As filed with the Securities and Exchange Commission on June 22, 2000.
FILE NO. 811-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
BBH GLOBAL EQUITY PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
63 Wall Street, New York, NY 10005
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (800) 625-5759
Philip W. Coolidge, 21 Milk Street, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Copy to: John E. Baumgardner, Esq.
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
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PART A
Responses to Items 1 through 3, 5 and 9 have been omitted pursuant to
Item 2(b)of Instruction B of the General Instructions to Form N-1A.
ITEM 4. Investment Objectives, Principal Investment Strategies and Related
Risks.
The investment objective of the Global Equity Portfolio (the
"Portfolio") is to provide investors with long-term maximization of total
return, primarily through capital appreciation.
Under normal circumstances the assets of the Portfolio are fully
invested in equity securities of companies based in the developed and
well-established markets of the world. These markets include the United States,
Canada, Japan, continental Europe, Australia, Hong Kong and Singapore. The
Portfolio may also invest in less developed markets although no more than 10% of
the Portfolio's assets will be invested in these markets.
Although the Investment Adviser expects to invest the assets of the
Portfolio primarily in common stocks, it may also purchase other securities with
equity characteristics, including securities convertible into common stock,
rights and warrants. The Investment Adviser may purchase these equity securities
directly or in the form of American Depositary Receipts, Global Depositary
Receipts or other similar securities representing securities of foreign-based
companies. Although the Investment Adviser invests primarily in equity
securities which are traded on foreign or domestic national securities
exchanges, the Investment Adviser may also purchase equity securities which are
traded in foreign or domestic over-the-counter markets. The Investment Adviser
may invest in securities of appropriate investment companies in order to obtain
participation in markets or market sectors which restrict foreign investment or
to obtain more favorable investment terms.
The Investment Adviser invests in medium and large sized global
companies with a sound financial structure, proven management, an established
industry position and competitive products and services. In selecting individual
securities, the focus is on (1) companies that exhibit above average revenue and
earnings growth as well as high or improving returns on investment and (2)
companies whose shares are selling at low valuation levels based on measures
such as low price-to-book and price-to-earnings ratios.
Consequently, the Portfolio holds a broadly diversified portfolio
representing many sectors of the global economy. This industry diversification
and participation in both growth and value oriented equities is designed to
control the portfolio's exposure to market risk and company specific risk.
The Investment Adviser seeks to add value in global markets primarily
through stock selection, with regional/country allocation used only as a risk
management tool. The research universe is comprised of approximately 650
companies that represent the top 90% of the MSCI-World Index by market
capitalization and by sector. The companies in which the Portfolio invests
generally have strong underlying fundamentals such as leading industry position,
effective management competitive products and services, high or improving return
on investment and a sound financial structure.
A bottom-up analysis of companies in the universe identifies earnings
growth potential or, where appropriate, improved return on equity/assets.
Simultaneously, quantitative tools such as discounted cash flow models (DCF),
economic value-added analysis (EVA), and cash flow return on investment (CFROI),
are applied to assess current and future value, and to differentiate companies
within the universe. This process ultimately produces an Attractive Investment
Opportunities List with issues appropriate for inclusion in the Portfolio.
Portfolio construction in the Portfolio is the result of selecting
issues from the Attractive Opportunities List which, when combined with regional
allocation policies, benchmark considerations, and risk management, will produce
a well-diversified portfolio expected to outperform its benchmark over a 12-18
month time horizon.
The Investment Adviser buys and sells securities denominated in a
variety of currencies. For non-U.S. dollar investments, interest, dividends and
sale proceeds are received in currencies other than the U.S. dollar. The
Investment Adviser enters into foreign currency exchange transactions from time
to time to convert to and from different foreign currencies and to convert
foreign currencies to and from the U.S. dollar. Put and call options on stock
indexes may be purchased and futures contracts on stock indexes may be entered
into for the Portfolio solely as a hedge against changes in the market value of
portfolio securities or securities intended to be purchased. Forward foreign
exchange contracts may be entered into on behalf of the Portfolio in order to
protect the dollar value of securities denominated in foreign currencies that
are held or intended to be purchased.
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PRINCIPAL RISK FACTORS
The principal risks of investing in the Portfolio and the circumstances
reasonably likely to adversely affect an investment are described below. The
price of the Portfolio changes daily based on market and other conditions. An
investor may lose money by investing in the Portfolio.
The principal risks of investing in the Portfolio are:
o Market Risk:
This is the risk that the price of a security falls due to changing
economic, political or market conditions, or due to a company's individual
situation.
o Foreign Investment Risk (Investments outside the U.S.)
Changes in political or social conditions, diplomatic relations,
confiscatory taxation, expropriation, nationalization, limitation on the removal
of funds or assets, or imposition of (or change in) exchange control or tax
regulations may adversely affect the value of such investments. Changes in
government administrations or economic or monetary policies in the United States
or other countries could result in appreciation or depreciation of portfolio
securities and could favorably or unfavorably affect the operations of the
Portfolio. The economies of individual foreign nations differ from the U.S.
economy, whether favorably or unfavorably, in areas such as growth of gross
domestic product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position. It may be more difficult to
obtain and enforce a judgment against a foreign company. Dividends paid by
foreign issuers may be subject to withholding and other foreign taxes which may
decrease the net return on foreign investments as compared to dividends paid by
domestic companies.
In addition, while the volume of transactions effected on foreign stock
exchanges has increased in recent years, in most cases it remains appreciably
below that of the New York Stock Exchange. Accordingly, foreign investments are
less liquid and their prices are more volatile than comparable investments in
securities of U.S. companies. Moreover, the settlement periods for foreign
securities, which are often longer than those for securities of U.S. companies,
may affect portfolio liquidity. In buying and selling securities on foreign
exchanges, fixed commissions are normally paid that are generally higher than
the negotiated commissions charged in the United States. In addition, there is
generally less government supervision and regulation of securities exchanges,
brokers and companies in foreign countries than in the United States.
The foreign investments made by the Portfolio are made in compliance
with the currency regulations and tax laws of the United States and foreign
governments. There may also be foreign government regulations and laws that
restrict the amounts and types of foreign investments.
Because securities in the Portfolio are denominated and pay dividends
in various currencies, and the Portfolio holds various foreign currencies from
time to time, the value of the net assets of the Portfolio as measured in U.S.
dollars is affected favorably or unfavorably by changes in exchange rates. The
Portfolio also incurs costs in connection with conversion between various
currencies.
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o Developing Countries:
The Portfolio may invest its assets in securities of issuers
based in developing countries. Investments in securities of issuers in
developing countries may involve a high degree of risk and many may be
considered speculative. These investments carry all of the risks of investing in
securities of foreign issuers outlined in this section to a heightened degree.
These heightened risks include: (i) greater risks of expropriation, confiscatory
taxation, nationalization, and less social, political and economic stability;
(ii) the small current size of the markets for securities of issuers in
developing countries and the currently low or non-existent volume of trading
resulting in lack of liquidity and in price volatility; (iii) certain national
policies which may restrict the Portfolio's investment opportunities including
restrictions on investing in issuers or industries deemed sensitive to relevant
national interests; and (iv) the absence of developed legal structures governing
private or foreign investment and private property.
o Diversification Risk:
The Portfolio is classified as "non-diversified" for purposes of the
Investment Company Act of 1940, as amended, which means that it is not limited
by that Act with regard to the portion of its assets that may be invested in the
securities of a single issuer. The Portfolio is however limited with respect to
such assets by certain requirements of federal tax law. The possible assumption
of large positions in the securities of a small number of issuers may cause
performance to fluctuate to a greater extent than that of a diversified
investment company as a result of changes in the financial condition or in the
market's assessment of the issuers.
Investments in the Portfolio are neither insured nor guaranteed by the
U.S. Government. Shares of beneficial interest of the Portfolio are not deposits
of or obligations of, or guaranteed by, Brown Brothers Harriman & Co. or any
other bank, and the shares of beneficial interest are not insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other federal,
state or other governmental agency.
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ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
Investment Adviser
The Investment Adviser is Brown Brothers Harriman & Co., Private
Bankers, 59 Wall Street, New York, NY 10005, a New York limited partnership
established in 1818. The firm is subject to examination and regulation by the
Superintendent of Banks of the State of New York and by the Department of
Banking of the Commonwealth of Pennsylvania. The firm is also subject to
supervision and examination by the Commissioner of Banks of the Commonwealth of
Massachusetts.
Brown Brothers Harriman & Co. provides portfolio management services to
the Portfolio. Subject to the general supervision of the Portfolio's Trustees.
Brown Brothers Harriman & Co. makes the day-to-day investment decisions for the
Portfolio, places the purchase and sale orders for portfolio transactions, and
generally manages the Portfolio's investments. Brown Brothers Harriman & Co.
provides a broad range of investment management services for customers in the
United States and abroad. At March 31, 2000, it managed total assets of
approximately $35 billion.
The Portfolio is managed on a day to day basis by a team of individuals
including Mr. Young Chin, Mr. G. Scott Clemons, Mr. Paul J. Fraker, Mr. William
M. Buchanan, Mr. Mohammad Rostom and Ms. Kayoko Kanari. Mr. Chin holds a B.A.
and a M.B.A from University of Chicago. He joined Brown Brothers Harriman & Co.
in 1999. Mr. Clemons holds a A.B. from Princeton University and is a Chartered
Financial Analyst. He joined Brown Brothers Harriman & Co. in 1990. Mr. Fraker
holds a B.A. from Carleton College and a M.A. from Johns Hopkins University. He
joined Brown Brothers Harriman & Co. in 1996. Prior to joining Brown Brothers
Harriman & Co., he worked for Clay Finlay. Mr. Buchanan holds a B.A. from Duke
University, a M.B.A. from New York University, and is a Chartered Financial
Analyst. He joined Brown Brothers Harriman & Co. in 1991. Mr. Rostom holds a
B.S. from Rochester Institute of Technology and a M.A. from Temple University.
