<PAGE>
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Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- ------------------------------------------------------------------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to seek long-term capital appreciation
through investment in securities markets outside the United States.
INVESTMENT ADVISER
Schroder Capital Management International Inc. (the "Investment Adviser") is a
wholly owned indirect subsidiary of Schroder plc, the London Stock Exchange
listed holding company parent of an investment banking and investment
management group of companies (the "Schroder Group") that dates its origins to
1804. The investment management operations of the Schroder Group are located
in 22 countries worldwide. As of December 31, 1998, the Schroder Group had
over $195 billion in assets under management. As of March 31, 1999, the
Investment Adviser, together with its U.K. affiliate, Schroder Capital
Management International Ltd., had approximately $28 billion under management.
June 3, 1999
Dear Shareholder:
We are pleased to present the semi-annual report for the Schroder Emerging
Markets Fund Institutional Portfolio for the six months ended April 30, 1999.
During this period the anxieties about the world's economies that were
prevalent towards the end of 1998 have lessened. The U.S. remained a
surprisingly solid engine of growth; moreover, it achieved this growth with
consistent improvements in productivity and with little pressure on core
inflation. Continental European economies clearly slowed, but we anticipate
that rapid action by the monetary authorities in the future to reduce interest
rates should ensure that the economies do not stall. In addition, the U.K.
seems set for a softer landing than seemed likely late last year. Elsewhere,
in Asian economies outside Japan, economic recovery is broadening out from the
export sectors to areas of domestic demand. A number of economies in the
region have experienced upgrades in their GDP forecasts for 1999 and many
remain on course with restructuring programs. The devaluation of the Brazilian
currency in January this year turned out not to be the precursor of further
global instability as feared. Better than expected inflation patterns in
Brazil and adherence to credible fiscal policies during the period helped to
boost confidence and, although the Brazilian economy remains under pressure,
there is the potential for a smooth recovery. Even in Japan, where the risks
of deflation remain high and there are few signs of economic recovery, pockets
of apparent stability have formed and there is a more widespread commitment to
structural reform. The interest rate gap between many emerging economies' debt
and that of U.S. Treasury bonds has narrowed as the risks of last year are
believed to be diminished. Increased confidence in an emerging markets
recovery is evident in the narrowing interest rate gap between emerging
markets and U.S. Treasury debt.
Looking ahead, we believe that it is unlikely that stock valuations in
developed markets will expand as fast as they have in the last few years.
Although valuations in many developed markets are relatively high, there
remain areas of compelling value, as large parts of these markets (often
including smaller and mid cap companies) have not participated in this trend.
While the global interest rate environment might provide less support for
stock prices than it has done, corporate earnings should continue to benefit
from the effect of previous interest rate cuts. Opportunities exist with
companies that distinguish themselves through improving internal operations
and learning to use capital more efficiently. We are encouraged by this trend,
which is becoming more common in many markets outside the U.S., and the
benefits of such restructuring activity is likely to be a positive influence
on companies' profitability for an extended period of time. Schroders'
investment process, based on detailed fundamental research and carried out
globally, is designed to highlight such opportunities for the long-term
benefit of our investors.
1
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Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- ------------------------------------------------------------------------------
Since your last report, Mark Smith has resigned as President and Chairman of
the Fund. As you may already know, Schroder Capital Management International
Inc., and its sister company responsible for investing in domestic markets,
will be merging into a newly created corporation called Schroder Investment
Management North America Inc. This change will allow us to simplify our
corporate structure and to integrate our global equity and fixed income
management services for U.S. clients into one corporate entity. We can assure
you that no changes in Fund management are planned or anticipated in
connection with the merger. We expect the merger to be effective on or about
July 1, 1999.
Thank you for your interest in the Schroder Emerging Markets Fund
Institutional Portfolio.
Sincerely,
/s/ Nancy A. Curtin /s/ Alexandra Poe
- ------------------- -----------------
Nancy A. Curtin Alexandra Poe
Chairman President
2
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Schroder Emerging Markets Fund Institutional Portfolio (Fund)
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MANAGEMENT DISCUSSION AND ANALYSIS (As of April 30, 1999) (unaudited)
How did the Fund perform for the six months ended April 30, 1999?
