<PAGE>
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SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
December 22, 1999
Dear Shareholder:
We are pleased to present the annual report to shareholders for Schroder
Capital Funds for the fiscal year ending October 31, 1999.
Over the twelve-month period ended October 31, 1999, markets outside the
United States saw a strong recovery in economic growth and the United States saw
sustained economic performance. The actions by the U.S. Federal Reserve and its
global counterparts in lowering interest rates late in 1998 and the
acknowledgement of their role in addressing international pressures set a tone
which spurred recovery in global growth. This was particularly true in the
world's emerging markets and the developed countries of Asia where lower
interest rates jump started economic recovery.
Japan's emergence from its longstanding financial troubles was a
particularly important development in 1999. Financial stimulus packages
implemented in Japan coupled with the first serious corporate restructurings by
some leading companies (such as SONY, NISSAN and NEC) began to pull Japan out of
a 10-year economic decline. Markets around the world reacted positively to these
signs of recovery.
The U.S. stock market, as measured by the S&P 500 Index, continued to post
strong returns. For the fiscal year, large cap stocks outperformed small cap
stocks, and across the board, growth stocks strongly outpaced value stocks.
Within these broad market figures, the disparities between the technology
segment, a group that more than doubled in value during the year, and many other
segments of the market were quite stark.
Developed markets outside the U.S. also generated solid returns for the
fiscal year. However, leadership shifted from the European equities that drove
much of the performance of the MSCI EAFE Index early in the fiscal year to
developed Asian and global emerging markets in the second half. Small companies
generally outperformed large companies in Asia, particularly Japan, as the
beginning of economic recovery sparked interest in companies with depressed
valuations and spurred new issue activity. The new issue market in Europe,
dominated by new technology companies, also sparked a turn in sentiment towards
smaller companies.
Emerging markets outperformed developed markets but showed greater signs of
volatility. Several countries in Latin America and Asia took some long-awaited
fiscal policy steps that caused many currencies to stabilize and interest rates
to drop.
As in the United States, but to a lesser degree, market sentiment in favor
of new issues and technology stocks began to put pressure on valuations of older
companies and stocks in most other sectors. Nevertheless, Schroders continues to
believe that its strong fundamental research around the globe is the key to
successful investment management and that its investment process can add value
by identifying the companies that are well positioned to maintain their earnings
prospects.
We thank you for your support of Schroder Capital Funds. We welcome your
comments and look forward to servicing your investment needs in the future.
Sincerely,
/s/ Alexandra Poe
Alexandra Poe
PRESIDENT
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<PAGE>
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SCHRODER INTERNATIONAL FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF OCTOBER 31, 1999)
PERFORMANCE
The Schroder International Fund's Investor Shares had a total return of
21.82% for the fiscal year ended October 31, 1999. The MSCI EAFE Index returned
23.27% over the same period.
While strong stock selection contributed to performance during the fiscal
year, country allocation detracted from overall Fund performance relative to the
Index. For instance, the Fund's underweight position in Japan hurt performance
since Japan experienced a strong recovery over the period.
MARKET BACKGROUND
Overall, it has been a good year for international equities. In particular,
the decline of interest rates overseas and economic recovery in Asia and
emerging markets sparked a new bull market in the asset class.
Asian emerging markets led this bull market. Among the strongest performers
were South Korea and Malaysia, where restructuring continued to gather momentum.
Singapore and Japan also delivered strong gains over the period, as fiscal
stimulus and corporate restructuring triggered strong economic and financial
recovery. Latin America started the fiscal year on a slow note, but rose sharply
after the Brazilian devaluation in January.
European markets, on the other hand, were a mixed bag. Relatively high
interest rates and unemployment and unstable currencies all contributed to
weakness in the region during the fiscal year. The weakest performers were
smaller European markets, such as Switzerland, Spain and Italy, as these markets
were populated with stocks in underperforming sectors, namely the financial,
utility or pharmaceutical sectors. Conversely, France delivered positive
returns, benefiting from a series of mergers, encompassing oil, banking and
retailing stocks. The Scandinavian markets of Sweden and Finland also performed
well due to the surge in technology stocks.
PORTFOLIO REVIEW
Stock selection for the Fund was particularly positive over the fiscal year.
Within Europe, the Fund's positions in the semi-conductor and the mobile
telephone industries led the way in strong performance. The Fund also benefited
from holding several stocks involved in mergers, most notably the French oil
producer, ELF AQUITAINE and Italian telecommunications company, TELECOM ITALIA.
In Japan, we were able to capture the burgeoning corporate restructuring trend
for the Fund by holding SONY, its leading proponent. The Fund's main holdings in
the soaring Korean market (SAMSUNG ELECTRONICS) and in the Singaporean market
(DBS BANK) were also key contributors to performance during the period.
In terms of country allocation, the main changes to the Fund's portfolio
during the fiscal year were in response to the switch in regional leadership
from Europe into Asia and the emerging markets. At the beginning of the fiscal
year, the Fund's low exposure to emerging markets hurt performance. However,
during the course of the year, we added to the Fund's emerging markets position,
allowing it to benefit from the strong economic activity in these regions.
Initially, we focused on investing in Asian emerging markets, where the economic
activity continues to be surprisingly vigorous. Towards the end of the period,
we initiated positions in the Latin American markets of Mexico, Argentina and
Brazil. Over the fiscal year, we also began adding to developed markets in Asia,
specifically boosting the Fund's position in Japan where economic momentum was
strong.
OUTLOOK
We are optimistic in our outlook for international equities, especially
given the recovery in economic activity outside the U.S. The Fund remains
committed to the developed European markets and Asia, where growth is solid and
companies continue to focus on raising productivity and profits. Within the
emerging markets, we are
- --------------------------------------------------------------------------------
2
<PAGE>
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SCHRODER INTERNATIONAL FUND
- --------------------------------------------------------------------------------
emphasizing companies located in Taiwan, the Philippines, Korea and Thailand,
which we believe should benefit from ongoing restructuring and a cyclical upturn
in the low interest rate environment. We also favor commodity-producing
economies, specifically Canada, New Zealand and Australia, as we believe these
should benefit from the recovery in global growth. Although we continue to build
the Fund's position in Japan, we remain cautious. Japanese equity prospects have
been enhanced by substantial fiscal stimulus, but we believe that the YEN'S
strength remains a principal threat to a self-sustaining recovery.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- --------------------------------------------------------------------------------
3
<PAGE>
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SCHRODER INTERNATIONAL FUND
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN SCHRODER INTERNATIONAL FUND INVESTOR SHARES
VS. MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX
<S> <C> <C>
INTERNATIONAL FUND MSCI EAFE INDEX
Oct-89 $10,000.00 $10,000.00
Nov-89 $10,340.00 $10,504.30
Dec-89 $10,782.55 $10,893.44
Jan-90 $10,731.87 $10,489.24
Feb-90 $10,224.26 $9,759.00
Mar-90 $9,970.69 $8,743.04
Apr-90 $9,936.79 $8,675.82
May-90 $10,840.05 $9,667.24
Jun-90 $11,128.39 $9,583.77
Jul-90 $11,427.75 $9,720.16
Aug-90 $10,287.26 $8,777.46
Sep-90 $8,926.25 $7,555.95
Oct-90 $9,992.94 $8,735.08
Nov-90 $9,535.27 $8,221.87
Dec-90 $9,552.43 $8,358.14
Jan-91 $9,815.12 $8,629.92
Feb-91 $10,576.77 $9,557.44
Mar-91 $9,945.34 $8,986.34
Apr-91 $10,037.83 $9,076.77
May-91 $9,994.67 $9,173.14
Jun-91 $9,473.95 $8,501.89
Jul-91 $9,911.64 $8,920.76
Aug-91 $9,658.90 $8,741.21
Sep-91 $10,110.93 $9,235.66
Oct-91 $10,037.12 $9,368.29
Nov-91 $9,554.34 $8,932.78
Dec-91 $9,992.88 $9,395.18
Jan-92 $10,017.86 $9,197.55
Feb-92 $9,891.64 $8,870.46
Mar-92 $9,577.08 $8,287.04
Apr-92 $9,885.47 $8,327.67
May-92 $10,440.04 $8,886.90
Jun-92 $10,182.17 $8,467.49
Jul-92 $9,885.87 $8,252.75
Aug-92 $10,011.42 $8,771.94
Sep-92 $9,810.19 $8,601.37
Oct-92 $9,545.32 $8,153.64
Nov-92 $9,482.32 $8,232.86
Dec-92 $9,592.31 $8,277.55
Jan-93 $9,573.13 $8,278.82
Feb-93 $9,782.78 $8,530.87
Mar-93 $10,328.66 $9,275.98
Apr-93 $11,026.88 $10,157.91
May-93 $11,128.32 $10,374.20
Jun-93 $11,096.05 $10,213.98
Jul-93 $11,483.30 $10,573.19
Aug-93 $12,226.27 $11,145.22
Sep-93 $12,353.43 $10,895.44
Oct-93 $12,937.74 $11,232.85
Nov-93 $12,461.63 $10,252.40
Dec-93 $13,978.22 $10,994.36
Jan-94 $14,776.37 $11,924.93
Feb-94 $14,449.81 $11,893.05
Mar-94 $13,799.57 $11,381.53
Apr-94 $14,194.24 $11,866.18
May-94 $14,207.01 $11,799.45
Jun-94 $14,047.90 $11,967.13
Jul-94 $14,276.88 $12,083.73
Aug-94 $14,863.66 $12,371.12
Sep-94 $14,512.87 $11,982.61
Oct-94 $14,761.04 $12,382.64
Nov-94 $14,095.32 $11,789.38
Dec-94 $13,939.68 $11,864.68
Jan-95 $13,129.40 $11,410.24
Feb-95 $13,079.21 $11,378.60
Mar-95 $13,796.27 $12,088.68
Apr-95 $14,212.16 $12,545.00
May-95 $14,463.14 $12,397.26
Jun-95 $14,520.50 $12,181.39
Jul-95 $15,273.42 $12,941.48
Aug-95 $14,814.50 $12,450.37
Sep-95 $15,287.76 $12,694.95
Oct-95 $14,993.76 $12,355.55
Nov-95 $15,094.15 $12,701.38
Dec-95 $15,552.18 $13,214.77
Jan-96 $15,948.00 $13,271.33
Feb-96 $16,121.17 $13,317.31
Mar-96 $16,360.30 $13,601.76
Apr-96 $16,830.33 $13,999.29
May-96 $16,830.33 $13,743.27
Jun-96 $16,978.76 $13,822.46
Jul-96 $16,418.03 $13,420.00
Aug-96 $16,541.72 $13,451.17
Sep-96 $16,871.56 $13,810.64
Oct-96 $16,500.49 $13,671.07
Nov-96 $17,127.19 $14,216.65
Dec-96 $17,096.00 $14,035.60
Jan-97 $16,920.86 $13,547.29
Feb-97 $17,368.45 $13,770.49
Mar-97 $17,465.75 $13,821.63
Apr-97 $17,553.32 $13,897.12
May-97 $18,730.68 $14,802.75
Jun-97 $19,635.59 $15,621.16
Jul-97 $19,956.69 $15,876.19
Aug-97 $18,185.79 $14,690.74
Sep-97 $19,178.27 $15,514.06
Oct-97 $17,874.42 $14,321.61
Nov-97 $17,543.59 $14,176.36
Dec-97 $17,667.06 $14,300.76
Jan-98 $18,361.59 $14,955.11
Feb-98 $19,446.79 $15,914.57
Mar-98 $20,238.98 $16,404.96
Apr-98 $20,640.51 $16,535.25
May-98 $20,781.58 $16,456.00
Jun-98 $20,629.66 $16,581.42
Jul-98 $20,705.62 $16,750.47
Aug-98 $18,285.62 $14,675.89
Sep-98 $17,743.02 $14,226.42
Oct-98 $18,556.92 $15,710.21
Nov-98 $19,435.93 $16,516.57
Dec-98 $20,055.56 $17,168.88
Jan-99 $20,480.58 $17,119.50
Feb-99 $20,201.66 $16,712.39
Mar-99 $20,719.65 $17,410.94
Apr-99 $21,370.46 $18,117.62
May-99 $20,666.53 $17,185.91
Jun-99 $21,436.87 $17,857.05
Jul-99 $22,034.56 $18,388.29
Aug-99 $21,875.17 $18,456.57
Sep-99 $21,609.54 $18,643.57
Oct-99 $22,605.74 $19,343.19
</TABLE>
The MSCI EAFE Index is a market weighted index composed of companies
representative of the market structure of certain developed market countries in
Europe, Australia, Asia and the Far East, and reflects dividends net of
non-recoverable witholding tax.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
ONE YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED
OCTOBER 31, 1999 OCTOBER 31, 1999 OCTOBER 31, 1999
---------------- ---------------- ----------------
<S> <C> <C> <C>
Schroder International Fund--Investor
Shares.................................. 21.82% 8.90%(a) 8.50%(a)
</TABLE>
(a) Average annual total returns
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
4
<PAGE>
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SCHRODER INTERNATIONAL FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
COUNTRY WEIGHTINGS
<TABLE>
<CAPTION>
COUNTRY % OF NET ASSETS
<S> <C>
- ------------------------------------------------
Japan 20.5%
United Kingdom 15.9
France 13.9
Germany 7.3
Netherlands 5.5
Switzerland 4.7
Sweden 3.1
Italy 2.5
Spain 1.8
Hong Kong 1.6
Canada 1.5
Ireland 1.5
Mexico 1.5
Australia 1.4
Singapore 1.3
Taiwan 1.1
Philippines 1.1
Finland 1.0
New Zealand 0.9
Korea 0.8
Thailand 0.7
Denmark 0.7
Portugal 0.6
Argentina 0.4
Brazil 0.4
Indonesia 0.1
Cash Equivalents and Other
Net Assets 8.2
------
100.0%
======
</TABLE>
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- ------------------------------------------------
Total Fina 3.1%
Ericsson Telephone 2.7
Novartis AG 2.1
Vivendi 2.1
ING Groep NV 1.9
Mannesmann AG 1.8
UBS AG 1.8
ST Microelectronics 1.6
Royal Dutch Petroleum 1.6
Takeda Chemical Industries 1.6
-----
20.3%
=====
</TABLE>
- --------------------------------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF OCTOBER 31, 1999)
PERFORMANCE
The Schroder Emerging Markets Fund's Investor Shares had a total return of
66.05% for the twelve-month period ended October 31, 1999. The MSCI Emerging
Markets Free Index returned 43.74% over the same period.(1)
Stock selection contributed positively to performance during the twelve
months, particularly due to the Fund's exposure to strong electronic and
brokerage stocks in Korea. Country selection also significantly added to
performance, mainly due to the Fund's exposure to the strong Korean market.
MARKET BACKGROUND
Asia was the strongest performing emerging markets region over the
twelve-month period. The rally was initially driven by the reduction in interest
rates across the region, which was helped by the strength of the YEN and
reductions in developed market interest rates. Ongoing restructuring and
economic recovery increasingly supported the markets through the period. South
Korea experienced significant growth as its economy benefited from higher export
growth and a successful start to the restructuring of various conglomerates.
Latin America also rose strongly during the twelve months ended October 31.
This rise largely occurred in early 1999 as markets recovered from the
devaluation of the Brazilian currency, the REAL, in January. The Mexican market
has been one of the strongest in the region. While reduced capital flows and
lower commodity prices have led to weaker currencies and recessions in most of
Latin America, Mexico, although facing the same challenges, outperformed the
rest of the region during the fiscal period. Mexico benefited from the strength
in oil prices, its close links to the U.S. and its comparatively sound economic
structures.
The emerging markets in central Europe have mostly underperformed the MSCI
Emerging Markets Free Index. Hungary and Poland experienced moderate rises only,
as their currencies suffered from concerns over deficit levels and corporate
earnings were affected by the slowdown in domestic and European growth. Russia
was the strongest performing market in the region during the twelve-month
period. Russia recovered sharply from the devaluation of its currency in
August 1998, mainly due to the recovery in oil prices. However, politics remain
unpredictable and the Russian market has recently reacted poorly to President
Yeltsin's fifth change of Prime Minister in 18 months and allegations of money
laundering.
In the context of other markets, the performance of Israel and South Africa
was mediocre. The expected 'peace dividend' has yet to emerge in Israel and the
wrangling between the Central Bank and the Government led to currency weakness
and a reversal in the expected direction of interest rates. In South Africa, the
recovery in commodity prices and more stable capital flows stabilized external
accounts and the RAND.
PORTFOLIO REVIEW
The Fund started the fiscal year underweighted in Latin America as a tight
credit environment was inhibiting economic growth. We remained underweight in
this region until after the Brazilian devaluation, and then increased the Fund's
exposure as an improvement in Brazil's economic outlook was expected. In Europe,
the Middle East and Africa, we steadily reduced the Fund's exposure as the
economic outlook deteriorated and further interest rate cuts looked unlikely. We
increased the Fund's exposure to Asia during the period, as a sharp decline in
local interest rates and signs of a turnaround in economic growth in the region
reinvigorated investors. Within
- ------------------------
(1) Effective October 31, 1999, the Fund changed its fiscal year end from
May 31 to October 31. Information for the Fund's fiscal period of June 1 to
October 31, 1999, follows this discussion.
- --------------------------------------------------------------------------------
6
<PAGE>
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SCHRODER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
Asia, the Fund's largest position was Korea, where the market rose dramatically
as the pace of restructuring accelerated. We reduced the Fund's cash position
over the twelve months due to our improved outlook for emerging markets and as
risks within the asset class diminished.
OUTLOOK
Looking ahead, uncertainty about Western interest rates and the Year 2000
are of concern, as are a number of local issues, for example reform in Brazil
and social instability in Indonesia. But with more balanced global growth,
ongoing economic recovery and restructuring in Asia and the potential for lower
interest rates in Latin America, our outlook for emerging markets remains
positive.
Against this background, our strategy is cautious. The Fund remains
committed to Asia, due to ongoing economic recovery in the region. Within Latin
America we continue to have high hopes for Brazil, as we believe there is
political will to reform and valuations are attractive. Our view for Eastern
Europe is also positive because we expect the region to benefit from the nascent
economic recovery in Germany. Elsewhere, the Fund remains broadly neutral, in
part, reflecting our optimistic outlook for most emerging markets.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN SCHRODER EMERGING
MARKETS FUND - INVESTOR SHARES VS. MORGAN STANLEY CAPITAL
INTERNATIONAL EMERGING MARKETS FREE INDEX
<S> <C> <C>
EMERGING MARKETS FUND MSCI EMF INDEX
Oct-97 $10,000.00 $10,000.00
$10,010.00 $10,000.00
$9,670.00 $9,635.00
$10,050.00 $9,867.20
$9,370.00 $9,093.61
$10,140.00 $10,042.99
$10,440.00 $10,478.85
Apr-98 $10,470.00 $10,364.63
$9,040.00 $8,944.68
$8,220.00 $8,006.38
$8,630.00 $8,260.18
$6,400.00 $5,872.17
$6,740.00 $6,244.46
Oct-98 $7,360.00 $6,902.00
$7,930.00 $7,476.25
$8,388.99 $7,367.84
$8,358.89 $7,249.22
$8,318.75 $7,319.54
$9,442.63 $8,284.25
Apr-99 $10,857.52 $9,309.02
$10,656.83 $9,255.02
$12,232.27 $10,305.47
$12,252.34 $10,025.16
$12,402.81 $10,116.39
$12,031.53 $9,774.46
Oct-99 $12,232.45 $9,982.58
</TABLE>
The MSCI EMF Index is an unmanaged market capitalization index of companies
representative of the market structure of 25 emerging countries in Europe, Latin
America and the Pacific Basin. The Index reflects actual buyable opportunities
for the non-domestic investor by taking into account local market restrictions
on share ownership by foreigners.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
PERIOD FROM
JUNE 1, 1999 TO ONE YEAR ENDED INCEPTION TO
OCTOBER 31, 1999(A) OCTOBER 31, 1999 OCTOBER 31, 1999(B)
------------------- ---------------- -------------------
<S> <C> <C> <C>
Schroder Emerging Markets
Fund--Investor Shares.............. 14.69% 66.05% 10.53%
</TABLE>
(a) Effective October 31, 1999 the Fund changed its fiscal year end from May 31
to October 31. Accordingly, performance has been shown for the shortened
fiscal period ended October 31, 1999.
(b) Average annual total return from commencement of Fund operations
(October 30, 1997)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
COUNTRY WEIGHTINGS
<TABLE>
<CAPTION>
COUNTRY % OF NET ASSETS
<S> <C>
- ------------------------------------------------
Korea 12.8%
Mexico 10.0
Taiwan 9.9
Brazil 8.2
India 7.7
South Africa 6.8
Greece 3.9
Israel 3.1
Thailand 3.1
Turkey 2.7
Philippines 1.9
Hungary 1.7
Indonesia 1.6
Chile 1.5
Argentina 1.5
Russia 1.4
China 1.3
Poland 1.3
Czech Republic 1.2
Zimbabwe 0.7
Cash Equivalents and Other
Net Assets 17.7
------
100.0%
======
</TABLE>
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- ------------------------------------------------
Telefonos de Mexico SA 4.1%
Taiwan Semiconductor 3.0
Hanwha Chemical 2.6
Hyundai Electronics
Industries 2.4
Shinhan Bank 2.3
Samsung Electronic 2.1
Standard Bank 2.1
Formosa Plastics 2.0
Alpha Credit Bank 1.8
Mahanagar Telephone 1.5
-----
23.9%
=====
</TABLE>
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF OCTOBER 31, 1999)
PERFORMANCE
The Schroder International Smaller Companies Fund's Investor Shares had a
total return of 65.27% for the fiscal year ended October 31, 1999. The Salomon
Smith Barney EMI EPAC Index rose 18.04% over the same period.
Our strategy has remained focused on stock selection, with all of the Fund's
outperformance derived from stock picking. Country allocation delivered a small
negative return.
MARKET BACKGROUND
Overall, it has been an excellent fiscal year for international smaller
companies. Apart from two months of underperformance at the end of 1998, smaller
companies have outperformed large companies in many international markets.
A number of markets in the Pacific Rim were buoyed by evidence of economic
recovery in the region, news of corporate restructuring and encouraging
regulatory reforms. Within this favorable domestically-focused environment,
smaller companies delivered attractive returns throughout 1999. Singapore and
Japan provided the highest returns.
Economic growth in Japan surprised positively during 1999. Interest in
smaller companies in particular was sparked by a number of new issues, as well
as depressed valuations generally. The creation of a number of domestic small
cap investment trusts also re-focused investor sentiment towards the lower end
of the market. Gains were widespread but a narrow range of technology-related
growth stocks produced spectacular gains, driving valuations to what appeared to
be inflated levels.
