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SCHRODER INTERNATIONAL FUND
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Two Portland Square, Portland, Maine 04101
<TABLE>
<S> <C>
General Information: (207) 879-8903
Account Information: (800) 344-8332
Fund Literature (800) 290-9826
Fax: (207) 879-6206
</TABLE>
SCHRODER CAPITAL MANAGEMENT INTERNATIONAL INC. -- INVESTMENT ADVISER
SCHRODER FUND ADVISORS INC. -- ADMINISTRATOR & DISTRIBUTOR
This Prospectus offers Advisor Shares ('Advisor Shares') of Schroder
International Fund (the 'Fund'), a separately-managed, diversified portfolio of
Schroder Capital Funds (Delaware) (the 'Trust'), an open-end management
investment company currently consisting of five separate portfolios, each of
which has different investment objectives and policies. The Fund's investment
objective is long-term capital appreciation through investment in securities
markets outside the United States. Investments in foreign securities involve
special risks in addition to the risks associated with investments in general
and there can be no assurance that the Fund's objective will be achieved.
THE FUND CURRENTLY SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY HOLDING, AS ITS
ONLY INVESTMENT SECURITIES, AN INTEREST IN INTERNATIONAL EQUITY FUND (THE
'PORTFOLIO'), A SEPARATE PORTFOLIO OF SCHRODER CAPITAL FUNDS ('SCHRODER CORE'),
A REGISTERED OPEN-END MANAGEMENT INVESTMENT COMPANY HAVING SUBSTANTIALLY THE
SAME INVESTMENT OBJECTIVE AND POLICIES AS THE FUND. ACCORDINGLY, THE FUND'S
INVESTMENT EXPERIENCE WILL CORRESPOND DIRECTLY WITH THE PORTFOLIO'S INVESTMENT
EXPERIENCE. SEE 'OTHER INFORMATION -- FUND STRUCTURE.'
This prospectus sets forth concisely the information a prospective investor
should know before investing in the Fund. A Statement of Additional Information
(the 'SAI') dated May 15, 1996 and as supplemented from time to time containing
additional information about the Fund has been filed with the Securities and
Exchange Commission ('SEC') and is hereby incorporated by reference into this
Prospectus. It is available without charge and may be obtained by writing or
calling the Fund at the address and telephone numbers printed above.
This prospectus should be read and retained for information about the Fund.
THE SHARES OFFERED HEREBY ARE NOT OBLIGATIONS, DEPOSITS, OR ACCOUNTS OF, OR
ENDORSED OR GUARANTEED BY, ANY BANK OR ANY AFFILIATE OF A BANK AND ARE NOT
INSURED OR GUARANTEED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE SYSTEM, OR ANY FEDERAL AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus is dated May 15, 1996.
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SCHRODER INTERNATIONAL FUND
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PROSPECTUS SUMMARY
THE FUND
The Fund is a separately managed, diversified portfolio of the Trust, a
Delaware business trust registered as an open-end management investment company
under the Investment Company Act of 1940 (the 'Act'). The Fund's investment
objective is long-term capital appreciation through investment in securities
markets outside the United States. Currently, the Fund seeks to achieve its
investment objective by investing exclusively in the Portfolio, a series of
Schroder Core, itself a registered open-end management investment company. The
Portfolio has substantially the same investment objective and policies as the
Fund. Accordingly, the investment experience of the Fund will correspond
directly with the investment experience of the Portfolio. The Fund currently
offers two separate classes of shares: Advisor Shares ('Advisor Shares') and
Investor Shares ('Investor Shares'). Only Advisor Shares are offered through
this Prospectus and are sometimes referred to herein as the 'Shares.'
INVESTMENT ADVISER
The Portfolio's Investment Adviser is Schroder Capital Management
International Inc. ('SCMI'), 787 Seventh Avenue, New York, New York 10019. The
investment advisory fee paid to SCMI by the Portfolio is borne indirectly by the
Fund. See 'Management -- Investment Adviser and Portfolio Manager.'
ADMINISTRATOR AND DISTRIBUTOR
Schroder Fund Advisors Inc. ('Schroder Advisors'), formerly Schroder
Capital Distributors, Inc., serves as Administrator and Distributor of the Fund,
and Forum Financial Services, Inc. ('Forum') serves as the Fund's
Sub-Administrator.
PURCHASES AND REDEMPTIONS OF SHARES
Shares may be purchased or redeemed by mail, by bank-wire and through an
investor's broker-dealer or other financial institution. The minimum initial
investment is $2,500, except that the minimum initial investment for an
Individual Retirement Account is $250. The minimum subsequent investment is
$250. See 'Investment in the Fund -- Purchase of Shares' and ' -- Redemption of
Shares.'
DIVIDENDS AND DISTRIBUTIONS
The Fund declares and pays as a dividend substantially all of its net
investment income annually and distributes any net realized long-term capital
gain at least annually. Dividend and capital gain distributions are reinvested
automatically in additional shares of the Fund at net asset value unless the
shareholder has notified the Fund in an Account Application or otherwise in
writing of the shareholder's election to receive dividends or distributions in
cash. See 'Dividends, Distributions and Taxes.'
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2
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SCHRODER INTERNATIONAL FUND
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RISK CONSIDERATIONS
There can be no assurance that the Fund will achieve its investment
objective, and the Fund's net asset value and total return will fluctuate based
upon changes in the value of the securities in which the Portfolio invests. The
Portfolio's objective of investing in the securities of foreign issuers may
involve risks in addition to those normally associated with investments in the
securities of U.S. issuers, including risks of foreign political and economic
instability, adverse movements in exchange rates, and the imposition or
tightening of limitations on the repatriation of capital. Accordingly, the Fund
is not a complete investment program. See 'Additional Investment Policies and
Risk Considerations.'
FEE TABLE
The table below is intended to assist investors in understanding the
expenses that an investor in Advisor Shares would incur. There are no
transaction expenses associated with purchases or redemptions of Advisor Shares.
<TABLE>
<S> <C>
Annual Fund Operating Expenses (as a percentage of average net assets)(1),(2)
Management Fees (after fee waivers)............................................................. 0.75%
12b-1 Fees(3)................................................................................... 0.25%
Other Expenses (after expense reimbursements)................................................... 0.49%
Total Fund Operating Expenses(1)................................................................ 1.49%
</TABLE>
(1) The amounts of expenses reflect the operating expenses of the Fund prior to
its investment in the Portfolio and are based on amounts incurred for the
Fund's most recent fiscal year ended October 31, 1995, after restatement to
eliminate certain voluntary fee waivers and to reflect current fees borne by
holders of Advisor Shares. Absent estimated fee waivers and expenses
reimbursements, Management Fees, Other Expenses and Total Operating Expenses
would be 0.80%, 0.55%, and 1.60%, respectively.
(2) The Fund's expenses have, since November 1, 1995, and will continue to
include the Fund's pro rata portion of all operating expenses of the
Portfolio, which will be borne indirectly by Fund shareholders. The Trust's
Board of Trustees believes that the aggregate per share expenses of the Fund
and the Portfolio will be approximately equal to the expenses the Fund would
incur if its assets were invested directly in portfolio securities.
Investment advisory fees are those incurred by the Portfolio; as long as the
Fund's assets are invested in the Portfolio, the Fund pays no investment
advisory fees directly. See 'Management.'
(3) Long-term holders of Advisor Shares may pay aggregate sales charges totaling
more than the economic equivalent of the maximum front-end sales charge
permitted by the Rules of Fair Practice of the National Association of
Securities Dealers, Inc.
SCMI and Schroder Advisors have voluntarily undertaken to waive a portion
of their fees and assume certain expenses of the Fund during the current fiscal
year to the extent that the Fund's total expenses exceed 1.49% of the Fund's
average daily net assets. This undertaking cannot be withdrawn except by a
majority vote of the Trust's Board of Trustees. See 'Management -- Expenses.'
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SCHRODER INTERNATIONAL FUND
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EXAMPLE
Based on the expenses listed above, an investor in Advisor Shares would pay
the following expenses on a $1,000 investment, assuming (1) a 5% annual return,
(2) redemption at the end of each time period, and (3) reinvestment of all
dividends and other distributions:
<TABLE>
<CAPTION>
<S> <C>
1 year.......................................... $ 15
3 years......................................... $ 47
5 years......................................... $ 81
10 years......................................... $178
</TABLE>
The Example should not be considered a representation of past or future
expenses or returns, and actual expenses or returns may be more or less than
those shown. The 5% annual return is not a prediction of the Fund's return, but
is required by the SEC.