For the six months ended April 30, 1999, the Schroder Emerging Markets Fund
Institutional Portfolio Investor Shares returned 29.91% and Advisor Shares
returned 29.75%, respectively, not including the deduction of the purchase and
redemption fees of 0.50%. Including the purchase and redemption fees, the
Fund's returns for the six months ended April 30, 1999, would have been 28.77%
for Investor shares and 28.61% for Advisor shares. The Fund's benchmark, the
unmanaged Morgan Stanley Capital International Emerging Markets Free
ex-Malaysia Index, rose 34.05% over the same period. Country allocation,
particularly the Fund's overweight position in Asia, contributed positively to
performance; however, the Fund's overweight position in China did hurt
performance, as fears about the effect of Brazil's January devaluation on the
Chinese currency, the renminbi, caused China to underperform. Stock selection
detracted from performance, as a number of stocks in the Index which did not
meet our investment criteria rose disproportionately over the period.
The devaluation of the Brazilian currency in January was one of the
significant economic events in the emerging markets over the period. How did
you position the portfolio following the devaluation?
The Fund's underweight position in Brazil and Latin America as a whole
contributed positively to performance, both in the run-up to and during the
Brazilian devaluation. Our hedge on the Brazilian real also helped
performance. After the devaluation, we gradually increased the Fund's exposure
to exporters, as these stocks appeared most likely to benefit from the
devaluation in terms of foreign revenue and local costs. Two of our best
performers were Vale do Rio, a metal mining company, and Aracruz, a paper
manufacturer. The Brazilian currency crisis eased as the new Central Bank
governor, Arminio Fraga, increased interest rates to protect the currency.
Following an additional support package from the International Monetary Fund,
we began to add to the Fund's weighting in Brazil in February, positioning the
Fund to take advantage of the sharp economic recovery in the region.
How was the Fund positioned over the period?
During the six months ended April 30, 1999, we made several changes which
benefited the Fund. At the beginning of the period the Fund was underweight in
Latin America, as a tight credit environment was preventing economic growth.
We remained underweight until after the Brazilian devaluation and moved to an
overweight position when our analysis indicated an improvement in Brazil's
economic outlook. In Europe, the Middle East and Africa (EMEA), we steadily
reduced the Fund's weighting from an overweight position to an underweight
one, as we recognized that the economic outlook was deteriorating and further
interest rate cuts looked unlikely. The Fund also benefited from our decision
to take profits and reduce our position in Greece, where valuations had become
among the highest in the asset class. We increased our exposure to Asia during
the period, due to a sharp decline in local interest rates and signs of a
turnaround in economic growth in the region. Within Asia, the Fund's largest
overweight position was in Korea, where the market rose dramatically as
restructuring progress accelerated. We reduced the Fund's cash position due to
our improved outlook for emerging markets and as risks within the asset class
diminished.
How is the Fund positioned to take advantage of this turnaround in emerging
markets?
We seek to identify countries that can sustain economic growth, ranking
markets according to their stage of development. Therefore, we are increasing
the Fund's overweight position in Asia due to signs of economic recovery in
the region. We favor those markets that are genuinely committed to
restructuring, of which Korea is the most dramatic example. Additionally, we
have increased our weighting from an underweight position to an overweight one
in the larger Latin American markets, specifically Brazil and
3
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Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- ------------------------------------------------------------------------------
Mexico, as the valuations in these countries appear attractive in wake of the
crisis. On a broader note, the emerging markets appear to be in a state of
transition from a period characterized by severe macroeconomic imbalances to a
period of economic stabilization. This transition is also reflected in the
Fund's current weightings: we are reducing our position in EMEA, where we were
overweight throughout 1998. We are also reducing the Fund's weighting in
Eastern Europe as external and fiscal deficits are weakening regional
currencies and growth is slowing in line with Germany, a major export link for
countries within this region.
Has the crisis in emerging markets subsided in your view?
The recent recovery in the emerging markets increases our confidence that we
are seeing a significant turning point in the asset class. There are several
factors which support our optimism: global growth has not slowed as
dramatically as had been feared and economic growth in the U.S. has exceeded
expectations; oil prices have significantly risen this year, helping many
emerging markets, such as Mexico and Venezuela, which rely on oil for a
significant portion of their government revenues; and other commodity prices
have also started to stabilize. Also, there is evidence of on-going structural
reform in many emerging market economies. For example, Thailand has passed
bankruptcy laws and Taiwan has eased foreign ownership restrictions. The most
dramatic example of restructuring progress is Korea which delivered
exceptional gains during the period as it continued to implement reforms.
The Brazilian devaluation in January did not cause a widespread financial
contagion as had been feared, thereby removing a major source of uncertainty.
However, there is still uncertainty within the emerging market sector. Not all
countries will recover or embrace reform at the same pace and external events,
such as potentially higher interest rates in the U.S., may result in further
volatility and market setbacks in some countries. China also remains a
concern. The likelihood of a Chinese devaluation, especially if the Japanese
yen were to weaken significantly, is one of the key threats to the emerging
market asset class.