He joined Brown Brothers Harriman & Co. in 1997. Prior to joining Brown Brothers
Harriman & Co., he worked for Kulicke & Soffa Industries. Ms. Kanari holds a
B.A. from Columbia University. She joined Brown Brothers Harriman & Co. in 1999.
Prior to joining Brown Brothers Harriman & Co., she worked for Morgan Stanley.
The Portfolio pays the Investment Adviser an annual fee, computed daily
and payable monthly, equal to 0.65% of the average daily net assets of the
Portfolio. This fee compensates the Investment Adviser for its services and its
expenses (such as salaries of its personnel).
ITEM 7. INVESTOR INFORMATION
The net asset value of the Portfolio is determined each day the New
York Stock Exchange is open for regular trading. This determination is made once
each business day as of 4:00 p.m. New York time. The net asset value of the
Portfolio may change on days when investors will not be able to make an
investment in or withdraw their investment from the Portfolio.
The Portfolio values its assets on the basis of their market quotations
and valuations provided by independent pricing services. If quotations are not
readily available, the assets are valued at fair value in accordance with
procedures established by the Portfolio's Trustees.
Beneficial interests in the Portfolio are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933 (the "1933 Act").
Investments in the Portfolio may only be made by other investment companies,
insurance company separate accounts, common or commingled trust funds, or
similar organizations or entities which are "accredited investors" as defined in
Rule 501 under the 1933 Act. This Registration Statement does not constitute an
offer to sell, or the solicitation of an offer to buy, any "security" within the
meaning of the 1933 Act.
An investment in the Portfolio may be made without a sales load. All
investments are made at net asset value next determined after an order is
received in "good order" by the Portfolio.
There is no minimum initial or subsequent investment in the Portfolio.
However, because the Portfolio intends to be as fully invested at all times as
is reasonably practicable in order to enhance the yield on its assets,
investments must be made in federal funds (i.e., monies credited to the
custodian of the Portfolio's account by a Federal Reserve Bank).
The Portfolio reserves the right to cease accepting investments at any
time or to reject any investment order.
An investor in the Portfolio may reduce all or any portion of its
investment at the net asset value next determined after a request in "good
order" is furnished by the investor to the Portfolio. The proceeds of a
reduction will be paid by the Portfolio in federal funds normally on the next
Portfolio business day after the reduction is effected, but in any event within
seven days. Investments in the Portfolio may not be transferred.
The right of any investor to receive payment with respect to any
reduction may be suspended or the payment of the proceeds therefrom postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on the New York Stock Exchange is restricted
or, to the extent otherwise permitted by the 1940 Act if an emergency exists.
The Portfolio reserves the right under certain circumstances, such as
accommodating requests for substantial withdrawals or liquidations, to pay
distributions in kind to investors (i.e., to distribute portfolio securities as
opposed to cash). If securities are distributed, an investor could incur
brokerage, tax or other charges in converting the securities to cash. In
addition, distribution in kind may result in a less diversified portfolio of
investments or adversely affect the liquidity of the Portfolio.
ITEM 8. DISTRIBUTION ARRANGEMENTS.
Not applicable.
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PART B
ITEM 10. COVER PAGE.
Not applicable.
TABLE OF CONTENTS PAGE
Portfolio History . . . . . . . . . . . . . . . . . . B-1
Description of Portfolio and Its Investments and Risks B-1
Management of the Portfolio . . . . . . . . . . . . . B-12
Control Persons and Principal Holders . . . . . . . . B-16
Investment Advisory and Other Services . . . . . . .
Expense Payment Agreement . . . . . . . . . . . . . . B-16
Brokerage Allocation and Other Practices . . . . . . B-18
Capital Stock and Other Securities . . . . . . . . . B-19
Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . B-23
Tax Status . . . . . . . . . . . . . . . . . . . . . B-25
Underwriters . . . . . . . . . . . . . . . . . . . . B-26
Calculations of Performance Data . . . . . . . . . . B-26
Financial Statements . . . . . . . . . . . . . . . . B-26
ITEM 11. PORTFOLIO HISTORY.
The Portfolio is a trust organized under the laws of the State of New York on
June 15, 1993.
ITEM 12. DESCRIPTION OF PORTFOLIO AND ITS INVESTMENTS AND RISKS.
The following discussion supplements the information regarding the investment
objective of the Portfolio and the policies to be employed to achieve this
objective as set forth above and in Part A.
EQUITY INVESTMENTS
Equity investments may or may not pay dividends and may or may not carry voting
rights. Common stock occupies the most junior position in a company's capital
structure. Convertible securities entitle the holder to exchange the securities
for a specified number of shares of common stock, usually of the same company,
at specified prices within a certain period of time and to receive interest or
dividends until the holder
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elects to convert. The provisions of any convertible security determine its
ranking in a company's capital structure. In the case of subordinated
convertible debentures, the holder's claims on assets and earnings are
subordinated to the claims of other creditors, and are senior to the claims of
preferred and common shareholders. In the case of convertible preferred stock,
the holder's claims on assets and earnings are subordinated to the claims of all
creditors and are senior to the claims of common shareholders.
DOMESTIC INVESTMENTS
The assets of the Portfolio are not invested in domestic securities (other than
short-term instruments), except temporarily when extraordinary circumstances
prevailing at the same time in a significant number of foreign countries render
investments in such countries inadvisable.
HEDGING STRATEGIES
Subject to applicable laws and regulations and solely as a hedge against
changes in the market value of portfolio securities or securities intended to be
purchased, put and call options on stocks, stock indexes and currencies may be
purchased and futures contracts on stock indexes may be entered into for the
Portfolio, although in each case the current intention is not to do so in a
manner that more than 5% of the Portfolio's net assets are at risk.
OPTIONS ON STOCK. A call option on a stock gives the purchaser of the
option the right to buy the underlying stock at a fixed price at any time during
the option period. Similarly, a put option gives the purchaser of the option the
right to sell the underlying stock at a fixed price at any time during the
option period. To liquidate a put or call option position, a "closing sale
transaction" may be made at any time prior to the expiration of the option which
involves selling the option previously purchased.
Covered call options may also be sold (written) on stocks, although in
each case the current intention is not to do so. A call option is "covered" if
the writer owns the underlying security.
OPTIONS ON STOCK INDEXES. A stock index fluctuates with changes in the
market values of the stocks included in the index. Examples of stock indexes are
the Standard & Poor's 500 Stock Index (Chicago Board of Options Exchange), the
New York Stock Exchange Composite Index (New York Stock Exchange), The Financial
Times-Stock Exchange 100 (London Traded Options Market), the Nikkei 225 Stock
Average (Osaka Securities Exchange) and Tokyo Stock Price Index (Tokyo Stock
Exchange).
Options on stock indexes are generally similar to options on stock except
that the delivery requirements are different. Instead of giving the right to
take or make delivery
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of stock at a fixed price ("strike price"), an option on a stock index gives the
holder the right to receive a cash "exercise settlement amount" equal to (a) the
amount, if any, by which the strike price of the option exceeds (in the case of
a put) or is less than (in the case of a call) the closing value of the
underlying index on the date of exercise, multiplied by (b) a fixed "index
multiplier". Receipt of this cash amount depends upon the closing level of the
stock index upon which the option is based being greater than, in the case of a
call, or less than, in the case of a put, the price of the option. The amount of
cash received is equal to such difference between the closing price of the index
and the strike price of the option expressed in U.S. dollars or a foreign
currency, as the case may be, times a specified multiple.
The effectiveness of purchasing stock index options as a hedging technique
depends upon the extent to which price movements in the portion of the
securities portfolio being hedged correlate with price movements of the stock
index selected. The value of an index option depends upon future movements in
the level of the overall stock market measured by the underlying index before
the expiration of the option. Accordingly, the successful use of options on
stock indexes is subject to the Investment Adviser's ability both to select an
appropriate index and to predict future price movements over the short term in
the overall stock market. Brokerage costs are incurred in the purchase of stock
index options and the incorrect choice of an index or an incorrect assessment of
future price movements may result in poorer overall performance than if a stock
index option had not been purchased.
OPTIONS ON CURRENCIES. A call option on a currency gives the purchaser of
the option the right to buy the underlying currency at a fixed price, either at
any time during the option period (American style) or on the expiration date
(European style). Similarly, a put option gives the purchaser of the option the
right to sell the underlying currency at a fixed price, either at any time
during the option period or on the expiration date. To liquidate a put or call
option position, a "closing sale transaction" may be made for a Portfolio at any
time prior to the expiration of the option, such a transaction involves selling
the option previously purchased. Options on currencies are traded both on
recognized exchanges (such as the Philadelphia Options Exchange) and
over-the-counter.
The value of a currency option purchased depends upon future changes in
the value of that currency before the expiration of the option. Accordingly, the
successful use of options on currencies is subject to the Investment Adviser's
ability to predict future changes in the value of currencies over the short
term. Brokerage costs are incurred in the purchase of currency options and an
incorrect assessment of future changes in the value of currencies may result in
a poorer overall performance than if such a currency had not been purchased.
