelihood of payment-capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation;

Nature of and provisions of the obligation;

Protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization, or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.

AAA An obligation rated AAA have the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its financial
commitment on the obligation is extremely strong.

AA An obligation rated AA differs from the highest-rated obligations
only in small degree. The obligor's capacity to meet its
financial commitment on the obligation is very strong.

IV-4
<PAGE>

A An obligation rated A is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
obligations in higher- rated categories. However, the obligor's
capacity to meet its financial commitment on the obligation is
still strong.

BBB An obligation rated BBB exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity of the obligator
to meet its financial commitment on the obligation.

Obligations rated BB, B, CCC , CC and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and
C the highest. While such obligations will likely have some quality and
protective characteristics, these may be outweighed by large uncertainties or
major risk exposures to adverse conditions.

BB An obligation rated BB is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing
uncertainties or exposures to adverse business, financial, or
economic conditions which could lead to the obligor's inadequate
capacity to meet its financial commitment on the obligation.

B An obligation rated B is more vulnerable to nonpayment than
obligations rated BB, but the obligor currently has the capacity
to meet its financial commitment on the obligation. Adverse
business, financial, or economic conditions will likely impair
the obligor's capacity or willingness to meet its financial
commitment on the obligation.

CCC An obligation rated CCC is currently vulnerable to non-payment,
and is dependent upon favorable business, financial, and economic
conditions for the obligor to meet its financial commitment on
the obligation. In the event of adverse business, financial, or
economic conditions, the obligor is not likely to have the
capacity to meet its financial commitment on the obligations.

CC An obligation rated CC is currently highly vulnerable to
nonpayment.

C The C rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but
payments on this obligation are being continued.

D An obligation rated D is in payment default. The D rating
category is used when payments on an obligation are not made on
the date due even if the applicable grace period has not expired,
unless Standard & Poor's believes that such payments will be made
during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.

Plus (+) or minus (-) The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

r This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligation linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk-such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.

SHORT-TERM ISSUE CREDIT RATINGS
- --------------------------------------------------------------------------------

Short-term ratings are generally assigned to those obligations considered
short-term in the relevant market. In the U.S., for example, that means
obligations with an original maturity of no more than 365 days - including
commercial paper. Short-term ratings are also used to indicate the
creditworthiness of an obligor with respect to put features on long-term
obligations. The result is a dual rating in which the short-term rating
addresses the put feature, in addition to the usual long-term rating. Medium-
term notes are assigned long-term ratings.

A-1 A short-term obligation rated A-1 is rated in the highest
category by Standard & Poor's. The obligor's capacity to meet its
financial commitment on the obligation is strong. Within this
category, certain obligations are designated with a plus sign
(+). This indicates that the obligor's capacity to meet its
financial commitment on these obligations is extremely strong.

IV-5
<PAGE>

A-2 A short-term obligation rated A-2 is somewhat more susceptible
to the adverse effects of changes in circumstances and
economic conditions than obligation in higher rating
categories. However, the obligor's capacity to meet its
financial commitment on the obligation is satisfactory.

A-3 A short-term obligation rated A-3 exhibits adequate protection
parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity
of the obligor to meet its financial commitment on the
obligation.

B A short-term obligation rated B is regarded as having
significant speculative characteristics. The obligor currently
has the capacity to meet its financial commitment on the
obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet
its financial commitment on the obligation.

C A short-term obligation rated C is currently vulnerable to
nonpayment and is dependent upon favorable business,
financial, and economic conditions for the obligor to meet its
financial commitment on the obligation.

D A short-term obligation rated D is in payment default. The D
rating category is used when payments on an obligation are not
made on the date due even if the applicable grace period has
not expired, unless Standard & Poors' believes that such
payments will be made during such grace period. The D rating
also will be used upon the filing of a bankruptcy petition or
the taking of a similar action if payments on an obligation
are jeopardized.

Duff & Phelps Credit Rating Co.

LONG-TERM DEBT AND PREFERRED STOCK
- --------------------------------------------------------------------------------

AAA Highest credit quality. The risk factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.

AA+/AA High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of
economic conditions.

A+/A/A- Protection factors are average but adequate. However, risk
factors are more variable in periods of greater economic
stress.

BBB+/BBB Below-average protection factors but still considered
sufficient for prudent investment. Considerable

BBB- variability in risk during economic cycles.

BB+/BB/BB- Below investment grade but deemed likely to meet obligations
when due. Present or prospective financial protection factors
fluctuate according to industry conditions. Overall quality
may move up or down frequently within this category.

B+/B/B- Below investment grade and possessing risk that obligation
will not be net when due. Financial protection factors will
fluctuate widely according to economic cycles, industry
conditions and/or company fortunes. Potential exists for
frequent changes in the rating within this category or into a
higher or lower rating grade.

CCC Well below investment-grade securities. Considerable
uncertainty exists as to timely payment of principal, interest
or preferred dividends. Protection factors are narrow and risk
can be substantial with unfavorable economic/industry
conditions, and/or with unfavorable company developments.

DD Defaulted debt obligations. Issuer failed to meet scheduled
principal and/or interest payments. Issuer failed to meet
scheduled principal and/or interest payments.

DP Preferred stock with dividend arrearages.

IV-6
<PAGE>

SHORT-TERM DEBT
- --------------------------------------------------------------------------------

High Grade

D-1+ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to alternative
sources of funds, is outstanding, and safety is just below risk-
free U.S. Treasury short-term obligations.

D-1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors.
Risk factors are minor.

D-1- High certainty of timely payment. Liquidity factors are strong
and supported by good fundamental protection factors. Risk
factors are very small.

Good Grade

D-2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may
enlarge total financing requirements, access to capital markets
is good. Risk factors are small.

Satisfactory Grade

D-3 Satisfactory liquidity and other protection factors qualify
issues as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is
expected.

Non-Investment Grade

D-4 Speculative investment characteristics. Liquidity is not
sufficient to insure against disruption in debt service.
Operating factors and market access may be subject to a high
degree of variation.

Default

D-5 Issuer failed to meet scheduled principal and/or interest
payments.

Fitch IBCA Ratings

INTERNATIONAL LONG-TERM CREDIT RATINGS
- --------------------------------------------------------------------------------

Investment Grade

AAA Highest credit quality. `AAA' ratings denote the lowest
expectation of credit risk. They are assigned only in case of
exceptionally strong capacity for timely payment for financial
commitments. This capacity is highly unlikely to be adversely
affected by foreseeable events.

AA Very high credit quality. `AA' ratings denote a very low
expectation of credit risk. They indicate very strong capacity
for timely payment of financial commitments. This capacity is not
significantly vulnerable to foreseeable events.

A High credit quality. `A' ratings denote a low expectation of
credit risk. The capacity for timely payment of financial
commitments is considered strong. This capacity may,
nevertheless, be more vulnerable to changes in circumstances or
in economic conditions than is the case for higher ratings.

IV-7
<PAGE>

B Good credit quality. `BBB' ratings indicate that there is
currently a low expectation of credit risk. The capacity for
timely payment of financial commitments is considered adequate,
but adverse changes in circumstances and in economic conditions
are more likely to impair this capacity. This is the lowest
investment-grade category.

Speculative Grade

BB Speculative. `BB' ratings indicate that there is a possibility
of credit risk developing, particularly as the result of
adverse economic change over time; however, business or
financial alternatives may be available to allow financial
commitments to be met. Securities rated in this category are
not investment grade.

B Highly speculative. `B' ratings indicate that significant
credit risk is present, but a limited margin of safety remains.
Financial commitments are currently being met; however,
capacity for continued payment is contingent upon a sustained,
favorable business and economic environment.

CCC,CC,C High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained,
favorable business or economic developments. A `CC' rating
indicates that default of some kind appears probable. `C'
ratings signal imminent default.

DDD,DD,D Default. Securities are not meeting current obligations and are
extremely speculative. `DDD' designates the highest potential
for recovery of amounts outstanding on any securities involved.
For U.S. corporates, for example, `DD' indicates expected
recovery of 50% - 90% of such outstandings, and `D' the lowest
recovery potential, i.e. below 50%.

International Short-Term Credit Ratings

F1 Highest credit quality. Indicates the strongest capacity for
timely payment of financial commitments; may have an added "+"
to denote any exceptionally strong credit feature.

F2 Good credit quality. A satisfactory capacity for timely payment
of financial commitments, but the margin of safety is not as
great as in the case of the higher ratings.

F3 Fair credit quality. The capacity for timely payment of
financial commitments is adequate; however, near-term adverse
changes could result in a reduction to non-investment grade.

B Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in
financial and economic conditions.

C High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon a
sustained, favorable business and economic environment.

D Default. Denotes actual or imminent payment default.

Notes

"+" or "-" may be appended to a rating to denote relative status within major
rating categories. Such suffixes are not added to the `AAA' long-term rating
category, to categories below `CCC', or to short-term ratings other than `F1'.

`NR' indicates that Fitch IBCA does not rate the issuer or issue in question.

`Withdrawn': A rating is withdrawn when Fitch IBCA deems the amount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.

RatingAlert: Ratings are placed on RatingAlert to notify investors that there
is a reasonable probability of a rating change and the likely direction of
such change. These are designated as "Positive", indicating a potential
upgrade, "Negative", for a potential downgrade, or "Evolving", if ratings may
be raised, lowered or maintained. RatingAlert is typically resolved over a
relatively short period.

IV-8
<PAGE>

V: Appendix B - Comparisons

V-1
<PAGE>

CDA Mutual Fund Report, published by CDA Investment Technologies, Inc. --
analyzes price, current yield, risk, total return and average rate of return
(average annual compounded growth rate) over specified time periods for the
mutual fund industry.

