<PAGE>
As filed with the Securities and Exchange Commission 1933 Act File No.
33-59221 on July 26, 2000
1940 Act Registration No. 811-8885
-----------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. __ [ ]
Post-Effective Amendment No. 2 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 3 [X]
(Check appropriate box or boxes)
-----------------------------
HEWITT SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
100 Half Day Road, Lincolnshire, IL 60069
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (847) 295-5000
Peter E. Ross, Esq.
100 Half Day Road
Lincolnshire, IL 60069
(Name and Address of Agent for Service)
Copy to:
Kenneth S. Gerstein, Esq.
Schulte Roth & Zabel LLP
900 Third Avenue
New York, NY 10022
(Name and Address of Agent for Process)
Approximate Date of Proposed Public Offering: As soon as practicable
after the Post Effective Amendment becomes effective.
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It is proposed that this filing will become effective (check appropriate box)
[x] immediately upon filing pursuant to paragraph (b)
[ ] on (date) 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:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
Hewitt Money Market Fund
A SERIES OF HEWITT SERIES TRUST
INSTITUTIONAL SHARES
ADMINISTRATIVE SHARES
Prospectus
July 26, 2000
Hewitt Money Market Fund is a series of Hewitt Series Trust, a diversified,
open-end management investment company. The Fund is a money market fund. The
investment objective of the Fund is to provide a high level of income, while
preserving capital and liquidity, by investing in high quality, short-term
securities. Unlike most other money market funds, the Fund does not maintain a
stable net asset value of $1.00 per share. Net asset value per share will
fluctuate.
The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
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TABLE OF CONTENTS
Hewitt Money Market Fund
A SERIES OF HEWITT SERIES TRUST
INSTITUTIONAL SHARES
ADMINISTRATIVE SHARES
Page
ABOUT THE FUND................................................................3
FUND PERFORMANCE..............................................................4
INVESTOR EXPENSES.............................................................6
INVESTMENT OBJECTIVE AND POLICIES.............................................7
MANAGEMENT ARRANGEMENTS.......................................................9
HOW TO BUY SHARES............................................................10
HOW TO REDEEM SHARES.........................................................12
NET ASSET VALUE..............................................................14
DIVIDENDS AND DISTRIBUTIONS..................................................15
TAXES........................................................................15
DISTRIBUTION AND SERVICING ARRANGEMENTS......................................16
PERFORMANCE INFORMATION......................................................17
FINANCIAL HIGHLIGHTS.........................................................18
ADDITIONAL INFORMATION.......................................................20
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ABOUT THE FUND
Investment Goals. Hewitt Money Market Fund is a series of
----------------
Hewitt Series Trust, a diversified, open-end management investment company. The
Fund is a money market fund. Its investment objective is to provide a high level
of income, while preserving capital and liquidity, by investing in high quality,
short-term securities.
The Fund is designed for use as an investment option by
employee benefit plans, individual retirement accounts and other investors who
seek income and stability of capital. Unlike most other money market funds, the
Fund does not maintain a stable net asset value per share because it declares
dividends on a monthly basis (rather than daily). This will not affect the
return on your investment in the Fund. Net asset value per share will fluctuate.
Principal Investment Strategies. The Fund pursues its
-------------------------------
investment objective by investing all of its investable assets in the Money
Market Master Portfolio, which is a series of Master Investment Portfolio. The
Money Market Master Portfolio has the same investment objective and
substantially the same investment policies as the Fund. Barclays Global Fund
Advisors serves as the Portfolio's investment adviser. The Money Market
Master Portfolio is a diversified portfolio that invests in the following types
of money market instruments:
. U.S. Government Obligations
. Commercial Paper and Short-Term Corporate Debt Instruments
. Repurchase Agreements
. Letters of Credit
. Floating- and Variable-Rate Obligations
Principal Risks. Because Money Market Master Portfolio invests
---------------
in debt securities, a decline in short-term interest rates will reduce the
overall yield of the Fund and the return on an investment. Strong equity markets
or a weak economy could cause a decline in short-term interest rates. Although
Money Market Master Portfolio invests only in high quality obligations, if an
issuer fails to pay interest or to repay principal, the return on an investment
in the Fund would be adversely affected and the net asset values of the Fund's
shares could decline. Net asset values may also be adversely affected by a
substantial increase in short-term interest rates.
An investment in the Fund is not a deposit account of Barclays
Global Fund Advisors or any of its affiliates and is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency. It
is possible to lose money by investing in the Fund.
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The return information provided below illustrates how the
performance of the Fund can vary, which is one indication of the risks of
investing in the Fund. Please keep in mind that the past performance of
Institutional Shares and Administrative Shares does not represent how those
shares will perform in the future.
Institutional Shares
CALENDAR YEAR TOTAL RETURNS
[GRAPH]
Year Returns
---- -------
1999 4.96%
BEST AND WORST QUARTERLY PERFORMANCE
(DURING THE PERIOD SHOWN ABOVE)
Best Quarter Return Worst Quarter Return
------------------- --------------------
1.38% (4th Q 1999) 1.14% (1st and 2nd Q 1999)
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/99
1-Year Since Inception (10/1/98)
------ -------------------------
4.96% 4.95%
To obtain current 7-day yield information for the
Institutional
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Shares, call 1-800-221-4524.
Administrative Shares
CALENDAR YEAR TOTAL RETURNS
[GRAPH]
Year Returns
---- -------
1999 4.65%
BEST AND WORST QUARTERLY PERFORMANCE
(DURING THE PERIOD SHOWN ABOVE)
Best Quarter Return Worst Quarter Return
------------------- --------------------
1.30% (4th Q 1999) 1.07% (1st and 2nd Q 1999)
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/99
1-Year Since Inception (10/1/98)
------ -------------------------
4.65% 4.64%
To obtain current 7-day yield information for the Administrative
Shares, call 1-800-221-4524.
5
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INVESTOR EXPENSES
This table describes the fees and expenses that you may pay if
you buy and hold shares of the Fund.
<TABLE>
<CAPTION>
Shareholder Fees (fees paid directly from Institutional Administrative
your investment) Shares Shares
------------- --------------
<S> <C> <C>
Maximum Sales Charge (Load) Imposed on Purchases None None
Maximum Deferred Sales Charge (Load) None None
Maximum Sales Charge (Load) imposed on
Reinvested Dividends None None
Redemption fee None None
Annual Fund Operating Expenses (expenses that are
deducted from Fund assets) as a percentage of
average net assets)
Management Fees1 0.10% 0.10%
Shareholder Servicing Fees 0.20% 0.25%
Distribution (12b-1) Fees None 0.25%
Other Expenses 0.72% 1.02%
Total Annual Fund Operating Expenses
(before reimbursement) 1.02% 1.62%
Reimbursement of Fund Expenses2 (0.57%) (0.87%)
Total Annual fund Operating Expenses
(after reimbursement) 0.45% 0.75%
</TABLE>
The following Example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time
periods indicated and then redeem all your shares at the end of those periods.
It also assumes that your investment has a 5% return each year and that the
Fund's operating expenses are as estimated above and remain the same. Although
your actual costs may be higher or lower, based on these assumptions your costs
would be:
Example 1 Year 3 Years
--------------------- ---------- -----------
Institutional Shares $46.04 $144.64
Administrative Shares $76.64 $239.66
---------------------
1 Includes investment advisory fee and ordinary operating expenses of the
Master Portfolio in which the Fund invests.
2 The Fund's administration agreement requires Hewitt Associates LLC to
absorb expenses of the Fund (excluding interest, brokerage commissions and
extraordinary expenses) to the extent necessary to assure that total
ordinary operating expenses of Institutional Shares of the Fund do not
exceed annually .45% of the average daily net assets attributable to
Institutional Shares and that total ordinary operating expenses of
Administrative Shares do not exceed annually .75% of the average daily net
assets attributable to Administrative Shares.
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INVESTMENT OBJECTIVE AND POLICIES
Investment Objective. Hewitt Money Market Fund (the "Fund") seeks to
--------------------
provide a high level of income, while preserving capital and liquidity, by
investing in high quality, short-term securities.
Investment Policies. The Fund pursues its investment objective by
-------------------
investing all of its investable assets in the Money Market Master Portfolio (the
"Portfolio"). The Portfolio is a series of Master Investment Portfolio ("MIP"),
which is an investment company, and has the same investment objective and
substantially the same investment policies as the Fund. It invests exclusively
in high quality, short-term debt securities (money market instruments),
including: U.S. Government obligations; certificates of deposit, time deposits
and other obligations issued by domestic banks; commercial paper and other debt
obligations of corporations; and repurchase agreements with respect to these
obligations. The Portfolio maintains a dollar-weighted average maturity of 90
days or less, and invests only in securities having remaining maturities of 397
days or less. All investments must be U.S. dollar denominated.
Securities purchased by the Portfolio, including repurchase
agreements, must be determined by Barclays Global Fund Advisors (the
"Investment Adviser") to present minimal credit risks pursuant to procedures
adopted by the Board of Trustees of MIP. Investments purchased by the Portfolio
will at the time of purchase be rated as high quality by at least two nationally
recognized statistical rating organizations ("NRSROs") (or by one NRSRO if the
instrument is rated by only one such organization). However, the Portfolio may
purchase an unrated investment if it is determined by the Investment Adviser to
be of comparable quality to an investment rated as high quality, in accordance
with procedures established by the Board of Trustees of MIP. Subsequent to its
purchase by the Portfolio, an issue of securities may cease to be rated or its
rating may be reduced below the minimum required rating. The Investment Adviser
will consider any such event in determining whether the Portfolio should
continue to hold the securities. If the Portfolio continues to hold the
securities, it may be subject to additional risk of default.
Types of Investments. Subject to applicable investment policies and
--------------------
restrictions, the Investment Adviser purchases and sells securities for the
Portfolio based on its assessment of current market conditions and its
expectations regarding future changes in interest rates and economic conditions.
The Portfolio may invest in the following types of securities:
U.S. Government Obligations - These obligations include debt
securities issued or guaranteed as to principal and interest by the U.S.
Government or one of its agencies or instrumentalities. Payment of principal and
interest on U.S. Government obligations (i) may be backed by the full faith and
credit of the United States (as with U.S. Treasury obligations and GNMA
certificates) or (ii) may be backed solely by the issuing or guaranteeing agency
or instrumentality itself (as with FNMA notes). In the latter case, the investor
must look principally to the agency or instrumentality issuing or guaranteeing
the obligation for ultimate repayment. There can be no assurance that the U.S.
Government would provide financial support to its
7
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agencies or instrumentalities where it is not obligated to do so. Certain types
of U.S. Government obligations are subject to fluctuations in yield or value due
to their structure or contract terms.
Bank Obligations - These obligations include, but are not limited to,
negotiable certificates of deposit ("CDs"), bankers' acceptances and fixed time
deposits of U.S. banks, foreign banks, foreign branches of U.S. banks, and U.S.
branches of foreign banks. The Fund may also invest in high-quality short-term
obligations of foreign branches of U.S. banks or U.S. branches of Foreign banks
that are denominated in and pay interest in U.S. dollars.
Fixed time deposits are bank obligations that are payable at stated
maturity dates and bear fixed rates of interest. They generally may be withdrawn
on demand, but may be subject to early withdrawal penalties which vary depending
upon market conditions and the remaining maturity of the obligation. Although
fixed time deposits do not have an established market, there are no contractual
restrictions on the Portfolio's right to transfer a beneficial interest in the
deposit to a third party. The Portfolio will not invest in fixed time deposits
subject to withdrawal penalties, other than overnight deposits, if as a result
more than 10% of the value of its net assets would be invested in illiquid
securities.
Obligations of foreign banks and foreign branches of U.S. banks
involve somewhat different investment risks from those affecting domestic
obligations. Liquidity could be impaired because of political and economic
developments and the obligations may be less marketable than comparable
obligations of U.S. banks. A foreign jurisdiction might impose withholding taxes
on interest income payable on those obligations and there is a risk that foreign
deposits may be seized or nationalized. Foreign governmental restrictions (such
as foreign exchange controls) may be adopted which might adversely affect the
payment of principal and interest on those obligations and the selection of
those obligations may be more difficult because there may be less publicly
available information concerning foreign banks or the accounting, auditing and
financial reporting standards, practices and requirements applicable to foreign
banks may differ from those applicable to U.S. banks. Foreign banks are not
subject to examination by any U.S. Government agency.
Commercial Paper and Short-Term Corporate Debt Instruments -
Commercial paper is a short-term, unsecured promissory note issued by a
corporation to finance its short-term credit needs. It is usually sold on a
discount basis and has a maturity at the time of issuance not exceeding nine
months. Variable amount master demand notes are a type of commercial paper.
These notes are demand obligations that permit the investment of fluctuating
amounts at varying market rates of interest pursuant to arrangements between the
issuer and a commercial bank acting as agent for the payee of the notes. Both
parties have the right to vary the amount of the outstanding indebtedness on the
notes.
Corporate debt securities include non-convertible bonds and debentures
that have not more than thirteen months remaining to maturity at the time of
their purchase by the Portfolio.
8
<PAGE>
Repurchase Agreements - These agreements involve the purchase of a
security by the Portfolio coupled with the agreement of the seller of the
security to repurchase that security on a future date and at a specified price
together with interest. The maturities of repurchase agreements are typically
quite short, often overnight or a few days. The Portfolio may enter into
repurchase agreements with respect to securities that it may purchase under its
investment policies without regard to the maturity of the securities underlying
the agreements. All repurchase transactions are fully collateralized. However,
the Portfolio may incur a loss on a repurchase transaction if the seller
defaults and the value of the underlying collateral declines or the Portfolio's
ability to sell the collateral is restricted or delayed. The Fund may
participate in pooled repurchase agreement transactions with other funds advised
by the Investment Adviser.
Letters of Credit - Debt obligations which the Portfolio is permitted
to purchase may be backed by an unconditional and irrevocable letter of credit
of a bank, savings and loan association or insurance company which assumes the
obligation for payment of principal and interest in the event of default by the
issuer. Letter of credit-backed investments must, in the opinion of the
Investment Adviser, be of investment quality comparable to other permitted
investments.
Floating-Rate and Variable-Rate Obligations - Debt obligations
purchased by the Portfolio may have interest rates that are periodically
adjusted at specified intervals or whenever a benchmark rate or index changes.
These floating- and variable-rate instruments may include certificates of
participation in such instruments.
Investment Restrictions. The Fund and the Portfolio are subject to
-----------------------
various additional restrictions on their investments in addition to those
described in this Prospectus. Certain of those restrictions, as well as the
restrictions on borrowings and concentration of investments described above and
the investment objective of the Fund and the Portfolio, are deemed fundamental
policies. These fundamental policies cannot be changed without the approval of
the holders of a majority of the Fund's or the Portfolio's outstanding voting
securities, as defined in the Investment Company Act of 1940 (the "Investment
Company Act").
MANAGEMENT ARRANGEMENTS
Board of Trustees. The business and affairs of the Fund are managed
-----------------
under the direction and supervision of the Board of Trustees of Hewitt Series
Trust ("Trust").
Investment Adviser. Barclays Global Fund Advisors (the "Investment
------------------
Adviser") serves as the investment adviser of the Portfolio. The Investment
Adviser is an indirect subsidiary of Barclays Bank PLC and is located at 45
Fremont Street, San Francisco, California 94105. As of December 31, 1999, the
Investment Adviser and its affiliates managed or provided investment advice for
assets in excess of $782 billion. The Portfolio pays the Investment Adviser a
monthly fee which is computed at the annual rate of 0.10% of the Fund's average
daily net assets. In consideration of this fee, the Investment Adviser provides
investment advice and is obligated to bear all of the ordinary operating
expenses of the Portfolio.
