SCHRODER CAPITAL FUNDS /DELAWARE/
497, 1997-01-15
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SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
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<S>                     <C>                                <C>                      <C>
Two Portland Square, Portland, Maine 04101                 Fund Literature:         (800) 290-9826
Adviser Information:    (800) 730-2932                     Account Information:     (800) 344-8332
General Information:    (207) 879-8903                     Fax:                     (207) 879-6206

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 SCHRODER CAPITAL MANAGEMENT INTERNATIONAL INC. - PORTFOLIO INVESTMENT ADVISER
              SCHRODER FUND ADVISORS INC. - ADMINISTRATOR & DISTRIBUTOR

This Prospectus offers Advisor Shares of Schroder International Smaller
Companies Fund (the "Fund"), a separately managed, diversified portfolio of
Schroder Capital Funds (Delaware) (the "Trust"), an open-end, management,
investment company currently consisting of seven 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. There can be no assurance that the Fund will
achieve its investment objective.

THE FUND CURRENTLY SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY HOLDING, AS ITS
ONLY INVESTMENT SECURITIES, AN INTEREST IN SCHRODER INTERNATIONAL SMALLER
COMPANIES PORTFOLIO (THE "PORTFOLIO"), A SEPARATE PORTFOLIO OF SCHRODER CAPITAL
FUNDS ("CORE TRUST"), A REGISTERED, OPEN-END, MANAGEMENT INVESTMENT COMPANY WITH
THE SAME INVESTMENT OBJECTIVE AND SUBSTANTIALLY SIMILAR INVESTMENT POLICIES AS
THE FUND. ACCORDINGLY, THE FUND'S INVESTMENT EXPERIENCE WILL CORRESPOND DIRECTLY
WITH THE PORTFOLIO'S INVESTMENT EXPERIENCE. SEE "OTHER INFORMATION -- FUND
STRUCTURE." THE PORTFOLIO SEEKS TO ACHIEVE ITS INVESTMENT OBJECTIVE BY
INVESTING, UNDER NORMAL MARKET CONDITIONS, AT LEAST 65% OF ITS TOTAL ASSETS IN
EQUITY SECURITIES OF COMPANIES DOMICILED OUTSIDE THE U.S. THAT, AT THE TIME OF
PURCHASE, HAVE MARKET CAPITALIZATIONS OF $1.5 BILLION OR LESS. INVESTMENTS IN
FOREIGN SECURITIES INVOLVE SPECIAL RISKS IN ADDITION TO THE RISKS ASSOCIATED
WITH INVESTMENTS IN GENERAL AND INVESTMENTS IN SMALLER CAPITALIZATION COMPANIES
INVOLVE GREATER RISKS THAN THOSE ASSOCIATED WITH INVESTMENTS IN LARGER
CAPITALIZATION COMPANIES.

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 November 1, 1996, and as amended from time to time, containing
additional information about the Fund, the Trust and Core Trust 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.

ANY INVESTMENT IN SHARES OF ANY MUTUAL FUND IS SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
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 November 1, 1996.

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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 U.S. Currently, the Fund seeks to achieve its
investment objective by investing all of its investable assets in Schroder
International Smaller Companies Portfolio (the "Portfolio"), a series of Core
Trust, itself a registered, open-end, management investment company. The
Portfolio has the same investment objective and substantially similar investment
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 and Investor
Shares. Only Advisor Shares are offered through this Prospectus and are
sometimes referred to as the "Shares."

INVESTMENT ADVISER. The Portfolio's investment adviser is Schroder Capital
Management International Inc. ("Schroder Capital" or the "Adviser"), 787 Seventh
Avenue, New York, New York 10019. The investment advisory fee paid to Schroder
Capital by the Portfolio is borne indirectly by the Fund. See "Management of the
Fund -- Investment Adviser and Portfolio Manager." Prior to November 1, 1996,
the Fund had no operating history. The historical performance of the Adviser's
commingled investment fund for tax-exempt pension and profit sharing trusts
which has substantially similar policies, strategies and risks, managed by
Schroder Capital, the portfolio manager of the Portfolio, is presented in
Appendix A.

ADMINISTRATOR AND DISTRIBUTOR. Schroder Fund Advisors Inc. ("Schroder Advisors")
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 or through an investor's broker-dealer or other financial
institution. The minimum initial investment is $25,000, except that the minimum
for an Individual Retirement Account ("IRA") is $2,000. The minimum subsequent
investment is $2,000. See "Investment in the Fund -- Purchase of Shares" and "--
Redemption of Shares."

DIVIDENDS AND OTHER DISTRIBUTIONS. The Fund declares annually and pays as a
dividend substantially all of its net investment income and realized net
short-term capitalization, and at least annually distributes any net realized
long-term capital gains and gains from foreign currency transactions. Dividends
and capital gain distributions are reinvested automatically in additional
Advisor 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 other distributions in cash. See
"Dividends, Other Distributions and Taxes."


                                          2


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RISK CONSIDERATIONS. There can be no assurance that the Portfolio will achieve
its investment objective. 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 so that upon redemption, an investment in the Fund may be
worth more or less than its original value. The Portfolio's policy of investing
in the securities of foreign issuers entails certain 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. Investments in smaller capitalization companies involve
greater risks than those associated with investments in larger capitalization
companies. Accordingly, the Fund is not a complete investment program. See
"Additional Investment Policies and Risk Considerations." By investing solely in
the Portfolio, the Fund may achieve certain efficiencies and economies of scale.
Nonetheless, this investment could also have potential adverse effects on the
Fund. Investors in the Fund should consider these risks, as described under
"Other Information - Fund Structure."

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.