Consumer Price Index (or Cost of Living Index), published by the U.S. Bureau
of Labor Statistics -- a statistical measure of change, over time in the price
of goods and services in major expenditure groups.

Donoghue's Money Fund Average -- is an average of all major money market fund
yields, published weekly for 7 and 30-day yields.

Dow Jones Industrial Average - a price-weighted average of thirty blue-chip
stocks that are generally the leaders in their industry and are listed on the
New York Stock Exchange. It has been a widely followed indicator of the stock
market since October 1, 1928.

Financial publications: Business Week, Changing Times, Financial World,
Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial Times, Global
Investor, Investor's Daily, Lipper Analytical Services, Inc., Morningstar,
Inc., New York Times, Personal Investor, Wall Street Journal and Weisenberger
Investment Companies Service -- publications that rate fund performance over
specified time periods.

Historical data supplied by the research departments of First Boston
Corporation, J.P. Morgan & Co, Inc., Salomon Smith Barney, Merrill Lynch &
Co., Inc., Lehman Brothers, Inc. and Bloomberg L.P.

IBC's Money Fund Average/All Taxable - an average of all major money market
fund yields, published weekly for 7- and 30-day yields.

IFC Investable Index - an unmanaged index maintained by the International
Finance Corporation. This index consists of 890 companies in 25 emerging
equity markets, and is designed to measure more precisely the returns
portfolio managers might receive from investment in emerging markets equity
securities by focusing on companies and markets that are legally and
practically accessible to foreign investors.

Lehman Aggregate Bond Index - an unmanaged fixed income market value-weighted
index that combines the Lehman Government/Corporate Index and the Lehman
Mortgage-Backed Securities Index, and includes treasury issues, agency issues,
corporate bond issues and mortgage backed securities. It includes fixed rate
issuers of investment grade (BBB) or higher, with maturities of at least one
year and outstanding par values of at least $200 million for U.S. government
issues and $25 million for others.

Lehman Corporate Bond Index - an unmanaged indices of all publicly issues,
fixed-rate, nonconvertible investment grade domestic corporate debt. Also
included are yankee bonds, which are dollar-denominated SEC registered public,
noncovertible debt issued or guaranteed by foreign sovereign governments,
municipalities, or governmental agencies, or international agencies.

Lehman Government Bond Index -an unmanaged treasury bond index including all
public obligations of the U.S. Treasury, excluding flower bonds and foreign-
targeted issues, and the Agency Bond Index (all publicly issued debt of U.S.
government agencies and quasi-federal corporation, and corporate debt
guaranteed by the U.S. government). In addition to the aggregate index, sub-
indices cover intermediate and long term issues.

Lehman Government/Corporate Index -- an unmanaged fixed income market value-
weighted index that combines the Government and Corporate Bond Indices,
including U.S. government treasury securities, corporate and yankee bonds.
All issues are investment grade (BBB) or higher, with maturities of at least
one year and outstanding par value of at least $100 million of r U.S.
government issues and $25 million for others. Any security downgraded during
the month is held in the index until month end and then removed. All returns
are market value weighted inclusive of accrued income.

Lehman High Yield Bond Index - an unmanaged index of fixed rate, non-
investment grade debt. All bonds included in the index are dollar
denominated, noncovertible, have at least one year remaining to maturity and
an outstanding par value of at least $100 million.

Lehman Intermediate Government/Corporate Index - an unmanaged fixed income
market value-weighted index that combines the Lehman Government Bond Index
(intermediate-term sub-index) and Lehman Corporate Bond Index.

V-2
<PAGE>

Lipper 1-5 Year Short Investment Grade Debt Funds Average -- is an average of
100 funds that invest at least 65% of assets in investment grade debt issues
(BBB or higher) with dollar-weighted average maturities of 5 years or less.

Lipper Balanced Fund Index - an unmanaged index of open-end equity funds whose
primary objective is to conserve principal by maintaining at all time a
balanced portfolio of both stocks and bonds. Typically, the stock/bond ratio
ranges around 60%/40%.

Lipper Equity Income Fund Index - an unmanaged index of equity funds which
seek relatively high current income and growth of income through investing 60%
or more of the portfolio in equities.

Lipper Equity Mid Cap Fund Index - an unmanaged index of funds which by
prospectus or portfolio practice invest primarily in companies with market
capitalizations less than $5 billion at the time of purchase.

Lipper Equity Small Cap Fund Index - an unmanaged index of funds by prospectus
or portfolio practice invest primarily in companies with market
capitalizations less than $1 billion at the time of purchase.

Lipper Growth Fund Index - an unmanaged index composed of the 30 largest funds
by asset size in this investment objective.

Lipper Mutual Fund Performance Analysis and Lipper -Fixed Income Fund
Performance Analysis -- measures total return and average current yield for
the mutual fund industry. Rank individual mutual fund performance over
specified time periods, assuming reinvestments of all distributions, exclusive
of any applicable sales charges.

Merrill Lynch 1-4.99 Year Corporate/Government Bond Index -- is an unmanaged
index composed of U.S. treasuries, agencies and corporates with maturities
from 1 to 4.99 years. Corporates are investment grade only (BBB or higher).

Morgan Stanley Capital International EAFE Index -- arithmetic, market value-
weighted averages of the performance of over 900 securities listed on the
stock exchanges of countries in Europe, Australia and the Far East.

Mutual Fund Source Book, published by Morningstar, Inc. - analyzes price,
yield, risk and total return for equity funds.

NASDAQ Composite Index -- is a market capitalization, price only, unmanaged
index that tracks the performance of domestic common stocks traded on the
regular NASDAQ market as well as national market System traded foreign common
stocks and ADRs..

New York Stock Exchange composite or component indices -- unmanaged indices of
all industrial, utilities, transportation and finance stocks listed on the New
York Stock Exchange.

Russell 1000 Index - an unmanaged index composed of the 1000 largest stocks in
the Russell 3000 Index.

Russell 2000 Growth Index - contains those Russell 2000 securities with higher
price-to-book ratios and higher forecasted growth values.

Russell 2000 Index -- an unmanaged index composed of the 2,000 smallest stocks
in the Russell 3000 Index.

Russell 2000 Value Index - contains those Russell 2000 securities with a less-
than-average growth orientation. Securities in this index tend to exhibit
lower price-to-book and price-earnings ratios, higher dividend yields and
lower forecasted growth values than the growth universe.

Russell 2500 Growth Index - contains those Russell 2500 securities with a
greater-than-average growth orientation. Securities in this index tend to
exhibit higher price-to-book and price-earnings ratios, lower dividend yields
and higher forecasted growth values than the value universe.

Russell 2500 Index - an unmanaged index composed of the 2,5000 smallest stocks
in the Russell 3000.

Russell 2500 Value Index - contains those Russell 2500 securities with a less-
than-average growth orientation. Securities in this index tend to exhibit
lower price-to-book and price-earnings ratios, higher dividend yields and
lower forecasted growth values then the Growth universe.

V-3
<PAGE>

Russell 3000 Index - composed of the 3,000 largest U.S. publicly traded
companies based on total market capitalization, which represents approximately
98% of the investable U.S. equity market.

Russell Mid-Cap Index -- is composed of the 800 smallest stocks in the Russell
1000 Index, with an average capitalization of $1.96 billion.

Salomon Smith Barney Global excluding U.S. Equity Index - an comprised of the
smallest stocks (less than $1 billion market capitalization) of the Extended
Market Index, of both developed and emerging markets.

Salomon Smith Barney One to Three Year Treasury Index - an unmanaged index
comprised of U.S. treasury notes and bonds with maturities one year or
greater, but less than three years.

Salomon Smith Barney Three-Month T-Bill Average -- the average for all
treasury bills for the previous three-month period.

Salomon Smith Barney Three-Month U.S. Treasury Bill Index - a return
equivalent yield average based on the last three 3-month Treasury bill issues.

Savings and Loan Historical Interest Rates -- as published by the U.S. Savings
and Loan League Fact Book.

Standard & Poor's 600 Small Cap Index - an unmanaged index comprised of 600
domestic stocks chosen for market size, liquidity, and industry group
representation. The index is comprised of stocks from the industrial,
utility, financial, and transportation sectors.

Standard & Poor's Midcap 400 Index -- consists of 400 domestic stocks chosen
for market size (medium market capitalization of approximately $700 million),
liquidity, and industry group representation. It is a market-value weighted
index with each stock affecting the index in proportion to its market value.

Standard & Poor's 500 Stock Index- an unmanaged index composed of 400
industrial stocks, 40 financial stocks, 40 utilities stocks and 20
transportation stocks.

Standard & Poor's Barra Value Index - is constructed by dividing the
securities in the S&P 500 Index according to price-to-book ratio. This index
contains the securities with the lower price-to-book ratios; the securities
with the higher price-to-book ratios are contained in the Standard & Poor's
Barra Growth Index.

Standard & Poor's Utilities Stock Price Index - a market capitalization
weighted index representing three utility groups and, with the three groups,
43 of the largest utility companies listed on the New York Stock Exchange,
including 23 electric power companies, 12 natural gas distributors and 8
telephone companies.

Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates --
historical measure of yield, price and total return for common and small
company stock, long-term government bonds, U.S. treasury bills and inflation.

U.S. Three-Month Treasury Bill Average - the average return for all treasury
bills for the previous three month period.

Value Line -- composed of over 1,600 stocks in the Value Line Investment
Survey.

Wilshire Real Estate Securities Index - a market capitalization weighted index
of publicly traded real estate securities, including real estate investment
trusts, real estate operating companies and partnerships. The index is used
by he institutional investment community as a broad measure of the performance
of public real estate equity for asset allocation and performance comparison.