FINANCIAL HIGHLIGHTS
The following financial highlights of the Fund are presented to assist
investors in evaluating the performance of a share of the Fund for the periods
shown. Information presented relates to Investor Shares of the Fund for a share
outstanding for the periods shown. The holders of Investor Shares bear expenses
that are lower than those borne by the holders of Advisor Shares. Prior to the
date of this Prospectus, Advisor Shares had not been offered by the Fund.
Accordingly, information has not been presented for Advisor Shares. Information
for periods prior to August 1, 1989 pertains to the Fund's
predecessor-in-interest, and to the Fund thereafter. Information, for all
periods after the year ended September 30, 1988, has been audited by Coopers &
Lybrand L.L.P., independent accountants to the Fund. The Fund's financial
statements for the year ended October 31, 1995 and independent accountants'
report thereon are contained in the Fund's Annual Report to Shareholders and are
incorporated by reference into the SAI. Further information about the
performance of the Fund is contained in the Annual Report, which may be obtained
without charge by writing or calling the Fund at the address or the telephone
number for Fund Literature on the cover of this Prospectus.
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For a Share Outstanding Throughout the Year:
<TABLE>
<CAPTION>
Unaudited
----------------
Month Year ended
Year ended October 31, ended October 31,
-------------------------------------------------------- October 31, ----------------
1995 1994 1993 1992 1991 1990 1989 1989 1988
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning
of period $23.17 $20.38 $15.15 $16.22 $17.70 $18.20 $18.95 $14.40 $18.02
Investment Operations:
Net investment income 0.46 0.18 0.08 0.25 0.25 0.15 0.03 0.20 0.05
Net realized gain (loss) (0.18) 2.69 5.27 (1.04) (0.25) (0.12) (0.78) 4.44 (2.34)
Total from investment
operations 0.28 2.87 5.35 (0.79) 0.00 0.03 (0.75) 4.64 (2.29)
Distributions
Dividends from net
investment income -- (0.08) (0.12) (0.23) (0.25) (0.16) 0.00 (0.04) 0.00
Distributions from realized
capital gains (2.54) -- -- (0.05) (1.23) (0.37) 0.00 (0.05) (1.33)
Total distributions (2.54) (0.08) (0.12) (0.28) (1.48) (0.53) 0.00 (0.09) (1.33)
Net Asset Value, end of
period $20.91 $23.17 $20.38 $15.15 $16.22 $17.70 $18.20 $18.95 $14.40
Total Return 2.08% 14.10% 35.54% (4.93%) 0.45% (0.07%) (4.01%) 32.2% (0.12%)
Ratios/Supplementary Data:
Net Assets, end of period
(Thousands) 212,330 500,504 320,550 159,556 108,398 62,438 49,740 48,655 29,917
Ratio of expenses to
average net assets 0.91% 0.90% 0.91% 0.93% 1.07% 1.12% 1.12%(1) 1.12% 1.30%
Ratio of net investment
income to average net
assets 0.99% 0.94% 0.87% 1.62% 1.59% 0.83% 2.29%(1) 1.27% 0.38%
Portfolio turnover rate 61.26% 25.17% 56.05% 49.42% 50.58% 55.91% 21.98%(1) 72.25% 86.19%
<CAPTION>
Year
ended December 30, 1985
October 31, to
1987 October 31, 1986
---------------------------------
<S> <C> <C>
Net Asset Value, beginning
of period $14.07 $10.00
Investment Operations:
Net investment income (0.07) 0.02
Net realized gain (loss) 4.71 4.05
Total from investment
operations 4.64 4.07
Distributions
Dividends from net
investment income (0.02) 0.00
Distributions from realized
capital gains (0.67) 0.00
Total distributions (0.69) 0.00
Net Asset Value, end of
period $18.02 $14.07
Total Return 34.8% 39.2%
Ratios/Supplementary Data:
Net Assets, end of period
(Thousands) 32,553 9,152
Ratio of expenses to
average net assets 1.64% 2.47%(1)
Ratio of net investment
income to average net
assets (0.42%) (0.12%)(1)
Portfolio turnover rate 84.97% 77.53%(1)
</TABLE>
(1) Annualized
INVESTMENT OBJECTIVE AND POLICIES
The Fund is designed for U.S. investors who seek international
diversification of their investments by participating in foreign securities
markets. The Fund is not a complete investment program and investments in the
securities of foreign issuers generally involve the risks in addition to risks
associated with investments in the securities of U.S. issuers. See 'Risk
Considerations.'
INVESTMENT OBJECTIVE AND THE PORTFOLIO
The investment objective of the Fund is long-term capital appreciation
through investment in securities markets outside the United States. There is no
assurance that the Fund will achieve its investment objective.
The Fund currently seeks to achieve its investment objective by investing
all of its investment assets in the Portfolio, which has substantially the same
investment objective and policies as the Fund. Therefore, although the following
discusses the investment policies of the Portfolio and the responsibilities of
Schroder Core's Board of Trustees (the 'Schroder Core Board'), it applies
equally to the Fund and the Trust's Board of Trustees (the 'Board'). Additional
information concerning the investment policies of the Fund and the Portfolio,
including additional fundamental policies, is contained in the SAI.
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SCHRODER INTERNATIONAL FUND
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INVESTMENT POLICIES
The Portfolio normally invests at least 65% of its total assets in equity
securities of companies domiciled outside the U.S. Investments by the Portfolio
are selected on the basis of their potential for capital appreciation without
regard for current income. The Portfolio may also invest in debt securities of
foreign governments, international organizations and foreign corporations and,
subject to certain restrictions, in the securities of closed-end investment
companies investing primarily in foreign securities. The Portfolio may invest up
to 5% of its net assets in debt securities with relatively high risk and high
yields (as compared to other debt securities meeting the Portfolio's investment
criteria). The debt securities in which the Portfolio invests may be unrated,
but will not be in default at the time of purchase. The value of debt securities
generally varies inversely with interest rate changes. See 'Additional
Investment Policies and Risk Considerations.'
Countries in which the Portfolio may invest include, but are not limited
to, countries listed in the Morgan Stanley EAFE'r' Index, which is a market
capitalization index of companies in 20 developed market countries in Europe,
Australasia and the Far East. The Portfolio invests in the securities of foreign
issuers domiciled in at least three foreign countries. The Portfolio may invest
more than 25% of its total assets in issuers located in any one country. To the
extent it invests in issuers located in one country, the Portfolio may be
susceptible to factors adversely affecting that country. The Portfolio may
invest in securities of issuers located in countries considered by some to be
emerging market countries. See 'Additional Investment Policies and Risk
Considerations' and ' -- Emerging Markets.'
The Portfolio may purchase preferred stock and convertible debt securities,
including warrants and convertible preferred stock, and may purchase American
Depository Receipts, European Depository Receipts or other similar securities of
foreign issuers. The Portfolio also may enter into foreign exchange contracts,
including forward contracts to purchase or sell foreign currencies, in
anticipation of its currency requirements and to protect against possible
adverse movements in foreign exchange rates. Although such contracts may reduce
the risk of loss to the Portfolio from adverse movements in currency values, the
contracts also limit possible gains from favorable movements. For temporary
defensive purposes, the Portfolio may invest without limitation in (or enter
into repurchase agreements maturing in seven days or less with U.S. banks and
broker-dealers with respect to) short-term debt securities, including U.S.
Government securities, certificates of deposit and bankers' acceptances of U.S.
banks. The Portfolio may also hold cash (U.S. dollars, foreign currencies or
multinational currency units) and time deposits in U.S. and foreign banks. See
'Additional Investment Policies and Risk Considerations' in the Prospectus and
Investment Policies in the SAI for further information about all these types of
investments.
ADDITIONAL INVESTMENT POLICIES AND RISK CONSIDERATIONS
INVESTMENT RESTRICTIONS
The investment objective and all investment policies of each of the Fund
and the Portfolio that are designated as fundamental may not be changed without
approval of the holders of a majority of the outstanding voting securities of
the Fund or the Portfolio, as applicable. A majority of outstanding
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SCHRODER INTERNATIONAL FUND
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voting securities means the lesser of (i) 67% of the shares present or
represented at a shareholder meeting at which the holders of more than 50% of
the outstanding shares are present or represented, or (ii) more than 50% of
outstanding shares. Unless otherwise indicated, all investment policies are not
fundamental and may be changed by the Board without approval by shareholders of
the Fund. Likewise, nonfundamental investment policies of the Portfolio may be
changed by the Board of Trustees of Schroder Core (the 'Schroder Core Board')
without shareholder approval. For more information concerning shareholder
voting, see Other Information Capitalization and Voting and Fund Structure.