Annual Fund Operating Expenses (as a percentage of average net assets)
    Management Fees(1) . . . . . . . . . . . . . . . . . . . . . . . . .  1.00%
    12b-1 Fees(2). . . . . . . . . . . . . . . . . . . . . . . . . . . .  0.00%
    Other Expenses(3). . . . . . . . . . . . . . . . . . . . . . . . . .  0.75%
                                                                          -----
    Total Fund Operating Expenses (after reimbursements)(4). . . . . . .  1.75%

    (1)  Management Fees includes the investment advisory fee of 0.75% payable
         to Schroder Capital and administrative fees of 0.25% payable to
         Schroder Advisors. As long as the Fund's assets are invested in the
         Portfolio, the Fund pays no advisory fees directly. See "Management of
         the Fund". For its services with respect to the Portfolio, the
         Investment Advisory Agreement between Schroder Capital and the Trust
         provides that Schroder Capital will receive a monthly advisory fee at
         the annual rate of 0.85% of the Portfolio's average daily net assets.
         Schroder Capital has agreed, however, to limit its fee to an annual
         rate of 0.75% of the Portfolio's average daily net assets. Such
         partail fee waiver shall remain in effect until its elimination is
         approved by the Core Trust Board.

    (2)  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.

    (3)  The amount of Other Expenses is an estimate of expenses relating to
         Advisor Shares for the Fund's first fiscal year assuming that net
         assets of the Fund are at least $50 million.

    (4)  Total Fund Operating Expenses include the Fund's pro rata portion of
         all operating expenses of the Portfolio. The Fund estimates 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.


                                          3


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Schroder Capital and Schroder Advisors have voluntarily undertaken to waive a
portion of their fees or assume certain expenses of the Fund to the extent that
the Fund's total expenses relating to Advisor Shares exceed 1.75% of the Fund's
average net assets. This undertaking cannot be withdrawn except by a majority
vote of the Trust's Board of Trustees. See "Management -- Other Expenses."

EXAMPLE

Based on the expenses listed above, you 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:

                  1   year . . . . . . . . . . . . . . . .   $18
                  3  years . . . . . . . . . . . . . . . .   $55
                  5   year . . . . . . . . . . . . . . . .   $95
                 10  years . . . . . . . . . . . . . . . .  $206

The 5% annual return is not a prediction of the Fund's return, but is required
by the SEC for purposes of these calculations. 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.


INVESTMENT OBJECTIVE AND POLICIES

The Fund is designed for United States investors who seek capital appreciation
and international diversification of their investments by participating in
foreign securities markets. The Fund is not a complete investment program.
Investments in smaller capitalization companies involve greater risks than those
associated with investments in larger capitalization companies and investments
in the securities of foreign issuers generally involve risks in addition to
risks associated with investments in the securities of U.S. issuers.

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 can be no
assurance that the Fund will achieve its investment objective.

The Fund currently seeks to achieve its investment objective by investing all of
its investable assets in the Portfolio, which has the same investment objective
and substantially similar investment policies. Therefore, although the following
discusses the investment policies of the Portfolio (and the responsibilities of
Core Trust's Board of Trustees), it applies equally to the Fund (and the Trust's
Board). Additional information concerning the investment policies of the Fund
and the Portfolio is contained below and in the Statement of Additional
Information ("SAI").


                                          4

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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. that have market
capitalizations under $1.5 billion at the time of investment. Investments by the
Portfolio are selected by Schroder Capital on the basis of their potential for
capital appreciation without regard for current income. Schroder Capital will
consider the following factors in determining the potential for capital
appreciation: (i) issuers' potential for long-term growth; (ii) issuers'
financial conditions; (iii) valuation; (iv) issuers' sensitivity to cyclical
factors; and (v) whether issuers' management holds a significant equity position
in the issuer.

The Portfolio may purchase preferred stock and convertible securities, including
warrants and convertible preferred stock, and may purchase American Depository
Receipts, European Depository Receipts, Global Depository Receipts or other
similar securities of foreign issuers. Depository receipts typically are
receipts issued by a financial institution or trust company evidencing ownership
of underlying securities. 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 and time deposits in foreign banks denominated in any major foreign
currency. 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.

Countries in which the Portfolio may invest include, but are not limited to,
Japan, Germany, the United Kingdom, France, Italy, Belgium, Austria, Finland,
Ireland, New Zealand, Switzerland, the Netherlands, Hong Kong, Singapore,
Malaysia, Australia, Sweden, Norway, Denmark and Spain. The Portfolio has a
non-fundamental policy to invest in the securities of foreign issuers domiciled
in at least three foreign countries. In general, the Portfolio will invest only
in securities of companies and governments in countries that Schroder Capital,
in its judgment, considers both politically and economically stable. 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. See
"Additional Investment Policies and Risk Considerations."

In selecting securities denominated in foreign currencies, Schroder Capital will
consider, among other factors, the effect of movement in currency exchange rates
on the U.S. dollar value of such securities. An increase in the value of a
currency will increase the total return to the Portfolio of securities
denominated in such currency. Conversely, a decline in the value of the currency
will reduce the total return. The Portfolio may also 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. See "Additional
Investment Policies and Risk Considerations" below.


                                          5

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ADDITIONAL INVESTMENT POLICIES AND RISK CONSIDERATIONS

INVESTMENT RESTRICTIONS

The investment objective and all investment policies 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 ("shares"), as applicable. A majority of outstanding 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 of the Fund are not
fundamental and may be changed by the Trust Board without approval of the
shareholders of the Fund. Likewise, non-fundamental investment policies of the
Portfolio may be changed by the Core Trust Board without approval of the
Portfolio's interest holders. For more information concerning shareholder /
interestholder voting, see "Other Information -- Capitalization and Voting" and
"Other Information -- Fund Structure."

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 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 preferred stockholders,
if any, are paid. Preferred stock is a class of stock having a preference over
common stock as to dividends and, generally, as to the recovery of investment. A
preferred stockholder is a shareholder in a 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 withdrawals 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. The Portfolio
may not invest in warrants if, as a result, more than 5% of its net assets would
be so invested or if more than 2% of its net assets would be invested in
warrants


                                          6

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that are not listed on the New York Stock Exchange or the American Stock
Exchange. These limitations notwithstanding, the Portfolio shall not be
prohibited from receiving warrants obtained involuntarily through corporate
actions of foreign issuers in connection with stock of such issuers held by the
Portfolio.