Wilshire REIT Index - includes 112 real estate investment trusts (REITs) but
excludes seven real estate operating companies that are included in the
Wilshire Real Estate Securities Index..

Note: With respect to the comparative measures of performance for equity
securities described herein, comparisons of performance assume reinvestment of
dividends, except as otherwise stated.

V-4
<PAGE>

VI: Portfolio Management Teams
<PAGE>

Listed below are the investment professionals of the adviser that form the
teams primarily responsible for the day-to-day management of the funds and a
brief biographical description of each member.

<TABLE>
<CAPTION>
Manager Experience
-----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Harindra de Silva Employment
----------
4/98 to present Analytic Investors, Inc., President
10/96 to 4/98 Analytic Investors, Inc., Managing Director
5/95 to 10/96 Analytic Investors, Inc., Director of Research
10/97 to 4/98 Analytic/TSA Investors, Inc., Managing Director
1/99 to present Analytic US Market Neutral, Ltd., Director
4/97 to a/98 Analytic Optioned Equity Fund, President
4/86 to 3/98 Analysis Group (Economic Management Consultant), Principal
5/93 to 3/98 AG Risk Management (Investment Management Consultant), President
Analytic Series Fund, President
Education
---------
Ph.D. in Finance from the University of California, Irvine
MBA in Finance and an MS in Economic Forecasting from the University of
Rochester
BS in Mechanical Engineering from the University of Manchester Institute
of Science and Technology
Other
-----
Chartered Financial Analyst
Member of Association for Investment Management and Research
Member of the American Finance Association
Member of the International Association of Financial Analysts
-----------------------------------------------------------------------------------------------------------------------------
Dennis M. Bein Employment
----------
1999 to present Analytic Investors, Inc., Portfolio Manager
1990 to 1998 Analysis Group, Inc. (Economic Management Consultant), Senior Associate

Education
---------
MBA from the Anderson Graduate School of Management at the University
of California, Riverside
Undergraduate studies in Business Administration from the Anderson
Graduate School of Management at the University of California, Riverside
Other
-----
Chartered Financial Analyst
Member of Association for Investment Management and Research
Member of the Institute of Chartered Financial Analysts
Member of the Los Angeles Society of Financial Analysts
-----------------------------------------------------------------------------------------------------------------------------
Greg McMurran Employment
----------
1/98 to present Analytic Investors, Inc., Chief Investment Officer
2/96 to 1/98 Analytic Investors, Inc., Director and Portfolio Manager
10/97 to present Analytic/TSA Investors, Inc., Chief Investment Officer
10/76 to 2/96 Analytic Investment Management, Senior Vice President and Senior
Portfolio Manager
Education
---------
MA in Economics at California State University, Fullerton
BS in Economics from the University of California, Irvine
-----------------------------------------------------------------------------------------------------------------------------
Bob Bannon Employment
----------
10/96 to present Analytic Investors, Inc., Managing Director
2/96 to 10/96 Analytic Investors, Inc., Director of Research
10/97 to present Analytic/TSA Investors, Inc., Managing Director
2/95 to 1/96 The Anderson Graduate School of Management at the University of
5/92 to 4/95 California, UCLA, Researcher
Institute for Policy Reform, Project Manager
Education
---------
Ph.D. in Finance and International Economics from the Anderson
Graduate School of Management at the University of California, UCLA
-----------------------------------------------------------------------------------------------------------------------------
MBA in Finance from Dartmouth College
BS in Economic/Mathematics from the University of Wyoming
</TABLE>

VI-2
<PAGE>

Education
---------
BA in Physics from Pomona College
-----------------------------------------------------------------------------------------------------------------------------
Robert Murdock, Ph.D. Employment
----------
11/97 to present Analytic Investors, Inc., Portfolio Manager
11/97 to present Analytic/TSA Investors, Inc., Portfolio Manager
9/91 to 7/97 TSA Capital Management (Investment Advisor), Senior Vice President
9/89 to 8/91 and Senior Investment Strategist
I.D.E.A., Inc. (Fixed Income Strategy Advisor), Senior Bond Strategist
Education
---------
MA in Economics from the University of California at Los Angeles
BA in Economics from Villanova University
Other
-----
Chartered Financial Analyst
Member of Association for Investment Management and Research
Member of the Los Angeles Society of Financial Analysts
-----------------------------------------------------------------------------------------------------------------------------
Douglas Savarese Employment
----------
8/96 to present Analytic Investors, Inc., Portfolio Manager
8/96 to present Analytic/TSA Investors, Inc., Portfolio Manager
11/97 to 10/98 Analysis Group (Economic Management Consultant), Senior Associate

Education
---------
BA in Mathematics and Business Studies from the Richard Stockton College
</TABLE>

VI-3
<PAGE>

PART C
UAM FUNDS, INC. II
OTHER INFORMATION
ITEM 23. EXHIBITS

Exhibits previously filed by the Fund are incorporated by reference to such
filings. The following table describes the location of all exhibits. In the
table, the following references are used: PRE 2 = Pre-Effective Amendment No. 2
filed on April 17, 1998; PEA 7 = Post-Effective Amendment No. 7 filed on April
7, 1999; Post-Effective Amendment No. 8 filed on June 30, 1999.

<TABLE>
<CAPTION>
Exhibit Incorporated by
- ------- Reference to (Location):
------------------------
<S> <C>
A. 1. Articles of Amendment and Reinstatement dated April 9, 1998 PRE 2
2. Articles of Amendment to Articles of Incorporation filed April 7, 1999 PEA 8
3. Certificate of Change of Registered Agent and Address of UAM Funds, Inc. II filed PEA 8
April 7, 1999
4. Articles Supplementary dated April 9, 1998 PRE 2
5. Articles Supplementary filed April 7, 1999 PEA 7

B. Amended and Restated By-Laws dated April 6, 1999 PEA 8

C. The rights of security holders are defined in the Registrant's Articles of Amendments PRE 2
and Restatement and in the Registrant's By-Laws.

D. 1. Investment Advisory Agreement For Analytic Defensive Equity Fund dated April 6, 1999 PEA 8
2. Investment Advisory Agreement For Analytic Enhanced Equity Fund dated April 6, 1999 PEA 8
3. Investment Advisory Agreement For Analytic Master Fixed Income Fund dated April 6, 1999 PEA 8
4. Investment Advisory Agreement For Analytic Short-Term Government Fund dated April 6, PEA 8
1999
5. Investment Advisory Agreement For Analytic International Fund dated September 15, 1999 Filed herewith

E. Forms of Selling Dealer Agreements PEA 8

F. Distribution Agreement between Registrant and UAM Fund Distributors, Inc. dated as of PEA 8
April 6, 1999

G. Fund Administration Agreement between Registrant and UAM Fund Services, Inc. dated as PEA 8
of April 6, 1999

H. Mutual Fund Services Agreement between UAM Fund Services, Inc. and SEI Mutual Funds PEA 8
Services dated April 7, 1999

I. Bonus or Profit Sharing Contracts Not applicable

J. 1 . Custodian Agreement between Registrant and CoreStates Bank, N.A. dated as of April 1, PRE 2
1998
2. Rule 17f-5 Amendment to Custodian Agreement between Registrant and First Union Filed herewith
National Bank dated as of August 19, 1999

K. Opinion and Consent of Counsel Filed herewith

L. 1. Consent of PricewaterhouseCoopers, LLP Filed herewith
2. Consent of Deloitte & Touche, LLP Filed herewith
</TABLE>
<PAGE>

<TABLE>
<S> <C>
M. Other Financial Statements Not applicable

N. Stock Subscription Agreement between the Registrant and Pilgrim Baxter & Associates, PRE 2
Ltd.

O. Rule 12b-1 Plan Not applicable

P. Financial Data Schedule Filed herewith

Q. Rule 18f-3 Plan Not applicable

R. Powers of Attorney PEA 7
</TABLE>
<PAGE>

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND

Not applicable.

ITEM 25. INDEMNIFICATION

Reference is made to Article SIXTH of the Registrant's Articles of
Incorporation, which was filed as Exhibit No. 1 to the Registrant's initial
registration statement, and as Exhibit No. A to PRE #2. Insofar as
indemnification for liability arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provision, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefor, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

Provisions for indemnification of UAM Fund Services, Inc. are contained in
Section 6 of its Fund Administration Agreement with the Registrant.

Provisions for indemnification of the Registrant's investment advisers are
contained in Section 7 of their respective Investment Advisory Agreements with
the Registrant.

Provisions for indemnification of Registrant's principal underwriter, UAM Fund
Distributors, Inc., are contained in Section 15 of its Distribution Agreement
with the Registrant.

Provisions for indemnification of Registrant's custodian, First Union National
Bank, N.A. (formerly CoreState Bank N.A.) are contained in Section 14 of its
Fund Global Custody Agreement with the Registrant.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Reference is made to the caption "Investment Adviser" in the Prospectuses
constituting Part A of this Registration Statement and "Investment Adviser" in
Part B of this Registration Statement. The information required by this Item 26
with respect to each director, officer, or partner of other investment adviser
of the Registrant is incorporated by reference to the Form ADV filed by Analytic
Investors, Inc. with the Securities and Exchange Commission pursuant to the
Investment Advisers Act of 1940, as amended, under the file number 801-7082.

Analytic Investors, Inc. is an affiliate of United Asset Management Corporation
("UAM"), a Delaware corporation owning firms engaged primarily in institutional
investment management.

ITEM 27. PRINCIPAL UNDERWRITERS

UAM Fund Distributors, Inc. ("UAMFDI") acts as sole distributor of the
registrant's shares.

