<PAGE>
As filed with the Securities and Exchange Commission on March 30, 2000
Securities Act File No. 333-70423
Investment Company Act of 1940 File No. 811-09195
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 3 / X /
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 5 / X /
SA Funds - Investment Trust
(Formerly known as RWB Funds - Investment Trust)
(Exact Name of Registrant as Specified in Charter)
1190 Saratoga Avenue, Suite 200
San Jose, California 95129
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number (408) 260-3143
Michael Gillespie
Vice President and Associate Counsel
State Street Bank and Trust Company
2 Avenue de Lafayette
Boston, Massachusetts 02111-1724
(Name and Address of Agent for Service)
Copies to:
Julie Allecta, Esq.
Paul, Hastings, Janofsky & Walker LLP
345 California Street
San Francisco, CA 94104-2635
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after this
Registration Statement is declared effective.
It is proposed that this filing will become effective: (check appropriate box)
immediately upon filing pursuant to paragraph (b)
------
on pursuant to paragraph (b)
------ ---------
x 60 days after filing pursuant to paragraph (a)(1)
------
75 days after filing pursuant to paragraph (a)(2)
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on pursuant to paragraph (a)(2) of Rule 485.
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If appropriate, check the following box:
This post-effective amendment designates a new effective date
-----
for a previously filed post-effective amendment.
<PAGE>
SA FUNDS - INVESTMENT TRUST
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
<TABLE>
<CAPTION>
Items in Part A of Form N-1A Heading
- ---------------------------- -------
<S> <C>
1. Front and Back Cover Pages Cover
2. Risk/Return Summary: Investments, Risks, and Risk/Return Summary - Goal, Principal
Performance Investment Strategies, Principal Risks
3. Risk/Return Summary: Fee Table Risk/Return Summary - Fees and Expenses
4. Investment Objectives; Principal Investment Risk/Return Summary - Goal, Principal
Strategies, and Related Risks Investment Strategies, Principal Risks;
More About SA Funds
5. Management's Discussion of Fund Performance Not Applicable
6. Management, Organization, and Capital Management
Structure
7. Shareholder Information Your Account
8. Distribution Arrangements Your Account
9. Financial Highlights Information Not Applicable
</TABLE>
<PAGE>
SA FUNDS - INVESTMENT TRUST
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a) (CONTINUED)
<TABLE>
<CAPTION>
Items in Part B of Form N-1A Heading
- ---------------------------- -------
<S> <C>
10. Cover Page and Table of Contents Cover and Table of Contents
11. Fund History History and General Information
12. Description of the Fund and Its Investments Description of the Funds and Their
and Risks Investments and Risks
13. Management of the Fund Management of the Trust
14. Control Persons and Principal Holders of Control Persons and Principal Holders of
Securities Securities
15. Investment Advisory and Other Services Investment Advisory and Other Services
16. Brokerage Allocation and Other Practices Brokerage Allocation and Other Practices
17. Capital Stock and Other Securities Information Concerning Shares
18. Purchase, Redemption and Pricing of Shares Purchase, Redemption and Pricing of Shares
19. Taxation of the Fund Taxes
20. Underwriters Investment Advisory and Other Services -
Distribution
21. Calculation of Performance Data Performance Information
22. Financial Statements Not Applicable
</TABLE>
<PAGE>
SA FUNDS - INVESTMENT TRUST
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a) (CONTINUED)
<TABLE>
<CAPTION>
Items in Part C of Form N-1A Heading
- ---------------------------- -------
<S> <C>
23. Exhibits Exhibits
24. Persons Controlled by or Under Common Persons Controlled by or Under
Control with Registrant Common Control with Registrant
25. Indemnification Indemnification
26. Business and Other Connections of the Business and Other Connections of the
Investment Advisor Investment Advisor
27. Principal Underwriters Principal Underwriters
28. Location of Accounts and Records Location of Accounts and Records
29. Management Services Management Services
30. Undertakings Undertakings
</TABLE>
<PAGE>
SA FUNDS
/ / SA U.S. GROWTH FUND
/ / SA U.S. LARGE VALUE STRATEGY FUND
PROSPECTUS
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities, or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
April [ ], 2000
<PAGE>
TABLE OF CONTENTS
2 RISK/RETURN SUMMARY
SA U.S. GROWTH FUND
SA U.S. LARGE VALUE STRATEGY FUND
FEES AND EXPENSES
PERFORMANCE
6 MANAGEMENT
7 YOUR ACCOUNT
9 PRICING OF FUND SHARES
10 DISTRIBUTIONS
11 FEDERAL TAX CONSIDERATIONS
12 MORE ABOUT THE FUNDS
BACK COVER FOR ADDITIONAL INFORMATION
<PAGE>
RISK/RETURN SUMMARY
- -------------------------------------------------------------------------------
This Risk/Return Summary briefly describes the goals and principal investment
strategies of the Funds and the principal risks of investing in the Funds. For
further information on these and the Funds' other investment strategies and
risks, please read the section entitled More About the Funds starting on page
12.
U.S. GROWTH FUND
GOAL
The Fund's goal is long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
The Fund intends to pursue its goal by investing under normal circumstances at
least 65% of its assets in common stocks of U.S. companies that the sub-adviser
believes have above-average growth potential. The Fund will emphasize
large-capitalization companies with market capitalizations that exceed $10
billion. The Fund will also invest in stocks of smaller companies that offer
good expansion prospects.
The Fund may invest in stocks that are convertible to common stocks.
Stocks are bought and sold based on the sub-adviser's judgment about the
companies and their financial prospects, and about the stock market and the
economy in general.
PRINCIPAL RISKS
The share price of the Fund may change daily based on market conditions and
other factors. Therefore, you may lose money if you invest in the Fund.
The principal risks that apply to the Fund are:
- - STOCK MARKET RISK: The value of the securities in which the Fund
invests may decline in response to the prospects of individual
companies and/or general economic conditions. Price changes may be
temporary or last for extended periods.
- - LARGE COMPANY STOCK RISK: Larger, more established companies are
generally not nimble and may be unable to respond quickly to
competitive challenges, such as changes in technology and consumer
tastes.
- - SMALLER COMPANY STOCK RISK: The stocks of small or medium-size
companies may have more risks than those of larger companies. Small
and medium-size companies often have narrower markets and more limited
managerial and financial resources than larger, more established
companies. As a result, they may be more sensitive to changing
economic conditions, which could increase the volatility of the Fund's
portfolio. In addition, small company stocks typically trade in lower
volume making them more difficult to sell. Generally, the smaller the
company size, the greater these risks.
- - INVESTMENT STYLE RISK: Returns from growth stocks may trail returns
from other asset classes (for example, value stocks) or the overall
stock market. Each type of asset class tends to experience periods of
doing better or worse than common stocks in general.
2
<PAGE>
U.S. LARGE VALUE STRATEGY FUND
GOAL
The Fund's goal is long-term growth of capital and income.
PRINCIPAL INVESTMENT STRATEGIES
The Fund invests primarily in common stocks of large U.S. companies with
market values of issuers included in the Russell 1000 Value Index. Under
normal circumstances, the Fund invests at least 65% of its total assets in
these securities. On December 31, 1999, the minimum market value of companies
in the index was $1.3 billion.
The Fund uses a multi-manager approach, relying on sub-advisers with differing
investment philosophies to each manage portions of the Fund's portfolio under
the general supervision of RWB Advisory Services, the Fund's investment
manager. Each sub-adviser, in managing its portion of the Fund's assets, uses
a value approach to select the Fund's investments. Using this investment
style, each sub-adviser seeks securities selling at reasonable prices or
substantial discounts to their underlying value and then holds these
securities until the market values reflect their intrinsic values. The
sub-advisers evaluate a security's potential value based on the company's
assets and prospects for earnings growth. The sub-advisers rely on the
knowledge, experience and judgment of their own staff that have access to a
wide variety of research. Factors the sub-advisers look for in selecting
investments include:
- Above average potential for earnings and growth.
- Low market valuations relative to earnings forecast, book value, cash
flow and sales.
- A sustainable competitive advantage, such as a brand name, customer
base, proprietary technology or economies of scale.
PRINCIPAL RISKS
The share price of the Fund may change daily based on market conditions and
other factors. Therefore, you may lose money if you invest in the Fund.
The principal risks that apply to the Fund are:
- - STOCK MARKET RISK: The value of the securities in which the Fund
invests may decline in response to the prospects of individual
companies and/or general economic conditions. Price changes may be
temporary or last for extended periods.
- - INVESTMENT STYLE RISK: Returns from value stocks may trail returns
from other asset classes (for example, growth stocks) or the overall
stock market. Each type of asset class tends to experience periods of
doing better or worse than common stocks in general.
- - LARGE COMPANY STOCK RISK: Larger, more established companies are
generally not nimble and may be unable to respond quickly to competitive
challenges, such as changes in technology and consumer tastes.
3
<PAGE>
FEES AND EXPENSES
The table below describes the fees and expenses that you may pay if you buy
and hold shares of a Fund. The Funds have no sales charge (load), redemption
fees or exchange fees, although some institutions may charge you a fee for
shares you buy or sell through them.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Annual Account Maintenance Fee
(for accounts under $100,000) (1)........................$100.00
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------------------------
U.S. GROWTH FUND U.S. VALUE FUND
CLASS S CLASS I CLASS S CLASS I
<S> <C> <C> <C> <C>
Management/Advisory Fee 1.32% 1.32% 1.32% 1.32%
Other Expenses (2)
Shareholder Servicing Fees .25% .05% .25% .05%
Other Operating Expenses 1.52% 1.46% 1.52% 1.46%
----- ----- ----- -----
Total Other Operating Expenses 1.77% 1.51% 1.77% 1.51%
----- ----- ----- -----
Total Annual Fund Operating Expenses 3.09% 2.83% 3.09% 2.83%
Fee Waiver and/or Expense Reimbursement 1.50% 1.50% 1.50% 1.50%
----- ----- ----- -----
Net Expenses (3) 1.59% 1.33% 1.59% 1.33%
</TABLE>
- -------------------
(1) The Funds may deduct an annual maintenance fee of $100.00 from accounts
when a redemption causes the value to be less than $100,000. The account
value is determined by aggregating all accounts with SA Funds. The Funds
expect to value accounts on the second Friday in November of each year.
Accounts opened after September 30th will not be subject to the fee for
that year. The fee is payable to the Funds and is designed to offset in
part the relatively higher costs of servicing smaller accounts. The Funds
reserve the right to waive the fee.
(2) Other expenses are based on estimates for the current fiscal year and
include an administration fee paid to the manager and all other ordinary
operating expenses not listed above.
(3) The manager has contractually agreed to waive its management fees and/or to
reimburse expenses to the extent necessary to limit the Fund's total annual
operating expenses to the amounts shown in the above table. This agreement
will remain in effect until July 7, 2009. The manager may elect to
recapture any amounts waived or reimbursed subject to the following
conditions: (1) the manager must request reimbursement within three years
from the year in which the waiver/reimbursement is made, (2) the Board of
Trustees must approve the reimbursement and (3) the Fund must be able to
make the reimbursement and still stay within the operating expense
limitation.
EXAMPLE
- --------------------------------------------------------------------------------
This example is intended to help you compare the cost of investing in a
Fund to 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 sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year, that the Fund's operating expenses remain
the same and that all dividends and distributions are reinvested. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
1 YEAR 3 YEARS
------ -------
U.S. GROWTH FUND
CLASS S SHARES $317 $968
CLASS I SHARES $290 $889
U.S. LARGE VALUE STRATEGY FUND
CLASS S SHARES $317 $968
CLASS I SHARES $290 $889
4
<PAGE>
PERFORMANCE
- --------------------------------------------------------------------------------
The Funds have not commenced operations as of the date of this prospectus
and, therefore, do not have any past performance information available.
[The remainder of this page is intentionally left blank.]
5
<PAGE>
MANAGEMENT
- --------------------------------------------------------------------------------
MANAGER
RWB Advisory Services, Inc., 1190 Saratoga Avenue, San Jose, California 95129,
is the Funds' investment manager. Founded in 1975, the manager provides
investment advisory services to individuals, pension and profit sharing plans,
trusts, estates, charitable organizations and other business entities. As of
March 1, 2000, the firm had more than $1.45 billion in assets under management.
The manager, in its capacity as investment adviser, handles the business affairs
of the Funds and has general responsibility for the management of the Funds'
investments. In its capacity as administrator, the manager provides
administrative services to the Funds. The manager is also the manager of six
other mutual funds.
SUB-ADVISERS
Each sub-adviser, subject to the supervision of the manager, is responsible for
managing the assets of the applicable Fund.
The manager has engaged the following sub-advisers:
U.S. GROWTH FUND
[TO BE COMPLETED]
U.S. LARGE VALUE STRATEGY FUND
MARTINGALE ASSET MANAGEMENT, L.P. ("Martingale") serves as a sub-adviser to
the Fund. As of December 31, 1999 Martingale had $1.4 billion in assets under
management.
SANFORD C. BERNSTEIN & CO., INC. ("Bernstein") serves as a sub-adviser to the
Fund. Founded in 1967, Bernstein is a closely held corporation organized
under the laws of the State of New York. Bernstein is a registered investment
adviser that managed approximately $88 billion in assets as of December 31,
1999 for individuals, endowments, trusts and estates, charitable foundations,
partnerships, corporations, insurance companies, mutual funds and tax-exempt
funds such as pension and profit-sharing plans.
PORTFOLIO MANAGERS
U.S. GROWTH FUND
U.S. LARGE VALUE STRATEGY FUND
MARTINGALE ASSET MANAGEMENT, L.P.
A committee of investment professionals manages a portion of the assets of
the Fund.
SANFORD C. BERNSTEIN & CO, INC.
A committee of investment professionals manages a portion of the assets of
the Fund.
MANAGEMENT FEES
The following chart shows the aggregate annual investment management fees that
each Fund will pay to the manager and the sub-adviser. Fees are stated before
any waiver. Please refer to the Fees and Expenses Table in the Risk/Return
Summary section of this prospectus for more information about fee waivers.
INVESTMENT MANAGEMENT FEE
(EXPRESSED AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
-------------------------------------------------------
U.S. Growth Fund 1.32%
U.S. Large Value Strategy Fund 1.32%
6
<PAGE>
YOUR ACCOUNT
- --------------------------------------------------------------------------------
This section describes how to do business with SA Funds and the services that
are available to shareholders.
HOW TO REACH SA FUNDS
By telephone: (800) 366-7266
Call for account information 8:00
a.m. to 5:00 p.m. Pacific time
Monday through Friday.
By mail: 1190 Saratoga Avenue
Suite 200
San Jose, California 95129
SHARE CLASSES
Each Fund offers two classes of shares: Class S and Class I. Both of the classes
are offered without a sales charge (load). Different shareholder servicing fees,
which are payable to the manager as the Funds' shareholder servicing agent, and
different operating expenses are payable by each class. Shareholder servicing
fees will be paid at an annual rate of up to 0.25% and 0.05% of the daily net
assets of the Class S and Class I shares, respectively. Other operating expenses
paid by Class S shares will exceed those paid by Class I shares by 0.06% of
their respective daily net assets.
Investors who maintain aggregate accounts of at least $5,000,000 (or less at the
discretion of SA Funds) may purchase Class I shares. All other investors must
purchase Class S shares.
PURCHASING SHARES
Only clients of investment advisers are eligible to purchase shares of the
Funds.
If you are making an initial investment, you must complete and submit an account
application.
If you purchase shares through an omnibus account maintained by a securities
firm, the firm may charge you an additional fee which will reduce your
investment, accordingly.
MINIMUM INVESTMENTS
The minimum initial investment is $100,000, unless waived by SA Funds.
There is no minimum for additional investments.
TIMING OF REQUESTS
All requests received by SA Funds' transfer agent, or other authorized
intermediary, before 4:00 p.m. Eastern time will be executed the same day, at
that day's net asset value per share ("NAV"). Orders received after 4:00 p.m.
Eastern time will be executed the following day, at that day's NAV. Authorized
intermediaries acting on a purchaser's behalf are responsible for transmitting
orders by the deadline.
SELLING SHARES
You or your financial representative may sell shares at any time by furnishing a
redemption request to the manager in the form required by the manager.
INCOMPLETE SELL REQUESTS
SA Funds will attempt to notify you or your financial representative promptly if
any information necessary to process your request is missing. Once the
information is obtained, you will receive the next-determined NAV.
TIMING OF REQUESTS
All requests received (in the form required by the manager) by SA Funds, or
authorized intermediary, before 4:00 p.m. Eastern time will be executed the same
day, at that day's NAV. Requests received after 4:00 p.m. Eastern time will be
executed the following day, at that day's NAV.
WIRE TRANSACTIONS
A fee of $10 will be deducted from all proceeds sent by wire, and your bank may
charge an additional fee to receive wired funds.
SELLING SHARES RECENTLY PURCHASED
If you sell shares before the check or electronic funds transfer (ACH) for those
shares has been collected, you will not receive the proceeds until your initial
payment has cleared. This may take up to 15 days after your purchase was
recorded (in rare cases, longer). If you open an account with shares purchased
by wire, you cannot sell those shares until your application has been processed.
7
<PAGE>
ACCOUNTS WITH LOW BALANCES
If the value of your total account with SA Funds falls below $10,000 as a result
of selling or exchanging shares, SA Funds may send you a notice asking you to
bring the account back up to $10,000 or to close it out. If you do not take
action within 60 days, SA Funds may sell your shares and mail the proceeds to
you at the address of record.
EXCHANGES
There is no fee to exchange shares among SA Funds. The exchange privilege is not
intended as a way to speculate on short-term movements in the markets.
You may acquire shares of the Funds by exchanging shares of the SSgA Money
Market Fund and may exchange your shares of the Funds for shares of the SSgA
Money Market Fund, if such shares are offered in your state of residence. The
SSgA Money Market Fund is a portfolio of the SSgA Funds. The SSgA Funds is an
open-end management investment company with multiple portfolios advised by State
Street Bank and Trust Company, 225 Franklin Street, Boston MA 02110, and is not
affiliated with SA Funds or SA Funds' distributor. Prior to making such an
exchange, you should carefully read the prospectus for the SSgA Money Market
Fund. You can obtain a copy of the prospectus through your financial
representative or by calling the manager at (800) 366-7266. The exchange
privilege is not an offering or recommendation on the part of the SA Funds or
the distributor of an investment in the SSgA Money Market Fund.
The SSgA Money Market Fund's fundamental investment objective is to maximize
current income, to the extent consistent with the preservation of capital and
liquidity and the maintenance of a stable $1.00 per share net asset value, by
investing in dollar denominated securities with remaining maturities of one year
or less.
An investment in the SSgA Money Market Fund is neither insured nor guaranteed by
the U.S. Government or by State Street Bank and Trust Company. There is no
assurance that the SSgA Money Market Fund will maintain a stable net asset value
of $1.00 per share.
ADDITIONAL POLICIES FOR PURCHASES, SALES AND EXCHANGES
- - SA Funds reserves the right to reject any purchase order.
- - At any time, SA Funds may change any of its purchase, redemption or
exchange procedures, and may suspend sale of its shares.
- - SA Funds may delay sending your redemption proceeds for up to seven days,
or longer if permitted by the Securities and Exchange Commission.
- - If accepted by a Fund, you may purchase shares of the Fund with securities
that a Fund may hold. The sub-adviser will determine if the securities
are consistent with that Fund's objectives and policies. If accepted, the
securities will be valued the same way the Fund values portfolio securities
that it already owns.
- - SA Funds reserves the right to make payment for redeemed shares wholly or
in part by giving the redeeming shareholder portfolio securities. The
shareholder may pay transaction costs to dispose of these securities.
- - SA Funds may authorize certain financial intermediaries to accept purchase,
redemption and exchange orders from their customers on behalf of the SA
Funds. Other intermediaries may also be designated to accept such orders,
if approved by SA Funds. Authorized intermediaries are responsible for
transmitting orders on a timely basis. A Fund will be deemed to have
received an order when the order is accepted in proper form by the
authorized intermediary, and the order will be priced at the Fund's NAV
next determined.
8
<PAGE>
PRICING OF FUND SHARES
- --------------------------------------------------------------------------------
Each Fund's NAV is calculated on each day the New York Stock Exchange is open.
NAV is calculated separately for each class of shares. NAV is the value of a
single share of a Fund. NAV is calculated by (1) taking the current market value
of a Fund's total assets allocated to each class, (2) subtracting the
liabilities and expenses charged to each class and (3) dividing that amount by
the total number of shares of each class owned by shareholders.