9
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The Investment Adviser manages the assets of the Portfolio in accordance
with the Portfolio's investment objective and policies. The primary
responsibility of the Investment Adviser is to formulate a continuing investment
program and to make all decisions regarding the purchase and sale of securities
for the Portfolio.
Administrator. Hewitt Associates LLC (the "Administrator") provides
-------------
administrative services to the Fund. The Administrator is located at 100 Half
Day Road, Lincolnshire IL 60069. Services provided by the Administrator include,
but are not limited to: managing the daily operations and business affairs of
the Fund, subject to the supervision of the Board of Trustees; overseeing the
preparation and maintenance of all documents and records required to be
maintained by the Fund and the Trust; preparing or assisting in the preparation
of regulatory filings, prospectuses and shareholder reports; providing, at its
own expense, the services of its personnel to serve as officers of the Trust;
and preparing and disseminating material for meetings of the Board of Trustees
and shareholders. The Fund pays the Administrator a monthly fee calculated at an
annual rate of 0.10% of the Fund's average daily net assets.
The Administrator also serves as Shareholder Servicing Agent for
Institutional Shares and is paid compensation by the Fund for furnishing various
shareholder related services. See "Distribution and Servicing Arrangements."
HOW TO BUY SHARES
The Fund offers two classes of its shares to investors: Institutional
Shares and Administrative Shares. No sales commissions or other charges are
imposed when shares are purchased or redeemed.
Institutional Shares. These shares are offered for sale exclusively to
--------------------
employee benefit plans which are recordkeeping clients of Hewitt Associates LLC.
Employee benefit plans may include 401(k) plans and plans qualified under
Sections 401(a) or 403(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), health and welfare plans and executive deferred compensation plans.
Participants in any employee benefit plan that allows participants to direct the
investment of their plan accounts should contact their plan administrator if
they wish to purchase shares of the Fund for their plan accounts. The plan
administrator will provide information regarding the procedures to be followed
to purchase shares.
For employee benefit plans seeking additional information on purchasing
Institutional Shares, please call the Administrator at 1-800-890-3200. The
appropriate plan fiduciary must submit a completed account application before
the plan or its participants may purchase Institutional Shares.
10
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Administrative Shares. These shares are available for purchase by
---------------------
individual retirement accounts ("IRAs") and other investors, including
individuals, trusts and corporations. They can be purchased through Hewitt
Services LLC, which serves as distributor of the Fund's shares (the
"Distributor"). Administrative Shares bear certain distribution related
expenses. See "Distribution and Servicing Arrangements."
You should contact the Distributor to purchase Administrative Shares. If
you do not have a brokerage account with the Distributor, you will need to
submit a completed Account Application before purchasing Administrative Shares.
For additional information on purchasing Administrative Shares or to
request an Account Application, please call the Distributor at 1-800-890-3200.
Minimum Initial and Subsequent Investment Amounts. Generally, no minimum
-------------------------------------------------
initial or subsequent investment requirements apply to the purchase of
Institutional Shares or Administrative Shares. However, if Administrative Shares
are not held in an IRA or other account with a financial intermediary (including
the Distributor) that maintains record ownership of shares on an omnibus basis
for its customers: (i) the initial purchase of Administrative Shares must be in
an amount of $10,000 or more; (ii) subsequent purchases of Administrative Shares
must be $1,000 or more; and (iii) the Fund will have the right to effect a
mandatory redemption of those shares if, as a result of one or more redemptions,
your shares have an aggregate value of less than $5,000. Before the Fund effects
a mandatory redemption of shares, you will be notified and given 60 days to
increase the amount of your investment in the Fund.
Shareholder Accounts. The Fund does not issue share certificates for
--------------------
Institutional Shares or Administrative Shares. Instead, an account is maintained
for each shareholder by Investors Bank & Trust Company, as the Fund's transfer
agent (the "Transfer Agent"), or by the Distributor as the Shareholder Servicing
Agent for Administrative Shares. Your account will reflect the full and
fractional shares of the Fund that you own. Shareholders will be sent
confirmations of each transaction in shares and monthly statements showing
account balances.
General Information. Shares of the Fund may be purchased on any Business
-------------------
Day. A Business Day is any day that the New York Stock Exchange (NYSE) is open
and that is not a federal bank holiday. All purchases of shares are effected at
the net asset value per share next determined after (i) an order in proper form
is received by the Administrator (for Institutional Shares) or by the
Distributor (for Administrative Shares) and (ii) federal funds are received by
the Fund's custodian. Purchase orders received prior to the close of regular
trading on the NYSE (normally, 4:00 p.m., Eastern time) are effected at the net
asset value per share determined as of the close of regular trading on the NYSE
on that Business Day. See "Net Asset Value." Orders received after the close of
regular trading on the NYSE are effected at the net asset value per share
determined on the next Business Day.
Purchase by Federal Funds Wire. Shares may be purchased by wiring federal
------------------------------
funds to the Fund's transfer agent. The Fund does not impose any transaction
charges; however, wire charges may be imposed by the bank which transmits the
wire. Purchase payments should
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be wired to:
Investors Bank & Trust Company
Boston, Massachusetts
attn: Transfer Agent
ABA number: 011001438
DDA number: 000011220
For further credit to: account name, fund and account info
Purchase by Check (Administrative Shares Only). Administrative Shares
-----------------
may be purchased by sending a check as described below. If you purchase shares
by check, your purchase order will not become effective until federal funds are
credited to the Fund's account, which normally will occur on the Business Day
following receipt of the check. Checks to purchase Administrative Shares should
be sent to:
Hewitt Portfolio
P.O. Box 101167 .
Atlanta, GA 30392-1167
HOW TO REDEEM SHARES
You may redeem all or a portion of your shares of the Fund on any
Business Day without any charge by the Fund. Shares are redeemed at their net
asset value per share next computed after the receipt of a redemption request in
proper form. Requests to redeem shares may be made as described below.
Institutional Shares. Participants in any employee benefit plan that
--------------------
allows participants to direct the investment of their plan accounts should
contact their plan administrator for information and instructions on redeeming
shares. Requests by employee benefit plans to redeem Institutional Shares may be
transmitted to the Administrator, as Shareholder Servicing Agent for
Institutional Shares, in accordance with procedures established by the plans
with the Administrator. Redemption proceeds for Institutional Shares will be
paid by federal funds wire to a bank account designated by the plan.
For additional information on redeeming Institutional Shares, please
call 1-800-890-3200.
Administrative Shares. Requests to redeem Administrative Shares may
---------------------
be made in writing or by telephone as described below. Redemption proceeds for
Administrative Shares will be paid by check or, if you request, by federal funds
wire (minimum wire amount $50,000) to a pre-designated bank account.
If you purchase shares by sending a check (including a certified or
cashiers check), the payment of the proceeds of a redemption of those shares may
be delayed until the check has cleared. This may take up to 15 days. For this
reason, if you need immediate access to
12
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your investment, you should purchase shares by wiring federal funds.
In order to redeem Administrative Shares that are not held through a
financial intermediary (including the Distributor), a completed Account
Application must be on file with the Distributor. See "How to Buy Shares." You
may designate a bank account to receive redemption payments on the Account
Application. You may change this designation at any time, by providing written
instructions to the Distributor. These instructions must be signed by each
person shown on the account registration as an owner of the account, and the
signatures must be guaranteed by an eligible guarantor institution as described
under "Written Redemption Requests" below. Signature guarantees may also be
required for you to change your address on the Fund's records.
For additional information on redeeming Administrative Shares, please call
1-800-890-3200.
General Information. Redemption requests are effected at the net asset
-------------------
value per share next computed after receipt by the Administrator (for
Institutional Shares) or the Distributor (for Administrative Shares) of a
redemption request in proper form. Requests received prior to the close of
regular trading on the NYSE (normally, 4:00 p.m., Eastern time) are effected at
the net asset value per share determined as of the close of regular trading on
the NYSE on that Business Day. See "Net Asset Value." Requests received after
the close of regular trading on the NYSE are effected at the net asset value per
share determined on the next Business Day. Redemption proceeds are usually
mailed or wired on the Business Day following the day a redemption is effected.
In unusual circumstances, the Fund may suspend the right of redemption or
postpone the payment of redemption proceeds for more than seven days as
permitted under the Investment Company Act.
The Fund may pay redemption proceeds by distributing securities held by the
Portfolio, but only in the unlikely event that the Board of Trustees of the
Trust determines that payment of the proceeds in cash would adversely affect
other shareholders of the Fund. A shareholder who redeems during any 90 day
period shares having a value not exceeding the lesser of (i) $250,000 or (ii) 1%
of the net assets of the Fund, will not be subject to this procedure.
Telephone Redemption Procedures (Administrative Shares Only). You may
-------------------------------
redeem Administrative Shares by calling the Distributor at 1-800-890-3200. You
will be asked to provide the account name and number, and the amount of the
redemption. Proceeds of the redemption will be paid by sending you a check,
unless you request payment by federal funds wire to a pre-designated bank
account (minimum wire amount $50,000). A telephone redemption request may be
made only if the telephone redemption procedure has been selected on the Account
Application or if written instructions authorizing telephone redemption have
been filed with the Distributor.
The Distributor uses certain reasonable procedures to confirm that
telephone redemption requests are genuine, such as recording telephone calls,
providing written
13
<PAGE>
confirmation of transactions, or requiring a form of personal identification or
other information prior to effecting a telephone redemption. If these procedures
are used, the Fund, the Distributor and the Transfer Agent will not be liable to
you for any loss due to fraudulent or unauthorized telephone instructions.
During periods of severe market or economic conditions, it may be difficult
to contact the Distributor by telephone. In that event, you should follow the
procedures described below for written redemption requests, but send the request
by overnight delivery service to:
Hewitt Portfolio
P.O. Box 101167
Atlanta, GA 30392-1167
Written Redemption Requests (Administrative Shares Only). You may redeem
---------------------------
Administrative Shares by sending a written redemption request. The request must
include the complete account name and address and the amount of the redemption
and must be signed by each person shown on the account registration as an owner
of the account. The signature of each person signing the request must be
guaranteed by an eligible guarantor institution if the redemption is $5,000 or
more. Organizations that may qualify as eligible guarantor institutions include
banks, brokers, dealers, national securities exchanges, clearing agencies,
credit unions, and savings associations. The Fund reserves the right to request
additional information from, and to make reasonable inquiries of, any eligible
guarantor institution. Proceeds of the redemption will be paid by sending you a
check, unless you request payment by federal funds wire to a pre-designated bank
account (minimum wire amount $50,000).
Written redemption requests should be sent to:
Hewitt Portfolio
P.O. Box 101167
Atlanta, GA 30392-1167
NET ASSET VALUE
The net asset values per share of Institutional Shares and Administrative
Shares are computed separately on each Business Day. Institutional Shares and
Administrative Shares will not have the same net asset values because the
expenses of the two share classes differ. Net asset value per share is
determined as of the close of regular trading on the NYSE (normally, 4:00 p.m.
Eastern time). However, on any day the trading markets for both U.S. Government
securities and money market instruments close early, net asset value will be
computed as of the earlier closing time. Unlike most other money market funds,
the Fund does not seek to maintain a stable net asset value per share.
Net asset value per share of each class of the Fund's shares is calculated
by dividing the value of the Fund's total assets attributable to that class,
less the liabilities (including accrued
14
<PAGE>
expenses) of the class and its allocable share of the Fund's liabilities (and
accrued expenses), by the number of shares of the class outstanding. Because the
Fund invests in the Portfolio, its assets will consist primarily of an interest
in the Portfolio. The value of this interest will depend on the value of the
assets of the Portfolio and its liabilities and expenses.
In determining the value of the Portfolio's assets, securities held by the
Portfolio are valued using the "amortized cost" method of valuation. This method
involves valuing each investment at cost and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the investment. Amortized cost
valuation provides certainty in valuation, but may result in periods during
which the value of an investment, as determined by amortized cost, is higher or
lower than the price that would be received if the investment were sold. The
Investment Adviser monitors the deviation between the net asset value of the
Portfolio determined by using available market quotations or market equivalents
and its net asset value determined by using amortized cost. If it is determined
that use of amortized cost valuation will result in material dilution or other
unfair results, the assets of the Portfolio may be valued based upon market
quotations.
DIVIDENDS AND DISTRIBUTIONS
Dividends are declared and paid monthly on each class of the Fund's shares
from net investment income (after deduction of expenses) and any realized
short-term capital gains allocable to that class. Distributions of net realized
long-term capital gains, if any, are declared and paid annually at the end of
the Fund's fiscal year. All dividends and other distributions are automatically
reinvested in full and fractional shares of the Fund at the applicable net asset
value per share in effect on the payment date, unless otherwise requested. Plans
may request that dividends and other distributions on Institutional Shares be
paid by check by notifying the Administrator. Shareholders who own
Administrative Shares may request that dividends and other distributions be paid
by check by sending a written request to the Distributor. Any such request must
be received at least five Business Days prior to a payment date in order to be
effective on that date.
Dividends are payable to all shareholders of record as of the time of
declaration. Shares become entitled to any dividend declared beginning on the
day on which they are purchased and are entitled to receive any dividends
declared through the day before they are redeemed.
In order to satisfy certain distribution requirements of the Code, the Fund
may declare special or regular year-end dividend and capital gains distributions
during October, November or December. If received by shareholders by January 31,
these distributions are deemed to have been paid by the Fund and received by
shareholders on December 31 of the prior year.
TAXES
Taxation of the Fund. The Fund has elected and intends to qualify each year
--------------------
as a "regulated investment company" under Subchapter M of the Code. If so
qualified, the Fund will
15
<PAGE>
not be subject to federal income tax to the extent it distributes its net income
to shareholders.
Federal Taxation of Shareholders. Dividend distributions, whether received
--------------------------------
in cash or reinvested in additional shares, will be taxable as ordinary income.
Although the Fund does not expect to distribute any long-term capital gains,
investors will also be subject to tax on any capital gains distributions they
receive. Since the Fund does not expect to earn dividend income, the dividends
and other distributions the Fund pays will generally not qualify for the
dividends-received deduction available to corporate investors. In January of
each year, the Fund sends each shareholder a statement showing the tax status of
distributions for the past calendar year.
The redemption of shares of the Fund is a taxable event and will result in
a gain (or loss) for federal income tax purposes, depending on the amount you
receive and the cost of your shares.
The Fund is required to withhold 31% of all taxable distributions and
redemption proceeds paid to shareholders who either have not complied with IRS
taxpayer identification regulations or are otherwise subject to backup
withholding. Investors are asked to certify in their Account Applications that
their taxpayer identification numbers are correct and that they are not subject
to backup withholding. Failure to provide this certification will result in
backup withholding.
State and Local Taxes. Dividends and other distributions paid by the Fund
---------------------
and received by an investor may be subject to state and local taxes. Although
shareholders of the Fund do not directly receive interest on U.S. Government
securities held by the Fund, certain states and localities may allow the
character of the Fund's income to pass through to shareholders. If so, the
portion of dividends paid by the Fund that is derived from interest on certain
U.S. Government securities may be exempt from state and local taxes. Applicable
rules vary from state to state, and interest on certain securities of U.S.
Government agencies may not qualify for the exemption in some states. The United
States Supreme Court has ruled that income from certain types of repurchase
agreements involving U.S. Government securities does not constitute interest on
U.S. Government securities for this purpose. However, it is not clear whether
the Court's holding extends to all types of repurchase agreements involving U.S.
Government securities in which the Fund may invest. Any exemption from state and
local income taxes does not preclude states from assessing other taxes (such as
intangible property taxes) on the ownership of U.S. Government securities.
The discussion set forth above regarding federal and state income taxation
is included for general information only. Prospective investors should consult
their own tax advisors concerning the federal and state tax consequences of an
investment in the Fund.