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Futures Contracts on Stock Indexes. In order to assure that the Portfolio
is not deemed a "commodity pool" for purposes of the Commodity Exchange Act,
regulations of the Commodity Futures Trading Commission ("CFTC") require that
the Portfolio enter into transactions in Futures Contracts and options on
Futures Contracts only (i) for bona fide hedging purposes (as defined in CFTC
regulations), or (ii) for non-hedging purposes, provided that the aggregate
initial margin and premiums on such non-hedging Futures Contracts provide for
the making and acceptance of a cash settlement based upon changes in the value
of an index of stocks and are used to hedge against anticipated future changes
in overall stock market prices which otherwise might either adversely affect the
value of securities held for the Portfolio or adversely affect the prices of
securities which are intended to be purchased at a later date. A Futures
Contract may also be entered into to close out or offset an existing futures
position.
In general, each transaction in Futures Contracts involves the
establishment of a position which is expected to move in a direction opposite to
that of the investment being hedged. If these hedging transactions are
successful, the futures positions taken would rise in value by an amount which
approximately offsets the decline in value of the portion of the Portfolio's
investments that is being hedged. Should general market prices move in an
unexpected manner, the full anticipated benefits of Futures Contracts may not be
achieved or a loss may be realized. There is also the risk of a potential lack
of liquidity in the secondary market.
The effectiveness of entering into Futures Contracts as a hedging technique
depends upon the extent to which price movements in the portion of the
securities portfolio being hedged correlate with price movements of the stock
index selected. The value of a Futures Contract depends upon future movements in
the level of the overall stock market measured by the underlying index before
the closing out of the Futures Contract. Accordingly, the successful use of
Futures Contracts is subject to the Investment Adviser's ability both to select
an appropriate index and to predict future price movements over the short term
in the overall stock market. The incorrect choice of an index or an incorrect
assessment of future price movements over the short term in the overall stock
market may result in poorer overall performance than if a Futures Contract had
not been purchased. Brokerage costs are incurred in entering into and
maintaining Futures Contracts.
When the Portfolio enters into a Futures Contract, it is initially required to
deposit, in a segregated account in the name of the broker performing the
transaction, an "initial margin" of cash, U.S. Government securities or other
high grade short-term obligations equal to approximately 3% of the contract
amount. Initial margin requirements are established by the exchanges on which
Futures Contracts trade and may, from time to time, change. In addition, brokers
may establish margin deposit requirements in excess of those required by the
exchanges. Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does
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not involve the borrowing of funds by a broker's client but is, rather, a good
faith deposit on the Futures Contract which will be returned upon the proper
termination of the Futures Contract. The margin deposits made are marked to
market daily and the Portfolio may be required to make subsequent deposits of
cash or eligible securities called "variation margin", with its futures contract
clearing broker, which are reflective of price fluctuations in the Futures
Contract.
Currently, investments in Futures Contracts on non-U.S. stock indexes by
U.S. investors, such as the Portfolio, can be purchased on such non-U.S. stock
indexes as the Osaka Stock Exchange (OSE), Tokyo Stock Exchange (TSE), Hong Kong
Futures Exchange (HKFE), Singapore International Monetary Exchange (SIMEX),
London International Financial Futures and Options Exchange (LIFFE), Marche
Terme International de France (MATIF), Sydney Futures Exchange Ltd. (SFE), Meff
Sociedad Rectora de Productos Financieros Derivados de Renta Variable, S.A.
(MEFF RENTA VARIABLE), Deutsche Terminborse (DTB), Italian Stock Exchange (ISE),
Financiele Termijnmarkt Amsterdam (FTA), and London Securities and Derivatives
Exchange, Ltd. (OMLX).
Exchanges may limit the amount by which the price of a Futures Contract
may move on any day. If the price moves equal the daily limit on successive
days, then it may prove impossible to liquidate a futures position until the
daily limit moves have ceased.
Another risk which may arise in employing Futures Contracts to protect
against the price volatility of portfolio securities is that the prices of an
index subject to Futures contracts (and thereby the Futures Contract prices) may
correlate imperfectly with the behavior of the cash prices of portfolio
securities. Another such risk is that the price of the Futures Contract may not
move in tandem with the change in overall stock market prices against which the
Portfolio seeks a hedge.
Over-the-counter options ("OTC Options") purchased are treated as not
readily marketable. (See "Investment Restrictions".)
The Investment Adviser on behalf of the Portfolio may enter into forward
foreign exchange contracts in order to protect the dollar value of all
investments in securities denominated in foreign currencies. The precise
matching of the forward contract amounts and the value of the securities
involved is not always possible because the future value of such securities in
foreign currencies changes as a consequence of market movements in the value of
such securities between the date the forward contract is entered into and the
date it matures.
B-5
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FOREIGN EXCHANGE CONTRACTS
Foreign exchange contracts are made with currency dealers, usually large
commercial banks and financial institutions. Although foreign exchange rates are
volatile, foreign exchange markets are generally liquid with the equivalent of
approximately $500 billion traded worldwide on a typical day.
While the Portfolio may enter into foreign currency exchange transactions to
reduce the risk of loss due to a decline in the value of the hedged currency,
these transactions also tend to limit the potential for gain. Forward foreign
exchange contracts do not eliminate fluctuations in the prices of a Portfolio's
securities or in foreign exchange rates, or prevent loss if the prices of these
securities should decline. The precise matching of the forward contract amounts
and the value of the securities involved is not generally possible because the
future value of such securities in foreign currencies changes as a consequence
of market movements in the value of such securities between the date the forward
contract is entered into and the date it matures. The projection of currency
market movements is extremely difficult, and the successful execution of a
hedging strategy is highly unlikely.
LOANS OF PORTFOLIO SECURITIES
Loans up to 30% of the total value of the Portfolio are permitted.
Securities of the Portfolio may be loaned if such loans are secured continuously
by cash or equivalent liquid securities as collateral or by an irrevocable
letter of credit in favor of the Portfolio at least equal at all times to 100%
of the market value of the securities loaned plus accrued income. By lending
securities, the Portfolio's income can be increase by its continuing to receive
income on the loaned securities as well as by the opportunity to receive
interest on the collateral. All or any portion of interest earned on invested
collateral may be paid to the borrower. Loans are subject to termination by the
Portfolio in the normal settlement time, currently three business days after
notice, or by the borrower on one day's notice. Borrowed securities are returned
when the loan is terminated. Any appreciation or depreciation in the market
price of the borrowed securities which occurs during the term of the loan inures
to the Portfolio and its investors. Reasonable finders' and custodial fees may
be paid in connection with a loan. In addition, all facts and circumstances,
including the creditworthiness of the borrowing financial institution, are
considered before a loan is made and no loan is made in excess of one year.
There is the risk that a borrowed security may not be returned to the Portfolio.
Securities are not loaned to Brown Brothers Harriman & Co. or to any affiliate
of the Portfolio or Brown Brothers Harriman & Co.
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SHORT-TERM INVESTMENTS
The assets of the Portfolio may be invested in non-U.S. dollar
denominated and U.S. dollar denominated short-term instruments, including U.S.
dollar denominated repurchase agreements. Cash is held for the Portfolio in
demand deposit accounts with the Portfolio's custodian bank. Although it is
intended that the assets of the Portfolio stay invested in the securities
described above and in the Prospectus to the extent practical in light of the
Portfolio's investment objective and long-term investment perspective, assets of
the Portfolio may be invested in short-term instruments to meet anticipated
expenses or for day-to-day operating purposes and when, in the Investment
Adviser's opinion, it is advisable to adopt a temporary defensive position
because of unusual and adverse conditions affecting the equity markets. In
addition, when the Portfolio experiences large cash inflows through additional
investments by its investors or the sale of portfolio securities, and desirable
equity securities that are consistent with its investment objective are
unavailable in sufficient quantities, assets may be held in short-term
investments for a limited time pending availability of such equity securities.
Short-term instruments consist of foreign and domestic: (i) short-term
obligations of sovereign governments, their agencies, instrumentalities,
authorities or political subdivisions; (ii) commercial paper; (iii) bank
obligations, including negotiable certificates of deposit, fixed time deposits
and bankers' acceptances; and (iv) repurchase agreements. Time deposits with a
maturity of more than seven days are treated as not readily marketable. At the
time the Portfolio's assets are invested in commercial paper, bank obligations
or repurchase agreements, the issuer must have outstanding debt rated A or
higher by Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's
Corporation ("Standard & Poor's"); the issuer's parent corporation, if any, must
have outstanding commercial paper rated Prime-1 by Moody's or A-1 by Standard &
Poor's; or, if no such ratings are available, the instrument must be of
comparable quality in the opinion of the Investment Adviser. The assets of the
Portfolio may be invested in non-U.S. dollar denominated and U.S. dollar
denominated short-term instruments, including U.S. dollar denominated repurchase
agreements.
GOVERNMENT SECURITIES. The assets of the Portfolio may be invested in
securities issued by the U.S. Government or sovereign foreign governments, their
agencies or instrumentalities. These securities include notes and bonds, zero
coupon bonds and stripped principal and interest securities.
RESTRICTED SECURITIES. Securities that have legal or contractual
restrictions on their resale may be acquired for the Portfolio. The price paid
for these securities, or received upon resale, may be lower than the price paid
or received for similar securities with a more liquid market. Accordingly, the
valuation of these securities reflects any limitation on their liquidity. (See
"Investment Restrictions".)