REPURCHASE AGREEMENTS. The Portfolio may invest in repurchase agreements. A
repurchase agreement is a means of investing monies for a short period. In a
repurchase agreement, a seller - a U.S. bank or recognized broker-dealer - sells
securities to the Portfolio and agrees to repurchase the securities at the
Portfolio 's cost plus interest within a specified period (normally one day). In
these transactions, the values of the underlying securities purchased by the
Portfolio are monitored at all times by Schroder Capital to ensure that the
total value of the securities equals or exceeds the value of the repurchase
agreement, and the Portfolio 's custodian bank holds the securities until they
are repurchased. In the event of default by the seller under the repurchase
agreement, the Portfolio may have difficulties in exercising its rights to the
underlying securities and may incur costs and experience time delays in
disposing of them. To evaluate potential risks, Schroder Capital reviews the
creditworthiness of those banks and dealers with which the Portfolio enters into
repurchase agreements.

ILLIQUID AND RESTRICTED SECURITIES. As a non-fundamental policy, the Portfolio
will not purchase or otherwise acquire any security if, as a result, more than
15% of its net assets (taken at current value) would be invested in securities
that are illiquid by virtue of the absence of a readily available market or
because of legal or contractual restrictions on resale ("restricted
securities"). There may be undesirable delays in selling illiquid securities at
prices representing their fair value. This policy includes over-the-counter
options held by the Portfolio and the "in the money" portion of the assets used
to cover such options. The limitation on investing in restricted 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, as amended. If Schroder Capital determines that a "Rule
144A security" is liquid pursuant to guidelines adopted by the Board, the
security 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. See "Investment Policies - Illiquid and
Restricted Securities" in the SAI for further information.

LOANS OF PORTFOLIO SECURITIES. The Portfolio may lend portfolio securities
(other than in repurchase transactions) to brokers, dealers and other financial
institutions meeting specified credit conditions, if the loan is collateralized
in accordance with applicable regulatory requirements and if, after any loan,
the value of the securities loaned does not exceed 25% of the value of the
Portfolio 's total assets. By so doing, the Portfolio attempts to earn income
through the receipt of interest on the loan. In the event of the bankruptcy of
the other party to a securities loan, the Portfolio could experience delays in
recovering the securities it lent. To the extent that, in the meantime, the
value of the securities the Portfolio lent has increased, the Portfolio could
experience a loss.


                                          7

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The Portfolio may lend securities from its portfolio if liquid assets in an
amount at least equal to the current market value of the securities loaned
(including accrued interest thereon) plus the interest payable to the Portfolio
with respect to the loan is maintained as collateral by the Portfolio in a
segregated account. Any securities that the Portfolio may receive as collateral
will not become a part of its portfolio at the time of the loan, and, in the
event of a default by the borrower, the Portfolio will, if permitted by law,
dispose of such collateral except for such part thereof that is a security in
which the Portfolio is permitted to invest. During the time that the securities
are on loan, the borrower will pay the Portfolio any accrued income on those
securities, and the Portfolio may invest the cash collateral and earn income or
receive an agreed upon fee from a borrower that has delivered cash equivalent
collateral. Cash collateral received by the Portfolio will be invested in U.S.
Government securities and liquid high grade debt obligations. The value of
securities loaned will be marked to market daily. Portfolio securities purchased
with cash collateral are subject to possible depreciation. Loans of securities
by the Portfolio will be subject to termination at the Portfolio's or the
borrower's option. The Portfolio may pay reasonable negotiated fees in
connection with loaned securities, so long as such fees are set forth in a
written contract and approved by the Trust's Board of Trustees.

OPTIONS AND FUTURES TRANSACTIONS. While the Portfolio does not presently intend
to do so, it may write covered call options and purchase certain put and call
options, stock index futures, and options on stock index futures and
broadly-based stock indices, all of which are referred to as "Hedging
Instruments". In general, the Portfolio may use Hedging Instruments:  (1) to
attempt to protect against declines in the market value of the portfolio's
securities, and thus protect the Fund's net asset value per share against
downward market trends, or (2) to establish a position in the equities markets
as a temporary substitute for purchasing particular equity securities. The
Portfolio will not use Hedging Instruments for speculation. The Hedging
Instruments which the Portfolio is authorized to use have certain risks
associated with them. Principal among such risks are:  (a) the possible failure
of such instruments as hedging techniques in cases where the price movements of
the securities underlying the options or futures do not follow the price
movements of the portfolio securities subject to the hedge; (b) potentially
unlimited loss associated with futures transactions and the possible lack of a
liquid secondary market for closing out a futures position; and (c) possible
losses resulting from the inability of Schroder Capital to correctly predict the
direction of stock prices, interests rates and other economic factors. The
Hedging Instruments the Portfolio may use and the risks associated with them are
described in greater detail under "Options and Futures Transactions" in the SAI.

SHORT SALES AGAINST-THE-BOX. The Portfolio may not sell securities short except
in "short sales against-the-box". For Federal income tax purposes, short sales
against-the-box may be made to defer recognition of gain or loss on the sale of
securities "in the box" and no income can result and no gain can be realized
from securities sold short against-the-box until the short position is closed
out. Such short sales are subject to the limits described under "Fundamental
Restrictions" above. See "Short Sales Against-the-Box" in the SAI for further
details.