DISTRIBUTION AND SERVICING ARRANGEMENTS
Distributor. Hewitt Services LLC (the "Distributor"), a broker-dealer
-----------
affiliated with the Administrator, serves as the distributor of the Fund's
shares. The Distributor is located at
16
<PAGE>
100 Half Day Road, Lincolnshire IL 60069.
Shareholder Servicing Arrangements. The Fund has retained Hewitt Associates
----------------------------------
LLC to serve as Shareholder Servicing Agent for Institutional Shares. As
Shareholder Servicing Agent, Hewitt Associates LLC is responsible for receiving
on behalf of the Transfer Agent orders by employee benefit plans to purchase and
redeem Institutional Shares and for maintaining records showing the number of
Institutional Shares allocable to individual participant accounts in those
plans. In addition, the Shareholder Servicing Agent sends all shareholder
communications relating to the Fund to shareholders and to plan participants or
arranges for these materials to be sent. For these services, the Fund pays the
Hewitt Associates LLC a monthly fee calculated at an annual rate of 0.20% of the
average daily net assets of the Fund attributable to Institutional Shares.
The Fund has retained the Distributor to serve as Shareholder Servicing
Agent for Administrative Shares. As Shareholder Servicing Agent, the Distributor
is responsible for maintaining records showing the number of Administrative
Shares owned by IRAs established through the Distributor and by other investors
who have purchased Administrative Shares through the Distributor. In addition,
the Shareholder Servicing Agent sends all shareholder communications relating to
the Fund to holders of Administrative Shares or arranges for these materials to
be sent. For these services, the Fund pays Hewitt Services LLC a monthly fee
calculated at an annual rate of 0.25% of the average daily net assets of the
Fund attributable to Administrative Shares. The Fund also reimburses each
Shareholder Servicing Agent for certain out-of-pocket expenses.
Distribution Fee (Administrative Shares only). The Fund has adopted a plan
----------------
pursuant to Rule 12b-1 under the Investment Company Act which allows the Fund to
pay expenses relating to the distribution of Administrative Shares. Under the
plan, the Fund pays a fee to the Distributor, calculated at an annual rate of
0.25% of the average daily net assets of Administrative Shares, as compensation
for services rendered in connection with the sale and distribution of
Administrative Shares. This fee is an expense of Administrative Shares only and
is not borne by Institutional Shares. Because the fee is paid out of Fund assets
on an on-going basis, over time the fee will increase the cost of an investment
in Administrative Shares.
PERFORMANCE INFORMATION
The Fund may publish its "current yield" and "effective yield" in
advertisements, sales materials and shareholder reports. Current yield refers to
the income generated by an investment in the Fund over a seven-day period; the
income is then annualized. In annualizing income, the amount of income generated
by the investment during the period is assumed to be generated each week over a
52-week period and is shown as a percentage of the investment. The effective
yield is calculated in the same manner, but when annualized, the income earned
by an investment in the Fund is assumed to be reinvested. The effective yield
will be slightly higher than the current yield because of the compounding effect
of the assumed reinvestment. All quotations of investment performance are based
upon historical investment results and are not intended to predict future
performance.
17
<PAGE>
In addition, comparative performance information may be used from time to
time in advertisements, sales literature and shareholder reports. This
information may include data, ratings and rankings from Lipper Analytical
Services, Inc., IBC Financial Data Money Fund Report, The Bank Rate Monitor,
Morningstar and other industry publications, business periodicals and services.
Comparisons to recognized market indices and to the returns on specific money
market securities or types of securities or investments may also be used. The
Fund may disseminate yields for periods longer than seven days, and may report
its total return. The "total return" of the Fund refers to the average annual
compounded rate of return over a specified period (as stated in the
advertisement) that would equate an initial amount invested at the beginning of
the period to the end of period redeemable value of the investment, assuming the
reinvestment of all dividends and distributions.
FINANCIAL HIGHLIGHTS
The following table presents, for Administrative Shares and Institutional
Shares of the Fund, financial highlights for a share outstanding throughout the
period indicated. The information in the table has been audited by KPMG LLP, the
Fund's independent auditors. It should be read in conjunction with the financial
statements and related notes contained in the annual report to shareholders of
the Fund. The annual report to shareholders may be obtained without charge.
Hewitt Money Market Fund
For the Periods from October 1, 1998 (commencement of operations)
to February 28, 1999 and March 1, 1999 to December 31, 1999.
<TABLE>
<CAPTION>
10/1/98 to 2/28/99* 3/1/99 to 12/31/99**
-----------------------------------------------------------------------
Administrative Institutional Administrative Institutional
Shares Shares Shares Shares
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period........ $100.00 $100.00 $100.02 $100.30
Income from investment operations:
Net investment income.................. 1.83 1.97 3.83 3.90
Net realized and unrealized gain
(loss) on investments................... 0.00 0.00 0.03 0.22
------- ------- ------- -------
Total from investment operations............ 1.83 1.97 3.86 4.12
Less distributions:
From net investment income............. (1.81) (1.67) (3.83) (3.90)
</TABLE>
-------------
* For the period from October 1, 1998 (commencement of operations) to February
28, 1999.
** For the ten months ended December 31, 1999. The Fund changed its fiscal year
end from February 28 to December 31.
18
<PAGE>
<TABLE>
<CAPTION>
10/1/98 to 2/28/99* 3/1/99 to 12/31/99**
-----------------------------------------------------------------------
Administrative Institutional Administrative Institutional
Shares Shares Shares Shares
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
From net realized gains................. 0.00 0.00 0.00*** 0.00***
Total distributions:......................... (1.81) (1.67) (3.83) (3.90)
Net Asset Value, end of period............... $100.02 $100.30 $100.05 $100.52
======= ======= ======= =======
Total Return (not annualized)................ 1.84% 1.98% 3.92% 4.18%
Ratios/Supplemental data:
Net assets, end of period (000)......... $45,916 $10,949 $54,318 $43,068
Number of shares outstanding, end
of period (000)......................... 459 109 543 428
Ratios to average net assets****:
Ratio of expenses to average net assets (1).. 0.75% 0.45% 0.74% 0.44%
Ratio of net investment income (loss)
to average net assets (2)............... 4.52% 4.86% 4.61% 5.03%
Portfolio turnover........................... -- -- -- --
(1) Ratio of expenses to average net
assets prior to reimbursement of
fees and expenses****................... 1.32% 1.62% 1.02% 0.72%
(2) Ratio of net investment income
(loss) to average net assets prior
to reimbursement of fees
and expenses****........................ 3.95% 3.69% 4.33% 4.75%
</TABLE>
-------------------
*** Rounds to less than $0.01.
**** Annualized.
19
<PAGE>
ADDITIONAL INFORMATION
Organization. The Trust is a Delaware business trust that was organized on
------------
July 7, 1998. It is authorized to issue an unlimited number of shares of
beneficial interest, $.001 par value. As of the date of this Prospectus, the
Trust has only one series of its shares outstanding, representing interests in
the Fund. These shares are divided into two classes of shares (Institutional
Shares and Administrative Shares). The Board of Trustees has the power to
establish additional series of shares, representing interests in separate
investment portfolios and, subject to applicable laws and regulations, to issue
two or more classes of shares of each series. Shares are fully paid and
non-assessable, and have no preemptive or conversion rights.
Shareholders of the Fund are entitled to vote, together with the holders of
any other series of the Trust's shares, on the election of Trustees and the
ratification of the Trust's independent auditors when those matters are voted
upon at a meeting of shareholders. Shareholder will also be entitled to vote on
certain other matters as required by the Investment Company Act or the Trust's
Declaration of Trust. On these other matters, shares of the Fund will generally
be voted as a separate class from other series of the Trust's shares.
Institutional Shares and Administrative Shares will also vote as separate
classes on certain matters. Each share (and fractional share) is entitled to one
vote (or fraction thereof). However, if shares of more than one class or series
vote together on a matter, each share will have that number of votes which
equals the net asset value of such share (or fraction thereof). All shares have
non-cumulative voting rights, meaning that shareholders entitled to cast more
than 50% of the votes for the election of Trustees can elect all of the Trustees
standing for election if they choose to do so. As discussed below, the Fund will
pass through to its shareholders the right to vote on Portfolio matters
requiring shareholder approval.
Information Concerning Investment Structure. The Fund does not invest
-------------------------------------------
directly in securities. Instead, it invests all of its investable assets in the
Portfolio, a separate series of MIP. The Portfolio has the same investment
objective and substantially the same investment policies as the Fund. The
Portfolio, in turn, purchases, holds and sells investments in accordance with
that objective and those policies. The Trustees of the Trust believe that the
per share expenses of the Fund (including its share of the Portfolio's expenses)
will be less than or approximately equal to the expenses that the Fund would
incur if its assets were invested directly in securities and other investments.
The Fund may withdraw its assets from the Portfolio at any time, and will
do so if the Trustees believe it to be in the best interest of the Fund's
shareholders. If the Fund withdraws its investment in the Portfolio, it will
either invest directly in securities in accordance with the investment policies
described in this Prospectus or will invest in another pooled investment vehicle
that has the same investment objective and policies as the Fund. In connection
with the withdrawal of its interest in the Portfolio, the Fund could receive
securities and other investments from the Portfolio instead of cash. This could
cause the Fund to incur certain expenses.
A change in the investment objective, policies or restrictions of the
Portfolio may
20
<PAGE>
cause the Fund to withdraw its investment in the Portfolio. Alternatively, the
Fund could seek to change its objective, policies or restrictions to conform to
those of the Portfolio. The investment objective and certain of the investment
restrictions of the Portfolio may not be changed without the approval of
investors in the Portfolio. When the Fund is asked to vote on such a change or
on other matters concerning the Portfolio, the Fund will hold a shareholders
meeting and vote its interest in the Portfolio in the same manner as shares of
the Fund are voted.
Shares of the Portfolio will be held by investors other than the Fund.
These investors may include other series of the Trust, other mutual funds and
other types of pooled investment vehicles. When investors in the Portfolio vote
on matters affecting the Portfolio, the Fund could be outvoted by other
investors. The Fund may also otherwise be adversely affected by other investors
in the Portfolio. These other investors offer shares (or interests) to their
investors which have costs and expenses that differ from those of the Fund.
Thus, the investment returns for investors in other funds that invest in the
Portfolio may differ the investment return of shares of the Fund. These
differences in returns are also present in other fund structures. Information
about other holders of shares of the Portfolio is available from the Shareholder
Servicing Agents.
Custodian. Investors Bank & Trust Company (the "Custodian") is the Fund's
---------
custodian. The Custodian maintains custody of all securities and cash assets of
the Fund and the Portfolio and is authorized to hold these assets in securities
depositories and to use subcustodians.
Transfer Agent. Investors Bank & Trust Company (the "Transfer Agent") is
--------------
the Fund's transfer agent and dividend disbursing agent. The Transfer Agent has
entered into arrangements with the Administrator under which the Administrator,
as Shareholder Servicing Agent for Institutional Shares, is authorized to
receive and is responsible to transmit to the Transfer Agent orders to purchase
and redeem Institutional Shares that are received from employee benefit plans.
Pursuant to these arrangements, the Administrator also maintains records showing
the number of Institutional Shares allocable to individual participant accounts
in employee benefit plans. The Distributor maintains records showing the number
of Administrative Shares owned by IRAs established through the Distributor and
by other investors who have purchased Administrative Shares through the
Distributor.
21
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus. If given or made,
such other information and representations should not be relied upon as having
been authorized by the Trust.
This Prospectus does not constitute an offer in any state in which,
or to any person, to whom, such offer may not lawfully be made.
INVESTMENT ADVISER
Barclays Global Fund Advisors
45 Fremont Street
San Francisco, California 94105
DISTRIBUTOR
Hewitt Services LLC
100 Half Day Road
Lincolnshire, Illinois 60069
ADMINISTRATOR
Hewitt Associates LLC
100 Half Day Road
Lincolnshire, Illinois 60069
TRANSFER AGENT
Investors Bank & Trust Company
200 Clarendon Street 16th Floor
Boston, Massachusetts 02116
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street 16th Floor
Boston, Massachusetts 02116
INDEPENDENT AUDITORS
KPMG LLP
99 High Street
Boston, Massachusetts 02110
LEGAL COUNSEL
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
22
<PAGE>
The Fund sends annual and semi-annual reports to shareholders.
These reports contain information regarding the investments of the Portfolio and
the Fund's investment performance and are available without charge from the
Shareholder Servicing Agents or your plan administrator. If you have questions
regarding the Fund, shareholder accounts, dividends or share purchase and
redemption procedures, or if you wish to receive the most recent annual or
semi-annual reports, please call 1-800-890-3200.
This Prospectus sets forth concisely the information about the
Fund and the Trust that you should know before investing. Additional information
about the Fund and the Trust has been filed with the Securities and Exchange
Commission (SEC) in a Statement of Additional Information (SAI) dated July 26,
2000, which is incorporated herein by reference and is available without charge
by writing to the Shareholder Servicing Agents or by calling 1-800-890-3200.
Information about the Fund (including the SAI) can be reviewed and copied at the
SEC's Public Reference Room in Washington D.C. Information on the operation of
the Public Reference Room may be obtained by calling the SEC at 1-202-942-8090.
Reports and other information about the Fund is also available on the EDGAR
database on the SEC's Internet site at http://www.sec.gov and copies of this
information may be obtained, upon payment of a duplicating fee, by writing the
Public Reference Section of the SEC, Washington, D.C. 20549-0102, or at the
following E-mail address: [email protected].
SEC File No. 811-8885
23
<PAGE>
HEWITT MONEY MARKET FUND
STATEMENT OF ADDITIONAL INFORMATION
July 26, 2000
INSTITUTIONAL SHARES
ADMINISTRATIVE SHARES
-----------------------
Hewitt Money Market Fund (the "Fund") is a series of Hewitt Series Trust
(the "Trust"), a diversified, open-end, management investment company. This
Statement of Additional Information ("SAI") contains information about the Fund
which supplements the information contained in the Fund's Prospectus. The
investment objective and policies of the Fund are described in the Prospectus.
This SAI is not a prospectus and should be read in conjunction with the
Fund's current Prospectus, dated July 26, 2000. A copy of the Prospectus may
be obtained without charge by writing Hewitt Associates LLC, the Fund's
administrator, at 100 Half Day Road, Lincolnshire, Illinois 60069 or by calling
1-800-890-3200.
B-1
<PAGE>
TABLE OF CONTENTS
Page
----
INTRODUCTION................................................................B-3
INVESTMENT RESTRICTIONS.....................................................B-3
INVESTMENT POLICIES AND PRACTICES...........................................B-5
MANAGEMENT.................................................................B-11
DISTRIBUTION ARRANGEMENTS..................................................B-14
EXPENSES...................................................................B-16
DETERMINATION OF NET ASSET VALUE...........................................B-18
PURCHASE AND REDEMPTION OF SHARES..........................................B-19
PORTFOLIO TRANSACTIONS.....................................................B-20
TAXES......................................................................B-22
PERFORMANCE INFORMATION....................................................B-23
ADDITIONAL INFORMATION.....................................................B-25
SAI APPENDIX...............................................................B-29
B-2
<PAGE>
INTRODUCTION
The Trust is a registered under the Investment Company Act of 1940
(the "1940 Act") as an open-end, management investment company. The Fund, which
is currently the sole investment portfolio of the Trust, pursues its investment
objective by investing all of its investable assets in the Money Market Master
Portfolio (the "Portfolio"). The Portfolio is a series of Master Investment
Portfolio ("MIP") and has the same investment objective and investment
restrictions as the Fund. MIP, like the Trust, is registered under the 1940 Act
as an open-end management investment company.