In light of these risks, investing in emerging market equities should only be
viewed as part of a complete investment program.
The views expressed in this report were those of the Fund's portfolio manager
as of April 30, 1999, and may not reflect the views of the portfolio manager
on the date this report is first 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.
4
<PAGE>
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Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- ------------------------------------------------------------------------------
Portfolio Characteristics as of April 30, 1999 (unaudited)
Country Weightings
Country % of Net Assets
- ------------------------------------------------
Mexico 14.31 %
Korea, Republic of 13.25
Brazil 10.31
South Africa 8.28
Taiwan 7.71
India 6.66
Argentina 4.52
Israel 4.28
Greece 3.30
Philippines 2.70
Thailand 2.63
Turkey 2.62
Chile 2.31
Poland 1.56
Hong Kong 1.54
Indonesia 1.47
Russia 1.44
Hungary 1.41
Portugal 1.28
China, Peoples Republic of 1.20
Peru 1.16
Czech Republic 0.67
Zimbabwe 0.62
United Kingdom 0.46
Egypt 0.41
Malaysia 0.36
Botswana 0.32
Mauritius 0.31
Colombia 0.13
Pakistan 0.10
Slovak Republic 0.02
Cash and Other Net Assets 2.66
------
Total 100.00 %
=======
Top Ten Holdings
Security % of Net Assets
- -----------------------------------------------------
Telefonos de Mexico, ADR 4.66 %
Samsung Electronics Co. 3.37
Korea Electric Power Corp. (includes ADR) 2.39
YPF Sociedad Anomina, ADR 1.91
Taiwan Semiconductor Manufacturing Co. 1.75
Cifra SA de CV, "C" 1.65
Hindustan Lever Ltd. 1.55
Anglo-American Corp. of South Africa Ltd. 1.49
Companhia Vale do Rio Doce 1.42
Telecomunicacoes de Sao Paulo SA-Telesp 1.26
-----
Total 21.45 %
=====
5
<PAGE>
- ------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities
April 30, 1999 (unaudited)
Assets:
Investments (Notes 1 and 2):
Investment in Schroder Emerging Markets
Fund Institutional Portfolio (the "Portfolio") $ 166,350,172
Receivable from investment adviser (Note 4) 3,826
Organization costs, net of amortization (Note 2) 5,533
--------------
Total Assets 166,359,531
--------------
Liabilities:
Payable for Fund shares redeemed 5,970,000
Payable to administrator (Note 3) 12,441
Payable to subadministrator (Note 3) 5,395
Accrued expenses and other liabilities 49,734
--------------
Total Liabilities 6,037,570
--------------
Net Assets $ 160,321,961
==============
Components of Net Assets:
Paid-in capital $ 199,984,308
Undistributed net investment income 974,255
Accumulated net realized loss on investments and
foreign currency transactions (57,917,511)
Net unrealized appreciation on investments and
foreign currency transactions 17,280,909
--------------
Net Assets $ 160,321,961
==============
Net Assets by Class:
Investor class $ 132,251,764
Advisor class 28,070,197
--------------
Net Assets $ 160,321,961
==============
Shares of Beneficial Interest:
Investor class 13,155,702
Advisor class 2,780,934
Net Asset Value, Offering, and Redemption Price
Per Share (Note 5):
Investor class $10.05
Advisor class $10.09
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
- --------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended April 30, 1999 (unaudited)
<TABLE>
<S> <C>
Net Investment Income Allocated from the Portfolio:
Dividend income (net of foreign withholding taxes of $141,637) $ 1,483,580
Interest income 119,390
Net expenses (819,363)
-------------
Net Investment Income Allocated from the Portfolio 783,607
-------------
Expenses:
Administration (Note 3) 34,807
Subadministration (Note 3) 34,807
Transfer agency - Investor Shares (Note 3) 10,897
Transfer agency - Advisor Shares (Note 3) 12,481
Shareholder services - Advisor Shares (Note 3) 29,617
Accounting (Note 3) 6,000
Legal 9,936
Audit 7,604
Registration 9,893
Trustees 7,208
Amortization of organization costs (Note 2) 3,000
Miscellaneous 7,190
-------------
Total Expenses 173,440
Fees waived and expenses reimbursed (Note 4) (9,826)
-------------
Net Expenses 163,614
-------------
Net Investment Income 619,993
-------------
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency Transactions Allocated from the Portfolio:
Net realized loss on investments (7,181,177)
Net realized loss on foreign currency transactions (286,043)
-------------
Net realized loss on investments and
foreign currency transactions (7,467,220)
-------------
Net change in unrealized appreciation on investments 45,408,871
Net change in unrealized depreciation on
foreign currency transactions (8,021)
-------------
Net change in unrealized appreciation on investments
and foreign currency transactions 45,400,850