FUNDAMENTAL POLICIES
The following investment restrictions of the Portfolio are fundamental
policies:
(a) The Portfolio will not invest more than 5% of its assets in the
securities of any single issuer, except U.S. Government securities.
(b) The Portfolio will not purchase more than 10% of the voting
securities of any one issuer.
(c) The Portfolio will not invest more than 10% of its assets in
'illiquid securities,' which are securities that cannot be disposed of
within seven days at their then current value. For purposes of this
limitation, 'illiquid securities,' includes, except in those circumstances
described below, (i) 'restricted securities,' which are securities that
cannot be resold to the public without registration under the Federal
securities laws, and (ii) securities of issuers having a record (together
with all predecessors) of less than three years of continuous operation.
(d) The Portfolio will not invest 25% or more of its total assets in
any one industry.
(e) The Portfolio will not pledge, mortgage or hypothecate its assets
to an extent greater than 10% of the value of the total assets of the
Portfolio.
The limitation on investing in illiquid securities does not include
securities that may not be resold to the general public but may be resold to
qualified institutional purchasers pursuant to Rule 144A under the Securities
Act of 1933. If SCMI determines that a 'Rule 144A security' is liquid pursuant
to guidelines adopted by the Schroder Core Board, it will not be deemed
illiquid. These guidelines take into account trading activity for the securities
and the availability of reliable pricing information, among other factors. If
there is a lack of trading interest in a particular Rule 144A security, that
security may become illiquid, which could affect the portfolio's liquidity.
The percentage restrictions described above and in the SAI apply only at
the time of investment and require no action by the Portfolio as a result of
subsequent changes in the value of the investments or the size of the Portfolio.
A supplementary list of investment restrictions is contained in the SAI.
INVESTMENT TYPES
COMMON AND PREFERRED STOCK AND WARRANTS. The Portfolio may invest in common
and preferred stock. Common stockholders are the owners of the company issuing
the stock and, accordingly, vote
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SCHRODER INTERNATIONAL FUND
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on various corporate governance matters such as mergers. They are not creditors
of the company, but rather, upon liquidation of the company, are entitled to
their pro rata share of the company's assets after creditors (including fixed
income security holders) and, if applicable, preferred stockholders are paid.
Preferred stock is a class of stock having a preference over common stock as to
dividends and, in the alternative, as to the recovery of investment. A preferred
stockholder is a shareholder in the company and not a creditor of the company,
as is a holder of the company's fixed income securities. Dividends paid to
common and preferred stockholders are distributions of the earnings of the
company and not interest payments, which are expenses of the company. Equity
securities owned by the Portfolio may be traded in the over-the counter market
or on a securities exchange, but may not be traded every day or in the volume
typical of securities traded on a major U.S. national securities exchange. As a
result, disposition by the Portfolio of a security to meet redemptions by
interest holders or otherwise may require the Portfolio to sell these securities
at a discount from market prices, to sell during periods when disposition is not
desirable, or to make many small sales over a lengthy period of time. The market
value of all securities, including equity securities, is based upon the market's
perception of value and not necessarily the book value of an issuer or other
objective measure of a company's worth. The Portfolio may also invest in
warrants, which are options to purchase an equity security at a specified price
(usually representing a premium over the applicable market value of the
underlying equity security at the time of the warrant's issuance) and usually
during a specified period of time.
FOREIGN EXCHANGE CONTRACTS. Changes in foreign currency exchange rates will
affect the U.S. dollar values of securities denominated in currencies other than
the U.S dollar. The rate of exchange between the U.S. dollar and other
currencies fluctuates in response to forces of supply and demand in the foreign
exchange markets. These forces are affected by the international balance of
payments and other economic and financial conditions, government intervention,
speculation and other factors, many of which may be difficult if not impossible
to predict. When investing in foreign securities, the Portfolio usually effects
currency exchange transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign exchange market. The Portfolio incurs foreign exchange
expenses in converting assets from one currency to another.
The Portfolio may enter into foreign currency forward contracts for the
purchase or sale of foreign currency to lock in the U.S. dollar price of the
securities denominated in a foreign currency or the U.S. dollar value of
interest and dividends to be paid on such securities, or to hedge against the
possibility that the currency of a foreign country in which the Portfolio has
investments may suffer a decline against the U.S. dollar. A forward currency
contract is an obligation to purchase or sell a specific currency at a future
date, which may be any fixed number of days from the date of the contract agreed
upon by the parties, at a price set at the time of the contract. This method of
attempting to hedge the value of portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities. Although the strategy of engaging in foreign currency
transactions could reduce the risk of loss due to a decline in the value of the
hedged currency, it could also limit the potential gain from an increase in the
value of the currency. The Portfolio does not intend to maintain a net exposure
to such contracts where the fulfillment of the Portfolio's obligations under
such contracts would obligate the Portfolio to deliver an amount of
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8
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SCHRODER INTERNATIONAL FUND
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foreign currency in excess of the value of the Portfolios portfolio securities
or other assets denominated in the currency. The Portfolio will not enter into
these contracts for speculative purposes and will not enter into non-hedging
currency contracts. These contracts involve a risk of loss if SCMI fails to
predict currency values correctly. The Portfolio has no present intention to
enter into currency futures or options contracts but may do so in the future.
Because most of the Portfolio's income will be received and realized in
foreign currencies and the Portfolio will be required to compute and distribute
income in U.S. dollars, a decline in the value of a particular foreign currency
against the U.S. dollar occurring after the Portfolios income has been earned
and thereafter computed into U.S. dollars may require the Portfolio to liquidate
some portfolio securities to acquire sufficient U.S. dollars to make such
distributions. Similarly, if the exchange rate declines between the time the
Portfolio incurs expenses in U.S. dollars and the time such expenses are paid,
the Portfolio may be required to liquidate additional foreign securities to
purchase the U.S. dollars required to meet such expenses.
DEBT SECURITIES. The Portfolio may seek capital appreciation through
investment in convertible or non-convertible debt securities. Capital
appreciation in debt securities may arise as a result of a favorable change in
relative foreign exchange rates, in relative interest rate levels, or in the
creditworthiness of issuers. The receipt of income from such debt securities is
incidental to the Portfolio's objective of long-term capital appreciation. Such
income can be used, however, to offset the operating expenses of the Portfolio.
In accordance with its investment objective, the Portfolio will not seek to
benefit from anticipated short-term fluctuations in currency exchange rates. The
Portfolio may, from time to time, invest in debt securities with relatively high
risk and high yields (as compared to other debt securities meeting the
Portfolio's investment criteria), notwithstanding that the Portfolio may not
anticipate that such securities will experience substantial capital
appreciation. The debt securities in which the Portfolio invests may be unrated,
but will not be in default at the time of purchase. The Portfolio also may
invest to a certain extent in debt securities in order to participate in
debt-to-equity conversion programs incident to corporate reorganizations.
The Portfolio may invest in debt securities issued or guaranteed by foreign
governments (including countries, provinces and municipalities) or their
agencies and instrumentalities, debt securities issued or guaranteed by
international organizations designated or supported by multiple foreign
governmental entities (which are not obligations of foreign governments) to
promote economic reconstruction or development, and debt securities issued by
corporations or financial institutions.
RISK CONSIDERATIONS
FOREIGN INVESTMENTS. All investments, domestic and foreign, involve certain
risks. Investment in the securities of foreign issuers may involve risks in
addition to those normally associated with investments in the securities of U.S.
issuers. In general, the Portfolio will invest only in securities of companies
and governments in countries which SCMI, in its judgment, considers both
politically and economically stable. Nevertheless, all foreign investments are
subject to risks of foreign political and economic instability, adverse
movements in foreign exchange rates, the imposition or tightening of exchange
controls or other limitations on repatriation of foreign capital and changes in
foreign
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SCHRODER INTERNATIONAL FUND
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governmental attitudes towards private investment possibly leading to
nationalization, increased taxation or confiscation of Portfolio assets. To the
extent the Portfolio invests substantially in issuers located in one country or
area, such investments may be subject to greater risk in the event of political
or social instability or adverse economic developments affecting that country or
area.