INVESTMENT RESTRICTIONS
Fundamental Investment Restrictions. The Fund and the Portfolio are
-----------------------------------
subject to certain investment restrictions which are fundamental policies. These
restrictions may not be changed without the approval of a majority of the
outstanding voting securities of the Fund or the Portfolio, as defined by the
1940 Act. A "majority of the outstanding voting securities" of a Fund or of the
Portfolio means the lesser of (i) 67% of the shares of that Fund or of the
Portfolio represented at a meeting at which holders of more than 50% of the
outstanding shares are present in person or represented by proxy or (ii) more
than 50% of the outstanding shares of the Fund or the Portfolio.
Under these fundamental restrictions, neither the Fund nor the
Portfolio may:
(1) purchase the securities of issuers conducting their principal
business activity in the same industry if, immediately after the purchase
and as a result thereof, the value of the Fund's investments in that
industry would be 25% or more of the current value of the Fund's total
assets, provided that there is no limitation with respect to investments in
(i) obligations of the U.S. Government, its agencies or instrumentalities;
(ii) obligations of domestic banks; and provided further, that the Fund may
invest all its assets in a diversified, open-end management investment
company, or a series thereof, having substantially the same investment
objective, policies and restrictions as the Fund;
(2) purchase or sell real estate or real estate limited partnerships
(other than securities secured by real estate or interests therein or
securities issued by companies that invest in real estate or interests
therein);
(3) purchase commodities or commodity contracts (including futures
contracts), except that the Fund and the Portfolio may purchase securities
of an issuer which invests or deals in commodities or commodity contracts;
(4) purchase interests, leases, or limited partnership interests in
oil, gas, or other mineral exploration or development programs;
(5) purchase securities on margin (except for short-term credits
necessary for the clearance of transactions and except for margin payments
in connection with options,
B-3
<PAGE>
futures and options on futures) or make short sales of securities;
(6) underwrite securities of other issuers, except to the extent that
the purchase of permitted investments directly from the issuer thereof or
from an underwriter for an issuer and the later disposition of such
securities in accordance with the Fund's or the Portfolio's investment
program may be deemed to be an underwriting; and provided further, that the
purchase by the Fund of securities issued by a diversified, open-end
management investment company, or a series thereof, having substantially
the same investment objective, policies and restrictions as the Fund shall
not constitute an underwriting for this purpose;
(7) make investments for the purpose of exercising control or
management; provided that the Fund may invest all its assets in a
diversified, open-end management investment company, or a series thereof,
having substantially the same investment objective, policies and
restrictions as the Fund;
(8) borrow money or issue senior securities as defined in the
Investment Company Act of 1940, except that the Fund and the Portfolio may
each borrow from banks up to 10% of the current value of its net assets for
temporary purposes only in order to meet redemptions, and these borrowings
may be secured by the pledge of up to 10% of the current value of its net
assets (but investments may not be purchased while any such outstanding
borrowing in excess of 5% of net assets exists);
(9) write, purchase or sell puts, calls, straddles, spreads, warrants,
options or any combination thereof, except that the Fund and the Portfolio
may purchase securities with put rights in order to maintain liquidity;
(10) purchase securities of any issuer (except securities issued or
guaranteed by the U.S. Government, its agencies and instrumentalities) if,
as a result, with respect to 75% of total assets, more than 5% of the value
of the Fund's or the Portfolio's total assets would be invested in the
securities of any one issuer or, with respect to 100% of total assets, the
Fund's or the Portfolio's ownership would be more than 10% of the
outstanding voting securities of such issuer, provided that the Fund may
invest all its assets in a diversified, open-end management investment
company, or a series thereof, having substantially the same investment
objective, policies and restrictions as the Fund; or
(11) make loans, except that the Fund and the Portfolio may purchase
or hold debt instruments or lend its portfolio securities in accordance
with its investment policies, and may enter into repurchase agreements.
Non-Fundamental Investment Restrictions. The Fund and the Portfolio
---------------------------------------
are also subject to the following additional investment restrictions which are
non-fundamental policies. These restrictions may be changed by the Board of
Trustees of the Trust or the Board of Trustees of MIP, as the case may be.
B-4
<PAGE>
(1) The Fund and the Portfolio may each invest in shares of other
open-end, management investment companies, subject to the limitations of
Section 12(d)(1) of the 1940 Act. Under the 1940 Act, the Fund's and the
Portfolio's investment in such securities currently is limited, subject to
certain exceptions, to (i) 3% of the total voting stock of any one
investment company, (ii) 5% of the Portfolio's or the Fund's net assets
with respect to any one investment company, and (iii) 10% of the
Portfolio's or the Fund's net assets in the aggregate. Other investment
companies in which the Portfolio or the Fund invest can be expected to
charge fees for operating expenses, such as investment advisory and
administration fees, that would be in addition to those charged by the
Portfolio and the Fund.
(2) The Fund and the Portfolio may not invest more than 10% of
its net assets in illiquid securities. For this purpose, illiquid
securities include, among others, (i) securities that are illiquid by
virtue of the absence of a readily available market or legal or contractual
restrictions on resale, (ii) fixed time deposits that are subject to
withdrawal penalties and that have maturities of more than seven days, and
(iii) repurchase agreements not terminable within seven days.
(3) The Portfolio and the Fund may lend securities from its
portfolio to brokers, dealers and financial institutions, in amounts not to
exceed (in the aggregate) one third of its total assets. Any such loans of
portfolio securities will be fully collateralized based on values that are
marked to market daily. The Portfolio or the Fund will not enter into any
portfolio security lending arrangement having a duration of longer than one
year.
General. Unless otherwise specified, all percentage and other
-------
restrictions, requirements and limitations on investments set forth in this
Statement of Additional Information, as well as those set forth in the
Prospectus, apply immediately after the purchase of an investment, and
subsequent changes and events do not constitute a violation or require the sale
of any investment by the Portfolio or the Fund.
INVESTMENT POLICIES AND PRACTICES
General. The following information supplements the description of the
-------
investment policies and practices of the Portfolio as described in the
Prospectus.
Currently, the Fund pursues its investment objective by investing all
of its investable assets in the Portfolio. The Fund may withdraw its investment
from the Portfolio at any time if the Board of Trustees of the Trust (the "Board
of Trustees") determines that it is in the best interest of the Fund to do so.
Upon any such withdrawal, the Fund's assets would be invested in accordance with
the investment policies described below with respect to the Portfolio.
B-5
<PAGE>
The assets of the Portfolio consist only of obligations maturing within
thirteen months from the date of acquisition, as determined in accordance with
applicable rules of the regulations of the Securities and Exchange Commission
(the "SEC"), and the dollar-weighted average maturity of the investments of the
Portfolio may not exceed 90 days. The securities in which the Portfolio may
invest will not yield as high a level of current income as could be achieved by
investing in securities having longer maturities, less liquidity and less
safety. There can be no assurance that the investment objective of the Portfolio
or the Fund, as described in the Prospectus, will be achieved.
Asset-Backed Securities. The Portfolio may purchase asset-backed
-----------------------
securities, which are securities backed by installment contracts, credit-card
receivables or other assets. Assets-backed securities represent interests in
"pools" of assets in which payments of both interest and principal on the
securities are made monthly, thus in effect "passing through" monthly payments
made by the individual borrowers on the assets that underlie the securities, net
of any fees paid to the issuer or guarantor of the securities. The average life
of asset-backed securities varies with the maturities of the underlying
instruments and is likely to be substantially less than the original maturity of
the assets underlying the securities as a result of prepayments. For this and
other reasons, an asset-backed security's stated maturity may be shortened, and
the security's total return may be difficult to predict precisely. The Portfolio
may invest in such securities up to the limits prescribed by Rule 2a-7 and other
provisions of the 1940 Act.
Treasury, Government and Agency Securities. The Portfolio invests in
------------------------------------------
short-term debt securities that are issued or guaranteed by the U.S. government
or an agency or instrumentality of the U.S. government ("Government
Securities"). These securities include obligations issued by the U.S. Treasury
("Treasury Securities"), including Treasury bills, notes and bonds. These are
direct obligations of the U.S. government and differ primarily in their rates of
interest and the length of their original maturities. Treasury Securities are
backed by the full faith and credit of the U.S. government. Government
Securities include Treasury Securities as well as securities issued or
guaranteed by the U.S. government or its agencies and instrumentalities ("Agency
Securities"). Agency Securities are in some cases backed by the full faith and
credit of the U.S. government. In other cases, Agency Securities are backed
solely by the credit of the governmental issuer. Certain issuers of Agency
Securities have the right to borrow from the U.S. Treasury, subject to certain
conditions. Government Securities purchased by the Portfolio may include
variable and floating rate securities.
Bank Obligations. Domestic commercial banks organized under federal law are
----------------
supervised and examined by the Comptroller of the Currency and are required to
be members of the Federal Reserve System. Domestic banks organized under state
law are supervised and examined by state banking authorities but are members of
the Federal Reserve System only if they elect to join. As a result of federal or
state laws and regulations, domestic banks, among other things, generally are
required to maintain specified levels of reserves, limited in the amounts which
they can loan to a single borrower and subject to other regulations designed to
promote financial soundness.
Investments in obligations of foreign banks involve various risks that are
not generally associated with investments in the obligations of domestic banks.
Unrated Investments and Changes in Ratings. The Portfolio may purchase
------------------------------------------
securities that are not rated if, in the opinion of Barclays Global Advisors,
Inc. (the "Investment Adviser"), the investment adviser of the Portfolio, such
obligations are of a quality comparable to that of the rated investments in
which the Portfolio may invest, if they are purchased in accordance with
procedures adopted by MIP's Board of Trustees in accordance with Rule 2a-7 under
the 1940 Act. These procedures require approval or ratification by the MIP
Trustees of the purchase of unrated securities.
After purchase by the Portfolio, a security may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund and
the Portfolio. Neither
B-6
<PAGE>
event will require an immediate sale of such security by the Portfolio provided
that, when a security ceases to be rated, the MIP Board of Trustees determines
that such security presents minimal credit risks and, provided further that,
when a security rating is downgraded below the eligible quality for investment
or no longer presents minimal credit risks, the MIP Board finds that the sale of
such security would not be in the Portfolio's shareholder's best interest. To
the extent the ratings given by Moody's Investors Service ("Moody's") or
Standard & Poors ("S&P") may change as a result of changes in such organizations
or their rating systems, the Fund will attempt to use comparable ratings as
standards for investments in accordance with the investment policies contained
in the Prospectus and in this SAI.
The ratings categories used by Moody's and S&P are more fully described in
the Appendix.
Pass-Through Obligations. Certain of the debt obligations in which the
------------------------
Portfolio may invest may be pass-through obligations that represent an ownership
interest in a pool of mortgages and the resultant cash flow from those
mortgages. Payments by homeowners on the loans in the pool flow through to
certificate holders in amounts sufficient to repay principal and to pay interest
at the pass-through rate. The stated maturities of pass-through obligations may
be shortened by unscheduled prepayments of principal on the underlying
mortgages. Therefore, it is not possible to predict accurately the average
maturity of a particular pass-through obligation. Variations in the maturities
of pass-through obligations will affect the yield of any fund investing in such
obligations. Furthermore, as with any debt obligation, fluctuations in interest
rates will inversely affect the market value of pass-through obligations.
Loans of Portfolio Securities. The Portfolio may lend its securities to
-----------------------------
brokers, dealers and financial institutions, provided the loan is secured
continuously by collateral consisting of cash, Government Securities or a letter
of credit. This collateral is marked to market daily to ensure that the loan is
fully collateralized at all times. Under procedures adhered to by the Portfolio,
the loan must be callable by the Portfolio at any time and the Portfolio must
have the right to obtain the return of the securities loaned. The Portfolio also
has the right to receive any interest paid on the securities loaned. The
Portfolio will not lend securities having an aggregate market value exceeding
one-third of its total assets.
Loans of securities will only be made to firms deemed by the Board of
Trustees of MIP to be creditworthy (such creditworthiness will be monitored on
an ongoing basis by the Investment Adviser) and when the income expected to be
earned from such loans justifies the attendant risks. There may be delays in the
recovery of the loaned securities or a loss of rights in the collateral supplied
should the borrower fail financially, in which case the Portfolio could suffer a
loss. In addition, securities lending involves a form of leverage, and the
Portfolio may incur a loss if securities purchased with the collateral from
securities loans decline in value or if the income earned does not cover
transaction costs. The Portfolio may pay reasonable finder's, administrative and
custodial fees in connection with loans of securities.
Loans of securities provides a way for the Portfolio to earn either through
the reinvestment of the cash collateral or the payment of fees by the borrower
of the securities. The
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<PAGE>
Portfolio does not intend to lend securities during the coming year.
Repurchase Agreements. The Portfolio may enter into repurchase agreements
---------------------
with respect to any security in which they are authorized to invest, although
the underlying security may mature in more than thirteen months. In a repurchase
agreement the Portfolio purchases a security and the seller of the security to
the Portfolio agrees to repurchase that security from the Portfolio at a
mutually agreed-upon time and price. The maturity of repurchase agreements are
generally not more than seven days. Any repurchase agreements having longer
maturities are deemed to be illiquid and are subject to the limitation on the
purchase of illiquid securities by the Portfolio.
The custodian of the Portfolio's assets or a subcustodian approved by MIP
maintains custody of securities acquired through repurchase agreements. These
securities serve as collateral to secure the obligation of the seller to
repurchase the underlying security and the seller is required to post additional
collateral if the value of the securities should decrease below the resale price
including accrued interest under the repurchase agreement. Repurchase agreements
are considered by the staff of the SEC to be loans by the Portfolio. The
Investment Adviser monitors on an ongoing basis the value of the collateral.
Certain costs may be incurred by the Portfolio in connection with the sale of
the underlying securities if the seller does not repurchase them in accordance
with the terms of the repurchase agreement. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the securities,
disposition of the securities by the Portfolio may be delayed or limited. This
could cause the Portfolio to suffer a loss if the value of the securities
declines in value.
Although it is not possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the underlying
securities, as well as delay and costs to the Fund in connection with insolvency
proceedings), it is the policy of the Portfolio to effect repurchase agreements
only with securities dealers, domestic banks or other financial institutions
determined by the Investment Adviser to meet certain requirements as to
creditworthiness.
Municipal Obligations. The Portfolio may invest in municipal obligations.
---------------------
Municipal bonds generally have a maturity at the time of issuance of up to 40
years. Medium-term municipal notes are generally issued in anticipation of the
receipt of tax funds, of the proceeds of bond placements, or of other revenues.
The ability of an issuer to make payments on notes is therefore especially
dependent on such tax receipts, proceeds from bond sales or other revenues, as
the case may be. Municipal commercial paper is a debt obligation with a stated
maturity of 270 days or less that is issued to finance seasonal working capital
needs or as short-term financing in anticipation of longer-term debt.
The Portfolio may invest in the following municipal obligations with
remaining maturities not exceeding 13 months: (i) long-term municipal bonds
rated at the date of purchase "Aa" or better by Moody's or "AA" or better by
S&P; (ii) municipal notes rated at the date of purchase "MIG1" or "MIG2" (or
"VMIG1" or "VMIG2" in the case of an issuer having a variable rate with a demand
feature) by Moody's or "SP-1+", "SP-1" or "SP-2" by S&P; and (iii)
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<PAGE>
short-term municipal commercial paper rated at the date of purchase "P-1" by
Moody's or "A-1+", "A-1" or "A-2" by S&P.