Towards the end of 1998, the underperformance of small companies in the UK
began to reverse, stimulated by an increase in corporate merger and acquisition
activity. At the start of 1999, many smaller companies were selling on
valuations that were half those of large companies, despite similar growth
rates. Combined with reductions in interest rates and an improved outlook for
the UK economy, smaller companies with exposure to the domestic economy
outperformed the rest of the market.
Continental European markets experienced disparate returns, with the region
as a whole the weakest performer in the EMI EPAC Index. However, consumer demand
held up well. Economic news has shown tentative signs of recovery, supported by
the weak Euro which increased competitiveness within the region. Of particular
note was the extraordinary strength of the new issues market in Europe,
especially in Germany. This "Neuer Markt" has provided an ideal environment for
spawning new technology companies and has marked a turn in sentiment towards
smaller companies.
PORTFOLIO REVIEW
The Fund started the fiscal year underweighted in Asia. Over the course of
the twelve months, we added to the Fund's position in this region, emphasizing
Singapore and Hong Kong where conditions for economic recovery appear more
firmly in place than elsewhere. We added stocks to gain exposure to the
improvements in consumer sentiment (TAN CHONG, a Malaysian car distributor) and
to take advantage of the expectation that Taiwanese manufactured components are
likely to be in short supply following the earthquake (ELEC & ELTEK, a printed
circuit board manufacturer in Hong Kong).
We also increased the Fund's weighting in Japan to establish positions in
more economically sensitive areas. For example, we invested in EIDEN COMPANY, a
regional electrical retailer, TACHIHI ENTERPRISE, a real estate company, and
NIPPON THOMPSON, a leading manufacturer of needle roller bearings, as valuations
in these domestically
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
oriented industries have become depressed. There are increasing signs of merger
activity in these areas and the Fund has partly paid for these purchases through
profit taking in a narrow band of growth stocks where valuations appeared
unsustainable.
The recent rise in interest rates in the UK underscored the greater maturity
of its economic cycle. Consequently, the Fund remained underweight in the UK
throughout the fiscal year. Economic growth has been gathering pace and smaller
companies fared relatively well through upgrades to expectations for Gross
Domestic Product (GDP) growth and improved manufacturing activity. We have
positioned the Fund to benefit from these economic trends by increasing its
exposure to more GDP sensitive companies, for example ALLIED LEISURE, a
bowling-to-bars leisure group, and CORPORATE SERVICES, a temporary staffing
company. Additionally, we sold some of the Fund's technology-related issues, as
valuations in the technology sector have risen significantly.
The rate of economic growth in Continental Europe was positive but stock
market returns were relatively muted. Consequently, our strategy was to shift
away from the traditional, more defensive industries into the higher growth
areas of the economy. We invested in a number of quality consumer stocks and
information technology services stocks, as valuations were attractive. We
invested in the Italian hotel operator, CIGA HOTELS, and ORDINA, an Information
Technology services and consulting group based in the Netherlands. We increased
the Fund's exposure to the high growth media sector, adding stocks such as
SOGECABLE, a pay-per-view television group in Spain, and MODERN TIMES, a
broadcasting, radio and publishing company in Sweden. The Fund was also able to
participate in several new issues in Germany which performed well.
OUTLOOK
Looking ahead, we believe that an improving world economic environment
coupled with a relatively low inflationary outlook should enable international
smaller companies to continue to deliver strong returns, especially given their
economic sensitivity within their individual markets. The aggressive monetary
easing that began late in 1998 appears to be over for the time being and, while
there have been increases in interest rates, we believe it is unlikely rates
will return to historic highs in the near future. We believe that the
acceleration in world growth is likely to be led by Asian markets, with slower
economic activity in Europe.
Going forward, the Fund remains committed to South East Asia and Japan, in
order to capture the short-term cyclical momentum in these markets and the
expectation of strong relative earnings growth. We have retained the Fund's
exposure in Continental Europe, due to the increase in confidence in economic
recovery towards the end of the fiscal period.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN SCHRODER INTERNATIONAL SMALLER COMPANIES FUND - INVESTOR SHARES
VS. SALOMON SMITH BARNEY EXTENDED MARKET INDEX (EUROPE PACIFIC BASIN COUNTRIES)
<S> <C>
INTERNATIONAL SMALLER COMPANIES FUND
Nov-96 $10,000.00
Nov-96 $9,970.00
Dec-96 $9,917.78
Jan-97 $9,527.48
Feb-97 $9,677.59
Mar-97 $9,637.56
Apr-97 $9,357.34
May-97 $9,997.84
Jun-97 $10,288.07
Jul-97 $9,947.81
Aug-97 $9,477.44
Sep-97 $9,567.51
Oct-97 $9,227.24
Nov-97 $8,756.87
Dec-97 $8,516.77
Jan-98 $9,176.82
Feb-98 $9,687.82
Mar-98 $10,241.41
Apr-98 $10,763.07
May-98 $11,306.01
Jun-98 $11,263.43
Jul-98 $11,529.58
Aug-98 $10,060.43
Sep-98 $9,528.14
Oct-98 $9,953.97
Nov-98 $10,294.64
Dec-98 $10,729.40
Jan-99 $10,925.11
Feb-99 $11,477.70
Mar-99 $12,076.34
Apr-99 $13,077.90
May-99 $12,962.78
Jun-99 $14,574.49
Jul-99 $15,886.89
Aug-99 $16,393.42
Sep-99 $16,163.18
Oct-99 $16,462.20
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN SCHRODER INTERNATIONAL SMALLER COMPANIES FUND - INVESTOR SHARES
VS. SALOMON SMITH BARNEY EXTENDED MARKET INDEX (EUROPE PACIFIC BASIN COUNTRIES)
<S> <C>
SALOMON SMITH BARNEY EMI EPAC INDEX
Nov-96 $10,000.00
Nov-96 $10,147.00
Dec-96 $9,962.32
Jan-97 $9,697.33
Feb-97 $9,874.79
Mar-97 $9,765.18
Apr-97 $9,619.68
May-97 $10,226.72
Jun-97 $10,468.69
Jul-97 $10,264.56
Aug-97 $9,803.65
Sep-97 $9,931.82
Oct-97 $9,542.09
Nov-97 $9,161.70
Dec-97 $8,938.51
Jan-98 $9,356.59
Feb-98 $10,049.63
Mar-98 $10,522.21
Apr-98 $10,606.54
May-98 $10,851.53
Jun-98 $10,545.84
Jul-98 $10,520.93
Aug-98 $9,287.35
Sep-98 $9,006.88
Oct-98 $9,649.97
Nov-98 $9,967.80
Dec-98 $10,202.04
Jan-99 $10,161.96
Feb-99 $9,974.10
Mar-99 $10,330.84
Apr-99 $10,860.41
May-99 $10,570.55
Jun-99 $10,928.03
Jul-99 $11,349.06
Aug-99 $11,523.13
Sep-99 $11,485.93
Oct-99 $11,390.47
</TABLE>
The Salomon Smith Barney EMI EPAC Index is an unmanaged index representing the
portion of the Salomon Smith Barney Broad Market Index related to companies with
small index capitalization in approximately 22 European and Pacific Basin
countries. The Salomon Smith Barney EMI EPAC 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.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
ONE YEAR ENDED INCEPTION TO
OCTOBER 31, 1999 OCTOBER 31, 1999(A)
---------------- -------------------
<S> <C> <C>
Schroder International Smaller Companies Fund--Investor
Shares................................................. 65.27% 18.10%
</TABLE>
(a) Average annual total return from commencement of Fund operations
(November 4, 1996)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
COUNTRY WEIGHTINGS
<TABLE>
<CAPTION>
COUNTRY % OF NET ASSETS
<S> <C>
- ------------------------------------------------
United Kingdom 24.9%
Japan 21.7
France 13.7
Germany 7.7
Spain 5.6
Netherlands 5.5
Switzerland 3.2
Sweden 3.1
Singapore 3.0
Italy 2.5
Hong Kong 2.3
Ireland 1.5
Luxembourg 1.0
Norway 0.8
Belgium 0.8
Denmark 0.8
Cash Equivalents and Other
Net Assets 1.9
------
100.0%
======
</TABLE>
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- ------------------------------------------------
SII 2.5%
Photo-Me International 2.5
Amstrad 2.0
GFI Informatique 1.9
Infogrames Entertainment 1.9
Alten 1.7
ADVA AG 1.7
Tan Chong International 1.6
Telepizza 1.5
CBT Group Public Ltd 1.4
-----
18.7%
=====
</TABLE>
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER GREATER CHINA FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF OCTOBER 31, 1999)
PERFORMANCE
Since the Schroder Greater China Fund's inception on January 4, 1999, the
Fund's Investor Shares had a total return of 27.20%. The MSCI China Free Index
returned 18.28% over the same period.
The Fund's outperformance of the Index during the noted period was aided by
high levels of cash at the beginning of the year, coupled with an overweight
position in the inexpensive cyclical H shares which delivered strong gains.
("H Shares" represent interests in Chinese companies with local management which
are listed in Hong Kong.) Performance was negatively affected by the Fund's
holdings in the toll road sector and the power sector, due to concerns over the
sustainability of their returns and levels of their foreign debt.
MARKET BACKGROUND
Fiscal 1999 was marked by turbulence in China's political relationships with
both the U.S. and Taiwan. Following encouraging signs for World Trade
Organization (WTO) accession this year, the U.S. rejection of significant
Chinese concessions in April was followed by NATO's accidental bombing of the
Chinese embassy in Belgrade. This prompted a widespread insurgence of anti-U.S.
feeling in China and negotiations for WTO entry were put on hold. In a further
setback to foreign relations, Taiwan's President Lee announced a new policy
towards China of "state to state" relations in July, prompting angry rhetoric
and displays of military hardware from the mainland and damaging market
sentiment on both sides of the Straits. Market sentiment was further damaged
toward the end of the period with the failure of the listing of China National
Offshore Oil Corporation. However, the successful public offering of CHINA
TELECOM, shortly thereafter, has increased the likelihood of future issues for
some of the large State Owned Enterprises (SOEs).
On the economic front, data from China was lackluster, with weak retail
sales growth, declines in GDP growth and evidence that the deflationary spiral
had not yet come to an end. The one bright spot was the increase in export
figures, especially in August and September. The overall weakness of economic
data inspired further plans for reform and restructure of the SOEs, mainly
through relief of the debt burden.
PORTFOLIO REVIEW
The Fund started the fiscal period positioned cautiously with high levels of
cash. In February, we took advantage of the low valuations of cyclical stocks
and increased the Fund's weighting in petrochemical companies. In particular,
YIZHENG CHEMICAL FIBRE and SHANGHAI PETROCHEMICAL performed extremely well. We
also added some mainland listed stocks, such as DAZHONG TAXI, a Shanghai
transport company, and the electricity generation company, ZHEJIANG SOUTHERN
ELECTRIC, so that the Fund was able to benefit from the government's liquidity
boosting measures. We maintained a focus on cyclical recovery stocks, such as
ANGAN STEEL and YIZHENG CHEMICAL FIBRE, in order to take advantage of the
recovery in Asia.
OUTLOOK
China has resumed domestic pro-WTO propaganda for the first time since the
bombing in Belgrade. While the issue of the devaluation of its currency, the
RENMINBI, has largely receded, we continue to believe that the Chinese
government will adjust their current currency regime. We believe that removal of
the uncertainty surrounding this issue is likely to be well received by the
markets, as the longer-term benefits to the economy appear clear. Going forward,
we will continue to maintain a high focus on cyclical recovery stocks for the
Fund as we believe that the recovery in Asia will take precedence over any
slowdown in the U.S. in the near term.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- --------------------------------------------------------------------------------
14
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER GREATER CHINA FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT GREATER CHINA FUND MSCI CHINA FREE INDEX
IN SCHRODER GREATER CHINA FUND INVESTOR SHARES
VS. MORGAN STANLEY CAPITAL INTERNATIONAL CHINA FREE INDEX
<S> <C> <C>
$10,000.00 $10,000.00
Jan-99 $8,630.00 $8,141.00
Feb-99 $8,390.00 $7,795.82
Mar-99 $9,510.00 $8,795.25
Apr-99 $11,840.00 $10,991.42
May-99 $10,990.00 $10,416.57
Jun-99 $16,360.00 $15,893.60
Jul-99 $15,230.00 $13,908.49
Aug-99 $14,690.00 $13,786.09
Sep-99 $14,020.00 $13,215.35
Oct-99 $12,720.35 $12,119.80
</TABLE>
The MSCI China Free Index is an unmanaged index of companies representative of
the market in China and Hong Kong, but reflects only actual buyable
opportunities for global investors in China and Hong Kong by taking into account
local market restrictions on share ownership by foreigners. To construct the
Index, every listed security in the market is identified and relevant data
collected. Once stocks are selected for the Index, they are included at their
full market capitalization weight.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
INCEPTION TO
OCTOBER 31, 1999(A)
-------------------
<S> <C>
Schroder Greater China Fund--Investor Shares................ 27.20%
</TABLE>
(a) Total return from commencement of operations (January 4, 1999)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
15
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER GREATER CHINA FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
COUNTRY WEIGHTINGS
<TABLE>
<CAPTION>
COUNTRY % OF NET ASSETS
<S> <C>
- ------------------------------------------------
China 79.0%
Hong Kong 17.5
Cash Equivalents and Other
Net Assets 3.5
------
100.0%
======
</TABLE>
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- ------------------------------------------------
Yizheng Chemical Fibre 15.3%
Shanghai Petrochemical 5.2
Angang New Steel 5.1
China Shipping Development 4.9
Maanshan Iron & Steel 4.8
China International Marine 4.8
China National Aviation 4.7
Dazhong Trans 4.7
Yanzhou Coal Mining 4.6
Zhejiang Expressway 4.5
-----
58.6%
=====
</TABLE>
- --------------------------------------------------------------------------------
16
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. DIVERSIFIED GROWTH FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF OCTOBER 31, 1999)
PERFORMANCE
For the fiscal year ended October 31, 1999, the Schroder U.S. Diversified
Growth Fund's Investor Shares had a total return of 30.95%. The S&P 500 Index
rose 25.67% over the same time period.
Strong stock selection in the communication services, financials and
technology sectors contributed positively to the Fund's performance. Sector
allocation also added to performance, especially the Fund's overweight position
in technology and underweight position in the consumer staples group.
MARKET BACKGROUND
The signal concern of the U.S. equity markets over the fiscal year has been
the direction of interest rates. The sizzling pace of U.S. economic growth,
recovering Asian economies, and a burgeoning U.S. international trade deficit,
pushed rates higher over the fiscal year and pressured the value of the U.S.
dollar. Few signs of an imminent slowing in the U.S. economy pressured the stock
and bond markets through the summer. Housing has yet to roll over, and consumer
spending has maintained substantial momentum. Core inflation results,
nevertheless, have remained benign. This environment, combined with a vigilant
Federal Reserve Bank, afforded the U.S. equity markets a strong rally in October
as investors discounted higher interest rates.
Paradoxically, it was earlier dollar strength that influenced relative
sector performance in the market, as multi-national consumer products companies
announced that currency changes would reduce top line performance. Other
underperforming sectors included financials and health care, the former from
interest rate concerns and the latter from the same and potential election year
legislation. Communication services were the clear winner away from technology.
The regional BELL operating companies outperformed significantly as two major
mergers drew closer to completion and BELL ATLANTIC filed to provide long
distance service in New York. Technology was again another big driver for index
and sector performance. The technology-heavy NASDAQ composite led all major
indices.
PORTFOLIO REVIEW
The Fund's emphasis on the technology sector and the specific holdings
within the sector greatly enhanced the Fund's performance relative to the S&P
500 Index. The Fund's holdings in this sector largely outperformed the returns
delivered by the S&P 500's technology stocks. Among our best performers in this
sector over the period were SEIBEL SYSTEMS, TELLABS, LEXMARK, and ADOBE SYSTEMS,
all doubling or more in price over the holding period. SEIBEL and ADOBE SYSTEMS
benefited from strong sales of their respective Web-enabled application
software. TELLABS saw excellent demand for their communications equipment as
bandwidth continues to be built. LEXMARK recognized market share gains in the
period for their printing products. Another strong performer was PROVIDIAN, in
the financial sector. This credit card specialist grew new accounts at a rapid
rate and delivered strong earnings growth. The biggest detractors to performance
were MCKESSON, WASTE MANAGEMENT and BOSTON SCIENTIFIC. These stocks no longer
met the Fund's investment criteria and were sold during the period.
OUTLOOK
The Fund's portfolio will remain diversified and sector weightings are not
expected to play a large role in relative performance over the long term. Our
emphasis will continue to be on strong stock selection across most sectors. The
number of holdings in the Fund will remain close to sixty, as this portfolio
diversification should moderate the Fund's overall risk exposure.
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. DIVERSIFIED GROWTH FUND
- --------------------------------------------------------------------------------
We will continue to focus on high quality, medium cap stocks. In particular,
we look for visible earnings growth, skilled management teams and attractively
priced securities relative to the relevant peer group or overall market. These
criteria are crucial to our stock selection process.
Sustained price appreciation for U.S. stocks remains problematic over the
near-term in the current unfriendly interest rate environment. A slowing economy
in response to higher short-term rates looks necessary to restart the cycle of
lower long-term rates and rising equities. As earnings for the market begin to
decelerate, we believe that the Fund will be well positioned due to the
stability of its holdings' long-term earnings prospects.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- --------------------------------------------------------------------------------
18
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. DIVERSIFIED GROWTH FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN SCHRODER U.S. DIVERSIFIED GROWTH FUND INVESTOR SHARES
VS. STANDARD & POOR...S 500 INDEX
<S> <C> <C>
U.S. DIVERSIFIED GROWTH FUND S&P 500 INDEX
Oct-89 $10,000.00 $10,000.00
Nov-89 $10,120.00 $10,206.40
Dec-89 $10,405.38 $10,447.37
Jan-90 $9,591.68 $9,745.31
Feb-90 $9,837.23 $9,871.71
Mar-90 $10,147.10 $10,131.13
Apr-90 $9,940.10 $9,881.91
May-90 $10,817.81 $10,846.09
Jun-90 $10,804.83 $10,769.95
Jul-90 $10,623.31 $10,734.62
Aug-90 $9,935.98 $9,765.82
Sep-90 $9,352.74 $9,286.32
Oct-90 $9,145.11 $9,251.78
Nov-90 $9,741.37 $9,846.66
Dec-90 $9,988.80 $10,117.05
Jan-91 $10,330.42 $10,565.14
Feb-91 $11,183.71 $11,320.55
Mar-91 $11,472.25 $11,588.16
Apr-91 $11,459.63 $11,619.91
May-91 $11,866.45 $12,118.64
Jun-91 $11,381.11 $11,564.94
Jul-91 $12,013.90 $12,105.72
Aug-91 $12,674.66 $12,391.05
Sep-91 $12,436.38 $12,189.69
Oct-91 $12,634.12 $12,353.65
Nov-91 $12,184.34 $11,854.31
Dec-91 $13,810.95 $13,210.44
Jan-92 $13,515.40 $12,966.58
Feb-92 $13,754.62 $13,132.29
Mar-92 $13,501.54 $12,875.56
Apr-92 $13,685.16 $13,251.39
May-92 $13,839.80 $13,323.48
Jun-92 $13,233.62 $13,129.89
Jul-92 $13,968.08 $13,659.42
Aug-92 $13,896.85 $13,383.64
Sep-92 $14,477.73 $13,538.48
Oct-92 $14,874.42 $13,586.95
Nov-92 $15,398.00 $14,046.19
Dec-92 $15,913.84 $14,231.46
Jan-93 $15,975.90 $14,335.21
Feb-93 $15,755.43 $14,528.59
Mar-93 $16,492.79 $14,842.55
Apr-93 $16,006.25 $14,478.61
May-93 $16,555.26 $14,868.67
Jun-93 $16,320.18 $14,918.03
Jul-93 $16,147.19 $14,846.57
Aug-93 $16,982.00 $15,319.14
Sep-93 $17,280.88 $15,207.00
Oct-93 $17,769.93 $15,516.77
Nov-93 $17,501.60 $15,371.22
Dec-93 $17,900.64 $15,560.90
Jan-94 $18,085.01 $16,083.75
Feb-94 $18,003.63 $15,648.85
Mar-94 $16,981.03 $14,966.56
Apr-94 $17,329.14 $15,158.13
May-94 $17,329.14 $15,406.72
Jun-94 $16,757.28 $15,029.26
Jul-94 $17,084.04 $15,522.22
Aug-94 $17,758.86 $16,158.63
Sep-94 $17,247.41 $15,764.36
Oct-94 $17,411.26 $16,119.06
Nov-94 $16,512.84 $15,532.32
Dec-94 $16,968.59 $15,762.20
Jan-95 $17,055.13 $16,170.44
Feb-95 $17,795.32 $16,801.09
Mar-95 $18,122.76 $17,296.72
Apr-95 $18,470.71 $17,805.24
May-95 $19,037.76 $18,517.45
Jun-95 $19,409.00 $18,947.06
Jul-95 $20,476.50 $19,576.10
Aug-95 $20,279.92 $19,625.04
Sep-95 $20,825.45 $20,453.22
Oct-95 $20,498.49 $20,379.59
Nov-95 $21,478.32 $21,274.25
Dec-95 $21,725.32 $21,684.84
Jan-96 $22,303.21 $22,422.13
Feb-96 $22,379.05 $22,630.65
Mar-96 $23,030.28 $22,847.91
Apr-96 $23,179.97 $23,183.77
May-96 $23,606.48 $23,781.91
Jun-96 $23,304.32 $23,872.28
Jul-96 $22,250.97 $22,817.13
Aug-96 $22,954.10 $23,298.57
Sep-96 $24,459.88 $24,610.28
Oct-96 $24,484.34 $25,289.52
Nov-96 $26,741.80 $27,201.41
Dec-96 $26,391.48 $26,662.82
Jan-97 $27,906.35 $28,329.25
Feb-97 $28,031.93 $28,550.22
Mar-97 $26,389.26 $27,373.95
Apr-97 $27,304.97 $29,008.18
May-97 $28,820.40 $30,763.17
Jun-97 $29,987.62 $32,141.36
Jul-97 $32,353.64 $34,699.81
Aug-97 $30,396.25 $32,756.62
Sep-97 $31,754.96 $34,551.69
Oct-97 $30,964.26 $33,397.66
Nov-97 $32,131.62 $34,943.97
Dec-97 $32,542.90 $35,545.01
Jan-98 $31,895.30 $35,939.56
Feb-98 $34,536.23 $38,530.80
Mar-98 $36,439.17 $40,503.58
Apr-98 $36,614.08 $40,912.66
May-98 $35,098.26 $40,208.96
Jun-98 $37,088.33 $41,841.45
Jul-98 $35,875.54 $41,393.74
Aug-98 $28,865.46 $35,408.21
Sep-98 $31,376.76 $37,677.88
Oct-98 $33,714.32 $40,741.09
Nov-98 $35,531.53 $43,210.00
Dec-98 $39,685.16 $45,698.89
Jan-99 $41,784.51 $47,609.11
Feb-99 $39,686.92 $46,128.46
Mar-99 $40,341.76 $47,973.60
Apr-99 $41,063.88 $49,830.18
May-99 $41,195.28 $48,654.19
Jun-99 $44,868.75 $51,354.49
Jul-99 $42,900.82 $49,752.23
Aug-99 $42,376.04 $49,508.45
Sep-99 $41,720.06 $48,151.92
Oct-99 $44,148.17 $51,199.93
</TABLE>
The S&P 500 Index is a market value weighted composite index of 500 large
capitalization U.S. companies and reflects the reinvestment of dividends.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
ONE YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED
OCTOBER 31, 1999 OCTOBER 31, 1999 OCTOBER 31, 1999
---------------- ---------------- ----------------
<S> <C> <C> <C>
Schroder U.S. Diversified Growth
Fund--Investor Shares................... 30.95% 20.46%(a) 16.02%(a)
</TABLE>
(a) Average annual total returns
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. DIVERSIFIED GROWTH FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- ------------------------------------------------
Siebel Systems, Inc. 4.7%
Adobe Systems, Inc. 3.6
United States Cellular Corp. 3.0
Comverse Technology, Inc. 2.9
Apple Computer 2.8
Texas Instruments, Inc. 2.8
Biogen, Inc. 2.5
Solectron Corp. 2.5
Citrix Systems, Inc. 2.5
Sprint Corp. 2.3
-----
29.6%
=====
</TABLE>
INVESTMENTS BY SECTOR
<TABLE>
<CAPTION>
SECTOR % OF NET ASSETS
<S> <C>
- ------------------------------------------------
Basic Materials 4.3%
Capital Goods 5.8
Computer Hardware 3.9
Computers 7.5
Consumer Cyclicals 12.1
Consumer Staples 1.4
Financial Services 3.6
Health Care 4.4
Technology 28.9
Telecommunications 9.2
Cash Equivalents and Other
Net Assets 18.9
------
100.0%
======
</TABLE>
- --------------------------------------------------------------------------------
20
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF OCTOBER 31, 1999)
PERFORMANCE
For the twelve-month period ended October 31, 1999, the Schroder U.S.