Moreover, (i) dividends payable on foreign securities may be subject to
foreign withholding taxes, thereby reducing the income available for
distribution to the Portfolio's, and thus the Fund's, shareholders; (ii)
commission rates payable on foreign portfolio transactions are generally higher
than in the U.S.; (iii) accounting, auditing and financial reporting standards
differ from those in the U.S., and this may mean that less information about
foreign companies may be available than is generally available about issuers of
comparable securities in the U.S.; (iv) foreign securities often trade less
frequently and with less volume than U.S. securities and consequently may
exhibit greater price volatility; and (v) foreign securities trading practices,
including those involving securities settlement, may expose the Portfolio to
increased risk in the event of a failed trade or the insolvency of a foreign
broker-dealer or registrar.
EMERGING MARKETS. The Portfolio may invest in securities of issuers located
in countries considered by some to be emerging market countries. The risks of
investing in foreign securities may be greater with respect to securities of
issuers in, or denominated in the currencies of, emerging market countries. The
economies of emerging market countries generally are heavily dependent upon
international trade and, accordingly, have been and may continue to be adversely
affected by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been and may continue
to be adversely affected by economic conditions in the countries with which they
trade. The securities markets of emerging market countries are substantially
smaller, less developed, less liquid and more volatile than the securities
markets of the U.S. and other developed countries. Disclosure and regulatory
standards in many respects are less stringent in emerging market countries than
in the U.S. and other major markets. There also may be a lower level of
monitoring and regulation of emerging market countries than in the U.S. and
other major markets. In addition, the enforcement of existing regulations may be
extremely limited. There also may be a lower level of monitoring and regulation
of emerging markets and the activities of brokers in such markets. Investing in
local markets, particularly in emerging market countries, may require the
Portfolio to adopt special procedures, seek local government approvals or take
other actions, each of which may involve additional costs to the Portfolio.
Certain emerging market countries may also restrict investment opportunities in
issuers in industries deemed important to national interests.
CURRENCY FLUCTUATIONS AND DEVALUATIONS. Because the Portfolio will invest
heavily in non-U.S. currency denominated securities, changes in foreign currency
exchange rates will affect the value of the Portfolio's investments. A decline
in the value of currencies in which the Portfolios investments are denominated
against the dollar will result in a corresponding decline in the dollar value of
the Portfolios assets. This risk tends to be heightened in the case of investing
in certain emerging market countries.
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GEOGRAPHIC CONCENTRATION. The Portfolio may invest more than 25% of its
total assets in issuers located in any one country. To the extent it invests in
issuers located in one country, the Portfolio is susceptible to factors
adversely affecting that country. In particular, these factors may include the
political and economic developments and foreign exchange rate fluctuations
discussed above. As a result of investing substantially in one country, the
value of the Portfolios assets may fluctuate more widely than the value of
shares of a comparable fund having a lesser degree of geographic concentration.
PORTFOLIO TURNOVER. The Portfolio may engage in short-term trading but its
portfolio turnover rate is not expected to exceed 100%. High portfolio turnover
and short-term trading involve correspondingly greater commission expenses and
transaction costs. Also, higher portfolio turnover rates may cause shareholders
of the Portfolio to recognize gains for federal income tax purposes. See
'Taxation' in the SAI.
MANAGEMENT
BOARD OF TRUSTEES
The business and affairs of the Fund are managed under the direction of the
Board. The business and affairs of the Portfolio are managed under the direction
of the Schroder Core Board. The Trustees of both the Trust and Schroder Core are
Peter E. Guernsey, Ralph E. Hansmann, John I. Howell, Laura E. Luckyn-Malone,
Clarence F. Michalis, Hermann C. Schwab and Mark J. Smith. Additional
information regarding the Trustees and the respective executive officers of the
Trust and Schroder Core may be found in the SAI under the heading
'Management -- Trustees and Officers.' The Board and the Schroder Core Board
have separately adopted written procedures reasonably appropriate to deal with
potential conflicts of interest.
INVESTMENT ADVISER AND PORTFOLIO MANAGER
The Fund currently invests all of its assets in the Portfolio. SCMI serves
as Investment Adviser to the Portfolio. SCMI manages the investment and
reinvestment of the assets the Portfolio and continuously reviews, supervises
and administers the Portfolios investments. In this regard, it is the
responsibility of SCMI to make decisions relating to the Portfolios investments
and to place purchase and sale orders regarding investments with brokers or
dealers selected by it in its discretion. For its services with respect to the
Portfolio, SCMI receives a monthly advisory fee equal on an annual basis to
0.45% of the Portfolio's average daily net assets, which the Fund indirectly
bears through investment in the Portfolio.
SCMI is a wholly-owned U.S. subsidiary of Schroders Incorporated, the
wholly-owned U.S. holding company subsidiary of Schroders plc, a publicly owned
company organized under the laws of England. Schroders plc is the holding
company parent of a large world-wide group of banks and financial services
companies (referred to as the Schroder Group), with associated companies and
branch and representative offices located in eighteen countries world-wide. The
investment management
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subsidiaries of the Schroder Group had, as of December 31, 1995, assets under
management in excess of $100 billion.
The investment management team of Mark J. Smith, a Trustee and Vice
President of the Trust and Schroder Core, and Laura Luckyn-Malone, a Trustee and
President of the Trust and Schroder Core, with the assistance of an SCMI
investment committee, is primarily responsible for the day-to-day management of
the Portfolio's investment portfolio. Mr. Smith, who has managed the Funds
portfolio since October 1989 and the Portfolio's investments since its
inception, has been a First Vice President of SCMI since April 1990 and a
Director thereof since April 1993. He has been employed by various Schroder
Group companies in the investment research and portfolio management areas since
1983. Ms. Luckyn-Malone, who joined the Portfolio's investment management team
in February 1995, has been a Managing Director of SCMI since March 1995.
The Fund began pursuing its investment objective through investment in the
Portfolio on November 1, 1995. The Fund may withdraw its investment from the
Portfolio at any time if the Board determines that it is in the best interests
of the Fund and its shareholders to do so. See 'Other Information -- Fund
Structure.' Accordingly, the Fund has retained SCMI as its investment adviser to
manage the Funds assets in the event the Fund withdraws its investment. SCMI
does not receive an investment advisory fee with respect to the Fund so long as
the Fund remains completely invested in the Portfolio or any other investment
company. If the Fund resumes directly investing in portfolio securities, the
Fund will pay SCMI a monthly advisory fee equal on an annual basis to 0.50% of
the first $100 million of the Funds average daily net assets; 0.40% of the next
$150 million of average daily net assets and 0.35% of average daily net assets
in excess of $250 million. The investment advisory contract between SCMI and the
Trust with respect to the Fund is the same in all material respects as the
investment advisory contract between SCMI and Schroder Core with respect to the
Portfolio, except as to the parties, the fees payable thereunder, the
circumstances under which fees will be paid and the jurisdiction whose laws
govern the agreement. For the fiscal year ended October 31, 1995, during which
time the Fund invested directly in portfolio securities, the Fund paid SCMI an
advisory fee of 0.45% of its average daily net assets.
ADMINISTRATIVE SERVICES
On behalf of the Fund, the Trust has entered into an administrative
services contract with Schroder Advisors, 787 Seventh Avenue, New York, New York
10019. Schroder Advisors is a wholly-owned subsidiary of SCMI. The Trust and
Schroder Advisors have entered into a sub-administration agreement with Forum.
Pursuant to these agreements, Schroder Advisors and Forum provide certain
management and administrative services necessary for the Funds operations, other
than the investment management and administrative services provided to the Fund
by SCMI. For these services, the Fund pays Schroder Advisors a monthly fee at
the annual rate of 0.20% of the Fund's average daily net assets. Payment for
Forums services is made by Schroder Advisors and is not a separate expense of
the Fund. Schroder Advisors and Forum provide similar services to the Portfolio,
the Portfolio pays Schroder Advisors a monthly fee at the annual rate of 0.15%
of the Portfolio's average daily net assets, a portion of which Schroder
Advisors pays Forum for its services with respect to the Portfolio.
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DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN.
Schroder Advisors acts as distributor of the Funds shares. Under a
distribution plan pursuant to Rule 12b-1 under the 1940 Act (the 'Distribution
Plan') adopted by the Trust on behalf of the Fund, each month the Trust pays
directly or reimburses Schroder Advisors, as distributor, for costs and expenses
incurred in connection with the distribution of Advisor Shares. Such payment or
reimbursement is subject to a limit on an annual basis to 0.50% of the Funds
average daily net assets attributable to Advisor Shares. The maximum annual
amount payable under the Distribution Plan is currently 0.25%, which amount may
only be increased by action of the Board.