The information required with respect to each director and officer of UAMFDI is
incorporated by reference to Schedule A of Form BD filed pursuant to the
Securities and Exchange Act of 1934 (SEC File No. 8-41126).

Not applicable.
<PAGE>

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the Rules promulgated thereunder, are
maintained as follows:

(a) First Union National Bank (successor to CoreStates Bank, N.A.)
530 Walnut Street
Philadelphia, PA 19106

(b) SEI Investments Mutual Funds Services (formerly SEI Fund Resources)
One Freedom Valley Road
Oaks, PA 19456

(d) UAM Shareholder Services Center, Inc.
825 Duportail Road
Wayne, PA 19087

(e) DST Systems, Inc.
210 West 10th Street
Kansas City, Missouri 64105

ITEM 29. MANAGEMENT SERVICES

Not Applicable.

ITEM 30. UNDERTAKINGS

Not Applicable.
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act and the Investment Company
Act, the registrant certifies that it meets all of the requirement for
effectiveness of this registration statement under Rule 485(b) under the
Securities Act and has duly caused this registration statement to be signed on
its behalf by the undersigned, duly authorized, in the City of Boston, and
Commonwealth of Massachusetts on the 22/nd/ day of September, 1999.

UAM FUNDS, INC. II

/s/ Michael E. DeFao, Esq.
Michael E. DeFao, Esq.
Secretary

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the 22/nd/ day of September, 1999:

*
___________________________________
Norton H. Reamer, Chairman and
President

*
___________________________________
John T. Bennett, Jr., Director

*
___________________________________
Nancy J. Dunn, Director

*
___________________________________
Philip D. English, Director

*
___________________________________
William A. Humenuk, Director

*
___________________________________
James P. Pappas, Director

*
___________________________________
Peter M. Whitman, Jr., Director

/s/ Gary L. French
Gary L. French, Treasurer

/s/ Michael E. DeFao, Esq.
* Michael E. DeFao, Esq.
(Attorney-in-Fact)
<PAGE>

EXHIBITS

Exhibit Description
- ------- -----------

D.5. Investment Advisory Agreement For Analytic International Fund
dated September 15, 1999

J.2. Rule 17f-5 Amendment to Custodian Agreement between Registrant
and First Union National Bank dated as of August 19, 1999

K. Opinion and Consent of Counsel

L.1. Consent of PricewaterhouseCoopers, LLP

L.2. Consent of Deloitte & Touche, LLP

P. Financial Data Schedule

<PAGE>

EXHIBIT D5
----------

INVESTMENT ADVISORY AGREEMENT
-----------------------------

UAM FUNDS, INC. II

ANALYTIC INTERNATIONAL FUND

AGREEMENT made this 15/th/ day of September, 1999 by and between UAM Funds,
Inc. II, a Maryland corporation (the "Fund"), and Analytic Investors, Inc. a
California corporation (the "Adviser").

1. Duties of Adviser. The Fund hereby appoints the Adviser to act as
investment adviser to the Fund's Analytic International Fund (the "Portfolio")
for the period and on such terms as set forth in this Agreement. The Fund
employs the Adviser to manage the investment and reinvestment of the assets of
the Portfolio, to continuously review, supervise and administer the investment
program of the Portfolio, to determine in its discretion the securities to be
purchased or sold and the portion of the Portfolio's assets to be held
uninvested, to provide the Fund with records concerning the Adviser's activities
which the Fund is required to maintain, and to render regular reports to the
Fund's officers and Board of Directors concerning the Adviser's discharge of the
foregoing responsibilities. The Adviser shall discharge the foregoing
responsibilities subject to the control of the officers and the Board of
Directors of the Fund, and in compliance with the objectives, policies and
limitations set forth in the Portfolio's prospectus and applicable laws and
regulations. The Adviser accepts such employment and agrees to render the
services and to provide, at its own expense, the office space, furnishings and
equipment and the personnel required by it to perform the services on the terms
and for the compensation provided herein.

2. Portfolio Transactions. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of securities of
the Portfolio and is directed to use its best efforts to obtain the best
available price and most favorable execution, except as prescribed herein.
Subject to
<PAGE>

policies established by the Board of Directors of the Fund, the Adviser may also
be authorized to effect individual securities transactions at commission rates
in excess of the minimum commission rates available, if the Adviser determines
in good faith that such amount of commission is reasonable in relation to the
value of the brokerage or research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Fund. The execution of such transactions
shall not be deemed to represent an unlawful act or breach of any duty created
by this Agreement or otherwise. The Adviser will promptly communicate to the
officers and Directors of the Fund such information relating to portfolio
transactions as they may reasonably request.

3. Compensation of the Adviser. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser in monthly installments, an advisory fee calculated by applying the
following annual percentage rate to the Portfolio's average daily net assets for
the month: 1.00% for the first $100 million of average daily net assets; and

0.80% of average daily net assets thereafter.

In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last business
day on which this Agreement is in effect subject to a pro rata adjustment based
on the number of days elapsed in the current fiscal month as a percentage of the
total number of days in such month.

4. Other Services. At the request of the Fund, the Adviser in its
discretion may make available to the Fund office facilities, equipment,
personnel and other services. Such office facilities, equipment, personnel and
services shall be provided for or rendered by the Adviser and billed to the Fund
at the Adviser's cost.

5. Reports. The Fund and the Adviser agree to furnish to each other
current prospectuses, proxy statements, reports to shareholders, certified
copies of their financial statements, and such other information with regard to
their affairs as each may reasonably request.

2
<PAGE>

6. Status of Adviser. The services of the Adviser to the Fund are not to
be deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby.

7. Liability of Adviser. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940, as amended
("1940 Act"), the Adviser shall not be subject to any liability whatsoever to
the Fund, or to any shareholder of the Fund, for any error or judgment, mistake
of law or any other act or omission in the course of, or connected with,
rendering services hereunder including, without limitation, for any losses that
may be sustained in connection with the purchase, holding, redemption or sale of
any security on behalf of the Portfolio.

8. Permissible Interests. Subject to and in accordance with the Articles
of Incorporation of the Fund and the Articles of Incorporation of the Adviser,
Directors, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and shareholders
of the Adviser are or may be interested in the Fund as Directors, officers,
agents, shareholders or otherwise; and the Adviser (or any successor) is or may
be interested in the Fund as a shareholder or otherwise; and the effect of any
such interrelationships shall be governed by said Articles of Incorporation and
the provisions of the 1940 Act.

9. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall continue until the earlier of March 31, 2001 or the date
of the first annual or special meeting of the shareholders of the Portfolio and,
if approved by a majority of the outstanding voting securities of the Portfolio,
thereafter shall continue for periods of one year so long as such continuance

3
<PAGE>

is specifically approved at least annually (a) by the vote of a majority of
those members of the Board of Directors of the Fund who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Board of
Directors of the Fund or (c) by vote of a majority of the outstanding voting
securities of the Portfolio; provided however, that if the shareholders of the
----------------
Portfolio fail to approve the Agreement as provided herein, the Adviser may
continue to serve in such capacity in the manner and to the extent permitted by
the 1940 Act and rules thereunder. This Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by vote of a majority
of the entire Board of Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Portfolio on 60 days' written notice to the
Adviser. This Agreement may be terminated by the Adviser at any time, without
the payment of any penalty, upon 90 days' written notice to the Fund. This
Agreement will automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given in writing,
addressed and delivered or mailed postpaid, to the other party at the principal
office of such party.

As used in this Section 9, the terms "assignment", "interested persons",
and "a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.

10. Amendment of Agreement. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those members of the Board of Directors of the Fund who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such amendment, and (b) for changes
or amendments requiring shareholder approval pursuant to the 1940 Act or other
applicable law, by vote of a majority of the outstanding voting securities of
the Portfolio.

11. Severability. If any provisions of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.

4
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this 15/th/ day of September, 1999.

ANALYTIC INVESTORS, INC. UAM FUNDS, INC. II

By: /s/ Harindra deSilva By: /s/ Norton H. Reamer
Harindra deSilva Norton H. Reamer
President President and Chairman
of the Board

<PAGE>

EXHIBIT J2
----------

RULE 17F-5 AMENDMENT TO CUSTODIAN AGREEMENT

AMENDMENT, dated August 19, 1999 to the Custodian Agreement ("Agreement")
between UAM Funds, Inc. II ("Fund"), a Maryland corporation, and First Union
National Bank, a National Bank ("First Union").

WHEREAS, the Fund desires to appoint First Union as a Foreign Custody
Manager on the terms and conditions contained herein;

WHEREAS, First Union desires to serve as a Foreign Custody Manager and
perform the duties set forth herein on the terms and conditions contained
herein.

NOW THEREFORE, in consideration of the mutual premises hereinafter
contained in this Agreement, the Fund and First Union hereby agree as follows:

Section 1. Except as modified hereby, the Agreement is confirmed in all
respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.