Smaller Companies Fund's Investor Shares had a total return of 8.91% and Advisor
Shares had a total return of 8.69%. The Russell 2000 Index rose 14.87% over the
same period.(1)
MARKET BACKGROUND
The past twelve months have been difficult for U.S. smaller companies. While
the U.S. market as a whole generated strong returns during the period, smaller
companies continued to underperform their larger peers. For the first five
months of this period, smaller companies dramatically underperformed, with the
Russell 2000 Index at the same level in mid-March as it was at the end of
October. The next three months saw a broadening of the market, with the Russell
2000 outperforming the S&P 500 Index during the second calendar quarter.
Beginning in July, however, fears of rising interest rates caused smaller
companies to underperform once again.
PORTFOLIO REVIEW
During the past five months, we maintained our discipline of investing in
growing and profitable companies that trade at reasonable valuations while
avoiding the high flyers and institutional favorites. Unfortunately, this
investment style was out of favor during this period and this hurt the relative
performance of the Fund. Rather than focusing on undervalued companies, or
companies with earnings, investors flocked to technology stocks, particularly
internet-related issues, most of which have no earnings and negligible revenues.
While the internet sector experienced a brief correction from its April highs,
it continued to drive the market. Perhaps the best measure of the narrowness of
the small cap market is the fact that the 40 strongest performing stocks in the
Russell 2000 delivered over 75% of the Index's performance. Needless to say,
these were mainly internet-related issues, with the best performers in the Index
being internet holding company CMGI, on-line broker E*TRADE and internet
software developer BROADVISION.
Throughout the fiscal period the Fund maintained an overweight position in
consumer stocks, such as retailers and restaurants and food companies. These
stocks were weak performers during the year, despite strong fundamentals and
numerous upward earnings revisions. Discount retailer AMES, for example, saw its
stock price fall by almost 50%, from June to October, despite earnings estimates
being revised upward from $3.16 to $3.30. Health care also was a drag on the
Fund's performance, with earnings disappointments at several companies. This was
offset by strength in the technology sectors where we continued to raise the
Fund's weighting due to solid fundamentals. Among our strongest performing
technology stocks were cable equipment supplier ANTEC CORP., software maker
REMEDY CORP. and electronic component manufacturer CTS CORP. The Fund's
portfolio benefited from a number of acquisitions during the year, as corporate
acquirers, such as TEXAS INSTRUMENTS and SHIRE PHARMACEUTICALS, realized good
value in our holdings. Detractors from performance included SLI, HENRY SCHEIN
and FREMONT GENERAL.
- ------------------------
(1) Effective October 31, 1999, the Fund changed its fiscal year end from
May 31 to October 31. Information regarding the Fund's fiscal period of June 1
to October 31, 1999, follows this discussion.
- --------------------------------------------------------------------------------
21
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
OUTLOOK
Looking forward, we will continue to search for companies that can grow
their earnings independently of the economic cycle. We believe that many smaller
companies offer more attractive investment opportunities than large companies
based on valuation and fast growth rates. We remain convinced that the market
will eventually broaden, and that when it does there will be a very quick and
powerful rally in the type of smaller companies in which the Fund invests. Going
forward, we will remain focused on individual stock selection, concentrating on
underfollowed and misunderstood companies that can offer superior earnings
growth.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- --------------------------------------------------------------------------------
22
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN SCHRODER U.S. SMALLER COMPANIES FUND - INVESTOR SHARES*
VS. RUSSELL 2000 INDEX
<S> <C> <C>
U.S. SMALLER COMPANIES FUND RUSSELL 2000 INDEX
Aug-93 $10,000.00 $10,000.00
$10,350.00 $10,432.00
$10,820.00 $10,726.18
$10,990.00 $11,001.85
Nov-93 $10,710.00 $10,639.88
$11,202.29 $11,003.77
$11,655.62 $11,349.29
$11,806.73 $11,308.43
$11,222.44 $10,711.34
$11,373.55 $10,774.54
May-94 $11,343.33 $10,653.87
$11,141.85 $10,291.64
$11,272.81 $10,460.42
$11,917.55 $11,043.06
$11,665.70 $11,006.62
$11,897.40 $10,963.70
Nov-94 $11,383.63 $10,520.76
$11,700.60 $10,803.77
$11,752.83 $10,667.64
$12,379.65 $11,111.42
$12,755.74 $11,302.53
$13,090.05 $11,553.45
May-95 $13,382.56 $11,752.17
$13,957.14 $12,362.11
$15,116.76 $13,074.16
$15,680.89 $13,344.80
$16,224.14 $13,583.67
$15,816.70 $12,976.48
Nov-95 $16,683.80 $13,521.49
$17,443.53 $13,878.46
$17,360.41 $13,863.19
$17,835.38 $14,295.73
$18,785.34 $14,587.36
$19,972.78 $15,367.78
May-96 $21,160.22 $15,973.27
$20,459.63 $15,316.77
$18,915.95 $13,979.62
$19,497.80 $14,791.83
$20,614.00 $15,370.34
$20,459.63 $15,133.64
Nov-96 $21,124.60 $15,757.14
$21,330.97 $16,169.98
$21,720.42 $16,493.38
$21,720.42 $16,094.24
$20,941.53 $15,334.59
$21,012.34 $15,377.53
May-97 $23,472.92 $17,087.51
$24,835.98 $17,820.57
$26,022.02 $18,649.22
$26,588.48 $19,076.29
$28,376.39 $20,472.67
$27,084.14 $19,573.92
Nov-97 $26,871.72 $19,446.69
$27,060.16 $19,787.01
$26,537.91 $19,474.37
$28,298.08 $20,913.53
$30,058.24 $21,775.17
$30,096.93 $21,894.93
May-98 $28,549.53 $20,714.79
$28,588.21 $20,758.30
$26,615.28 $19,078.95
$21,392.80 $15,373.82
$21,934.39 $16,577.59
$22,766.12 $17,253.95
Nov-98 $24,139.44 $18,158.06
$24,563.04 $19,282.04
$24,078.37 $19,538.50
$22,508.05 $17,955.88
$22,527.43 $18,235.99
$24,000.83 $19,869.93
May-99 $24,815.07 $20,160.03
$26,385.40 $21,071.27
$26,036.44 $20,493.92
$24,621.20 $19,735.64
$24,698.75 $19,739.59
Oct-99 $24,795.08 $19,820.52
</TABLE>
The Russell 2000 Index is a market capitalization weighted broad based index of
2000 small capitalization U.S. companies.
*The line shown presents performance information for Investor Shares only.
Performance of Advisor Shares of the Fund will be less than the line shown for
Investor Shares due to shareholder servicing fees paid by Advisor Shares.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
PERIOD FROM
JUNE 1, 1999 TO ONE YEAR ENDED FIVE YEARS ENDED INCEPTION TO
OCTOBER 31, 1999(A) OCTOBER 31, 1999 OCTOBER 31, 1999(B) OCTOBER 31, 1999(C)
------------------- ---------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Schroder U.S. Smaller
Companies Fund--
Investor Shares.... -0.08% 8.91% 15.82% 15.67%
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
JUNE 1, 1999 TO ONE YEAR ENDED FIVE YEARS ENDED INCEPTION TO
OCTOBER 31, 1999(A) OCTOBER 31, 1999 OCTOBER 31, 1999 OCTOBER 31, 1999(D)
------------------- ---------------- ---------------- -------------------
<S> <C> <C> <C> <C>
Schroder U.S. Smaller
Companies Fund--
Advisor Shares..... -0.16% 8.69% -- 5.70%
</TABLE>
(a) Effective October 31, 1999, the Fund changed its fiscal year end from May 31
to October 31. Accordingly, performance has been shown for the shortened
fiscal period ended October 31, 1999.
(b) Average annual total return.
(c) Average annual total return from commencement of Fund operations (August 6,
1993)
(d) Average annual total return from inception of Advisor Shares (December 23,
1996)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
23
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- ------------------------------------------------
SPX Corp. 1.9%
Perkinelmer, Inc. 1.9
Zebra Technologies Corp. 1.9
Mueller Industries, Inc. 1.9
Jack in The Box, Inc. 1.8
Amphenol Corp. 1.7
Heller Financial, Inc. 1.7
Nova Corp. 1.6
Remedy Corp. 1.6
Shopko Stores, Inc. 1.5
-----
17.5%
=====
</TABLE>
INVESTMENTS BY SECTOR
<TABLE>
<CAPTION>
SECTOR % OF NET ASSETS
<S> <C>
- ------------------------------------------------
Basic Industry 2.5%
Business Services 2.2
Capital Goods 7.5
Consumer Cyclical 21.2
Consumer Staples 2.5
Energy 5.1
Financials 9.0
Health Care 11.7
Media 5.1
Real Estate 1.7
Technology 23.1
Transportation 1.5
Utilities 4.3
Cash Equivalents and Other
Net Assets 2.6
------
100.0%
======
</TABLE>
- --------------------------------------------------------------------------------
24
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MICRO CAP FUND
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION AND ANALYSIS (AS OF OCTOBER 31, 1999)
PERFORMANCE
For the twelve-month period ended October 31, 1999, the Schroder Micro Cap
Fund's Investor Shares had a total return of 90.89%. The Russell 2000 Index
returned 14.87% over the same period.(1) Strong performance from our technology,
health care and consumer stocks helped the Fund outperform the Index.
MARKET BACKGROUND / PORTFOLIO REVIEW
Throughout the year, the Fund maintained an overweight position in consumer
stocks, such as retailers and restaurants. While many of these stocks were weak
performers during the year, despite strong fundamentals and numerous upward
earnings revisions, the Fund's concentrated portfolio structure allowed it to
benefit from strong performance from stocks such as WHITEHALL JEWELERS, BRAUNS
FASHIONS and INTERTAN. Unfortunately, our largest position in the consumer
sector, women's clothing retailer CATO CORP., fell in price despite strong sales
and better than expected earnings. Health care was a strong contributor to
performance during the twelve-month period, with the Fund's position in breast
implant maker INAMED appreciating sharply. This company began the year with no
Wall Street coverage, but strong growth prospects. Today, its management has
presented at several investor conferences, the stock is followed by several
firms and its price/earnings multiple has expanded dramatically. The Fund bought
the stock in July at an average price of $17.50 and sold it in September and
October, as it had reached our valuation target. Technology was also a strong
contributor to performance. In this area, the Fund benefited from investments in
semiconductor companies, such as ELANTEC SEMICONDUCTOR, DATARAM and PERICOM
SEMICONDUCTOR. The Fund also benefited from investments in initial public
offerings of internet-related companies, such as ASK JEEVES and E PIPHANY. These
companies had explosive initial performance and we took quick profits as we felt
the market price was unsustainable. The Fund's substantial over-performance with
respect to the Russell 2000 Index was due, in significant part, to successful
investments in initial public offerings throughout the course of the fiscal
period. While many of our investments in initial public offerings proved
profitable, market conditions change rapidly and we realized losses on a few,
namely VITAMIN SHOPPE and AIRONET WIRELESS. As always, we continue to attempt to
take advantage of market volatility, by adding to and subtracting positions when
opportunities arise. Finally, the Fund continued its practice of hedging market
exposure through the use of put options.
OUTLOOK
Looking forward, we will continue to search for companies for the Fund that
can grow their earnings independently of the economic cycle. We believe that
many smaller companies offer more attractive investment opportunities than large
companies based on valuation and potentially fast growth rates. We believe that
the market will eventually broaden, and that when it does there will be a very
quick and powerful rally in the type of smaller companies that the Fund invests
in. As always, we will remain focused on individual stock selection,
concentrating on underfollowed and misunderstood companies that can offer
superior earnings growth.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO
MANAGERS AS OF OCTOBER 31, 1999, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO
MANAGERS ON THE DATE THIS REPORT IS PUBLISHED OR ANY TIME THEREAFTER. THESE
VIEWS ARE INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR
INVESTMENT IN THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD
CONSULT THEIR OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT
PROGRAMS.
- ------------------------
(1) Effective October 31, 1999, the Fund changed its fiscal year end from
May 31 to October 31. Information for the Fund's fiscal period of June 1 to
October 31, 1999, follows this discussion.
- --------------------------------------------------------------------------------
25
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MICRO CAP FUND
- --------------------------------------------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN SCHRODER MICRO CAP FUND INVESTOR SHARES
VS. RUSSELL 2000 INDEX
<S> <C> <C>
MICRO CAP FUND RUSSELL 2000 INDEX
Oct-97 $10,000.00 $10,000.00
$10,260.00 $9,561.00
Nov-97 $10,370.00 $9,498.85
$10,778.36 $9,665.08
$10,747.77 $9,512.38
$12,124.38 $10,215.34
$13,592.76 $10,636.21
$14,632.87 $10,694.71
May-98 $14,541.10 $10,118.27
$14,683.86 $10,139.51
$14,765.43 $9,319.23
$13,582.57 $7,509.43
$14,265.77 $8,097.42
$15,275.29 $8,427.80
Nov-98 $16,352.09 $8,869.41
$17,573.46 $9,418.43
$18,344.22 $9,543.70
$19,814.61 $8,770.66
$19,553.73 $8,907.48
$21,735.59 $9,705.59
May-99 $23,929.31 $9,847.29
$24,830.51 $10,292.39
$25,909.58 $10,010.38
$25,506.42 $9,639.99
$27,878.00 $9,641.92
Oct-99 $29,157.60 $9,681.45
</TABLE>
The Russell 2000 Index is a market capitalization weighted broad based index of
2000 small capitalization U.S. companies.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
PERIOD FROM
JUNE 1, 1999 TO ONE YEAR ENDED INCEPTION TO
OCTOBER 31, 1999(A) OCTOBER 31, 1999 OCTOBER 31, 1999(B)
------------------- ---------------- -------------------
<S> <C> <C> <C>
Schroder Micro Cap Fund--Investor
Shares............................. 21.85% 90.89% 68.70%
</TABLE>
(a) Effective October 31, 1999, the Fund changed its fiscal year end from May 31
to October 31. Accordingly, performance has been shown for the shortened
fiscal period ended October 31, 1999.
(b) Average annual total return from commencement of operations (October 15,
1997)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
- --------------------------------------------------------------------------------
26
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MICRO CAP FUND
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1999
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- ------------------------------------------------
Cato Corp. 4.2%
Hanger Orthopedic Group 3.6
Saga Communications 3.5
Intertan, Inc. 3.3
Safety 1st, Inc. 3.2
Brauns Fashions Corp. 2.9
Mesaba Holdings, Inc. 2.8
Aftermarket Technology Corp. 2.7
Tractor Supply Co. 2.4
Rare Hospitality International,
Inc. 2.4
-----
31.0%
=====
</TABLE>
INVESTMENTS BY SECTOR
<TABLE>
<CAPTION>
SECTOR % OF NET ASSETS
<S> <C>
- ------------------------------------------------
Business Services 1.6%
Capital Goods 3.9
Consumer Cyclicals 11.3
Consumer Staples 2.0
Energy 4.9
Financials 3.9
Health Care 11.4
Media 3.5
Restaurants 7.6
Retail 13.9
Technology 7.6
Transportation 2.8
Utilities 0.6
Cash Equivalents and Other
Net Assets 25.0
------
100.0%
======
</TABLE>
- --------------------------------------------------------------------------------
27
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS - 91.5%
ARGENTINA - 0.4%
24,500 Telefonica de Argentina SA ADR $ 627,813
------------
AUSTRALIA - 1.4%
22,000 Brambles Industries Limited 618,253
70,400 Broken Hill Proprietary Company Limited 727,077
68,800 Lend Lease Corporation Limited 791,046
------------
2,136,376
------------
BRAZIL - 0.4%
7,000 Telecomunicacoes Brasileiras SA ADR 545,125
------------
CANADA - 1.5%
79,440 Abitibi Consolidated, Incorporated 966,739
33,770 Bank of Nova Scotia 771,414
28,010 Canadian Pacific Limited 656,975
------------
2,395,128
------------
DENMARK - 0.7%
10,000 Den Danske Bank Group 1,138,296
------------
FINLAND - 1.0%
10,340 Nokia Oyj 1,182,532
31,290 Stora Enso Oyj 411,092
------------
1,593,624
------------
FRANCE - 13.9%
4,788 Accor SA 1,076,940
4,350 Air Liquide 669,808
5,550 Alcatel 866,250
11,700 Assurances Generales de France 651,756
9,600 AXA 1,353,081
16,370 Canal Plus (1) 1,135,576
2,950 Cap Gemini SA 446,486
6,970 Danone 1,776,512
30,630 Sanofi-Synthelabo SA (1) 1,350,525
29,040 STMicroelectronics NV 2,548,630
11,440 Suez Lyonnaise des Eaux 1,845,687
35,933 Total Fina SA 4,853,059
43,107 Vivendi 3,264,415
------------
21,838,725
------------
GERMANY - 7.3%
23,840 BASF AG 1,071,189
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
23,711 DaimlerChrysler AG 1,844,188
28,780 Deutsche Bank AG $ 2,062,998
21,800 Karstadt AG 985,255
18,250 Mannesmann AG 2,867,660
26,980 RWE AG 1,086,086
12,170 Siemens AG 1,091,736
22,500 Thyssen Krupp AG (1) 532,094
------------
11,541,206
------------
HONG KONG - 1.6%
206,000 China Telecom (Hong Kong) Limited (1) 703,943
162,000 Hutchison Whampoa Limited 1,626,356
21,000 Sun Hung Kai Properties Limited 170,281
------------
2,500,580
------------
INDONESIA - 0.1%
403,380 PT Telekomunikasi Indonesia 192,085
------------
IRELAND - 1.5%
136,280 Bank of Ireland (1) 1,062,820
50,900 Elan Corporation PLC ADR (1) 1,310,675
------------
2,373,495
------------
ITALY - 2.5%
214,100 ENI SpA 1,251,166
181,840 Olivetti SpA (1) 353,578
40,670 San Paolo-IMI SpA 526,634
150,153 Tecnost SpA 288,808
243,670 Telecom Italia Mobile SpA 1,521,290
------------
3,941,476
------------
JAPAN - 20.5%
80,000 Amada Metrecs Company Limited 505,941
54,000 Bridgestone Corporation 1,485,051
23,900 Credit Saison Company Limited 587,423
60,000 Dai-Dan Company Limited 493,867
257,000 Dai-Tokyo Fire and Marine Insurance
Company Limited 1,305,193
69,000 Daiwa House Industry Company Limited 630,759
194 East Japan Railway Company 1,187,868
51,000 Fuji Photo Film 1,637,121
149,000 Hanshin Electric Railway Company Limited 442,602
115,000 Kuraray Company Limited 1,542,736
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
28
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
JAPAN (CONTINUED)
62,000 Matsushita Electric Industrial Company
Limited $ 1,304,043
256,000 Mitsui & Company Limited 1,891,298
19,000 Murata Manufacturing Company Limited 2,439,631
131 Nippon Telegraph & Telephone Corporation 2,008,431
58,000 Nomura Securities Company Limited 956,477
37 NTT Mobile Communication Network,
Incorporated 982,081
56,000 Omron Corporation 1,169,796
15,300 Promise Company Limited 1,026,255
21,000 Sekisui House Limited 227,185
51,000 Showa Shell Sekiyu 306,410
7,000 SMC Corporation 1,179,858
11,500 Sony Corporation 1,791,778
89,000 Sumitomo Electric Industries 1,194,796
949,000 Sumitomo Metal Industries Limited (1) 927,539
44,000 Takeda Chemical Industries Limited 2,525,488
97,000 Toppan Printing Company Limited 1,188,798
212,000 Yasuda Fire & Marine Insurance Company
Limited 1,434,189
------------
32,372,614
------------
KOREA - 0.8%
19,257 Kookmin Bank 300,213
5,100 Korea Electric Power Corporation 149,237
9,000 Pohang Iron & Steel Company Limited ADR 300,375
2,533 Samsung Electronics 422,343
6 SK Telecom Company Limited 6,928
360 SK Telecom Company Limited ADR 4,702
------------
1,183,798
------------
MEXICO - 1.5%
18,240 Grupo Televisa SA ADR (1) 775,200
17,920 Telefonos de Mexico SA ADR 1,532,160
------------
2,307,360
------------
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
NETHERLANDS - 5.5%
50,294 ING Groep NV $ 2,964,475
42,290 Royal Dutch Petroleum Company 2,526,033
69,245 TNT Post Group NV 1,761,276
19,366 United Pan-Europe Communications NV (1) 1,487,924
------------
8,739,708
------------
NEW ZEALAND - 0.9%
412,700 Carter Holt Harvey Limited 522,257
225,500 Telecom Corporation of New Zealand
Limited 906,309
------------
1,428,566
------------
PHILIPPINES - 1.1%
1,709,500 Ayala Land, Incorporated 436,422
274,000 Manila Electric Company "B" Shares 750,684
23,000 Philippine Long Distance Telephone
Company 478,331
------------
1,665,437
------------
PORTUGAL - 0.6%
64,800 EDP-Electricidade de Portugal SA 1,006,637
------------
SINGAPORE - 1.3%
75,000 City Developments Limited 387,657
56,957 DBS Group Holdings Limited 643,565
120,000 DBS Land Limited 222,136
45,895 Singapore Press Holdings Limited 786,137
10,000 United Overseas Bank Limited 75,728
------------
2,115,223
------------
SPAIN - 1.8%
6,000 Bankinter SA 230,622
73,736 Endesa SA 1,474,830
72,735 Telefonica SA 1,195,649
------------
2,901,101
------------
SWEDEN - 3.1%
39,620 Securitas AB 586,733
101,905 Telefonaktiebolaget LM Ericsson "B"
Shares 4,230,465
------------
4,817,198
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
29
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
SWITZERLAND - 4.7%
11,687 ABB Limited (1) $ 1,177,339
2,260 Novartis AG 3,381,686
9,649 UBS AG 2,808,445
------------
7,367,470
------------
TAIWAN - 1.1%
24,280 Asustek Computer, Incorporated 342,348
21,300 China Steel Corporation 362,632
28,630 Taiwan Semiconductor Manufacturing
Company Limited ADR 991,314
------------
1,696,294
------------
THAILAND - 0.4%
173,000 Bangkok Bank Public Company Limited (1) 403,368
38,000 Electricity Generating Public Company
Limited 50,207
22,000 PTT Exploration and Production Public
Company Limited (1) 160,725
76,000 Siam Commercial Bank Public Company
Limited (1) 82,694
------------
696,994
------------
UNITED KINGDOM - 15.9%
41,120 Abbey National PLC 801,588
207,270 Airtours PLC 1,115,558
96,260 Allied Zurich PLC 1,168,852
53,820 ARM Holdings PLC (1) 1,518,104
6,759 Bass PLC 73,976
130,990 Blue Circle Industries PLC 607,209
90,637 British Energy PLC (1) 617,214
130,550 British Land Company PLC 938,281
123,160 British Sky Broadcasting Group PLC 1,325,731
51,570 British Telecommunications PLC 934,218
109,480 Cable & Wireless PLC 1,275,484
351,620 David S. Smith (Holdings) PLC 1,102,018
183,400 Electrocomponents PLC 1,640,128
70,200 Future Network PLC (1) 819,009
COMMON STOCKS (CONTINUED)
UNITED KINGDOM (CONTINUED)
162,530 Imperial Chemical Industries PLC $ 1,614,840
227,800 Kingfisher PLC 2,489,487
<CAPTION>
SHARES VALUE
- ----------- ------------
<C> <S> <C>
444,040 LASMO PLC 983,644
205,000 Legal & General Group PLC 568,490
53,796 Lloyds TSB Group PLC 743,265
830 Pearson PLC 18,659
41,500 Rio Tinto PLC 707,531
466,531 Rolls-Royce PLC 1,653,545
355,180 Vodafone AirTouch PLC 1,652,279
150,243 Williams PLC 751,927
------------
25,121,037
------------
Total Common Stocks
(Cost $118,938,615) 144,243,366
------------
PREFERRED STOCK - 0.3%
THAILAND - 0.3%
396,500 Siam Commercial Bank Public Company
Limited (1)
(Cost $528,052) 449,400
------------
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
REPURCHASE AGREEMENT - 4.8%
$ 7,560,000 State Street Bank and Trust Company,
4.25%, 11/01/1999 (Cost
$7,560,000) (2) 7,560,000
</TABLE>
<TABLE>
<S> <C>
-------------
Total Investments - 96.6%
(Cost $127,026,667) 152,252,766
Other Assets Less Liabilities - 3.4% 5,367,176
------------
Total Net Assets - 100% $157,619,942
============
</TABLE>
- ------------------
(1) Denotes non-income producing security.