Payment or reimbursement under the Distribution Plan may be for various
types of costs, including: (1) advertising expenses, (2) costs of printing
prospectuses and other materials to be given or sent to prospective investors,
(3) expenses of sales employees or agents of Schroder Advisors, including
salary, commissions, travel and related expenses in connection with the
distribution of Advisor Shares, (4) payments to broker-dealers who advise
shareholders regarding the purchase, sale, or retention of Advisor Shares, and
(5) payments to banks, trust companies, broker-dealers (other than Schroder
Advisors) or other financial organizations (collectively, Service
Organizations). Payments to Service Organizations under the Distribution Plan
are calculated by reference to the average daily net assets of Advisor Shares
held by shareholders who have a brokerage or other service relationship with the
Service Organization. The Fund will not be liable for distribution expenditures
made by Schroder Advisors in any given year in excess of the maximum amount
payable under the Distribution Plan in that year. Costs or expenses in excess of
the per annum limit may not be carried forward to future years. Salary expenses
of salesmen who are responsible for marketing various mutual funds of the Trust
may be allocated to those funds, including the Advisor Shares class of the Fund,
that have adopted a distribution plan similar to that of the Fund on the basis
of average daily net assets. Travel expenses may be allocated to, or divided
among, the particular mutual funds of the Trust for which they are incurred.
The Trust, on behalf of the Fund, has also adopted a shareholder service
plan (the 'Shareholder Service Plan'), pursuant to which Schroder Advisors, as
administrator of the Fund, is authorized to pay Service Organizations a
servicing fee. Payments under the Shareholder Service Plan may be for various
types of services, including (1) answering customer inquiries regarding the
manner in which purchases, exchanges and redemptions of shares of the Fund may
be effected and other matters pertaining to the Fund's services, (2) providing
necessary personnel and facilities to establish and maintain shareholder
accounts and records, (3) assisting shareholders in arranging for processing
purchase, exchange and redemption transactions, (4) arranging for the wiring of
funds, (5) guaranteeing shareholder signatures in connection with redemption
orders and transfers and changes in shareholder-designated accounts, (6)
integrating periodic statements with other customer transactions and (7)
providing such other related services as the shareholder may request.
Payments to Service Organizations under the Shareholder Service Plan are
calculated by reference to the average daily net assets of Advisor Shares held
by shareholders who have a brokerage or other service relationship with the
Service Organization. Some Service Organizations may impose additional or
different conditions on their clients, such as requiring their clients to invest
more than the
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minimum or subsequent investments specified by the Fund or charging a direct fee
for servicing. If imposed, these fees would be in addition to any amounts which
might be paid to the Service Organization by Schroder Advisors. Each Service
Organization has agreed to transmit to its clients a schedule of any such fees.
Shareholders using Service Organizations are urged to consult them regarding any
such fees or conditions.
EXPENSES
SCMI and Schroder Advisors have voluntarily undertaken to assume certain
expenses of the Fund and the Portfolio (or waive their respective fees). This
undertaking is designed to place a maximum limit on total Fund expenses
(excluding taxes, interest, brokerage commissions and other portfolio
transaction expenses and extraordinary expenses) of 1.49% of the average daily
net assets of the Fund attributable to Advisor Shares. This expense limitation
cannot be modified or withdrawn except by a majority vote of the Trustees of the
Trust who are not affiliated with SCMI or Schroder Advisors. If expense
reimbursements are required, they will be made on a monthly basis. SCMI will
reimburse the Fund for four-fifths of the amount required and Schroder Advisors,
will reimburse the Fund for the remaining one-fifth; provided, however, that
neither SCMI nor Schroder Advisors will be required to make any reimbursements
or waive any fees in excess of the fees payable to them by the Fund and the
Portfolio on a monthly basis for their respective advisory and administrative
services.
PORTFOLIO TRANSACTIONS
SCMI places orders for the purchase and sale of the Portfolio's investments
with brokers and dealers selected by SCMI in its discretion and seeks 'best
execution' of such portfolio transactions. The Portfolio may pay higher than the
lowest available commission rates when SCMI believes it is reasonable to do so
in light of the value of the brokerage and research services provided by the
broker effecting the transaction. Commission rates for brokerage transactions
are fixed on many foreign securities exchanges, and this may cause higher
brokerage expenses to accrue to the Portfolio than would be the case for
comparable transactions effected on U.S. securities exchanges.
Subject to the Portfolio's policy of obtaining the best price consistent
with quality of execution on transactions, SCMI may employ Schroder Securities
Limited and its affiliates (collectively, 'Schroder Securities'), affiliates of
SCMI, to effect transactions of the Portfolio on certain foreign securities
exchanges. Because of the affiliation between SCMI and Schroder Securities, the
Portfolios payment of commissions to Schroder Securities is subject to
procedures adopted by Schroder Core's Board designed to ensure that such
commissions will not exceed the usual and customary brokers' commissions. No
specific portion of the Portfolio's brokerage will be directed to Schroder
Securities and in no event will Schroder Securities receive any brokerage in
recognition of research services.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to seeking the most favorable price and
execution available and such other policies as the Schroder Core Board may
determine, SCMI may consider sales of shares of the Fund or any other entity
that invests in the Portfolio as a factor in the selection of broker-dealers to
execute portfolio transactions for the Portfolio.
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Although the Portfolio does not currently engage in directed brokerage
arrangements to pay expenses, it may do so in the future. These arrangements,
whereby brokers executing the Portfolio's portfolio transactions would agree to
pay designated expenses of the Portfolio if brokerage commissions generated by
the Portfolio reached certain levels, might reduce the Portfolio's expenses
(and, indirectly, the Fund's expenses). As anticipated, these arrangements would
not materially increase the brokerage commissions paid by the Portfolio.
Brokerage commissions are not deemed to be Fund expenses. In the Fund's fee
table, per share table, and financial highlights, however, directed brokerage
arrangements might cause Fund expenses to appear lower than actual expenses
incurred.
CODE OF ETHICS
The Trust, Schroder Core, SCMI, Schroder Advisors, and Schroders
Incorporated have adopted codes of ethics that contain a policy on personal
securities transactions by 'access persons,' including portfolio managers and
investment analysts. That policy complies in all material respects with the
recommendations set forth in the Report of the Advisory Group on Personal
Investing of the Investment Company Institute, of which the Trust is a member.
INVESTMENT IN THE FUND
PURCHASE OF SHARES
Investors may purchase Advisor Shares directly from the Trust.
Prospectuses, sales material and Account Applications can be obtained from the
Trust or through Forum Financial Corp., the Funds transfer agent (the 'Transfer
Agent'). See 'Other Information -- Shareholder Inquires.' Investments may also
be made through Service Organizations that assist their customers in purchasing
shares of the Fund. Such Service Organizations may charge their customers a
service fee for processing orders to purchase or sell shares of the Fund.
Investors wishing to purchase shares through their accounts at a Service
Organization should contact that organization directly for appropriate
instructions.
Shares of the Fund are offered at the net asset value next determined after
receipt of a Purchase Order (at the address set forth below). The minimum
initial investment is $2,500, except that the minimum initial investment for an
Individual Retirement Account is $250. The minimum subsequent investment is
$250. All purchase payments are invested in full and fractional shares. The Fund
is authorized to reject any purchase order.
Initial and subsequent purchases may be made by mailing a check (in U.S.
dollars), payable to Schroder International Fund, to:
Schroder International Fund
P.O. Box 446
Portland, Maine 04112
For initial purchases, the check must be accompanied by a completed Account
Application in proper form.
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Investors and Service Organizations (on behalf of their customers) may
transmit purchase payments by Federal Reserve Bank wire directly to the Fund as
follows:
Chase Manhattan Bank
New York, NY
ABA No.: 021000021
For Credit To: Forum Financial Corp.
Acct. No.: 910-2-718187
Ref.: Schroder International Fund -- Advisor Shares
Account of: (shareholder name)
Account Number: (shareholder account number)
The wire order must specify the name of the Fund, class of shares, the
account name and number, address, confirmation number, amount to be wired, name
of the wiring bank and name and telephone number of the person to be contacted
in connection with the order. If the initial investment is by wire, an account
number will be assigned and an Account Application must be completed and mailed
to the Fund. Wire orders received prior to 4:00 p.m. (New York City Time) on a
Fund Business Day will be processed at the net asset value determined as of that
day. Wire orders received after 4:00 p.m. will be processed at the net asset
value determined as of the next Fund Business Day. See 'Net Asset Value' below.