Section 2. The Agreement is amended by adding a new Paragraph 18 as
follows:

18. Compliance with SEC Rule 17f-5.
- ------------------------------------

a. Appointment. The Fund hereby appoints First Union as a Foreign Custody
------------
Manager to perform the responsibilities set forth in this Paragraph 18 with
respect to Foreign Assets, and First Union hereby accepts such appointment as a
Foreign Custody Manager of the Fund. First Union agrees to fulfill its duties
and perform its responsibilities hereunder in accordance with SEC Rule 17f-5,
the Fund's currently effective registration statement, the Fund's currently
effective registration statement, and such other instructions as may be
communicated to First Union by the Fund from time-to-time.

b. Standard of Care. First Union shall use the reasonable care, prudence, and
-----------------
diligence a person having responsibility for the safekeeping of the assets of an
investment company registered under the 1940 Act would exercise in performing
the responsibilities set forth in this Paragraph 18.

c. Scope of Responsibilities as Foreign Custody Manager.
-----------------------------------------------------

(i) Selection. First Union shall place and maintain Foreign Assets in
the care of one or more Eligible Foreign Custodians. In performing its
responsibilities to place and maintain Foreign Assets with an Eligible Foreign
Custodian, First Union shall determine that the Eligible Foreign Custodian will
hold Foreign Assets in the exercise of

1
<PAGE>

reasonable care, based on the standards applicable to custodians in the
jurisdiction or market in which the Foreign Assets will be held by that Eligible
Foreign Custodian, after considering all factors relevant to the safekeeping of
such assets, including, without limitation:

(A) the Eligible Foreign Custodian's practices, procedures, and
internal controls, including, but not limited to, the physical
protections available for certificated securities (if
applicable), its methods of keeping custodial records, its
security and data protection practices, settlement practices, and
its Year 2000 and Euro conversion safeguards, preparations and
precautions;

(B) whether the Eligible Foreign Custodian has the financial strength
to provide reasonable care for Foreign Assets and to protect
Foreign Assets against the Eligible Foreign Custodian's
insolvency;

(C) the Eligible Foreign Custodian's general reputation and standing
and, in the case of a Securities Depository, the Securities
Depository's operating history and the number of participants
therein; and

(D) whether the Fund will have jurisdiction over, and be able to
enforce judgments against, the Eligible Foreign Custodian in the
United States.

First Union shall have no responsibility under this Paragraph 18.c.(i) with
respect to Compulsory Depositories; however, it will be responsible for
providing the Fund or its delegate information necessary to aid in its
responsibility with respect to selecting Compulsory Depositories, as described
in Appendix 1-B.

(ii) Contracts. First Union shall ensure that the Fund's foreign
custody arrangements with each Eligible Foreign Custodian are governed by a
written contract with such Eligible Foreign Custodian (or in the case of a
Securities Depository, by such a contract, by the rules or established practices
or procedures of the Securities Depository, or by any combination of the
foregoing). First Union shall determine that the written contract (or in the
case of a Securities Depository, the written contract, the rules or established
practices or procedures of the Securities Depository, or any combination of the
foregoing) governing the foreign custody arrangements with each Eligible Foreign
Custodian First Union selects will provide reasonable care for Foreign Assets
held by that Eligible Foreign Custodian. Each written contract will include
terms that provide:

(A) for indemnification and/or insurance arrangements such that the
Fund will be adequately protected against the risk of loss of the
Foreign Assets held in accordance with such contract;

2
<PAGE>

(B) that the Foreign Assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor of
the Eligible Foreign Custodian or its creditors, except a claim
for the Eligible Foreign Custodian's services under the contract
or, in the case of cash deposits, liens or rights in favor of
creditors of such Eligible Foreign Custodian arising under
bankruptcy, insolvency or similar laws;

(C) that beneficial ownership of the Foreign Assets will be freely
transferable without the payment of money or value, other than
payments for the Eligible Foreign Custodian's services under the
contract;

(D) that the Eligible Foreign Custodian will maintain adequate
records identifying the Foreign Assets held under the contract
as belonging to a Portfolio or as being held by a third party
for the benefit of a Portfolio;

(E) that the Fund's independent public accountants will be given
access to those records or confirmation of the contents of those
records; and

(F) that the Fund will receive periodic reports with respect to the
safekeeping of the Foreign Assets, including, but not limited
to, notification of any transfer of the Foreign Assets to or
from the account of a Portfolio or a third party account
containing the Foreign Assets held for the benefit of a
Portfolio.

or, in lieu of any or all of the terms set forth in (A) through (F) above, such
other terms that First Union determines will provide, in their entirety, the
same or greater level of care and protection for the Foreign Assets as the
provisions set forth in (A) through (F) above in their entirety.

First Union shall have no responsibility under this Paragraph 18.c.(ii) with
respect to Compulsory Depositories; however, it will be responsible for
providing the Fund or its delegate information necessary to aid in its
responsibility with respect to selecting Compulsory Depositories, as described
in Appendix 1-B.

(iii) Monitoring. First Union will establish and maintain a system to
monitor: (i) the appropriateness of maintaining assets with each Eligible
Foreign Custodian; (ii) each Eligible Foreign Custodian's continuing compliance
with the standards set forth in Rule 17f-5 and this Amendment; and (iii)
Material Changes to the Fund's foreign custody arrangements, as defined in
paragraph (d) below (the "Monitoring System").

3
<PAGE>

(iv) Withdrawing Fund Assets. In the event that a foreign custody
arrangement no longer meets the terms and conditions set forth in SEC Rule 17f-5
or this Agreement, First Union will promptly notify the Fund and will then act
in accordance with the Fund's Instructions with respect to the disposition of
the affected Foreign Assets. Under exigent circumstances, however, First Union
is authorized to withdraw Foreign Assets if, after using its best efforts to
first notify the Fund via telephone, facsimile or other electronic methods,
forty-eight (48) hours has passed without receiving a response to the
notification from an Authorized Person.

(v) Reporting Requirements. First Union shall report the placement of
Foreign Assets with an Eligible Foreign Custodian and non-Material Changes by
providing a written report to the Board at the end of each calendar quarter.
With respect to Material Changes, First Union shall provide the Board with a
written report promptly after the occurrence of the Material Change. "Material
Changes" may include, but are not limited to: a decision to remove all Foreign
Assets from a particular sub-custodian; any event that may adversely and
materially affect an Eligible Foreign Custodian's financial or operational
strength; First Union's inability to perform its duties in accordance with a
standard of care under this Amendment; a change in control of an Eligible
Foreign Custodian; the failure of an Eligible Foreign Custodian to comply with
the terms of Rule 17f-5, its contract governing the Fund's foreign custody
arrangements or the established practices or procedures of a Securities
Depository; any material change in any contract governing the Fund's foreign
custody arrangements; any material change in the established practices or
procedures of a Securities Depository; the failure of First Union or a foreign
custody arrangement to meet the standards in Rule 17f-5 or this Amendment; any
event that may adversely affect First Union's ability to comply with Rule 17f-5
or this Amendment; and a material change in any information provided to the
Board regarding First Union's expertise in foreign custody issues and risks,
First Union's use of third party experts to perform its foreign custody
responsibilities, the Board's ability to monitor First Union's performance,
First Union's financial strength or its ability to indemnify the Fund.

(vi) Provision of Information. First Union shall provide to the Fund
such information as is specified in Appendix 1-B hereto, as may be amended from
time to time by the parties. The Fund hereby acknowledges that such information
is solely designed to inform the Fund of market conditions and procedures, but
is not intended to influence the Fund's investment decisions. First Union must
use reasonable care in gathering such information. First Union agrees to
promptly notify the Fund's Administrator at the time that First Union becomes
aware of a material change to the information provided or if First Union learns
that any information previously provided is incomplete or inaccurate. At least
annually, First Union will provide to the Fund a written statement as may
reasonably be required to document its compliance with the terms of this
Agreement, as well as information regarding the following factors: (i) First
Union's expertise in foreign custody issues and risks; (ii) First Union's use of
third party experts to perform its foreign custody responsibilities; (iii) the
Board's ability to monitor First Union's performance; and (iv) First Union's
financial strength and its ability to indemnify the Fund if necessary. With
respect to each Eligible Foreign Custodian employed by the Fund under this

4
<PAGE>

Paragraph 18 (c)(vi), First Union agrees to provide to the Fund or its
investment adviser any information it possesses regarding Country Risk or the
risks associated with placing or maintaining Foreign Assets with the Eligible
Foreign Custodian.

d. Representations. The Fund hereby represents to First Union that (i) this
----------------
Agreement has been duly authorized, executed and delivered by the Fund,
constitutes a valid and legally binding obligation of the Fund enforceable in
accordance with its terms, and no statute, regulation, rule, order, judgment or
contract binding on the Fund prohibits the Fund's execution or performance under
this Agreement. First Union hereby represents to the Fund that (i) it is a U.S.
Bank with the full power to carry on its businesses as now conducted, and to
enter into this Agreement and to perform its obligations hereunder; (ii) this
Agreement has been duly authorized, executed and delivered by First Union,
constitutes a valid and legally binding obligation of First Union enforceable in
accordance with its terms, and no statute, regulation, rule, order, judgment or
contract binding on First Union prohibits First Union's execution or performance
of this Agreement; and (iii) First Union has established, and agrees to maintain
during the term of this Agreement, the Monitoring System.