(2) The repurchase agreement, dated 10/29/99 with a repurchase price of
$7,562,678 is collateralized by a $7,645,000 United States Treasury Bond,
6.625%,
due 2/15/27, valued at $7,711,894.
ADR- American Depository Receipts.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
30
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- --------------------- ------------
<C> <S> <C>
COMMON STOCKS - 80.4%
ARGENTINA - 1.5%
3,800 Perez Companc SA "B" Shares $ 22,887
700 Quilmes Industrial SA (Quinsa)
ADR 7,306
600 Telecom Argentina Stet-Fracne
Telecom SA ADR 16,500
------------
46,693
------------
BRAZIL - 7.1%
1,400 Companhia Cervejaria Brahma
ADR 17,500
900 Companhia Energetica de Minas
Gerais ADR 12,863
1,700 Companhia Paranaense de
Energia-Copel ADR 11,263
1,700 Companhia Vale do Rio Doce 24,820
2,600 Embratel Participacoes SA ADR 33,475
3,000 Petroleo Brasileiro SA ADR 47,950
400 Tele Centro Sul Participacoes
SA ADR 23,900
1,000 Tele Norte Leste Participacoes
SA (Telemar) ADR 16,875
1,500 Uniao de Bancos Brasileiros SA
(Unibanco) 34,688
------------
223,334
------------
CHILE - 1.5%
500 Banco Santiago ADR 10,000
1,200 CIA de Telecomunicaciones de
Chile SA ADR 20,025
1,400 Embotelladora Andina SA ADR 18,025
1 Enersis SA ADR 23
------------
48,073
------------
CHINA - 1.3%
150,000 Yizheng Chemical Fibre Company
Limited (1) 41,026
------------
CZECH REPUBLIC - 1.2%
6,600 Ceska Sporitelna AS GDR (1) 36,960
2 Komercni Banka AS GDR (1) 17
------------
36,977
------------
GREECE - 3.9%
753 Alpha Credit Bank 57,586
630 Commercial Bank of Greece (1) 46,855
918 Hellenic Telecommunications
Organization SA (OTE) 19,453
------------
123,894
------------
HUNGARY - 1.7%
960 Matav Rt ADR 27,660
570 OTP Bank Rt. GDR 25,664
------------
53,324
<CAPTION>
SHARES VALUE
- --------------------- ------------
<C> <S> <C>
------------
INDIA - 7.7%
3,300 Gujarat Ambuja Cements Limited $ 40,507
2,000 Larsen & Toubro Limited GDR 42,600
5,800 Mahanagar Telephone Nigam
Limited 48,720
5,000 Mahindra & Mahindra Limited
GDR 39,125
1,425 Pentafour Software & Exports
Limited GDR 40,613
2,100 Videsh Sanchar Nigam Limited
GDR 33,495
------------
245,060
------------
INDONESIA - 1.6%
6,000 H M Sampoerna (1) 13,978
30,000 PT Indofood Sukses Makmur (1) 35,604
------------
49,582
------------
ISRAEL - 3.1%
19,110 Bank Hapoalim Limited 45,433
10,000 Bank Leumi Le-Israel 17,631
335 ECI Telecom Limited 9,757
1,710 Partner Communications Company
Limited (1) 26,933
------------
99,754
------------
KOREA - 12.8%
547 Daewoo Securities Company 7,000
9,000 Hanwha Chemical Corporation 81,409
4,550 Hyundai Electronics Industries
Company (1) 75,675
2,000 Kookmin Bank 31,180
1,400 Korea Electric Power
Corporation 40,967
6,000 Korea Exchange Bank (1) 28,012
400 Samsung Electronics 66,694
7,000 Shinhan Bank 74,114
------------
405,051
------------
MEXICO - 10.0%
6,100 Alfa SA 23,368
600 Cemex SA de CV ADR (1) 13,500
3,100 Cemex Sa de CV 13,999
14,000 Cifra SA de CV (1) 21,365
15,000 Consorico Ara SA (1) 16,849
8,600 Fomento Economico Mexico SA de
CV 27,856
7,100 Grupo Bimbo SA de CV 13,002
12,700 Grupo Financiero Banamex
Accival SA de CV
(Banacci) (1) 31,709
600 Grupo Televisa SA ADR (1) 25,500
1,500 Telefonos de Mexico SA ADR 128,250
------------
315,398
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
31
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- --------------------- ------------
<C> <S> <C>
PHILIPPINES - 1.9%
12,000 Manila Electric Company "B"
Shares $ 32,877
1,870 Metropolitan Bank & Trust
Company 13,972
80,000 SM Prime Holdings 14,147
------------
60,996
------------
POLAND - 1.3%
1,700 KGHM Polska Miedz SA GDR 20,995
3,760 Telekomunikacja Polska SA GDR 18,988
------------
39,983
------------
RUSSIA - 1.4%
900 LUKoil Holding ADR 27,000
1,000 Vimpel-Communications ADR (1) 16,875
------------
43,875
------------
SOUTH AFRICA - 6.8%
29,600 Malbak Limited 21,435
26,900 Metro Cash and Carry Limited 22,325
27,300 Profurn Limited 23,768
26,700 Sanlam Limited 30,632
3,050 Sappi Limited 25,264
4,000 Sasol Limited 27,339
18,990 Standard Bank Investment
Corporation Limited 64,896
------------
215,659
------------
TAIWAN - 9.9%
12,076 Acer Peripherals, Incorporated 32,149
21,600 China Development Industrial
Bank 32,053
47,400 Chinatrust Commercial Bank 43,457
43,000 CTCI Corporation 36,443
31,000 Formosa Plastics Corporation 62,020
21,560 Taiwan Semiconductor
Manufacturing Company 95,777
9,120 United World Chinese
Commercial Bank 11,551
------------
313,450
------------
THAILAND - 2.3%
1,500 Delta Electronics (Thailand)
Public Company Limited 12,280
1,000 Siam Cement Public Company
Limited (1) 25,906
<CAPTION>
SHARES VALUE
- --------------------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
THAILAND (CONTINUED)
25,000 Thai Farmers Bank Public
Company Limited (1) $ 35,298
------------
73,484
------------
TURKEY - 2.7%
700,000 Eregli Demir ve Celik
Fabrikalari T.A.S (Erdemir) 17,472
165,000 Koc Holding AS 16,645
46,815 Migros Turk T.A.S. 20,205
2,000,000 Yapi ve Kredi Bankasi AS 29,120
------------
83,442
------------
ZIMBABWE - 0.7%
162,000 Econet Wireless Holdings (1) 23,294
------------
Total Common Stocks
(Cost $2,166,157) 2,542,349
------------
WARRANTS - 0.8%
THAILAND - 0.8%
25,000 Bangkok Bank Public Company
Limited (Cost $24,328) (1) 23,986
------------
PREFERRED STOCK - 1.1%
BRAZIL - 1.1%
905,000 Gerdau SA 16,366
200,000 Telecomunicacoes de Sao Paulo
SA 18,801
------------
35,167
------------
Total Preferred Stock
(Cost $42,023) 35,167
------------
<CAPTION>
PRINCIPAL
AMOUNT
- ---------------------
<C> <S> <C>
REPURCHASE AGREEMENT - 10.0%
$ 317,000 State Street Bank and Trust
Company, 4.25%, 11/01/1999
(Cost $317,000) (2) 317,000
------------
</TABLE>
<TABLE>
<S> <C>
Total Investments - 92.3%
(Cost $2,549,508) 2,918,502
Other Assets Less Liabilities - 7.7% 243,880
------------
Total Net Assets - 100% $ 3,162,382
============
</TABLE>
- ------------------
<TABLE>
<C> <S>
(1) Denotes non-income producing security.
(2) The repurchase agreement, dated 10/29/99 with
a repurchase price of $317,112 is
collateralized by a $325,000 United States
Treasury Note, 6.250%,
due 7/31/01, valued at $327,438.
ADR - American Depository Receipts.
GDR - Global Depository Receipts.
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
32
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ----------
<C> <S> <C>
COMMON STOCKS - 96.7%
BELGIUM - 0.8%
3,000 Carestel (1) $ 75,676
----------
DENMARK - 0.8%
760 Christian Hansen Holding AS 74,689
----------
FRANCE - 13.7%
1,500 ALTEN (1) 163,806
2,400 Coflexip SA ADR 95,100
6,810 Cyrano (1) 36,075
5,850 Genesys (1) 114,426
2,100 GFI Informatique 187,613
2,300 Group R2I Sante 106,366
1,700 HF Company 132,579
2,000 Infogrames Entertainment SA (1) 185,195
1,600 Manitou B.F. SA 78,198
7,200 Societe Pour L' Informatique (1) 249,730
----------
1,349,088
----------
GERMANY - 6.3%
1,500 ADVA AG Optical Networking (1) 162,387
2,333 Das Werk AG (1) 73,563
2,500 PrimaCom AG (1) 124,287
3,090 Rhon-Klinikum AG 125,038
2,300 Telegate AG (1) 82,192
2,500 WWL Internet AG (1) 57,808
----------
625,275
----------
HONG KONG - 2.3%
150,000 Elec & Eltek International Holdings
Limited 27,029
738,000 Tan Chong International Limited 159,578
19,000 Varitronix International Limited 40,961
----------
227,568
----------
IRELAND - 1.5%
7,000 CBT Group Public Limited Company ADR (1) 144,375
----------
ITALY - 2.5%
89,200 Ciga SpA (1) 83,441
11,500 Class Editori SpA 96,817
11,400 Gewiss SpA 70,574
----------
250,832
----------
<CAPTION>
SHARES VALUE
- ----------- ----------
<C> <S> <C>
JAPAN - 21.7%
6,000 Airport Facilities Company Limited $ 31,679
18,000 Amada Metrecs Company Limited 113,837
4,000 ARC Land Sakamoto Company Limited 67,075
14,000 Canon Copier Sales Company Limited 108,662
6,000 Charle Company Limited 62,093
6,000 Daidoh Limited 14,316
12,000 Diamond City Company Limited 41,395
12,000 Eiden Company Limited 133,499
6,000 Idec Izumi Corporation 66,175
5,000 Inaba Denkisangyo Company Limited 75,699
7,000 Inabata & Comapny Limited 32,599
5,000 Japan Airport Terminal Company Limited 63,338
6,000 Kosaido Company Limited 94,289
4,000 Mandom Corporation 120,736
4,000 Maruzen Company Limited 16,136
1,000 Meiko Shokai Company Limited 38,520
6,000 Mirai Industry Company Limited 96,589
4,000 Nippon Cable Systems, Incorporated 51,936
22,000 Nippon Thompson Company Limited 142,507
6,500 Nishio Rent All Company 51,696
38,000 Nissan Fire & Marine Insurance Company
Limited 131,085
14,000 Sanki Engineering Company Limited 77,003
12,000 Sanyo Chemical Industries, Limited 130,165
16,000 Sumitomo Warehouse Company Limited 47,834
3,000 Tachihi Enterprise Company Limited 80,778
10,000 Toho Real Estate Company Limited 45,036
2,500 Trusco Nakayama Corporation 34,999
10,000 Tsubaki Nakashima Company Limited 143,733
5,000 Yushiro Chemical Industry Company
Limited 23,716
----------
2,137,125
----------
LUXEMBOURG - 1.0%
2,600 SBS Broadcasting SA (1) 95,225
----------
NETHERLANDS - 5.5%
4,000 Apothekers Cooperatie OPG 83,243
12,000 Be Semiconductor Industries NV 122,973
6,000 Devote NV (1) 88,288
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
33
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ----------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
NETHERLANDS (CONTINUED)
4,034 Endemol Entertainment Holding NV $ 137,798
4,368 Ordina Beheer NV 106,052
----------
538,354
----------
NORWAY - 0.8%
5,200 Petroleum Geo-Services ASA (1) 77,557
----------
SINGAPORE - 3.0%
52,000 Parkway Holdings Limited 95,634
70,000 Singapore Bus Services Limited 110,647
98,000 Wing Tai Holdings Limited 85,994
----------
292,275
----------
SPAIN - 5.6%
5,000 Cortefiel SA 130,488
10,000 NH Hoteles SA 112,988
10,000 Prosegur, CIA de Seguridad SA 81,982
2,900 Sogecable SA (1) 79,584
27,300 TelePizza SA (1) 145,764
----------
550,806
----------
SWEDEN - 3.1%
3,800 Modern Times Group MTB AB (1) 122,696
7,800 OM Gruppen AB 100,362
8,800 Scandic Hotels AB 82,251
----------
305,309
----------
SWITZERLAND - 3.2%
4 Lindt & Spruengli AG 98,442
290 Selecta Group 102,584
282 SEZ Holding AG 114,744
----------
315,770
----------
UNITED KINGDOM - 24.9%
260,000 Allied Leisure PLC 127,990
105,000 Amstrad PLC 198,139
6,000 Ask Central PLC 58,088
35,000 Booker PLC 71,789
100,500 British Regional Airlines Group PLC 87,402
80,000 Corporate Services Group PLC 139,148
12,400 Fairey Group PLC 78,947
11,000 Freeport Leisure PLC 101,621
<CAPTION>
SHARES VALUE
- ----------- ----------
<C> <S> <C>
14,550 Galen Holdings PLC $ 134,894
37,800 Jarvis Hotels PLC 68,539
60,000 John David Sports PLC 137,343
120,000 Limelight Group PLC 94,516
29,000 Low & Bonar PLC 90,414
38,000 Meconic PLC 139,050
30,000 MERANT PLC (1) 120,606
40,000 Microgen PLC 114,863
58,500 Ockham Holdings PLC 82,554
24,300 Penna Holdings PLC 117,628
10,000 Photo-Me International PLC 244,658
12,300 Renishaw PLC 101,823
30,000 Rosebys PLC 143,250
----------
2,453,262
----------
Total Common Stocks
(Cost $8,173,120) 9,513,186
----------
PREFERRED STOCK - 1.4%
GERMANY - 1.4%
640 Marschollek, Lautenschlaeger und Partner
AG (Cost $61,750) 134,871
----------
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
REPURCHASE AGREEMENT - 0.1%
$ 14,500 State Street Bank and Trust Company,
4.25%, 11/01/1999 (Cost $14,500) (2) 14,500
----------
</TABLE>
<TABLE>
<S> <C>
Total Investments - 98.2%
(Cost $8,249,370) 9,662,557
Other Assets Less Liabilities - 1.8% 173,393
----------
Total Net Assets - 100% $9,835,950
==========
</TABLE>
- ------------------
(1) Denotes non-income producing security.
(2) The repurchase agreement, dated 10/29/99 with a repurchase price of $14,505
is collateralized by a $15,000 United States Treasury Note, 6.250%, due
5/31/00, valued at $15,450.
ADR American Depository Receipts.
-
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
34
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER GREATER CHINA FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ------- ----------
<C> <S> <C>
COMMON STOCKS - 96.5%
CHINA - 79.0%
556,000 Angang New Steel Company Limited $ 65,121
452,000 Anhui Conch Cement Company Limited 44,796
95,600 China International Marine Containers
Limited 61,399
340,000 China Shipping Development Company
Limited (1) 63,453
81,663 China Vanke Company Limited 23,439
167,000 Dazhong Transportation Company (1) 60,454
70,000 Eastern Communicationns Company Limited 57,120
69,000 Guangdong Electric Power Development
Company Limited 31,971
56,000 Guangdong Kelon Electrical Holdings
Company Limited 49,733
804,000 Maanshan Iron & Steel Company
Limited (1) 62,089
72,800 Shanghai Lujiazhui Finance & Trade Zone
Development Company Limited 21,258
324,000 Shanghai Petrochemical Company Limited 66,722
160,000 Shanghai Tyre & Rubber Company Limited 18,240
71,000 Shanghai Waigaoqiao Free Trade Zone
Development Company Limited 19,880
174,000 Shenzhen Expressway Company Limited 25,979
178,000 Yanzhou Coal Mining Company Limited 58,993
720,000 Yizheng Chemical Fibre Company
Limited (1) 196,923
376,000 Zhejiang Expressway Company Limited 57,589
112,000 Zhejiang Southeast Electric Power
Company Limited 32,032
----------
1,017,191
----------
<CAPTION>
SHARES VALUE
- ------- ----------
<C> <S> <C>
HONG KONG - 17.5%
7,500 Brilliance China Automotive Holdings
Limited (1) $ 27,830
72,000 China Merchants Holdings International
Company Limited 56,992
480,000 China National Aviation Company Limited 60,544
62,000 Cosco Pacific Limited 46,284
29,000 New World Infrastructure Limited (1) 33,593
----------
225,243
----------
Total Common Stocks
(Cost $1,065,397) 1,242,434
<CAPTION>
PRINCIPAL
AMOUNT
- ---------
<C> <S> <C>
REPURCHASE AGREEMENT - 3.3%
$43,000 State Street Bank and Trust Company,
4.25%, 11/01/1999
(Cost $43,000)(2) 43,000
----------
</TABLE>
<TABLE>
<S> <C>
Total Investments - 99.8%
(Cost $1,108,397) 1,285,434
Other Assets Less Liabilities - 0.2% 2,728
----------
Total Net Assets - 100.0% $1,288,162
==========
</TABLE>
- ------------------
(1) Denotes non-income producing security.