The Funds calculate NAV as of the close of business on the New York Stock
Exchange, normally 4:00 p.m. Eastern time. If the New York Stock Exchange closes
early, the Funds accelerate calculation of NAV transaction deadlines to that
time.
The NAV of each Fund is generally based on the market value of the securities
held in the Fund. If market values are not readily available or if the
sub-adviser believes that events occurring after the close of a foreign exchange
have rendered the quotations unreliable, the Fund may use fair-value estimates
instead. A Fund that uses fair value to price securities may value those
securities higher or lower than a fund that uses market quotations. If such
events materially affect the value of portfolio securities, these securities
may be valued at their fair value as determined in good faith by, or following
procedures approved by, the Board of Trustees.
[Trading in foreign securities may be completed at times that vary from the
closing of the New York Stock Exchange. The Funds value foreign securities at
the latest closing price on the exchange on which they are traded immediately
prior to the closing of the New York Stock Exchange. Certain foreign currency
exchange rates may also be determined at the latest rate prior to the closing of
the New York Stock Exchange. Foreign securities quoted in foreign currencies are
translated into U.S. dollars at current rates. Occasionally, events that affect
these values and exchange rates may occur between the times at which they are
determined and the closing of the New York Stock Exchange. If such events
materially affect the value of portfolio securities, these securities may be
valued at their fair value as determined in good faith by, or following
procedures approved by, the Board of Trustees.
Foreign securities may trade in their primary markets on weekends or other days
when the Fund does not price its shares. Therefore, the value of the portfolio
of a Fund holding foreign securities may change on days when shareholders will
not be able to buy or sell their shares.]
9
<PAGE>
DISTRIBUTIONS
- --------------------------------------------------------------------------------
As a shareholder, you are entitled to your share of a Fund's net income and
gains on its investments. Each Fund passes substantially all of its earnings
along to its shareholders as distributions. When a Fund earns dividends from
stocks and interest from debt securities and distributes these earnings to
shareholders, it is called a DIVIDEND DISTRIBUTION. A Fund realizes capital
gains when it sells securities for a higher price than it paid. When these gains
are distributed to shareholders, it is called a CAPITAL GAIN DISTRIBUTION.
Each Fund pays dividends, if any, at least annually.
Each Fund distributes capital gains, if any, at least annually.
You will receive distributions from a Fund in additional shares of that Fund
unless you elect to receive your distributions in cash. If you wish to receive
distributions in cash, you may either indicate your request on your account
application or you or your financial representative may notify the manager by
calling (800) 366-7266.
10
<PAGE>
FEDERAL TAX CONSIDERATIONS
- -------------------------------------------------------------------------------
Your investment in a Fund will have tax consequences that you should consider.
Some of the more common federal tax consequences are described here, but you
should consult your tax adviser about your own particular situation.
TAXES ON DISTRIBUTIONS
You will generally have to pay federal income tax on all Fund distributions.
Shareholders not subject to tax on their income generally will not be required
to pay any tax on distributions. Your distributions will be taxed in the same
manner whether you receive the distributions in cash or in additional shares of
the Fund. Distributions that are derived from net long-term capital gains
generally will be taxed as long-term capital gains. Dividend distributions and
short-term capital gains generally will be taxed as ordinary income. The tax you
pay on a given capital gain distribution generally depends on how long the Fund
held the portfolio securities it sold. It does not depend on how long you held
your Fund shares.
The Funds expect that their distributions will consist primarily of capital
gains.
You generally are required to report all Fund distributions on your federal
income tax return. Each year SA Funds will send you information detailing the
amount of ordinary income and capital gains paid to you for the previous year.
TAXES ON SALES OR EXCHANGES
If you sell your shares of a Fund or exchange them for shares of another Fund,
you generally will be subject to tax on any taxable gain. Your taxable gain is
computed by subtracting your tax basis in the shares from the redemption
proceeds (in the case of a sale) or the value of the shares received (in the
case of an exchange). Because your tax basis depends on the original purchase
price and on the price at which any dividends may have been reinvested, you
should be sure to keep your account statements so that you or your tax preparer
will be able to determine whether a sale or exchange will result in a taxable
gain.
OTHER CONSIDERATIONS
If you buy shares of a Fund just before the Fund makes any distribution, you
will pay the full price for the shares and then receive back a portion of the
money you have just invested in the form of a taxable distribution.
If you have not provided complete, correct taxpayer information (i.e. your
social security number), by law the Funds must withhold a portion of your
distributions and redemption proceeds to pay federal income taxes.
Dividends and certain interest income earned from foreign securities by a Fund
may be subject to foreign withholding or other taxes. A Fund may be permitted to
pass on to its shareholders the right to a credit or deduction for income or
other tax credits earned from foreign investments and will do so if possible.
These deductions and credits may be subject to tax law limitations.
11
<PAGE>
MORE ABOUT THE FUNDS
- --------------------------------------------------------------------------------
The Funds' principal investment strategies and risks are summarized above in the
section entitled "Risk/Return Summary". A more complete description of each
Fund's investments and strategies and their associated risks is provided below.
The Funds may also invest in other securities and are subject to further
restrictions and risks that are described in the Funds' Statement of Additional
Information ("SAI"). Each Fund's objective may be changed without shareholder
approval.
EQUITY SECURITIES. The Funds may invest in all types of equity securities. These
include common and preferred stocks publicly traded in the United States or in
foreign countries, warrants, convertible securities, foreign government
authorized pooled investment vehicles, shares of other investment companies and
depository receipts.
CONVERTIBLE SECURITIES. A convertible security is a bond or preferred stock that
may be converted (exchanged) into the common stock of the issuing company within
a specified time period for a specified number of shares. Convertible securities
offer the Funds a way to participate in the capital appreciation of the common
stock into which the securities are convertible, while earning higher current
income than is available from the common stock.
FUTURES CONTRACTS AND RELATED OPTIONS. A futures contract is a type of
derivative instrument that obligates the holder to buy or sell an asset in the
future at an agreed upon price. When a Fund purchases an option on a futures
contract, it has the right to assume a position as a purchaser or seller of a
futures contract at a specified exercise price during the option period. When a
Fund sells an option on a futures contract, it becomes obligated to purchase or
sell a futures contract if the option is exercised.
INVESTMENT STRATEGY. The Funds may invest in futures contracts and options
on futures contracts on domestic or foreign exchanges or boards of trade.
These instruments may be used for hedging purposes, to maintain liquidity
to meet potential shareholder redemptions, to invest cash balances or
dividends, or to minimize trading costs.
A Fund will not purchase or sell a futures contract unless, after the
transaction, the sum of the aggregate amount of margin deposits on its
existing futures positions and the amount of premiums paid for related
options used for non-hedging purposes is 5% or less of the Fund's total
assets.
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SPECIAL RISKS. Futures contracts and related options present the following
risks: imperfect correlation between the change in market value of a Fund's
securities and the price of futures contracts and options; the possible
inability to close a futures contract when desired; losses due to
unanticipated market movements, which are potentially unlimited; and the
possible inability of the advisor or sub-advisor to correctly predict the
direction of securities prices, interest rates, currency exchange rates and
other economic factors.
BORROWING AND REVERSE REPURCHASE AGREEMENTS. The Funds can borrow money from
banks and enter into reverse repurchase agreements with banks and other
financial institutions. Reverse repurchase agreements involve the sale of
securities held by a Fund subject to the Fund's agreement to repurchase them at
a mutually agreed upon date and price (including interest).
INVESTMENT STRATEGY. Each Fund may borrow money up to 33 1/3% of its
assets. This is a fundamental policy which can be changed only by
shareholders.
SPECIAL RISKS. Borrowings and reverse repurchase agreements by a Fund may
involve leveraging. If the securities held by the Fund decline in value
while these transactions are outstanding, the Fund's net asset value will
decline in value by proportionately more than the decline in value of the
securities. In addition, reverse repurchase agreements involve the risks
that the interest income earned by the Fund (from the investment of the
proceeds) will be less than the interest expense of the transaction, that
the market value of the securities sold by the Fund will decline below the
price the Fund is obligated to pay to repurchase the securities, and that
the securities may not be returned to the Fund.
ILLIQUID SECURITIES. Illiquid securities include private placements or other
securities that are subject to legal or contractual restrictions on resale or
for which there is no readily available market.
INVESTMENT STRATEGY. Each Fund may invest up to 15% of its net assets in
securities that are illiquid.
SPECIAL RISKS. To the extent that a Fund invests in illiquid securities,
the Fund risks not being able to sell the securities at the time and the
price that it would like. The Fund may have to lower the price, sell
substitute securities or forego an investment opportunity, each of which
may cause a loss to the Fund.
INVESTMENT COMPANIES. To the extent consistent with their respective investment
objectives and policies, the Funds may invest in securities issued by other
investment companies.
INVESTMENT STRATEGY. Investments by a Fund in other investment companies
will be subject to the limitations of the 1940 Act.
SPECIAL RISKS. As a shareholder of another investment company, a Fund would
be subject to the same risks as any other investor in that company. In
addition, it would bear a proportionate share of any fees and expenses paid
by that company. These would be in addition to the advisory and other fees
paid directly by the Fund.
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DEFENSIVE INVESTING. During unusual market conditions, each Fund may place up to
100% of its total assets in cash or high-quality, short-term debt securities.
SPECIAL RISKS. To the extent that the Fund invests its assets in short-term
obligations, it may not achieve its investment objective.
SHORT TERM TRADING. Each Fund may engage in active and frequent trading to
achieve its investment goal.
SPECIAL RISKS. A high rate of portfolio turnover (100%) or more) could
increase transaction costs and taxable distribution, which could detract
from the Fund's performance.
[OTHER INVESTMENT STRATEGIES]
DERIVATIVE RISKS. "Derivative" instruments are financial contracts whose value
is based on an underlying security, a currency exchange rate, an interest rate
or a market index. Many types of instruments representing a wide range of
potential risks and rewards are derivatives, including futures contracts,
options on futures contracts, options, swaps and forward currency contracts.
INVESTMENT STRATEGY. All Funds may use derivative instruments. Derivatives
can be used for hedging (attempting to reduce risk by offsetting one
investment position with another) or speculation (taking a position in the
hope of increasing return). The Funds may, but are not required to, use
derivatives for hedging purposes or for the purpose of remaining fully
invested or maintaining liquidity. The Funds will not use derivatives for
speculative purposes.
SPECIAL RISKS. The use of derivative instruments exposes a Fund to
additional risks and transaction costs. Risks of derivative instruments
include: (1) the risk that interest rates, securities prices and currency
markets will not move in the direction that a portfolio manager
anticipates; (2) imperfect correlation between the price of derivative
instruments and movements in the prices of the securities, interest rates
or currencies being hedged; (3) the fact that skills needed to use these
strategies are different than those needed to select portfolio securities;
(4) the possible absence of a liquid secondary market for any particular
instrument and possible exchange imposed price fluctuation limits, either
of which may make it difficult or impossible to close out a position when
desired; (5) the risk that adverse price movements in an instrument can
result in a loss substantially greater than the Fund's initial investment
in that instrument (in some cases, the potential loss is unlimited); (6)
particularly in the case of privately-negotiated instruments, the risk that
the counterparty will not perform its obligations, which could leave the
Fund worse off than if it had not entered into the position; and (7) the
inability to close out certain hedged positions to avoid adverse tax
consequences.
FOREIGN INVESTMENT RISK. Foreign securities include investments in non-U.S.
dollar-denominated securities traded outside of the United States and
dollar-denominated securities of foreign issuers traded in the United States.
Foreign securities also include investments such as American Depository Receipts
("ADRs"), European Depository Receipts ("EDRs") and Global Depository Receipts
("GDRs"). ADRs are U.S. dollar-denominated receipts representing shares of
foreign-based corporations. ADRs are issued by U.S. banks or trust companies,
and entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. EDRs and GDRs are receipts issued by non-U.S.
financial institutions that often trade on foreign exchanges. They represent
ownership in an underlying foreign or U.S. security and are generally
denominated in a foreign currency.
INVESTMENT STRATEGY. The Funds may invest in foreign securities.
SPECIAL RISKS. Foreign securities involve special risks and costs.
Investment in the securities of foreign governments involves the risk that
foreign governments may default on their obligations or may otherwise not
respect the integrity of their debt.
Investment in foreign securities may involve higher costs than investment
in U.S. securities, including higher transaction and custody costs as well
as the imposition of additional taxes by foreign governments. Foreign
investments may also involve risks associated with the level of currency
exchange rates, less complete financial information about the issuers, less
market liquidity, more market volatility and political instability. Future
political and economic developments, the possible imposition of withholding
taxes on dividend income, the possible seizure or nationalization of
foreign holdings, the possible establishment of exchange controls or
freezes on the convertibility of currency, or the adoption of other
governmental restrictions might adversely affect an investment in foreign
securities. Additionally, foreign issuers may be subject to less stringent
regulation, and to different accounting, auditing and recordkeeping
requirements.
Currency exchange rates may fluctuate significantly over short periods of
time causing a Fund's net asset value to fluctuate as well. A decline in
the value of a foreign currency relative to the U.S. dollar will reduce the
value of a foreign currency-denominated security. To the extent that a Fund
is invested in foreign securities while also maintaining currency
positions, it may be exposed to greater combined risk. The Funds'
respective net currency positions may expose them to risks independent of
their securities positions.
Additional risks are involved when investing in countries with emerging
economies or securities markets. In general, the securities markets of
these countries are less liquid, are subject to greater price volatility,
have smaller market capitalizations and may have problems with securities
registration and custody. In addition, because the securities settlement
procedures are less developed in these countries, a Fund may be required to
deliver securities before receiving payment and may also be unable to
complete transactions during market disruptions. As a result of these and
other risks, investments in these countries generally present a greater
risk of loss to the Fund.
A further risk of investing in foreign securities is the risk that a Fund
may be adversely affected by the conversion of certain European currencies
into the Euro. This conversion, which is under way, is scheduled to be
completed in the year 2002. However, problems with the conversion process
and delays could increase volatility in world markets and affect European
markets in particular.
SECURITIES LENDING. In order to generate additional income, each Fund may lend
securities on a short-term basis to qualified institutions. By reinvesting any
cash collateral it receives in these transactions, the Fund could realize
additional income gains or losses.
INVESTMENT STRATEGY. Securities lending may represent no more than 25% of
the value of a Fund's total assets (including the loan collateral).
SPECIAL RISKS. The main risk when lending securities is that if the
borrower fails to return the securities or the invested collateral has
declined in value, the Fund could lose money.
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FOR MORE INFORMATION
More information on SA Funds is available free upon request, including the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Provides more details about the Funds and their policies. A current SAI is on
file with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
TO RECEIVE A FREE COPY OF THIS PROSPECTUS, OR THE SAI, OR TO OBTAIN
INFORMATION PLEASE CONTACT:
- --------------------------------------------------------------------------------
BY TELEPHONE
Call 1-800-366-7266
BY MAIL
SA Funds
1190 Saratoga Avenue
Suite 200
San Jose, California 95129
ON THE INTERNET Text-only versions of fund
documents can be viewed online or
downloaded from:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-202-942-8090) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC 2054-6009.
You may also obtain information after paying a duplicating fee, by electronic
request at: [email protected]
- --------------------------------------------------------------------------------
SA FUNDS -INVESTMENT TRUST
SEC FILE NUMBER: 811-09195
<PAGE>
SA FUNDS
SA U.S. Growth Fund
SA U.S. Large Value Strategy Fund
STATEMENT OF ADDITIONAL INFORMATION
April [ ], 2000
This Statement of Additional Information ("SAI") provides supplementary
information pertaining to all shares representing interests in each of the
no-load mutual funds listed above (the "Funds"). SA Funds Investment Trust (the
"Trust") currently offers a selection of eight Funds, two of which are described
in this SAI. This SAI is not a prospectus, and should be read only in
conjunction with the Trust's Prospectus dated April [ ], 2000. A copy of the
Prospectus may be obtained by calling (800) 366-7266.
<PAGE>
TABLE OF CONTENTS
PAGE
1. History and General Information........................................3
2. Description of the Funds and Their Investments and Risks...............3
Investments, Strategies and Risks...................................3
Fund Policies.......................................................9
3. Management of the Trust...............................................11
Trustees and Officers..............................................11
Compensation Table.................................................13
4. Control Persons and Principal Holders of Securities...................13
5. Investment Advisory and Other Services................................14
Investment Manager and Sub-Advisers................................14
Distributor........................................................15
Shareholder Servicing Arrangements.................................15
Administration.....................................................15
Custodian..........................................................15
Transfer Agent and Dividend Disbursing Agent.......................15
Counsel............................................................16
Independent Auditors...............................................16
6. Brokerage Allocations and Other Practices.............................16
7. Code of Ethics........................................................17
8. Information Concerning Shares.........................................17
9. Purchase, Redemption and Pricing of Shares............................17
Purchase and Redemption Information................................17
10. Taxes.................................................................18
Tax Status of the Funds............................................18
Taxation of Fund Distributions.....................................19
Disposition of Shares..............................................20
Information Relating to Foreign Investments........................20
Information Relating to Fund Investments...........................21
Backup Withholding.................................................22
Other Taxation.....................................................23
11. Performance Information...............................................23
No person has been authorized to give any information or to make any
representations not contained in this SAI or in the Prospectus in connection
with the offering made by the Prospectus and, if given or made, such information
or representations must not be relied upon as having been authorized by the
Funds. The Prospectus does not constitute an offering by the Funds in any
jurisdiction in which such offering may not lawfully be made.
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HISTORY AND GENERAL INFORMATION
The Trust was organized as a Delaware business trust on June 16, 1998 under
the name RWB Funds Investment Trust which was changed on June 7, 1999 to SA
Funds-Investment Trust.
The Trust is an open-end, management investment company. The Declaration of
Trust permits the Trust to offer separate portfolios ("Funds") of shares of
beneficial interest and different classes of shares of each Fund. The Trust
currently offers eight Funds, each of which is a diversified mutual fund. The
following Funds are described in this SAI: SA U.S. Growth Fund and SA U.S. Value
Fund
The investment manager of each Fund is RWB Advisory Services Inc. ("RWBAS"
or the "Manager"). _________ serves as sub-adviser for the SA U.S. Growth Fund.
Martingale Asset Management, L.P. and Sanford Bernstein & Co., Inc. each
serves as sub-adviser for the SA U.S. Large Value Strategy Fund (each, a
"Sub-Adviser").
RWB Securities, Inc. is the distributor of shares of the Funds.
DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS
INVESTMENTS, STRATEGIES AND RISKS
The following supplements the information contained in the Prospectus
concerning the investments and investment techniques of the Funds. Each Fund's
investment objective is a non-fundamental policy and may be changed without the
approval of the Fund's shareholders. There can be no assurance that a Fund will
achieve its objective.
BORROWING. The Funds are authorized to borrow money in amounts up to 5% of
the value of their total assets at the time of such borrowings for temporary
purposes, and are authorized to borrow money in excess of the 5% limit as
permitted by the Investment Company Act of 1940, as amended (the "1940 Act").
This borrowing may be unsecured. The 1940 Act requires the Funds to maintain
continuous asset coverage of 300% of the amount borrowed. If the 300% asset
coverage should decline as a result of market fluctuations or other reasons, the
Funds may be required to sell some of their portfolio holdings within three days
to reduce the debt and restore the 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities at that time.
Borrowed funds are subject to interest costs that may or may not be offset by
amounts earned on the borrowed funds. A Fund may also be required to maintain
minimum average balances in connection with such borrowing or to pay a
commitment or other fees to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated interest rate.
Each Fund may, in connection with permissible borrowings, transfer as collateral
securities owned by the Funds.
FOREIGN SECURITIES. As stated in the Prospectus, the Funds may invest in
foreign securities. Investors should consider carefully the substantial risks
involved in securities of companies and governments of foreign nations, which
are in addition to the usual risks inherent in domestic investments.
There may be less publicly available information about foreign companies
comparable to the reports and ratings published about companies in the United
States. Foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards, and auditing practices and
requirements may not be comparable to those applicable to U.S. companies.
Foreign markets have substantially less volume than U.S. markets and securities
of some foreign companies are less liquid and more volatile than securities of
comparable U.S. companies. In many foreign countries, there is less government
supervision and regulation of stock exchanges, brokers, and listed companies
than in the United States. Such concerns are particularly heightened for
emerging markets and Eastern European countries.