                                          8

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DEPOSITORY RECEIPTS. The Portfolio may invest in certain issuers exclusively or
primarily through the purchase of sponsored and unsponsored American Depository
Receipts ("ADRs") or other similar securities, such as European Depository
Receipts ("EDRs"), Global Depository Receipts ("GDRs") or International
Depository Receipts ("IDRs") or through investment in government-approved
investment companies or other vehicles. ADRs are receipts typically issued by
U.S. banks evidencing ownership of the underlying securities, into which they
are convertible. These securities may or may not be denominated in the same
currency as the underlying securities. Unsponsored ADRs may be created without
the participation of the foreign issuer. Holders of these ADRs generally bear
all the costs of the ADR facility, whereas foreign issuers typically bear
certain costs in a sponsored ADR. The bank or trust company depository of an
unsponsored ADR may be under no obligation to distribute shareholder
communications received from the foreign issuer or to pass through voting
rights. EDRs, GDRs and IDRs are similar to ADRs and are designed for use in
foreign markets.

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 or currency
futures or options 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 and may expose the
Portfolio to the risk that the counterparty is unable to perform. 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 obligations under such contracts would obligate it to deliver an
amount of foreign currency in excess of the value of its 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 Schroder Capital
fails to predict currency values correctly.


                                          9


<PAGE>

The Portfolio will be required to distribute substantially all of its investment
income in U.S. dollars. Because most of the Portfolio's income will be received
and realized in foreign currencies, a decline in the value of a particular
foreign currency against the U.S. dollar occurring after the Portfolio's income
has been earned 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.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. From time
to time, in the ordinary course of business, the Portfolio may purchase
securities on a when-issued or delayed delivery basis or may purchase or sell
securities on a forward commitment basis. When such transactions are negotiated,
the price is fixed at the time of the commitment, but delivery and payment can
take place a month or more after the date of the commitment. There is no overall
limit on the percentage of the Portfolio's assets that may be committed to the
purchase of securities on a when-issued, delayed delivery or forward commitment
basis. An increase in the percentage of the Portfolio's assets committed to the
purchase of securities on a when-issued, delayed delivery or forward commitment
basis may increase the volatility of the Portfolio's net asset value.

WHEN, AS AND IF ISSUED SECURITIES. The Portfolio may purchase securities on a
"when, as and if issued" basis under which the issuance of the security depends
upon the occurrence of a subsequent event, such as approval of a merger,
corporate reorganization, leveraged buyout or debt restructuring. If the
anticipated event does not occur and the securities are not issued, the
Portfolio will have lost an investment opportunity. There is no overall limit on
the percentage of the Portfolio's assets that may be committed to the purchase
of securities on a "when, as and if issued" basis. An increase in the percentage
of the Portfolio's assets committed to the purchase of securities on a "when, as
and if issued" basis may increase the volatility of its net asset value.

DEBT SECURITIES. The Portfolio may also invest in debt obligations of the United
States and its subdivisions, foreign governments, international organizations
and foreign corporations. The Portfolio may from time to time invest up to 5% of
its total assets in debt securities with 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."

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 that Schroder Capital, 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


                                          10

<PAGE>

imposition or tightening of exchange controls or other limitations on
repatriation of foreign capital and changes in foreign 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 earned by the Portfolio, and thus
available for distribution to the Fund's shareholders; (ii) commission rates
payable on foreign portfolio transactions are generally higher than in the
United States; (iii) accounting, auditing and financial reporting standards
differ from those in the United States, which means 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.

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 Portfolio's investments are denominated
against the U.S. dollar will result in a corresponding decline in the U.S.
dollar value of its assets.

SMALLER COMPANIES. Investments in smaller capitalization companies involve
greater risks than those associated with investments in larger capitalization
companies. Smaller capitalization companies generally experience higher growth
rates and higher failure rates than do larger capitalization companies. The
trading volume of securities of smaller capitalization companies is normally
less than that of larger capitalization companies and, consequently, generally
has a disproportionate effect on their market price, tending to make them rise
more in response to buying demand and fall more in response to selling pressure
than is the case with larger capitalization companies.

Investments in small, unseasoned issuers generally involve greater risk than is
customarily associated with larger, more seasoned companies. Such issuers often
have products and management personnel which have not been thoroughly tested by
time or the marketplace and their financial resources may not be as substantial
as those of more established companies. Their securities, which the Portfolio
may purchase when they are offered to the public for the first time, may have a
limited trading market, which may adversely affect their sale by the Portfolio
and can result in such securities being priced lower than otherwise might be the
case. If other institutional investors engage in trading this type of security,
the Portfolio may be forced to dispose of its holdings at prices lower than
might otherwise be obtained.


                                          11

<PAGE>

GEOGRAPHIC CONCENTRATION. The Portfolio may invest more than 25% of its total
assets in issuers located in any one country. See "Investment Policies" above.
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 Portfolio's assets may fluctuate more widely than the
value of shares of a comparable portfolio having a lesser degree of geographic
concentration.

PORTFOLIO TURNOVER. Although the Portfolio does not currently intend to do so,
it may in the future engage in short-term trading, but its portfolio turnover
rate is not expected to exceed 100%.

MANAGEMENT OF THE FUND

BOARDS OF TRUSTEES

The business and affairs of the Fund are managed under the direction of the
Trust Board. The business and affairs of the Portfolio are managed under the
direction of the Core Trust Board. The Trustees of both Trust and Core Trust
(collectively the "Trusts") are Peter E. Guernsey, 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 Trusts may be found in the SAI under the heading "Management --
Trustees and Officers." The Board and the Core Trust 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 investment assets in the Portfolio.
Schroder Capital serves as investment adviser to the Portfolio. Schroder Capital
manages the investment and reinvestment of the Portfolio's assets and
continuously reviews, supervises and administers the Portfolio's investments. In
this regard, it is the responsibility of Schroder Capital to make decisions
relating to the Portfolio's investments and to place purchase and sale orders
regarding investments with brokers or dealers selected by it in its discretion.
For its services provided to the Portfolio, Schroder Capital receives a monthly
advisory fee at the annual rate of 0.75% of the Portfolio's average daily net
assets. The Fund indirectly bears Schroder Capital's advisory fees through its
investment in the Portfolio. The Investment Advisory Agreement between Schroder
Capital and the Trust provides that Schroder Capital may receive a monthly
advisory fee at the annual rate of 0.85%  of the Portfolio's average daily net
assets. Schroder Capital has agreed, however, to limit its fee to an annual rate
of 0.75% of such assets. Such partial fee waiver shall remain in effect until
its elimination is approved by the Core Trust Board.