In addition to any express or implied warranties made in the Agreement, First
Union hereby represents and warrants that each and every commercial and
noncommercial hardware, software, firmware, mechanical, or electrical product
("Product(s)") utilized, created, assembled, manufactured, developed, or
modified in connection with any goods or services offered or provided under this
Amendment shall, at no additional costs to the Fund, be able to store and
process accurately any and all data reflected in the currency unit of the
European Monetary Union, the Euro, and related to the Euro (including, but not
limited to, calculating, comparing, storing, processing, recording, valuing,
recognizing, validating, presenting, and sequencing). The Fund may, at no
additional cost, require First Union to demonstrate compliance and/or compliance
techniques and test procedures it intends to follow, or evidence of compliance
by First Union and relevant third party vendors, consistent with the Euro-
related representations, warranties, and obligations contained herein. These
representations and warranties shall be in effect so long as the service(s) or
Product(s) provided under this agreement are used by First Union or provided by
First Union for the benefit of the Fund.

e. Condition Precedent. As a condition precedent to First Union's performance
-------------------
under this Amendment, the Fund shall deliver to First Union a certificate from
the Fund's secretary containing the resolution of the Board regarding the
Board's determination that it is reasonable to rely on First Union to perform
the delegated responsibilities provided for herein.

f. Country Risk. First Union's responsibilities under this Paragraph 18 shall
------------
not include, or be deemed to include, any evaluation of Country Risks associated
with investment in a particular country.

g. Best Customer. If at any time First Union is or becomes a party to an
-------------
agreement to serve as Foreign Custody Manager to an investment company that
provides for either: (a)

5
<PAGE>

a standard of care with respect to the selection of Eligible Foreign Custodians
in any jurisdiction higher than that set forth in Paragraph 18.c (i) or (ii) a
standard of care with respect to exercise of First Union's duties other than
that set forth in Paragraph 18.b, First Union agrees to notify the Fund of this
fact and to raise the applicable standard of care hereunder to the standard
specified in such other agreement. In the event that First Union offers services
to an investment company with respect to Compulsory Depositories in addition to
those First Union provides to the Fund hereunder, First Union agrees that it
will notify the Fund of this fact and will offer such services to the Fund
subject to its normal commercial terms for such services.

h. Direction of Eligible Foreign Custodians. The Fund may direct First Union
----------------------------------------
to place and maintain Foreign Assets with a particular Eligible Foreign
Custodian. In such event, First Union will have no duties under this Paragraph
18 with respect to such arrangement, except those included under Paragraph 18.c
(vi) and those that it may undertake specifically in writing.

i Tax Services.
------------

(i) First Union shall apply for a reduction of withholding tax and
any refund of any tax paid or tax credits that apply in each market in respect
of income payments on Assets for the benefit of the Fund which First Union
believes may be available to the Fund. If the Fund is eligible, pursuant to
applicable law or to the provisions of any tax treaty, for a reduced rate of, or
exemption from, any tax which is otherwise required to be withheld or paid on
behalf of the Fund under any applicable law, First Union shall, or shall
instruct the applicable Eligible Foreign Custodian or withholding agent to,
either withhold or pay such tax at such reduced rate or refrain from withholding
or paying such tax, as appropriate. In the event that a reduced rate of, or
exemption from, any tax is obtainable only by means of an application for
refund, First Union shall, or shall instruct the applicable Eligible Foreign
Custodian or withholding agent to, apply for such refund. The provision of tax
services is conditional upon the Fund's provision to First Union of all
documentary evidence as First Union shall reasonably require in connection with
taxation, and the Fund warrants that when given, this information shall be true
and correct in every material respect. The Fund undertakes to notify First Union
immediately if any such information requires updating or amendment.

(ii) First Union and the applicable Eligible Foreign Custodian shall
have no responsibility for the accuracy or validity of any forms or
documentation the Fund provides to First Union hereunder, and the Fund hereby
indemnifies and agrees to hold harmless First Union and each Eligible Foreign
Custodian in respect of any liability arising from any underwithholding or
underpayment of any tax which results from the inaccuracy or invalidity of any
such forms or other documentation.

(iii) First Union and the applicable Eligible Foreign Custodian shall
not be liable to the Fund or any third party for any taxes, fines or penalties
payable by the Fund or First Union, and shall be indemnified accordingly,
whether these result form the

6
<PAGE>

Fund's or any third party's inaccurate completion of documents, or as a result
of the Fund's or any third party's provision of inaccurate or misleading
information or the withholding of material information, or as a result of any
delay of any revenue authority or any other event beyond the control of First
Union or any Eligible Foreign Custodian.

(iv) First Union shall perform tax reclaim services only for taxation
levied by the revenue authorities of the countries notified to First Union from
time to time, and First Union may, after notifying the Fund in writing,
supplement or amend the markets in which it offers tax reclaim services. Other
than as expressly provided in this clause (iv), First Union shall have no
responsibility for the Fund's tax position or status in any jurisdiction.

(v) First Union is authorized to deduct from any Property in the form
of cash any taxes or levies required by any revenue or governmental authority
under applicable law in respect of the Account.

j. Definitions.
-----------

"Board" means the board of trustees or board of directors, as applicable, of the
Fund.

"Compulsory Depository" means a Securities Depository listed on Appendix 1-A
hereto, as the Board, its delegate or its duly authorized officer(s) may amend
from time to time, upon notice to First Union.

"Country Risks" means the systemic risks arising from holding assets in a
particular country, including those arising from a country's financial
infrastructure, prevailing custody and settlement practices; expropriation, and
nationalization or other governmental actions; and laws applicable to the
safekeeping and recovery of assets held in custody in such country.

"Eligible Foreign Custodian" means an Eligible Foreign Custodian as defined in
SEC Rule 17f-5(a)(1) and any other entity that the SEC qualifies as such by
exemptive order, no-action relief, rule or other appropriate SEC action.

"Foreign Assets" means any Portfolio's investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Portfolio's
transactions in such investments.

"Foreign Custody Manager" means a Foreign Custody Manager as defined in SEC Rule
17f-5(a)(2).

"Portfolio" means each separate series of shares offered by the Fund
representing interests in a separate portfolio of securities and other assets.

"SEC" means the U.S. Securities and Exchange Commission.

7
<PAGE>

"Securities Depository" means any securities depository or clearing agency
within the meaning of SEC Rule 17f-5(a)(1)(ii) or (iii).

"U.S. Bank" means a U.S. bank as defined in SEC Rule 17f-5(a)(7).

"1940 Act" means the Investment Company Act of 1940.

k. Authorization. Subject to the terms and conditions herein, First Union is
-------------
hereby authorized to: (i) place and maintain Foreign Assets on behalf of the
Fund with Eligible Foreign Custodians pursuant to a written contract determined
appropriate by First Union in accordance with the terms and conditions herein
and (ii) withdraw Foreign Assets from Eligible Foreign Custodians in accordance
with the terms and conditions herein.

l. Concerning First Union
----------------------

(i) For its services hereunder, the Fund agrees to pay to First Union
such compensation and out-of-pocket expenses as shall be mutually agreed.

(ii) First Union shall have only such duties as are expressly set
forth herein. In no event shall First Union be liable for any Country Risks
associated with investments in a particular country.

m. Counterparts. This Agreement may be executed in any number of counterparts,
------------
each of which shall be deemed to be an original, but such counterparts shall
together, constitute only one instrument.

IN WITNESS WHEREOF, the Fund and First Union have caused this Agreement to
be executed by their respective officers, thereunto duly authorized, as of the
date first above written.

UAM FUNDS, INC. II

By: /s/ Gary L. French
Treasurer

Tax Identification No.

FIRST UNION NATIONAL BANK

By: /s/ Paul T. Cahill
Vice President

8
<PAGE>

Appendix 1-A

List of Compulsory Depositories, as determined by the Board, its delegate or
duly authorized officers of the Fund:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
APPENDIX 1-A
Securities Depositories
As of August 1999
- --------------------------------------------------------------------------------------------------------------------------------
COUNTRY DEPOSITORY INSTRUMENT
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Argentina Caja de Valores S.A. Equity, Corporate & Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Australia Austraclear Ltd. Corporate Debt, Money Market & Semi-Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Australia CHESS Equity
(Clearing House Electronic Subregister System) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Australia RITS Government Debt
(Reserve Bank Information and Transfer System) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Austria Osterreichische Kontrolbank AG Equity, Corporate + Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Belgium CIK Equity + Corporate Debt
(Caisse Interprofessionnelle de Depots et de
Virements de Titres s.a.) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Belgium Banque Nationale de Belgique Treasury Bills + Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Brazil CBLC Equity
(Companhia Brasileira de Liquidacao e Custodia) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Brazil CLC Equity
(Camara de Liquidacao e Custodia Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Brazil CETIP Corporate Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Bulgaria BNB Government Debt
(Bulgaria National Bank) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Bulgaria Central Depository A.D. Equity
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Canada CDS Equity, Corporate + Government Debt
(The Canadian Depository for Securities Ltd.) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Chile DCV Equity, Corporate + Government Debt
(Deposito Central de Valores) Compulsory for government debt securities and for
brokers as of November 1998; will be compulsory for all
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

9
<PAGE>

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
market participants during 1999.
- --------------------------------------------------------------------------------------------------------------------------------
China, Shanghai SSCCRC Equity
(Shanghai Securities Central Clearing and Compulsory
Registration Corporation)
- --------------------------------------------------------------------------------------------------------------------------------
China, Shenzhen SSCC Equity
(Shenzhen Securities Clearing Company, Limited) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Colombia DCV Government debt issued, guaranteed or administered by
(Deposito Central de Valores) the central bank.
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Colombia DECEVAL Equity, Corporate + Government Debt
(Deposito Central de Valores) Voluntary. Due to change in tax status of DECEVAL,
use of DECEVAL is becoming market standard.
- --------------------------------------------------------------------------------------------------------------------------------
Croatia CDA Equity and listed government debt. (Created in April
(Central Depository Agency) 1997, the CDA is expected to be operational in 1999)
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Croatia Ministry of Finance Registry & Short-term debt issued by the Ministry of Finance and
National Bank of Croatia Registry the National Bank of Croatia, respectively.
Compulsory
- ------------------------------------------------------------------------------------------------------------------------------
Czech Republic SCP Equity + Long-Term Government Debt
(Stredisko cennych papiru) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Denmark VP Equity, Corporate + Government Debt
(Vaerdipapircentralen) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Egypt Misr Clearing, Settlement and Depository, Equity
S.A.E. Compulsory
- ------------------------------------------------------------------------------------------------------------------------------
Estonia EVK Equity
(Estonian Central Depository for Securities Compulsory
Limited)
- --------------------------------------------------------------------------------------------------------------------------------
Euromarket Cedel & Euroclear Euro-Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Finland CSR Equity + Government Debt
(Central Share Registry Finland) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
France SICOVAM Equity + Corporate Debt
(Societe Interprofessionnelle pour la Compulsory
Compensation des Valeurs Mobilieres, S.A.)
- --------------------------------------------------------------------------------------------------------------------------------
Germany DBC Equity, Corporate + Government Debt
(Deutsche Boerse Clearing AG) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Greece Apothetirio Titlon A.E. Equity
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Greece Bank of Greece Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Hong Kong CCASS Equity
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