Investments in companies domiciled in developing countries may be subject
to potentially higher risks than investments in developed countries. These risks
include: (i) less social, political and economic stability; (ii) the small
current size of the markets for such securities and the currently low or
nonexistent volume of trading, which
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result in a lack of liquidity and in greater price volatility; (iii) certain
national policies which may restrict a Fund's investment opportunities,
including restrictions on investment in issuers or industries deemed sensitive
to national interest; (iv) foreign taxation; (v) the absence of developed legal
structures governing private or foreign investment or allowing for judicial
redress for injury to private property; (vi) the absence, until recently in
certain Eastern European countries, of a capital market structure or
market-oriented economy; and (vii) the possibility that recent favorable
economic developments in Eastern Europe may be slowed or reversed by
unanticipated political or social events in such countries.
Investments in Eastern European countries may involve risks of
nationalization, expropriation and confiscatory taxation. The Communist
governments of a number of Eastern European countries expropriated large amounts
of private property in the past, in many cases without adequate compensation,
and there can be no assurance that such expropriation will not occur in the
future. In the event of such expropriation, a Fund could lose a substantial
portion of any investments it has made in the affected countries. Further, no
accounting standards exist in Eastern European countries. Finally, even though
certain Eastern European currencies may be convertible into United States
dollars, the conversion rates may be artificial to the actual market values and
may be adverse to a Fund.
Each Sub-Adviser endeavors to buy and sell foreign currencies on as
favorable a basis as practicable. Some price spread on currency exchange (to
cover service charges) may be incurred, particularly when the Fund changes
investments from one country to another or when proceeds of the sale of Fund
shares in U.S. dollars are used for the purchase of securities in foreign
countries. Also, some countries may adopt policies which would prevent the Fund
from transferring cash out of the country or withhold portions of interest and
dividends at the source. There is the possibility of expropriation,
nationalization or confiscatory taxation, withholding and other foreign taxes on
income or other amounts, foreign exchange controls (which may include suspension
of the ability to transfer currency from a given country), default in foreign
government securities, political or social instability or diplomatic
developments that could affect investments in securities of issuers in foreign
nations.
Foreign securities markets have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when assets of a Fund are uninvested and no return is earned
thereon. The inability of a Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems could result either in losses to a Fund due to subsequent declines in
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser.
A Fund may be affected either unfavorably or favorably by fluctuations in
the relative rates of exchange between the currencies of different nations, by
exchange control regulations and by indigenous economic and political
developments. Changes in foreign currency exchange rates will influence values
within a Fund from the perspective of U.S. investors, and may also affect the
value of dividends and interest earned, gains and losses realized on the sale of
securities, and net investment income and gains, if any, to be distributed to
shareholders by a Fund. The rate of exchange between the U.S. dollar and other
currencies is determined by the forces of supply and demand in the foreign
exchange markets. These forces are affected by the international balance of
payments and other economic and financial conditions, government intervention,
speculation and other factors. Each Sub-Adviser will attempt to avoid
unfavorable consequences and to take advantage of favorable developments in
particular nations where, from time to time, it places a Fund's investments.
The exercise of this flexible policy may include decisions to purchase
securities with substantial risk characteristics and other decisions such as
changing the emphasis on investments from one nation to another and from one
type of security to another. Some of these decisions may later prove profitable
and others may not. No assurance can be given that profits, if any, will exceed
losses.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Funds may enter
into futures contracts and options on futures contracts only for the purpose of
remaining fully invested and to maintain liquidity to pay
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<PAGE>
redemptions. Futures contracts provide for the future sale by one party and
purchase by another party of a specified amount of defined securities at a
specified future time and at a specified price. Futures contracts which are
standardized as to maturity date and underlying financial instrument are traded
on national futures exchanges. A Fund will be required to make a margin deposit
in cash or government securities with a broker or custodian to initiate and
maintain positions in futures contracts. Minimal initial margin requirements are
established by the futures exchange and brokers may establish margin
requirements which are higher than the exchange requirements. After a futures
contract position is opened, the value of the contract is marked to market
daily. If the futures contract price changes, to the extent that the margin on
deposit does not satisfy margin requirements, payment of additional "variation"
margin will be required. Conversely, reduction in the contract value may reduce
the required margin resulting in a repayment of excess margin to a Fund.
Variation margin payments are made to and from the futures broker for as long as
the contract remains open. The Funds expect to earn income on their margin
deposits. To the extent that a Fund invests in futures contracts and options
thereon for other than bona fide hedging purposes, no Fund will enter into such
transactions if, immediately thereafter, the sum of the amount of initial margin
deposits and premiums paid for open futures options would exceed 5% of the
Fund's net assets, after taking into account unrealized profits and unrealized
losses on such contracts it has entered into; provided, however, that, in the
case of an option that is in-the-money at the time of purchase, the in-the-money
amount may be excluded in calculating the 5%. Pursuant to published positions of
the Securities and Exchange Commission, the Funds may be required to identify
liquid assets, such as cash or liquid securities (or, as permitted under
applicable regulation, enter into offsetting positions) in an account maintained
with the Fund's custodian in connection with their futures contract transactions
in order to cover their obligations with respect to such contracts.
Positions in futures contracts may be closed out only on an exchange which
provides a secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular futures contract an any specific
time. Therefore, it might not be possible to close a futures position and, in
the event of adverse price movements, a Fund would continue to be required to
make variation margin deposits. In such circumstances, if a Fund has
insufficient cash, it might have to sell portfolio securities to meet daily
margin requirements at a time when it might be disadvantageous to do so.
Management intends to minimize the possibility that it will be unable to close
out a futures contract by only entering into futures which are traded on
national futures exchanges and for which there appears to be a liquid secondary
market.
A Fund may purchase and sell options on the same types of futures in which
it may invest.
Options on futures are similar to options on underlying instruments except
that options on futures give the purchaser the right, in return for the premium
paid, to assume a position in a futures contract (a long position if the option
is a call and a short position if the option is a put), rather than to purchase
or sell the futures contract, at a specified exercise price at any time during
the period of the option. Upon exercise of the option, the delivery of the
futures position by the writer of the option to the holder of the option will be
accompanied by the delivery of the accumulated balance in the writer's futures
margin account which represents the amount by which the market price of the
futures contract, at exercise, exceeds (in the case of a call) or is less than
(in the case of a put) the exercise price of the option on the futures contract.
Purchasers of options who fail to exercise their options prior to the exercise
date suffer a loss of the premium paid.
As an alternative to writing or purchasing call and put options on stock
index futures, a Fund may write or purchase call and put options on stock
indices. Such options would be used in a manner similar to the use of options on
futures contracts.
SPECIAL RISKS OF TRANSACTIONS IN OPTIONS ON FUTURES CONTRACTS. The risks
described above for futures contracts are substantially the same as the risks of
using options on futures. In addition, where a Fund seeks to close out an option
position by writing or buying an offsetting option covering the same underlying
instrument, index or contract and having the same exercise price and expiration
date, its ability to establish and close out positions on such options will be
subject to the maintenance of a liquid secondary market. Reasons for the absence
of a liquid secondary market on an exchange include the following: (i) there may
be insufficient trading interest in certain options; (ii) restrictions may be
imposed by an exchange on opening transactions or closing transactions or both;
(iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of
5
<PAGE>
options, or underlying instruments; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
a clearing corporation may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the trading
of options (or a particular class or series of options), in which event the
secondary market on that exchange (or in the class or series of options) would
cease to exist, although outstanding options on the exchange that had been
issued by a clearing corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated trading activity or other unforeseen events might
not, at times, render certain of the facilities of any of the clearing
corporations inadequate, and thereby result in the institution by an exchange of
special procedures which may interfere with the timely execution of customers'
orders.
ADDITIONAL FUTURES AND OPTIONS CONTRACTS. Although the Funds have no
current intention of engaging in futures or options transactions other than
those described above, they reserve the right to do so. Such futures and options
trading might involve risks which differ from those involved in the futures and
options described above.
FEDERAL TAX TREATMENT OF FUTURES CONTRACTS, OPTIONS AND FORWARD FOREIGN
EXCHANGE CONTRACTS. Certain option, futures, and forward foreign exchange
contracts, including options and futures on currencies, which are Section 1256
contracts, may result in a Fund entering into straddles.
Open Section 1256 contracts at fiscal year end will be considered to have
been closed at the end of the Fund's fiscal year and any gains or losses will be
recognized for tax purposes at that time. Such gains or losses from the normal
closing or settlement of such transactions will be characterized as 60%
long-term capital gain or loss and 40% short-term capital gain or loss
regardless of the holding period of the instrument. The Fund will be required to
distribute net gains on such transactions to shareholders even though it may not
have closed the transaction and received cash to pay such distributions.
Options, futures and forward foreign exchange contracts, including options
and futures on currencies, which offset a security or currency position may be
considered straddles for tax purposes, in which case a loss on any position in a
straddle will be subject to deferral to the extent of unrealized gain in an
offsetting position. The holding period of the securities or currencies
comprising the straddle may be deemed not to begin until the straddle is
terminated. The holding period of the security offsetting an "in-the-money
qualified covered call" option will not include the period of time the option is
outstanding.
Losses on written covered calls and purchased puts on securities, excluding
certain "qualified covered call" options, may be long-term capital loss, if the
security covering the option was held for more than twelve months prior to the
writing of the option.
ILLIQUID SECURITIES. Each Fund may invest up to 15% of the value of its net
assets (determined at time of acquisition) in securities that are illiquid.
Illiquid securities would generally include securities for which there is a
limited trading market, repurchase agreements and time deposits with
notice/termination dates in excess of seven days, and certain securities that
are subject to trading restrictions because they are not registered under the
Securities Act of 1933, as amended (the "Act"). If, after the time of
acquisition, events cause this limit to be exceeded, the Fund will take steps to
reduce the aggregate amount of illiquid securities as soon as reasonably
practicable in accordance with the policies of the Securities and Exchange
Commission.
A Fund may invest in commercial obligations issued in reliance on the
"private placement" exemption from registration afforded by Section 4(2) of the
Act ("Section 4(2) paper"). A Fund may also purchase securities that are not
registered under the Act, but which can be sold to qualified institutional
buyers in accordance with Rule 144A under the Act ("Rule 144A securities").
Section 4(2) paper is restricted as to disposition under the Federal securities
laws, and generally is sold to institutional investors who agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors through or with the
assistance of the issuer or investment dealers which make a market in the
Section 4(2) paper, thus providing liquidity. Rule 144A securities generally
must be sold only to other qualified institutional buyers. If a particular
investment in Section
6
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4(2) paper or Rule 144A securities is not determined to be liquid, that
investment will be included within the Fund's limitation on investment in
illiquid securities. Each Sub-Adviser will determine the liquidity of such
investments pursuant to guidelines established by the Board of Trustees. It is
possible that unregistered securities purchased by a Fund in reliance upon Rule
144A could have the effect of increasing the level of the Fund's illiquidity to
the extent that qualified institutional buyers become, for a period,
uninterested in purchasing these securities.
INVESTMENT COMPANY SECURITIES. Each Fund may invest in securities issued by
other investment companies. As a shareholder of another investment company, a
Fund would bear its pro rata portion of the other investment company's expenses,
including advisory fees. These expenses would be in addition to the expenses
each Fund bears directly in connection with its own operations. Each Fund
currently intends to limit its investments in securities issued by other
investment companies so that, as determined immediately after a purchase of such
securities is made: (i) not more than 5% of the value of the Fund's total assets
will be invested in the securities of any one investment company; (ii) not more
than 10% of the value of its total assets will be invested in the aggregate in
securities of investment companies as a group; and (iii) not more than 3% of the
outstanding voting stock of any one investment company will be owned by the
Fund.
LENDING OF PORTFOLIO SECURITIES. To enhance the return on its portfolio,
each of the Funds may lend securities in its portfolio (subject to a limit of 33
1/3% of the total assets) to securities firms and financial institutions,
provided that each loan is secured continuously by collateral adjusted daily to
have a market value at least equal to the current market value of the securities
loaned. These loans are terminable at any time, and the Funds will receive any
interest or dividends paid on the loaned securities. In addition, it is
anticipated that a Fund may share with the borrower some of the income received
on the collateral for the loan or the Fund will be paid a premium for the loan.
The risk in lending portfolio securities, as with other extensions of credit,
consists of possible delay in recovery of the securities or possible loss of
rights in the collateral or loss on sale of the collateral should the borrower
fail financially. In determining whether the Funds will lend securities, each
Sub-Adviser will consider all relevant facts and circumstances. The Funds will
only enter into loan arrangements with broker-dealers, banks or other
institutions which the Manager has determined are creditworthy under guidelines
established by the Board of Trustees.
MONEY MARKET INSTRUMENTS. Each Fund may invest from time to time in "money
market instruments," a term that includes, among other instruments, bank
obligations, commercial paper, variable amount master demand notes and corporate
bonds with remaining maturities of 397 days or less.
Bank obligations include bankers' acceptances, negotiable certificates of
deposit and non-negotiable time deposits, including U.S. dollar-denominated
instruments issued or supported by the credit of U.S. or foreign banks or
savings institutions. Although the Funds will invest in obligations of foreign
banks or foreign branches of U.S. banks only where the Sub-Adviser deems the
instrument to present minimal credit risks, such investments may nevertheless
entail risks that are different from those of investments in domestic
obligations of U.S. banks due to differences in political, regulatory and
economic systems and conditions. All investments in bank obligations are limited
to the obligations of financial institutions having more than $1 billion in
total assets at the time of purchase.
The Funds may also purchase variable amount master demand notes which are
unsecured instruments that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate. Although the notes are
not normally traded and there may be no secondary market in the notes, a Fund
may demand payment of the principal of the instrument at any time. The notes are
not typically rated by credit rating agencies, but issuers of variable amount
master demand notes must satisfy the same criteria as set forth above for
issuers of commercial paper. If an issuer of a variable amount master demand
note defaulted on its payment obligation, a Fund might be unable to dispose of
the note because of the absence of a secondary market and might, for this or
other reasons, suffer a loss to the extent of the default. The Funds invest in
variable amount master notes only when a Sub-Adviser deems the investment to
involve minimal credit risk.
NON-DOMESTIC BANK OBLIGATIONS. Non-domestic bank obligations include
Eurodollar Certificates of Deposit ("ECDs"), which are U.S. dollar-
denominated certificates of deposit issued by offices of foreign and domestic
banks located outside the United States; Eurodollar Time Deposits ("ETDs"),
which are U.S. dollar-
7
<PAGE>
denominated deposits in a foreign branch of a U.S. bank or a foreign bank;
Canadian Time Deposits ("CTDs"), which are essentially the same as ETDs
except they are issued by Canadian offices of major Canadian banks; Schedule
Bs which are obligations issued by Canadian branches of foreign or domestic
banks; Yankee Certificates of Deposit ("Yankee CDs"), which are U.S.
dollar-denominated certificates of deposit issued by a U.S. branch of a
foreign bank and held in the United States; and Yankee Bankers' Acceptances
("Yankee BAs"), which are U.S. dollar denominated bankers' acceptances issued
by a U.S. branch of a foreign bank and held in the United States.
REPURCHASE AGREEMENTS. Each Fund may agree to purchase securities from
financial institutions such as member banks of the Federal Reserve System or any
foreign bank or any domestic or foreign broker/dealer that is recognized as a
reporting government securities dealer, subject to the seller's agreement to
repurchase them at an agreed-upon time and price ("repurchase agreements"). Each
Sub-Adviser will review and continuously monitor the creditworthiness of the
seller under a repurchase agreement, and will require the seller to maintain
liquid assets segregated on the books of the Fund or the Fund's custodian in an
amount that is greater than the repurchase price. Default by, or bankruptcy of,
the seller would, however, expose a Fund to possible loss because of adverse
market action or delays in connection with the disposition of underlying
obligations except with respect to repurchase agreements secured by U.S.
Government securities.
The repurchase price under repurchase agreements generally equals the price
paid by a Fund plus interest negotiated on the basis of current short-term rates
(which may be more or less than the rate on the securities underlying the
repurchase agreement).
Securities subject to repurchase agreements will be held, as applicable, by
the Fund's custodian in the Federal Reserve/Treasury book-entry system or by
another authorized securities depositary. Repurchase agreements are considered
to be loans by a Fund under the 1940 Act.
REVERSE REPURCHASE AGREEMENTS. Each Fund may borrow funds for temporary or
emergency purposes by selling portfolio securities to financial institutions
such as banks and broker/dealers and agreeing to repurchase them at a mutually
specified date and price ("reverse repurchase agreements"). Reverse repurchase
agreements involve the risk that the market value of the securities sold by a
Fund may decline below the repurchase price. A Fund will pay interest on amounts
obtained pursuant to a reverse repurchase agreement. While reverse repurchase
agreements are outstanding, a Fund will maintain cash, U.S. Government
securities or other liquid high-grade securities earmarked on the books of the
Fund or the Fund's custodian in an amount at least equal to the market value of
the securities, plus accrued interest, subject to the agreement.
U.S. GOVERNMENT OBLIGATIONS. Each Fund may purchase obligations issued or
guaranteed by the U.S. Government and U.S. Government agencies and
instrumentalities. Obligations of certain agencies and instrumentalities of the
U.S. Government, such as those of the GNMA, are supported by the full faith and
credit of the U.S. Treasury. Others, such as those of the Export-Import Bank of
the United States, are supported by the right of the issuer to borrow from the
U.S. Treasury; and still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the agency or instrumentality
issuing the obligation. No assurance can be given that the U.S. Government would
provide financial support to U.S. government-sponsored instrumentalities if it
is not obligated to do so by law. Examples of the types of U.S. Government
obligations that may be acquired by the Funds include U.S. Treasury Bills,
Treasury Notes and Treasury Bonds and the obligations of Federal Home Loan
Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, FNMA, Government National Mortgage
Association, General Services Administration, Student Loan Marketing
Association, Central Bank for Cooperatives, FHLMC, Federal Intermediate Credit
Banks and Maritime Administration.
WARRANTS. Warrants are privileges issued by corporations enabling the
owners to subscribe to and purchase a specified number of shares of the
corporation at a specified price during a specified period of time. The purchase
of warrants involves the risk that a Fund could lose the purchase value of a
warrant if the right to subscribe to additional shares is not exercised prior to
the warrant's expiration. Also, the purchase of warrants involves the risk that
the effective price paid for the warrant added to the subscription price of the
related security may exceed
8
<PAGE>
the value of the subscribed security's market price such as when there is no
movement in the level of the underlying security.
WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS (DELAYED-DELIVERY
TRANSACTIONS). Each Fund may purchase securities on a when-issued or delayed
delivery basis. When-issued purchases and forward commitments (delayed-delivery
transactions) are commitments by a Fund to purchase or sell particular
securities with payment and delivery to occur at a future date (perhaps one or
two months later). These transactions permit the Fund to lock-in a price or
yield on a security, regardless of future changes in interest rates.
When a Fund agrees to purchase securities on a when-issued or forward
commitment basis, the Fund will earmark cash or liquid portfolio securities
equal to the amount of the commitment. Normally, the Fund will earmark portfolio
securities to satisfy a purchase commitment, and in such a case the Fund may be
required subsequently to earmark additional assets in order to ensure that the
value of the account remains equal to the amount of the Fund's commitments. It
may be expected that the market value of the Fund's net assets will fluctuate to
a greater degree when it earmarks portfolio securities to cover such purchase
commitments than when it earmarks cash.
A Fund will purchase securities on a when-issued or forward commitment
basis only with the intention of completing the transaction and actually
purchasing the securities. If deemed advisable as a matter of investment
strategy, however, a Fund may dispose of or renegotiate a commitment after it is
entered into, and may sell securities it has committed to purchase before those
securities are delivered to the Fund on the settlement date. In these cases the
Fund may realize a taxable capital gain or loss.
When a Fund engages in when-issued and forward commitment transactions, it
relies on the other party to consummate the trade. Failure of such party to do
so may result in the Fund's incurring a loss or missing an opportunity to obtain
a price considered to be advantageous.
The market value of the securities underlying a when-issued purchase or a
forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the market value of
a Fund starting on the day the Fund agrees to purchase the securities. The Fund
does not earn interest on the securities it has committed to purchase until they
are paid for and delivered on the settlement date.
YIELDS AND RATINGS. The yields on certain obligations, including the money
market instruments in which the Funds may invest (such as commercial paper and
bank obligations), are dependent on a variety of factors, including general
money market conditions, conditions in the particular market for the obligation,
the financial condition of the issuer, the size of the offering, the maturity of
the obligation and the ratings of the issue. The ratings of S&P, Moody's, Duff &
Phelps Credit Rating Co., Thomson Bank Watch, Inc., and other nationally
recognized statistical rating organizations ("NRSROs") represent their
respective opinions as to the quality of the obligations they undertake to rate.