Schroder Capital is a wholly-owned U.S. subsidiary of Schroders Incorporated,
the wholly-owned U.S. 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


                                          12

<PAGE>

financial services companies (referred to as the "Schroder Group"), with
associated companies and branch and representative offices located in eighteen
countries world-wide. The Schroder Group specializes in providing investment
management services with assets under management, as of June 30, 1996, in excess
of $130 billion.

As of the date of this Prospectus, Schroder Capital has been investing in
international small companies as a specialist area for over 20 years and has 14
analysts dedicated to following small company stock. Schroders' analysts
maintain contact with over 1,500 small companies in a typical year and conduct
over 900 exclusive on-site company visits.

Laura Luckyn-Malone, a Trustee and President of the Trusts, with the assistance
of an investment committee, is primarily responsible for the day-to-day
management of the Portfolio's investments. Ms. Luckyn-Malone has been a Managing
Director of Schroder Capital since October 1995 and has been a Senior Vice
President and Director of Schroder Capital since 1990.

The Fund began pursuing its investment objective through investment in the
Portfolio upon commencement of operations. The Fund may withdraw its investment
from the Portfolio at any time if the Trust 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 Trust has retained Schroder Capital as its
investment adviser to manage the Fund's assets in the event the Fund withdraws
its investment. Schroder Capital does not receive an investment advisory fee
from 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, it will pay Schroder Capital a monthly advisory fee equal
on an annual basis to 0.75% of the Fund's average daily net assets. The
investment advisory contract between Schroder Capital and the Trust with respect
to the Fund is the same in all material respects as Core Trust's Investment
Advisory Contract with respect to the portfolios, except as to the parties, the
fees payable thereunder, the circumstances under which fees will be paid and the
jurisdiction whose laws govern the contract.

ADMINISTRATIVE SERVICES

On behalf of the Fund, the Trust has entered into an administrative services
agreement with Schroder Advisors, 787 Seventh Avenue, New York, New York 10019.
Schroder Advisors is a wholly-owned subsidiary of Schroder Capital. On behalf of
the Fund, the Trust has also entered into an administrative services agreement
with Forum, Two Portland Square, Portland, Maine 04101. Pursuant to these
agreements, Schroder Advisors and Forum provide certain management and
administrative services necessary for the Fund's operations, other than the
administrative services provided to the Fund by Schroder Capital. For these
services, the Fund pays Schroder Advisors a monthly fee at an annual rate of
0.10% of the Fund's average daily net assets and pays Forum a monthly fee of
0.075% of the Fund's average daily net assets.

Schroder Advisors and Forum provide similar services to the Portfolio, for which
the Portfolio pays Schroder Advisors at an annual rate of 0.15% and pays Forum a
monthly fee at the annual rate of 0.075% of the Portfolio's average daily net
assets.


                                          13

<PAGE>

DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN

Schroder Advisors acts as distributor of the Fund's shares. Schroder Advisors
was organized in 1989 and registered as a broker-dealer to serve as an
administrator and distributor of the Fund and other mutual funds. Under a
distribution plan, pursuant to Rule 12b-1 under the Act (the "Distribution
Plan") adopted by the Trust on behalf of the Fund, which is in the form of a
reimbursement plan, the Trust each month may potentially reimburse Schroder
Advisors, as distributor, for costs and expenses incurred in connection with the
distribution of Advisor Shares. Such reimbursement is subject to a limit on an
annual basis to 0.50% of the Fund's average daily net assets attributable to
Advisor Shares. The Fund will not make any payments under the Distribution Plan
with respect to Advisor Shares until the Board so authorizes.

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 sales personnel who are
responsible for marketing various shares of portfolios of the Trust may be
allocated to those portfolios, including the Advisor Shares 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 portfolios of the Trust for which they are incurred.

EXPENSES

Schroder Capital and Schroder Advisors have voluntarily undertaken to waive a
portion of their fees or assume certain expenses of the Fund. 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) chargeable to Advisor Shares of 1.75% of the average
daily net assets of the Fund attributable to those shares. This expense
limitation cannot be modified or withdrawn except by a majority vote of the
Trustees of the Trust who are not affiliated persons (as defined in the Act) of
the Trust. If expense reimbursements are required, they will be made on a
monthly basis. Forum agrees to waive, up to 0.025%, a pro rata portion of its
fees at the Fund level to the extent necessary to keep the total expense ratio
for the Schroder International Smaller Companies Fund - Advisor Shares,
including indirect expenses


                                          14

<PAGE>


borne by the Fund as a result of investing in the Core Portfolio, at or below
1.75% of average daily net assets in the Fund.

PORTFOLIO TRANSACTIONS

Schroder Capital places orders for the purchase and sale of the Portfolio's
investments with brokers and dealers selected by Schroder Capital in its
discretion and seeks "best execution" of such portfolio transactions. The
Portfolio may pay higher than the lowest available commission rates when
Schroder Capital 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, Schroder Capital may employ Schroder
Securities Limited and its affiliates (collectively, "Schroder Securities"),
affiliates of Schroder Capital, to effect transactions of the Portfolio on
certain foreign securities exchanges. Because of the affiliation between
Schroder Capital and Schroder Securities, the Portfolio's payment of commissions
to Schroder Securities is subject to procedures adopted by the Core Trust 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
such brokerage in recognition of research services.

Consistent with the Rules of the Association 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 Core Trust Board may
determine, Schroder Capital 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.

Although the Portfolio does not currently engage in directed brokerage
arrangements to pay expenses, it may do so in the future. These are 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. These arrangements 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.

CODE OF ETHICS

The Trust, Core Trust, Schroder Capital, 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.