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REPURCHASE AGREEMENTS. Repurchase agreements may be entered into for the
Portfolio only with a "primary dealer" (as designated by the Federal Reserve
Bank of New York) in U.S. Government securities. This is an agreement in which
the seller (the "Lender") of a security agrees to repurchase from the Portfolio
the security sold at a mutually agreed upon time and price. As such, it is
viewed as the lending of money to the Lender. The resale price normally is in
excess of the purchase price, reflecting an agreed upon interest rate. The rate
is effective for the period of time assets of the Portfolio are invested in the
agreement and is not related to the coupon rate on the underlying security. The
period of these repurchase agreements is usually short, from overnight to one
week. The securities which are subject to repurchase agreements, however, may
have maturity dates in excess of one week from the effective date of the
repurchase agreement. The Portfolio always receives as collateral securities
which are issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Collateral is marked to the market daily and has a market
value including accrued interest at least equal to 100% of the dollar amount
invested on behalf of the Portfolio in each agreement along with accrued
interest. Payment for such securities is made for the Portfolio only upon
physical delivery or evidence of book entry transfer to the account of Brown
Brothers Harriman & Co. (the "Custodian"). If the Lender defaults, the Portfolio
might incur a loss if the value of the collateral securing the repurchase
agreement declines and might incur disposition costs in connection with
liquidating the collateral. In addition, if bankruptcy proceedings are commenced
with respect to the Lender, realization upon the collateral on behalf of the
Portfolio may be delayed or limited in certain circumstances.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Securities may be purchased
for the Portfolio on a when-issued or delayed delivery basis. For example,
delivery and payment may take place a month or more after the date of the
transaction. The purchase price and the interest rate payable on the securities,
if any, are fixed on the transaction date. The securities so purchased are
subject to market fluctuation and no income accrues to the Portfolio until
delivery and payment take place. At the time the commitment to purchase
securities on a when-issued or delayed delivery basis is made, the transaction
is recorded and thereafter the value of such securities is reflected each day in
determining the Portfolio's net asset value. The Portfolio maintains with the
Custodian a separate account with a segregated portfolio of securities in an
amount at least equal to these commitments. At the time of its acquisition, a
when-issued or delayed delivery security may be valued at less than the purchase
price. Commitments for such when-issued or delayed delivery securities are made
only when there is an intention of actually acquiring the securities. On
delivery dates for such transactions, such obligations are met from maturities
or sales of securities and/or from cash flow. If the right to acquire a
when-issued or delayed delivery security is disposed of prior to its
acquisition, the Portfolio could, as with the disposition of any other portfolio
obligation, incur a gain or loss due to market fluctuation. When-issued or
delayed delivery commitments for the Portfolio may not be entered into if such
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<PAGE>
commitments exceed in the aggregate 15% of the market value of its total assets,
less liabilities other than the obligations created by when-issued or delayed
delivery commitments.
INVESTMENT COMPANY SECURITIES. Subject to applicable statutory and
regulatory limitations, the assets of the Portfolio may be invested in shares of
other investment companies. Under the 1940 Act, assets of the Portfolio may be
invested in shares of other investment companies in connection with a merger,
consolidation, acquisition or reorganization or if immediately after such
investment (i) 10% or less of the market value of the Portfolio's total assets
would be so invested, (ii) 5% or less of the market value of the Portfolio's
total assets would be invested in the shares of any one such company, and (iii)
3% or less of the total outstanding voting stock of any other investment company
would be owned by the Portfolio. As a shareholder of another investment company,
the Portfolio would bear, along with other shareholders, its pro rata portion of
the other investment company's expenses, including advisory fees. These expenses
would be in addition to the advisory and other expenses that the Portfolio bears
directly in connection with its own operations.
ADDITIONAL INVESTMENT INFORMATION
In response to adverse market, economic, political or other conditions,
the Portfolio may make temporary investments that are not consistent with its
investment objective and principal investment strategies. Such investments may
prevent the Portfolio from achieving its investment objective.
INVESTMENT RESTRICTIONS
The Portfolio is operated under the following investment restrictions which
are deemed fundamental policies and may be changed only with the approval of the
holders of a "majority of the outstanding voting securities" as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), of the Portfolio.
As used in this Part B, the term "majority of the outstanding voting securities"
as defined in the 1940 Act currently means the vote of (i) 67% or more of the
voting securities present at a meeting, if the holders of more than 50% of the
outstanding voting securities are present in person or represented by proxy; or
(ii) more than 50% of the outstanding voting securities, whichever is less.
The Portfolio may not:
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<PAGE>
(1) invest in a security if, as a result of such investment, more than 25% of
its total assets (taken at market value at the time of such investment) would be
invested in the securities of issuers in any particular industry, or in
industrial development revenue bonds based, directly or indirectly, on the
credit of private entities in any one industry; except that this restriction
does not apply to securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities (or repurchase agreements with respect thereto).
Investments in utilities, gas, electric, water and telephone companies will be
considered as being in separate industries;
(2) with respect to 75% of its assets, invest in a security if, as a result of
such investment, it would hold more than 10% (taken at the time of such
investment) of the outstanding voting securities of any one issuer;
(4) purchase or sell real estate, although it may purchase securities secured by
real estate or interests therein, or securities issued by companies which invest
in real estate, or interests therein;
(5) purchase or sell commodities or commodities contracts or oil, gas or mineral
programs. This restriction shall not prohibit the Portfolio, subject to
restrictions described in Part A and elsewhere in this Part B, from purchasing,
selling or entering into futures contracts, options on futures contracts,
foreign currency forward contracts, foreign currency options, or any foreign
currency-related hedging instrument, subject to compliance with any applicable
provisions of the federal securities or commodities laws;
(6) purchase securities on margin, except for use of short-term credit necessary
for clearance of purchases and sales of portfolio securities, but it may make
margin deposits in connection with transactions in options, futures, and options
on futures;
(7) borrow money, issue senior securities, or pledge, mortgage or hypothecate
its assets, except that the Portfolio may (i) borrow from banks or enter into
reverse repurchase agreements, or employ similar investment techniques, and
pledge its assets in connection therewith, but only if immediately after each
borrowing there is asset coverage of 300% and (ii) enter into transactions in
options, futures, options on futures, and other instruments as described in Part
A and in this Part B (the deposit of assets in escrow in connection with the
writing of covered put and call options and the purchase of securities on a
when-issued or delayed delivery basis, collateral arrangements with respect to
initial or variation margin deposits for futures contracts and commitments
entered into under other instruments, will not be deemed to be pledges of the
Portfolio's assets);
B-9
<PAGE>
(8) lend any funds or other assets, except that the Portfolio may, consistent
with its investment objective and policies: (a) invest in debt obligations,
including bonds, debentures, or other debt securities, bankers' acceptances and
commercial paper, even though the purchase of such obligations may be deemed to
be the making of loans, (b) enter into repurchase agreements, and (c) lend its
portfolio securities in an amount not to exceed one-third of the value of its
total assets, provided such loans are made in accordance with applicable
guidelines established by the SEC and the Trustees of the Portfolio;
(9) act as an underwriter of securities of other issuers, except to the extent
that in connection with the disposition of portfolio securities, it may be
deemed to be an underwriter under the federal securities laws;
(10) maintain a short position, or purchase, write or sell puts, calls,
straddles, spreads or combinations thereof, except as set forth in Part A and in
this Part B for transactions in options, futures and options on future.
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<PAGE>
NON-FUNDAMENTAL RESTRICTIONS
The Portfolio may not as a matter of operating policy invest less than 65%
of the value of the total assets of the Portfolio is invested in equity
securities of companies based in countries in which it may invest. For these
purposes, equity securities are defined as common stock, securities convertible
into common stock, rights and warrants, and include securities purchased
directly and in the form of American Depositary Receipts, Global Depositary
Receipts or other similar securities representing common stock of foreign-based
companies. This policy is not fundamental and may be changed without investor
approval.
The Portfolio is classified as "non-diversified" under the 1940 Act,
which means that it is not limited by the 1940 Act with respect to the
proportion of its assets which may be invested in securities of a single issuer
(although certain diversification requirements are imposed by the Internal
Revenue Code of 1986, as amended).
The possible assumption of large positions in the securities of a small
number of issuers may cause the performance of each of the Portfolio to
fluctuate to a greater extent than that of a diversified investment company as a
result of changes in the financial condition or in the market's assessment of
the issuers.
PERCENTAGE RESTRICTIONS. If a percentage restriction on investment or
utilization of assets set forth above or referred to in Part A is adhered to at
the time an investment is made or assets are so utilized, a later change in
percentage resulting
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from changes in the value of the portfolio securities of a portfolio security is
not considered a violation of policy. If investment restrictions relating to any
particular investment practice or policy are inconsistent between the Portfolio
and an investor, the Portfolio will adhere to the more restrictive limitation.
ITEM 13. MANAGEMENT OF THE PORTFOLIO.
The Portfolio's Trustees, in addition to supervising the actions of the
Investment Adviser decide upon matters of general policy with respect to the
Portfolio.
Because of the services rendered to the Portfolio by the Investment
Adviser, the Portfolio requires no employees, and its officers (all of whom are
employed by 59 Wall Street Administrators), other than the Chairman, receive no
compensation from the Portfolio.
The Trustees and executive officers of the Portfolio, their business
addresses, and principal occupation during the past five years (although their
titles may have varied during the period) are:
J.V. SHIELDS, JR.* - Trustee (since May 2000); Trustee of the BBH
Portfolios(1) (since October 1999); Trustee of The 59 Wall Street Trust;
Director of The 59 Wall Street Fund, Inc.; Managing Director, Chairman and Chief
Executive Officer of Shields & Company; Chairman of Capital Management
Associates, Inc.; Director of Flowers Industries, Inc.(2). Vice Chairman and
Trustee of New York Racing Association.