-------------
Net Realized and Unrealized Gain on Investments
and Foreign Currency Transactions Allocated from the Portfolio 37,933,630
-------------
Net Increase in Net Assets Resulting From Operations $ 38,553,623
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
- --------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
Six Months Ended Year Ended
April 30, 1999 October 31, 1998
(unaudited)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Assets, Beginning of Period $ 131,935,067 $ 204,715,762
-------------------- --------------------
Operations:
Net investment income 619,993 1,891,229
Net realized loss on investments
and foreign currency transactions (7,467,220) (33,857,609)
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 45,400,850 (30,037,143)
-------------------- --------------------
Net increase (decrease) in net assets
resulting from operations 38,553,623 (62,003,523)
-------------------- --------------------
Distributions to Shareholders from:
Net investment income - Investor Shares (504,513) (596,860)
Net investment income - Advisor Shares (39,323) (26,384)
-------------------- --------------------
Total distributions to shareholders (543,836) (623,244)
-------------------- --------------------
Capital Share Transactions: (Note 5)
Sale of shares - Investor Class 3,984,714 32,111,369
Sale of shares - Advisor Class 2,976,763 6,379,884
Reinvestment of distributions - Investor Class 310,385 355,423
Reinvestment of distributions - Advisor Class 39,323 26,384
Redemption of shares - Investor Class (15,083,040) (46,569,811)
Redemption of shares - Advisor Class (1,851,038) (2,457,177)
-------------------- --------------------
Net decrease from capital share transactions (9,622,893) (10,153,928)
-------------------- --------------------
Net increase (decrease) in net assets 28,386,894 (72,780,695)
-------------------- --------------------
Net Assets, End of Period (a) $ 160,321,961 $ 131,935,067
==================== ====================
Share Transactions:
Sale of shares - Investor Class 443,555 2,945,917
Sale of shares - Advisor Class 355,070 663,007
Reinvestment of distributions in shares - Investor Class 38,156 32,460
Reinvestment of distributions in shares - Advisor Class 4,849 2,414
Redemption of shares - Investor Class (1,673,445) (4,830,885)
Redemption of shares - Advisor Class (206,242) (314,314)
-------------------- --------------------
Net decrease in shares (1,038,057) (1,501,401)
==================== ====================
</TABLE>
- -------------------------------------------------------------
(a) Includes accumulated undistributed net investment income of $974,225
and $898,098 respectively, for the six months ended April 30, 1999 and
the year ended October 31, 1998.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
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Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- --------------------------------------------------------------------------------
Financial Highlights - Investor Shares
Selected per share data and ratios for an Investor share outstanding
throughout each period:
<TABLE>
<CAPTION>
For the For the
Six Months Ended Period Ended
April 30, For the Year Ended October 31, October 31,
1999 1998 1997 1996 1995 (a)
(unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 7.77 $ 11.08 $ 11.06 $ 10.63 $ 10.00
------ ------- ------- ------- -------
Investment Operations
Net Investment Income (b) 0.04 0.12 0.06 0.02 0.02
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions 2.28 (3.39) (0.03) 0.43 0.61
------ ------- ------- ------- -------
Total from Investment Operations 2.32 (3.27) 0.03 0.45 0.63
------ ------- ------- ------- -------
Distributions From Net Investment Income (0.04) (0.04) (0.01) (0.02) -
------ ------- ------- ------- -------
Net Asset Value, End of Period $ 10.05 $ 7.77 $ 11.08 $ 11.06 $ 10.63
====== ======= ======= ======= =======
Total Return (c)(d) 29.91% (29.64)% 0.27% 4.22% 6.30%
Ratio/Supplementary Data:
Net Assets at End of Period (in thousands) $ 132,252 $ 111,463 $ 179,436 $167,570 $ 18,423
Ratios to Average Net Assets (b):
Expenses, including
reimbursement/waiver of fees 1.37% (e) 1.36% 1.41% 1.60% 1.58% (e)
Expenses, excluding
reimbursement/waiver of fees 1.73% (e) 1.64% 1.62% 1.71% 2.45% (e)
Net investment income,
including reimbursement/waiver of fees 0.93% (e) 1.11% 0.51% 0.36% 0.46% (e)
Portfolio Turnover Rate (f) 34% 67% 43% 103% 44%
</TABLE>
- ---------
(a) The Fund commenced operations on March 31, 1995, and converted to Core
and Gateway(Registered) structure on November 1, 1995 (See Note 1).