Floating- and Variable-Rate Obligations. The Portfolio may purchase
---------------------------------------
floating- and variable-rate obligations as described in the Prospectus. These
obligations may include floating- and variable-rate demand notes and bonds,
which are obligations ordinarily having stated maturities in excess of thirteen
months, but which permit the holder to demand payment of principal at any time,
or at specified intervals not exceeding thirteen months. Variable rate demand
notes include master demand notes that are obligations that permit the Portfolio
to invest fluctuating amounts, which may change daily without penalty, pursuant
to direct arrangements between the Portfolio, as lender, and the borrower. The
interest rates on these notes fluctuate from time to time. The issuer of these
obligations ordinarily has a corresponding right, after a given period, to
prepay in its discretion the outstanding principal amount of the obligations
plus accrued interest upon a specified number of days' notice to the holders of
the obligations. The interest rate on a floating-rate demand obligation is based
on a specified lending rate, such as a bank's prime rate, and is adjusted
automatically each time that rate is adjusted. The interest rate on a variable-
rate demand obligation is adjusted automatically at specified intervals.
Frequently, these obligations are secured by letters of credit or other credit
support arrangements provided by banks. Because these obligations are direct
lending arrangements between the lender and borrower, it is not contemplated
that the obligations generally will be traded, and there generally is no
established secondary market for these obligations, although they are redeemable
at face value. Where these obligations are not secured by letters of credit or
other credit support arrangements, the Portfolio's right to redeem is dependent
on the ability of the borrower to pay principal and interest on demand. Such
obligations frequently are not rated by credit rating agencies and the Portfolio
may invest in obligations which are not so rated only if the Investment Adviser
determines that at the time of investment the obligations are of comparable
quality to the other obligations in which the Portfolio may invest. The
Investment Adviser considers on an ongoing basis the creditworthiness of the
issuers of the floating- and variable-rate demand obligations in which the
Portfolio invests. The Fund will not invest more than 10% of the value of its
total net assets in floating or variable-rate demand obligations whose demand
feature is not exercisable within seven days. Such obligations may be treated as
liquid if an active secondary market exists.
Forward Commitments, When-Issued Purchases and Delayed-Delivery
---------------------------------------------------------------
Transactions. The Portfolio may purchase securities on a when-issued or forward
------------
commitment (sometimes called a delayed-delivery) basis, which means that the
price is fixed at the time of commitment, but delivery and payment ordinarily
take place a number of days after the date of the commitment to purchase. The
Portfolio will make commitments to purchase such securities only with the
intention of actually acquiring the securities, but the Portfolio may sell these
securities before the settlement date if it is deemed advisable. The Portfolio
will not accrue income in respect of a security purchased on a forward
commitment basis prior to its stated delivery date.
Securities purchased on a when-issued or forward commitment basis are
subject to changes in value and the Portfolio is subject to the risk that such
fluctuations may occur prior
B-9
<PAGE>
to the actual delivery of the securities. Purchasing securities on a when-issued
or forward commitment basis also involves the risk that the yield available in
the market when the delivery takes place may be higher than that obtained by the
Portfolio. When the Portfolio purchases a security on a when-issued or forward
commitment basis, it will establish a segregated account with its custodian,
consisting of cash or high quality liquid debt securities at least equal at all
times to the amount of the when-issued or forward commitment.
Purchasing securities on a forward commitment basis when the Portfolio is
fully or almost fully invested may result in greater potential fluctuation in
the value of the Portfolio's net assets. In addition, because the Portfolio will
set aside cash and other high quality liquid debt securities as described above,
the liquidity of the Portfolio's investment portfolio may decrease as the
proportion of securities purchased on a when-issued or forward commitment basis
increases.
The value of the securities underlying a when-issued purchase or a forward
commitment to purchase securities, and any subsequent fluctuations in their
value, is taken into account when determining the Portfolio's net asset value
starting on the day the Portfolio agrees to purchase the securities. The Fund
does not earn interest on the securities it has committed to purchase until the
securities are paid for and delivered on the settlement date. When the Portfolio
makes a forward commitment to sell securities it owns, the proceeds to be
received upon settlement are included in the Portfolio's assets, and
fluctuations in the value of the underlying securities are not reflected in the
Portfolio's net asset value as long as the commitment remains in effect.
Illiquid Securities. The Portfolio may invest in securities not registered
-------------------
under the 1933 Act and other securities subject to legal or other restrictions
on resale. Because such securities may be less liquid than other investments,
they may be difficult to sell promptly at an acceptable price.
Foreign Obligations. Investments in foreign obligations involve certain
-------------------
considerations that are not typically associated with investing in domestic
obligations. There may be less publicly available information about a foreign
issuer than about a domestic issuer. Foreign issuers also are not generally
subject to uniform accounting, auditing and financial reporting standards or
governmental supervision comparable to those applicable to domestic
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<PAGE>
issuers. In addition, with respect to certain foreign countries, taxes may be
withheld at the source under foreign income tax laws, and there is a possibility
of expropriation or confiscatory taxation, political or social instability or
diplomatic developments that could adversely affect investments in, the
liquidity of, and the ability to enforce contractual obligations with respect
to, securities of issuers located in those countries.
Obligations of foreign banks and foreign branches of U.S. banks involve
somewhat different investment risks from those affecting obligations of U.S.
banks, including the possibilities that liquidity could be impaired because of
future political and economic developments; the obligations may be less
marketable than comparable obligations of U.S. banks; a foreign jurisdiction
might impose withholding taxes on interest income payable on those obligations;
foreign deposits may be seized or nationalized; foreign governmental
restrictions (such as foreign exchange controls) may be adopted which might
adversely affect the payment of principal and interest on those obligations; and
the selection of those obligations may be more difficult because there may be
less publicly available information concerning foreign banks. In addition, the
accounting, auditing and financial reporting standards, practices and
requirements applicable to foreign banks may differ from those applicable to
U.S. banks. In that connection, foreign banks are not subject to examination by
any U.S. Government agency or instrumentality.
Funding Agreements. The Portfolio may invest in short-term funding
------------------
agreements. A funding agreement is a contract between an issuer and a purchaser
that obligates the issuer to pay a guaranteed rate of interest on a principal
sum deposited by the purchaser. Funding agreements will also guarantee the
return of principal and may guarantee a stream of payments over time. A
funding agreement has a fixed maturity and may have either a fixed, variable or
floating interest rate that is based on an index and guaranteed for a fixed time
period. The Portfolio will purchase short-term funding agreements only from
banks and insurance companies that, at the time of purchase, are rated in one of
the three highest rating categories and have assets of $1 billion or more. The
secondary market, if any, for these funding agreements is limited; thus, such
investments purchased by the Portfolio may be treated as illiquid. If a funding
agreement is determined to be illiquid it will be valued at its fair market
value as determined by procedures approved by the Board of Trustees. Valuation
of illiquid indebtedness involves a greater degree of judgment in determining
the Portfolio's net asset value than if the value were based on available market
quotations.
Loan Participation Agreements. The Portfolio may purchase interests in loan
-----------------------------
participations that typically represent direct participation in a loan to a
corporate borrower, and generally are offered by an intermediary bank or other
financial institution or lending syndicate. Under these loan participation
arrangements, the Portfolio will have the right to receive payments of
principal, interest and any fees to which it is entitled from the bank selling
the loan participation upon receipt by the bank of the payments from the
borrower. The borrower in the underlying loan will be deemed to be the issuer of
the participation interest except to the extent the Portfolio derives its rights
from the intermediary bank that sold the loan participation. Such loans must be
to issuers in whose obligations the Portfolio may invest. Any participation
purchased by the Portfolio must be sold by an intermediary bank in the United
States with assets exceeding $1 billion. Because the bank issuing the loan
participation does not guarantee the participation in any way, the participation
is subject to the credit risks associated with the underlying corporate
borrower. In addition, it may be necessary, under the terms of the loan
participation, for the Portfolio to assert its rights against the underlying
corporate borrower, in the event that the underlying corporate borrower should
fail to pay principal and interest when due. Thus, the Portfolio could be
subject to delays, expenses, and risks that are greater than those that would
have been involved if the Portfolio had purchased a direct obligation of the
borrower. Moreover, under the terms of the loan participation, the Portfolio may
be regarded as a creditor of the issuing bank (rather than of the underlying
corporate borrower), so that the Portfolio also may be subject to the risk that
the issuing bank may become insolvent. Further, in the event of the bankruptcy
or insolvency of the corporate borrower, the loan participation might be subject
to certain defenses that can be asserted by the borrower as a result of improper
conduct by the issuing bank. The secondary market, if any, for these loan
participation interests is limited; thus, such participations purchased by the
Portfolio may be treated as illiquid. If a loan participation is determined to
be illiquid, it will be valued at is fair market value as determined by
procedures approved by the Board of Trustees. Valuation of illiquid indebtedness
involves a greater degree of judgment in determining the Portfolio's net asset
value than if the value were based on available market quotations.
MANAGEMENT
Directors and Officers. The Board of Trustees of the Trust has the overall
----------------------
responsibility for monitoring the operations of the Trust and the Fund and for
supervising its operations. The officers of the Trust are responsible for
managing the day-to-day operations of the Trust and the Fund. MIPs Board of
Trustees has similar responsibilities with respect to the operations of the
Portfolio.
Set forth below is information with respect to each of the Trustees and
officers of the Trust, including their principal occupations during the past
five years.
<TABLE>
<CAPTION>
Name, Position with Trust, Age and Address Principal Occupations During Last Five Years
------------------------------------------ --------------------------------------------
<S> <C>
*E. Scott Peterson, 46 Consultant, Hewitt Associates LLC
Trustee
Donald S. Hunt, 61 Director and President, ADA Financial Services;
Trustee Director ADA Holding Co.: Director, Vision III;
860 N. Lakeshore Drive Director and Chief Executive Officer, Global
Chicago, IL 60611 Training Inc.; Director and President, Harris
Bank Corp. and Harris Trust & Savings Bank
John D. Oliverio, 46 Executive Vice President and Chief Operating
Trustee Officer, Wheaton Franciscan Services, Inc.;
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Name, Position with Trust, Age and Address Principal Occupations During Last Five Years
------------------------------------------ --------------------------------------------
<S> <C>
26 West 171 Roosevelt Road Director, AHA Investment Funds, Inc.
Wheaton, IL 60189
</TABLE>
------------
* Trustee who is an "interested person" of the Trust, as defined in the 1940
Act, because of his affiliation with Hewitt Associates LLC, an affiliate of the
distributor of the Fund's shares.
Except as otherwise indicated above, the address of each Trustee and
officer of the Trust is 100 Half Day Road, Lincolnshire, Illinois 60069.
Trustees who are not employed by Hewitt Associates LLC or one of its
affiliates are paid an attendance fee of $1000 for each meeting of the Board of
Trustees they attend. Officers of the Trust receive no compensation from the
Trust. Trustees who are not employees of Hewitt Associates LLC or one of its
affiliates are reimbursed for reasonable out-of-pocket expenses incurred in
connection with the performance of their responsibilities, including travel
related expenses. As of the date of this Statement of Additional Information,
the Trustees and officers of the Trust, as a group, owned less than 1% of the
outstanding shares of the Trust and the Fund.
Trustee compensation for the calendar year ended December 31, 1999, is as
follows:
Compensation Table
<TABLE>
<CAPTION>
Pension or Retirement
Aggregate Compensation Benefits Accrued as Part Total Compensation from
Name of Person from Trust of Fund Expenses Trust Paid to Trustees
------------------- ------------------------ -------------------------- -------------------------
<S> <C> <C> <C>
E. Scott Peterson $0 $0 0
Donald S. Hunt $4000 $0 $4000
John D. Oliverio $4000 $0 $4000
</TABLE>
Investment Adviser. The Investment Adviser, Barclays Global Fund Advisors,
------------------
located at 45 Fremont Street, San Francisco, California 94105, is a subsidiary
of Barclays Global Investors, N.A., which in turn is an indirect subsidiary of
Barclays Bank PLC. It provides investment advisory services to the Portfolio
pursuant to an investment advisory agreement with MIP dated January 1, 1996 (the
"Advisory Agreement"). Pursuant to the Advisory Agreement, the Investment
Adviser is responsible for the management of the investments of the Portfolio
and makes all decisions regarding, and places all orders for, the purchase and
sale of securities.
As compensation for services rendered and expenses assumed by the
Investment Adviser, the Portfolio pays the Investment Adviser a monthly fee
which is computed at the
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<PAGE>
annual rate of 0.10% of the net assets of the Portfolio. Because the Fund is an
investor in the Portfolio, shareholders of the Fund indirectly bear this fee.
Under the Advisory Agreement, the Investment Adviser is obligated to bear all of
the ordinary operating expenses of the Portfolio.
The Advisory Agreement was approved by the Board of Trustees of MIP,
including a majority of the Trustees of MIP who are not "interested persons," as
defined by the 1940 Act of MIP or the Investment Adviser. It continues in effect
from year to year thereafter if approved annually by either (i) MIP's Board of
Trustees or (ii) vote of a majority of the outstanding voting securities of the
Fund (as defined in the 1940 Act); or by MIP's Board of Trustees, and provided
that the continuance also is approved by a majority of MIP's Board of Trustees
who are not "interested persons" (as defined in the 1940 Act) of the MIP or the
Investment Adviser, by vote cast in person at a meeting called for the purpose
of voting on such approval. The Advisory Agreement is terminable without
penalty, on 60 days' written notice by the Board of Trustees of MIP or by vote
of the holders of a majority of the outstanding voting securities of the
Portfolio. As required by the 1940 Act, the Advisory Agreement provides for its
automatic termination in the event of its assignment (as defined by the 1940
Act).
Administrator. Hewitt Associates LLC (the "Administrator") provides
-------------
administrative services to the Fund pursuant to the terms of an administration
agreement dated September 1, 1998, entered into by the Trust and the
Administrator. Services provided by the Administrator include, but are not
limited to: managing the daily operations and business affairs of the Fund,
subject to the supervision of the Board of Trustees; overseeing the preparation
and maintenance of all documents and records required to be maintained by the
Fund and the Trust; preparing or assisting in the preparation of regulatory
filings, prospectuses and shareholder reports; providing, at its own expense,
the services of its personnel to serve as officers of the Trust; and preparing
and disseminating material for meetings of the Board of Trustees and
shareholders. The Fund pays the Administrator a monthly fee calculated at an
annual rate of 0.10% of the Fund's average daily net assets.
The Administration Agreement was approved by the Board of Trustees of the
Trust, including a majority of the Trustees who are not "interested persons" of
the Trust or of Investment Adviser or the Distributor, as defined by the 1940
Act (the "Independent Trustees"), at a meeting held in person on August 18,
1998. It has an initial term expiring August 31, 2000, and may be continued in
effect from year to year thereafter if such continuance is approved annually by
the Board of Trustees, including the vote of a majority of the Independent
Trustees. The Administration Agreement terminates automatically in the event of
its "assignment" (as defined by the 1940 Act), and may be terminated by either
party without penalty on not less than 60 days' written notice.
Pursuant to the Administration Agreement, the Trust has acknowledged that
the name "Hewitt" is a property right of the Administrator and its affiliates
and has agreed that the Administrator and its affiliated companies may use and
permit others to use that name. If the Administration Agreement is terminated,
the Trust may be required to cease using the name Hewitt as part of its name or
the name of the Fund, unless otherwise permitted by the Administrator or any
successor to its interest in such name.
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<PAGE>
The Administrator also serves as the Shareholder Servicing
Agent for Institutional Shares and is paid compensation by the Fund for
furnishing various shareholder related services. See "Shareholder Servicing
Arrangements," below.
Shareholder Servicing Arrangements. The Fund has retained Hewitt
----------------------------------
Associates LLC to serve as the Shareholder Servicing Agent for Institutional
Shares pursuant to the terms of a shareholder servicing agreement dated
September 1, 1998 (the "Institutional Shares Servicing Agreement"). Pursuant to
the Institutional Shares Servicing Agreement, the Fund pays Hewitt Associates
LLC a monthly fee calculated at an annual rate of 0.20% of the Fund's average
daily net assets attributable to the Institutional Shares.