Ratings, however, are general and are not absolute standards of quality.
Consequently, obligations with the same rating, maturity and interest rate may
have different market prices.
OTHER. Subsequent to its purchase by a Fund, a rated security may cease to
be rated or its rating may be reduced below the minimum rating required for
purchase by the Fund. The Board of Trustees or each Sub-Adviser, pursuant to
guidelines established by the Board, will consider such an event in determining
whether the Fund should continue to hold the security in accordance with the
interests of the Fund and applicable regulations of the Securities and Exchange
Commission.
FUND POLICIES
FUNDAMENTAL POLICIES. Each Fund is subject to the investment limitations
enumerated in this section which may be changed with respect to a particular
Fund only by a vote of the holders of a majority of such Fund's outstanding
shares. As used in this SAI and in the Prospectus, a "majority of the
outstanding shares" of a Fund means the lesser of (a) 67% of the shares of the
particular Fund represented at a meeting at which the holders of
9
<PAGE>
more than 50% of the outstanding shares of such Fund are present in person or by
proxy, or (b) more than 50% of the outstanding shares of such Fund.
1. No Fund may invest more than 25% of its total assets in any
one industry (securities issued or guaranteed by the United
States Government, its agencies or instrumentalities are not
considered to represent industries).
2. No Fund may with respect to 75% of the Fund's assets, invest
more than 5% of the Fund's assets (taken at a market value at
the time of purchase) in the outstanding securities of any
single issuer or own more than 10% of the outstanding voting
securities of any one issuer, in each case other than
securities issued or guaranteed by the United States
Government, its agencies or instrumentalities.
3. No Fund may borrow money or issue senior securities (as
defined in the 1940 Act) except that the Funds may borrow
amounts not exceeding 33 1/3% of its total assets (including
the amount borrowed) valued at the lesser of cost or market,
less liabilities (not including the amount borrowed) valued at
the time the borrowing is made and additionally for temporary
or emergency purposes in amounts not exceeding 5% of its total
assets.
4. No Fund may pledge, mortgage or hypothecate its assets other
than to secure borrowings permitted by investment limitation 3
above (collateral arrangements with respect to margin
requirements for options and futures transactions are not
deemed to be pledges or hypothecations for this purpose).
5. No Fund may make loans of securities to other persons in
excess of 33 1/3% of a Fund's total assets; provided the Funds
may invest without limitation in short-term debt obligations
(including repurchase agreements) and publicly distributed
debt obligations.
6. No Fund may underwrite securities of other issuers, except
insofar as a Fund may be deemed an underwriter under the
Securities Act of 1933, as amended, in selling portfolio
securities.
7. No Fund may purchase or sell real estate or any interest
therein, including interests in real estate limited
partnerships, except securities issued by companies (including
real estate investment trusts) that invest in real estate or
interests therein.
8. No Fund may purchase securities on margin, except for the use
of short-term credit necessary for the clearance of purchases
and sales of portfolio securities, but the Funds may make
margin deposits in connection with transactions in options,
futures and options on futures.
9. No Fund may invest in commodities or commodity futures
contracts, provided that this limitation shall not prohibit
the purchase or sale by the Fund of forward foreign currency
exchange contracts, financial futures contracts and options on
financial futures contracts, foreign currency futures
contracts, and options on securities, foreign currencies and
securities indices, as permitted by the Fund's prospectus.
NON-FUNDAMENTAL POLICIES. Additional investment restrictions adopted by
each Fund, which may be changed by the Board of Trustees, provide that a Fund
may not:
1. Invest more than 15% of its net assets (taken at market value
at the time of purchase) in securities which cannot be readily
sold or disposed of within the ordinary course of business
within seven days at approximately the value at which the Fund
has valued the investment;
2. Purchase or sell interests in oil, gas or other mineral
exploration or development plans or leases;
10
<PAGE>
3. Make investments for the purpose of exercising control or
management; or
4. Invest in other investment companies except as permitted under
the 1940 Act.
If a percentage limitation is satisfied at the time of investment, a later
increase or decrease in such percentage resulting from a change in the value of
a Fund's investments will not constitute a violation of such limitation, except
that any borrowing by a Fund that exceeds the fundamental investment limitations
stated above must be reduced to meet such limitations within the period required
by the 1940 Act (currently three days). Otherwise, a Fund may continue to hold a
security even though it causes the Fund to exceed a percentage limitation
because of fluctuation in the value of the Fund's assets.
MANAGEMENT OF THE TRUST
The management of the Trust is supervised by the Board of Trustees under
the laws of the State of Delaware. Subject to the provisions of the Declaration
of Trust, the business of the Trust shall be managed by the Trustees, and they
shall have all powers necessary or convenient to carry out that responsibility.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Trust and their principal
occupations during the past five years are as set forth below. An asterisk
indicates a Trustee who may be deemed to be an "interested person" (as defined
by the 1940 Act) of the Trust.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND DATE OF BIRTH POSITION(S) HELD WITH FUND PAST 5 YEARS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bryan W. Brown Trustee Self Employed Management Consultant
950 Hayman Place (since 1992)
Los Altos, CA 94024
DOB: 02/09/45
David G. Booth* Trustee President and Chairman-Chief Executive
1299 Ocean Avenue Officer of the following companies:
Santa Monica, CA 90401 Dimensional Fund Advisors Inc., DFA
DOB: 12/02/46 Securities Inc., DFA Australia Limited,
DFA Investment Dimensions Group Inc.,
Dimensional Investment Group Inc. and
Dimensional Emerging Markets Value Fund
Inc.; Trustee, President and Chairman-Chief
Executive Officer of the DFA Investment Trust
Company (registered investment company);
Chairman and Director, Dimensional Fund
Advisors Ltd.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND DATE OF BIRTH POSITION(S) HELD WITH FUND PAST 5 YEARS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John J. Bowen, Jr.* Trustee, President Chief Executive Officer and President,
1190 Saratoga Avenue, Suite 200 and Chief Executive Officer Assante Capital Management Inc. (holding
San Jose, CA 95120 company) (since July 1998); Chief
DOB: 10/01/55 Executive Officer, Registered Principal
and President, RWB Securities Inc. (since
July 1998); Chief Executive Officer and
President, RWB Advisory Services Inc.
(since July 1998); Chief Executive
Officer, Registered Principal and
President, Reinhardt Werba Bowen
Securities, Inc. (December 1993 to
October 1998); Chief Executive Officer,
Director and President, Reinhardt, Werba,
Bowen, Inc. (investment adviser) (July
1980 to October 1998).
Patrick Keating* Trustee Director, Assante Corporation (financial
Commodity Exchange Tower services company) (since September 1998);
1500-360 Main Street President and Chief Executive Officer,
Winnipeg, Manitoba, Canada Loring Ward Investment Counsel Ltd.
R3C3Z3 ("Loring Ward") (since September 1998);
DOB: 12/21/54 Executive Vice President, Loring Ward
(January 1996 to September 1998);
Manager, Client Services, Loring Ward
(May 1995 to December 1995); General
Manager, Advance Electronics Ltd.
(retail organization) (until May 1995).
Charles M. Roame Trustee Managing Principal, The Tiburon Group
The Tiburon Group (management consulting to financial
1735 Tiburon Blvd. institutions) (since April 1998); Vice
Tiburon, CA 94920 President, Charles Schwab & Co. (discount
DOB: 09/17/65 brokerage and mutual funds) (July 1995 to
April 1998); Senior Engagement Manager,
McKinsey & Co. (management consulting to
financial institutions) (February 1994 to
July 1995).
Harold M. Shefrin Trustee Professor of Finance, Santa Clara
Leavey School of Business University (since 1990).
Santa Clara University
Santa Clara, CA 95053
DOB: 07/27/48
Alexander B. Potts Vice President and Secretary Vice President of Advisor Services and
1190 Saratoga Avenue, Suite 200 Investment Operations, RWB Advisory
San Jose, CA 95120 Services Inc. (since October 1998); Vice
DOB: 06/14/67 President of Advisor Services and
Investment Operations, Reinhardt, Werba,
Bowen Inc. (April 1990 - October 1998).
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND DATE OF BIRTH POSITION(S) HELD WITH FUND PAST 5 YEARS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Michael R. Clinton Treasurer and Chief Financial Treasurer and Chief Financial Officer,
1190 Saratoga Avenue, Suite 200 and Accounting Officer RWB Advisory Services Inc. (since October
San Jose, CA 95129 1998); Treasurer and Chief Financial
DOB: 10/06/66 Officer, Reinhardt, Werba, Bowen Inc.
(June 1995 to October 1998); CPA,
Crawford, Pimentel & Co., Inc.
(accounting firm) (September 1989 to June
1995).
Ronald G. Reynolds Assistant Secretary and Chief Operating Officer, RWB Advisory
1190 Saratoga Avenue, Suite 200 Assistant Treasurer Services Inc. (since July 1998); Chief
San Jose, CA 95129 Operating Officer, Reinhardt, Werba,
DOB: 6/20/41 Bowen, Inc. (January 1997 to October
1998); Consultant (February 1995 to
January 1997); Vice President
Operations/Corporate Secretary, Coastcom
(telecommunications) (August 1994 to
February 1995); Vice President
Operations, Litton Corporation (February
1967 to August 1994).
</TABLE>
COMPENSATION TABLE
For their services as trustees, the trustees who are not "interested
persons" (as defined in the 1940 Act) receive a $5,000 annual retainer fee and
$1,000 per meeting attended, as well as reimbursement for expenses incurred in
connection with attendance at such meetings. The interested trustees receive no
compensation for their services as trustees. The following table summarizes the
estimated compensation to be paid by the Trust to its trustees during the
current fiscal year. The aggregate compensation is provided for the Trust, which
is comprised of eight Funds.
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION FROM PENSION OR RETIREMENT BENEFITS
NAME OF TRUSTEE THE TRUST
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Bryan W. Brown $9,000 None
David G. Booth None None
John J. Bowen, Jr. None None
Patrick Keating None None
Charles M. Roame $9,000 None
Harold M. Shefrin $9,000 None
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of the date of this SAI, RWBAS may be deemed to control the Funds
because it is the record and beneficial owner of 100% of each class of each
Fund. As a result, RWBAS will be able to affect the outcome of matters presented
for a vote of each Fund's shareholders.
13
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT MANAGER AND SUB-ADVISERS
The Trust, on behalf of each Fund, has entered into an Investment
Advisory and Administrative Services Agreement (the "Agreement") with the
Manager, an indirect, wholly-owned subsidiary of Assante Corporation, which is a
publicly held financial services company located in Winnipeg, Canada.
The Agreement will continue in effect for a period of two years from
its effective date. If not sooner terminated, the Agreement will continue in
effect for successive one year periods thereafter, provided that its continuance
is specifically approved annually by (a) the vote of a majority of the Board of
Trustees who are not parties to the Agreement or interested persons (as defined
in the 1940 Act), cast in person at a meeting called for the purpose of voting
on approval, and (b) either (i) the vote of a majority of the outstanding voting
securities of the affected Fund, or (ii) the vote of a majority of the Board of
Trustees. The Agreement is terminable with respect to a Fund by vote of the
Board of Trustees, or by the holders of a majority of the outstanding voting
securities of the Fund, at any time without penalty, on 60 days' written notice
to the Manager. The Manager may also terminate its advisory relationship with
respect to a Fund without penalty on 90 days' written notice to the Trust, as
applicable. The Advisory Agreement terminates automatically in the event of its
assignment (as defined in the 1940 Act).
For the advisory services provided pursuant to the Agreement, the
Manager is entitled to a fee from each Fund computed daily and payable monthly
at the rate of 1.32% of the average daily net assets of each Fund.
_________ is the Sub-Adviser, respectively for the SA U.S. Growth
Fund. Martingale Asset Management, L.P. is a limited partnership organized
under the laws of the State of Delaware; and Sanford Bernstein &. Co., Inc.
is a closely held corporation organized under the laws of the State of New
York. Each is a sub-adviser for the SA U.S., Large Value strategy Fund and;
each is registered with the Securities and Exchange Commission as an
investment adviser.
The Trust has entered into a sub-advisory agreement (the "Sub-Advisory
Agreement") with each Sub-Adviser. Under the terms of the Sub-Advisory
Agreements, each Sub-Adviser provides sub-advisory services to the Funds.
Subject to supervision of the Manager, each Sub-Adviser is responsible for the
management of each the Fund's portfolio, including decisions regarding purchases
and sales of portfolio securities by the Funds. Each Sub-Adviser is also
responsible for arranging the execution of portfolio management decisions,
including the selection of brokers to execute trades and the negotiation of
brokerage commissions in connection therewith.
Each Sub-Advisory Agreement will continue in effect with respect to a
Fund for a period of two years from its effective date. If not sooner
terminated, each Sub-Advisory Agreement will continue in effect for successive
one year periods thereafter, provided that each continuance is specifically
approved annually by (a) the vote of a majority of the Board of Trustees who are
not parties to the Sub-Advisory Agreement or interested persons (as defined in
the 1940 Act), cast in person at a meeting called for the purpose of voting on
approval, and (b) the vote of a majority of the Board of Trustees. Each
Sub-Advisory Agreement is terminable by vote of the Board of Trustees, or, with
respect to a Fund, by the holders of a majority of the outstanding voting
securities of that Fund, at any time without penalty, on 60 days' written notice
to the Sub-Adviser. Once each Sub-Advisory Agreement has been in effect for a
period of not less than four years, it may be terminated by the Manager or the
Sub-Adviser as to a particular Fund by giving not less than twelve month's
written notice. Each Sub-Advisory Agreement terminates automatically in the
event of its assignment (as defined in the 1940 Act).
For the sub-advisory services provided, each Sub-Adviser is entitled to
a fee computed daily and payable monthly at an annual rate based on each Fund's
average daily net assets as set forth below:
SA U.S. Growth Fund
[to be completed]
SA U.S. Large Value Strategy Fund
Martingale Asset Management, L.P. [ ]%
Sanford Bernstein & Co., Inc. [ ]%
14
<PAGE>
The following individuals are affiliated persons of the Trust and of
the Manager: John J. Bowen, Jr.; Patrick Keating; Alexander B. Potts; Michael R.
Clinton and Ronald G. Reynolds. David G. Booth is an affiliated person of the
Trust. The capacities in which each such individual is affiliated with the Trust
and the Manager is set forth above under "Trustees and Officers."
DISTRIBUTOR
RWB Securities, Inc. (the "Distributor") and the Trust have entered
into a distribution agreement, under which the Distributor, as agent, sells
shares of each Fund on a continuous basis. The Distributor's principal offices
are located at 1190 Saratoga Avenue, Suite 200, San Jose, CA 95129. The
Distributor is an indirect, wholly-owned subsidiary of Assante Capital
Management, Inc. and is an affiliate of RWBAS. The Distributor receives no
compensation for distribution of the Funds shares.
John J. Bowen, Jr. is an affiliated person of the Trust and of the
Distributor.
SHAREHOLDER SERVICING ARRANGEMENTS
Under a Shareholder Servicing Agreement with the Trust, the Manager
performs various services for the Funds, including establishing a toll-free
telephone number for shareholders of each Fund to use to obtain up-to-date
account information; providing to shareholders quarterly and other reports with
respect to the performance of each Fund; and providing shareholders with such
information regarding the operations and affairs of each Fund, and their
investment in its shares, as the shareholders or the Board of Trustees may
reasonably request. The Manager is paid an annual service fee at the rate of up
to 0.25% of the value of average daily net assets of the Class S shares, and an
annual service fee at the rate of up to 0.05% of the value of average daily net
assets of the Class I shares of each Fund.
ADMINISTRATION
State Street Bank and Trust Company ("State Street"), whose principal
business address is 225 Franklin Street, Boston, Massachusetts, 02110, serves as
sub-administrator for the Trust, pursuant to a sub-administration agreement (the
"Sub-Administration Agreement") with the manager and the Trust.
Under the Sub-Administration Agreement, State Street has agreed to
oversee the computation of each Fund's net asset value, net income and realized
capital gains, if any; furnish statistical and research data, clerical services,
and stationery and office supplies; prepare and file various reports with the
appropriate regulatory agencies; and prepare various materials required by the
Securities and Exchange Commission. For providing these services, State Street
receives a fee which is calculated daily and paid monthly at an annual rate
based on the average daily net assets of each Fund as follows: 0.06% on the
first $750 million of net assets, plus 0.04% for net assets between $750 million
and $1.5 billion, plus 0.02% on net assets over $1.5 billion. There is a minimum
charge of $85,000 per fund.
CUSTODIAN
State Street is the custodian of each Fund's assets pursuant to a
custodian agreement (the "Custody Contract") with the Trust. State Street is
also the custodian with respect to the custody of foreign securities held by the
Funds. Under the Custody Contract, State Street (i) holds and transfers
portfolio securities on account of each Fund, (ii) accepts receipts and makes
disbursements of money on behalf of each Fund, (iii) collects and receives all
income and other payments and distributions on account of each Fund's securities
and (iv) makes periodic reports to the Board of Trustees concerning the Funds'
operations.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street serves as the transfer agent and dividend disbursing agent
for the Funds.
15
<PAGE>
COUNSEL
The law firm of Paul, Hastings, Janofsky & Walker LLP, 345 California
Street, San Francisco, California 94104, has passed upon certain legal matters
in connection with the shares offered by the Funds and serves as counsel to the
Trust.
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLC, 555 California Street, San Francisco,
California 94101, serves as the independent auditors for the Trust, providing
audit and accounting services including: examination of each Fund's annual
financial statements, assistance and consultation with respect to the
preparation of filings with the Securities and Exchange Commission; and
preparation of income tax returns.
BROKERAGE ALLOCATIONS AND OTHER PRACTICES
Subject to the general supervision of the Trustees, each Sub-Adviser
makes decisions with respect to and places orders for all purchases and sales of
portfolio securities for the Funds.
Transactions on U.S. stock exchanges involve the payment of negotiated
brokerage commissions. On exchanges on which commissions are negotiated, the
cost of transactions may vary among different brokers.
Over-the-counter issues, including corporate debt and government
securities, are normally traded on a "net" basis (i.e., without commission)
through dealers, or otherwise involve transactions directly with the issuer of
an instrument. With respect to over-the-counter transactions, each Sub-Adviser
will normally deal directly with dealers who make a market in the instruments
involved except in those circumstances where more favorable prices and execution
are available elsewhere. The cost of foreign and domestic securities purchased
from and sold to dealers include a dealer's mark-up or mark-down.
Each Sub-Adviser will place portfolio transaction with a view to
receiving the best price and execution.
Transactions may be placed with brokers who provide a Sub-Adviser with
investment research, such as reports concerning individual issuers, industries
and general economic and financial trends and other research services. Each
Sub-Advisory Agreement permits the Sub-Adviser to cause the Funds to pay a
broker or dealer which furnishes brokerage and research services a higher
commission than that which might be charged by another broker or dealer for
effecting the same transaction, provided that each Sub-Adviser determines in
good faith that such commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either the particular transaction or the overall responsibilities of
each Sub-Adviser to the Funds.
Supplementary research information so received is in addition to, and
not in lieu of, services required to be performed by each Sub-Adviser and does
not reduce the advisory fees payable to the Sub-Adviser. 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
investment discretion is exercised. Conversely, a Fund may be the primary
beneficiary of the research or services received as a result of portfolio
transactions effected for such other account or investment company.
Investment decisions for each Fund and for other investment accounts
managed by a Sub-Adviser are made independently of each other in the light of
differing conditions. However, the same investment decision may be made for two
or more of such accounts. In such cases, simultaneous transactions are
inevitable. Purchases or sales are then averaged as to price and allocated as to
amount in a manner deemed equitable to each such account. While in some cases
this practice could have a detrimental effect on the price or value of the
security as far as a Fund is concerned, in other cases it is believed to be
beneficial to a Fund. To the extent permitted by law, each Sub-Adviser may
aggregate the securities to be sold or purchased for a Fund with those to be
sold or purchased for other investment companies or accounts in executing
transactions.
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<PAGE>
Portfolio securities will not be purchased from or sold to the Manager,
Sub-Advisers Declaration of Trust authorizes the Board of Trustees to classify
or reclassify any unissued shares of the Trust into one or more classes by
setting or changing, in any one or more respects, their respective designations,
preferences, conversion or other rights, voting powers, restrictions,
limitations, qualifications and terms and conditions of redemption. Currently,
the Trust's Board of Trustees has authorized the issuance of an unlimited number
of shares of beneficial interest in the Trust, representing interests in eight
separate series, each of which is a Fund. Each Fund currently offers two classes
of shares.