His business address is Shields & Company, 140 Broadway, New York, NY 10005.
EUGENE P. BEARD** - Trustee (since May 2000); Trustee of the BBH
Portfolios (since October 1999); Trustee of The 59 Wall Street Trust; Director
of The 59 Wall Street Fund, Inc.; Executive Vice President - Finance and
Operations of The Interpublic Group of Companies. His business address is The
Interpublic Group of Companies, Inc., 1271 Avenue of the Americas, New York, NY
10020.
DAVID P. FELDMAN** - Trustee (since May 2000); Trustee of the BBH
Portfolios (since October 1999); Trustee of The 59 Wall Street Trust; Director
of The 59 Wall Street Fund, Inc.; Retired; Vice President and Investment Manager
of AT&T Investment Management Corporation (prior to October 1997); Director of
Dreyfus Mutual Funds, Jeffrey Co. and Heitman Financial. His business address is
3 Tall Oaks Drive, Warren, NJ 07059.
ALAN G. LOWY** - Trustee (since May 2000); Trustee of the BBH
Portfolios (since October 1999); Trustee of The 59 Wall Street Trust; Director
of The 59 Wall Street Fund, Inc.; Private Investor. His business address is 4111
Clear Valley Drive, Encino, CA 91436.
B-12
<PAGE>
ARTHUR D. MILTENBERGER** - Trustee (since May 2000); Trustee of the BBH
Portfolios (since October 1999); Trustee of The 59 Wall Street Trust; Director
of The 59 Wall Street Fund, Inc.; Retired, Executive Vice President and Chief
Financial Officer of Richard K. Mellon and Sons (prior to June 1998); Treasurer
of Richard King Mellon Foundation (prior to June 1998); Vice President of the
Richard King Mellon Foundation; Trustee, R.K. Mellon Family Trusts; General
Partner, Mellon Family Investment Company IV, V and VI; Director of
Aerostructures Corporation (since 1996) (3). His business address is Richard K.
Mellon and Sons, P.O. Box RKM, Ligonier, PA 15658.
RICHARD L. CARPENTER** - Trustee (since May 2000); Trustee of the BBH
Portfolios; Trustee of Dow Jones Islamic Market Index Portfolio (since March
1999); Trustee of The 59 Wall Street Trust (since October 1999); Director of The
59 Wall Street Fund, Inc. (since October 1999); Retired; Director of
Investments, Pennsylvania Public School Employees' Retirement System (prior to
December 1997). His business address is 12664 Lazy Acres Court, Nevada City, CA
95959.
CLIFFORD A. CLARK** - Trustee (since May 2000); Trustee of the BBH
Portfolios; Trustee of Dow Jones Islamic Market Index Portfolio (since March
1999); Trustee of The 59 Wall Street Trust (since October 1999); Director of The
59 Wall Street Fund, Inc. (since October 1999); Retired. His business address is
42 Clowes Drive, Falmouth, MA 02540.
DAVID M. SEITZMAN** - Trustee (since May 2000); Trustee of the BBH
Portfolios; Trustee of The 59 Wall Street Trust (since October 1999); Director
of The 59 Wall Street Fund, Inc. (since October 1999); Physician, Private
Practice. His business address is 7117 Nevis Road, Bethesda, MD 20817.
J. ANGUS IVORY - Trustee (since May 2000); Trustee of the BBH
Portfolios (since October 1999); Trustee of Dow Jones Islamic Market Index
Portfolio (since March 1999); Trustee of The 59 Wall Street Trust (since October
1999); Director of The 59 Wall Street Fund, Inc. (since October 1999); Retired
[CONFIRM W/BBH]; Director of Brown Brothers Harriman Ltd., subsidiary of Brown
Brothers Harriman & Co.; Director of Old Daily Saddlery; Advisor, RAF Central
Fund; Committee Member, St. Thomas Hospital Pain Clinic (since 1999).
OFFICERS OF THE PORTFOLIO
PHILIP W. COOLIDGE -- President; President of the BBH Portfolios; Chief
Executive Officer and President of Signature Financial Group, Inc. ("SFG"), 59
Wall Street Distributors, Inc. ("59 Wall Street Distributors") and 59 Wall
Street Administrators, Inc. ("59 Wall Street Administrators").
B-13
<PAGE>
MOLLY S. MUGLER -- Secretary; Secretary of the BBH Portfolios; Vice
President and Secretary of SFG; Secretary of 59 Wall Street Distributors and 59
Wall Street Administrators.
LINWOOD C. DOWNS - Treasurer; Treasurer of the BBH Portfolios; Senior
Vice President and Treasurer of SFG.
SUSAN JAKUBOSKI - Assistant Treasurer; Assistant Secretary and
Assistant Treasurer of the BBH Portfolios; Vice President, Assistant Secretary
and Assistant Treasurer of Signature Financial Group (Cayman) Limited.
CHRISTINE D. DORSEY -- Assistant Secretary; Assistant Secretary of the
BBH Portfolios; Vice President of SFG (since January 1996); Paralegal and
Compliance Officer, various financial companies (July 1992 to January 1996).
-------------------------
*Mr. Shields is an "interested person" of the Portfolio because of his
affiliation with a registered broker-dealer. Except for Mr. Shields, no Trustee
is an "interested person" of the Portfolio as that term is defined in the 1940
Act.
**These Trustees are members of the Audit Committee of the Portfolio.
(1) The BBH Portfolios consist of the following active investment
companies: BBH U.S. Money Market Portfolio, BBH U.S. Equity Portfolio,
BBH European Equity Portfolio, BBH Pacific Basin Equity Portfolio, BBH
International Equity Portfolio, BBH Broad Market Fixed Income Portfolio
and BBH High Yield Fixed Income Portfolio and the following inactive
investment companies: BBH U.S. Balanced Growth Portfolio and BBH
Intermediate Tax-Exempt Bond Portfolio.
(2) Shields & Company, Capital Management Associates, Inc. and Flowers
Industries, Inc., with which Mr. Shields is associated, are a
registered broker-dealer and a member of the New York Stock Exchange, a
registered investment adviser, and a diversified food company,
respectively.
(3) Richard K. Mellon and Sons, Richard King Mellon Foundation, R.K. Mellon
Family Trusts, Mellon Family Investment Company IV, V and VI and
Aerostructures Corporation, with which Mr. Miltenberger is or has been
associated, are a private foundation, a private foundation, a trust, an
investment company and an aircraft manufacturer, respectively.
B-14
<PAGE>
The address of each officer is 21 Milk Street, Boston, Massachusetts
02109. Messrs. Coolidge and Downs and Mss. Mugler, Jakuboski and Dorsey also
hold similar positions with other investment companies for which affiliates of
59 Wall Street Distributors serve as the principal underwriter.
Trustees of the Portfolio
The Trustees of the Portfolio receive a base annual fee of $15,000
(except the Chairman who receives a base annual fee of $20,000) and such base
annual fee is allocated among all series of The 59 Wall Street Fund, Inc., all
series of The 59 Wall Street Trust and the Portfolio and any other active BBH
Portfolio having the same Board of Trustees based upon their respective net
assets. In addition, each series of The 59 Wall Street Fund, Inc. and The 59
Wall Street Trust, the Portfolio and each other active BBH Portfolio which has
commenced operations pays an annual fee to each Trustee of $1,000.
<TABLE>
<S> <C> <C> <C> <C>
Pension or Total
Aggregate Retirement Compensation
Compensation Benefits Accrued Estimated Annual from Fund
Name of Person, from the Fund as Part of Benefits upon Complex* Paid
Position Complex** Expenses Retirement to Trustees*
J.V. Shields, Jr., $250 none none $36,000
Trustee
Eugene P. Beard, $250 none none $31,000
Trustee
Richard L. Carpenter, $250 none none $31,000
Trustee
Clifford A. Clark, $250 none none $31,000
Trustee
David P. Feldman, $250 none none $31,000
Trustee
J. Angus Ivory, $250 none none $31,000
Trustee
Alan G. Lowy, $250 none none $31,000
Trustee
Arthur D. Miltenberger, $250 none none $31,000
Trustee
David M. Seitzman, $250 none none $31,000
Trustee
<FN>
* The Fund Complex consists of The 59 Wall Street Fund, Inc. (which currently
consists of six series), The 59 Wall Street Trust (which currently consists of
four series) and the eight active BBH Portfolios.
**Estimated to be paid as of October 31, 2000.
</FN>
</TABLE>
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<PAGE>
By virtue of the responsibilities assumed by Brown Brothers Harriman & Co. under
the Investment Advisory Agreement with the Portfolio, and by Brown Brothers
Harriman Trust Company of New York LLC ("Brown Brothers Harriman Trust Company
LLC") under the Administration Agreement with the Portfolio (see "Investment
Adviser" and "Administrator"), the Portfolio does not require employees other
than its officers, and none of its officers devote full time to the affairs of
the Portfolio, or, other than the Chairman, receive any compensation from the
Portfolio. Prior to May 6, 2000, the name of Brown Brothers Harriman Trust
Company LLC was Brown Brothers Harriman Trust Company.
Item 14. Control Persons and Principal Holders of Securities.
As of June 20, 2000, BBH & Co. Global Equity Fund (Cayman) owned 99% of the
outstanding beneficial interests in the Portfolio. So long as BBH & Co. Global
Equity Fund (Cayman) controls the Portfolio, it may take actions without the
approval of any other holder of beneficial interest in the Portfolio.