(2) The repurchase agreement, dated 10/29/99 with a repurchase price of $43,015
is collateralized by a $45,000 United States Treasury Note, 6.250%, due
5/31/01, valued at $46,350.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
35
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. DIVERSIFIED GROWTH FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
COMMON STOCKS - 81.1%
BASIC MATERIALS - 4.3%
5,000 Georgia-Pacific Group $ 198,438
3,400 Weyerhaeuser Company 202,937
4,900 Willamette Industries, Incorporated 203,656
-----------
605,031
-----------
CAPITAL GOODS - 5.8%
5,000 American Standard Companies,
Incorporated (1) 190,937
4,400 Rockwell International Corporation 213,125
2,500 Textron, Incorporated 192,969
5,600 Tyco International Limited 223,650
-----------
820,681
-----------
COMPUTER HARDWARE - 3.9%
3,700 Intel Corporation 286,519
4,200 Tellabs, Incorporated (1) 265,650
-----------
552,169
-----------
COMPUTERS - 7.5%
5,000 Apple Computer, Incorporated (1) 400,625
6,000 Siebel Systems, Incorporated (1) 658,875
-----------
1,059,500
-----------
CONSUMER CYCLICAL - 12.1%
4,800 Abercrombie & Fitch Company (1) 130,800
7,400 Circuit City Stores-Circuit City Group 315,887
9,500 Family Dollar Stores, Incorporated 195,938
5,100 GAP, Incorporated 189,338
6,900 Jones Apparel Group, Incorporated (1) 218,212
4,300 Lowe's Companies, Incorporated 236,500
6,900 TJX Companies, Incorporated 187,163
3,400 Whirlpool Corporation 236,937
-----------
1,710,775
-----------
CONSUMER STAPLES - 1.4%
10,300 Darden Restaurants, Incorporated 196,344
-----------
FINANCIAL SERVICES - 3.6%
4,650 Citigroup, Incorporated 251,681
2,300 Morgan Stanley Dean Witter & Company 253,719
-----------
505,400
-----------
<CAPTION>
SHARES VALUE
- ----------- -----------
<C> <S> <C>
HEALTH CARE - 4.4%
2,500 Allergan, Incorporated $ 268,437
4,800 Biogen, Incorporated (1) 355,800
-----------
624,237
-----------
TECHNOLOGY - 28.9%
7,200 Adobe Systems, Incorporated 503,550
6,400 Altera Corporation (1) 311,200
8,500 Amdocs Limited (1) 236,406
5,400 Citrix Systems, Incorporated (1) 346,275
9,400 Compuware Corporation (1) 261,438
3,600 Comverse Technology, Incorporated (1) 408,600
10,350 Concord EFS, Incorporated (1) 280,097
1,800 Electronic Arts, Incorporated (1) 145,463
3,800 Lexmark International Group,
Incorporated (1) 296,637
4,700 Solectron Corporation (1) 353,675
4,900 Synopsys, Incorporated (1) 305,331
4,400 Texas Instruments, Incorporated 394,900
4,400 Waters Corporation (1) 233,750
-----------
4,077,322
-----------
TELECOMMUNICATIONS - 9.2%
3,800 Corning, Incorporated 298,775
2,800 MCI WorldCom, Incorporated (1) 240,275
4,400 Sprint Corporation 326,975
4,800 United States Cellular Corporation (1) 424,800
-----------
1,290,825
-----------
Total Common Stocks
(Cost $8,829,601) 11,442,284
SHORT TERM INVESTMENT - 0.0%
5,221 SSgA U.S. Government Money Market Fund,
4.888%
(Cost $5,221)(2) 5,221
-----------
</TABLE>
<TABLE>
<S> <C>
Total Investments - 81.1%
(Cost $8,834,822) 11,447,505
Other Assets Less Liabilities - 18.9% 2,662,359
-----------
Total Net Assets - 100% $14,109,864
===========
</TABLE>
- ------------------
(1) Denotes non-income producing security.
(2) Interest rate shown is 7-day yield as of October 31, 1999.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
36
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- -------- -----------
<C> <S> <C>
COMMON STOCKS - 97.4%
BASIC INDUSTRY - 2.5%
9,256 Cambrex Corporation $ 279,994
12,481 Elcor Corporation 307,345
6,076 Ferro Corporation 123,798
23,800 UCAR Internal, Incorporated (1) 465,587
-----------
1,176,724
-----------
BUSINESS SERVICES - 2.2%
21,117 ACNielson Corporation (1) 464,574
39,894 Group Maintenance America
Corporation (1) 383,980
16,240 RemedyTemp, Incorporated Class A (1) 174,580
-----------
1,023,134
-----------
CAPITAL GOODS - 7.5%
13,400 Astec Industries, Incorporated (1) 314,062
24,778 Hussmann International, Incorporated 396,448
27,428 Mueller Industries, Incorporated (1) 875,982
18,200 Plexus Corporation (1) 482,300
37,470 Safety-Kleen Corporation 428,563
13,272 SLI, Incorporated (1) 142,674
10,685 SPX Corporation (1) 905,554
-----------
3,545,583
-----------
CONSUMER CYCLICAL - 21.2%
22,590 Ames Department Stores,
Incorporated (1) 715,821
20,039 CEC Entertainment, Incorporated (1) 642,501
54,139 Dal-Tile International,
Incorporated (1) 504,169
45,456 Fairfield Communities, Incorporated (1) 556,836
22,394 Family Dollar Stores, Incorporated 461,876
46,700 Heilig-Meyers Company 204,313
21,700 Helen of Troy Limited (1) 193,944
31,008 Hollywood Entertainment Corporation (1) 437,988
34,943 Jack in The Box, Incorporated (1) 840,816
16,862 Papa John's International,
Incorporated (1) 630,217
35,115 Regis Corporation 651,822
33,092 Rent-A-Center, Incorporated (1) 605,997
30,756 Rent-Way, Incorporated (1) 511,319
24,855 Ruby Tuesday, Incorporated 473,798
37,435 School Specialty, Incorporated (1) 554,506
28,705 ShopKo Stores, Incorporated (1) 719,419
14,604 Valassis Communications,
Incorporated (1) 627,972
32,990 WestPoint Stevens, Incorporated 624,748
-----------
9,958,062
-----------
<CAPTION>
SHARES VALUE
- -------- -----------
<C> <S> <C>
CONSUMER STAPLES - 2.5%
13,180 American Italian Pasta Company (1) $ 331,147
25,015 Aurora Foods, Incorporated (1) 322,068
6,409 Chattem, Incorporated (1) 112,959
20,600 International Home Foods,
Incorporated (1) 393,975
-----------
1,160,149
-----------
ENERGY - 5.1%
19,280 BJ Services Company (1) 661,545
11,186 Cooper Cameron Corporation (1) 432,758
16,700 Core Laboratories N.V. (1) 306,863
12,869 Hanover Compressor Company (1) 476,153
15,214 Weatherford International, Incorporated 515,374
-----------
2,392,693
-----------
FINANCIALS - 9.0%
20,420 Affiliated Managers Group,
Incorporated (1) 546,235
23,378 AmerUs Life Holdings, Incorporated 563,994
4,000 Annuity and Life Re (Holdings) Limited 94,000
14,837 Bank United Corporation 578,643
24,600 Capitol Federal Financial 246,000
19,079 Colonial BancGroup, Incorporated 227,756
24,898 Cullen/Frost Bankers, Incorporated 718,930
6,229 Duff & Phelps Credit Rating Company 467,175
33,218 Heller Financial, Incorporated 788,927
-----------
4,231,660
-----------
HEALTH CARE - 11.7%
4,300 Beckman Coulter, Incorporated 197,800
2,200 C. R. Bard, Incorporated 118,663
17,500 CONMED Corporation (1) 436,406
28,088 Haemonetics Corporation (1) 524,894
54,600 Health Management Associates,
Incorporated (1) 484,575
15,091 Invacare Corporation 315,025
9,100 Jones Pharma, Incorporated 282,100
67,200 Laboratory Corporation of America
Holdings (1) 201,600
12,900 Lincare Holdings, Incorporated (1) 362,812
18,600 Medicis Pharmaceutical Corporation (1) 567,300
21,300 ProVantage Health Services,
Incorporated (1) 248,944
26,866 Province Healthcare Company (1) 433,214
25,693 Quest Diagnostics, Incorporated (1) 719,404
23,439 Sybron International Corporation (1) 558,141
1,100 Universal Health Services,
Incorporated (1) 32,313
-----------
5,483,191
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
37
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- -------- -----------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDIA - 5.1%
4,790 Cox Radio, Incorporated Class A (1) $ 335,300
4,800 Emmis Communications Corporation (1) 346,200
1,465 Entercom Communications Corporation (1) 72,975
42,254 Mail-Well, Incorporated (1) 565,147
900 Radio Unica Corporation (1) 25,763
8,500 Salem Communications Corporation (1) 211,437
4,100 Spanish Broadcasting Systems,
Incorporated (1) 109,163
12,533 True North Communications, Incorporated 505,237
5,098 Young & Rubicam, Incorporated 233,233
-----------
2,404,455
-----------
REAL ESTATE - 1.7%
22,425 Catellus Development Corporation (1) 263,494
21,926 Manufactured Home Communities,
Incorporated 511,150
-----------
774,644
-----------
TECHNOLOGY - 23.1%
21,300 Actel Corporation (1) 402,038
13,400 Affiliated Computer Services,
Incorporated (1) 509,200
300 Akamai Technologies, Incorporated (1) 43,556
13,900 Amphenol Corporation (1) 821,837
1,600 Ardent Software, Incorporated (1) 35,300
26,700 Artesyn Technologies, Incorporated (1) 527,325
13,400 Burr-Brown Corporation (1) 526,788
2,796 CTS Corporation 158,149
9,700 DII Group, Incorporated (1) 349,200
29,300 General Semiconductor, Incorporated (1) 307,650
13,200 Integrated Device Technology,
Incorporated (1) 271,425
13,000 L - 3 Communications Holdings,
Incorporated (1) 548,437
20,200 LTX Corporation (1) 319,413
29,727 NOVA Corporation (1) 772,902
<CAPTION>
SHARES VALUE
- -------- -----------
<C> <S> <C>
22,143 Perkinelmer, Incorporated (1) $ 903,711
22,258 Pinnacle Holdings, Incorporated (1) 534,192
9,900 Progress Software Corporation (1) 331,650
17,526 Remedy Corporation (1) 753,618
25,600 Sybase, Incorporated (1) 345,600
14,300 Symantec Corporation (1) 682,825
14,226 Symbol Technologies, Incorporated 565,483
14,000 Varian, Incorporated (1) 264,250
16,279 Zebra Technologies Corporation (1) 885,171
-----------
10,859,720
-----------
TRANSPORTATION - 1.5%
400 Landstar System, Incorporated (1) 16,200
27,170 Mesaba Holdings, Incorporated (1) 312,455
15,265 SkyWest, Incorporated 378,763
-----------
707,418
-----------
UTILITIES - 4.3%
1,300 CT Communications, Incorporated 62,562
75,607 El Paso Electric Company (1) 689,914
30,200 Kinder Morgan, Incorporated 607,775
23,204 Montana Power Company 659,864
300 Triton PCS Holdings, Incorporated (1) 10,575
-----------
2,030,690
-----------
Total Common Stocks
(Cost $42,887,488) 45,748,123
SHORT TERM INVESTMENT - 0.7%
351,555 SSgA U.S. Government Money Market Fund,
4.888%
(Cost $351,555) (2) 351,555
-----------
</TABLE>
<TABLE>
<S> <C>
Total Investments - 98.1%
(Cost $43,239,043) 46,099,678
Other Assets Less Liabilities - 1.9% 884,031
-----------
Total Net Assets - 100% $46,983,709
===========
</TABLE>
- ------------------
(1) Denotes non-income producing security.
(2) Interest rate shown is 7-day yield as of October 31, 1999.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
38
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MICRO CAP FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS - 75.0%
BUSINESS SERVICES - 1.6%
15,000 EMCOR Group, Incorporated (1) $ 281,250
7,900 ICT Group, Incorporated (1) 53,325
-----------
334,575
-----------
CAPITAL GOODS - 3.9%
25,000 Bayou Steel Corporation (1) 84,375
35,000 IT Group, Incorporated (1) 345,625
12,000 Nortek, Incorporated (1) 367,500
-----------
797,500
-----------
CONSUMER CYCLICAL - 11.3%
60,000 Aftermarket Technology Corporation (1) 566,250
35,000 Isle of Capri Casinos, Incorporated (1) 415,625
100,000 Movie Gallery, Incorporated (1) 487,500
10,000 OshKosh B' Gosh, Incorporated 205,000
85,000 Safety 1st, Incorporated (1) 658,750
-----------
2,333,125
-----------
CONSUMER STAPLES - 2.0%
15,000 Performance Food Group Company (1) 406,875
-----------
ENERGY - 4.9%
25,000 Midcoast Energy Resources, Incorporated 456,250
10,000 Pennaco Energy, Incorporated 110,625
20,000 Prima Energy Corporation Company (1) 437,500
-----------
1,004,375
-----------
FINANCIALS - 3.9%
4,500 Duff & Phelps Credit Rating Company 337,500
22,500 Triad Guaranty, Incorporated (1) 462,656
-----------
800,156
-----------
HEALTH CARE - 11.4%
40,000 Embrex, Incorporated (1) 335,000
60,000 Hanger Orthopedic Group,
Incorporated (1) 738,750
23,200 Immucor, Incorporated (1) 278,400
2,500 Invivo Corporation (1) 28,750
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
20,000 LifePoint Hospitals, Incorporated (1) $ 236,250
20,000 Medco Research, Incorporated (1) 482,500
43,500 Unilab Corporation 247,406
-----------
2,347,056
-----------
MEDIA - 3.5%
30,000 Saga Communications, Incorporated (1) 723,750
-----------
RESTAURANT - 7.6%
20,000 ICH Corporation (1) 217,500
18,300 NPC International, Incorporated (1) 219,600
7,500 PJ America, Incorporated (1) 148,594
25,000 RARE Hospitality International,
Incorporated (1) 498,437
55,000 Taco Cabana, Incorporated (1) 477,813
-----------
1,561,944
-----------
RETAIL - 13.9%
36,500 Braun's Fashions Corporation (1) 606,813
75,000 Cato Corporation 862,500
18,125 Fred's, Incorporated 217,500
30,000 InterTan, Incorporated (1) 675,000
25,000 Tractor Supply Company (1) 500,000
-----------
2,861,813
-----------
TECHNOLOGY - 7.6%
20,000 Daisytek International Corporation (1) 332,500
20,000 Elantec Semiconductor, Incorporated (1) 427,500
5,000 JNI Corporation (1) 267,187
5,000 Nanometrics, Incorporated (1) 60,313
2,500 Predictive Systems, Incorporated (1) 108,750
10,000 Rare Medium Group, Incorporated (1) 144,375
6,000 Rogers Corporation (1) 217,500
-----------
1,558,125
-----------
TRANSPORTATION - 2.8%
50,000 Mesaba Holdings, Incorporated (1) 575,000
-----------
UTILITIES - 0.6%
15,000 El Paso Electric Company (1) 136,875
-----------
Total Common Stocks
(Cost $14,009,694) 15,441,169
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
39
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MICRO CAP FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
OPTIONS - 3.5%
10,000 Russell 2000 Index Put (1) $ 120,000
20,000 Russell 2000 Index Put (1) 217,500
20,000 S & P Small Capital 600 Index Put (1) 120,000
10,000 US Oncology, Incorporated Put (1) 56,250
15,000 US Oncology, Incorporated Put (1) 88,125
15,000 US Oncology, Incorporated Put (1) 123,750
-----------
Total Options
(Cost $788,013) 725,625
-----------
SHORT TERM INVESTMENTS - 9.7%
1,000,035 SSgA U.S. Government Money Market Fund,
4.888% (2) 1,000,035
1,000,035 SSgA Money Market Fund, 5.134% (2) 1,000,035
-----------
Total Short Term Investments
(Cost $2,000,070) 2,000,070
-----------
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
REPURCHASE AGREEMENT - 16.2%
$3,330,000 State Street Bank and Trust Company,
4.250%, 11/01/1999
(Cost $3,330,000) (3) $ 3,330,000
-----------
</TABLE>
<TABLE>
<S> <C>
Total Investments - 104.4%
(Cost $20,127,777) 21,496,864
Liabilities in Excess of Other Assets -
(4.4%) (901,282)
-----------
Total Net Assets - 100% $20,595,582
===========
</TABLE>
- ------------------
(1) Denotes non-income producing security.
(2) Interest rate shown is 7-day yield as of October 31, 1999.
(3) The repurchase agreement, dated 10/29/99 with a repurchase price of
$3,331,179 is collateralized by a $3,300,000 United States Treasury Note,
6.250%, due 5/31/00, valued at $3,339,000.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
40
<PAGE>
(This page has been left blank intentionally.)
- --------------------------------------------------------------------------------
41
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
<TABLE>
<CAPTION>
EMERGING
INTERNATIONAL MARKETS
FUND FUND
-------------- ----------
<S> <C> <C>
ASSETS
Investments in
securities, at
value--Note 2 $144,692,766 $2,601,502
Repurchase agreements 7,560,000 317,000
Cash 7,439 79,303
Foreign currency, at
value 4,749,697 212,529
Dividends receivable 206,276 21,497
Interest receivable 2,677 112
Receivable for
securities sold 3,107,780 79,570
Receivable for Fund
shares sold 3,031,203 10,246
Deferred organizational
costs 2,474 584
Prepaid expenses 3,692 22,543
Due from Investment
Adviser--Note 3 66,700 33,791
------------ ----------
Total Assets 163,430,704 3,378,677
------------ ----------
LIABILITIES
Payable for securities
purchased 2,772,207 184,190
Payable for forward
foreign currency
contracts purchased 555,350 3,540
Payable for Fund shares
redeemed 2,165,532 0
Advisory fee
payable--Note 3 58,391 2,498
Administration fee
payable--Note 3 29,195 321
Shareholder servicing
fee payable--Note 4 0 0
Accrued expenses and
other liabilities 230,087 25,746
------------ ----------
Total Liabilities 5,810,762 216,295
------------ ----------
Net Assets $157,619,942 $3,162,382
============ ==========
NET ASSETS
Capital paid-in $119,027,661 $2,500,456
Undistributed
(distributions in
excess of) net
investment income 1,145,028 63,557
Accumulated net
realized gain (loss)
on investments and
foreign currency
transactions 12,767,394 235,046
Net unrealized
appreciation
(depreciation) of
investments and
foreign currency
transactions 24,679,859 363,323
------------ ----------
Net Assets $157,619,942 $3,162,382
============ ==========
INVESTOR CLASS:
Net Assets $157,619,942 $3,162,382
Net asset value,
offering and
redemption price per
share $ 17.02 $ 12.18
Total shares outstanding
at end of period 9,262,927 259,628
ADVISOR CLASS:
Net Assets $ -- $ --
Net asset value,
offering and
redemption price per
share $ -- $ --
Total shares outstanding
at end of period -- --
Cost of securities
including repurchase
agreements $127,026,667 $2,549,508
Cost of foreign currency $ 4,744,273 $ 212,125
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
42
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
SMALLER GREATER U.S. DIVERSIFIED U.S. SMALLER MICRO
COMPANIES CHINA GROWTH COMPANIES CAP
FUND FUND FUND FUND FUND
-------------- ----------- ----------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in
securities, at
value--Note 2 $9,648,057 $1,242,434 $11,447,505 $46,099,678 $18,166,864
Repurchase agreements 14,500 43,000 0 0 3,330,000
Cash 41 1,624 200 0 5,908
Foreign currency, at
value 171,444 7,407 0 0 0
Dividends receivable 17,358 1,049 5,726 13,859 0
Interest receivable 5 15 87 11,532 9,037
Receivable for
securities sold 83,547 44,357 2,717,867 1,328,901 493,764
Receivable for Fund
shares sold 82,933 0 8 389,916 15,104
Deferred organizational
costs 12,088 0 0 8,969 0
Prepaid expenses 0 321 0 9,161 5,556
Due from Investment
Adviser--Note 3 20,704 20,317 4,581 44,262 16,478
---------- ---------- ----------- ----------- -----------
Total Assets 10,050,677 1,360,524 14,175,974 47,906,278 22,042,711
---------- ---------- ----------- ----------- -----------
LIABILITIES
Payable for securities
purchased 162,702 0 0 822,798 1,378,815
Payable for forward
foreign currency
contracts purchased 25,674 13,724 0 0 0
Payable for Fund shares
redeemed 0 0 0 0 0
Advisory fee
payable--Note 3 0 999 7,488 24,221 20,909
Administration fee
payable--Note 3 2,041 277 0 10,092 4,182
Shareholder servicing
fee payable--Note 4 0 0 0 5,209 0
Accrued expenses and
other liabilities 24,310 57,362 58,622 60,249 43,223
---------- ---------- ----------- ----------- -----------
Total Liabilities 214,727 72,362 66,110 922,569 1,447,129
---------- ---------- ----------- ----------- -----------
Net Assets $9,835,950 $1,288,162 $14,109,864 $46,983,709 $20,595,582
========== ========== =========== =========== ===========
NET ASSETS
Capital paid-in $7,066,950 $1,018,953 $ 9,824,027 $45,787,066 $13,269,260
Undistributed
(distributions in
excess of) net
investment income 30,780 7,997 0 (120,661) 0
Accumulated net
realized gain (loss)
on investments and
foreign currency
transactions 1,350,414 97,899 1,673,154 (1,543,331) 5,957,235
Net unrealized
appreciation
(depreciation) of
investments and
foreign currency
transactions 1,387,806 163,313 2,612,683 2,860,635 1,369,087
---------- ---------- ----------- ----------- -----------
Net Assets $9,835,950 $1,288,162 $14,109,864 $46,983,709 $20,595,582
========== ========== =========== =========== ===========
INVESTOR CLASS:
Net Assets $9,835,950 $1,288,162 $14,109,864 $42,177,047 $20,595,582
Net asset value,
offering and
redemption price per
share $ 14.29 $ 12.72 $ 6.73 $ 12.79 $ 24.59
Total shares outstanding
at end of period 688,188 101,262 2,097,760 3,298,279 837,704
ADVISOR CLASS:
Net Assets $ -- $ -- $ -- $ 4,806,662 $ --
Net asset value,
offering and
redemption price per
share $ -- $ -- $ -- $ 12.72 $ --
Total shares outstanding
at end of period -- -- -- 377,833 --
Cost of securities
including repurchase
agreements $8,249,370 $1,108,397 $ 8,834,822 $43,239,043 $20,127,777
Cost of foreign currency $ 171,586 $ 7,407 $ -- $ -- $ --
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
43
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1999
<TABLE>
<CAPTION>
EMERGING EMERGING
INTERNATIONAL MARKETS MARKETS
FUND FUND (1) FUND (2)
--------------- ----------------------
<S> <C> <C> <C>
INVESTMENT
INCOME--(NOTE 1)
Dividend income $ 1,984,821 $ 15,320 $ 21,598
Interest income 362,681 3,637 4,468
Foreign taxes (126,270) (6,946) (1,596)
Allocated expenses (579,131) (10,594) (15,866)
----------- -------- --------
Total Income 1,642,101 1,417 8,604
----------- -------- --------
EXPENSES
Investment advisory
fees--Note 3 290,211 3,367 0
Shareholder servicing
fees--Note 4 0 0 0
Administrative
fees--Note 3 261,555 1,925 1,695
Subadministration
Fees--Note 3 103,790 1,083 25,000
Custodian fees 21,909 17,186 12,000
Audit fees 44,678 29,875 11,447
Legal fees 63,753 1,404 1,626
Printing expenses 26,666 3,354 2,098
Trustees fees--Note 5 13,825 104 115
Transfer agent fees 55,749 9,055 17,454
Organizational expenses 1,031 24 0
Registration fees 23,400 5,952 12,618
Other 22,622 80 230
----------- -------- --------
Total Expenses 929,189 73,409 84,283
Expenses borne by
Investment
Adviser--Note 3 (73,657) (65,719) (51,617)
Expenses
waived--Note 3 (72,215) 0 (29,847)
----------- -------- --------
Net Expenses 783,317 7,690 2,819
----------- -------- --------
Net Investment
Income (Loss) 858,784 (6,273) 5,785
----------- -------- --------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized gain
(loss) on investments
sold 15,174,807 243,205 199,523
Net realized gain
(loss) on foreign
currency transactions (1,083,183) 3,628 2,854
----------- -------- --------
Net realized gain
(loss) on investments
and foreign currency
transactions 14,091,624 246,833 202,377
----------- -------- --------
Change in net
unrealized
appreciation
(depreciation) on
investments 13,744,699 134,209 240,027
Change in net
unrealized
appreciation
(depreciation) on
foreign currency
transactions (551,663) (6,075) (2,648)
----------- -------- --------
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currency
transactions 13,193,036 128,134 237,379
----------- -------- --------
Net Gain (Loss) 27,284,660 374,967 439,756
----------- -------- --------
NET INCREASE (DECREASE)
IN NET ASSETS
RESULTING FROM
OPERATIONS $28,143,444 $368,694 $445,541
=========== ======== ========
</TABLE>
- ----------------
(1) For the period June 1, 1999 through October 31, 1999.