For each shareholder of record, the Funds Transfer Agent, as the
shareholders agent, establishes an open account to which all shares purchased
are credited, together with any dividends and capital gain distributions that
are invested in additional shares. Although most shareholders elect not to
receive share certificates, certificates for full shares can be obtained by
specific written request to the Fund's Transfer Agent. No certificates are
issued for fractional shares. The Transfer Agent will deem an account lost if
six months have passed since correspondence to the shareholder's address of
record is returned, unless the Transfer Agent determines the shareholder's new
address. When an account is deemed lost, dividends and capital gains will be
reinvested. In addition, the amount of any outstanding checks for dividends and
capital gains that have been returned to the Transfer Agent will be reinvested
and such checks will be canceled.
RETIREMENT PLANS
Shares of the Fund are offered in connection with tax-deferred retirement
plans. Applications forms and further information about these plans, including
applicable fees, are available upon request. Before investing in the Fund
through one of these plans, investors should consult their tax advisors.
INDIVIDUAL RETIREMENT ACCOUNTS
The Fund may be used as an investment vehicle for an Individual Retirement
Account (IRA). An IRA plan naming The First National Bank of Boston as custodian
is available from the Trust or the Fund's Transfer Agent. The minimum initial
investment for an IRA is $250; the minimum subsequent investment is $250. IRAs
are available to individuals who receive compensation or earned income, and
their spouses, whether or not they are active participants in a tax-qualified or
government-approved
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retirement plan. An IRA contribution by an individual who participates, or whose
spouse participates, in a tax-qualified or government-approved retirement plan
may not be deductible depending upon the individuals income. Individuals also
may establish an IRA to receive a 'rollover' contribution of distributions from
another IRA or a qualified plan. Tax advice should be obtained before effecting
a rollover.
REDEMPTION OF SHARES
Shares of the Fund are redeemed at their next determined net asset value
following receipt by the Fund (at the address set forth above under Purchase of
Shares) of a redemption request in proper form. See 'Net Asset Value.'
Redemption requests may be made between 9:00 a.m. and 6:00 p.m. (New York City
Time) on each day that the New York Stock Exchange is open for trading.
Redemption requests that are received prior to 4:00 p.m. (New York City Time)
will be processed at the net asset value determined as of that day. Redemption
requests that are received after 4:00 p.m. will be processed at the net asset
value determined the next Fund Business Day. See 'Net Asset Value' below.
BY TELEPHONE. Redemption requests may be made by telephoning the Transfer
Agent at the Account Information telephone number on the cover page of this
Prospectus. A shareholder must provide the Transfer Agent with the class of
shares, the dollar amount or number of shares to be redeemed, the shareholder
account number and some additional form of identification such as a password. A
redemption by telephone may be made only if the telephone redemption privilege
option has been elected on the Account Application or otherwise in writing. In
an effort to prevent unauthorized or fraudulent redemption requests by
telephone, reasonable procedures will be followed by the Transfer Agent to
confirm that such instructions are genuine. The Transfer Agent and the Trust
will not be liable for any losses due to unauthorized or fraudulent redemption
requests but may be liable if they do not follow these procedures. Shares for
which certificates have been issued may not be redeemed by telephone. In times
of drastic economic or market changes, it may be difficult to make redemptions
by telephone. If a shareholder cannot reach the Transfer Agent by telephone,
redemption requests may be mailed or hand-delivered to the Transfer Agent.
WRITTEN REQUESTS. Redemptions may be made by letter to the Fund specifying
the class of shares, the dollar amount or number of shares to be redeemed and
the shareholder account number. The letter must also be signed in exactly the
same way the account is registered (if there is more than one owner of the
shares, all must sign) and, in certain cases, signatures must be guaranteed by
an institution that is acceptable to the Funds Transfer Agent. Such institutions
include certain banks, brokers, dealers (including municipal and government
securities brokers and dealers), credit unions and savings associations.
Notaries public are not acceptable. Further documentation, such as copies of
corporate resolutions and instruments of authority, may be requested from
corporations, administrators, executors, personal representatives, directors or
custodians to evidence the authority of the person or entity making the
redemption request. Questions concerning the need for signature guarantees or
documentation of authority should be directed to the Fund at the above address
or by calling the Account Information telephone number appearing on the cover of
this Prospectus.
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If shares to be redeemed are held in certificate form, the certificates
must be enclosed with the redemption request and the assignment form on the back
of the certificates, or an assignment separate from the certificates (but
accompanied by the certificates), must be signed by all owners in exactly the
same way the owners names are written on the face of the certificates.
Requirements for signature guarantees and/or documentation of authority as
described above could also apply. For your protection, the Fund suggests that
certificates be sent by registered mail.
ADDITIONAL REDEMPTION INFORMATION. Checks for redemption proceeds will
normally be mailed within seven days. No redemption will be effected until all
checks in payment for the purchase of the shares to be redeemed have been
cleared, which may take up to 15 calendar days. Unless other instructions are
given in proper form, a check for the proceeds of a redemption will be sent to
the shareholders address of record.
The Fund may suspend the right of redemption during any period when (i)
trading on the New York Stock Exchange is restricted or that exchange is closed,
(ii) the SEC has by order permitted such suspension, or (iii) an emergency, as
defined by rules of the SEC, exists making disposal of portfolio investments or
determination of the Funds Net Asset Value not reasonably practicable.
If the Board determines that it would be detrimental to the best interest
of the remaining shareholders of the Fund to make payment wholly or partly in
cash, the Fund may redeem shares in whole or in part by a distribution in kind
of securities from the portfolio of the Fund, in lieu of cash, in conformity
with applicable rules of the SEC. The Fund will, however, redeem shares solely
in cash up to the lesser of $250,000 or 1% of net assets during any 90-day
period for any one shareholder. In the event that payment for redeemed shares is
made wholly or partly in portfolio securities, the shareholder may be subject to
additional risks and costs in converting the securities to cash. See 'Additional
Purchase and Redemption Information -- Redemption in Kind' in the SAI.
The proceeds of a redemption may be more or less than the amount invested
and, therefore, a redemption may result in a gain or loss for Federal income tax
purposes.
Due to the relatively high cost of maintaining smaller accounts, the Fund
reserves the right to redeem shares in any account (other than an IRA) if at any
time the account does not have a value of at least $2,000, unless the value of
the account fell below that amount solely as a result of market activity.
Shareholders will be notified that the value of the account is less than $2,000
and be allowed at least 30 days to make an additional investment to increase the
account balance to at least $2,000.
NET ASSET VALUE
The net asset value per share of the Fund is calculated separately for each
class of shares of the Fund at 4:00 p.m. (New York City Time), Monday through
Friday, each day that the New York Stock Exchange is open for trading, (a 'Fund
Business Day'), which excludes the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Net asset value per share is calculated by
dividing the aggregate value of the Fund's assets (which is principally the
value of the Fund's investment in the Portfolio) less all Fund liabilities by
the number of shares of the Fund outstanding.
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Securities held by the Portfolio that are listed on recognized stock
exchanges are valued at the last reported sale price, prior to the time when the
securities are valued, on the exchange on which the securities are principally
traded. Listed securities traded on recognized stock exchanges where last sale
prices are not available are valued at mid-market prices. Securities traded in
over-the-counter markets, or listed securities for which no trade is reported on
the valuation date, are valued at the most recent reported mid-market price.
Other securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith using methods
approved by the Schroder Core Board.
Trading by the Portfolio in securities on European and Far Eastern
exchanges and over-the-counter markets may not take place on every day that the
New York Stock Exchange is open for trading. Furthermore, trading takes place in
various foreign markets on days on which the Funds net asset value is not
calculated. As a result, the Fund's net asset value may be significantly
affected by such trading on days when an investor has no access to the Fund. If
events materially affecting the value of foreign securities occur between the
time when their price is determined and the time when net asset value is
calculated, such securities will be valued at fair value as determined in good
faith by using methods approved by the Schroder Core Board.
All assets and liabilities of the Portfolio denominated in foreign
currencies are valued in U.S. dollars based on the exchange rate last quoted by
a major bank prior to the time when the net asset value of the Fund is
calculated.
DIVIDENDS, DISTRIBUTIONS AND TAXES
THE FUND
The Fund intends to distribute substantially all of its net investment
income and its net realized capital gain at least annually and, therefore,
intends to continue not to be subject to Federal income tax.