CODE OF ETHICS
The Trust, the Manager, each Sub-Adviser and the Distributor each have
adopted a code of ethics as required by applicable law, which is designed to
prevent affiliated persons of the Trust, the Manager, each Sub-Adviser and the
Distributor from engaging in deceptive, manipulative or fraudulent activities
in connection with securities held or to be acquired by the Funds (which may
also be held by persons subject to a code of ethics). There can be no assurance
that the codes of ethics will be effective in preventing such activities. Each
code of ethics, filed as exhibits to this registration statement, may be
examined at the office of the SEC in Washington, D.C. or on the Internet from
the SEC's website at http:/www.sec.gov.
INFORMATION CONCERNING SHARES
The Trust is a Delaware business trust. Under the Declaration of
Trust, the beneficial interest in the Trust may be divided into an unlimited
number of full and fractional transferable shares. The Declaration of Trust
authorizes the Board of Trustees to classify or reclassify any unissued shares
of the Trust into one or more classes by setting or changing, in any one or
more respects, their respective designations, preferences, conversion or other
rights, voting powers, restrictions, limitations, qualifications and terms and
conditions of redemption. Currently, the Trust's Board of Trustees has
authorized the issuance of an unlimited number of shares of beneficial interest
in the Trust, representing interests in six separate series, each of which is a
Fund. Each Fund currently offers two classes of shares.
In the event of a liquidation or dissolution of the Trust, shareholders
of a particular Fund would be entitled to receive the assets available for
distribution belonging to such Fund, and a proportionate distribution, based
upon the relative net asset values of the Funds, of any general assets not
belonging to any particular Fund which are available for distribution.
Shareholders of a Fund are entitled to participate in the net distributable
assets of the particular Fund involved on liquidation, based on the number of
shares of the Fund that are held by each shareholder.
Shares of the Trust have noncumulative voting rights and, accordingly,
the holders of more than 50% of the Trust's outstanding shares (irrespective of
class) may elect all of the trustees. Shares have no preemptive rights and only
such conversion and exchange rights as the Board may grant in its discretion.
When issued for payment as described in the applicable Prospectus, shares will
be fully paid and non-assessable by the Trust.
Shareholder meetings to elect trustees will not be held unless and
until such time as required by law. At that time, the trustees then in office
will call a shareholders' meeting to elect trustees. Except as set forth above,
the trustees will continue to hold office and may appoint successor trustees.
Meetings of the shareholders, shall be called by the trustees upon the written
request of shareholders owning at least 10% of the outstanding shares entitled
to vote.
PURCHASE, REDEMPTION AND PRICING OF SHARES
PURCHASE AND REDEMPTION INFORMATION
Purchases and redemptions are discussed in the Funds' Prospectus and
such information is incorporated herein by reference.
RETIREMENT PLANS. Shares of any of the Funds may be purchased in
connection with various types of tax deferred retirement plans, including
individual retirement accounts ("IRAs"), 401(k) plans, deferred compensation for
public schools and charitable organizations (403(b) plans) and simplified
employee pension IRAs (SEP-IRAs). An individual or organization considering the
establishment of a retirement plan should consult with an attorney and/or an
accountant with respect to the terms and tax aspects of the plan. A $10.00
annual custodial fee is also charged on IRAs. This custodial fee is due by
December 15 of each year and may be paid by check or shares liquidated from a
shareholder's account.
IN-KIND PURCHASES. Payment for shares may, in the discretion of each
Sub-Adviser, be made in the form of securities that are permissible investments
for the Funds as described in the Prospectuses. For further information about
this form of payment please contact the Manager. In connection with an in-kind
securities payment, a Fund will require, among other things, that the securities
(a) meet the investment objectives and policies of the Funds; (b) are acquired
for investment and not for resale; (c) are liquid securities that are not
restricted as to transfer either by law or liquidity of markets; (d) have a
value that is readily ascertainable by a listing on a nationally recognized
securities exchange; and (e) are valued on the day of purchase in accordance
with the pricing methods used by the Fund and that the Fund receive satisfactory
assurances that (i) it will have good and marketable title to the securities
received by it; (ii) that the securities are in proper form for transfer to the
Fund; and (iii) adequate information will be provided concerning the basis and
other tax matters relating to the securities.
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<PAGE>
REDEMPTION IN-KIND. Redemption proceeds are normally paid in cash;
however, each Fund reserves the right to pay the redemption price in whole or
part by a distribution in kind of securities from the portfolio of the
particular Fund, in lieu of cash. Redemption in-kind will be made in conformity
with applicable rules of the Securities and Exchange Commission taking such
securities at the same value employed in determining net asset value and
selecting the securities in a manner the Board of Trustees determines to be fair
and equitable. The Trust has elected to be governed by Rule 18f-1 under the 1940
Act under which the Fund is obligated to redeem shares for any one shareholder
in cash only up to the lesser of $250,000 or 1% of the class' net asset value
during any 90-day period. If shares are redeemed in kind, the redeeming
shareholder might incur transaction costs in converting the assets into cash.
OTHER REDEMPTION INFORMATION. The Funds reserve the right to suspend or
postpone redemptions during any period when: (i) trading on the New York Stock
Exchange (the "NYSE") is restricted by applicable rules and regulations of the
Securities and Exchange Commission; (ii) the NYSE is closed for other than
customary weekend and holiday closings; (iii) the Securities and Exchange
Commission has by order permitted such suspension or postponement for the
protection of the shareholders; or (iv) an emergency, as determined by the
Securities and Exchange Commission, exists, making disposal of portfolio
securities or valuation of net assets of a Fund not reasonably practicable.
The Funds may involuntarily redeem an investor's shares if the net
asset value of such shares is less than $10,000; provided that involuntary
redemptions will not result from fluctuations in the value of an investor's
shares. A notice of redemption, sent by first-class mail to the investor's
address of record, will fix a date not less than 60 days after the mailing date,
and shares will be redeemed at the net asset value at the close of business on
that date unless sufficient additional shares are purchased to bring the
aggregate account value up to $10,000 or more. A check for the redemption
proceeds payable to the investor will be mailed to the investor at the address
of record.
TAXES
The following summarizes certain additional federal and state income
tax considerations generally affecting the Funds and their shareholders that are
not described in the Funds' Prospectuses. No attempt is made to present a
detailed explanation of the tax treatment of the Funds or their shareholders,
and the discussion here and in the Prospectus is not intended as a substitute
for careful tax planning. This discussion is based upon present provisions of
the Code, the regulations promulgated thereunder, and judicial and
administrative ruling authorities, all of which are subject to change, which
change may be retroactive. Prospective investors should consult their own tax
advisors with regard to the federal tax consequences of the purchase, ownership
and disposition of Fund shares, as well as the tax consequences arising under
the laws of any state, foreign country, or other taxing jurisdiction.
TAX STATUS OF THE FUNDS
Each Fund intends to elect and qualify to be taxed separately as a
regulated investment company under the Code. As a regulated investment company,
each Fund generally is exempt from federal income tax on its net investment
income and realized capital gains which it distributes to shareholders, provided
that it distributes an amount equal to the sum of (a) at least 90% of its
investment company taxable income (net investment income and the excess of net
short-term capital gain over net long-term capital loss), if any, for the year
and (b) at least 90% of its net tax-exempt interest income, if any, for the year
(the "Distribution Requirement") and satisfies certain other requirements of the
Code that are described below. Distributions of investment company taxable
income and net tax-exempt interest income made during the taxable year or, under
specified circumstances, within twelve months after the close of the taxable
year will satisfy the Distribution Requirement.
In addition to satisfaction of the Distribution Requirement, each Fund
must derive with respect to a taxable year at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans and gains
from the sale or other disposition of stock or securities or foreign currencies,
or from other income derived with respect to its business of investing in such
stock, securities, or currencies (the "Income Requirement").
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<PAGE>
In addition to the foregoing requirements, at the close of each quarter
of its taxable year, at least 50% of the value of each Fund's assets must
consist of cash and cash items, U.S. Government securities, securities of other
regulated investment companies, and securities of other issuers (as to which a
Fund has not invested more than 5% of the value of its total assets in
securities of such issuer and as to which a Fund does not hold more than 10% of
the outstanding voting securities of such issuer) and no more than 25% of the
value of each Fund's total assets may be invested in the securities of any one
issuer (other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which such Fund controls and
which are engaged in the same or similar trades or businesses.
If for any taxable year any Fund does not qualify as a regulated
investment company, all of its taxable income will be subject to tax at regular
corporate rates without any deduction for distributions to shareholders. In such
event, all distributions (whether or not derived from exempt-interest income)
would be taxable as ordinary income and would be eligible for the dividends
received deduction in the case of corporate shareholders to the extent of such
Fund's current and accumulated earnings and profits.
Although a Fund expects to qualify as a "regulated investment company"
and to be relieved of all or substantially all Federal income taxes, depending
upon the extent of its activities in states and localities in which its offices
are maintained, in which its agents or independent contractors are located or in
which it is otherwise deemed to be conducting business, a Fund may be subject to
the tax laws of such states or localities.
TAXATION OF FUND DISTRIBUTIONS
Distributions of net investment income received by a Fund from
investments in debt securities and any net realized short-term capital gains
distributed by a Fund will be taxable to shareholders as ordinary income and
will not be eligible for the dividends received deduction for corporations.
Each Fund intends to distribute to shareholders any excess of net
long-term capital gain over net short-term capital loss ("net capital gain") for
each taxable year. Such gain is distributed as a capital gain dividend and is
taxable to shareholders as gain from the sale or exchange of a capital asset
held for more than one year, regardless of the length of time a shareholder has
held his or her Fund shares and regardless of whether the distribution is paid
in cash or reinvested in shares. The Funds expect that capital gain dividends
will be taxable to shareholders as long-term gain. Capital gain dividends are
not eligible for the dividends received deduction.
In the case of corporate shareholders, distributions of a Fund for any
taxable year generally qualify for the dividends received deduction to the
extent of the gross amount of "qualifying dividends" received by such Fund for
the year and if certain holding period requirements are met. Generally, a
dividend will be treated as a "qualifying dividend" if it has been received from
a domestic corporation.
Amounts not distributed on a timely basis in accordance with a calendar
year distribution requirement are subject to a nondeductible 4% excise tax. To
prevent imposition of the excise tax, a Fund must distribute during each
calendar year an amount equal to the sum of (1) at least 98% of its ordinary
income (not taking into account any capital gains or losses) for the calendar
year, (2) at least 98% of its capital gains in excess of its capital losses
(adjusted for certain ordinary losses, as prescribed by the Code) for the
one-year period ending on October 31 of the calendar year, and (3) any ordinary
income and capital gains for previous years that was not distributed during
those years. A distribution will be treated as paid on December 31 of the
current calendar year if it is declared by a Fund in October, November or
December with a record date in such a month and paid by a Fund during January of
the following calendar year. Such distributions will be taxable to shareholders
in the calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received. To prevent application of
the excise tax, a Fund intends to make its distributions in accordance with the
calendar year distribution requirement.
Shareholders will be advised annually as to the federal income tax
consequences of distributions made by the Funds each year.
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DISPOSITION OF SHARES
Upon a redemption, sale or exchange of his or her shares, a shareholder
will realize a taxable gain or loss depending upon his or her basis in the
shares. Such gain or loss will be treated as capital gain or loss if the shares
are capital assets in the shareholder's hands and will be long-term or
short-term, generally, depending upon the shareholder's holding period for the
shares. Any loss realized on a redemption, sale or exchange will be disallowed
to the extent the shares disposed of are replaced (including through
reinvestment of dividends) within a period of 61 days beginning 30 days before
and ending 30 days after the shares are disposed of. In such a case, the basis
of the shares acquired will be adjusted to reflect the disallowed loss. Any loss
realized by a shareholder on the sale of Fund shares held by the shareholder for
six months or less will be treated as a long-term capital loss to the extent of
any distributions of net capital gains received or treated as having been
received by the shareholder with respect to such shares and treated as long-term
capital gains. Furthermore, a loss realized by a shareholder on the redemption,
sale or exchange of shares of a Fund with respect to which exempt-interest
dividends have been paid will, to the extent of such exempt-interest dividends,
be disallowed if such shares have been held by the shareholder for six months or
less.
INFORMATION RELATING TO FOREIGN INVESTMENTS
Income received by a Fund from sources within foreign countries may be
subject to withholding and other foreign taxes. The payment of such taxes will
reduce the amount of dividends and distributions paid to the Funds'
shareholders. So long as a Fund qualifies as a regulated investment company,
certain distribution requirements are satisfied, and more than 50% of the value
of the Fund's assets at the close of the taxable year consists of securities of
foreign issuers, the Fund may elect, subject to limitation, to pass through its
foreign tax credits to its shareholders. The Fund may qualify for and make this
election in some, but not necessarily all, of its taxable years. If a Fund were
to make an election, an amount equal to the foreign income taxes paid by the
Fund would be included in the income of its shareholders and the shareholders
would be entitled to credit their portions of this amount against their U.S. tax
due, if any, or to deduct such portions from their U.S. taxable income, if any.
Shortly after any year for which it makes such an election, a Fund will report
to its shareholders, in writing, the amount per share of such foreign tax that
must be included in each shareholder's gross income and the amount which will be
available for deduction or credit. No deduction for foreign taxes may be claimed
by a shareholder who does not itemize deductions. Certain limitations are
imposed on the extent to which the credit (but not the deduction) for foreign
taxes may be claimed.
Shareholders who choose to utilize a credit (rather than a deduction)
for foreign taxes will be subject to limitations, including the restriction that
the credit may not exceed the shareholder's United States tax (determined
without regard to the availability of the credit) attributable to his or her
total foreign source taxable income. For this purpose, the portion of dividends
and distributions paid by the Fund from its foreign source income will be
treated as foreign source income. The Fund's gains and losses from the sale of
securities will generally be treated as derived from United States sources and
certain foreign currency gains and losses likewise will be treated as derived
from United States sources. The limitation on the foreign tax credit is applied
separately to foreign source "passive income", such as the portion of dividends
received from the Fund which qualifies as foreign source income. In addition,
only a portion of the foreign tax credit will be allowed to offset any
alternative minimum tax imposed on corporations and individuals. Because of
these limitations, shareholders may be unable to claim a credit for the full
amount of their proportionate shares of the foreign income taxes paid by the
Fund.
Certain Funds may invest in shares of foreign corporations that may be
classified under the Code as passive foreign investment companies ("PFICs"). In
general, a foreign corporation is classified as a PFIC if at least one-half of
its assets constitute passive assets, or 75% or more of its gross passive
income. If a Fund receives a so-called "excess distribution" with respect to
PFIC stock, the Fund itself may be subject to a tax on a portion of the excess
distribution, whether or not the corresponding income is distributed by the Fund
to shareholders. In general, under the PFIC rules, an excess distribution is
treated as having been realized ratably over the period during which the Fund
held the PFIC shares. Each Fund will itself be subject to tax on the portion, if
any, of an excess distribution that is so allocated to prior Fund taxable years
and an interest factor will be added to the tax, as if the tax had been payable
in such prior taxable years. Certain distributions from a PFIC as well as gain
from the sale of PFIC shares
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are treated as excess distributions. Excess distributions are characterized as
ordinary income even though, absent application of the PFIC rules, certain
excess distributions might have been classified as capital gain.
The Funds may be eligible to elect alternative tax treatment with
respect to PFIC shares. Under an election that currently is available in some
circumstances, a Fund generally would be required to include in its gross income
its share of the earnings of a PFIC on a current basis, regardless of whether
distributions were received from the PFIC in a given year. If this election were
made, the special rules, discussed above, relating to the taxation of excess
distributions, would not apply. In addition, another election would involve
marking to market the Fund's PFIC shares at the end of each taxable year, with
the result that unrealized gains would be treated as though they were realized
and reported as ordinary income. Any mark-to market losses and any loss from an
actual disposition of Fund shares would be deductible as ordinary losses to the
extent of any net mark-to-market gains included in income in prior years.
Income received by a Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries.
INFORMATION RELATING TO FUND INVESTMENTS
TAXATION OF CERTAIN FINANCIAL INSTRUMENTS. Special rules govern the
Federal income tax treatment of financial instruments that may be held by some
of the Funds. These rules may have a particular impact on the amount of income
or gain that the Funds must distribute to their respective shareholders to
comply with the Distribution Requirement and on the income or gain qualifying
under the Income Requirement.
ORIGINAL ISSUE DISCOUNT. The Funds may purchase debt securities with
original issue discount. Original issue discount represents the difference
between the original issue price of the debt instrument and the stated
redemption price at maturity. Original issue discount is required to be accreted
on a daily basis and is considered interest income for federal income tax
purposes and, therefore, such income would be subject to the distribution
requirements applicable to regulated investment companies.
MARKET DISCOUNT. The Funds may purchase debt securities at a discount
in excess of the original issue discount, or at a discount to the stated
redemption price at maturity (for debt securities without original issue
discount). This discount is called "market discount". Market discount is
permitted to be recorded daily or at time of disposition of the debt security.
If market discount is to be recognized at time of disposition of the debt
security, accrued market discount is recognized to the extent of gain on the
disposition of the debt security.
HEDGING TRANSACTIONS. The taxation of equity options and
over-the-counter options on debt securities is governed by Code section 1234.
Pursuant to Code section 1234, the premium received by a Fund for selling a put
or call option is not included in income at the time of receipt. If the option
expires, the premium is short-term capital gain to the Fund. If the Fund enters
into a closing transaction, the difference between the amount paid to close out
its position and the premium received is short-term capital gain or loss. If a
call option written by a Fund is exercised, thereby requiring the Fund to sell
the underlying security, the premium will increase the amount realized upon the
sale of such security and any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term depending upon the holding period of
the security. With respect to a put or call option that is purchased by a Fund,
if the option is sold, any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term, depending upon the holding period of
the option. If the option expires, the resulting loss is a capital loss and is
long-term or short-term, depending upon the holding period of the option. If the
option is exercised, the cost of the option, in the case of a call option, is
added to the basis of the purchased security and, in the case of a put option,
reduces the amount realized on the underlying security in determining gain or
loss.
Any regulated futures and foreign currency contracts and certain
options (namely, nonequity options and dealer equity options) in which a Fund
may invest may be "section 1256 contracts." Gains or losses on section 1256
contracts are generally considered 60% long-term and 40% short-term capital
gains or losses; however, foreign currency gains or losses arising from certain
section 1256 contracts may be treated as ordinary income or loss. Also, section,
1256 contracts held by a Fund at the end of each taxable year (and generally for
purposes of the 4%
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excise tax, on October 31 of each year) are "marked-to-market" with the result
that unrealized gains or losses are treated as though they were realized.
Generally, hedging transactions, if any, undertaken by a Fund may
result in "straddles" for U.S. federal income tax purposes. The straddle rules
may affect the character of gains (or losses) realized by the Funds. In
addition, losses realized by a Fund on positions that are part of a straddle may
be deferred under the straddle rules, rather than being taken into account in
calculating the taxable income for the taxable year in which such losses are
realized. Because only a few regulations implementing the straddle rules have
been promulgated, the tax consequences of hedging transactions to the Funds are
not entirely clear. The hedging transactions may increase the amount of
short-term capital gain realized by the Funds which is taxed as ordinary income
when distributed to shareholders.
The Funds may make one or more of the elections available under the
Code which are applicable to straddles. If a Fund makes any of the elections,
the amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.
Because application of the straddle rules may affect the character of
gains or losses, defer losses and/or accelerate the recognition of gains or
losses from the affected straddle positions, the amount which must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not engage in such hedging transactions.
The diversification requirements applicable to the Funds' assets may
limit the extent to which the Funds will be able to engage in transactions in
options, futures or forward contracts.
CONSTRUCTIVE SALES. Recently enacted rules may affect the timing and
character of gain if a Fund engages in transactions that reduce or eliminate its
risk of loss with respect to appreciated financial positions. If the Fund enters
into certain transactions in property while holding substantially identical
property, the Fund would be treated as if it had sold and immediately
repurchased the property and would be taxed on any gain (but not loss) from the
constructive sale. The character of gain from a constructive sale would depend
upon the Fund's holding period in the property. Loss from a constructive sale
would be recognized when the property was subsequently disposed of, and its
character would depend on the Fund's holding period and the application of
various loss deferral provisions of the Code.
CURRENCY FLUCTUATIONS - "SECTION 988" GAINS OR LOSSES. Under the Code,
gains or losses attributable to fluctuations in exchange rates which occur
between the time a Fund accrues receivables or liabilities denominated in a
foreign currency and the time the Fund actually collects such receivables or
pays such liabilities generally are treated as ordinary income and loss.