The Fund has retained Hewitt Services LLC to serve as the Shareholder
Servicing Agent for Administrative Shares pursuant to the terms of a shareholder
servicing agreement dated September 1, 1998 (the "Administrative Shares
Servicing Agreement"). Pursuant to the Administrative Shares Servicing
Agreement, the Fund pays Hewitt Services LLC a monthly fee calculated at an
annual rate of 0.25% of the Fund's average daily net assets attributable to the
Administrative Shares. The responsibilities of each Shareholder Servicing Agent
are described in the Prospectus. The Fund reimburses each Shareholder Servicing
Agent for certain out-of-pocket expenses.
The Institutional Shares Servicing Agreement and the Administrative
Shares Servicing Agreement were approved by the Board of Trustees of the Trust,
including a majority of the Independent Trustees, at a meeting held in person on
August 18, 1998. Each has an initial term expiring August 31, 2000, and may be
continued in effect from year to year thereafter if such continuance is approved
annually by the Board of Trustees of the Trust, including the vote of a majority
of the Independent Trustees. Each servicing agreement terminates automatically
in the event of its "assignment" (as defined by the 1940 Act), and may be
terminated by either party to the agreement without penalty on not less than 60
days' written notice.
DISTRIBUTION ARRANGEMENTS
Hewitt Services LLC, an affiliate of the Administrator, serves as the
distributor of shares of the Fund (the "Distributor"). The Distributor also
serves as the Shareholder Servicing Agent for the Administrative Shares and is
paid compensation by the Fund for furnishing various shareholder related
services. See "Shareholder Servicing Arrangements," above. The Distributor also
receives payments from the Fund in connection with the distribution of
Administrative Shares, as described below.
Distribution Agreement. The Distributor serves as the exclusive
----------------------
distributor of shares of the Fund pursuant to a distribution agreement with the
Trust, dated as of September 1, 1998 (the "Distribution Agreement"). Pursuant to
the Distribution Agreement, the Distributor is authorized to enter into selling
agreements with securities dealers and other financial institutions for the
distribution of shares. Shares of the Fund are available for purchase on a
continuous basis from the Distributor, as agent, although the Distributor is not
obligated to sell any particular amount of shares. The Fund has appointed the
Shareholder Servicing Agent as its agent for purposes of accepting orders to
purchase and redeem Institutional Shares on behalf of the
B-14
<PAGE>
Distributor and transmitting those orders to the Fund's transfer agent.
The Distribution Agreement was approved by the Board of Trustees of
the Trust, including a majority of the Independent Trustees, at a meeting held
in person on August 18, 1998. It has an initial term expiring August 31, 2000,
and may be continued in effect from year to year thereafter if such continuance
is approved annually by the Board of Trustees, including the vote of a majority
of the Independent Trustees. The Distribution Agreement may be terminated at any
time, without penalty, by either party upon 60 days written notice and
terminates automatically in the event of an "assignment" as defined by the 1940
Act.
Under the Distribution Agreement, the Distributor is required to bear
all of the costs associated with distribution of shares of the Fund, including
the incremental cost of printing prospectuses, annual reports and other periodic
reports for distribution to prospective investors and the costs of preparing,
distributing and publishing sales literature and advertising materials. As
described below, Administrative Shares of the Fund pay a fee to the Distributor
for services it renders in connection with the distribution of Administrative
Shares.
Distribution Plan (Administrative Shares Only). The Trust has adopted
-----------------
a plan and agreement of distribution pursuant to Rule 12b-1 under the Investment
Company Act which allows the Fund to pay expenses relating to the distribution
of Administrative Shares (the "Distribution Plan"). Under the Distribution Plan,
the Fund pays a fee to the Distributor, calculated at an annual rate of 0.25% of
the average daily net assets of Administrative Shares, as compensation for the
services the Distributor renders and the expenses it bears in connection with
the sale and distribution of Administrative Shares. This fee is an expense of
Administrative Shares only and is not borne by Institutional Shares. During the
fiscal year ended December 31, 1999, $103,133 in payments by the Administrative
Shares were accrued as compensation to the Distributor under the Distribution
Plan.
The Distribution Plan was approved by the Board of Trustees of the
Trust, including a majority of the Trustees who are not "interested persons" (as
defined by the 1940 Act) of the Trust and who have no direct or indirect
financial interest in the operation of the Distribution Plan or in any agreement
related to the Plan ("Qualified Trustees"), at a meeting held in person on
August 18, 1998. It provides that it will continue in effect for a period of one
year from the date of its execution, and may be continued in effect from year to
year thereafter, provided that each such continuance is approved annually by a
vote of both a majority of the Trustees and a majority of the Qualified
Trustees. The Board of Trustees, including a majority of the Qualified Trustees,
approved the continuation of the Distribution Plan for an additional one year
period at a meeting held in person on August 19, 1999. The Distribution Plan
requires that the Trust provide the Board of Trustees of the Trust, and that the
Board review, at least quarterly, a written report of the amounts expended (and
the purposes therefor) under the Distribution Plan. In addition, the
Distribution Plan provides that the selection and nomination of Qualified
Trustees shall be committed to the discretion of those Trustees, who are not
"interested persons" (as defined by the 1940 Act) of the Distributor, then in
office. The Distribution Plan may be terminated at any time by a vote of a
majority of the Qualified Trustees or by vote of a majority of the outstanding
voting shares of the Fund (as defined by the 1940 Act). It may not be amended
B-15
<PAGE>
to increase materially the amount of permitted expenses thereunder without the
approval of the holders of Administrative Shares and may not be materially
amended in any other respect without a vote of the majority of both the Trustees
and the Qualified Trustees.
Since payments made pursuant to the Distribution Plan are not
directly tied to actual expenses, the amount of payments by Administrative
Shares to the Distributor during any year may be more or less than actual
expenses incurred by the Distributor in providing services. For this reason,
this type of distribution fee arrangement is characterized by the staff of the
Securities and Exchange Commission as being of the "compensation variety" (in
contrast to "reimbursement" arrangements under which payments by a fund are made
only to reimburse specific expenses). However, Administrative Shares are not
liable to pay any distribution related expenses incurred by the Distributor in
excess of the amounts paid pursuant the Distribution Plan.
The Distribution Plan was adopted and has been continued by the
Board of Trustees of the Trust to foster the distribution of Administrative
Shares. The Trustees believe that the Distribution Plan will provide an
incentive for the Distributor to make Administrative Shares available to its
customers and that, without the Distribution Plan, the Distributor would not
offer shares of the Fund to its customers. In addition, the Trustees believe
that the Distribution Plan will help assure that assets of the Fund attributable
to Administrative Shares reach a level that will enable the per share expenses
of Administrative Shares to be competitive with the per share expenses of other
money market funds. For these reasons, the Board of Trustees determined that
adoption of the Distribution Plan will benefit the Fund and shareholder who own
Administrative Shares.
The Trustee and officers of the Trust who are members or employees
of the Distributor, or of any company affiliated with or controlling the
Distributor, may be deemed to have a direct or indirect interest in the
operation of the Distribution Plan.
EXPENSES
All expenses of the Trust and the Fund not expressly assumed by the
Administrator or the Distributor are paid by the Fund. In addition, as an
investor in the Portfolio, the Fund bears a pro rata portion of the expenses of
the Portfolio. Expenses borne by the Fund and the Portfolio include, but are not
limited to: fees for investment advisory and administration services; fees paid
to the Shareholder Servicing Agents; the distribution fee payable by
Administrative Shares; the fees and expenses of any registrar, custodian,
accounting agent, transfer agent or dividend disbursing agent; brokerage
commissions; taxes; registration costs; the cost and expense of printing,
including typesetting, and distributing prospectuses and supplements thereto to
shareholders; all expenses of shareholders' and Trustees' meetings and of
preparing, printing and mailing of proxy statements and reports to shareholders;
fees and travel expenses of Trustees or members of any advisory board or
committee who are not employees of the Administrator, the Distributor or the
Investment Adviser; all expenses incident to any dividend, withdrawal or
redemption options; charges and expenses of any outside service used for pricing
shares of the Trust; fees and expenses of legal counsel; fees and expenses of
B-16
<PAGE>
independent auditors; membership dues of industry associations; interest on
borrowings; postage; insurance premiums on property or personnel (including
officers and Trustees) of the Trust and MIP which inure to its benefit; and
extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification relating thereto).
The Fund's administration agreement requires Hewitt Associates LLC to
absorb expenses of the Fund (excluding interest, brokerage commissions and
extraordinary expenses) to the extent necessary to assure that total ordinary
operating expenses of Institutional Shares of the Fund do not exceed annually
0.45% of the average daily net assets attributable to Institutional Shares and
that total ordinary operating expenses of Administrative Shares do not exceed
annually 0.75% of the average daily net assets attributable to Administrative
Shares.
For the periods October 1, 1998 (commencement of operations) to
February 28, 1999, and March 1, 1999 to December 31, 1999, fees payable to the
Investment Adviser, Administrator and Distributor were as follows:
10/1/98
(commencement of
operations) to
3/1/99 to 12/31/99 2/28/99
------------------ ----------------
The portion of the advisory fee
payable by the Portfolio to
Barclays Global Fund Advisors
and the share of the ordinary
operating expenses of the
Portfolio attributable
to the Fund........................... $ 65,000 $11,934
Administration fee payable
to Hewitt Associates LLC.............. $ 61,792 11,629
Shareholder servicing fee
payable to Hewitt Associates
LLC and Hewitt Services LLC........... $144,210 27,879
Distribution fees payable to
Hewitt Services LLC with respect
to Adminstrative Shares............... $103,133 23,108
--------------------------------------------------------------------------------
Portions of the fees payable by the Fund were waived and certain Fund
expenses were reimbursed during the fiscal year to satisfy the limitations on
Fund operating expenses described above.
B-17
<PAGE>
DETERMINATION OF NET ASSET VALUE
Days and Times Net Asset Value Per Share is Computed. The Prospectus
----------------------------------------------------
describes the days on which the net asset values per share of the Fund are
computed for purposes of purchases and redemptions of shares by investors, and
also sets forth the times as of which such computations are made.
Shares of the Fund may be purchased on any that the New York Stock Exchange
(NYSE) is open and that is not a federal bank holiday. The following days are
either days on which the NYSE is closed or which are federal bank holidays: New
Year's Day; Martin Luther King's Birthday (third Monday in January); Presidents'
Day (third Monday in February); Good Friday (Friday before Easter); Memorial Day
(last Monday in May); Independence Day; Labor Day (first Monday in September);
Columbus Day (second Monday in October); Veterans Day; Thanksgiving Day (fourth
Thursday in November); and Christmas Day.
Net asset value is computed as of the closing time of the U.S. government
securities markets on days when the Public Securities Association recommends an
early closing of such markets. Early closings may occur the Fridays preceding
the following holidays: Martin Luther King's Birthday; Presidents' Day; Memorial
Day; Labor Day; and Columbus Day. Early closings may also occur on the business
days preceding the following holidays: Independence Day; Veterans Day;
Thanksgiving Day; Christmas Day; New Year's Day, and the Friday following
Thanksgiving Day.
The net asset values per share of Institutional Shares and Administrative
Shares are computed separately. Net asset value per share of each class of the
Fund's shares is calculated by dividing the value of the Fund's total assets
attributable to that class, less the liabilities (including accrued expenses) of
the class and its allocable share of the Fund's liabilities (and accrued
expenses), by the number of shares of the class outstanding. The value of the
Portfolio's net assets (its securities and other assets, less its liabilities,
including expenses payable or accrued) is determined at the same time and on the
same days as the net asset values per share of the Fund are determined. Unlike
most other money market funds, the Fund does not seek to maintain a stable net
asset value per share.
Amortized Cost Valuation. The Fund and the Portfolio use the amortized cost
------------------------
method of valuation to determine the value of their portfolio securities in
accordance with the provisions of Rule 2a-7 under the 1940 Act. The amortized
cost method involves valuing a security at its cost and amortizing any discount
or premium over the period until maturity, regardless of the impact of
fluctuating interest rates on the market value of the security. This method of
valuation does not take into account unrealized capital gains and losses
resulting from changes in the market values of the securities due to changes in
prevailing interest rate levels or other factors.
While this method provides certainty in valuation, it may result in periods
during which the value, as determined by amortized cost, is higher or lower than
the price that the Fund would receive if the security were sold. During these
periods the yield to a shareholder may
B-18
<PAGE>
differ somewhat from that which could be obtained from a similar fund that uses
a method of valuation based upon market prices. Thus, during periods of
declining interest rates, if the use of the amortized cost method resulted in a
lower net asset value of the Fund's portfolio on a particular day, a prospective
investor in the Fund would be able to obtain a somewhat higher yield than would
result from investment in a fund using solely market values, and existing Fund
shareholders would receive correspondingly less income. The converse would apply
during periods of rising interest rates.
Rule 2a-7 provides that in order to value its portfolio using the amortized
cost method, the Fund (or to the extent the Fund invests in the Portfolio, the
Portfolio) must maintain a dollar-weighted average portfolio maturity of 90 days
or less, purchase securities having remaining maturities (as defined in Rule
2a-7) of thirteen months or less and invest only in those high- quality
securities that are determined by the Board of Trustees of the Trust (or MIP) to
present minimal credit risks. The maturity of an instrument is generally deemed
to be the period remaining until the date when the principal amount thereof is
due or the date on which the instrument is to be redeemed. However, Rule 2a-7
provides that the maturity of an instrument may be deemed shorter in the case of
certain instruments, including certain variable- and floating-rate instruments
subject to demand features. In addition, Rule 2a-7 requires that the Portfolio
invest only in securities which have been determined by the Investment Adviser,
under procedures adopted by the Board of Trustees of MIP, to present minimal
credit risks and to be of eligible credit quality under applicable regulations.
PURCHASE AND REDEMPTION OF SHARES
The procedures to be used in purchasing and redeeming Institutional Shares
and Administrative Shares are set forth in the Prospectus under "How To Buy
Shares" and "How To Redeem Shares". The Company reserves the right to reject any
purchase order and to change the amount of the minimum investment and subsequent
purchases in the Funds.
Purchases by Check (Administrative Shares Only). Administrative Shares may
------------------
be purchased by check as described in the Prospectus. If a check to purchase
Administrative Shares does not clear, the shares purchased may be redeemed by
the Distributor and the investor will be responsible for any loss or expenses
incurred by the Fund or the Distributor as a result of the redemption or
non-clearance.
Mandatory Redemption of Shares. Under the Declaration of Trust, the Trust
------------------------------
has the right to redeem all shares of the Fund held by a shareholder if as a
result of one or more redemptions the aggregate value of shares held in the
shareholder's account is less than such dollar amount of $1 million or such
lesser amount as may be specified by the Trustees, which amount may be no
greater than the then applicable minimum initial investment amount. There is
currently no minimum required investment for Institutional Shares. There is also
currently no minimum required initial investment for Administrative Shares, if
those shares are held in an account with a financial intermediary (including the
Distributor) that holds shares for its customers on an omnibus basis. Thus,
Institutional Shares and Administrative Shares held as described above are not
subject to the mandatory redemption procedure described above. As
B-19
<PAGE>
described in the Prospectus, Administrative Shares not held on an omnibus basis
may be subject to mandatory redemption if the value of Administrative Shares
held by a shareholder is less than $5,000. The Trust is under no obligation to
compel the redemption of any account.
Suspension of Redemptions. Redemption proceeds are normally
-------------------------
paid as described in the Prospectuses. The payment of redemption proceeds by the
Fund may be postponed for more than seven days or the right of redemption
suspended at times (a) when the New York Stock Exchange is closed for other than
customary weekends and holidays, (b) when trading on the New York Stock Exchange
is restricted, (c) when an emergency exists as a result of which disposal by the
Fund of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Fund to determine fairly the value of its net
assets, or (d) during any other period when the Securities and Exchange
Commission (the "SEC"), by order, so permits for the protection of shareholders.