BBH & Co. Global Equity Fund (Cayman) has informed the Portfolio that whenever
it is requested to vote on matters pertaining to the Portfolio (other than a
vote by the Portfolio to continue the operation of the Portfolio upon the
withdrawal of another investor in the Portfolio), it will hold a meeting of its
investors and will cast its vote as instructed by those investors.
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES.
INVESTMENT ADVISOR
Under an Investment Advisory Agreement with the Portfolio, subject to the
general supervision of the Portfolio's Trustees and in conformance with the
stated policies of the Portfolio, Brown Brothers Harriman & Co. provides
investment advice and portfolio management services to the Portfolio. In this
regard, it is the responsibility of Brown Brothers Harriman & Co. to make the
day-to-day investment decisions for the Portfolio, to place the purchase and
sale orders for portfolio transactions, and to manage, generally, the
investments of the Portfolio.
The Investment Advisory Agreement between Brown Brothers Harriman & Co. and the
Portfolio is dated May 9, 2000 and remains in effect for two years from such
date and thereafter, but only as long as the agreement is specifically approved
at least annually (i) by a vote of the holders of a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of the Portfolio or by the
Portfolio's Trustees, and (ii) by a vote of a majority of the Trustees of the
Portfolio who are not parties to the Investment Advisory Agreement or
"interested persons" (as defined in the 1940 Act) of the Portfolio ("Independent
Trustees") cast in person at a meeting called for the purpose of voting on
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<PAGE>
such approval. The Investment Advisory Agreement was most recently approved by
the Independent Trustees on May 9, 2000. The Investment Advisory Agreement
terminates automatically if assigned and is terminable at any time without
penalty by a vote of a majority of the Trustees of the Portfolio, or by a vote
of the holders of a "majority of the outstanding voting securities" (as defined
in the 1940 Act) of the Portfolio on 60 days' written notice to Brown Brothers
Harriman & Co. and by Brown Brothers Harriman & Co. on 90 days' written notice
to the Portfolio. (See "Additional Information".)
The investment advisory fee paid to the Investment Adviser is calculated daily
and paid monthly at an annual rate equal to 0.65% of the Portfolio's average
daily net assets.
The investment advisory services of Brown Brothers Harriman & Co. to the
Portfolio are not exclusive under the terms of the Investment Advisory
Agreement. Brown Brothers Harriman & Co. is free to and does render investment
advisory services to others, including other registered investment companies.
Pursuant to license agreements between Brown Brothers Harriman & Co. and each of
59 Wall Street Administrators and 59 Wall Street Distributors (each a Licensee),
dated June 22, 1993 and June 8, 1990, respectively, each Licensee may continue
to use in its name 59 Wall Street, the current and historic address of Brown
Brothers Harriman & Co., only if Brown Brothers Harriman & Co. does not
terminate the respective license agreement, which would require the Licensee to
change its name to eliminate all reference to 59 Wall Street. Pursuant to a
license agreement between the Portfolio and Brown Brothers Harriman & Co. dated
May 9, 2000, the Portfolio may continue to use in its name BBH. The agreement
may be terminated by Brown Brothers Harriman & Co. at any time upon written
notice to the Portfolio upon the expiration or earlier termination of any
investment advisory agreement between the Portfolio and Brown Brothers Harriman
& Co. Termination of the agreement would require the Portfolio to change its
name to eliminate all reference to BBH.
ADMINISTRATOR
Brown Brothers Harriman Trust Company, LLC acts as Administrator of the
Portfolio. Brown Brothers Harriman Trust Company, LLC is a wholly-owned
subsidiary of Brown Brothers Harriman & Co.
Brown Brothers Harriman Trust Company, LLC in its capacity as Administrator of
the Portfolio, administers all aspects of the Portfolio's operations subject to
the supervision of the Portfolio's Trustees except as set forth above under
"Investment Adviser". In connection with its responsibilities as Administrator
for the Portfolio and at its own expense, Brown Brothers Harriman Trust Company,
LLC (i) provides the Portfolio with the services of persons competent to perform
such supervisory, administrative and clerical functions as are necessary in
order to provide effective administration of the Portfolio, including the
maintenance of certain books and records, receiving and processing requests for
increases and decreases in the beneficial interests in the Portfolio,
notification to the Investment Adviser of available funds for investment,
reconciliation of account information and balances between the Custodian and the
Investment Adviser, and processing, investigating and responding to investor
inquiries; (ii) oversees the performance of administrative and professional
services to the Portfolio by others, including the Custodian; (iii) provides the
Portfolio with adequate office space and communications and other facilities;
and (iv) prepares and/or arranges for the preparation, but does not pay for, the
periodic updating of the Portfolio's registration statement for filing with the
SEC, and the preparation of tax returns for the Portfolio and reports to
investors and the SEC.
The Administration Agreement between the Portfolio and Brown Brothers Harriman
Trust Company, LLC (dated May 9, 2000) will remain in effect for successive
annual periods but only so long as such agreement is specifically approved at
least annually in the same manner as the Portfolio's Investment Advisory
Agreement (see "Investment Adviser"). The Independent Trustees most recently
approved the Portfolio's Administration Agreement on May 9, 2000. The agreement
will terminate automatically if assigned by either party thereto and is
terminable at any time without penalty by a vote of a majority of the Trustees
of the Portfolio or by a vote of the holders of a "majority of the outstanding
voting securities" (as defined in the 1940 Act) of the Portfolio. (See
"Additional Information"). The Portfolio's Administration Agreement is
terminable by the Trustees of the Portfolio or by the Portfolio's corresponding
Fund and other investors in the Portfolio on 60 days' written notice to Brown
Brothers Harriman Trust Company, LLC and by Brown Brothers Harriman Trust
Company, LLC on 90 days' written notice to the Portfolio.
The administrative fee payable to Brown Brothers Harriman Trust Company, LLC
from the Portfolio is calculated and payable monthly at an annual rate equal to
0.035% of the Portfolio's average daily net assets. Pursuant to a
Subadministrative Services Agreement with Brown Brothers Harriman Trust Company,
LLC, 59 Wall Street Administrators performs such subadministrative duties for
the Portfolio as are from time to time agreed upon by the parties. 59 Wall
Street Administrators' subadministrative duties may include providing equipment
and clerical personnel necessary for maintaining the organization of the
Portfolio, participation in the preparation of documents required for compliance
by the Portfolio with applicable laws and regulations, preparation of certain
documents in connection with meetings of Trustees of and investors in the
Portfolio, and other functions that would otherwise be performed by the
Administrator of the Portfolio as set forth above. For performing such
subadministrative services, 59 Wall Street Administrators receives such
compensation as is from time to time agreed upon, but not in excess of the
amount paid to the Administrator from the Portfolio.
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<PAGE>
PLACEMENT AGENT
The Portfolio has not retained the services of a principal underwriter or
distributor, since interests in the Portfolio are offered solely in private
placement transactions. 59 Wall Street Distributors, Inc. ("59 Wall Street
Distributors"), acting as agent for the Portfolio, serves as the placement agent
of interests in the Portfolio. 59 Wall Street Distributors receives no
compensation for serving as placement agent.
EXPENSE PAYMENT AGREEMENT
Under an agreement dated May 9, 2000, Brown Brothers Harriman Trust Company, LLC
pays the expenses of the Portfolio, other than fees paid to Brown Brothers
Harriman Trust Company, LLC under the Portfolio's Administration Agreement and
other than expense relating to the organization of the Portfolio. In return,
Brown Brothers Harriman Trust Company, LLC receives a fee from the Portfolio
such that after such payment the aggregate expenses of the Portfolio do not
exceed an agreed upon annual rate, currently 0.90% of the average daily net
assets of the Portfolio. Such fees are computed daily and paid monthly.
CUSTODIAN
Brown Brothers Harriman & Co., 59 Wall Street, New York, NY 10005, is the
Custodian for the Portfolio.
As Custodian, Brown Brothers Harriman & Co. is responsible for maintaining books
and records of portfolio transactions and holding the Portfolio's securities and
cash pursuant to a custodian agreement with the Portfolio. Cash is held for the
Portfolio in demand deposit accounts at the Custodian. Subject to the
supervision of the Administrator, the Custodian maintains the accounting and
portfolio transaction records for the Portfolio and each day computes the net
asset value and net income of the Portfolio.
INDEPENDENT AUDITORS
Deloitte & Touche LLP are the independent auditors of the Portfolio.
CODE OF ETHICS
The Portfolio, the Adviser and the Placement Agent each have adopted a code of
ethics pursuant to Rule 17j-1 under the 1940 Act. Each code of ethics permits
personnel subject to such code of ethics to invest in securities, including
securities that may be purchased or held by the Portfolio. However, the codes of
ethics contain provisions and
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requirements designed to identify and address certain conflicts of interest
between personal investment activities and the interests of the Portfolio. Of
course, there can be no assurance that the codes of ethics will be effective in
identifying and addressing all conflicts of interest relating to personal
securities transactions. The code of ethics of the Portfolio, the Adviser and
the Placement Agent are on file with and are available from the SEC by calling
1-202-942-8090. Additionally, this information is available on the EDGAR
database at the SEC's internet site at http://www.sec.gov. A copy may be
obtained, after paying a duplicating fee, by electronic request at the following
e-mail address: [email protected].
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES.
The Portfolio is managed actively in pursuit of its investment objective.
Securities are not traded for short-term profits but, when circumstances
warrant, securities are sold without regard to the length of time held. A 100%
annual turnover rate would occur, for example, if all portfolio securities
(excluding short-term obligations) were replaced once in a period of one year.