(b) Includes the Fund's proportionate share of income and expenses of the
Portfolio, since the Fund's conversion to Core and Gateway(Registered)
structure.
(c) Total return calculation does not include the purchase and redemption fee
of 0.50%, respectively.
(d) Total returns would have been lower had certain expenses not been reduced
during the periods shown (See Note 4).
(e) Annualized.
(f) The rate after October 31, 1995, represents the turnover of the
underlying Portfolio.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
- ------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- ------------------------------------------------------------------------------
Financial Highlights - Advisor Shares
Selected per share data and ratios for an Advisor share outstanding throughout
each period:
<TABLE>
<CAPTION>
For the For the For the
Six Months Ended Year Ended Period Ended
April 30, 1999 October 31, 1998 October 31, 1997 (a)
(unaudited)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 7.79 $ 11.11 $ 11.28
----------------- ----------------- -----------------
Investment Operations
Net Investment Income (b) 0.03 0.08 0.03
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currency Transactions 2.28 (3.39) (0.19)
----------------- ----------------- -----------------
Total from Investment Operations 2.31 (3.31) (0.16)
----------------- ----------------- -----------------
Distributions From Net Investment Income (0.01) (0.01) (0.01)
----------------- ----------------- -----------------
Net Asset Value, End of Period $ 10.09 $ 7.79 $ 11.11
================= ================= =================
Total Return (c)(d) 29.75% (29.81)% (1.42)%
Ratio/Supplementary Data:
Net Assets at End of Period (in thousands) $ 28,070 $ 20,472 $ 25,280
Ratios to Average Net Assets (b):
Expenses, including
reimbursement/waiver of fees 1.62% (e) 1.61% 1.66% (e)
Expenses, excluding
reimbursement/waiver of fees 2.07% (e) 1.97% 2.03% (e)
Net investment income,
including reimbursement/waiver of fees 0.67% (e) 0.82% 0.27% (e)
Portfolio Turnover Rate (f) 34% 67% 43%
- ----------------------------------------------
(a) Advisor Class shares were first issued on November 21, 1996.
(b) Includes the Fund's proportionate share of income and expenses of the
Portfolio.
(c) Total returns calculations do not include the purchase or redemption fee
of 0.50%, respectively.
(d) Total returns would have been lower had certain expenses not been reduced
during the periods shown (See Note 4).
(e) Annualized.
(f) Rate represents the turnover of the underlying Portfolio.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
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Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
Note 1. Organization
Schroder Capital Funds (Delaware) (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, which is registered as an
open-end, management investment company under the Investment Company Act of
1940, as amended (the "Act"), currently has nine investment portfolios.
Included in this report is the Schroder Emerging Markets Fund Institutional
Portfolio (the "Fund"), which is a non-diversified portfolio that commenced
operations on March 31, 1995. Under its Trust Instrument, the Trust is
authorized to issue an unlimited number of the Fund's Investor Shares and
Advisor Shares of beneficial interest without par value. As of April 30, 1999,
both Investor Shares and Advisor Shares had been issued.
Until May 28, 1999, the Fund sought to achieve its investment
objective by investing all its investable assets in Schroder Emerging Markets
Fund Institutional Portfolio (the "Portfolio"), a separate non-diversified
portfolio of Schroder Capital Funds ("Schroder Core") that had the same
investment objective and substantially similar investment policies as the
Fund. The Fund accounted for its investment in the Portfolio as a partnership
investment and recorded daily its share of the Portfolio's income, expenses
and realized and unrealized gain and loss. The Portfolio's financial
statements are included elsewhere in this report and should be read in
conjunction with the Fund's financial statements. As of April 30, 1999, the
Fund owned approximately 71% of the interests in the Portfolio.
Since May 28, 1999, the Fund has sought its objective by investing
directly in a portfolio of securities considered by Schroder Capital
Management International Inc., the Fund's investment adviser, to be consistent
with the Fund's investment objective and policies, and has ceased to invest in
the Portfolio.
Note 2. Significant Accounting Policies
These financial statements are prepared in accordance with generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of increase and decrease in
net assets from operations during the fiscal period. Actual amounts could
differ from those estimates.
The following represent the significant accounting policies of the
Fund:
Security Valuation
The Trust determines the net asset value per share of the Fund as of
the close of trading on the New York Stock Exchange on each Fund business day.
Valuation of securities held in the Portfolio are discussed in the Notes to
the Financial Statements of the Portfolio. Investments held directly by the
Fund will be valued in the same manner as the Portfolio would value such
investments.
Investment Income and Expenses
For the periods covered by these Financial Statements, the Trust
recorded daily its pro rata share of the Portfolio's income, expenses and
realized and unrealized gain and loss. In addition, the Fund incurred its own
expenses.