Applicable rules and regulations of the SEC will govern as to whether the
conditions described in (b) or (c) exist.
Redemption in Kind. In the event that the Board of Trustees
------------------
determines that it would be detrimental to the best interests of remaining
shareholders of the Fund to pay any redemption or redemptions in cash, a
redemption payment by a Fund may be made in whole or in part by a distribution
in kind of portfolio securities, subject to applicable rules of the SEC. Any
securities distributed in kind will be readily marketable and will be valued,
for purposes of the redemption, in the same manner as such securities are
normally valued in computing net asset value per share. In the unlikely event
that shares are redeemed in kind, the redeeming shareholder would incur
transaction costs in converting the distributed securities to cash. The Trust
has elected to be governed by Rule 18f-1 under the 1940 Act and is therefore
obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of a Fund during any 90 day period for any one shareholder.
PORTFOLIO TRANSACTIONS
Purchases and sales of debt securities generally are principal
transactions. Debt securities acquired for the Portfolio normally are purchased
or sold from or to dealers serving as market makers for the securities at a net
price. Debt securities also may be purchased in underwritten offerings and may
be purchased directly from the issuer. Generally, Government Securities and
other money market securities are traded on a net basis and do not involve
brokerage commissions. The cost of executing transactions in debt securities
consists primarily of dealer spreads and underwriting commissions. Under the
1940 Act, persons affiliated with the Trust are prohibited from dealing with the
Trust as a principal in the purchase and sale of securities unless an exemptive
order allowing such transactions is obtained from the SEC or an exemption is
otherwise available. However, the Portfolio may purchase securities from
underwriting syndicates in which the Investment Adviser or an affiliate of the
Investment Adviser is a member under certain conditions in accordance with the
provisions of a rule adopted under the 1940 Act and in compliance with
procedures adopted by the MIP Board of Trustees.
MIP has no obligation to deal with any dealer or group of
dealers in the execution of transactions in portfolio securities. Subject to
policies established by the MIP Board of
B-20
<PAGE>
Trustees, the Investment Adviser is responsible for the Portfolio's investment
decisions and the placing of orders to purchase and sell securities. In placing
orders, it is the policy of the Portfolio to obtain the best overall terms
taking into account the dealer's general execution and operational facilities,
the type of transaction involved and other factors such as the dealer's risk in
positioning the securities involved. While the Investment Adviser generally
seeks reasonably competitive spreads or commissions, the Portfolio will not
necessarily be paying the lowest spread or commission available.
In assessing the best overall terms available for any
transaction, the Investment Adviser considers factors deemed relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. The Investment Adviser may cause the Portfolio to pay a
broker which furnishes brokerage and research services a higher commission than
that which might be charged by another broker for effecting the same
transaction, provided that the Investment Adviser determines in good faith that
such commission is reasonable in relation to the value of the brokerage and
research services provided by that broker, viewed in terms of either the
particular transaction or the overall responsibilities of the Investment
Adviser. Such brokerage and research services might consist of reports and
statistics relating to specific companies or industries, general summaries of
groups of stocks or bonds and their comparative earnings and yields, or broad
overviews of the stock, bond, and government securities markets and the economy.
Supplementary research information so received is in addition
to, and not in lieu of, services required to be performed by the Investment
Adviser and does not reduce the advisory fees payable by the Portfolio. The MIP
Board of Trustees will periodically review the commissions paid by the Portfolio
to consider whether commissions paid over representative periods of time appear
to be reasonable in relation to the benefits inuring to the Portfolio. It is
possible that certain of the supplementary research or other services received
will primarily benefit one or more other investment companies or other accounts
for which the Investment Adviser exercises investment discretion. Conversely,
the Portfolio may be the primary beneficiary of the research or services
received as a result of portfolio transactions effected for such other accounts
or investment companies.
Under Section 28(e) of the Securities Exchange Act of 1934, an
adviser shall not be "deemed to have acted unlawfully or to have breached its
fiduciary duty" solely because under certain circumstances it has caused the
account to pay a higher commission than the lowest available. To obtain the
benefit of Section 28(e), an adviser must make a good faith determination that
the commissions paid are "reasonable in relation to the value of the brokerage
and research services provided...viewed in terms of either that particular
transaction or its overall responsibilities with respect to the accounts as to
which it exercises investment discretion and that the services provided by a
broker provide an adviser with lawful and appropriate assistance in the
performance of its investment decision-making responsibilities." Accordingly,
the price to the Portfolio in any brokerage transaction may be less favorable
than that available from another broker if the difference is reasonably
justified by other aspects of the portfolio execution services offered.
B-21
<PAGE>
Broker-dealers utilized by the Investment Adviser may furnish
statistical, research and other information or services which are deemed by the
Investment adviser to be beneficial to the Portfolio's investment program.
Research services received from brokers supplement the Investment Adviser's own
research and may include the following types of information: statistical and
background information on industry groups and individual companies; forecasts
and interpretations with respect to U.S. and foreign economics, securities,
markets, specific industry groups and individual companies; information on
political developments; portfolio management strategies; performance information
on securities and information concerning prices of securities; and information
supplied by specialized services to the Investment Adviser and to the Portfolio
with respect to the performance, investment activities and fees and expenses of
other mutual funds. Such information may be communicated electronically, orally
or in written form. Research services may also include the providing of
equipment used to communicate research information, the arranging of meetings
with management of companies and the providing of access to consultants who
supply research information.
The outside research assistance is useful to the Investment
Adviser since the brokers utilized by the Investment Adviser as a group tend to
follow a broader universe of securities and other matters than the staff of the
Investment Adviser can follow. In addition, this research provides the
Investment Adviser with a diverse perspective on financial markets. Research
services which are provided to the Investment Adviser by brokers are available
for the benefit of all accounts managed or advised by the Investment Adviser. It
is the opinion of the Investment Adviser that this material is beneficial in
supplementing their research and analysis; and, therefore, it may benefit the
Portfolio by improving the quality of the Investment Adviser's investment
advice.
TAXES
It is the policy of the Trust to distribute each fiscal year
substantially all of the Fund's net investment income and net realized capital
gains, if any, to shareholders. The Trust intends that the Fund will qualify as
a regulated investment company under the provisions of the Internal Revenue Code
of 1986, as amended (the "Code"). If so qualified, the Fund will not be subject
to federal income tax on that part of its net investment income and net realized
capital gains which it distributes to its shareholders. To qualify for such tax
treatment, the Fund must generally, among other things: (a) derive at least 90%
of its gross income from dividends, interest, payments received with respect to
loans of stock and securities, and gains from the sale or other disposition of
stock or securities and certain related income; and (b) diversify its holdings
so that at the end of each fiscal quarter (i) 50% of the market value of the
Fund's assets is represented by cash, Government Securities, securities of other
regulated investment companies, and other securities limited, in respect of any
one issuer, to an amount not greater than 5% of the Fund's assets or 10% of the
voting securities of any issuer, and (ii) not more than 25% of the value of its
assets is invested in the securities of any one issuer (other than Government
Securities).
The Portfolio has elected to be treated as a partnership for
federal income tax purposes and therefore believes that it will not be required
to pay any federal or state income or
B-22
<PAGE>
excise taxes. Any interest, dividends, gains and losses of the Portfolio will be
deemed to pass through to the Fund in proportion to the Fund's ownership
interest in the Portfolio. Thus, to the extent that the Portfolio accrues but
does not distribute income or gains, the Fund will be deemed to have realized
and recognized its proportionate share of interest, dividends and gains,
regardless of whether there has been a distribution of such items to the Fund.
The Portfolio will seek to minimize recognition by its investors, including the
Fund, of interest, dividends and gains without a distribution.
The Code requires regulated investment companies to pay a nondeductible 4%
excise tax to the extent they do not distribute 98% of their ordinary income,
determined on a calendar year basis, and 98% of their capital gains, determined
on an October 31 year end. The Trust intends to distribute the income and
capital gains of the Funds in the manner necessary to avoid imposition of the 4%
excise tax by the end of each calendar year.
Dividends of the Funds declared in October, November or December and paid
the following January will be taxable to shareholders as if received on December
31 of the year in which they are declared.
PERFORMANCE INFORMATION
Calculation of Yield. Quotations of the "current yield" and "effective
--------------------
yield" of Institutional Shares and Administrative Shares may be used in
advertisements, sales materials and shareholder reports. Current yield is the
simple annualized yield for an identified seven calendar day period. This yield
calculation is based on a hypothetical account having a balance of exactly one
share of the Fund at the beginning of the seven-day period. The base period
return is the net change in the value of the hypothetical account during the
seven-day period, including dividends declared on any shares purchased with
dividends on the shares but excluding any capital changes. Yield will vary as
interest rates and other conditions change. Yields also depend on the quality,
length of maturity and type of instruments held and operating expenses of the
Fund. Because the expenses of Institutional Shares and Administrative Shares
differ, the yield of each class of the Fund's shares will differ.
Effective yield is computed by compounding the unannualized seven-day
period return as follows: by adding 1 to the unannualized seven-day base period
return, raising the sum to a power equal to 365 divided by 7, and subtracting 1
from the result.
Effective yield = [(base period return + 1)(365/7)]-1
For the seven day period ending December 31, 1999, the yield and effective
yield of Institutional Shares was 5.58% and 5.51% and the yield and effective
yield of Administrative Shares was 5.36% and 5.74%. These yield quotations
reflect the effect of fee waivers and reimbursement of expenses and would be
lower in the absence of waiver and reimbursement.
Calculation of Total Return. Quotations of average annual total return and
---------------------------
other total return data relating to Institutional Shares and Administrative
Shares may also be used in
B-23
<PAGE>
advertisements, sales materials and shareholder reports. Average annual total
return quotations for the specified periods are computed by finding the average
annual compounded rates of return (based on net investment income and any
realized and unrealized capital gains or losses on investments over such
periods) that would equate the initial amount invested to the redeemable value
of such investment at the end of each period. In making these computations, all
dividends and distributions are assumed to be reinvested and all applicable
recurring and non-recurring expenses are taken into account. The Fund also may
quote annual, average annual and annualized total return and aggregate total
return performance data, both as a percentage and as a dollar amount based on a
hypothetical investment amount, for various periods. The total return of
Institutional Shares and Administrative Shares will differ because their
expenses differ.
Total return quotations will be computed in accordance with the
following formula, except that as required by the periods of the quotations,
actual annual, annualized or aggregate data, rather than average annual data,
may be quoted:
P (1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000
payment made at the beginning of the period.
For the one year period ended December 31, 1999, the annual total
return was 4.65% for Administrative Shares and 4.96% for Institutional Shares.
For the period October 1, 1998 (date of commencement of operations) to December
31, 1999, the average annual total return was 4.64% for Administrative Shares
and 4.95% for Institutional Shares. These total return quotations reflect the
effect of fee waivers and reimbursement of expenses and would be lower in the
absence of waiver and reimbursement.
Actual annual or annualized total return data generally will be lower
than average annual total return data because the average rates of return
reflect compounding of return. Aggregate total return data, which is calculated
according to the following formula, generally will be higher than average annual
total return data because the aggregate rates of return reflect compounding over
longer periods of time:
ERV - P
-------
P
Where: P = a hypothetical initial payment of $1,000.
B-24
<PAGE>
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period.
Yield and total return quotations are based upon historical
investment performance and is not intended to indicate future performance. Yield
and total return will fluctuate and will depend upon not only changes in
prevailing interest rates, but also upon any realized gains and losses and
changes in expenses.
Performance Comparisons. From time to time and only to the extent the
-----------------------
comparison is appropriate, the performance of Institutional Shares and
Administrative Shares may be compared to the performance of various indices and
investments for which reliable performance data is available. Performance of
Institutional Shares and Administrative Shares may also be compared to averages,
performance rankings and other information prepared by recognized mutual fund
statistical services.
Quotations of performance used in advertising and other types of
literature may be compared to the 91-Day Treasury Bill Average (Federal
Reserve), Lipper Money Market Fund Average, Donoghue Taxable Money Market Fund
Average, Salomon Three-Month Treasury Bill Index, or Bank Averages, which are
calculated from figures supplied by the U.S. League of Savings Institutions
based on effective annual rates of interest on both passbook and certificate
accounts. Savings accounts offer a guaranteed return of principal and a fixed
rate of interest. The performance of Institutional Shares and Administrative
Shares also may be compared to the Consumer Price Index, as published by the
U.S. Bureau of Labor Statistics, which is an established measure of change over
time in the prices of goods and services in major expenditure groups.
Performance comparisons to other mutual funds having investment objectives
similar to those of the Fund may also be used. This comparative performance
could be expressed as a ranking prepared by Lipper Analytical Services, Inc.,
Donoghue's Money Fund Report, including Donoghue's Taxable Money Market Fund
Average or Morningstar, Inc., independent services which monitor the performance
of mutual funds.
Of course, past performance is no guarantee of future investment
results.
ADDITIONAL INFORMATION
Description of the Trust and its Shares. The Trust was organized on
---------------------------------------
July 7, 1998, as a business trust under the laws of the State of Delaware.
Interests in the Fund are represented by shares of beneficial
interest, $.001 par value. The Trust is authorized to issue an unlimited number
of shares, and may issue shares in series, with each series representing
interests in a separate portfolio of investments (a "series"). As of the date of
this Statement of Additional Information, shares representing interests in the
Fund constitute the sole series of the Trust's shares outstanding. Two classes
of the Fund's shares (Institutional Shares and Administrative Shares) have been
authorized.
B-25
<PAGE>
Each share of each class represents an equal proportionate interest
in that Fund with each other share of that class, without any priority or
preference over other shares. All consideration received for the sales of the
Fund, all assets in which such consideration is invested, and all income,
earnings and profits derived therefrom are allocated to and belong to that Fund.
As such, the interest of shareholders in the Fund will be separate and distinct
from the interest of shareholders of any other funds which may be represented by
other series of shares of the Trust, and shares of the Fund will be entitled to
dividends and distributions only out of the net income and gains, if any, of the
Fund as declared by the Board of Trustees of the Trust. The assets of the Fund
and those of each other series of the Trust that may be authorized will be
segregated on the Trust's books and will be charged with the expenses and
liabilities of that series and a pro rata share of the general expenses and
liabilities of the Trust not attributable solely to any particular series. The
Board of Trustees determines those expenses and liabilities deemed to be general
expenses and liabilities of the Trust, and these items will be allocated among
Fund and other series of the Trust in a manner deemed fair and equitable by the
Board of Trustees in its sole discretion.
The Board of Trustees may create additional classes of shares of the
Funds. Except for the different distribution related and other specific costs
borne by each class of the Fund's shares, shares of each class have the same
voting and other rights. These varying costs will result in different dividends
for each class.
Annual meetings of shareholders of the Trust will not be held except
as required by the 1940 Act or other applicable law. A meeting will be held on
the removal of a Trustee or Trustees of the Trust if requested in writing by
shareholders representing not less than 10% of the outstanding shares of the
Trust. The Trust will assist in communications among shareholders as required by
Section 16(c) of the 1940 Act.
The Portfolio and MIP. The Fund pursues its investment objective by
---------------------
investing all of its investable assets in the Portfolio. The Portfolio is a
series of MIP, an open-end management investment company that is organized as a
Delaware business trust. MIP was formed on October 21, 1993. In accordance with
Delaware law and in connection with the tax treatment sought by MIP, the
Declaration of Trust of MIP provides that investors in MIP are personally
responsible for Trust liabilities and obligations, but only to the extent that
MIP's property is insufficient to satisfy such liabilities and obligations. The
MIP Declaration of Trust also provides that MIP shall maintain appropriate
insurance (for example, fidelity bonding and errors and omissions insurance) for
the protection of the MIP, its investors, Trustees of MIP, officers, employees
and agents covering possible tort and other liabilities, and that investors will
be indemnified to the extent that they are held liable for a disproportionate
share of MIP's obligations.