(2) For the year ended May 31, 1999.
(3) For the period January 4, 1999 (commencement of operations) through October
31, 1999.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
44
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL GREATER U.S. DIVERSIFIED U.S. SMALLER U.S. SMALLER
SMALLER CHINA GROWTH COMPANIES COMPANIES MICRO CAP
COMPANIES FUND FUND(3) FUND FUND(1) FUND(2) FUND(1)
--------------- --------------- ------------------ ------------------------------ -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME--(NOTE 1)
Dividend income $ 140,857 $ 8,229 $ 76,636 $ 95,016 $ 295,623 $ 6,116
Interest income 10,249 21,763 707 62,373 131,425 82,356
Foreign taxes (9,695) 0 0 0 0 0
Allocated expenses (37,297) 0 0 0 (451,140)
---------- -------- ---------- ----------- ----------- ----------
Total Income 104,114 29,992 77,343 157,389 (24,092) 88,472
---------- -------- ---------- ----------- ----------- ----------
EXPENSES
Investment advisory
fees--Note 3 28,677 8,981 102,942 106,650 0 87,205
Shareholder servicing
fees--Note 4 0 0 0 5,209 11,960 0
Administrative fees--Note 3 12,692 2,495 0 53,348 139,898 17,441
Subadministration
Fees--Note 3 18,439 10,816 13,767 21,508 41,969 7,060
Custodian fees 16,926 52,422 43,323 22,217 12,000 17,186
Audit fees 32,708 19,570 21,193 30,513 22,582 13,850
Legal fees 3,502 6,509 8,093 24,489 33,882 14,524
Printing expenses 8,176 1,809 13,738 11,317 29,347 3,354
Trustees fees--Note 5 543 122 1,939 3,144 5,808 471
Transfer agent fees 16,761 15,829 35,685 18,003 77,717 9,055
Organizational expenses 1,259 0 0 2,091 816 0
Registration fees 13,657 14,442 18,128 9,193 29,811 6,120
Other 355 0 14,022 215 7,390 1,028
---------- -------- ---------- ----------- ----------- ----------
Total Expenses 153,695 132,995 272,830 307,897 413,180 177,294
Expenses borne by Investment
Adviser--Note 3 (71,451) (98,555) (27,576) (29,847) (27,387) (37,550)
Expenses waived--Note 3 (15,366) (14,435) (39,875) 0 (29,317) 0
---------- -------- ---------- ----------- ----------- ----------
Net Expenses 66,878 20,005 205,379 278,050 356,476 139,744
---------- -------- ---------- ----------- ----------- ----------
Net Investment Income
(Loss) 37,236 9,987 (128,036) (120,661) (380,568) (51,272)
---------- -------- ---------- ----------- ----------- ----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) on
investments sold 1,362,745 97,899 1,801,211 1,996,019 (5,520,499) 3,611,077
Net realized gain (loss) on
foreign currency
transactions (1,929) (1,990) 0 0 0 0
---------- -------- ---------- ----------- ----------- ----------
Net realized gain (loss) on
investments and foreign
currency transactions 1,360,816 95,909 1,801,211 1,996,019 (5,520,499) 3,611,077
---------- -------- ---------- ----------- ----------- ----------
Change in net unrealized
appreciation
(depreciation) on
investments 2,032,111 177,037 1,962,730 (1,771,479) (3,940,525) (154,964)
Change in net unrealized
appreciation
(depreciation) on foreign
currency transactions (25,239) (13,724) 0 0 0 0
---------- -------- ---------- ----------- ----------- ----------
Net change in unrealized
appreciation
(depreciation) on
investments and foreign
currency transactions 2,006,872 163,313 1,962,730 (1,771,479) (3,940,525) (154,964)
---------- -------- ---------- ----------- ----------- ----------
Net Gain (Loss) 3,367,688 259,222 3,763,941 224,540 (9,461,024) 3,456,113
---------- -------- ---------- ----------- ----------- ----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS $3,404,924 $269,209 $3,635,905 $ 103,879 $(9,841,592) $3,404,841
========== ======== ========== =========== =========== ==========
<CAPTION>
MICRO CAP
FUND(2)
-----------
<S> <C>
INVESTMENT INCOME--(NOTE 1)
Dividend income $ 11,262
Interest income 61,772
Foreign taxes 0
Allocated expenses 0
----------
Total Income 73,034
----------
EXPENSES
Investment advisory
fees--Note 3 102,215
Shareholder servicing
fees--Note 4 0
Administrative fees--Note 3 20,443
Subadministration
Fees--Note 3 25,000
Custodian fees 47,595
Audit fees 17,653
Legal fees 3,191
Printing expenses 2,538
Trustees fees--Note 5 824
Transfer agent fees 30,691
Organizational expenses 0
Registration fees 13,234
Other 3,873
----------
Total Expenses 267,257
Expenses borne by Investment
Adviser--Note 3 0
Expenses waived--Note 3 (104,034)
----------
Net Expenses 163,223
----------
Net Investment Income
(Loss) (90,189)
----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) on
investments sold 3,798,687
Net realized gain (loss) on
foreign currency
transactions 0
----------
Net realized gain (loss) on
investments and foreign
currency transactions 3,798,687
----------
Change in net unrealized
appreciation
(depreciation) on
investments 932,978
Change in net unrealized
appreciation
(depreciation) on foreign
currency transactions 0
----------
Net change in unrealized
appreciation
(depreciation) on
investments and foreign
currency transactions 932,978
----------
Net Gain (Loss) 4,731,665
----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS $4,641,476
==========
</TABLE>
- ----------------
(1) For the period June 1, 1999 through October 31, 1999.
(2) For the year ended May 31, 1999.
(3) For the period January 4, 1999 (commencement of operations) through October
31, 1999.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
45
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
INTERNATIONAL FUND
--------------------------
Year Ended Year Ended
10/31/99 10/31/98
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss) $ 858,784 $ 1,915,529
Net realized gain (loss) on
investments and foreign
currency 14,091,624 23,730,622
Change in net unrealized
appreciation (depreciation)
on investments and foreign
currency 13,193,036 (15,922,356)
------------ ------------
Net increase (decrease) in net
assets resulting from
operations 28,143,444 9,723,795
Dividends and distributions to
Investor Shareholders:
From net investment income (1,311,873) (3,140,556)
From net realized capital
gains (22,931,620) (15,603,343)
Dividends and distributions to
Advisor Shareholders:
From net investment income 0 0
From net realized capital
gains (17) 0
Net increase (decrease) from
Investor share transactions 23,765,334 (52,243,857)
Net increase (decrease) from
Advisor share transactions (100) (398)
------------ ------------
TOTAL INCREASE (DECREASE) 27,665,168 (61,264,359)
Net Assets
Beginning of period 129,954,774 191,219,133
------------ ------------
End of period $157,619,942 $129,954,774
============ ============
Undistributed (distributions in
excess of) net investment
income $ 1,145,028 $ 2,713,544
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
46
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING MARKETS FUND
-----------------------------------------------------
For the Period INTERNATIONAL SMALLER
10/31/97 COMPANIES FUND
(Commencement of -------------------------------
For the Period Year Ended Operations) Year Ended Year Ended
6/01/99 to 10/31/99 5/31/99 to 5/31/98 10/31/99 10/31/98
------------------- -------------- ---------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss) $ (6,273) $ 5,785 $ 37 $ 37,236 $ 20,201
Net realized gain (loss) on
investments and foreign
currency 246,833 202,377 (915) 1,360,816 293,969
Change in net unrealized
appreciation (depreciation)
on investments and foreign
currency 128,134 237,379 (2,190) 2,006,872 334,169
---------- ---------- ------- ---------- -----------
Net increase (decrease) in net
assets resulting from
operations 368,694 445,541 3,068 3,404,924 648,339
Dividends and distributions to
Investor Shareholders:
From net investment income 0 (1,988) 0 (16,342) (9,569)
From net realized capital
gains 0 0 0 (313,960) (377,722)
Dividends and distributions to
Advisor Shareholders:
From net investment income 0 0 0 0 0
From net realized capital
gains 0 0 0 0 0
Net increase (decrease) from
Investor share transactions 575,954 1,756,354 20,895 2,596,644 (2,932,448)
Net increase (decrease) from
Advisor share transactions 0 0 0 0 0
---------- ---------- ------- ---------- -----------
TOTAL INCREASE (DECREASE) 944,648 2,199,907 17,827 5,671,266 (2,671,400)
Net Assets
Beginning of period 2,217,734 17,827 0 4,164,684 6,836,084
---------- ---------- ------- ---------- -----------
End of period $3,162,382 $2,217,734 $17,827 $9,835,950 $ 4,164,684
========== ========== ======= ========== ===========
Undistributed (distributions in
excess of) net investment
income $ 63,557 $ 6,691 $ 39 $ 30,780 $ 11,815
<CAPTION>
GREATER CHINA FUND
--------------------
For the Period
1/04/99
(Commencement of
Operations)
to 10/31/99
--------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss) $ 9,987
Net realized gain (loss) on
investments and foreign
currency 95,909
Change in net unrealized
appreciation (depreciation)
on investments and foreign
currency 163,313
----------
Net increase (decrease) in net
assets resulting from
operations 269,209
Dividends and distributions to
Investor Shareholders:
From net investment income 0
From net realized capital
gains 0
Dividends and distributions to
Advisor Shareholders:
From net investment income 0
From net realized capital
gains 0
Net increase (decrease) from
Investor share transactions 1,018,953
Net increase (decrease) from
Advisor share transactions 0
----------
TOTAL INCREASE (DECREASE) 1,288,162
Net Assets
Beginning of period 0
----------
End of period $1,288,162
==========
Undistributed (distributions in
excess of) net investment
income $ 7,997
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
47
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
OCTOBER 31, 1999 (CONTINUED)
<TABLE>
<CAPTION>
U.S. DIVERSIFIED GROWTH FUND
--------------------------------
Year Ended Year Ended
10/31/99 10/31/98
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
From operations:
Net investment
income (loss) $ (128,036) $ (95,983)
Net realized gain
(loss) on
investments and
foreign currency 1,801,211 4,826,342
Change in net
unrealized
appreciation
(depreciation) on
investments and
foreign currency 1,962,730 (3,505,555)
----------- -----------
Net increase
(decrease) in net
assets resulting
from operations 3,635,905 1,224,804
Dividends and
distributions to
Investor
Shareholders:
From net investment
income 0 0
From net realized
capital gains (4,808,678) (3,866,690)
Dividends and
distributions to
Advisor
Shareholders:
From net investment
income 0 0
From net realized
capital gains 0 0
Net increase
(decrease) from
Investor share
transactions 2,742,276 1,321,097
Net increase
(decrease) from
Advisor share
transactions 0 0
----------- -----------
TOTAL INCREASE
(DECREASE) 1,569,503 (1,320,789)
Net Assets
Beginning of period 12,540,361 13,861,150
----------- -----------
End of period $14,109,864 $12,540,361
=========== ===========
Undistributed
(distributions in
excess of) net
investment income $ 0 $ 0
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
48
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MICRO CAP FUND
-----------------------------------------------------
For the Period
U.S. SMALLER COMPANIES FUND 10/15/97
-------------------------------------------------- (Commencement of
For the Period Year Ended Year Ended For the Period Year Ended Operations)
6/1/99 to 10/31/99 5/31/99 5/31/98 6/01/99 to 10/31/99 5/31/99 to 5/31/98
------------------ -------------- -------------- ------------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS
From operations:
Net investment
income (loss) $ (120,661) $ (380,568) $ (220,475) $ (51,272) $ (90,189) $ (16,549)
Net realized gain
(loss) on
investments and
foreign currency 1,996,019 (5,520,499) 2,230,689 3,611,077 3,798,687 651,514
Change in net
unrealized
appreciation
(depreciation) on
investments and
foreign currency (1,771,479) (3,940,525) 4,722,131 (154,964) 932,978 591,073
----------- ----------- ----------- ----------- ----------- ----------
Net increase
(decrease) in net
assets resulting
from operations 103,879 (9,841,592) 6,732,345 3,404,841 4,641,476 1,226,038
Dividends and
distributions to
Investor
Shareholders:
From net investment
income 0 0 0 0 0 0
From net realized
capital gains 0 (115,656) (3,305,205) 0 (1,091,088) (45,400)
Dividends and
distributions to
Advisor
Shareholders:
From net investment
income 0 0 0 0 0 0
From net realized
capital gains 0 (12,796) (84,662) 0 0 0
Net increase
(decrease) from
Investor share
transactions (5,812,990) 5,935,694 22,355,679 2,873,384 4,427,370 5,158,961
Net increase
(decrease) from
Advisor share
transactions (60,483) 564,119 4,340,300 0 0 0
----------- ----------- ----------- ----------- ----------- ----------
TOTAL INCREASE
(DECREASE) (5,769,594) (3,470,231) 30,038,457 6,278,225 7,977,758 6,339,599
Net Assets
Beginning of period 52,753,303 56,223,534 26,185,077 14,317,357 6,339,599 0
----------- ----------- ----------- ----------- ----------- ----------
End of period $46,983,709 $52,753,303 $56,223,534 $20,595,582 $14,317,357 $6,339,599
=========== =========== =========== =========== =========== ==========
Undistributed
(distributions in
excess of) net
investment income $ (120,661) $ 0 $ 0 $ 0 $ 0 $ 0
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
49
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTOR SHARES
Selected per share data and ratios for an Investor Share outstanding
throughout each period:
<TABLE>
<CAPTION>
For the Year Ended October 31,
------------------------------------------------
1999 1998 1997 1996 (a) 1995
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 17.10 $ 18.37 $ 20.01 $ 20.91 $ 23.17
-------- -------- -------- -------- --------
Investment Operations (b)
Net Investment Income 0.07 0.23 0.14 0.15 0.46
Net Realized and
Unrealized Gain
(Loss) on Investments
and Foreign Currency
Transactions 3.20 0.34 1.31 1.74 (0.18)
-------- -------- -------- -------- --------
Total from Investment
Operations 3.27 0.57 1.45 1.89 0.28
-------- -------- -------- -------- --------
Distributions From
Net Investment Income (0.18) (0.29) (0.46) (0.47) --
Net Realized Gain on
Investments and
Foreign Currency
Transactions (3.17) (1.55) (2.63) (2.32) (2.54)
-------- -------- -------- -------- --------
Total Distributions (3.35) (1.84) (3.09) (2.79) (2.54)
-------- -------- -------- -------- --------
Net Asset Value, End of
Period $ 17.02 $ 17.10 $ 18.37 $ 20.01 $ 20.91
======== ======== ======== ======== ========
Total Return (c) 21.82% 3.82% 8.33% 10.05% 2.08%
Ratios and Supplementary
Data:
Net Assets at End of
Period (in thousands) $157,620 $129,955 $191,219 $202,735 $212,330
Ratios to Average Net
Assets: (b)
Expenses including
reimbursement/ waiver
of fees 0.99% 0.99% 0.99% 0.99% 0.91%
Expenses excluding
reimbursement/ waiver
of fees 1.06% 1.08% 1.06% 1.04% N/A
Net investment income
including
reimbursement/waiver
of fees 0.60% 1.14% 0.67% 0.86% 0.99%
Portfolio Turnover Rate
(d) 85% 53% 36% 56% 61%
</TABLE>
- --------------
(a) On November 1, 1995, the Fund converted to a master-feeder structure. See
Note 1.
(b) From the period November 1, 1995 to May 31, 1999, the Fund recognized its
proportionate share of income, expenses and gains/losses of the underlying
portfolio, Schroder International Equity Portfolio. Commencing June 1,
1999, the income, expenses and gains/losses were directly accrued to the
Fund.
(c) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown (See Note 3).
(d) The portfolio turnover rates for the years after October 31, 1995 through
October 31, 1998 represent the turnover of the underlying Portfolio,
International Equity Fund. For the year ending October 31, 1999, the rate
represents the period from November 1, 1998 through May 31, 1999 during
which time the Fund invested in the Portfolio and from June 1, 1999 through
October 31, 1999 during which time the Fund held direct investments in a
portfolio of securities.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
50
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTOR SHARES
Selected per share data and ratios for an Investor Share outstanding
throughout each period:
<TABLE>
<CAPTION>
For the Period For the Year For the Period
Ended Ended Ended
October 31, 1999 (a) May 31, 1999 May 31, 1998 (f)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 10.62 $ 9.04 $ 10.00
-------- -------- --------
Investment Operations (b)
Net Investment Income (Loss) (0.03) 0.03 0.02
Net Realized and Unrealized Gain
(Loss) on Investments and
Foreign Currency Transactions 1.59 1.58 (0.98)
-------- -------- --------
Total from Investment Operations 1.56 1.61 (0.96)
-------- -------- --------
Distributions From
Net Investment Income -- (0.03) --
-------- -------- --------
Net Asset Value, End of Period $ 12.18 $ 10.62 $ 9.04
======== ======== ========
Total Return (c) 14.69% 17.88% (9.60)%
Ratios and Supplementary Data
Net Assets at End of Period
(in thousands) $ 3,162 $ 2,218 $ 18
Ratios to Average Net Assets: (b)
Expenses including
reimbursement/waiver of fees 1.70%(d) 1.65% 1.70%(d)
Expenses excluding
reimbursement/waiver of fees 7.84%(d) 10.74% -- (e)
Net investment income (loss)
including reimbursement/waiver
of fees (0.59)%(d) 0.51% 1.72%(d)
Portfolio Turnover Rate (g) 160% 177% 23%
</TABLE>
- --------------
(a) See Note 1.
(b) Prior to September 17, 1999, the Fund recognized its proportionate share of
income, expenses and gains/losses of the underlying Portfolio, Schroder EM
Core Portfolio. Commencing September 20, 1999, the income, expenses and
gains/losses were directly accrued to the Fund.
(c) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown. (See Note 3). Total return
calculations for a period of less than one year are not annualized.
(d) Annualized.
(e) Amount is not meaningful due to short period of operations.
(f) The Fund commenced operations on October 31, 1997.
(g) The portfolio turnover rates for the period ending May 31, 1998 and the
year ended May 31, 1999 represent the turnover of the underlying Portfolio,
Schroder EM Core Portfolio. For the year ending October 31, 1999, the rate
represents the period from June 1, 1999 through September 17, 1999 during
which time the Fund invested in the Portfolio and from September 20, 1999
through October 31, 1999 during which time the Fund held direct investments
in a portfolio of securities.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
51
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTOR SHARES
Selected per share data and ratios for an Investor Share outstanding
throughout each period:
<TABLE>
<CAPTION>
For the Year Ended For the Period
October 31, Ended
------------------ October 31,
1999 1998 1997 (a)
<S> <C> <C> <C>
- -----------------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 9.35 $ 9.22 $ 10.00
-------- -------- --------
Investment Operations (b)
Net Investment Income 0.06 0.05 0.02
Net Realized and Unrealized Gain
(Loss) on Investments and
Foreign Currency Transactions 5.62 0.60 (0.79)
-------- -------- --------
Total from Investment Operations 5.68 0.65 (0.77)
-------- -------- --------
Distributions From
Net Investment Income (0.04) (0.01) (0.01)
Net Realized Gain on Investments
and Foreign Currency
Transactions (0.70) (0.51) --
-------- -------- --------
Total Distributions (0.74) (0.52) (0.01)
-------- -------- --------
Net Asset Value, End of Period $ 14.29 $ 9.35 $ 9.22
======== ======== ========
Total Return (c) 65.27% 7.88% (7.73)%
Ratios and Supplementary Data:
Net Assets at End of Period (in
thousands) $ 9,836 $ 4,165 $ 6,836
Ratios to Average Net Assets: (b)
Expenses including
reimbursement/waiver of fees 1.50% 1.50% 1.50%(d)
Expenses excluding
reimbursement/waiver of fees 2.74% 5.26% 3.93%(d)
Net investment income including
reimbursement/waiver of fees 0.53% 0.33% 0.21%(d)
Portfolio Turnover Rate (e) 81% 82% 32%
</TABLE>
- --------------
(a) For the period November 4, 1996 (Commencement of Operations) through
October 31, 1997.
(b) Prior to June 1, 1999, the Fund recognized its proportionate share of
income, expenses and gains/losses of the underlying portfolio, Schroder
International Smaller Companies Portfolio. Commencing June 1, 1999, the
income, expenses and gains/losses were directly accrued to the Fund.
(c) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown (See Note 3). Total return
calculations for a period of less than one year are not annualized.
(d) Annualized.