10
<PAGE>

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(Central Clearing and Settlement System) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Hong Kong CMU Corporate + Government Debt
(Central Moneymarkets Unit) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Hungary Keler Ltd. Equity + Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
India NSDL Equity + Corporate Debt
(National Securities Depository Limited) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Indonesia KSEI Equity
(PT Dustodian sentral Efek Indonesia) Voluntary
- --------------------------------------------------------------------------------------------------------------------------------
Ireland CRESTCo Limited Equity
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Ireland GSO Government Debt
(Gilt Settlement Office) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Israel TASE Clearing House Equity, Corporate + Government Debt
(Tel Aviv Stock Exchange Clearing House) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Italy Monte Titoli S.p.a. Equity + Corporate Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Italy Bank of Italy Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Japan JASDEC Equity
(Japan Securities Depository Center) Voluntary
- --------------------------------------------------------------------------------------------------------------------------------
Japan Bank of Japan Registered Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Kazahkstan Central Securities Depository Mandatory for all equity securities traded on the
Kazahkstan Stock Exchange. Currently all trading is
over the counter.
Voluntary
- --------------------------------------------------------------------------------------------------------------------------------
Latvia LCD Equity + Government Debt
(Latvian Central Depository) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Lebanon Midclear Equity
(Custodian and Clearing Center of Lebanon and Compulsory
the Middle East)
- --------------------------------------------------------------------------------------------------------------------------------
Lithuania CSDL Equity + Government Debt
(Central Securities Depository of Lithuania) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Luxembourg Cedel Bank, s.a. Equity
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Malaysia MCD Equity
(Malaysian Central Depository Snd Bhd) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

11
<PAGE>

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mauritius CDS Equity
(Central Depository and Settlement Company Compulsory
Limited)
- --------------------------------------------------------------------------------------------------------------------------------
Mexico Indeval Equity, Corporate + Government Debt.
(Institucion para el Deposito de Valores) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Morocco Maroclear Equity + Corporate Debt (will be compulsory as of
March 21, 1999)
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Netherlands NECIGEF Equity, Corp. + Govt. D
(Nederlands Centraal Insituut voor Giraal Compulsory
Effectenverkeer B.V.)
- --------------------------------------------------------------------------------------------------------------------------------
New Zealand Austraclear New Zealand Equity, Corporate + Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Norway VPS Equity, Corporate + Government Debt
(Verdipapirsentralen) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Oman MSM Equity
(Muscat Securities Market) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Pakistan CDC Equity
(Central Depository Company of Pakistan Limited) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Peru CAVALI Equity
(Caja de Valores y Liquidaciones) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Philippines PCD Equity
(Philippine Central Depository Inc.) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Poland NDS Equity, Long-Term Government Debt + Vouchers
(National Securities Depository) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Poland CRT Treasury-Bills
(Central Registry of Treasury-Bills) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Portugal Interbolsa Equity, Corporate + Government Debt
(Central de Valores Mobiliarios e Sistema de Compulsory
Liquidacao e Compensacao)
- --------------------------------------------------------------------------------------------------------------------------------
Romania SNCDD - RASDAQ Equity
(National Company for Clearing, Settlement and Compulsory
Depository for Securities)
- --------------------------------------------------------------------------------------------------------------------------------
Romania BSE Equity
(Bucharest Stock Exchange Registry) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Romania National Bank of Romania Treasury-Bills
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Russia Vnestorgbank Ministry of Finance Bonds
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Russia National Depository Center GKOs are Treasury Bills with three months to one
year maturity; OFZs are Federal Loan bonds with
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

12
<PAGE>

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
one to two years' maturity.
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Singapore CDP Equity + Corporate Debt and Malaysian equities traded
(Central Depository (Pte.) Ltd.) on CLOB
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Singapore Monetary Authority of Singapore Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Slovak Republic SCP Equity + Government Debt
(Stredisko Cennych Papierov) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Slovak Republic National Bank of Slovakia Treasury-Bills
Compulsory
- ------------------------------------------------------------------------------------------------------------------------------
Slovenia KDD Equity + Corporate Debt
(The Centralna Klirinsko Depotna Druzba d.d. Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
South Africa CD Corporate + Government Debt
(Central Depository (Pty) Limited) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
South Korea KSD Equity, Corporate + Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Spain SCLV Equity + Corporate Debt.
(Servicio de Compensacion y Liquidacion de
Valores, S.A.) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Spain CBEO Government Debt
(Central Book Entry Office) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Sri Lanka CDS Equity
(Central Depository System (Pte) Limited) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Sweden VPC Equity, Corporate + Government Debt
(Vardepapperscentralen AB) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Switzerland SEGA Equity, Corporate + Government Debt
(Schweizerische Effekten-Giro AG) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Taiwan TSCD Equity + Government Debt
(Taiwan Securities Central Depository Co., Ltd.) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Thailand TSDC Equity, Corporate + Government Debt
(Thailand Securities Depository Company Limited) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Tunisia STICODEVAM Equity
(Societe Tunisienne Interprofessionnelle pour la
Compensation et le Depot des Valeurs Mobilieres) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Tunisia Ministry of Finance Government Debt tradable on the stock exchange (BTNBs)
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Tunisia Central Bank of Tunisia Government Debt not tradable on the stock exchange
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

13
<PAGE>

<TABLE>
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(BTCs)
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Turkey IMKB Takas ve Saklama Bankasi A.S. Equity + Corporate Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Turkey Central Bank of Turkey Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
United Kingdom CRESTCo Limited Equity + Corp. Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
United Kingdom CMO Sterling CDs & CP
(Central Moneymarket Office) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
United Kingdom CGO Gilts
(Central Gilts Office) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
United States DTC Equity + Corporate Debt
(Depository Trust Company) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
United States PTC Mortgage Back Debt
(Participants Trust Company) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
United States Fed Book-Entry System Government Debt
Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
Zambia LuSE Equity + Government Debt
(LuSE Central Shares Depository Limited) Compulsory
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

14
<PAGE>

Appendix 1-B
Information Regarding Country Risk and Compulsory Depositories

1. To aid the Fund or its delegate in its consideration of Country Risks,
First Union shall furnish the Fund annually and prior to the initial placing of
Foreign Assets into a country, the following information:

a. Opinions of local counsel, both internal and concerning whether
applicable foreign law would restrict the: (i) access afforded the Fund's
independent public accountants to books and records kept by an Eligible Foreign
Custodian located in that country; (ii) Fund's ability to recover its Foreign
Assets in the event of the bankruptcy of an Eligible Foreign Custodian in that
country; or (iii) Fund's ability to recover Foreign Assets that are lost while
under the control of an Eligible Foreign Custodian located in that country.

b. Written information concerning: (i) the likelihood of expropriation,
nationalization, freezes, or confiscation of the Fund's Foreign Assets and (ii)
whether difficulties in converting the Fund's cash and cash equivalents to U.S.
dollars are reasonably foreseeable.

c. A market report with respect to the following topics: (i) securities
regulatory environment; (ii) foreign ownership restrictions; (iii) foreign
exchange; (iv) securities settlement and registration; (v) taxation; and (vi)
compulsory depositories.

2. To aid the Fund in monitoring Country Risk, First Union shall furnish the
Fund with the following information: [Market flashes], including with respect to
changes in the information contained in the above market reports.

3. To aid the Fund or its delegate in selecting Compulsory Depositories, First
Union shall furnish the Fund with the following information: (i) information
regarding the Compulsory Depository's practices, procedures and internal
controls, including the Eligible Foreign Custodian's physical facilities to
safeguard certificated securities, settlement practices (such as whether trades
are settled strictly on a "delivery vs. payment" or some other basis), security
and data protection practices, and recordkeeping methods, and its Year 2000 and
Euro conversion safeguards, preparations and precautions; (ii) financial
information on the Compulsory Depository, including, but not limited to, the
Compulsory Depository's most recently audited financial statements (prepared
according to U.S. GAAP, if feasible); (iii) the Compulsory Depository's general
reputation and standing, both in its own country and abroad, including, but not
limited to, the Compulsory Depository's operating history and number of
participants; and (iv) information regarding whether the Fund has U.S.
jurisdiction over the Compulsory Depository and whether the Fund can enforce
judgments against the Compulsory Depository.

15
<PAGE>

4. First Union shall furnish additional information customarily provided to
other investment companies registered under the Investment Company Act of 1940
for which First Union provides foreign custody services.

5. First Union shall furnish additional information regarding Country Risks
and Compulsory Depositories as the Fund may reasonably request from time to
time.

<PAGE>

Drinker Biddle & Reath LLP
One Logan Square
18th and Cherry Streets
Philadelphia, PA 19103-6996
(215) 988-2700
(215) 988-2757 (Fax)

September 21, 1999

UAM Funds, Inc. II
211 Congress Street
Fourth Floor
Boston, MA 02110

Re: UAM Funds, Inc. II - Shares of Common Stock
-------------------------------------------

Ladies and Gentlemen:

We have acted as counsel for UAM Funds Inc. II, a Maryland corporation,
("UAM") in connection with the registration by UAM of its shares of common
stock, par value $0.001 per share. The Articles of Incorporation of UAM
authorizes the issuance of 10,000,000,000 shares of common stock, which are
divided into multiple series and classes. The shares of common stock designated
into each such series are referred to herein as the "Shares." You have asked
for our opinion on certain matters relating to the Shares.