The amount of brokerage commissions and taxes on realized capital gains to be
borne by the investors tend to increase as the level of portfolio activity
increases.
In effecting securities transactions the Investment Adviser seeks to obtain the
best price and execution of orders. In selecting a broker, the Investment
Adviser considers a number of factors, including: the broker's ability to
execute orders without disturbing the market price; the broker's reliability for
prompt, accurate confirmations and on-time delivery of securities; the broker's
financial condition and responsibility; the research and other information
provided by the broker; and the commissions charged. Accordingly, the
commissions charged by any such broker may be greater than the amount another
firm might charge if the Investment Adviser determines in good faith that the
amount of such commissions is reasonable in relation to the value of the
brokerage services and research information provided by such broker.
The Investment Adviser may direct a portion of the Portfolio's securities
transactions to certain unaffiliated brokers which in turn use a portion of the
commissions they receive from the Portfolio to pay other unaffiliated service
providers on behalf of the Portfolio for services provided for which the
Portfolio would otherwise be obligated to pay. Such commissions paid by the
Portfolio are at the same rate paid to other brokers for effecting similar
transactions in listed equity securities.
Research services provided by brokers to which Brown Brothers Harriman & Co. has
allocated brokerage business in the past include economic statistics and
forecasting services, industry and company analyses, portfolio strategy
services, quantitative data, and consulting services from economists and
political analysts. Research
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services furnished by brokers are used for the benefit of all the Investment
Adviser's clients and not solely or necessarily for the benefit of the
Portfolio. The Investment Adviser believes that the value of research services
received is not determinable nor does such research significantly reduce its
expenses. The Portfolio does not reduce the fee paid to the Investment Adviser
by any amount that might be attributable to the value of such services.
Portfolio securities are not purchased from or sold to the Administrator or
Investment Adviser or any "affiliated person" (as defined in the 1940 Act) of
the Administrator or Investment Adviser when such entities are acting as
principals, except to the extent permitted by law.
A committee, comprised of officers and partners of Brown Brothers Harriman & Co.
who are portfolio managers of some of Brown Brothers Harriman & Co.'s managed
accounts (the "Managed Accounts"), evaluates semi-annually the nature and
quality of the brokerage and research services provided by brokers, and, based
on this evaluation, establishes a list and projected ranking of preferred
brokers for use in determining the relative amounts of commissions to be
allocated to such brokers. However, in any semi-annual period, brokers not on
the list may be used, and the relative amounts of brokerage commissions paid to
the brokers on the list may vary substantially from the projected rankings.
The Trustees of the Portfolio review regularly the reasonableness of commissions
and other transaction costs incurred for the Portfolio in light of facts and
circumstances deemed relevant from time to time and, in that connection, receive
reports from the Investment Adviser and published data concerning transaction
costs incurred by institutional investors generally.
Over-the-counter purchases and sales are transacted directly with principal
market makers, except in those circumstances in which, in the judgment of the
Investment Adviser, better prices and execution of orders can otherwise be
obtained. If the Portfolio effects a closing transaction with respect to a
futures or option contract, such transaction normally would be executed by the
same broker-dealer who executed the opening transaction. The writing of options
by the Portfolio may be subject to limitations established by each of the
exchanges governing the maximum number of options in each class which may be
written by a single investor or group of investors acting in concert, regardless
of whether the options are written on the same or different exchanges or are
held or written in one or more accounts or through one or more brokers. The
number of options which the Portfolio may write may be affected by options
written by the Investment Adviser for other investment advisory clients. An
Exchange may order the liquidation of positions found to be in excess of these
limits, and it may impose certain other sanctions.
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On those occasions when Brown Brothers Harriman & Co. deems the purchase or sale
of a security to be in the best interests of the Portfolio as well as other
customers, Brown Brothers Harriman & Co., to the extent permitted by applicable
laws and regulations, may, but is not obligated to, aggregate the securities to
be sold or purchased for the Portfolio with those to be sold or purchased for
other customers in order to obtain best execution, including lower brokerage
commissions, if appropriate. In such event, allocation of the securities so
purchased or sold as well as any expenses incurred in the transaction are made
by Brown Brothers Harriman & Co. in the manner it considers to be most equitable
and consistent with its fiduciary obligations to its customers, including the
Portfolio. In some instances, this procedure might adversely affect the
Portfolio.
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES.
The Portfolio is organized as a trust under the laws of the State of New York.
Under the Declaration of Trust, the Trustees are authorized to issue beneficial
interests in the Portfolio. Investors are entitled to participate pro rata in
distributions of taxable income, loss, gain and credit of the Portfolio. Upon
liquidation or dissolution of the Portfolio, investors are entitled to share pro
rata in the Portfolio's net assets available for distribution to its investors.
Investments in the Portfolio have no preference, preemptive, conversion or
similar rights and are fully paid and nonassessable, except as set forth below.
Investments in the Portfolio may not be transferred. Certificates representing
an investor's beneficial interest in the Portfolio are issued only upon the
written request of an investor.
Each investor is entitled to a vote in proportion to the amount of its
investment in the Portfolio. Investors in the Portfolio do not have cumulative
voting rights, and investors holding more than 50% of the aggregate beneficial
interest in the Portfolio may elect all of the Trustees if they choose to do so
and in such event the other investors in the Portfolio would not be able to
elect any Trustee. The Portfolio is not required and has no current intention to
hold annual meetings of investors but the Portfolio will hold special meetings
of investors when in the judgment of the Portfolio's Trustees it is necessary or
desirable to submit matters for an investor vote. Changes in fundamental
policies will be submitted to investors for approval. No material amendment may
be made to the Portfolio's Declaration of Trust without the affirmative majority
vote of investors (with the vote of each being in proportion to the amount of
its investment). Investors have under certain circumstances (e.g., upon
application and submission of certain specified documents to the Trustees by a
specified percentage of the outstanding interests in the Portfolio) the right to
communicate with other investors in connection with requesting a meeting of
investors for the purpose of removing one or more Trustees. Investors also have
the right to remove one or more Trustees without a meeting by a declaration in
writing by a specified percentage of the outstanding interests in the Portfolio.
Upon liquidation of the Portfolio, investors would be entitled to share pro rata
in the net assets of the Portfolio available for distribution to investors.
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The term "majority of the outstanding voting securities" (as defined in the 1940
Act) currently means the vote of (i) 67% or more of the outstanding voting
securities present at a meeting, if the holders of more than 50% of the
outstanding voting securities are present in person or represented by proxy; or
(ii) more than 50% of the outstanding voting securities, whichever is less.
The end of the Portfolio's fiscal year is October 31.
Under the anticipated method of operation of the Portfolio, the Portfolio will
not be subject to any income tax. However, each investor in the Portfolio will
be taxable on its share (as determined in accordance with the governing
instruments of the Portfolio) of the Portfolio's ordinary income and capital
gain in determining its income tax liability. The determination of such share
will be made in accordance with the Internal Revenue Code of 1986, as amended
(the "Code"), and regulations promulgated thereunder.
It is intended that the Portfolio's assets, income and distributions will be
managed in such a way that an investor in the Portfolio will be able to satisfy
the requirements of Subchapter M of the Code, assuming that the investor
invested all of its assets in the Portfolio.
Investor inquiries may be directed to 59 Wall Street Distributors, Inc, 21 Milk
Street, Boston, MA 02109, 1-800-625-5759.
The Portfolio may enter into a merger or consolidation, or sell all or
substantially all of its assets, if approved by the vote of two thirds of its
investors (with the vote of each being in proportion to its percentage of the
beneficial interests in the Portfolio), except that if the Trustees recommend
such sale of assets, the approval by vote of a majority of the investors (with
the vote of each being in proportion to its percentage of the beneficial
interests of the Portfolio) will be sufficient. The Portfolio may also be
terminated (i) upon liquidation and distribution of its assets if approved by
the vote of two thirds of its investors (with the vote of each being in
proportion to the amount of its investment) or (ii) by the Trustees by written
notice to its investors.
Investors in the Portfolio will be held personally liable for its obligations
and liabilities, subject, however, to indemnification by the Portfolio in the
event that there is imposed upon an investor a greater portion of the
liabilities and obligations of the Portfolio than its proportionate beneficial
interest in the Portfolio. The Declaration of Trust also provides that the
Portfolio shall maintain appropriate insurance (for example, fidelity bonding
and errors and omissions insurance) for the protection of the Portfolio, its
investors, Trustees, officers, employees and agents covering possible tort and
other liabilities. Thus, the risk of an investor incurring financial loss on
account of investor liability is limited to circumstances in which both
inadequate insurance existed and the Portfolio itself was unable to meet its
obligations.
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The Portfolio's Declaration of Trust further provides that obligations of the
Portfolio are not binding upon the Trustees individually but only upon the
property of the Portfolio and that the Trustees will not be liable for any
action or failure to act, but nothing in the Declaration of Trust protects a
Trustee against any liability to which he would otherwise be subject by reason
of wilful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SECURITIES
Beneficial interests in the Portfolio are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Investments in the Portfolio may only be made by
other investment companies, insurance company separate accounts, common or
commingled trust funds, or similar organizations or entities which are
"accredited investors" as defined in Rule 501 under the 1933 Act. This
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" within the meaning of the 1933 Act.
An investment in the Portfolio may be made without a sales load. All investments
are made at net asset value next determined after an order is received in "good
order" by the Portfolio. The net asset value of the Portfolio is determined once
on each business day.