Similarly, on disposition of debt securities denominated in a foreign currency
and on disposition of certain futures, forward contracts and options, gains or
losses attributable to fluctuations in the value of the foreign currency between
the date of acquisition of the security or contract and the date of disposition
also may be treated as ordinary gain or loss. These gains or losses, referred to
under the Code as "Section 988" gains or losses, may increase or decrease the
amount of a Fund's investment company taxable income to be distributed to its
shareholders as ordinary income.
BACKUP WITHHOLDING
The Trust will be required in certain cases to withhold and remit to
the United States Treasury 31% of taxable distributions, including gross
proceeds realized upon sale or other dispositions paid to any shareholder (i)
who has provided an incorrect tax identification number or no number at all,
(ii) who is subject to backup withholding by the Internal Revenue Service for
failure to report the receipt of taxable interest or dividend income properly,
or (iii) who has failed to certify that he is not subject to backup withholding
or that he is an "exempt recipient."
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OTHER TAXATION
The foregoing discussion relates only to U.S. federal income tax law
and certain state taxes as applicable to U.S. persons (i.e., U.S. citizens and
residents and domestic corporations, partnerships, trusts and estates).
Distributions by the Funds, and dispositions of Fund shares also may be subject
to other state and local taxes, and their treatment under state and local income
tax laws may differ from the U.S. federal income tax treatment. Shareholders
should consult their tax advisers with respect to particular questions of U.S.
federal, state and local taxation. Shareholders who are not U.S. persons should
consult their tax advisers regarding U.S. and foreign tax consequences of
ownership of shares of the Fund, including the likelihood that distributions to
them would be subject to withholding of U.S. federal income tax at a rate of 30%
(or at a lower rate under a tax treaty). Future legislative or administrative
changes or court decisions may significantly change the conclusions expressed
herein, and any such changes or decisions may have a retroactive effect with
respect to the transactions contemplated herein.
PERFORMANCE INFORMATION
The 30-day (or one month) standard yield is calculated for the Fixed
Income Fund in accordance with the method prescribed by the SEC for mutual
funds:
6
YIELD = 2 [( a-b + 1) - 1]
---
cd
Where:
a =dividends and interest earned by the Fund during the period;
b =expenses accrued for the period (net of reimbursements and waivers);
c =average daily number of shares outstanding during the period
entitled to receive dividends;
d =maximum offering price per share on the last day of the period.
For the purpose of determining interest earned on debt obligations
purchased by the Fund at a discount or premium (variable "a" in the formula),
the Fund computes the yield to maturity of such instrument based on the market
value of the obligation (including actual accrued interest) at the close of
business on the last business day of each month, or, with respect to obligations
purchased during the month, the purchase price (plus actual accrued interest).
Such yield is then divided by 360 and the quotient is multiplied by the market
value of the obligation (including actual accrued interest) in order to
determine the interest income on the obligation for each day of the subsequent
month that the obligation is in the portfolio. It is assumed in the above
calculation that each month contains 30 days. The maturity of a debt obligation
with a call provision is deemed to be the next call date on which the obligation
reasonably may be expected to be called or, if none, the maturity date. For the
purpose of computing yield on equity securities held by the Fund, dividend
income is recognized by accruing 1/360 of the stated dividend rate of the
security for each day that the security is held by the Fund.
Interest earned on tax-exempt obligations that are issued without
original issue discount and have a current market discount is calculated by
using the coupon rate of interest instead of the yield to maturity. In the case
of tax-exempt obligations that are issued with original issue discount but which
have discounts based on current market value that exceed the then-remaining
portion of the original issue discount (market discount), the yield to maturity
is the imputed rate based on the original issue discount calculation. On the
other hand, in the case of tax-exempt obligations that are issued with original
issue discount but which have the discounts based on current market value that
are less than the then-remaining portion of the original issue discount (market
premium), the yield to maturity is based on the market value.
With respect to mortgage or other receivables-backed debt obligations
purchased at a discount or premium, the formula generally calls for amortization
of the discount or premium. The amortization schedule will be adjusted monthly
to reflect changes in the market value of such debt obligations. Expenses
accrued for the period (variable "b" in the formula) include all recurring fees
charged by the Fund to all shareholder accounts in proportion to the length of
the base period and the Fund's mean (or median) account size. Undeclared earned
income will be subtracted from the offering price per share (variable "d" in the
formula).
TOTAL RETURN
23
<PAGE>
Each Fund that advertises its "average annual total return" computes
such return by determining the average annual compounded rate of return during
specified periods that equates the initial amount invested to the ending
redeemable value of such investment according to the following formula:
n
P (1 + T) = ERV
Where:
T = average annual total return
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year (or other) periods at the end of
the applicable period (or a fractional portion thereof)
P = hypothetical initial payment of $1,000
n = period covered by the computation, expressed in years.
Each Fund that advertises its "aggregate total return" computes such
returns by determining the aggregate compounded rates of return during specified
periods that likewise equate the initial amount invested to the ending
redeemable value of such investment.
The calculations are made assuming that (1) all dividends and capital
gain distributions are reinvested on the reinvestment dates at the price per
share existing on the reinvestment date, (2) all recurring fees charged to all
shareholder accounts are included, and (3) for any account fees that vary with
the size of the account, a mean (or median) account size in the Fund during the
periods is reflected. The ending redeemable value is determined by assuming
complete redemption of the hypothetical investment after deduction of all
non-recurring charges at the end of the measuring period.
The performance of any investment is generally a function of portfolio
quality and maturity, type of investment and operating expenses.
From time to time, the performance of a Fund may be compared in
publications to the performance of various indices and investments for which
reliable performance data is available. The performance of a Fund may also be
compared in publications to averages, performance rankings, or other information
prepared by recognized mutual fund statistical services.
24
<PAGE>
PART C: OTHER INFORMATION
<TABLE>
ITEM 23. EXHIBITS
<S> <C>
(i) Agreement and Declaration of Trust(1)
(ii) Amendment to Agreement and Declaration of Trust(3)
(b)(i) By-Laws(1)
(ii) Amendment to By-Laws(3)
(c) Not Applicable
(d) (i) Investment Advisory and Administrative Services Agreement
with RWB Advisory Services Inc.(5)
(ii) Investment Sub-Advisory Agreement with Dimensional Fund Advisors, Inc.(5)
(iii) Form of Investment Sub-Advisory Agreement for Martingale Asset
Management, L.P. is filed herein
(iv) Form of Investment Sub-Advisory Agreement for Sanford C. Bernstein
& Co., Inc. is filed herein.
(e) Distribution Agreement with RWB Securities Inc.(5)
(f) Not Applicable
(g) Custodian Contract with State Street Bank and Trust Company(3)
(h)(i) Sub-Administration Agreement with State Street Bank Trust Company(5)
(ii) Form of Transfer Agency and Service Agreement with State Street Bank and Trust Company(2)
(iii) Shareholder Servicing Agreement(5)
(i)(i) Opinion and Consent of Paul, Hastings, Janovsky & Walker
LLP with respect to SA Fixed Income Fund, SA U.S. Market Fund,
SA U.S. HBtM Fund, SA U.S. Small Company Fund, SA
International HBtM Fund and SA International Small Company
Fund(3)
(ii) Opinion and Consent of Paul, Hastings, Janovsky & Walker LLP
with respect to SA U.S. Growth Fund and SA U.S. Large Value
Strategy Fund(4)
(j) Not Applicable
(k) Not Applicable
(l) Initial Capital Agreement(3)
(m) Not Applicable
(n) Not Applicable
(o) Multi-Class Plan(3)
(p)(i) Powers of Attorney(2)
(ii) Powers of Attorney(6)
(q)(i) Code of Ethics for the Trust, the Manager and the Distributor
is filed herein.
(ii) Code of Ethics of Martingale Asset Management(4)
(iii) Code of Ethics of Sanford C. Bernstein & Co., Inc.(4)
</TABLE>
- -------------------------------
(1) Incorporated herein by reference from Registrant's Registration Statement on
Form N-1A (the "Registration Statement") (File Nos. 333-70423, 811-09195) as
filed with the U.S. Securities and Exchange Commission on January 11, 1999.
(2) Incorporated herein by reference from Pre-Effective Amendment No. 1 to the
Registration Statement as filed with the Securities and Exchange Commission on
June 9, 1999.
(3) Incorporated herein by reference from Pre-Effective Amendment No. 2 to the
Registration Statement as filed with the Securities and Exchange Commission on
July 15, 1999.
(4) To be filed by Amendment.
(5) Incorporated herein by reference from Post-Effective Amendment No. 1 to the
Registration Statement as filed with the Securities and Exchange Commission on
December 21, 1999.
(6) Incorporated herein by reference from Post-Effective Amendment No. 2 to the
Registration Statement as filed with the Securities and Exchange Commission on
March 3, 2000.
<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT
Not applicable.
ITEM 25. INDEMNIFICATION
Indemnification of Registrant's principal underwriter against certain
losses is provided for in the Distribution Agreement incorporated herein by
reference to Exhibit (e) hereto.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
Registrant, Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The Trustees shall not be responsible or liable in any event for any
neglect or wrong-doing of any officer, agent, employee, Investment Adviser or
principal underwriter of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee, and the Trust out of its assets shall
indemnify and hold harmless each and every Trustee from and against any and all
claims, demands and expenses (including reasonable attorneys' fees) whatsoever
arising out of or related to each Trustee's performance of his or her duties as
a Trustee of the Trust; provided that nothing herein contained shall indemnify,
hold harmless or protect any Trustee from or against any liability to the Trust
or any Shareholder to which he or she would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office.
Every note, bond, instrument, certificate or undertaking and every
other act or thing whatsoever issued, executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
RWB Advisory Services Inc. performs investment advisory services for Registrant
and institutional and individual investors.
Dimensional Fund Advisors Inc. performs investment advisory services for
Registrant with respect to SA Fixed Income Fund, SA U.S. Market Fund, SA U.S.
HBtM Fund, SA U.S. Small Company Fund, SA International HBtM Fund and SA
International Small Company Fund and other investment companies and
institutional and individual investors.
Martingale Asset Management, L.P. and Sanford C. Bernstein & Co., Inc. perform
investment advisory services for Registrant with respect to SA Large Value
Strategy Fund and other investment companies and institutional and individual
investors.
<PAGE>
See the information concerning RWB Advisory Services Inc. set forth in Parts A
and B of this Registration Statement.
RWB Advisory Services Inc. Dimensional Fund Advisors Inc., Martingale Asset
Management, L.P. and Sanford C. Bernstein & Co., Inc. are investment
advisers registered under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"). The list required by this Item 26 of directors, officers or
partners of RWB Advisory Services Inc. and Dimensional Fund Advisors Inc.,
together with any information as to any business profession, vocation or
employment of a substantial nature engaged in by such directors, officers or
partners during the past two years, is incorporated herein by reference from
Schedules B and D of Forms ADV filed by RWB Advisory Services Inc. (SEC File No.
801-55934), Dimensional Fund Advisors Inc. (SEC File No. 801-16283), Martingale
Asset Management, L.P. and Sanford C. Bernstein & Co., Inc., pursuant to the
Advisers Act.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) Not Applicable
(b)
<TABLE>
<CAPTION>
(1) (2) (3)
NAME AND PRINCIPAL BUSINESS POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
ADDRESS UNDERWRITER WITH FUND
<S> <C> <C>
John J. Bowen, Jr. Chief Executive Officer, Chief Executive Officer,
RWB Securities Inc. Registered Principal and President and Trustee
1190 Saratoga Avenue President
Suite 200
San Jose, CA 95129
</TABLE>
(c) Not Applicable
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
The following entities prepare, maintain and preserve the records required by
Section 31(a) of the 1940 Act for the Registrant. These services are provided to
the Registrant through written agreements between the parties to the effect that
such records will be maintained on behalf of the Registrant for the periods
prescribed by the rules and regulations of the Commission under the 1940 Act and
that such records are the property of the entity required to maintain and
preserve such records and will be surrendered promptly on request:
(1) RWB Advisory Services Inc.
1190 Saratoga Avenue, Suite 200
San Jose, California 95129
(2) Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
(3) Martingale Asset Management, L.P.
222 Berkeley Street
Boston, Massachusetts 02116
(4) Sanford C. Bernstein & Co., Inc.
767 Fifth Avenue
New York, New York 10153-0185
<PAGE>
(5) State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
(6) Boston Financial Data Services, Inc.
Two Heritage Drive
North Quincy, Massachusetts 02171
ITEM 29. MANAGEMENT SERVICES
Not Applicable.
ITEM 30. UNDERTAKING
Not Applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant has duly
caused this Post-Effective Amendment No. 3 to the Registration Statement to be
signed on its behalf by the undersigned, duly authorized, in the City of Boston
and the Commonwealth of Massachusetts, on the 30th day of March, 2000.
SA FUNDS - INVESTMENT TRUST
By: * /s/ John J. Bowen, Jr.
-------------------------
John J. Bowen, Jr.
President and Chief Executive Officer
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the registration statement has been signed below by the
following person in the capacities and on the date indicated:
SIGNATURES TITLE DATE
* /s/ John J. Bowen, Jr. Trustee March 30, 2000
- ------------------------
John J. Bowen, Jr.
* /s/ Bryan W. Brown Trustee March 30, 2000
- --------------------
Bryan W. Brown
* /s/ David G. Booth Trustee March 30, 2000
- --------------------
David G. Booth
* /s/ Patrick Keating Trustee March 30, 2000
- ---------------------
Patrick Keating
* /s/ Harold M. Shefrin Trustee March 30, 2000
- -----------------------
Harold M. Shefrin
* /s/ Michael Clinton Treasurer and Chief March 30, 2000
- --------------------- Financial and Accounting
Michael Clinton Officer
*By: /s/ Francine S. Hayes ** /s/ Alexander Potts
-------------------- -------------------
Francine S. Hayes Alexander Potts
As Attorney-in-Fact
* and ** pursuant to powers of attorney.
<PAGE>
EXHIBIT INDEX
Item No. Exhibit
99(d)(iii) Form of Investment Sub-Advisory Agreement between
Martingale Asset Management, L.P. and the Registrant
99(d)(iv) Form of Investment Sub-Advisory Agreement between
Sanford Bernstein & Co, Inc. and the Registrant
99(q)(i) Code of Ethics of the Trust, the Manager and the
Distributor
<PAGE>
EXHIBIT 99(D)(III)
SA FUNDS - INVESTMENT TRUST
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT executed as of ___________, 2000 by and among SA FUNDS -
INVESTMENT TRUST (THE "TRUST"), RWB ADVISORY SERVICES ("RWBAS") and
MARTINGALE ASSET MANAGEMENT, LP., a Delaware limited partnership and
registered investment adviser ("Sub-Adviser").
WHEREAS, RWBAS is the investment manager for the Trust, an open-end
management investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"); and
WHEREAS, RWBAS and Sub-Adviser intend to enter into a letter agreement
pursuant to which the parties will agree to conduct certain joint activities;
and
WHEREAS, RWBAS desires to retain Sub-Adviser as agent to furnish
investment advisory services to the investment portfolios of the Trust listed on
SCHEDULE A hereto and Sub-Adviser has agreed to act in such capacity (each a
"Fund" and collectively the "Funds").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. APPOINTMENT. RWBAS hereby appoints Sub-Adviser to provide
sub-investment advisory services to the Funds for the period and on the terms
set forth in this Agreement. Sub-Adviser accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. RWBAS has furnished Sub-Adviser with copies
properly certified or authenticated of each of the following:
(a) the Trust's Declaration of Trust, as filed with the Secretary
of State of Delaware and all amendments thereto or restatements thereof
(such Declaration of Trust, as presently in effect and as it shall from
time to time be amended or restated, is herein called the "Declaration
of Trust");
(b) the Trust's By-Laws and amendments thereto;
(c) resolutions of the Trust's Board of Trustees authorizing the
appointment of Sub-Adviser and approving this Agreement;
(d) the Trust's Notification of Registration on Form N-8A under
the 1940 Act as filed with the Securities and Exchange Commission (the
"SEC") on January 11, 1999 and all amendments thereto;
(e) the Trust's Registration Statement on Form N-lA under the
Securities Act of 1933, as amended ("1933 Act") (File No. 33-70423) and
under the 1940 Act (File No. 811-09195) as filed
<PAGE>
with the SEC and all amendments thereto insofar as such Registration
Statement and such amendments relate to the Funds; and
(f) the Trust's most recent prospectus and Statement of Additional
Information for the Funds (such prospectus and Statement of Additional
Information, as presently in effect, and all amendments and supplements
thereto, are - herein collectively called the "Prospectus").
RWBAS will furnish the Sub-Adviser from time to time with copies
of all amendments of or supplements to the foregoing.
3. MANAGEMENT. Subject always to the supervision of Trust's Board of
Trustees and RWBAS, the Sub-Adviser will furnish an investment program in
respect of, and make investment decisions for, all assets of the Funds and place
all orders for the purchase and sale of securities, all on behalf of the Funds.
In the performance of its duties, the Sub-Adviser will satisfy its fiduciary
duties to the Funds and will monitor the Funds' investments, and will comply
with the provisions of Trust's Declaration of Trust and By-Laws, as amended from
time to time, and the stated investment objectives, policies and restrictions of
the Funds as contained in the Prospectus. The Sub-Adviser and RWBAS will make
their officers and employees available to the other from time to time at
reasonable times to review investment policies of the Funds and to consult with
each other regarding the investment affairs of the Funds. The Sub-Adviser will
report to the Board of Trustees and RWBAS to with respect to the implementation
of such program.
The Sub-Adviser further agrees that it:
(a) will use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which it has
investment responsibilities;
(b) will conform with all applicable U.S. rules and regulations
pertaining to its investment advisory activities;
(c) will place orders pursuant to its investment determinations
for the Funds either directly with the issuer or with any broker or
dealer. The Sub-Adviser will place orders for the purchase or sale of
securities with a view to receiving the best price and execution for
such purchase or sale. Where the Sub-Adviser places orders for the
purchase or sale of securities for the Funds, in selecting brokers or
dealers to execute such orders, the Sub-Adviser is expressly authorized
to consider the fact that a broker or dealer has been or will be
furnishing research or other information or services which assist the
Sub-Adviser's performance of its investment decision-making
responsibilities generally, provided that the commission cost is
reasonable in relation to the brokerage and research services provided.
Compensation received by the Sub-Adviser pursuant to this Agreement
shall not be reduced by any benefits received by the Sub-Adviser
pursuant to this section. The Sub-Adviser may direct brokerage to
whomever it deems appropriate consistent with the foregoing. In no
instance will portfolio securities be purchased from or sold to RWBAS
or any of its affiliated brokers or dealers, the Sub-Adviser or any
affiliated person of either the Trust, RWBAS or Sub-Adviser, except as
may be permitted under the 1940 Act;
(d) will report regularly to RWBAS and to the Board of Trustees
and will make appropriate persons available for the purpose of
reviewing with representatives of RWBAS and
<PAGE>
the Board of Trustees on a regular basis at reasonable times the
management of the Funds, including, without limitation, review of the
general investment strategy of the Funds, the performance of the Funds
in relation to standard industry indices, interest rate considerations
and general conditions affecting the marketplace and will provide
various other reports from time to time as reasonably requested by
RWBAS (including, without limitation, with respect to benefits obtained
from brokerage);
(e) will maintain books and records with respect to Trust's
securities transactions and will furnish RWBAS and the Trust's Board of
Trustees such periodic and/or special reports as the Board or RWBAS may
request;
(f) will act upon instructions from RWBAS not inconsistent with
its fiduciary duties hereunder;
(g) will treat confidentially and as proprietary information of
Trust all such records and other information relative to Trust
maintained by the Sub-Adviser, and will not use such records and
information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification
to and approval in writing by Trust, which approval shall not be
unreasonably withheld and may not be withheld where the Sub-Adviser may
be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by Trust;
(h) will receive the research and recommendations of RWBAS with
respect to the investment and reinvestment of the assets of the Funds;
and
(i) will vote proxies received by the Sub-Adviser in connection
with securities held by the Funds consistent with its fiduciary duties
hereunder.
4. RWBAS'S DUTIES. RWBAS shall continue to have responsibility for all
other services to be provided to the Funds pursuant to its Investment Management
Agreements and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement. The Advisor shall also retain direct portfolio
management responsibility with respect to any assets of the Series which are not
allocated by it to the portfolio management of the Sub-Adviser.