(e) The portfolio turnover rates for the period ending October 31, 1997 and
year ended October 31, 1998 represent the turnover of the underlying
portfolio, Schroder International Smaller Companies Portfolio. For the year
ending October 31, 1999, the rate represents the period from November 1,
1998 through May 31, 1999 during which time the Fund invested in the
Portfolio and from June 1, 1999 through October 31, 1999 during which time
the Fund held direct investments in a portfolio of securities.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
52
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER GREATER CHINA FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTOR SHARES
Selected per share data and ratios for an Investor Share outstanding
throughout the period:
<TABLE>
<CAPTION>
For the
Period Ended
October 31, 1999 (a)
<S> <C>
- ------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 10.00
--------
Investment Operations
Net Investment Income 0.10
Net Realized and Unrealized Gain on Investments
and Foreign Currency Transactions 2.62
--------
Total from Investment Operations 2.72
--------
Distributions From
Net Investment Income --
Net Realized Gain on Investments and Foreign
Currency Transactions --
--------
Total Distributions --
--------
Net Asset Value, End of Period $ 12.72
========
Total Return (b) 27.20%
Ratios and Supplementary Data:
Net Assets at End of Period (in thousands) $ 1,288
Ratios to Average Net Assets:
Expenses including reimbursement/waiver of fees 2.00%(c)
Expenses excluding reimbursement/waiver of fees 13.31%(c)
Net investment income including
reimbursement/waiver of fees 1.00%(c)
Portfolio Turnover Rate 140%
</TABLE>
- --------------
(a) For the period January 4, 1999 (commencement of operations) through
October 31, 1999.
(b) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown. (See Note 3). Total return
calculations for a period of less than one year are not annualized.
(c) Annualized.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
53
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. DIVERSIFIED GROWTH FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTOR SHARES
Selected per share data and ratios for an Investor Share outstanding
throughout each period:
<TABLE>
<CAPTION>
For the Year Ended October 31,
-------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 7.79 $ 9.82 $ 9.76 $ 9.41 $ 8.52
------- ------- ------- ------- -------
Investment Operations
Net Investment Income
(Loss) (0.06) (0.06) (0.01) 0.04 0.07
Net Realized and
Unrealized Gain
(Loss) on Investments 2.00 0.78 2.20 1.62 1.33
------- ------- ------- ------- -------
Total from Investment
Operations 1.94 0.72 2.19 1.66 1.40
------- ------- ------- ------- -------
Distributions From
Net Investment Income -- -- (0.02) (0.07) (0.05)
Net Realized Gain on
Investments (3.00) (2.75) (2.11) (1.24) (0.46)
------- ------- ------- ------- -------
Total Distributions (3.00) (2.75) (2.13) (1.31) (0.51)
------- ------- ------- ------- -------
Net Asset Value, End of
Period $ 6.73 $ 7.79 $ 9.82 $ 9.76 $ 9.41
======= ======= ======= ======= =======
Total Return (a) 30.95% 8.87% 26.49% 19.45% 17.68%
Ratios and Supplementary
Data:
Net Assets at End of
Period (in thousands) $14,110 $12,540 $13,861 $17,187 $19,688
Ratios to Average Net
Assets:
Expenses including
reimbursement/waiver
of fees 1.50% 1.50% 1.50% 1.40% 1.40%
Expenses excluding
reimbursement/waiver
of fees 1.99% 1.85% 1.68% 1.43% N/A
Net investment income
(loss) including
reimbursement/waiver
of fees (0.93)% (0.71)% (0.09)% 0.43% 0.78%
Portfolio Turnover Rate 87% 209% 44% 57% 57%
</TABLE>
- --------------
(a) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown (see Note 3).
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
54
<PAGE>
(This page has been left blank intentionally.)
- --------------------------------------------------------------------------------
55
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTOR SHARES
Selected per share data and ratios for an Investor Share outstanding
throughout each period:
<TABLE>
<CAPTION>
For the Period
Ended
October 31, 1999 (b)
<S> <C>
- -----------------------------------------------
Net Asset Value,
Beginning of Period $ 12.80
-------
Investment Operations (c)
Net Investment Loss (0.03)
Net Realized and
Unrealized Gain
(Loss) on Investments 0.02
-------
Total from Investment
Operations (0.01)
-------
Distributions From
Net Realized Gain on
Investments --
-------
Net Asset Value, End of
Period $ 12.79
=======
Total Return (d) (0.08)%
Ratios and Supplementary
Data
Net Assets at End of
Period (in thousands) $42,177
Ratios to Average Net
Assets: (c)
Expenses including
reimbursement/waiver
of fees 1.35%(e)
Expenses excluding
reimbursement/waiver
of fees 1.35%(e)
Net investment income
(loss) including
reimbursement/waiver
of fees (0.54)%(e)
Portfolio Turnover Rate
(f) 52%
</TABLE>
- --------------
(a) On August 15, 1996, the Fund converted to a master-feeder structure. See
Note 1.
(b) See Note 1.
(c) From November 1, 1995 to May 31, 1999, the Fund recognized its
proportionate share of income, expenses and gains/losses of the underlying
portfolio, Schroder U.S. Smaller Companies Portfolio. Commencing June 1,
1999, the income, expenses and gains/losses were directly accrued to the
Fund.
(d) Total returns would have been lower had certain expenses not been limited
during the periods shown (See Note 3). Total return calculations for a
period of less than one year are not annualized.
(e) Annualized.
(f) The portfolio turnover rates for the years after October 31, 1995 through
May 31, 1999, represent the turnover of the underlying Portfolio, Schroder
U.S. Smaller Companies Portfolio.
(g) Effective May 31, 1997, the Fund changed its fiscal year end from
October 31 to May 31.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
56
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended For the Year Ended
May 31, For the Period October 31,
---------------------------- Ended --------------------------
1999 1998 May 31, 1997 (g) 1996 (a) 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 14.76 $ 13.26 $ 17.23 $ 15.14 $ 11.81 $ 10.99
------- ------- ------- ------- ------- -------
Investment Operations (c)
Net Investment Loss (0.09) (0.06) (0.02) (0.06) (0.04) (0.07)
Net Realized and Unrealized Gain
(Loss) on Investments (1.84) 2.82 1.88 4.10 3.78 0.97
------- ------- ------- ------- ------- -------
Total from Investment Operations (1.93) 2.76 1.86 4.04 3.74 0.90
------- ------- ------- ------- ------- -------
Distributions From
Net Realized Gain on Investments (0.03) (1.26) (5.83) (1.95) (0.41) (0.08)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period $ 12.80 $ 14.76 $ 13.26 $ 17.23 $ 15.14 $ 11.81
======= ======= ======= ======= ======= =======
Total Return (d) (13.08)% 21.63% 14.73% 29.35% 32.84% 8.26%
Ratios and Supplementary Data
Net Assets at End of Period
(in thousands) $47,870 $51,679 $26,104 $13,743 $15,287 $13,324
Ratios to Average Net Assets: (c)
Expenses including
reimbursement/waiver of fees 1.42% 1.37% 1.49%(e) 1.49% 1.49% 1.45%
Expenses excluding
reimbursement/waiver of fees 1.45% 1.37% 1.87%(e) N/A N/A N/A
Net investment income (loss)
including reimbursement/waiver
of fees (0.65)% (0.51)% (0.42)%(e) (0.35)% (0.30)% (0.58)%
Portfolio Turnover Rate (f) 119% 55% 34% 59% 93% 71%
</TABLE>
- --------------
(a) On August 15, 1996, the Fund converted to a master-feeder structure. See
Note 1.
(b) See Note 1.
(c) From November 1, 1995 to May 31, 1999, the Fund recognized its
proportionate share of income, expenses and gains/losses of the underlying
portfolio, Schroder U.S. Smaller Companies Portfolio. Commencing June 1,
1999, the income, expenses and gains/losses were directly accrued to the
Fund.
(d) Total returns would have been lower had certain expenses not been limited
during the periods shown (See Note 3). Total return calculations for a
period of less than one year are not annualized.
(e) Annualized.
(f) The portfolio turnover rates for the years after October 31, 1995 through
May 31, 1999, represent the turnover of the underlying Portfolio, Schroder
U.S. Smaller Companies Portfolio.
(g) Effective May 31, 1997, the Fund changed its fiscal year end from
October 31 to May 31.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
57
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER U.S. SMALLER COMPANIES FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--ADVISOR SHARES
Selected per share data and ratios for an Advisor Share outstanding
throughout each period:
<TABLE>
<CAPTION>
For the Period For the Year For the Year For the Period
Ended Ended Ended Ended
October 31, 1999 (a) May 31, 1999 May 31, 1998 May 31, 1997 (b)
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 12.74 $ 14.72 $ 13.24 $ 11.89
------- ------- ------- -------
Investment Operations (c)
Net Investment Loss (0.04) (0.12) (0.05) (0.03)
Net Realized and Unrealized
Gain (Loss) on Investments 0.02 (1.83) 2.79 1.38
------- ------- ------- -------
Total from Investment
Operations (0.02) (1.95) 2.74 1.35
------- ------- ------- -------
Distributions From
Net Realized Gain on
Investments -- (0.03) (1.26) --
------- ------- ------- -------
Net Asset Value, End of Period $ 12.72 $ 12.74 $ 14.72 $ 13.24
======= ======= ======= =======
Total Return (d) (0.16)% (13.25)% 21.50% 11.35%
Ratios and Supplementary Data
Net Assets at End of Period
(in thousands) $ 4,807 $ 4,883 $ 4,544 $ 81
Ratios to Average Net Assets:
(c)
Expenses including
reimbursement/ waiver of
fees 1.60%(e) 1.69% 1.58% 1.74%(e)
Expenses excluding
reimbursement/ waiver of
fees 2.24%(e) 2.52% 3.88% 57.02%(e)
Net investment income (loss)
including
reimbursement/waiver of
fees (0.79)%(e) (0.95)% (0.78)% (0.67)%(e)
Portfolio Turnover Rate (f) 52% 119% 55% 34%
</TABLE>
- --------------
(a) See Note 1.
(b) Advisor Shares were first issued on December 23, 1996.
(c) Prior to June 1, 1999, the Fund recognized its proportionate share of
income, expenses and gains/losses of the underlying portfolio, Schroder
U.S. Smaller Companies Portfolio. Commencing June 1, 1999, the income,
expenses and gains/losses were directly accrued to the Fund.
(d) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the period shown (see Note 3). Total return
calculation for a period of less than one year are not annualized.
(e) Annualized.
(f) The portfolio turnover rates for the periods through May 31, 1999 represent
the turnover of the underlying Portfolio, Schroder U.S. Smaller Companies
Portfolio.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
58
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER MICRO CAP FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS--INVESTOR SHARES
Selected per share data and ratios for an Investor Share outstanding
throughout each period:
<TABLE>
<CAPTION>
For the Period For the Year For the
Ended Ended Period Ended
October 31, 1999 (a) May 31, 1999 May 31, 1998 (d)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 20.18 $ 14.26 $ 10.00
-------- -------- --------
Investment Operations:
Net Investment Loss (0.06) (0.13) (0.04)
Net Realized and Unrealized Gain
on Investments 4.47 8.28 4.50
-------- -------- --------
Total from Investment Operations 4.41 8.15 4.46
-------- -------- --------
Distributions from Net Realized
Gain on Investments -- (2.23) (0.20)
-------- -------- --------
Net Asset Value, End of Period $ 24.59 $ 20.18 $ 14.26
======== ======== ========
Total Return (b) 21.85% 64.56% 45.41%
Ratios and Supplementary Data:
Net Assets at End of Period (in
thousands) $ 20,596 $ 14,317 $ 6,340
Ratios to Average Net Assets:
Expenses including
reimbursement/waiver of fees 2.00%(c) 2.00% 2.00%(c)
Expenses excluding
reimbursement/waiver of fees 2.53%(c) 3.27% 6.02%(c)
Net investment loss including
reimbursement/ waiver of fees (0.73)%(c) (1.10)% (0.77)%(c)
Portfolio Turnover Rate 173% 341% 166%
</TABLE>
- --------------
(a) See Note 1.
(b) Total returns would have been lower had certain Fund expenses not been
waived or reimbursed during the periods shown (See Note 3). Total return
calculations for a period of less than one year are not annualized.
(c) Annualized.
(d) The Fund commenced operations on October 15, 1997.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
59
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
NOTE 1. ORGANIZATION
Schroder Capital Funds (Delaware) (the "Trust"), is an open-end series
management investment company registered under the Investment Company Act of
1940, as amended. The Trust was organized as a Maryland corporation on
July 30, 1969; reorganized as Schroder Capital Funds, Inc., a series company,
on February 29, 1988; and reorganized on January 9, 1996, as a Delaware
business trust. The Trust has an unlimited number of authorized shares which
are divided into eight separate investment portfolios, seven of which are
included in this report: Schroder International Fund, Schroder Emerging
Markets Fund, Schroder International Smaller Companies Fund, Schroder Greater
China Fund, Schroder U.S. Diversified Growth Fund, Schroder U.S. Smaller
Companies Fund and Schroder Micro Cap Fund (collectively, the "Funds"). All
Funds, except Schroder Micro Cap Fund, are presently authorized to issue two
classes of shares--"Investor Shares" and "Advisor Shares". As of October 31,
1999, each Fund had Investor Shares outstanding and only Schroder U.S. Smaller
Companies Fund has Advisor Shares outstanding.
Through May 31, 1999 (September 17, 1999 for the Schroder Emerging Markets
Fund), the Funds, (except for Schroder U.S. Diversified Growth Fund, Schroder
Greater China Fund and Schroder Micro Cap Fund) sought to achieve their
investment objective by investing all their investable assets in shares of
separate portfolios of Schroder Capital Funds (each a "Schroder Core"), that
had the same investment objective and substantially similar investment
policies as each respective Fund. These Funds accounted for their investment
in their respective Schroder Core as a partnership investment and recorded
daily its share of the Schroder Core's income, expenses and realized and
unrealized gains and losses. Since June 1, 1999 (September 20, 1999 for the
Schroder Emerging Markets Fund), these Funds have sought their objectives by
investing directly in a portfolio of securities considered by Schroder
Investment Management North America Inc. ("SIMNA"), the Trust's investment
adviser, to be consistent with each Fund's investment objective and policies,
and have ceased to invest in the Schroder Core portfolios.
Effective October 31, 1999, Schroder U.S. Smaller Companies Fund, Schroder
Emerging Markets Fund and Schroder Micro Cap Fund changed their fiscal year
ends from May 31 to October 31.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by
the Trust which are in conformity with generally accepted accounting
principles:
VALUATION OF INVESTMENTS:
Portfolio securities listed on recognized stock exchanges are valued at
the last reported sale price on the exchange on which the securities are
principally traded. Listed securities traded on recognized stock exchanges
where last sale prices are not available are valued at the mean of the closing
bid and ask prices ("mid-market price") or, if none, the last sale price on
the preceding trading day. Securities traded in over-the-counter markets are
valued at the most recent reported mid-market price. Prices used for
valuations generally are provided by independent pricing services. Short-term
investments, having a maturity of 60 days or less, are valued at amortized
cost, which approximates market value, unless the investment adviser believes
another valuation is more appropriate. 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 Trust's Board of
Trustees ("Trustees").
- --------------------------------------------------------------------------------
60
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
REPURCHASE AGREEMENTS:
When entering into repurchase agreements, it is each Fund's policy (other
than Schroder U.S. Diversified Growth Fund) that the Fund take into its
possession, through its custodian, the underlying collateral and monitor the
collateral's value at the time the agreement is entered into and on a daily
basis during the term of the repurchase agreement to ensure that it equals or
exceeds the repurchase price. In the event of default or bankruptcy by the
other party to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings.
INVESTMENT TRANSACTIONS:
Investment security transactions are recorded as of trade date. Realized
gains and losses on sales of investments are determined on the basis of
identified cost.
INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date except that certain
foreign dividends are recorded as the Funds are informed of the ex-dividend
date. Dividend income is recorded net of unrecoverable withholding tax.
Interest income is recorded on an accrual basis. Foreign dividend and interest
income amounts and realized capital gains or losses are converted to U.S.
dollar equivalents using foreign exchange rates in effect at the date of the
transactions. Dividend income, interest income, foreign taxes and allocated
expenses on the Statement of Operations include the allocable portion of the
Schroder Core portfolios for the periods when the Funds invested in the
portfolios.
EXPENSES:
Expenses are recorded on an accrual basis. Most of the expenses of the
Trust can be directly attributable to a specific Fund and/or class of shares.
Expenses not directly attributable to a specific Fund and/or class of shares
are allocated among the Funds and/or classes of shares in such a manner as
deemed equitable by SIMNA or the Trustees.
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to shareholders from net investment income and net realized
capital gains are declared and distributed at least annually. Distributions
are recorded on the ex-dividend date.
With respect to each Fund that currently offers two classes of shares,
investment income, common expenses of a Fund and gains/losses on investments
are allocated to both classes of the Fund based on the respective daily net
assets of each class. Shareholder servicing fees related to Advisor Shares are
charged directly to that class. Neither class has preferential dividend
rights. Income dividends, if any, paid by a Fund on its two classes of shares
will normally differ in amounts due to the differing expenses borne by each
class.
DEFERRED ORGANIZATION COSTS:
Costs incurred by the Funds in connection with their organizations are
amortized on a straight-line basis over a five-year period.
FEDERAL INCOME TAXES:
It is the policy of the Trust for each Fund to qualify as a "regulated
investment company" by complying with the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended. By so qualifying, the Funds will
not be subject to federal income taxes to the extent that, among other things,
they distribute
- --------------------------------------------------------------------------------
61
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
substantially all of their taxable income, including capital gains, for the
fiscal year. In addition, as a result of distributing substantially all of
their net investment income during each calendar year, capital gains and
certain other amounts, if any, the Funds will not be subject to a federal
excise tax.
As of May 31, 1999, the Fund listed below had net tax basis capital loss
carryforwards, for federal income tax purposes, that may be applied against
taxable gains until their expiration date as follows:
<TABLE>
<CAPTION>
FUND AMOUNT EXPIRATION DATE
---- ----------- ----------------
<S> <C> <C>
Schroder U.S. Smaller Companies Fund $ 5,190,650 May 31, 2007
</TABLE>
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
losses deferred due to wash sales, passive foreign investment companies, tax
treatment of foreign currency and excise tax regulations.
At October 31, 1999, the Trust reclassified the following amounts between
paid in capital, undistributed net investment income and accumulated
undistributed net realized gain/loss:
<TABLE>
<CAPTION>
INCREASE (DECREASE) INCREASE (DECREASE)
INCREASE (DECREASE) UNDISTRIBUTED NET ACCUMULATED
PAID IN CAPITAL INVESTMENT INCOME REALIZED GAIN (LOSS)
------------------- ------------------- --------------------
<S> <C> <C> <C>
Schroder International Fund $ 117,337 $(1,115,427) $ 998,090
Schroder Emerging Markets Fund 147,254 63,139 (210,393)
Schroder International Smaller
Companies Fund 725 (1,929) 1,204
Schroder Greater China Fund 0 (1,990) 1,990
Schroder U.S. Diversified Growth
Fund 21 128,036 (128,057)
Schroder U.S. Smaller Companies
Fund (1,881,323) 0 1,881,323
Schroder Micro Cap Fund 809,545 51,272 (860,817)
</TABLE>
These reclassifications had no impact on the net asset value of the Funds
and are designed to present each Fund's capital accounts on a tax basis.
FOREIGN CURRENCY:
Foreign currency amounts are translated into U.S. dollars at the mean of
the bid and asked prices of such currencies against U.S. dollars as follows:
(i) assets and liabilities at the rate of exchange at the end of the
respective period; and (ii) purchases and sales of securities and income and
expenses at the rate of exchange prevailing on the dates of such transactions.
The portion of the results of operations arising from changes in the exchange
rates and the portion due to fluctuations arising from changes in the market
prices of securities are not isolated. Such fluctuations are included with the
net realized and unrealized gain or loss on investments.
Certain Funds may enter into forward foreign currency contracts to protect
the U.S. dollar value of the underlying portfolio of securities against the
effect of possible adverse movements in foreign exchange rates. Principal
risks associated with such transactions include the movement in value of the
foreign currency relative to the U.S. dollar and the ability of the
counterparty to perform. Fluctuations in the value of such forward
- --------------------------------------------------------------------------------
62
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
foreign currency transactions are recorded daily as unrealized gain or loss;
realized gain or loss includes net gain or loss on transactions that have
terminated by settlement or by the Funds entering into offsetting commitments.
NOTE 3. INVESTMENT ADVISORY FEES AND ADMINISTRATION AGREEMENTS
The Trust has entered into an investment advisory agreement with SIMNA.
Under this agreement, SIMNA provides investment management services and is
entitled to receive for its services compensation payable monthly at the
following annual rates based on average daily net assets of each Fund taken
separately: 0.50% up to $100 million, 0.40% of the next $150 million, and
0.35% in excess of $250 million for the Schroder International Fund; 1.00% for
the Schroder Emerging Markets Fund; 0.85% for the Schroder International
Smaller Companies Fund; 0.90% for the Schroder Greater China Fund; 0.75% of
the first $100 million, and 0.50% in excess of $100 million for the Schroder
U.S. Diversified Growth Fund; 0.50% up to $100 million, 0.40% of the next $150
million, and 0.35% in excess of $250 million for Schroder U.S. Smaller
Companies Fund; and 1.25% for the Schroder Micro Cap Fund. The above rates
were also in effect for the Schroder Core portfolios in which the Funds
invested through May 31, 1999 except for the Schroder International Fund's
underlying portfolio rate which was 0.45%. SIMNA has agreed to limit the
investment advisory fees payable to it by Schroder International Fund to the
annual rate of 0.45% of the Fund's average daily net assets.
Until July 1, 1999, Schroder Capital Management International Inc.
("SCMI") served as investment adviser to the Trust. On that date, SCMI merged
into SIMNA, a newly organized Delaware corporation. SCMI and SIMNA are both
wholly owned subsidiaries of Schroder U.S. Holdings, Inc.
The administrator of the Trust is Schroder Fund Advisors Inc. ("Schroder
Advisors") a wholly owned subsidiary of SIMNA. For its services, Schroder
Advisors is entitled to receive compensation at an annual rate payable monthly
of: 0.225% of the average daily net assets of the Schroder International Fund;
and 0.25% of the average daily net assets of the Schroder Emerging Markets
Fund, Schroder International Smaller Companies Fund, Schroder Greater China
Fund, Schroder U.S. Smaller Companies Fund and Schroder Micro Cap Fund.