11
<PAGE>
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Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- ------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
Distributions to Shareholders
Dividends and capital gain distributions, if any, are distributed to
shareholders at least annually and are recorded on the ex-dividend date.
Distributions are based on amounts calculated in accordance with applicable
federal income tax regulations, which may differ from generally accepted
accounting principles. These differences are due primarily to differing
treatments of income and gain on various investment securities held by the
Portfolio or the Fund, timing differences and differing characterizations of
distributions made by the Fund.
Federal Taxes
The Fund intends to qualify each year as a regulated investment
company and distribute all its taxable income. In addition, by distributing in
each calendar year substantially all its net investment income, capital gain
and certain other amounts, if any, the Fund will not be subject to a federal
excise tax. Therefore, no federal income or excise tax provision is required.
Expense Allocation
The Trust accounts separately for the assets and liabilities and
operation of its funds. Expenses that are directly attributable to more than
one fund are allocated among the respective funds in proportion to each fund's
net assets. Expenses that are directly attributable to a class are allocated
to that class.
Organization Costs
Costs incurred by the Fund in connection with its organization are
amortized on a straight-line basis over a five-year period.
Note 3. Investment Advisory and Other Services
Investment Adviser
Schroder Capital Management International Inc. ("SCMI") is the
investment adviser to the Fund. Prior to May 28, 1999, the Fund invested all
its assets in the Portfolio, which had retained SCMI to act as investment
adviser pursuant to an Investment Advisory Agreement. Beginning June 1, 1999,
the Fund incurs investment advisory fees at an annual rate, payable monthly,
of 1.00% of the Fund's average daily net assets, payable to SCMI. See Notes to
the Financial Statements of the Portfolio.
SCMI has informed the Trust that it expects on or about July 1, 1999
to be merged into Schroder Investment Management North America Inc., a newly
organized Delaware corporation. SCMI and Schroder Investment Management North
America Inc. are both wholly owned subsidiaries of Schroder U.S. Holdings,
Inc.
Administrator and Subadministrator
The administrator of the Fund is Schroder Fund Advisors Inc.
("Schroder Advisors"). For its services, Schroder Advisors is entitled to
receive compensation at an annual rate, payable monthly, of 0.10% of the
average daily net assets of the Fund. (Until May 28, 1999, Schroder Advisors
was entitled to receive compensation at an annual rate, payable monthly, of
0.05% of the Fund's average daily net assets; Schroder also received fees from
the Portfolio for providing administrative services at an annual rate of 0.05%
of the Portfolio's average daily net assets.) In addition, the Trust has
entered into a Sub-Administration Agreement with State Street Bank and Trust
Company and Schroder Advisors. Under that Agreement, the
12
<PAGE>
- --------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
Fund, together with other mutual funds managed by SCMI 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. Pursuant to a separate agreement, the Fund pays
State Street fees for accounting services at the following annual rates: 0.02%
of the first $100 million of net assets, 0.015% of the next $100 million;
0.005% of the next $300 million, and 0.0025% of assets in excess of $500
million, subject to certain minimum requirements. Prior to June 1, 1999, the
Fund paid subadministration fees to Forum Administrative Services, LLC
("FAdS") at an annual rate of 0.05% of the average daily net assets of the
Fund, and paid accounting fees to Forum Accounting Services, LLC at an annual
rate of $12,000.
Shareholder Service Plan and Service Organizations
The Trust has adopted a Shareholder Service Plan (the "Plan") for
Advisor Shares under which Schroder Advisors, or other shareholder servicing
organizations, provide administrative support services to shareholders of the
Fund's Advisor Shares. For providing for, or arranging for, the provision of
these shareholder services, Schroder Advisors receives compensation monthly at
an annual rate of up to 0.25% of the average daily 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 4. Waiver of Fees and Reimbursement of Expenses
In order to limit the Fund's expenses, SCMI is contractually obligated
to reduce its compensation (and, if necessary, to pay certain other Fund
expenses) until December 31, 1999, to the extent that the Fund's net expenses
attributable to its Investor and Advisor shares exceed 1.45% and 1.70%,
respectively (based on the Fund's average daily net assets). For the period
ended April 30, 1999, Forum Shareholder Services, LLC waived fees of $6,000.
Schroder Advisors reimbursed expenses in the amount of $3,826.