5. REFERENCES TO SUB-ADVISER. During the term of this Agreement, RWBAS
agrees to furnish to the Sub-Adviser at its principal office all prospectuses,
proxy statements, reports to stockholders, sales literature or other material
prepared for distribution to sales personnel, shareholders of the Fund or the
public, which refer to the Sub-Adviser or its clients in any way, prior to use
thereof and not to use such material if the Sub-Adviser reasonably objects in
writing five business days (or such other time as may be mutually agreed upon)
after receipt thereof. Sales literature may be furnished to the Sub-Adviser
hereunder by first-class or overnight mail, facsimile transmission equipment or
hand delivery, attn: Legal Department.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule 3la-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
Sub-Adviser further agrees to maintain the records required to be maintained by
subsections
<PAGE>
(b)(1), (b)(5), (b)(9), (b)(10), (b)(11), (e) and (f) of Rule 3la-1 under the
1940 Act and preserve them for the periods prescribed by Rule 3la-2 under the
1940 Act.
7. EXPENSES. During the term of this Agreement, Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions,
custodial fees and expenses and stamp duties, if any) purchased for the Funds.
8. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, RWBAS Investment Trust will pay the Sub-Adviser, and
the Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory
fee, accrued daily and payable monthly, in accordance with SCHEDULE A hereto.
9. SERVICES TO OTHERS. Subject to exclusivity clauses in the SAMPLE
ADVISOR Services Agreement, RWBAS understands, and has advised Trust's Board of
Trustees, that the Sub-Adviser now acts, and may in the future act, as an
investment adviser to fiduciary and other managed accounts, and as investment
adviser, sub-investment adviser, and/or administrator to other investment
companies. RWBAS has no objection to the Sub-Adviser's acts in such capacities,
provided that whenever one or more of the Funds and one or more other investment
companies or accounts advised by Sub-Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a manner believed by the Sub-Adviser to be equitable consistent
with its fiduciary obligations to the Funds and such other investment entities.
RWBAS recognizes, and has advised Trust's Board of Trustees, that in some cases
this procedure may adversely affect the size of the position that the
participating Fund(s) may obtain in a particular security. In addition, RWBAS
understands, and has advised Trust's Board of Trustees, that the persons
employed by the Sub-Adviser to assist in the Sub-Adviser's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement will be deemed to limit or restrict the right of the
Sub-Adviser or any of its affiliates to engage in and devote time and attention
to other businesses or to render services of whatever kind or nature.
10. CLIENT SUITABILITY. RWBAS understands and agrees that the
Sub-Adviser, as part of its duties hereunder, is not responsible for determining
whether or not any of the Funds are suitable and appropriate investments for the
clients who invest in such Funds.
11. LIMITATION OF LIABILITY. RWBAS will not take any action against the
Sub-Adviser to hold the Sub-Adviser liable for any error of judgment or mistake
of law or for any loss suffered by the Fund in connection with the performance
of the Sub-Adviser's duties under this Agreement, except a loss resulting from
the Sub-Adviser's willful misfeasance, bad faith, or gross negligence in the
performance of its duties under this Agreement.
12. INDEMNIFICATION. RWBAS and the Sub-Adviser each agree to indemnify
the other against any claim against, loss or liability to such other party
(including reasonable attorneys fees) arising out of any action on the part of
the indemnifying party which constitutes willful misfeasance, bad faith or gross
negligence.
13. DURATION AND TERMINATION. This Agreement will become effective as
to each Fund as to the date set forth opposite each Fund's name on SCHEDULE A,
provided that it has been approved by a vote of a majority of the outstanding
voting securities of such Fund in accordance with the requirements under
<PAGE>
the 1940 Act and, unless sooner terminated as provided herein, will continue in
effect for two (2) years from such date.
Thereafter, if not terminated as to a Fund, this Agreement will
continue in effect as to a Fund for successive periods of twelve (12) months,
provided that such continuation is specifically approved at least annually (a)
by the vote of a majority of those members of the Trust's Board of Trustees who
are not interested persons of the Trust, the Sub-Adviser, or RWBAS, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of such Fund. Notwithstanding the foregoing, this Agreement
may be terminated as to the Fund at any time, without the payment of any
penalty, on sixty (60) days' written notice by the Trust.
Once this Agreement has been in effect for a period of not less than
five (5) years, then unless otherwise terminated in accordance with the
foregoing, this Agreement may be terminated by RWBAS or by the Sub-Adviser, as
to all Funds, by giving not less than one (1) year's notice. Notwithstanding the
foregoing provisions, each of RWBAS and the Sub-Adviser may terminate this
Agreement prior to the expiration of the initial five (5) year term as follows:
(a) if either RWBAS or the Sub-Adviser shall materially breach this Agreement
and such breach shall remain uncured for a period of sixty (60) days, the
non-breaching party may terminate this Agreement upon expiration of the
sixty-day period; and (b) in the event that the Trust terminates this Agreement
with respect to either RWBAS or the Sub-Adviser, the non-terminated party may
terminate this Agreement concurrent with the Fund's termination. This Agreement
will immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities",
"interested persons" and "assignment" have the same meaning of such terms in the
1940 Act.)
14. AMENDMENT OF THIS AGREEMENT. No provision this Agreement may be
changed, waived, discharged or, terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
15. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and will be governed by the
laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
SA FUNDS - INVESTMENT TRUST
By:
Name:
Title:
<PAGE>
Martingale Asset Management, LP, by Martingale Asset
Management Corporation, its General Partner
By:
Name:
Title:
RWB ADVISORY SERVICES INC.
By:
Name:
Title:
<PAGE>
SCHEDULE A
FUND FEE
SA FUNDS - INVESTMENT TRUST
By:
Name:
Title:
Martingale Asset Management, LP, by Martingale
Asset Management Corporation, its General Partner
By:
Name:
Title:
RWB ADVISORY SERVICES INC.
By:
Name:
Title:
<PAGE>
Exhibit 99(d)(iv)
INVESTMENT SUB-ADVISORY AGREEMENT
This Investment Sub-Advisory Agreement (the "Agreement") is made as of
the ___ day of ________, 2000 by and between __________________________
("Adviser") and Sanford C. Bernstein & Co., Inc., a New York corporation
("Sub-Adviser").
W I T N E S S E T H
WHEREAS, Advisor is the investment advisor of the
_______________________ (the "Fund"), an open-end diversified, management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), currently consisting of _______ separate series or
portfolios (collectively, the "Fund Portfolios");
WHEREAS, Adviser desires to retain Sub-Adviser to furnish investment
advisory services for the Fund Portfolio(s) identified in Exhibit A hereto, as
such Exhibit may be amended from time to time (the "Portfolio(s)"), and
Sub-adviser wishes to provide such services, upon the terms and conditions set
forth herein;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows:
1. APPOINTMENT. Adviser hereby appoints Sub-Adviser to provide certain
sub-investment advisory services to the Portfolio(s) for the period and on the
terms set forth in this Agreement. Sub-Adviser hereby accepts such appointment
and agrees to furnish the services on the terms set forth in this Agreement.
2. SUB-ADVISER SERVICES. Subject always to the supervision of the
Fund's Board of [Directors/Trustees] and Adviser, Sub-Adviser will furnish an
investment program in respect of, and make investment decisions for, such
portion of the assets of each Portfolio as Adviser shall from time to time
designate (each a "Portfolio Segment") and place all orders for the purchase and
sale of securities on behalf of each Portfolio Segment. In the performance of
its duties, Sub-Adviser will satisfy its fiduciary duties to each Portfolio and
will monitor each Portfolio Segment's investments, and will comply with the
[provisions of the Fund's Declaration of Trust and By-laws, as amended from time
to time, and the] stated investment objectives, policies and restrictions of
each Portfolio as set forth in the prospectus and Statement of Additional
Information for each Portfolio, as amended from time to time, as well as any
other written objectives, policies or limitations as may be provided to and
accepted by Sub-Adviser from Adviser in writing from time to time.
Sub-Adviser will provide reports at least quarterly to the Fund's Board
of [Directors/Trustees] and to Adviser. Sub-Adviser will make its officers and
employees available to Adviser and the Board of [Directors/Trustees] from time
to time at reasonable times to review investment policies of each Portfolio with
respect to each Portfolio Segment and to consult with Adviser regarding the
investment affairs of each Portfolio Segment.
Sub-Adviser agrees that it:
<PAGE>
(a) will use the same skill and care in providing such services as it
uses in providing services to fiduciary accounts for which it has
investment responsibilities;
(b) will comply with all applicable provisions of the 1940 Act and
rules and regulations of the Securities and Exchange Commission in all
material respects and in addition will conduct its activities under
this Agreement in accordance, with any applicable laws and regulations
of any governmental authority pertaining to its investment advisory
activities;
(c) to the extent directed by Adviser in writing, will execute
purchases and sales of portfolio securities for each Portfolio Segment
through brokers or dealers designated by management of the Fund to
Adviser for the purpose of providing direct benefits to the Fund,
provided that Sub-Advisor determines that such brokers or dealers will
provide best execution in view of such other benefits, and is hereby
authorized as the agent of the Fund to give instructions to the Fund's
custodian as to deliveries of securities or other investments and
payments of cash of each Portfolio Segment to such brokers or dealers
for the account of the relevant Portfolio. Adviser and the Fund
understand that the brokerage commissions or transaction costs in such
transactions may be higher than those which the Sub-Adviser could
obtain from another broker or dealer, in order to obtain such benefits
for the Fund;
(d) is authorized to and will select all other brokers or dealers that
will execute the purchases and sales of portfolio securities for each
Portfolio Segment and is hereby authorized as the agent of the Fund to
give, instructions to the Fund's custodian as to deliveries of
securities or other investments and payments of cash of each Portfolio
Segment for the account of each Portfolio. In making such selection,
Sub-Adviser is directed to use its best efforts to obtain best
execution, taking into account all appropriate factors, including
price, dealer spread or commission, size and difficulty of the
transaction and research or other services provided. With respect to
transactions under subparagraph (c) or this subparagraph (d), it is
understood that Sub-Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Fund or in
respect of each Portfolio, or be in breach of any obligation owing to
the Fund or in respect of each Portfolio under this Agreement, or
otherwise, solely by reason of its having caused a Portfolio to pay a
member of a securities exchange, a broker or a dealer a commission for
effecting a securities transaction of a Portfolio in excess of the
amount of commission another member of an exchange, broker or dealer
would have charged if Sub-Adviser determined in good faith that the
commission paid was reasonable in relation to the brokerage and
research services provided by such member, broker, or dealer, viewed in
terms of that particular transaction or Sub-Adviser's overall
responsibilities with respect to the accounts as to which it exercises
investment discretion;
(e) is authorized to consider for investment by each Portfolio Segment
securities that may also be appropriate for other funds and/or clients
served by Sub-Adviser. To assure fair treatment of each Portfolio
Segment and all other clients of Sub-Adviser in situations in which two
or more clients' accounts participate simultaneously in a buy or sell
program involving the same security, such transactions will be
allocated among each
2
<PAGE>
Portfolio Segment and other clients in a manner deemed equitable by
Sub-Adviser. Sub-Adviser is authorized to aggregate purchase and sale
orders for securities held (or to be held) in each Portfolio Segment
with similar orders being made on the same day for other eligible
client accounts or portfolios managed by Sub-Adviser. When an order is
so aggregated, the actual prices applicable to the aggregated
transaction will be averaged and each Portfolio Segment and each other
account or portfolio participating in the aggregated transaction will
be treated as having purchased or sold its portion of the securities at
such average price. Adviser and the Fund understand that Sub-Adviser
may not be able to aggregate transactions through brokers or dealers
designated by Adviser with transactions through brokers or dealers
selected by Sub-Adviser, in which event the prices paid or received by
each Portfolio Segment will not be so averaged and may be higher or
lower than those paid or received by other accounts or portfolios of
Sub-Adviser;
(f) will report regularly to Adviser and to the Fund's Board of
[Directors/Trustees] and will make appropriate persons available for
the purpose of reviewing with representatives of Adviser and the Board
of [Directors/Trustees] on a regular basis at reasonable times the
management of each Portfolio Segment, including without limitation,
review of the, general investment strategies of each Portfolio Segment,
the performance of each Portfolio Segment in relation to standard
industry indices and general conditions affecting the marketplace, and
will provide various other reports from time to time as reasonably
requested by Adviser;
(g) will prepare such books and records with respect to each Portfolio
Segment's securities transactions, as requested by Adviser and will
furnish Adviser and the Fund's Board of [Directors/Trustees] such
periodic and special reports as the Board or Adviser may reasonably
request;
(h) will vote all proxies with respect to securities in each Portfolio
Segment; and
(i) will act upon reasonable instructions from Adviser which, in the
reasonable determination of Sub-Adviser, are not inconsistent with
Sub-Adviser's fiduciary duties under this Agreement.
3. EXPENSES. During the term of this Agreement, Sub-Adviser will
provide the office space, furnishings, equipment and personnel required to
perform its activities under this Agreement, and will pay all customary expenses
incurred by it in connection with its activities under this Agreement, which
shall not include the cost of securities (including brokerage commissions, if
any) purchased for each Portfolio Segment.
4. COMPENSATION. For the services provided under this Agreement,
Adviser will pay Sub-Adviser a sub-advisory fee computed and paid as set forth
in Exhibit B hereto.
5. OTHER SERVICES. Sub-Adviser will for all purposes herein be deemed
to be an independent contractor and will, unless otherwise expressly provided or
authorized, have no authority to act for or represent Adviser, the Fund or a
Portfolio or otherwise be deemed an agent of Adviser, the Fund or a Portfolio.
Adviser understands and has advised the Fund's Board of
3
<PAGE>
[Directors/Trustees] that Sub-Adviser acts as an investment adviser or
sub-investment adviser to other investment companies and other advisory clients.
Sub-Adviser understands that during the term of this Agreement Adviser may
retain one or more other sub-advisers with respect to any portion of the assets
of a Portfolio other than the Portfolio Segments.
6. AFFILIATED BROKER. In connection with the purchase or sale of
securities or other investments for each Portfolio Segment, Sub-Adviser may act
as broker or Sub-Adviser may allocate orders for purchase and sale transactions
to any broker-dealer affiliated with Sub-Adviser ("Affiliated Broker"), and may
cause each Portfolio or the Fund to compensate Sub-Adviser or an Affiliated
Broker for effecting such transactions, subject to: (a) the requirement that
Sub-Adviser seek to obtain best execution as set forth above; (b) compliance
with procedures adopted by the Fund pursuant to Rule 17e-1 under the 1940 Act;
(c) the provisions of the Investment Advisers Act of 1940, as amended (the
"Advisers Act"); (d) the provisions of the Securities Exchange Act of 1934, as
amended; and (e) other applicable provisions of law. Subject to the requirements
of applicable law and any procedures adopted by the Fund's Board of
[Directors/Trustees], Sub-Adviser or its affiliated persons may receive
brokerage commissions, fees or other remuneration from the Portfolio or the Fund
for such services in addition to Sub-Adviser's fees for services under this
Agreement.
Adviser or the Fund may revoke any or all of the consents and
authorizations given hereby at any time and without penalty by providing written
notice to Sub-Adviser.
7. REPRESENTATIONS OF SUB-ADVISER. Sub-Adviser represents and warrants
that it is registered with the Securities and Exchange Commission under the
Advisers Act. Sub-Adviser agrees that it shall remain so registered throughout
the term of this Agreement and shall notify Adviser immediately if Sub-Adviser
ceases to be so registered as an investment adviser. Sub-Adviser further
represents and warrants that it: (a) is duly organized and validly existing
under the laws of the state of its organization with the power to own and
possess its assets and carry on its business as it is now being conducted; (b)
has the authority to enter into and perform the services contemplated by this
Agreement; (c) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (d) has met, and will
continue to seek to meet for the duration of this Agreement, any other
applicable federal or state requirements, and the applicable requirements of any
regulatory or industry self-regulatory agency, necessary to be met in order to
perform its services under this Agreement; and (e) will promptly notify Adviser
of the occurrence of any event that would disqualify it from serving as an
investment adviser to an investment company pursuant to Section 9(a) of the 1940
Act. In addition, Sub-Adviser represents that it has provided Adviser with
copies of each of the following documents: (i) Sub-Adviser's Form ADV as filed
with the Securities Exchange Commission; and (ii) separate lists of persons who
Sub-Adviser wishes to have authorized to give written and/oral instructions to
the custodians of the Fund's assets for each Portfolio. Sub-Adviser will furnish
Adviser from time to time with copies, properly certified or otherwise
authenticated, of all material amendments of or supplements to the foregoing, if
any. Such amendments or supplements as to items (i) through (ii) will be
provided within 10 days of the time such materials became available to
Sub-Adviser.
8. BOOKS AND RECORDS. Sub-Adviser will maintain, in the form and for
the period required by Rule 31a-2 under the 1940 Act, all records relating to
each Portfolio Segment's
4
<PAGE>
investments that are required to be maintained by the Fund pursuant to the
requirements of paragraphs (b)(5), (b)(6), (b)(7), (b)(9), (b)(10) and (f) of
Rule 3la-1 under the 1940 Act. Sub-Adviser agrees that all books and records
which it maintains In connection with its management of the Portfolio Segments
are the property of the Fund and further agrees to surrender promptly to the
Adviser or the Fund any such books, records or information upon the Adviser's or
the Fund's request (provided, however, that Sub-Adviser may retain copies of
such records). All such books and records shall be made available, within five
business days of a written request, to the Fund's accountants or auditors during
regular business hours at Sub-Adviser's offices. Adviser and the Fund or either
of their authorized representative shall have the right to copy any records in
the possession of Sub-Adviser which pertain to each Portfolio or the Fund. Such
books, records, information or reports shall be made available to properly
authorized government representatives consistent with state and federal law
and/or regulations, In the event of the termination of this Agreement, all such
books, records or other information shall be returned to Adviser or the Fund,
provided, however, that Sub-Adviser may retain copies of such records.
Sub-Adviser agrees that it will not disclose or use any records or
confidential information obtained pursuant to this Agreement in any manner
whatsoever except as authorized in this Agreement or in writing by Adviser or
the Fund, or if such disclosure is required by federal or state, regulatory
authorities. Sub-Adviser may disclose the investment performance of each
Portfolio Segment, provided that such disclosure does not reveal the identity of
Adviser, each Portfolio or the Fund. Sub-Adviser may, however, disclose that
Adviser, the Fund and each Portfolio are its clients.
9. CODE OF ETHICS. Sub-Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and will
provide Adviser and the Fund with a copy of such code. Within 20 days of the end
of each calendar quarter during which this Agreement remains in effect, the
president or a vice president of Sub-Adviser shall certify to Adviser or the
Fund that Sub-Adviser has complied with the requirements of Rule 17j-1 during
the previous quarter and that there have been no violations of Sub-Adviser's
code of ethics or, if any violation has occurred, the nature of such violation
and of the action taken in response to such violation.
10. LIMITATION OF LIABILITY. Neither Sub-Adviser nor any of its
directors, officers, stockholders, agents or employees shall have any liability
to Adviser, the Fund or any shareholder of the Fund for any error of judgment,
mistake of law, or loss arising out of any investment, or for any other act or
omission in the performance by Sub-Adviser of its duties hereunder, except for
liability resulting from willful misfeasance, bad faith, or gross negligence on
Sub-Adviser's part in the, performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
Sub-Adviser agrees to indemnify and defend Adviser, its officers,
directors, employees and any person who controls Adviser for any loss or expense
(including reasonable attorneys' fees) arising out of or in connection with any
action, suit or proceeding relating to any actual or alleged material
misstatement or omission in the Fund's registration statement, any proxy
statement, or any communication to current or prospective investors in each
Portfolio if such material misstatement or omission was made in reliance upon
and in conformity with written information furnished by Sub-Adviser to Adviser
or the Fund.
5
<PAGE>
Adviser agrees to indemnify and defend Sub-Adviser, its officers,
directors, employees and any person who controls Sub-Adviser for any loss or
expense (including reasonable attorneys' fees) arising out of or in connection
with any action, suit or proceeding relating to any actual or alleged material
misstatement or omission in the Fund's registration statement, any proxy
statement, or any communication to current or prospective investors in each
Portfolio (other than any material misstatement or omission made in reliance
upon and in conformity with written information furnished by Sub-Adviser to
Adviser or the Fund).
11. TERM AND TERMINATION. This Agreement shall become effective with
respect to each Portfolio Segment on _____________, 2000, and shall remain in
full force until __________________, unless sooner terminated as hereinafter
provided. This Agreement shall continue in force from year to year thereafter
with respect to each Portfolio, but only as long as such continuance is
specifically approved for each Portfolio at least annually in the manner
required by the 1940 Act and the rules and regulations thereunder; provided,
however, that if the continuation of this Agreement is not approved for a
Portfolio, Sub-Adviser may continue. to serve in such capacity for such
Portfolio in the manner and to the extent permitted by the 1940 Act and the
rules and regulations thereunder.