In addition, effective June 1, 1999 the Trust has entered into a
Sub-Administration Agreement with State Street Bank and Trust Company ("State
Street") and Schroder Advisors. Under that Agreement, the Trust, together with
other mutual funds managed by SIMNA and certain related entities, pays fees to
State Street based on the combined average daily net assets of all of the
Funds in the Schroder complex, according to the following annual rates: 0.06%
of the first $1.7 billion of such assets, 0.04% of the next $1.7 billion, and
0.02% of assets in excess of $3.4 billion, subject to certain minimum
requirements. Prior to June 1, 1999, the Trust paid sub-administration fees to
Forum Administrative Services, LLC ("FAdS") at an annual rate of 0.10% of the
average daily net assets of Schroder U.S. Diversified Growth Fund, Schroder
Greater China Fund and Schroder Micro Cap Fund; 0.075% of the average daily
net assets of Schroder Emerging Markets Fund, Schroder U.S. Smaller Companies
Fund and Schroder International Smaller Companies Fund: and 0.05% of the
average daily net assets of Schroder International Fund, subject to certain
minimums.
In order to limit the Fund's expenses, SIMNA and Schroder Advisors are
contractually obligated to reduce their compensation (and, if necessary, to
pay certain expenses of the Trust) until March 1, 2000, to the extent that
each Fund's total operating expenses attributable to its Investor Shares and
Advisor Shares exceed the following annual rates (based on average net assets
of each Fund taken separately): Schroder International Fund: 0.99% (Investor
Shares) and 1.24% (Advisor Shares); Schroder Emerging Markets Fund: 1.70%
(Investor Shares) and 1.95% (Advisor Shares); Schroder International Smaller
Companies Fund: 1.50% (Investor Shares) and 1.75% (Advisor Shares); Schroder
Greater China Fund: 2.00% (Investor Shares) and 2.25% (Advisor Shares);
Schroder U.S. Diversified Growth Fund: 1.50% (Investor Shares) and 1.75%
(Advisor
- --------------------------------------------------------------------------------
63
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Shares); Schroder U.S. Smaller Companies Fund: 1.49% (Investor Shares) and
1.74% (Advisor Shares) and Schroder Micro Cap Fund: 2.00% (Investor Shares).
In addition, SIMNA has voluntarily undertaken, until further notice, to limit
its fees or to pay a portion of the expenses incurred by Schroder U.S. Smaller
Companies Fund in respect of its Advisor Shares so that the net expenses of
the Fund's Advisor Shares will not exceed the net expenses of the Fund's
Investor Shares by more than 0.25%. SIMNA has contractually agreed that, in
any event, the advisory fees paid to it by Schroder U.S. Diversified Growth
Fund through May 31, 2000 will be limited to 0.65% of the Fund's average daily
net assets. SIMNA is contractually obligated through May 31, 2000 to waive
0.10% of the advisory fees payable by Schroder International Smaller Companies
Fund. For the period ended October 31, 1999, SIMNA, Schroder Advisors and
Forum Shareholder Services, LLC waived the following fees:
<TABLE>
<CAPTION>
FORUM
SCHRODER SHAREHOLDER
SIMNA ADVISORS SERVICES, LLC TOTAL
------------ ----------- ------------- -----------
<S> <C> <C> <C> <C>
Schroder International Fund $ -- $ 62,209 $ 10,006 $ 72,215
Schroder International Smaller
Companies Fund -- 3,131 12,235 15,366
Schroder Greater China Fund 3,617 1,005 9,813 14,435
Schroder U.S. Diversified Growth Fund 32,875 -- 7,000 39,875
</TABLE>
NOTE 4. SHAREHOLDER SERVICING PLAN
The Trust has adopted a Shareholder Servicing Plan (the "Plan"), for
Advisor Shares under which Schroder Advisors, or other shareholder servicing
organizations, provide administrative support services to shareholders of the
Funds' Advisor Shares. Providing for, or arranging for the provision of, these
shareholders services, Schroder Advisors receives compensation monthly at an
annual rate of up to 0.25% of the average net assets of the Fund attributable
to its Advisor Shares. Schroder Advisors may pay shareholder servicing
organizations for these services at an annual rate of up to 0.25%.
NOTE 5. TRANSACTIONS WITH AFFILIATES
TRUSTEES' FEES:
The Trust pays no compensation to Trustees who are interested persons of
the Trust, SIMNA or Schroder Fund Advisors Inc. For their services as Trustees
of all open-end investment companies distributed by Schroder Fund Advisors
Inc., with the exception of Schroder Series Trust II, trustees who are not
interested persons of the Trust, SIMNA or Schroder Fund Advisors Inc. receive
an annual retainer of $11,000 and $1,250 per meeting attended in person or
$500 per meeting attended by telephone. Members of an Audit Committee for one
year or more of such Funds receive an additional $1,000 per year. Payment of
the annual retainer will be allocated among the various Funds based on their
relative net assets. Payment of meeting fees will be allocated only among
those Funds to which the meeting relates.
- --------------------------------------------------------------------------------
64
<PAGE>
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SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 6. INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of investments, excluding short-term
securities for each Fund, for the period ended October 31, 1999 were as
follows:
<TABLE>
<CAPTION>
NON- NON-
GOVERNMENT GOVERNMENT
PURCHASES SALES
------------ ------------
<S> <C> <C>
Schroder International Fund $ 39,921,041 $ 53,140,043
Schroder Emerging Markets Fund 1,348,730 628,795
Schroder International Smaller Companies Fund 3,090,332 2,632,014
Schroder Greater China Fund 2,312,246 1,344,748
Schroder U.S. Diversified Growth Fund 11,730,088 16,576,166
Schroder U.S. Smaller Companies Fund 24,851,504 28,382,719
Schroder Micro Cap Fund 25,986,532 23,154,301
</TABLE>
The above amounts exclude the activity of the underlying Portfolios during
the period such Funds had invested in their respective portfolios.
At October 31, 1999, the identified cost for federal income tax purposes
of investments owned by each Fund and their respective gross unrealized
appreciation and depreciation at October 31, 1999 were as follows:
<TABLE>
<CAPTION>
GROSS UNREALIZED
IDENTIFIED ------------------------------ NET UNREALIZED
COST APPRECIATION (DEPRECIATION) APPRECIATION
------------ ------------ -------------- --------------
<S> <C> <C> <C> <C>
Schroder International Fund $127,272,834 $31,702,937 $(6,723,005) $24,979,932
Schroder Emerging Markets Fund 2,898,616 100,116 (80,230) 19,886
Schroder International Smaller
Companies Fund 8,251,421 2,026,973 (615,837) 1,411,136
Schroder Greater China Fund 1,113,769 291,956 (120,291) 171,665
Schroder U.S. Diversified Growth
Fund 8,834,822 3,036,456 (423,773) 2,612,683
Schroder U.S. Smaller Companies
Fund 42,395,278 7,533,223 (3,828,823) 3,704,400
Schroder Micro Cap Fund 19,983,762 1,944,844 (431,742) 1,513,102
</TABLE>
NOTE 7. PORTFOLIO INVESTMENT RISKS
Schroder Greater China Fund's investments in companies domiciled in China
and Hong Kong may cause the Fund to be more susceptible to political, social
and economic events adversely affecting Asian countries in which it invests
than funds not so concentrated.
Schroder International Smaller Companies Fund has a relatively large
number of portfolio securities invested in companies domiciled in the United
Kingdom, France and Japan. The Fund may be more susceptible to political,
social and economic events adversely affecting those countries than securities
not so invested.
Schroder Emerging Markets Fund may invest more than 25% of its total
assets in issuers located in any one country. To the extent that it does so,
the Fund is susceptible to a range of factors that could adversely affect that
country, including political and economic developments and foreign
exchange-rate fluctuations. As a result of investing substantially in a single
country, the value of the Fund's assets may fluctuate more widely
- --------------------------------------------------------------------------------
65
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
than the value of shares of a comparable fund with a lesser degree of
geographic concentration. The Fund invests in countries with limited or
developing capital markets. Investments in these markets may involve greater
risk than investments in more developed markets.
Option contracts involve the risk that they may not work as intended due
to unanticipated developments in market conditions or other causes. Options
also involve the risk that the other party to the transaction will be unable
to meet its obligation or that the Funds will be unable to close out the
position at any particular time or at an acceptable price.
In different market cycles, fewer companies may determine to make initial
public offerings ("IPO's") of their securities. The investment performance of
the Micro Cap Fund during periods when it is unable to invest in IPOs may be
lower than during periods when the Fund is able to do so. The prices of
securities sold in IPOs can be highly volatile.
For more complete risk disclosure, please refer to the Funds' current
prospectus.
NOTE 8. SHAREHOLDER MEETING
On May 10, 1999, the sole shareholder of the Schroder Greater China Fund
voted to change the Fund's subclassification from a diversified to a
non-diversified investment company.
NOTE 9. SHAREHOLDER TRANSACTIONS
Following is a summary of shareholder transactions for each Fund:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1999* OCTOBER 31, 1998
---------------------------- ----------------------------
SHARES DOLLARS SHARES DOLLARS
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
SCHRODER INTERNATIONAL FUND INVESTOR
SHARES
Shares sold 6,591,795 $ 105,900,667 3,452,665 $ 61,200,571
Shares issued to shareholders in
reinvestment 1,232,674 18,465,458 788,008 12,794,795
Shares redeemed (6,159,592) (100,600,891) (7,053,415) (126,239,223)
----------- ------------- ----------- -------------
Net increase (decrease) 1,664,877 $ 23,765,234 (2,812,742) $ (52,243,857)
=========== ============= =========== =============
* 5 Advisor Shares were redeemed in the amount of $100.
</TABLE>
- --------------------------------------------------------------------------------
66
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
PERIOD FROM JUNE 1, 1999
TO YEAR ENDED
OCTOBER 31, 1999 MAY 31, 1999
---------------------------- ----------------------------
SHARES DOLLARS SHARES DOLLARS
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
SCHRODER EMERGING MARKETS FUND
INVESTOR SHARES
Shares sold 295,733 $ 3,568,272 636,064 $ 5,729,736
Shares issued to shareholders in
reinvestment -- -- 233 1,988
Shares redeemed (244,868) (2,992,318) (429,505) (3,975,370)
----------- ------------- ----------- -------------
Net increase (decrease) 50,865 $ 575,954 206,792 $ (1,756,354)
=========== ============= =========== =============
<CAPTION>
PERIOD FROM
OCTOBER 31, 1997
(COMMENCEMENT OF
OPERATIONS)
TO
MAY 31, 1998
----------------------------
SHARES DOLLARS
----------- -------------
<S> <C> <C> <C> <C>
SCHRODER EMERGING MARKETS FUND
INVESTOR SHARES (CONTINUED)
Shares sold 1,971 $ 20,895
Shares issued to shareholders in
reinvestment -- --
Shares redeemed -- --
----------- -------------
Net increase 1,971 $ 20,895
=========== =============
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998
---------------------------- ----------------------------
SHARES DOLLARS SHARES DOLLARS
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
SCHRODER INTERNATIONAL SMALLER
COMPANIES FUND INVESTOR SHARES
Shares sold 341,062 $ 3,936,628 21,307 $ 192,122
Shares issued to shareholders in
reinvestment 11,420 104,039 9,348 75,896
Shares redeemed (109,607) (1,444,023) (327,018) (3,200,466)
----------- ------------- ----------- -------------
Net increase (decrease) 242,875 $ 2,596,644 (296,363) $ (2,932,448)
=========== ============= =========== =============
</TABLE>
- --------------------------------------------------------------------------------
67
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 4, 1999
(COMMENCEMENT OF
OPERATIONS)
TO
OCTOBER 31, 1999
----------------------------
SHARES DOLLARS
----------- -------------
<S> <C> <C> <C> <C>
SCHRODER GREATER CHINA FUND INVESTOR
SHARES
Shares sold 101,262 $ 1,018,953
Shares issued to shareholders in
reinvestment -- --
Shares redeemed -- --
----------- -------------
Net increase 101,262 $ 1,018,953
=========== =============
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998
---------------------------- ----------------------------
SHARES DOLLARS SHARES DOLLARS
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
SCHRODER U.S. DIVERSIFIED GROWTH FUND
INVESTOR SHARES
Shares sold 50,376 $ 237,273 31,106 $ 261,603
Shares issued to shareholders in
reinvestment 640,288 3,726,473 386,628 2,861,046
Shares redeemed (202,406) (1,221,470) (220,413) (1,801,552)
----------- ------------- ----------- -------------
Net increase 488,258 $ 2,742,276 197,321 $ 1,321,097
=========== ============= =========== =============
<CAPTION>
PERIOD ENDED YEAR ENDED
OCTOBER 31, 1999 MAY 31, 1999
---------------------------- ----------------------------
SHARES DOLLARS SHARES DOLLARS
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
SCHRODER U.S. SMALLER COMPANIES FUND
INVESTOR SHARES
Shares sold 359,380 $ 4,665,045 3,708,043 $ 48,301,794
Shares issued to shareholders in
reinvestment -- -- 9,456 114,698
Shares redeemed (801,878) (10,478,035) (3,477,759) (42,480,798)
----------- ------------- ----------- -------------
Net (decrease)
increase (442,498) $ (5,812,990) 239,740 $ 5,935,694
=========== ============= =========== =============
</TABLE>
- --------------------------------------------------------------------------------
68
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED
MAY 31, 1998
----------------------------
SHARES DOLLARS
----------- -------------
<S> <C> <C> <C> <C>
SCHRODER U.S. SMALLER COMPANIES FUND
INVESTOR SHARES (CONTINUED)
Shares sold 2,088,564 $ 30,815,123
Shares issued to shareholders in
reinvestment 206,939 2,814,366
Shares redeemed (763,482) (11,273,810)
----------- -------------
Net increase 1,532,021 $ 22,355,679
=========== =============
<CAPTION>
PERIOD ENDED YEAR ENDED
OCTOBER 31, 1999 MAY 31, 1999
---------------------------- ----------------------------
SHARES DOLLARS SHARES DOLLARS
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
SCHRODER U.S. SMALLER COMPANIES FUND
ADVISOR SHARES
Shares sold 62,559 $ 807,383 524,063 $ 5,849,691
Shares issued to shareholders in
reinvestment -- -- 1,058 12,796
Shares redeemed (67,963) (867,866) (450,609) (5,298,368)
----------- ------------- ----------- -------------
Net (decrease)
increase (5,404) $ (60,483) 74,512 $ 564,119
=========== ============= =========== =============
<CAPTION>
YEAR ENDED
MAY 31, 1998
----------------------------
SHARES DOLLARS
----------- -------------
<S> <C> <C> <C> <C>
SCHRODER U.S. SMALLER COMPANIES FUND
ADVISOR SHARES (CONTINUED)
Shares sold 376,171 $ 5,400,648
Shares issued to shareholders in
reinvestment 2,056 27,828
Shares redeemed (75,600) (1,088,176)
----------- -------------
Net increase 302,627 $ 4,340,300
=========== =============
</TABLE>
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69
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED
OCTOBER 31, 1999 MAY 31, 1999
---------------------------- ----------------------------
SHARES DOLLARS SHARES DOLLARS
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
SCHRODER MICRO CAP FUND INVESTOR
SHARES
Shares sold 174,358 $ 3,871,457 409,850 $ 6,563,434
Shares issued to shareholders in
reinvestment -- -- 56,415 770,633
Shares redeemed (46,302) (998,073) (201,229) (2,906,697)
----------- ------------- ----------- -------------
Net increase 128,056 $ 2,873,384 265,036 $ 4,427,370
=========== ============= =========== =============
<CAPTION>
PERIOD FROM
OCTOBER 15, 1997
(COMMENCEMENT OF
OPERATIONS)
TO
MAY 31, 1998
----------------------------
SHARES DOLLARS
----------- -------------
<S> <C> <C> <C> <C>
SCHRODER MICRO CAP FUND INVESTOR
SHARES (CONTINUED)
Shares sold 508,435 $ 6,068,331
Shares issued to shareholders in
reinvestment 4,567 45,400
Shares redeemed (68,390) (954,770)
----------- -------------
Net increase 444,612 $ 5,158,961
=========== =============
</TABLE>
NOTE 10. BENEFICIAL INTEREST
The following table shows the number of shareholders each owning
beneficially or of record 5% or more of a class of shares of a Fund
outstanding as of October 31, 1999 and the total percentage of the class of
shares of the Fund held by such shareholders.
<TABLE>
<CAPTION>
5% OR GREATER SHAREHOLDERS
------------------------------
SHARES % OF CLASS HELD
-------- ---------------
<S> <C> <C>
Schroder International Fund--Investor Shares 7 73.42%
Schroder Emerging Markets Fund--Investor Shares 4 96.34%
Schroder International Smaller Companies Fund--Investor
Shares 3 99.05%
Schroder Greater China Fund--Investor Shares 1 98.75%
Schroder U.S. Diversified Growth Fund--Investor Shares 4 31.19%
Schroder U.S. Smaller Companies Fund--Investor Shares 3 72.73%
Schroder U.S. Smaller Companies Fund--Advisor Shares 2 98.19%
Schroder Micro Cap Fund--Investor Shares 4 49.11%
</TABLE>
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70
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
NOTE 11. FORWARD FOREIGN CURRENCY CONTRACTS
As of October 31, 1999, the following Funds had open forward foreign
currency contracts which contractually obligates the Funds to deliver
currencies at a specified date as follows:
SCHRODER INTERNATIONAL FUND
<TABLE>
<CAPTION>
SOLD SETTLEMENT DATE COST VALUE DEPRECIATION
---- --------------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
614,957,000 Japanese Yen 2/18/00 $5,468,472 $6,000,079 $(531,607)
537,373,000 Japanese Yen 2/28/00 5,227,491 5,251,234 (23,743)
---------
$(555,350)
=========
</TABLE>
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND
<TABLE>
<CAPTION>
SOLD SETTLEMENT DATE COST VALUE DEPRECIATION
---- --------------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
28,436,220 Japanese Yen 2/18/00 $ 252,868 $ 277,450 $ (24,582)
24,713,000 Japanese Yen 2/28/00 240,405 241,497 (1,092)
---------
$ (25,674)
=========
</TABLE>
SCHRODER EMERGING MARKETS FUND
<TABLE>
<CAPTION>
APPRECIATION
SOLD SETTLEMENT DATE COST VALUE (DEPRECIATION)
---- --------------- -------- -------- --------------
<S> <C> <C> <C> <C>
1,220,000 Hong Kong Dollar 1/21/00 $152,869 $156,853 $ (3,984)
<CAPTION>
PURCHASED
---------
<S> <C> <C> <C> <C>
1,220,000 Hong Kong Dollar 1/21/00 $156,414 $156,858 444
--------
$ (3,540)
========
</TABLE>
SCHRODER GREATER CHINA FUND
<TABLE>
<CAPTION>
SOLD SETTLEMENT DATE COST VALUE DEPRECIATION
---- --------------- -------- -------- ------------
<S> <C> <C> <C> <C>
4,260,000 Hong Kong Dollar 1/13/00 $534,035 $547,759 $(13,724)
========
</TABLE>
- --------------------------------------------------------------------------------
71
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
TAX INFORMATION NOTICE (UNAUDITED)
For Federal income tax purposes, the following information is furnished
with respect to the distributions of the Trust for its fiscal year ended
October 31, 1999:
The Funds listed below designated the following amounts as long term
capital gain dividends for the purposes of the dividends paid deduction:
<TABLE>
<CAPTION>
CAPITAL GAINS DIVIDENDS
LONG TERM
-----------------------
<S> <C>
Schroder International Fund $22,438,746
Schroder U.S. Diversified Growth Fund 4,808,678
</TABLE>
The Funds listed below have designated the following amounts as foreign
tax credits for Federal income tax purposes:
<TABLE>
<S> <C>
Schroder International Fund $126,270
Schroder Emerging Markets Fund 508
Schroder International Smaller Companies Fund 9,695
</TABLE>
These credits will affect only those shareholders of the Funds who are
holders on the dividend record date in December, 1999. Accordingly,
shareholders will receive more detailed information along with their
Form 1099-DIV in January 2000.
On December 13, 1999, the Funds made the following per share distributions
to shareholders of record December 10, 1999:
<TABLE>
<CAPTION>
NET INVESTMENT SHORT TERM LONG TERM
INCOME CAPITAL GAIN CAPITAL GAIN
-------------- ------------ ------------
<S> <C> <C> <C>
Schroder International Fund--Investor Shares...... $0.073389 $0.49744 $1.10677
Schroder Emerging Markets Fund--Investor Shares... 0.119543 0.37756 0.10791
Schroder International Smaller Companies
Fund--Investor Shares........................... 0.008251 1.95471 0.00368
Schroder Greater China Fund--Investor Shares...... 0.131933 0.96613 --
Schroder U.S. Diversified Growth Fund--Investor
Shares.......................................... -- 0.30716 0.51454
Schroder Micro Cap Fund--Investor Shares.......... -- 7.12174 --
</TABLE>
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72
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER CAPITAL FUNDS
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of Schroder Capital Funds (Delaware):
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Schroder
Capital Funds (Delaware) (consisting of the Schroder International Fund,
Schroder Emerging Markets Fund, Schroder International Smaller Companies Fund,
Schroder Greater China Fund, Schroder U.S. Diversified Growth Fund, Schroder
U.S. Smaller Companies Fund, and Schroder Micro Cap Fund) (collectively the
"Funds") as of October 31, 1999, and the results of their operations, the
changes in each of their net assets and the financial highlights for the
periods indicated herein, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of investments at October 31, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 17, 1999
- --------------------------------------------------------------------------------
73
<PAGE>
INVESTMENT ADVISER
Schroder Investment Management
North America Inc.
787 Seventh Avenue, 34th Floor
New York, NY 10019
TRUSTEES
Nancy A. Curtin, CHAIRMAN
David N. Dinkins
Peter E. Guernsey
Sharon L. Haugh
John I. Howell
Peter S. Knight
William L. Means
Clarence F. Michalis
Hermann C. Schwab
ADMINISTRATOR & DISTRIBUTOR
Schroders Fund Advisors Inc.
787 Seventh Avenue, 34th Floor
New York, NY 10019
TRANSFER & SHAREHOLDER
SERVICING AGENT
Boston Financial Data Services, Inc.
CUSTODIAN
State Street Bank and Trust Company
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
COUNSEL
Ropes & Gray
The information contained in this report is
intended for the general information of the
shareholders of the Trust. This report is not
authorized for distribution to prospective
investors unless preceded or accompanied
by a current Trust prospectus which contains
important information concerning the Trust.
Schroder Capital Funds
P.O. Box 8507
Boston, MA 02266
800-464-3108
[SCHRODER LOGO]
------------------------------------------
SCHRODER CAPITAL
FUNDS
Schroder International Fund
Schroder Emerging Markets Fund
Schroder International Smaller Companies Fund
Schroder Greater China Fund
Schroder U.S. Diversified Growth Fund
Schroder U.S. Smaller Companies Fund
Schroder Micro Cap Fund
ANNUAL REPORT
October 31, 1999
SF1299AR