                                          15

<PAGE>

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 Fund's transfer agent ("Transfer Agent"). See
"Other Information -- Shareholder Inquiries." 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 completed Account Application (at the address set forth below). The
minimum initial investment is $25,000, except that the minimum initial
investment for an IRA is $2,000. The minimum subsequent investment is $2,000.
Schroder Capital reserves the right to waive the minimum initial investment at
its discretion. 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 Smaller Companies Fund - Advisor
Shares", to:

         Schroder International Smaller Companies Fund
         P.O. Box 446
         Portland, Maine 04112

For initial purchases, the check must be accompanied by a completed Account
Application in proper form. Further documentation, such as 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 subscription request.

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 Smaller Companies Fund - Advisor Shares
         Account of: (shareholder name)
         Account Number: (shareholder account number)


                                          16

<PAGE>

The wire order must specify the name of the Fund, the Advisor Shares class, 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. (Eastern Time) on each day
that the New York Stock Exchange is open for trading (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. (Eastern Time) 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 Transfer Agent, as the shareholder's agent,
establishes an open account to which all Shares purchased are credited, together
with any dividends and other distributions that are reinvested 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
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.
Application 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 IRA including SEP-IRA. An
IRA naming The First National Bank of Boston as custodian is available from the
Trust or the Transfer Agent. The minimum initial investment for an IRA is
$2,000. Under certain circumstances contributions to an IRA may be tax
deductible. 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 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
individual's 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.


                                          17

<PAGE>

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. (Eastern Time)
on each day Fund Business Day. Redemption requests that are received prior to
4:00 p.m. (Eastern Time) will be processed at the net asset value determined as
of that day. Redemption requests that are received after 4:00 p.m. (Eastern
Time) on a Fund Business Day 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
generally 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 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 may be requested 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.

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.


                                          18


<PAGE>

ADDITIONAL REDEMPTION INFORMATION. Checks for redemption proceeds will normally
be mailed within seven days. No redemption proceeds will be mailed until checks
in payment for the purchase of the Shares to be redeemed have been cleared,
which may take up to 15 calendar days from the purchase date. Unless other
instructions are given in proper form, a check for the proceeds of a redemption
will be sent to the shareholder's 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 Fund's net asset value not reasonably practicable.

If the Trust 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 portfolio securities (from the investment portfolio of the Portfolio or 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. (Eastern Time), Monday through Friday,
each Fund Business Day, which excludes the following U.S. 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 less all Fund liabilities, if
any, by the number of Shares of the Fund outstanding.

Generally, securities held by the Portfolio that are listed on recognized stock
exchanges are valued at the last reported sale price, on the day when the
securities are valued (the "Valuation Day"), on the primary exchange on which
the securities are principally traded. Listed securities


                                          19


<PAGE>

traded on recognized stock exchanges for which there were no sales on the
Valuation Day are valued at the last sale price on the proceeding trading day or
at closing mid-market prices. Securities traded in over-the-counter markets 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 Core Trust Board.

Trading 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 Fund's net asset value is not calculated. 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 Core Trust 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, OTHER DISTRIBUTIONS AND TAXES

THE FUND

The Fund intends to comply with the provisions of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), applicable to regulated
investment companies ("RIC"). By complying therewith, the Fund will be relieved
of Federal income tax on that part of its investment company taxable income
(consisting generally of its share of the Portfolio's net investment income, net
short-term capital gain and gain from certain foreign currency transactions) and
net long-term capital gain that is distributed to its shareholders. The Fund
intends to distribute substantially all of its net investment income and its net
realized long-term capital gain at least annually and, therefore, intends not to
be subject to Federal income tax.

If the Fund is eligible to do so, it intends to elect to permit its shareholders
to take a credit (or a deduction) for the Fund's share of foreign income taxes
paid by the Portfolio. If the Fund makes such an election its shareholders would
include as gross income in their Federal income tax returns both distributions
received from the Fund and the amount that the Fund advises is their pro rata
portion of foreign income taxes paid with respect to or withheld from, dividends
and interest paid to the Portfolio from its foreign investments. Shareholders
then would be entitled, subject to certain limitations, to take a foreign tax
credit against their 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 annually and pay as a dividend substantially
all of its net investment income and net short-term capital gain and to
distribute annually any net capital gain (the excess of net long-term capital
gain over net short-term capital loss) and net realized gains from foreign
currency transactions. The Fund also may make an additional dividend or other
distribution if necessary to avoid a 4% excise tax on certain undistributed
income and gain. Dividends and capital gain distributions on Advisor Shares are
reinvested


                                          20


<PAGE>

automatically in additional Advisor Shares at net asset value unless the
shareholder has elected in the Account Application, or otherwise in writing, to
receive distributions in cash.

After every dividend and other distribution, the value of a Share declines by
the amount of the distribution. Purchases made shortly before a dividend or
other distribution include in the purchase price the amount of the distribution,
which will be returned to the investor in the form of a taxable distribution.

Dividends and other distributions paid by the Fund with respect to both classes
of its shares will be calculated in the same manner and at the same time. The
per share dividends on Advisor Shares are expected to be lower than the per
share dividends on Investor Shares as a result of any 12b-1 fees and other
compensation payable to Service Organizations for distribution and shareholder
servicing for the Advisor Shares.

Dividends from the Fund's taxable income generally will be taxable to its
shareholders as ordinary income whether they are invested in additional Shares
or received in cash. Distributions by the Fund of any net capital gain
designated by the Fund as such will be taxable to a shareholder as long-term
capital gain, regardless of how long the 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 other
distributions.

As of the date of this Prospectus, and subject to changes in the tax law, a
redemption of Shares may result in taxable gain or loss to the redeeming
shareholder, depending on whether the redemption proceeds are more or less than
the shareholder's adjusted basis for the redeemed Shares. If Shares are redeemed
at a loss after being held for six months or less, the loss will be treated as a
long-term, rather than a short-term, capital loss to the extent of any capital
gain distributions received on those Shares.