Note 5. Purchase and Redemption Fees
Purchases and redemptions of Fund shares are subjected to a transaction
fee of 0.50% of the amount invested and the net asset value redeemed,
respectively. These charges are designed to cover the transaction costs that
the Portfolio incurs (either directly or indirectly) as a result of the Fund's
investment in, or redemption of, Fund shares. These charges, which are not
sales charges, are assessed by the Fund and paid to the Portfolio, not
Schroder Advisors or any other entity. The purchase and redemption fees are
included in the Statements of Changes in Net Assets shares sold and shares
redeemed amounts, respectively, and are included as part of Paid-in Capital in
the Statement of Assets and Liabilities. The purchase and redemption fee for
each class are as follows:
</TABLE>
<TABLE>
<CAPTION>
Investor Shares Advisor Shares
--------------- --------------
For the Periods Ended Purchase Redemption Purchase Redemption
--------------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C>
April 30, 1999 $ 23,197 $ 45,287 $ 14,864 $ 9,237
October 31, 1998 162,923 232,843 30,610 10,778
</TABLE>
13
<PAGE>
- --------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Fund)
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (concluded)
Note 6. Beneficial Interest
As of April 30, 1999, there were 3 shareholders, otherwise unaffiliated
with the Fund, each owning more than 5% of the Fund's net assets, totaling
74.9%.
14
<PAGE>
- ------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Portfolio)
- ------------------------------------------------------------------------------
Schedule of Investments
April 30, 1999 (unaudited)
Stocks, Rights, and Warrants - 97.3%
Shares Value US$
- --------------------------------------------------------------------------------
Argentina - 4.5%
Common Stock
218,100 Astra Cia Argentina de Petroleo SA (a) $311,999
21,100 Banco de Galicia y Buenos
Aires SA de CV 486,619
24,000 Banco Hipotecario SA (a) 276,103
27,200 Embotella Andina SA, ADR 396,100
45,000 Gas Natural Ban SA (a) 86,432
64,400 Quilmes Industrial SA, ADR 704,375
107,914 Perez Companc SA (a) 671,475
118,900 Siderar SA IC 366,349
93,900 Telecom Argentina Stet -
France Telecom SA (a) 632,183
237,400 Telefonica de Argentina SA 876,333
34,500 Telefonica de Argentina SA, ADR 1,289,438
106,200 YPF Sociedad Anomina, ADR 4,460,400
-----------
10,557,806
-----------
Botswana - 0.3%
Common Stock
699,000 Sechaba Brewery Holdings Ltd. (a)(c) 753,189
-----------
Brazil - 10.3%
Common Stock
24,300 Aracruz Celulose SA, ADR 486,000
45,300 Companhia Brasileira de Distribuicao
Group Pao de Acucar 789,919
4,300,000 Companhia Cimento Portland Itau (a) 462,668
45,279,490 Companhia Energetica de Minas
Gerais - CEMIG 1,086,294
97,000 Companhia Paranaense de
Energia - Copel 794,188
12,222,000 Companhia Paulista de Forca
e Luz - CPFL 810,397
7,358,000 Companhia Siderurgica Nacional (a) 159,671
99,200,000 Eentrais Eletricas Brasileiras SA -
Eletrobras (a) 1,973,278
48,100 Embratel Participacoes SA (a) 781,625
11,800 Telecomunicacoes Brasileiras SA -
Telebras, ADR 922
Preferred Stock
147,230,000 Banco Bradesco SA (a) 780,983
1,665,000 Banco Itau SA 878,183
2,544,000 Companhia Cervejaria Brahma (a) 1,226,789
172,300 Companhia Vale do Rio Doce 3,313,131
7,220,000 Electropaulo Metropolitana -
Electricidade de Sao Paulo SA 278,535
42,655,000 Gerdau SA 655,651
776,353 Itausa-Investimentos Itau SA 421,177
10,454,000 Petrol Brasileiro SA - Petrobras 1,688,807
156,370,000 Tele Centro Sul Participacoes SA (a) 1,706,062
11,800 Telecomunicacoes Brasileiras SA -
Telebras, ADR 1,076,013
23,620,062 Telecomunicacoes de Sao Paulo SA -
Telesp 2,932,993
Shares Value US$
- --------------------------------------------------------------------------------
Brazil - continued