We have reviewed UAM's Articles of Incorporation, Articles Supplementary
and By-laws, resolutions of UAM's Board of Directors ("Board"), certificates of
public officials and of UAM's officers and such other legal and factual matters
as we have deemed appropriate. We have also reviewed UAM's Registration
Statement on Form N-1A under the Securities Act of 1933 (the "Registration
Statement"), as amended through Post-Effective Amendment No. 11 thereto.

This opinion is based exclusively on the General Corporation Law of the
State of Maryland and the federal law of the United States of America.

We have assumed the following for purposes of this opinion:

1. The shares of Common Stock have been issued in accordance with the
Articles of Incorporation, Articles Supplementary and By-laws of UAM
and resolutions of UAM's Board relating to the creation, authorization
and issuance of the Shares.
<PAGE>

2. With respect to the future Shares, there will be compliance with the
terms, conditions and restrictions applicable to the issuance of such
shares that are set forth in (i) UAM's Articles of Incorporation and
By-laws, each as amended as of the date of such issuance, and (ii) the
applicable future series designations.

3. The Board will not change the preferences, limitations or relative
rights of any class or series of Shares after any shares of such class
or series have been issued.

Based upon the foregoing, we are of the opinion that the Shares will be,
when issued in accordance with, and sold for the consideration described in the
Registration Statement, validly issued, fully paid and non-assessable by UAM.

We consent to the filing of this opinion with Post-Effective Amendment No.
11 to the Registration Statement to be filed by UAM with the Securities and
Exchange Commission.

Very truly yours,

/s/ Drinker Biddle & Reath LLP

DRINKER BIDDLE & REATH LLP

AT/MM

-2-

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in Post-Effective Amendment No. 11
to the Registration Statement of the UAM Funds, Inc. II (formerly PBHG Advisor
Funds Inc.) on form N-1A (File No. 33-44193) of our report on the financial
statements and financial highlights of the Analytic Defensive Equity, Analytic
Enhanced Equity, Analytic Master Fixed Income and Analytic Short-Term Government
Funds, (the "Funds"), as of December 31, 1998, and for the year then ended,
which Report is included in the Annual Report to Shareholders for the year ended
December 31, 1998 which is incorporated by reference in the Post-Effective
Amendment to the Registration Statement. We also consent to the reference to
our Firm under the heading "Financial Highlights" in the Prospectus and under
the headings "Independent Public Accountant" and "Financial Statements" in the
Statement of Additional Information.

PricewaterhouseCoopers LLP

2400 Eleven Penn Center
Philadelphia, Pennsylvania
September 20, 1999

<PAGE>

INDEPENDENT AUDITORS' CONSENT

We consent to the reference to us under the heading "Financial Highlights" in
the Prospectus in this Post-Effective Amendment No. 11 to the Registration
Statement on Form N-1A of The Analytic Funds (File No. 333-44193).

DELOITTE & TOUCHE LLP

Boston, Massachusetts
September 17, 1999

<PAGE>

<ARTICLE> 6
<CIK> 0001052518
<NAME> UAM FUNDS INC II
<SERIES>
<NUMBER> 10
<NAME> ANALYTIC DEFENSIVE EQUITY FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<INVESTMENTS-AT-COST> 60,709,695
<INVESTMENTS-AT-VALUE> 67,621,536
<RECEIVABLES> 219,270
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 67,840,806
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,150,690
<TOTAL-LIABILITIES> 1,150,690
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 504,850,000
<SHARES-COMMON-STOCK> 4,841,252
<SHARES-COMMON-PRIOR> 4,760,831
<ACCUMULATED-NII-CURRENT> 191,697
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9,408,822
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6,604,597
<NET-ASSETS> 66,690,116
<DIVIDEND-INCOME> 487,853
<INTEREST-INCOME> 55,607
<OTHER-INCOME> 0
<EXPENSES-NET> (329,625)
<NET-INVESTMENT-INCOME> 213,835
<REALIZED-GAINS-CURRENT> 10,497,443
<APPREC-INCREASE-CURRENT> (1,124,717)
<NET-CHANGE-FROM-OPS> 9,586,561
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 966,561
<NUMBER-OF-SHARES-REDEEMED> (886,095)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 10,669,067
<ACCUMULATED-NII-PRIOR> (22,138)
<ACCUMULATED-GAINS-PRIOR> (1,088,621)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 178,603
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 383,520
<AVERAGE-NET-ASSETS> 60,027,852
<PER-SHARE-NAV-BEGIN> 11.77
<PER-SHARE-NII> .04
<PER-SHARE-GAIN-APPREC> 1.97
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.78
<EXPENSE-RATIO> 1.11

</TABLE>

<PAGE>

<ARTICLE> 6
<CIK> 0001052518
<NAME> UAM FUNDS INC II
<SERIES>
<NUMBER> 020
<NAME> ANALYTIC ENHANCED EQUITY FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<INVESTMENTS-AT-COST> 45,087,413
<INVESTMENTS-AT-VALUE> 49,259,320
<RECEIVABLES> 351,756
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 49,611,076
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 109,955
<TOTAL-LIABILITIES> 109,955
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 40,311,872
<SHARES-COMMON-STOCK> 3,918,684
<SHARES-COMMON-PRIOR> 3,107,966
<ACCUMULATED-NII-CURRENT> 182,091
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,704,601
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,302,557
<NET-ASSETS> 49,501,121
<DIVIDEND-INCOME> 322,774
<INTEREST-INCOME> 84,417
<OTHER-INCOME> 0
<EXPENSES-NET> (213,096)
<NET-INVESTMENT-INCOME> 194,095
<REALIZED-GAINS-CURRENT> 5,109,052
<APPREC-INCREASE-CURRENT> 584,367
<NET-CHANGE-FROM-OPS> 5,887,514
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,586,300
<NUMBER-OF-SHARES-REDEEMED> (775,582)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 15,612,603
<ACCUMULATED-NII-PRIOR> (12,004)
<ACCUMULATED-GAINS-PRIOR> (404,451)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 116,196
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 258,333
<AVERAGE-NET-ASSETS> 39,053,012
<PER-SHARE-NAV-BEGIN> 10.90
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 1.68
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.63
<EXPENSE-RATIO> 1.10

</TABLE>

<PAGE>

<ARTICLE> 6
<CIK> 0001052518
<NAME> UAM FUNDS INC II
<SERIES>
<NUMBER> 030
<NAME> ANALYTIC MASTER FIXED INCOME FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<INVESTMENTS-AT-COST> 5,914,147
<INVESTMENTS-AT-VALUE> 5,709,164
<RECEIVABLES> 110,291
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5,819,455
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 70,664
<TOTAL-LIABILITIES> 70,664
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 6,143,395
<SHARES-COMMON-STOCK> 613,992
<SHARES-COMMON-PRIOR> 504,834
<ACCUMULATED-NII-CURRENT> 1,349
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (217,403)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (178,550)
<NET-ASSETS> 5,748,791
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 163,111
<OTHER-INCOME> 0
<EXPENSES-NET> (25,835)
<NET-INVESTMENT-INCOME> 137,276
<REALIZED-GAINS-CURRENT> 38,093
<APPREC-INCREASE-CURRENT> (294,865)
<NET-CHANGE-FROM-OPS> (119,496)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (137,031)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 166,994
<NUMBER-OF-SHARES-REDEEMED> (73,439)
<SHARES-REINVESTED> 15,603
<NET-CHANGE-IN-ASSETS> 794,574
<ACCUMULATED-NII-PRIOR> 1,104
<ACCUMULATED-GAINS-PRIOR> (255,496)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,435
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 63,032
<AVERAGE-NET-ASSETS> 5,572,433
<PER-SHARE-NAV-BEGIN> 9.81
<PER-SHARE-NII> .23
<PER-SHARE-GAIN-APPREC> (.45)
<PER-SHARE-DIVIDEND> (.23)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.36
<EXPENSE-RATIO> .93

</TABLE>

<PAGE>

<ARTICLE> 6
<CIK> 0001052518
<NAME> UAM FUNDS INC II
<SERIES>
<NUMBER> 040
<NAME> ANALYTIC SHORT TERM GOVERNMENT FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<INVESTMENTS-AT-COST> 4,666,068
<INVESTMENTS-AT-VALUE> 4,625,859
<RECEIVABLES> 103,718
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,729,577
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 64,995
<TOTAL-LIABILITIES> 64,995
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,514,465
<SHARES-COMMON-STOCK> 470,518
<SHARES-COMMON-PRIOR> 520,727
<ACCUMULATED-NII-CURRENT> 2,908
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (806,888)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (45,903)
<NET-ASSETS> 4,664,582
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 155,286
<OTHER-INCOME> 0
<EXPENSES-NET> (18,409)
<NET-INVESTMENT-INCOME> 136,877
<REALIZED-GAINS-CURRENT> (13,815)
<APPREC-INCREASE-CURRENT> (80,908)
<NET-CHANGE-FROM-OPS> 42,154
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (130,857)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 30,345
<NUMBER-OF-SHARES-REDEEMED> (95,597)
<SHARES-REINVESTED> 15,043
<NET-CHANGE-IN-ASSETS> (594,649)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (793,073)
<OVERDISTRIB-NII-PRIOR> (3,112)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,113
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 62,458
<AVERAGE-NET-ASSETS> 4,781,312
<PER-SHARE-NAV-BEGIN> 10.10
<PER-SHARE-NII> .29
<PER-SHARE-GAIN-APPREC> (.20)
<PER-SHARE-DIVIDEND> (.28)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.91
<EXPENSE-RATIO> .78

</TABLE>