There is no minimum initial or subsequent investment in the Portfolio. However,
because the Portfolio intends to be as fully invested at all times as is
reasonably practicable in order to enhance the yield on its assets, investments
must be made in federal funds (i.e., monies credited to the account of the
Custodian by a Federal Reserve Bank).
The Portfolio reserves the right to cease accepting investments at any time or
to reject any investment order.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each day the New York Stock Exchange is open for regular trading.
At 4:00 P.M., New York time on each such business day, the value of each
investor's beneficial interest in the Portfolio is determined by multiplying the
net asset value of the Portfolio by the percentage, effective for that day,
which represents that investor's share of the aggregate beneficial interests in
the Portfolio. Any additions or withdrawals, which are to be effected on that
day, are then effected. The investor's percentage of the aggregate beneficial
interests in the Portfolio is then recomputed as the percentage equal to the
fraction (i) the numerator of which is the value of such investor's investment
in the Portfolio as of 4:00 P.M New York time on such day plus or minus, as the
case may be, the amount of any additions to or withdrawals from the investor's
investment in the Portfolio effected on such day, and (ii) the denominator of
which is the aggregate net
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asset value of the Portfolio as of 4:00 P.M. New York time, on such day plus or
minus, as the case may be, the amount of the net additions to or withdrawals
from the aggregate investments in the Portfolio by all investors in the
Portfolio. The percentage so determined is then applied to determine the value
of the investor's interest in the Portfolio as of 4:00 P.M., New York time on
the following business day of the Portfolio.
The net income and capital gains and losses, if any, of the Portfolio are
determined at 4:00 p.m., New York time on each business day. Net income for days
other than business days is determined as of 4:00 p.m., New York time on the
immediately preceding business day. All the net income, as defined below, and
capital gains and losses, if any, so determined are allocated pro rata among the
investors in the Portfolio at the time of such determination.
For this purpose the "net income" of the Portfolio (from the time of the
immediately preceding determination thereof) consists of (i) accrued interest,
accretion of discount and amortization of premium less (ii) all actual and
accrued expenses of the Portfolio (including the fees payable to the Investment
Adviser and Administrator of the Portfolio).
The value of investments listed on a domestic securities exchange is based on
the last sale prices as of the regular close of the New York Stock Exchange
(which is currently 4:00 P.M New York time) or, in the absence of recorded
sales, at the average of readily available closing bid and asked prices on such
Exchange.
Unlisted securities are valued at the average of the quoted bid and asked prices
in the over-the-counter market. The value of each security for which readily
available market quotations exist is based on a decision as to the broadest and
most representative market for such security.
Securities or other assets for which market quotations are not readily available
are valued at fair value in accordance with procedures established by and under
the general supervision and responsibility of the Portfolio's Trustees. Such
procedures include the use of independent pricing services, which use prices
based upon yields or prices of securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Short-term investments which mature in 60 days or less are valued at
amortized cost if their original maturity was 60 days or less, or by amortizing
their value on the 61st day prior to maturity, if their original maturity when
acquired was more than 60 days, unless this is determined not to represent fair
value by the Trustees of the Portfolio.
If the Portfolio determines that it would be detrimental to the best interest of
the remaining investors in the Portfolio to make payment wholly or partly in
cash, payment of the redemption price may be made in whole or in part by a
distribution in kind of
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securities from the Portfolio, in lieu of cash, in conformity with the
applicable rules of the Securities and Exchange Commission (the "SEC"). If
interests are redeemed in kind, the redeeming investor might incur transaction
costs in converting the assets into cash. The method of valuing portfolio
securities is described above and such valuation will be made as of the same
time the redemption price is determined.
An investor in the Portfolio may reduce all or any portion of its investment at
the net asset value next determined after a request in "good order" is furnished
by the investor to the Portfolio. The proceeds of a reduction will be paid by
the Portfolio in federal funds normally on the next Portfolio Business Day after
the reduction is effected, but in any event within seven days. Investments in
the Portfolio may not be transferred.
The right of any investor to receive payment with respect to any reduction may
be suspended or the payment of the proceeds therefrom postponed during any
period in which the New York Stock Exchange is closed (other than weekends or
holidays) or trading on the New York Stock Exchange is restricted or, to the
extent otherwise permitted by the 1940 Act if an emergency exists.
The Portfolio reserves the right under certain circumstances, such as
accommodating requests for substantial withdrawals or liquidations, to pay
distributions in kind to investors (i.e., to distribute portfolio securities as
opposed to cash). If securities are distributed, an investor could incur
brokerage, tax or other charges in converting the securities to cash. In
addition, distribution in kind may result in a less diversified portfolio of
investments or adversely affect the liquidity of the Portfolio.
ITEM 19. TAX STATUS.
The Portfolio is organized as a New York trust. The Portfolio is not subject to
any income or franchise tax in the State of New York or the Commonwealth of
Massachusetts. However each investor in the Portfolio will be taxable on its
share (as determined in accordance with the governing instruments of the
Portfolio) of the Portfolio's ordinary income and capital gain in determining
its income tax liability. The determination of such share will be made in
accordance with the Internal Revenue Code of 1986, as amended (the "Code"), and
regulations promulgated thereunder.
Although, as described above, the Portfolio will not be subject to federal
income tax, it will file appropriate income tax returns.
It is intended that the Portfolio's assets will be managed in such a way that an
investor in the Portfolio will be able to satisfy the requirements of Subchapter
M of the Code.
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Gains or losses on sales of securities by the Portfolio will be treated as
long-term capital gains or losses if the securities have been held by it for
more than one year except in certain cases where, if applicable, the Portfolio
acquires a put or writes a call thereon. Other gains or losses on the sale of
securities will be short-term capital gains or losses.
FOREIGN TAXES. The Portfolio may be subject to foreign withholding taxes with
respect to income received from sources within foreign countries.
OTHER TAXATION. The investment by an investor in the Portfolio does not cause
the investor to be liable for any income or franchise tax in the State of New
York. Investors are advised to consult their own tax advisers with respect to
the particular tax consequences to them of an investment in the Portfolio.
ITEM 20. UNDERWRITERS.
The placement agent for the Portfolio is 59 Wall Street Distributors, Inc.,
which receives no compensation for serving in this capacity. Other investment
companies, insurance company separate accounts, common and commingled trust
funds and similar organizations and entities may continuously invest in the
Portfolio acted as placement agent for the Portfolio under the same terms and
conditions as set forth herein.
ITEM 21. CALCULATIONS OF PERFORMANCE DATA.
Not applicable.
ITEM 22. FINANCIAL STATEMENTS.
The Portfolio's Statement of Assets and Liabilities dated June 20, 2000 has been
included.
BBH GLOBAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 20, 2000
ASSETS:
Cash ........................................ $100,100
LIABILITIES:
Accrued Expenses ............................ 0
---------
$100,100
---------
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PART C
ITEM 23. EXHIBITS.
(a) Amended and Restated Declaration of Trust.(1)
(b) By-laws.(1)
(c) Not Applicable.
(d) Investment Advisory Agreement.(1)
(e) Placement Agent Agreement.(1)
(f) Not Applicable.
(g) Custodian Agreement. (1)
(h) Administration Agreement. (1)
(h)(i) Expense Payment Agreement. (1)
(i) Not Applicable.
(j) Not Applicable.
(k) Not Applicable.
(l) Forms of Investment representation letters
of initial investors.(1)
(m) Not Applicable.
(n) Not Applicable.
(o) Not Applicable.
(p)(i)Code of Ethics of the Portfolio.(1)
(p)(ii)Code of Ethics of the Brown Brothers Harriman & Co.(1)
(p)(iii) Code of Ethics of 59 Wall Street Distributors, Inc. (1)
(1) Filed herewith.
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<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Not applicable.
ITEM 25. INDEMNIFICATION.
Reference is hereby made to Article V of the Registrant's Declaration of Trust,
filed as an Exhibit herewith.
The Trustees and officers of the Registrant are insured under an errors and
omissions liability insurance policy. The Registrant and its officers are also
insured under the fidelity bond required by Rule 17g-1 under the Investment
Company Act of 1940, as amended.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
The Registrant's investment adviser, Brown Brothers Harriman & Co., is a New
York limited partnership. Brown Brothers Harriman & Co. conducts a general
banking business and is a member of the New York Stock Exchange.
To the knowledge of the Registrant, none of the general partners or officers of
Brown Brothers Harriman & Co. is engaged in any other business, profession,
vocation or employment of a substantial nature.
ITEM 27. PRINCIPAL UNDERWRITERS.
Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940, as amended, and the Rules
thereunder are maintained at the offices of:
BBH Global Equity Portfolio
63 Wall Street
New York, NY 10005
Brown Brothers Harriman & Co.
59 Wall Street
New York, NY 10005
(investment advisor)
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Brown Brothers Harriman Trust Company, LLC
63 Wall Street
New York, NY 10005
(administrator)
59 Wall Street Distributors, Inc.
21 Milk Street
Boston, MA 02109
(placement agent)
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
(custodian)
ITEM 29. MANAGEMENT SERVICES.
Not applicable.
ITEM 30. UNDERTAKINGS.
Not applicable.
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SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, BBH
Global Equity Portfolio has duly caused this registration statement on Form N-1A
to be signed on its behalf by the undersigned, thereto duly authorized, in the
City of Boston, Massachusetts on the 22nd day of June, 2000.
BBH GLOBAL EQUITY PORTFOLIO
By: /s/PHILIP W. COOLIDGE
Philip W. Coolidge
President