This Agreement shall terminate as follows:
(a) This Agreement shall automatically terminate in the event of its
assignment (as defined in the Advisers Act) and may be terminated at
any time without the payment of any penalty by Adviser or by
Sub-Adviser on sixty days written notice to the other party. This
Agreement may also be terminated by the Fund with respect to each
Portfolio by action of the Board of [Directors/Trustees] or by a vote
of a majority of the outstanding voting securities of each Portfolio
(as defined in the 1940 Act) on sixty days written notice to
Sub-Adviser by the Fund.
(b) This Agreement may be terminated with respect to each Portfolio at
any time without payment of any penalty by Adviser, the Board of
[Directors/Trustees] or a vote of majority of the outstanding voting
securities of such Portfolio in the event that Sub-Adviser or any
officer or director of Sub-Adviser has taken any action which results
in a material breach of the covenants of Sub-Adviser under this
Agreement.
(c) This Agreement shall automatically terminate in the event the
investment management agreement between Adviser and the Fund with
respect to a Portfolio is terminated, assigned or not renewed.
Termination of this Agreement shall not affect the right of Sub-Adviser to
receive payments of any unpaid balance of the compensation described in Section
4 earned prior to such termination.
12. NOTICE. Any notice under this Agreement by a party shall be in
writing, addressed and personally delivered, mailed postage prepaid, or sent by
facsimile transmission with confirmation of receipt, to the other party at such
address as such other party may designate in writing for the receipt of such
notice.
6
<PAGE>
13. ADVISER REPRESENTATIONS AND RESPONSIBILITY. Adviser represents and
warrants that it has all requisite power and authority to execute, deliver and
perform this Agreement, that the execution and delivery of this Agreement has
been duly authorized and when so executed and delivered will be binding upon
Adviser in accordance with its terms. Adviser will deliver to Su-Adviser such
evidence of its authority with respect to this Agreement as Sub-Adviser may
reasonably require, whether by way of a certified resolution or otherwise.
Adviser will provide Sub-Adviser with copies of the Fund's constituent
documents, prospectus, and Statement of Additional Information and any amendment
thereto, and any objectives, policies or limitations not appearing therein as
they may be relevant to Sub-Adviser's performance under this Agreement;
provided, however, that no changes or modifications to the foregoing shall be
binding on Sub-Adviser until it is notified thereof.
16. MISCELLANEOUS. This Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof and may be amended only
by written consent of both parties. The captions in this Agreement are included
for convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made, invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit of
the parties and their respective successors.
17. APPLICABLE LAW. This Agreement shall be construed in accordance
with applicable federal law and the laws of the State of New York.
IN WITNESS WHEREOF, Adviser and Sub-Adviser have caused this Agreement
to be executed as of the date and year first above written.
[NAME OF ADVISER]
By: _______________________________
Name:
Title:
SANFORD C. BERNSTEIN & CO., INC.
By: _______________________________
Name:
Title:
7
<PAGE>
EXHIBIT A
PORTFOLIO(S)
<PAGE>
EXHIBIT B
FEE SCHEDULE
Adviser shall pay Sub-Adviser with respect to each Portfolio Segment each
calendar month during the term of this Agreement, a fee based on the average
daily net assets of each Portfolio Segment, at the following annual rates:
<PAGE>
Exhibit 99(q)(i)
RWB ADVISORY SERVICES INC.
RWB SECURITIES INC.
SA FUNDS-INVESTMENT TRUST
CODE OF ETHICS
Revised as of March 1, 2000
GENERAL
This Code of Ethics (the "Code") is adopted by RWB Advisory Services
Inc. (the "Adviser"), RWB Securities Inc. (the "Distributor"), and SA
Funds-Investment Trust (the "Trust") pursuant to the requirements of Rule 17j-1
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"). It is the policy of the Adviser, the Distributor and the Trust in
connection with personal securities investments of Access Persons1, that such
persons at all times shall place the interests of the Adviser and the
Distributor clients and the Trust's shareholders first. All personal securities
transactions of Access Persons shall be conducted in a manner consistent with
this Code of Ethics in such a manner as to avoid any actual or potential
conflict of interest or any abuse of an Access Person's position of trust and
responsibility. An Access Person may not take inappropriate advantage of his or
her position with the Adviser, the Distributor or the Trust.
1. PROHIBITIONS
No Access Person:
(a) In connection with the purchase or sale, directly or indirectly, by
such Access Person of a security(2) held or to be acquired(3) by the
Trust or a registered investment company for which the Adviser acts
as investment adviser or the Distributor acts as the principal
underwriter:
(i) shall employ any device, scheme or artifice to defraud the Trust
or such registered investment company;
(ii) shall make to the Trust or such registered investment company any
untrue statement of a material fact or omit to state to such
registered investment company a material fact necessary in order
to make the statements made, in light of the circumstances under
which they are made, not misleading;
(iii) shall engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon such
registered investment company, or
(iv) shall engage in any manipulative practice with respect to the
Trust or such registered investment company.
- --------
(1) For the meaning of all terms marked with a footnote, see section 6 of the
Code "Definitions."
(b) Shall purchase or sell, directly or indirectly, any security in which
he has, or by reason of such transaction acquires, any direct or
indirect beneficial ownership(4) and which to his actual knowledge at
the time of such purchase or sale:
(i) is being considered for purchase or sale by the Trust or such
registered investment company; or
(ii) is then being purchased or sold by the Trust or such registered
investment company.
(c) Shall, in addition to the above-stated prohibitions:
(i) acquire any securities in an initial public offering; PROVIDED,
HOWEVER, that such prohibition shall not apply to a purchase of
securities in the retail tranche of a new issue where such
securities are acquired through a retail application form which
does not disclose, and where allotment is not dependent on, the
applicant's affiliation with the Adviser, the Distributor or the
Trust;
(ii) acquire securities in a private placement or initial public
offering, except as provided in section 2(f) herein;
(iii) accept any personal gift of more than DE MINIMIS value from any
person or entity that does business with, or on behalf of an the
Adviser' or the Distributor' account of any client and with or on
behalf of the Trust; or
(iv) serve on the board of directors of a publicly traded company,
except as provided in section 2(g) herein.
No Independent Trustee(5):
(d) shall purchase or sell, directly or indirectly, any security in which
such Independent Trustee has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership and which to
such Independent Trustee's actual knowledge at the time of such
purchase or sale:
(i) is being considered for purchase or sale by a Fund(6); or
(ii) is being purchased or sold by a Fund.
2. EXEMPTED TRANSACTIONS
The prohibitions of Section 1 of this Code shall not apply to:
(a) Purchases or sales effected in any account over which the Access
Person or Independent Trustee has no direct or indirect influence or
control.
(b) Purchases or sales of securities which are not eligible for purchase
or sale by the Trust, or a registered investment company for which the
Adviser acts as the investment adviser or the Distributor acts as the
principal underwriter.
<PAGE>
(c) Purchases or sales which are non-volitional on the part of either the
Trust, an Independent Trustee or a registered investment company for
which the Adviser acts as the investment adviser or the Distributor
acts as the principal underwriter.
(d) Purchases which are part of an automatic dividend reinvestment plan.
(e) Purchases effected upon the exercise of rights issued by an issuer PRO
RATA to all holders of a class of its securities, to the extent such
rights were acquired from such issuer, and sales of such rights so
acquired.
(f) Purchase or sale requests which receive the prior written approval of
the Compliance Officer(7) or President or the Secretary of a
registered investment company for which the Adviser acts as the
investment adviser or the Distributor acts as the principal
underwriter because there exists only a remote potential for a
conflict of interest with such registered investment company,
because the proposed transaction would be very unlikely to affect a
highly institutional market, or when they clearly are not related
economically to the securities to be purchased, sold or held by a
Fund or such registered investment company. The Compliance Officer
of the Trust or Secretary of the Adviser or the Distributor, as the
case may be, shall record any action taken pursuant to this
subsection 2(f).
(g) purchases or sales other than those exempted in (a) through (e) above,
(i) which will not cause the Independent Trustee to gain improperly
a personal profit as a result of such Independent Trustee's
relationship with the Trust, or (ii) which are only remotely
potentially harmful to a Fund because the proposed transaction
would be unlikely to affect a highly institutional market, or (iii)
which, because of the circumstances of the proposed transaction,
are not related economically to the securities purchased or sold or
to be purchased or sold by a Fund, and in each case which are
previously approved by the Compliance Officer of the Trust, which
approval shall be confirmed in writing.
(h) Service by an Access Person on the board of directors of a publicly
traded company. Such Access Person shall, however, inform the
Compliance Officer of the Trust or the President or Secretary of such
registered investment company of such appointment. In the event that
Compliance Officer of the Trust or the President or Secretary of such
registered investment company, in consultation with outside counsel,
should decide that the potential for conflicts of interests exists
with respect to such person's obligations as a director and the
Adviser or the Distributor duties to its clients, the Compliance
Officer of the Trust or the President or Secretary of such registered
investment company may, acting upon the recommendations of outside
counsel, place restrictions on the activities of, or information
received by, such Access Person.
3. PROCEDURAL MATTERS
(a) The Secretary of the Adviser or the Distributor, as the case may be,
or the Compliance Officer of the Trust shall:
(i) Furnish a copy of this Code to each Access Person of the Adviser,
the Distributor or the Trust and obtain from each such person a
written
<PAGE>
acknowledgement of the receipt thereof. Each Access Person shall
provide the Secretary, on an annual basis, with an executed
certificate stating that he or she has read and understood the
Code of Ethics, respectively, and recognize that he or she is
subject to the Code. In addition, each Access Person shall
certify to the Secretary on an annual basis that he or she has
compiled with the requirements of the Code of Ethics and has
disclosed or reported all personal securities transactions
required to be disclosed or reported pursuant to the requirements
of this Code.
(ii) Notify each such Access Person of his/her obligation to file
reports as provided by Section 4 of this Code.
(iii)Report to the Board of Directors of the Adviser and the
Distributor and the Board of Trustees of the Trust at the next
occurring regular meeting the facts contained in any reports
filed with the Secretary or Compliance Officer pursuant to
Section 4 of this Code when any such report indicates that an
Access Person engaged in a transaction in a security held or to
be acquired by a Fund.
(iv) Maintain any records required by paragraph (d) of Rule 17j-1.
(v) Maintain any records pursuant to Section 2(f) of this Code.
(vi) Maintain the records of any violation of this Code, and/or any
action taken as a result of such violation in an easily
accessible place for a period of not less than five years
following the end of the fiscal year in which the violation
occurs.
4. REPORTING
(a) Initial Holdings Report. Every Access Person is required to report his
or her ownership in a Security no later than 10 days after becoming an
Access Person (i.e., no later than 10 days after beginning
employment). In addition, each Access Person is required to report any
investment account beneficially held at a broker or bank or similar
institution.
(b) Annual Holdings Report. Within thirty days of the end of each year,
each Access Person shall update the Initial Holdings Report, reporting
each Security beneficially held and each account maintained at a bank,
broker or similar institution.
(c) Quarterly Transaction Report. Every Access Person of the Adviser, the
Distributor and the Trust shall report to the Adviser, the Distributor
or the Trust, as the case may be, the information described in Section
4(b) of this Code with respect to transactions in any security in
which such Access Person has, or by reason of such transaction
acquires, any direct or indirect beneficial ownership in the security;
provided, however that an Access Person shall not be required to make
a report with respect to transactions effected for any account over
which such person does not have any direct or indirect influence; and,
provided, further, no Access Person of the Adviser or the Distributor
shall be required to make a report with respect to information which
would be duplicative of information recorded pursuant to Rule
204-2(a)(12) or 204-2(a)(13) under the Investment Advisers Act of
1940.
<PAGE>
(d) Every Quarterly Transaction Report shall be made not later than 10
days after the end of the calendar quarter in which the transaction to
which the report relates was effected, and may be on the form provided
by the Adviser, the Distributor or the Trust, a copy of which is
attached hereto, the report shall contain the following information:
(i) The date of the transaction, the title and the number of shares,
and the principal amount of each security involved;
(ii) The nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(iii)The price at which the transaction was effected; and,
(iv) The name of the broker, dealer or bank with or through whom the
transaction was effected. If a new account is opened by the
Access Person, but no transaction was effected, the Access Person
is nonetheless still required to report the new account.
(e) Any such report may contain a statement that the report shall not be
construed as an admission by the person making such report that he/she
has any direct or indirect beneficial ownership in the security to
which the report relates.
(f) At periodic intervals established by the trustees of the Trust, but no
less frequently than annually, the Compliance Officer of the Trust and
shall provide a written report to the trustees of the Trust of all
material matters raised pursuant to the Code during such period,
including but not limited to, information about material violations
and sanctions imposed in response to those material violations.
Additionally, the Compliance Officer will provide the trustees of the
Trust a written certification which certifies to the trustees of the
Trust that the Trust, the Adviser and the Distributor have adopted
procedures reasonably necessary to prevent its Access Persons from
violating the Code.
5. VIOLATIONS
Upon being apprised of facts which indicate that a violation of this Code
may have occurred, the Board shall determine whether, in its judgment, the
conduct being considered did in fact violate the provisions of this Code.
If the Board determines that a violation of this Code has occurred, the
Board may impose such sanctions as it deems appropriate in the
circumstances. If the person whose conduct is being considered by the Board
is a member of such Board, he/she shall not be eligible to participate in
the judgment of the Board as to whether a violation exists or in whether,
or to what extent, sanctions should be imposed.
6. DEFINITIONS
(a) For purposes of this Code, the words appearing below in quotation
marks shall have the meanings ascribed thereto; provided however, that
all such terms shall be construed in a manner consistent with the
definitions thereof contained in Rule 17j-1.
(i) The term "Access Person" shall mean the following:
<PAGE>
(1) with respect to the Adviser, each officer, director and
employee of the Adviser in connection with his/her regular
functions or duties, makes, participates in, or obtains
information regarding the purchase or sale of a security by
a registered investment company, for which the Adviser act
as investment adviser, or whose functions relate to the
making of any recommendations with respect to such purchases
or sales, and any natural person in a control relationship
to the Adviser who obtains information concerning
recommendations with regard to the purchase or sale of a
security,
(2) with respect to the Distributor, each officer and director
of the Distributor who in the ordinary course of his
business makes, participates in or obtains information
regarding the purchase or sale of securities for any
registered investment company for which the Distributor acts
as the principal underwriter or whose functions or duties as
part of the ordinary course of his business relate to the
making of any recommendation to such investment company
regarding the purchase or sale of securities, and
(3) with respect to the Trust, each officer and trustee of the
Trust.
(ii) "Security" means all securities except securities issued by the
Government of the United States, bankers' acceptances,
certificates of deposits, commercial paper and shares of
registered open-end investment companies.
(iii) A "security held or to be acquired" by a registered investment
company means any security which (i) is held by such company; or
(ii) is being or has been considered by such company or its
investment advisor for purchase by such company.
(iv) "Beneficial ownership" of a security by an Access Person shall be
interpreted in the same manner as it would be in determining
whether a person is subject to the provisions of Section 16 of
the Securities Exchange Act of 1934 and the rules and regulations
thereunder, except that the determination of direct or indirect
beneficial ownership shall apply to all securities which such
Access Person has or acquires. In general, a person may be
regarded as having beneficial ownership of securities held in the
name of:
(1) a husband, wife, domestic partner or minor child;
(2) a relative sharing the same house;
(3) anyone else if the Access Person:
(a) obtains benefits substantially equivalent to ownership
of the securities, or
(b) can obtain ownership of the securities immediately or
at some future time.
(v) "Independent Trustee" shall mean any trustee of the Trust who is
not an Interested Person (as defined in the Investment Company
Act) of the Trust.
(vi) "Fund" or "Funds" shall mean the portfolio series of the Trust.
<PAGE>
(vii) "Compliance Officer" shall mean with respect to the Trust, a
person designated by the Trust to receive reports and take
certain actions.
The requirements of this Code are not applicable to transactions for any account
over which the Access Person has no influence or control. If in doubt, the
Access Person may state on any form required to be completed under the
provisions of this Code that he/she disclaims any beneficial ownership in the
securities involved.
<PAGE>
<TABLE>
<CAPTION>
INITIAL REPORT OF SECURITIES HOLDINGS AND ACCOUNTS
DATE ON WHICH I BECOME AN ACCESS PERSON______________________
Check Type of Account
Amount and Title of Covered Name of Broker
Security: Dealer or Bank Pers. Immed. Fam. Fiduciary
<S> <C> <C> <C>
</TABLE>
The above is a record of (i) every covered security in which I had any direct or
indirect beneficial ownership on the date I became an Access Person as more
fully defined in the Fund's Code of Ethics; and (ii) the name of each broker,
dealer or bank with whom I maintained an account in which any securities were
held for my direct or indirect benefit as of the date I became an Access Person.
Date: Signature:
--------------------- -------------------------------------
Note 1. This report shall not be construed as an admission by me that I have any
direct or indirect beneficial ownership in the securities reported, which have
been marked by me with an asterisk(*). Such securities holdings are reported
solely to meet the standards imposed by Rule 17j-1 under the Investment Company
Act of 1940.
Note 2. Copies of brokerage statements are attached to this signed report in
lieu of the above.
Note 3. Report must be submitted within 10 days after becoming an Access Person.
<PAGE>
<TABLE>
<CAPTION>
QUARTERLY REPORT OF SECURITIES TRANSACTIONS AND ACCOUNTS
FOR CALENDAR QUARTER ENDING______________________
Date Check Type of Account
Amount and Title of Bought Sold Price Name of Broker Approved by:
Covered Security: Dealer or Bank and Pers. Immed. Fam. Fiduciary (if applicable)
Date Account was
Established
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
The above is a record of (i) every transaction during the quarter in a covered
security in which I had or by reason of which I acquired any direct or indirect
beneficial ownership as more fully defined in the Fund's Code of Ethics; and
(ii) each account established by me with a broker, dealer or bank in which any
securities were held during the quarter for my direct or indirect benefit.
Date: Signature:
--------------------- -------------------------------------
Note 1. If the transaction is other than a sale or purchase, please explain the
transaction below.
Note 2. In the case of debt securities, include principal amount, interest rate
and maturity date.
Note 3. This report shall not be construed as an admission by me that I have any
direct or indirect beneficial ownership in the securities reported, which have
been marked by me with an asterisk (*). Such securities holdings are reported
solely to meet the standards imposed by Rule 17j-1 under the Investment Company
Act of 1940.
Note 4. Copies of brokerage statements are attached to this signed report in
lieu of the above.
Note 5. Report must be submitted within 10 days after the end of the calendar
quarter.
<PAGE>
ANNUAL REPORT OF SECURITIES HOLDINGS AND ACCOUNTS
FOR CALENDAR YEAR ENDING DECEMBER 31, ________
<TABLE>
<CAPTION>
Check Type of Account
Amount and Title of Covered Name of Broker
Security: Dealer or Bank Pers. Immed. Fam. Fiduciary
<S> <C> <C> <C>
</TABLE>
The above is a record of (i) every covered security in which I had any direct or
indirect beneficial ownership on the date I became an Access Person as more
fully defined in the Fund's Code of Ethics; and (ii) the name of each broker,
dealer or bank with whom I maintained an account in which any securities were
held for my direct or indirect benefit as of the date I became an Access Person.
Date: Signature:
--------------------- -------------------------------------
Note 1. This report shall not be construed as an admission by me that I have any
direct or indirect beneficial ownership in the securities reported, which have
been marked by me with an asterisk(*). Such securities holdings are reported
solely to meet the standards imposed by Rule 17j-1 under the Investment Company
Act of 1940.
Note 2. Copies of brokerage statements are attached to this signed report in
lieu of the above.
Note 3. Report must be filed within 30 days after the calendar year end.
<PAGE>
ANNUAL CERTIFICATION FORM
This is to certify that I have read and understand the Code of Ethics
of RWB Advisory Services Inc., RWB Securities Inc. and SA Funds - Investment
Trust as amended March 1, 2000, and that I recognize that I am subject to the
provisions thereof and will comply with these provisions.
This is to further certify that I have complied with the requirement of
the Code of Ethics and that I have reported all personal securities
transactions, holdings and securities accounts required to be disclosed or
reported pursuant to the Code of Ethics.
--------------------------------
Signature
--------------------------------
Position
--------------------------------
Date