Interests in the Portfolio have substantially identical voting and
other rights as those right discussed above with respect to the Trust. Whenever
the Fund has the right to vote on any matter relating to MIP or the Portfolio by
virtue of its investment in the Portfolio, the Fund will hold a meeting of its
shareholders and will cast its vote as an investor in the Portfolio in the same
proportion as shares of the Fund are voted.
B-26
<PAGE>
Trustee and Officer Liability. Under the Trust's Declaration of
-----------------------------
Trust and its By-Laws, and under Delaware law, the Trustees, officers, employees
and agents of the Trust are entitled to indemnification under certain
circumstances against liabilities, claims and expenses arising from any
threatened, pending or completed action, suit or proceeding to which they are
made parties by reason of the fact that they are or were such Trustees,
officers, employees or agents of the Trust, subject to the limitations of the
1940 Act which prohibit indemnification which would protect such persons against
liabilities to the Trust or its shareholders to which they would otherwise be
subject by reason of their own bad faith, willful misfeasance, gross negligence
or reckless disregard of duties. Similar provisions are contained in the
Declaration of Trust of MIP.
Principal Holders of Shares. Set forth below is information with
---------------------------
respect to each person who, to the Trust's knowledge, owned beneficially or of
record more than 5% of any class of the Fund's total outstanding shares and
their aggregate ownership of total outstanding shares as of June 30, 2000.
<TABLE>
<CAPTION>
Name and Address Class Number of Shares % of Class (% of Fund)
---------------- ----- ---------------- ----------------------
<S> <C> <C> <C>
State Street Bank & Trust Co. Institutional 727,566 89%( %)
as trustee f/b/o Xerox Corp.
Retirement Plans Master Trust
1 Enterprise Drive
Quincy, MA 02170
State Street Bank & Trust Co. Institutional 77,049 10%( %)
as trustee f/b/o Southern California
Edison Stock Savings plan
1 Enterprise Drive
Quincy, MA 02170
</TABLE>
As a result of its direct and beneficial ownership of 89% of the
outstanding Institutional Shares of the Fund on June 30, 2000, State Street Bank
& Trust Co. as trustee f/b/o Xerox Corp. Retirement Plans Master Trust may be
deemed to "control" the Fund, as that term is defined in the 1940 Act. Through
the exercise of voting rights with respect to those shares, the persons voting
such shares may be able to determine the outcome of shareholder voting as
matters requiring the approval of shareholders.
Independent Auditors. KPMG LLP, 99 High Street, Boston,
--------------------
Massachusetts, 02110, are the independent auditors of the Trust. The independent
auditors are responsible for auditing the financial statements annually and
reviewing the tax returns of the Fund. KPMG LLP also serve as the independent
auditors of MIP and audits the financial statements of the Portfolio. The
selection of the independent auditors for the Trust and MIP is approved annually
by their respective Boards of Trustees.
B-27
<PAGE>
Custodian. Investors Bank & Trust Company, 200 Clarendon Street, 16th
---------
Floor, Boston, Massachusetts, 02116, serves as custodian of the Fund and the
Portfolio and maintains custody of the securities and similar assets of the Fund
and the Portfolio. Cash held by the custodian, which may at times be
substantial, is insured by the Federal Deposit Insurance Corporation up to the
amount of available insurance coverage limits (presently, $100,000). Investors
Bank & Trust Company also maintains the accounting books and records of the Fund
and provides sub-administrative services.
Transfer Agent. Investors Bank & Trust Company, 200 Clarendon Street, 16th
--------------
Floor, Boston, Massachusetts, 02116 (the "Transfer Agent") serves as the Fund's
transfer agent and dividend disbursing agent.
Shareholder Reports. Shareholders of the Fund are kept fully informed
-------------------
through annual and semi-annual reports showing diversification of investments,
securities owned and other information regarding the activities of the Fund.
Legal Counsel. Schulte Roth & Zabel LLP, New York, New York, serves as
-------------
counsel to the Trust.
Registration Statement. This Statement of Additional Information and the
----------------------
Prospectus do not contain all of the information set forth in the Registration
Statement the Trust has filed with the SEC. The complete Registration Statement
may be obtained from the SEC upon payment of the fee prescribed by the rules and
regulations of the SEC.
Financial Statements. The Fund's and the Portfolio's audited financial
--------------------
statements appearing in the Fund's Annual Report to shareholders, dated December
31, 1999, and the report thereon of KPMG LLP, independent auditors, are
incorporated by reference in this Statement of Additional Information. The
Fund's Annual Report, which contains the referenced statements, is available
upon request and without charge.
B-28
<PAGE>
SAI APPENDIX
The following is a description of the ratings given by Moody's
and S&P to corporate bonds and commercial paper.
Corporate Bonds
Moody's: The four highest ratings for corporate bonds are
-------
"Aaa," "Aa," "A" and "Baa." Bonds rated "Aaa" are judged to be of the "best
quality" and carry the smallest amount of investment risk. Interest payments are
protected by a large or by an exceptionally stable margin and principal is
secure. Bonds rated "Aa" are of "high quality by all standards," but margins of
protection or other elements make long-term risks appear somewhat greater than
"Aaa" rated bonds. Bonds rated "A" possess many favorable investment attributes
and are considered to be upper medium grade obligations. Bonds rated "Baa" are
considered to be medium grade obligations; 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 have speculative characteristics as well. Moody's applies numerical
modifiers "1," "2" and "3" in each rating category from "Aa" through "Baa" in
its rating system. The modifier "1" indicates that the security ranks in the
higher end of its category; the modifier "2" indicates a mid-range ranking; and
the modifier "3" indicates that the issue ranks in the lower end.
S&P: The four highest ratings for corporate bonds are "AAA,"
---
"AA," "A" and "BBB." Bonds rated "AAA" have the highest ratings assigned by S&P
and have an extremely strong capacity to pay interest and repay principal. Bonds
rated "AA" have a "very strong capacity to pay interest and repay principal" and
differ "from the highest rated issued only in small degree." Bonds rated "A"
have a "strong capacity" to pay interest and repay principal, but are "somewhat
more susceptible" to adverse effects of changes in economic conditions or other
circumstances than bonds in higher rated categories. Bonds rated "BBB" are
regarded as having an "adequate capacity" to pay interest and repay principal,
but changes in economic conditions or other circumstances are more likely to
lead to a "weakened capacity" to make such repayments. The ratings from "AA" to
"BBB" may be modified by the addition of a plus or minus sign to show relative
standing within the category.
Corporate Commercial Paper
Moody's: Moody's employs the designations of "Prime-1,"
-------
"Prime-2" and "Prime-3" to indicate the relative capacity of the rated issuers
or borrowers to repay punctually. The highest rating for corporate commercial
paper is "Prime- 1." Issuers rated "Prime-1" have a "superior capacity for
repayment of short- term promissory obligations," and will normally be evidenced
by leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate reliance
on debt and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.
Issuers rated "Prime-2" "have a strong capacity for repayment of short-term
B-29
<PAGE>
promissory obligations," but earnings trends, while sound, will be subject to
more variation.
S&P: The "A-1" rating for corporate commercial paper indicates that the
---
"degree of safety regarding timely payment is either overwhelming or very
strong." Commercial paper with "overwhelming safety characteristics" will be
rated "A-1+." Commercial paper with a strong capacity for timely payments on
issues will be rated "A-2."
B-30
<PAGE>
PART C
OTHER INFORMATION
Item 23. Exhibits.
Exhibit
Number Description
------ -----------
(a) Declaration of Trust, dated July 6, 1998.*
(b) By-Laws of Registrant.*
(c) Certificate of Trust, dated July 6, 1998.*
(d) Not Applicable.
(e) Distribution Agreement, dated September 1, 1998.**
(f) Not Applicable.
(g) Custodian Agreement, dated September 1, 1998.**
(h)(1) Administration Agreement, dated September 1, 1998.**
(h)(2) Transfer Agency and Service Agreement, dated September 1,
1998.**
(h)(3) Sub-Administration Agreement, dated September 1, 1998.**
(h)(4) Shareholder Services Agreement (Institutional), dated
September 1, 1998.**
(h)(5) Shareholder Services Agreement (Administrative), dated
September 1, 1998.**
----------------
* Incorporated by reference to Registrant's initial filing on Form N-1A, filed
July 16, 1998.
** Incorporated by reference to Registrant's previous filing on Form N-1A,
Pre-Effective Amendment No. 1, filed September 4, 1998.
C-1
<PAGE>
Exhibit
Number Description
------ -----------
(h)(6) Third Party Feeder Fund Agreement, dated September 1,
1998.**
(i) Legal Opinion.**
(j)(1) Consent of Independent Auditors.
(j)(2) Power of Attorney.**
(k) Not Applicable.
(l) Not Applicable.
(m) Rule 12b-1 Plan.**
(n) Rule 18f-3 Plan.**
(o) Reserved.
(p) Not Applicable (the Fund is a Money Market Funds).
Item 24. Persons Controlled by or Under Common Control with Registrant.
No persons are controlled by Registrant. As noted in the SAI,
Xerox Corp. Retirement Plans Master Trust may be deemed to "control" the Fund,
as that term is defined in the 1940 Act.
Item 25. Indemnification.
As permitted by Section 17(h) and (i) of the Investment Company
Act of 1940, as amended (the "Investment Company Act"), and pursuant to Article
VI of Registrant's By-Laws, officers, trustees, employees and agents of
Registrant may be indemnified against certain liabilities in connection with
Registrant, and pursuant to Section 9 of the Distribution Agreement, Hewitt
Services LLC as principal underwriter of Registrant, may be indemnified against
certain liabilities which it may incur. Such Article VI of the By-Laws and
Section 9 of the Distribution Agreement are hereby incorporated by reference in
their entirety.
Registrant maintains an insurance policy insuring its officers and
trustees against
----------------------------------
** Incorporated by reference to Registrant's previous filing on Form N-1A, Pre-
Effective Amendment No. 1, filed September 4, 1998.
C-2
<PAGE>
certain liabilities, and certain costs of defending claims against such officers
and trustees, and to bear the costs of such policy except for such costs as is
determined to be attributable to coverage protecting such persons against
liabilities to which they may become subject as a consequence of their own
willful misfeasance, bad faith, gross negligence or reckless disregard in the
performance of their duties. The insurance policy also insures Registrant
against the cost of indemnification payments to officers and trustees under
certain circumstances.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "1933 Act"), may be permitted to
trustees, officers and controlling persons of Registrant and the principal
underwriter pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer, or controlling person of Registrant and the
principal underwriter in connection with the successful defense of any action,
suit or proceeding) is asserted against Registrant by such trustee, officer or
controlling person or the principal underwriter in connection with the shares
being registered, 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 1933 Act and will be governed by the
final adjudication of such issue.
Registrant hereby undertakes that it will apply the indemnification
provisions of its By-Laws in a manner consistent with Release No. 11330 of the
Securities and Exchange Commission under the Investment Company Act so long as
the interpretations of Sections 17(h) and 17(i) of the Investment Company Act
remain in effect and are consistently applied.
Item 26. Business and Other Connections of Investment Adviser.
Registrant does not have an investment adviser because it pursues its
investment objective by investing its assets in the Money Market Master
Portfolio, a series of Master Investment Portfolio, a registered open-end
management company. The investment adviser of Money Market Master Portfolio is
Barclays Global Fund Advisors. The information required by this Item 26 with
respect to Barclays Global Fund Advisors is incorporated by reference to Form
N-1A of Masterworks Fund Inc., filed July 2, 1998, accession number 0000929624-
98-00127.
Item 27. Principal Underwriters.
(a) Not Applicable.
C-3
<PAGE>
(b)
Positions and Offices Positions and Offices
Name with Distributor with Funds
---- ---------------- ----------
John M. Ryan Chief Executive Officer
Peter E. Ross Chief Compliance Secretary
Officer/Assistant Secretary
C. Lawrence Connolly, III General Counsel/Secretary
Stacy L. Schaus Marketing Director/Chief President
Operating Officer
The principal business address of each of the above persons is 100
Half Day Road, Lincolnshire, Illinois 60069.
(c) The Distributor does not receive compensation for its services as
principal underwriter, except that it is paid a fee for services rendered in
connection with the distribution of Administrative Shares of Registrant. See
"Distribution and Servicing Arrangements" in Part A and "Distribution
Arrangements" in Part B.
Item 28. Location of Accounts and Records.
All accounts books and other documents required to be maintained by
Registrant by Section 31(a) of the Investment Company Act of 1940 and the rules
thereunder are maintained by Investors Bank & Trust Company, 200 Clarendon
Street, 16th Floor, Boston Massachusetts, 02116, which serves as Registrant's
custodian and transfer agent, except for records required by paragraph (b)(4) of
Rule 31a-1 which will be maintained at the offices of Hewitt Associates LLC, 100
Half Day Road, Lincolnshire, Illinois 60069.
Item 29. Management Services.
Not Applicable.
Item 30. Undertakings.
Not Applicable.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment
Company Act, the Registrant, Hewitt Series Trust, has duly caused this
Post-Effective Amendment No. 2 to the Registration Statement to be signed on its
behalf by the undersigned, duly authorized, in the City of Lincolnshire, and
state of Illinois, on the day of July 25, 2000.
Hewitt Series Trust
By: /s/ Stacy L. Schaus
--------------------------
Stacy L. Schaus
President
Pursuant to the requirements of the Securities Act, this Post-Effective
Amendment No. 2 to the Registration Statement of Registrant has been signed
below by the following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Trustee July __, 2000
------------------------
Donald Hunt
/s/ John D. Oliverio Trustee July 25, 2000
------------------------
John D. Oliverio
/s/ E. Scott Peterson Trustee July 26, 2000
------------------------
E. Scott Peterson
President July __, 2000
------------------------ (Principal Executive Officer)
Stacy L. Schaus
Treasurer and July __, 2000
------------------------ Chief Financial Officer
Anthony P. Santori (Principal Financial Officer)
C-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, The Hewitt Associates certifies that it meets all of the
requirements for effectiveness of this registration statement under Rule 485(b)
under the Securities Act, and has duly caused this Post-Effective Amendment No.
2 to be signed on its behalf by the undersigned, thereto duly authorized, in the
City of Little Rock, State of Arkansas on the 26 day of July, 2000
MASTER INVESTMENT PORTFOLIO
MONEY MARKET MASTER PORTFOLIO
By: /s/ Richard H. Blank, Jr.
-----------------------------
Richard H. Blank, Jr.
Secretary and Treasurer
(Principal Financial Officer)
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 dates indicated.
Signatures Title Date
---------- ----- ----
/s/ Richard H. Blank, Jr. Secretary and Treasurer July 26, 2000
---------------------------- (Principal Financial Officer)
Richard H. Blank, Jr.
Trustee [ ], 2000
---------------------------
Jack S. Euphrat*
Chairman, President [ ], 2000
--------------------------- (Principal Executive Officer)
R. Greg Feltus* and Trustee
Trustee [ ], 2000
---------------------------
W. Rodney Hughes*
Trustee [ ], 2000
---------------------------
Leo Soong*
* Richard H. Blank, Jr.. signs this document pursuant to powers of attorney as
previously filed (in the case of Messrs. Euphrat, Feltus and Hughes) and filed
herewith (in the case of Mr. Soong).
By: /s/ Richard H. Blank, Jr.
------------------------------
Richard H. Blank, Jr.
C-6
<PAGE>
Attorney-in-Fact
C-7
<PAGE>
INDEX TO EXHIBITS
(j)(1) Consent of Independent Auditors
(j)(2) Power of Attorney for Leo Soong