The Fund intends to elect, pursuant to Section 853 of the Code if the Fund
is eligible to do so, to permit shareholders to take a credit (or a deduction)
for foreign income taxes paid by the Fund. An investor should include as gross
income in its Federal income tax returns both cash dividends received from the
Fund and also the amount that the Fund advises is its pro rata portion of
foreign income taxes paid with respect to, or withheld from, dividends and
interest paid to the Fund from the Fund's foreign investments. An investor would
then be entitled, subject to certain limitations, to take a foreign tax credit
against its Federal income tax liability for the amount of such foreign taxes or
else to deduct such foreign taxes as an itemized deduction from gross income.
The Fund intends to declare and pay as a dividend substantially all of its
net investment income annually and to distribute any net realized capital gain
at least annually. Dividend and capital gains distributions will be reinvested
automatically in additional shares of the Fund at net asset value unless the
shareholder elects in writing to receive distributions in cash.
Dividend and capital gain distributions are made on a per share basis.
After every distribution, the value of a share declines by the amount of the
distribution. Purchases made shortly before a
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distribution include in the purchase price the amount of the distribution, which
will be returned to the investor in the form of a taxable dividend or capital
gain distribution.
For Federal income tax purposes, distributions of the Funds net taxable
income will be taxable to shareholders as ordinary income whether they are
invested in additional shares or received in cash. Distributions of any net
capital gains designated by the Fund as capital gain dividends will be taxable
as long-term capital gain, regardless of how long a shareholder has held the
shares and whether they are invested in additional shares or received in cash.
Each year the Trust will notify shareholders of the tax status of dividends and
distributions.
Earnings of the Fund not distributed on a timely basis in accordance with a
calendar year distribution requirement are subject to a non-deductible 4% excise
tax. To prevent imposition of this tax, the Fund intends to comply with this
distribution requirement.
The Fund generally will be required to withhold at a rate of 31% ('backup
withholding') of all dividends, capital gain distributions and redemption
proceeds paid to shareholders if (i) the payee fails to furnish and to certify
the payees correct taxpayer identification number or social security number,
(ii) the IRS notifies the Fund that the payee has failed to report properly
certain interest and dividend income to the IRS and to respond to notices to
that effect or (iii) when required to do so, the payee fails to certify that he
is not subject to backup withholding.
Depending on the residence of the shareholder for tax purposes,
distributions may also be subject to state and local taxes, including
withholding taxes. Shareholders should consult their own tax advisors as to the
tax consequences of ownership of shares of the Fund in their particular
circumstances.
THE PORTFOLIO
The Portfolio is not required to pay Federal income taxes on its net
investment income and capital gain, as it is treated as a partnership for
Federal income tax purposes. All interest, dividends and gain and losses of the
Portfolio are deemed to have been passed through to the Fund in proportion to
its holdings of the Portfolio, regardless of whether such interest, dividends or
gain have been distributed by the Portfolio or losses have been realized by the
Portfolio. Investment income received by the Fund from sources within foreign
countries may be subject to foreign income or other taxes, with respect to which
shareholders may be entitled to claim a credit or deduction for those taxes. See
'The Fund' immediately above.
OTHER INFORMATION
CAPITALIZATION AND VOTING
The Trust was originally organized as a Maryland corporation on July 30,
1969 and on January 9, 1996 was reorganized as a Delaware business trust. The
Trust was formerly known as 'Schroder Capital Funds, Inc.' The Trust has
authority to issue an unlimited number of shares of beneficial interest. The
Board may, without shareholder approval, divide the authorized shares into an
unlimited
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SCHRODER INTERNATIONAL FUND
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number of separate portfolios or series (such as the Fund) and may divide
portfolios or series into classes of shares (such as Advisor Shares), and the
costs of doing so will be borne by the Trust. The Trust currently consists of
five separate portfolios, each of which has separate investment objectives and
policies, and 9 classes of shares. The Fund currently consists of two classes of
shares.
Shares are fully paid and non-assessable, and have no preferences as to
conversion, exchange, dividends, retirement or other features. Shares have no
pre-emptive rights. They have non-cumulative voting rights, which means that the
holders of more than 50% of the shares voting for the election of Trustees can
elect 100% of the Trustees if they choose to do so. A shareholder is entitled to
one vote for each full share held (and a fractional vote for each fractional
share held) standing in his name on the books of the Trust. On matters requiring
shareholder approval, shareholders of the Trust are entitled to vote only with
respect to matters that affect the interest of the Fund or class of shares they
hold, except as otherwise required by applicable law.
There will normally be no meetings of shareholders to elect Trustees unless
and until such time as less than a majority of the Trustees holding office have
been elected by shareholders. However, the holders of not less than a majority
of the outstanding shares of the Trust may remove any person serving as a
Trustee and the Board will call a special meeting of shareholders to consider
removal of one or more Trustees if requested in writing to do so by the holders
of not less than 10% of the outstanding shares of the Trust. Each share of the
Fund has equal voting rights, except that if a matter affects only the
shareholders of a particular class only shareholders of that class shall have a
right to vote.
From time to time, certain shareholders may own a large percentage of the
shares of the Fund. Accordingly, those shareholders may be able to greatly
affect (if not determine) the outcome of a shareholder vote.
REPORTS
The Trust sends to each shareholder of the Fund a semi-annual report.
PERFORMANCE INFORMATION
The Fund may, from time to time include quotations of its total return in
advertisements or reports to shareholders or prospective investors. Total return
is calculated separately for each class of the Fund. Quotations of average
annual total return for the Fund will be expressed in terms of the average
annual compounded rate of return of a hypothetical investment in a class of
shares over a period of 1, 5 and 10 years. Total return quotations assume that
all dividends and distributions are reinvested when paid.
Performance information for the Fund may be compared to various unmanaged
securities indices, groups of mutual funds tracked by mutual fund ratings
services, or other general economic indicators. Unmanaged indices may assume the
reinvestment of dividends but generally do not reflect deductions for
administrative and management costs and expenses.
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SCHRODER INTERNATIONAL FUND
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Performance information for the Fund represents only past performance and
does not necessarily indicate future results. Performance information should be
considered in light of the Funds investment objective and policies,
characteristics and quality of the Funds investments, and the market conditions
during the given time period, and should not be considered as a representation
of what may be achieved in the future. For a description of the methods used to
determine total return for the Fund, see the SAI.
CUSTODIAN AND TRANSFER AGENT
The Chase Manhattan Bank, N.A. is Custodian of the Funds and of the
Portfolios assets. Forum Financial Corp. serves as the Funds Transfer and
Dividend Disbursing Agent.
SHAREHOLDER INQUIRIES
Inquiries about the Fund, including the Funds past performance, should be
directed to:
Schroder International Fund
P.O. Box 446
Portland, Maine 04112
Information about specific shareholder accounts may be obtained from the
Transfer Agent by calling (800) 344-8332.
CERTAIN SERVICE ORGANIZATIONS
The Glass-Steagall Act and other applicable laws and regulations provide
that banks may not engage in the business of underwriting, selling or
distributing securities. There is currently no precedent prohibiting banks from
performing administrative and shareholder servicing functions as Service
Organizations. However, judicial or administrative decisions or interpretations
of such laws, as well as changes in either Federal or state regulations relating
to the permissible activities of banks and their subsidiaries or affiliates,
could prevent a bank Service Organization from continuing to perform all or part
of its servicing activities. If a bank were prohibited from so acting, its
shareholder clients would be permitted to remain shareholders of the Fund and
alternative means for continuing the servicing of such shareholders would be
sought. It is not expected that shareholders would suffer any adverse financial
consequences as a result of any of these occurrences.
FUND STRUCTURE
OTHER CLASSES OF SHARES. The Fund has two classes of shares, Advisor Shares
and Investor Shares. Investor Shares are offered by a separate prospectus to
corporations, institutions, and fiduciaries, including fiduciary, agency, and
custodial clients of bank trust departments, trust companies, and their
affiliates. Investor Shares incur less expenses than Advisor Shares.
Accordingly, the performance of the two classes will differ. Except for certain
differences, each share of each class represents an undivided, proportionate
interest in the Fund. Each share of the Fund is entitled to participate equally
in dividends and other distributions and the proceeds of any liquidation of the
Fund except that, due to the differing expenses borne by the two classes, the
amount of dividends and other distribution will
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SCHRODER INTERNATIONAL FUND
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differ between the classes. Information about Investor Shares is available from
the Fund by calling Forum Financial Corp. at (207) 879-8903.