The Fund must withhold 31% from dividends, capital gain distributions and
redemption proceeds payable to any individuals and certain other noncorporate
shareholders who do not furnish the Fund with a correct taxpayer identification
number. Withholding at that rate also is required from dividends and capital
gain distributions payable to such shareholders who otherwise are subject to
backup withholding. Depending on the residence of a shareholder for tax
purposes, distributions from the Fund 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 in their particular
circumstances.

The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders; see the SAI
for further information.

THE PORTFOLIO

The Portfolio will not be required to pay Federal income tax on its net
investment income and capital foreign currency gains because it is classified as
a partnership for Federal income tax purposes. All interest, dividends and gains
and losses of the Portfolio will be deemed to have


                                          21


<PAGE>

been "passed through" to the Fund in proportion to its holdings in the
Portfolio, regardless of whether such interest, dividends or gains have been
distributed by the Portfolio.

The Portfolio intends to conduct its operations so as to enable the Fund to
qualify as a RIC. Investment income received by the Portfolio from sources
within foreign countries may be subject to foreign income or other taxes, which
will reduce the yield on its securities.

OTHER INFORMATION

CAPITALIZATION AND VOTING

The Trust was organized as a Maryland corporation ("Schroder Capital Funds,
Inc.") on July 30, 1969 and on January 9, 1996 was reorganized as a Delaware
business trust. The Trust has authority to issue an unlimited number of shares
of beneficial interest. The Trust Board may, without shareholder approval,
divide the authorized shares into an unlimited 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 seven separate portfolios, each of which
has separate investment objectives and policies. The Fund currently consists of
two classes of Shares.

Each share of the Fund is entitled to participate equally in dividends and other
distributions and the proceeds of any liquidation except that, due to the
differing expenses borne by the classes, dividends and liquidation proceeds for
each class will likely differ. Shares are fully paid and non-assessable, and
shareholders have no pre-emptive rights. Shareholders 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). On matters requiring shareholder approval,
shareholders of the Trust are entitled to vote only with respect to matters that
affect the interests, of the Fund or the 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 Trust 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.


                                          22

<PAGE>

REPORTS

The Trust sends to each shareholder of the Fund a semi-annual report and an
audited 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 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 or over the life of the Fund, if shorter. Total return
quotations assume that all dividends and other 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, other general economic indicators, or the prior performance of the
Adviser (SEE Appendix A). Unmanaged indices may assume the reinvestment of
dividends but generally do not reflect deductions for administrative and
management costs and expenses.

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 Fund's investment objective and policies, 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 Fund's and of the Portfolio's
assets. Forum Financial Corp. serves as the Fund's transfer and dividend
disbursing agent.

SHAREHOLDER INQUIRIES

Inquiries about the Fund, including its past performance, should be directed to:

         Schroder International Smaller Companies 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.


                                          23

<PAGE>

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

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. 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 distributions will differ between
the classes. Information about Investor Shares is available from the Fund by
calling Schroder Advisors at (800) 730-2932.

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 Core Trust, a
business trust organized under the laws of the State of Delaware in September
1995. Core Trust 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 Core
Trust.

The investment objective and fundamental investment policies of the Fund and the
Portfolio can be changed only with shareholder or interestholder approval,
respectively. See "Investment Objective and Policies," and "Management of the
Fund" for a complete description of the Portfolio's 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 November 1, 1996, the Fund is the only institutional
investor in the Portfolio. The Portfolio


                                          24

<PAGE>

may permit other investment companies or institutional investors to invest in
it. All other 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 its shareholders 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 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 Core Trust 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. Core Trust, its Trustees and
certain of its officers are required to sign the registration statement of the
Trust and may be required to sign the registration statements of certain other
future publicly offered investors in the Portfolio. In addition, under the
federal securities laws, Core Trust could be liable for misstatements or
omissions of a material fact in any proxy soliciting material of a publicly
offered investor in Core Trust, including the Fund. Under the Trust Instrument
for Core Trust, each investor in the Portfolio, including the Trust, will
indemnify Core Trust and its Trustees and officers ("Core Trust Indemnitees")
against certain claims.

Indemnified claims are those brought against Core Trust 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 Core
Trust in the investor's registration statement or proxy materials that was
supplied to the investor by Core Trust. Similarly, Core Trust will indemnify
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 Core Trust that is supplied to
the investor by Core Trust. In addition, each registered investment company
investor in the Portfolio will indemnify each Core Trust 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


                                          25

<PAGE>

provisions is principally to limit the liability of Core Trust 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 Core Trust, its
liability is similarly limited to information about and supplied by it.

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 Trust 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 Trust
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 Trust 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 Schroder Capital, 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 Schroder
Capital to manage the Fund's assets, could have a significant impact on
shareholders of the Fund.

Each Investor in the Portfolio, including the Fund, will be liable for all
obligations of the Portfolio, but not any other portfolio of Core Trust. 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, the occurrence of which Schroder
Capital considers to be quite remote. 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.


                                          26


<PAGE>

APPENDIX A
PRIOR PERFORMANCE OF THE ADVISER

The following table sets forth the Adviser's composite performance data relating
to the historical performance of a commingled investment fund for tax-exempt
pension and profit sharing trusts which is managed by the Adviser and is the
only account managed by the Adviser with investment objectives, policies,
strategies and risks substantially similar to those of the Portfolio. The
commingled fund commenced operations in May, 1989, and as of September 30, 1996,
had total net assets of approximately $980 million. THE DATA IS PROVIDED TO
ILLUSTRATE THE PAST PERFORMANCE OF THE ADVISER IN MANAGING SUBSTANTIALLY SIMILAR
ACCOUNTS AS MEASURED AGAINST SPECIFIED MARKET INDICES AND DOES NOT REPRESENT THE
PERFORMANCE OF THE PORTFOLIO. INVESTORS SHOULD NOT CONSIDER THIS PERFORMANCE
DATA AS AN INDICATION OF FUTURE PERFORMANCE OF THE PORTFOLIO, THE FUND OR  THE
ADVISER.

The Adviser's composite performance data shown below was calculated in
accordance with recommended standards of the Association for Investment
Management and Research ("AIMR"), respectively applied to all time periods. AIMR
is a non-profit membership and education organization with more than 60,000
members worldwide that, among other things, has formulated a set of performance
presentation standards for investment advisers. These AIMR performance
presentation standards are intended to (i) promote full and fair presentations
by investment advisers of their performance results, and (ii) ensure uniformity
in reporting so that performance results of investment advisers are directly
comparable. All returns presented were calculated on a total return basis and
include all dividends and interest, accrued income and realized and unrealized
gains and losses. All returns do not reflect the deduction of investment
advisory fees, custody fees, brokerage commissions and execution costs paid by
the account, without provision for federal or state taxes. Securities
transactions are accounted for on the trade date and accrual accounting is
utilized. Cash and equivalents are included in performance returns. The monthly
returns combine the accounts' returns (calculated on a time-weighted rate of
return that is revalued whenever cash flows exceed $500) by asset-weighting each
account's asset value as of the beginning of the month. Quarterly and yearly
returns are calculated by linking the monthly and quarterly returns,
respectively, in accordance with AIMR standards.

The commingled investment fund that is included in the Adviser's composite is
not subject to the same types of expenses to which the Portfolio is subject nor
to the diversification requirements, specific tax restrictions and investment
limitations imposed on the Portfolio by the Investment Company Act of 1940 or
the Internal Revenue Code. The performance results for the Adviser's composite
could have been adversely affected if the commingled investment fund had been
subject to such regulation.

The investment results of the commingled investment fund are audited annually.
Presenting the performance of such fund here is not intended to predict or
suggest the returns that might be experienced by the Portfolio, the Fund or an
individual investor investing in the Fund. Investors should also be aware that
the use of a methodology different from that used below to calculate performance
could result in different performance data.


                                          27


<PAGE>

ANNUAL RATES OF RETURN

<TABLE>
<CAPTION>

                                                                                       5/31/89 -
                              1996      1995    1994    1993    1992    1991    1990    12/31/89
                             --------  ------  ------  ------  ------  ------  ------  ---------

<S>                          <C>       <C>     <C>     <C>     <C>     <C>     <C>     <C>
Adviser's Composite          13.15%    6.2%    4.4%    30.0%   -9.3%   8.4%    -2.3%   36.8%

Salomon Brothers
Extended Market Index (1)    6.47%     4.8%    9.4%    30.7%   -15.3%  6.5%    -22.6%  24.9%

</TABLE>

(1) The Salomon Brothers Extended Market Index ("EMI") is the portion of the
Salomon Brothers Broad Market Index ("BMI") related to companies with small
market capitalization in approximately 22 countries. Only issues that non-local
investors may purchase are included. In establishing the EMI, Salomon Brothers
ranks all companies in the BMI (i.e., companies with available market capital
greater than U.S. $100 million) within each country by their total (unadjusted)
market capital. The EMI represents the smallest companies in each country based
on total market capital having in the aggregate 20% of the cumulative available
market capital in such country.


                                          28


<PAGE>

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
Cooper & Lybrand L.L.P.
One Post Office Square
Boston, Massachusetts 02109


                                          29


<PAGE>

Table of Contents

PROSPECTUS SUMMARY. . . . . . . . . . . . . . . .
The Fund. . . . . . . . . . . . . . . . . . . . .
Investment Adviser. . . . . . . . . . . . . . . .
Administrator and Distributor . . . . . . . . . .
Purchases and Redemptions of Shares . . . . . . .
Dividends and Distributions . . . . . . . . . . .
Risk Considerations . . . . . . . . . . . . . . .
Fee Table . . . . . . . . . . . . . . . . . . . .
FINANCIAL HIGHLIGHTS. . . . . . . . . . . . . . .
INVESTMENT OBJECTIVE
 AND POLICIES . . . . . . . . . . . . . . . . . .
Investment Objective and the Portfolio. . . . . .
Investment Policies . . . . . . . . . . . . . . .
ADDITIONAL INVESTMENT POLICIES
 AND RISK CONSIDERATIONS. . . . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . .
Investment Types. . . . . . . . . . . . . . . . .
Risk Considerations . . . . . . . . . . . . . . .
MANAGEMENT OF THE FUND. . . . . . . . . . . . . .
Board of Trustees . . . . . . . . . . . . . . . .
Investment Adviser and Portfolio Manager. . . . .
Administrative Services . . . . . . . . . . . . .
Distribution Plan & Shareholder Services Plan . .
Expenses. . . . . . . . . . . . . . . . . . . . .
Portfolio Transactions
Code of Ethics. . . . . . . . . . . . . . . . . .
INVESTMENT IN THE FUND. . . . . . . . . . . . . .
Purchase of Shares. . . . . . . . . . . . . . . .
Retirement Plans. . . . . . . . . . . . . . . . .
Individual Retirement Accounts. . . . . . . . . .
Redemption of Shares. . . . . . . . . . . . . . .
Net Asset Value . . . . . . . . . . . . . . . . .
DIVIDENDS, OTHER DISTRIBUTIONS
 AND TAXES. . . . . . . . . . . . . . . . . . . .
The Fund. . . . . . . . . . . . . . . . . . . . .
The Portfolio . . . . . . . . . . . . . . . . . .
OTHER INFORMATION . . . . . . . . . . . . . . . .
Capitalization and Voting . . . . . . . . . . . .
Reports . . . . . . . . . . . . . . . . . . . . .
Performance Information . . . . . . . . . . . . .
Custodian and Transfer Agent. . . . . . . . . . .
Shareholder Inquires. . . . . . . . . . . . . . .
Certain Service Organization. . . . . . . . . . .
Fund Structure. . . . . . . . . . . . . . . . . .
APPENDIX A -
Prior Performance of the Adviser. . . . . . . . .



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