THE PORTFOLIO. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio, which has substantially
the same investment objective and policies as the Fund. Accordingly, the
Portfolio directly acquires its own securities and the Fund acquires an indirect
interest in those securities. The Portfolio is a separate series of Schroder
Core, a business trust organized under the laws of the State of Delaware in
September 1995. Schroder Core is registered under the Act as an open-end
management investment company and currently has four separate portfolios. The
assets of the Portfolio, a diversified portfolio, belong only to, and the
liabilities of the Portfolio are borne solely by, the Portfolio and no other
portfolio of Schroder Core.
The investment objective and fundamental investment policies of the Fund
and the Portfolio can be changed only with shareholder approval. See 'Investment
Objective and Policies,' and 'Management of the Fund' for a complete description
of the Portfolios investment objective, policies, restrictions, management, and
expenses.
The Fund's investment in the Portfolio is in the form of a non-transferable
beneficial interest. As of the date of this Prospectus, the Fund is the only
institutional investor in the Portfolio. The Portfolio may permit other
investment companies or institutional investors to invest in it. All investors
in the Portfolio will invest on the same terms and conditions as the Fund and
will pay a proportionate share of the Portfolio's expenses.
The Portfolio normally will not hold meetings of investors except as
required by the Act. Each investor in the Portfolio will be entitled to vote in
proportion to its relative beneficial interest in the Portfolio. On most issues
subject to a vote of investors, as required by the Act and other applicable law,
the Fund will solicit proxies from shareholders of the Fund and will vote its
interest in the Portfolio in proportion to the votes cast by its shareholders.
If there are other investors in the Portfolio, there can be no assurance that
any issue that receives a majority of the votes cast by Fund shareholders will
receive a majority of votes cast by all investors in the Portfolio; indeed, if
other investors hold a majority interest in the Portfolio, they could hold have
voting control of the Portfolio.
The Portfolio will not sell its shares directly to members of the general
public. Another investor in the Portfolio, such as an investment company, that
might sell its shares to members of the general public would not be required to
sell its shares at the same public offering price as the Fund, and could have
different advisory and other fees and expenses than the Fund. Therefore, Fund
shareholders may have different returns than shareholders in another investment
company that invests exclusively in the Portfolio. There is currently no such
other investment company that offers its shares to members of the general
public. Information regarding any such funds in the future will be available
from Schroder Core by calling Forum Financial Corp. at (207) 879-8903.
Under the Federal securities laws, any person or entity that signs a
registration statement may be liable for a misstatement or omission of a
material fact in the registration statement. Schroder Core, its Trustees and
certain of its officers are required to sign the registration statement of the
Trust and the registration statements of certain other publicly-offered
investors in the Portfolio. In addition, under the Federal securities laws,
Schroder Core could be liable for a misstatements or omissions of a
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SCHRODER INTERNATIONAL FUND
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material fact in any proxy soliciting material of a publicly-offered investor in
Schroder Core, including the Fund. Under the Trust Instrument for the Schroder
Core, each investor in the Portfolio, including the Trust, indemnifies Schroder
Core and its Trustees and officers ('Schroder Core Indemnitees') against certain
claims. Indemnified claims are those brought against Schroder Core Indemnitees
but based on a misstatement or omission of a material fact in the investor's
registration statement or proxy materials, except to the extent such claim is
based on a misstatement or omission of a material fact relating to information
about Schroder Core in the investor's registration statement or proxy materials
that was supplied to the investor by Schroder Core. Similarly, Schroder Core
indemnifies each investor in the Portfolio, including the Fund, for any claims
brought against the investor with respect to the investor's registration
statement or proxy materials, to the extent the claim is based on a misstatement
or omission of a material fact relating to information about Schroder Core that
is supplied to the investor by Schroder Core. In addition, each registered
investment company investor in the Portfolio indemnifies each Schroder Core
Indemnitee against any claim based on a misstatement or omission of a material
fact relating to information about a series of the registered investment company
that did not invest in the Core. The purpose of these cross-indemnity provisions
is principally to limit the liability of Schroder Core to information that it
knows or should know and can control. With respect to other prospectuses and
other offering documents and proxy materials of investors in Schroder Core,
Schroder Core's liability is similarly limited to information about and supplied
by Schroder Core.
CERTAIN RISKS OF INVESTING IN THE PORTFOLIO. The Fund's investment in the
Portfolio may be affected by the actions of other large investors in the
Portfolio, if any. For example, if the Portfolio had a large investor other than
the Fund that redeemed its interest in the Portfolio, the Portfolio's remaining
investors (including the Fund) might, as a result, experience higher pro rata
operating expenses, thereby producing lower returns.
The Fund may withdraw its entire investment from the Portfolio at any time,
if the Board determines that it is in the best interests of the Fund and its
shareholders to do so. The Fund might withdraw, for example, if there were other
investors in the Portfolio with power to, and who did by a vote of the
shareholders of all investors (including the Fund), change the investment
objective or policies of the Portfolio in a manner not acceptable to the Board.
A withdrawal could result in a distribution in kind of portfolio securities (as
opposed to a cash distribution) by the Portfolio. That distribution could result
in a less diversified portfolio of investments for the Fund and could affect
adversely the liquidity of the Fund's portfolio. If the Fund decided to convert
those securities to cash, it usually would incur brokerage fees or other
transaction costs. If the Fund withdrew its investment from the Portfolio, the
Board would consider what action might be taken, including the management of the
Fund's assets in accordance with its investment objective and policies by the
SCMI, the Fund's investment adviser and subadviser, respectively, or the
investment of all of the Fund's investable assets in another pooled investment
entity having substantially the same investment objective as the Fund. The
inability of the Fund to find a suitable replacement investment, in the event
the Board decided not to permit SCMI to manage the Fund's assets, could have a
significant impact on shareholders of the Fund.
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SCHRODER INTERNATIONAL FUND
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Each investor in the Portfolio, including the Fund, will be liable for all
obligations of the Portfolio, but not any other portfolio of Schroder Core. The
risk to an Investor in the Portfolio of incurring financial loss on account of
such liability, however, would be limited to circumstances in which the
Portfolio was unable to meet its obligations. 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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INVESTMENT ADVISER
Schroder Capital Management International Inc.
787 Seventh Avenue
New York, New York 10019
ADMINISTRATOR & DISTRIBUTOR
Schroder Fund Advisors, Inc.
787 Seventh Avenue
New York, New York 10019
SUB-ADMINISTRATOR
Forum Financial Services, Inc.
Two Portland Square
Portland, Maine 04101
CUSTODIAN
The Chase Manhattan Bank, N.A.
Global Custody Division
Woolgate House, Coleman Street
London EC2P 2HD, United Kingdom
TRANSFER AND DIVIDEND DISBURSING AGENT
Forum Financial Corp.
P.O. Box 446
Portland, Maine 04112
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, L.L.P.
One Post Office Square
Boston, Massachusetts 02109
Table of Contents
<TABLE>
<S> <C>
PROSPECTUS SUMMARY............................. 2
The Fund....................................... 2
Investment Adviser............................. 2
Administrator and Distributor.................. 2
Purchases and Redemptions of Shares............ 2
Dividends and Distributions.................... 2
Risk Considerations............................ 3
Fee Table...................................... 3
FINANCIAL HIGHLIGHTS........................... 4
INVESTMENT OBJECTIVE AND POLICIES.............. 5
Investment Objective and the Portfolio......... 5
Investment Policies............................ 6
ADDITIONAL INVESTMENT POLICIES AND RISK
CONSIDERATIONS............................... 6
Investment Restrictions........................ 6
Fundamental Policies........................... 7
Investment Types............................... 7
Risk Considerations............................ 9
MANAGEMENT..................................... 11
Board of Trustees.............................. 11
Investment Adviser and Portfolio Manager....... 11
Administrative Services........................ 12
Distribution Plan & Shareholder Services
Plan......................................... 13
Expenses....................................... 14
Portfolio Transactions......................... 14
Code of Ethics................................. 15
INVESTMENT IN THE FUND......................... 15
Purchase of Shares............................. 15
Retirement Plans............................... 16
Individual Retirement Accounts................. 16
Redemption of Shares........................... 17
Net Asset Value................................ 18
DIVIDENDS, DISTRIBUTIONS AND TAXES............. 19
The Fund....................................... 19
The Portfolio.................................. 20
OTHER INFORMATION.............................. 20
Capitalization and Voting...................... 20
Reports........................................ 21
Performance Information........................ 21
Custodian and Transfer Agent................... 22
Shareholder Inquiries.......................... 22
Certain Service Organizations.................. 22
Fund Structure................................. 22
</TABLE>
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[Logo]
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Schroder
International
Fund
Advisor Shares
PROSPECTUS
May 16, 1996
Schroder Capital Funds (Delaware)
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