4,974,858 Telecomunicacoes do Parana SA -
Telepar (a) $710,709
23,907,062 Telesp Celular 1,023,169
Rights
955,360 Electropaulo Metropolitana -
Electricidade de Sao Paulo SA 11,518
----------
24,048,682
----------
Chile - 2.3%
Common Stock
21,700 Banco Santander Chile, ADR 374,325
56,100 Chilectra SA, ADR 1,240,652
27,700 Compania Cervecerias Unidas SA, ADR 680,381
44,225 Compania de Telecomunicaciones de
Chile SA, ADR 1,169,198
44,600 Distribucion y Servicio D&S SA, ADR 674,575
3,255 Enersis SA, ADR 62,455
48,500 Quinenco SA, ADR 670,904
18,194 Sociedad Quimica y Minera de
Chile SA, ADR 521,375
----------
5,393,865
----------
China, Peoples Republic Of - 1.2%
Common Stock
3,146,000 Beijing Datang Power Generation Co. 943,775
712,000 China Resources Enterprises Ltd. (a) 1,198,885
48,400 Huaneng Power
International, Inc., ADR (a) 650,375
---------
2,793,035
---------
Columbia - 0.1%
Common Stock
56,000 Bavaria SA 308,569
---------
Czech Republic - 0.7%
Common Stock
107,666 SPT Telekom AS (a) 1,566,136
---------
Egypt - 0.4%
Common Stock
23,060 EFG-Hermes Holdings SAE (a) 243,860
33,820 Oriental Weavers Co. 699,901
---------
943,761
---------
Greece - 3.3%
Common Stock
26,270 Alpha Credit Bank 1,880,149
15,720 Antenna TV SA, ADR (a) 184,710
36,810 Hellenic Bottling Co. SA 1,092,120
120,453 Hellenic Telecommunication
Organization SA (OTE) 2,801,782
17,414 National Bank of Greece SA 1,189,956
16,890 STET Hellas Telecommunications
SA, ADR (a) 456,030
15
<PAGE>
- ------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Portfolio)
- ------------------------------------------------------------------------------
Schedule of Investments - continued
Stocks, Rights, and Warrants - continued
Shares Value US$
- ---------- -----------
Greece - continued
Rights
31,094 National Bank of Greece SA (a) $96,148
----------
7,700,895
----------
Hong Kong - 1.5%
Common Stock
49,000 Cheung Kong Infrastructure Holdings Ltd. 102,423
758,000 China Merchants Holdings
International Co. Ltd. 533,031
333,000 China Telecom (Hong Kong) Ltd. (a) 760,509
1,398,000 Cosco Pacific Ltd. 947,008
303,000 New World Infrastructure Ltd. (a) 553,205
302,000 Ng Fung Hong Ltd. (a) 292,250
1,255,000 Quingling Motors Co. 195,937
1,328,000 Zhehuang Expressway Co. Ltd. 221,042
----------
3,605,405
----------
Hungary - 1.4%
Common Stock
55,218 Matav RT, ADR (a) 1,553,006
60,310 MOL Magyar Olaj -
es Gazipare RT, GDR (a) 1,355,467
8,960 OTP Bank RT, GDR (a) 383,264
----------
3,291,737
----------
India - 6.7%
Common Stock
20,060 Associated Cement Co. Ltd. 656,964
90,000 Bajaj Auto Ltd. 1,079,170
190,500 Bharat Heavy Electricals Ltd. (a) 806,020
192,000 Bharat Petroleum Corp. Ltd. (a) 760,977
200 BSES Ltd. (a) 654
59,500 Castrol (India) Ltd. 1,151,648
2,000 Great Eastern Shipping Co. 935
75,000 Hindustan Lever Ltd. (a) 3,619,499
34,700 Hindustan Petroleum Corp. Ltd. 150,266
1,700 Indian Hotels Co. Ltd. (a) 11,485
86,992 ITC Ltd. 1,947,923
263,000 Mahanagar Telephone Nigam Ltd. (a) 965,223
2,000 Mahindra & Mahindra Ltd. (a) 10,437
38,100 NIIT Ltd. (a) 1,485,571
475,500 Reliance Industries Ltd. (a) 1,507,796
250,000 State Bank of India 925,110
28,300 Videsh Sanchar Nigam Ltd. 460,832
----------
15,540,510
----------
Indonesia - 1.5%
Common Stock
341,000 PT Gudang Garam Tbk 617,910
584,000 PT HM Sampoerna Tbk (a) 809,028
723,000 PT Indofood Sukses Makmur Tbk (a) 572,336
352,500 PT Indosat, ADR (a) 680,169
1,680,000 PT Telekomunikasi Indonesia 748,074
----------
3,427,517
----------
Israel - 4.3%
Common Stock
440,600 Bank Hapoalim Ltd. (a) 1,052,745
1,011,240 Bank Leumi Le-Israel 1,732,462
Shares Value US$
- ---------- ----------
Israel - continued
276,080 Bezeq Israeli
Telecommunication Corp. Ltd. (a) $1,074,173
62,900 Blue Square-Israel Ltd. 872,738
68,510 ECI Telecommunications Ltd. 2,526,306
319,000 Super-Sol Ltd. (a) 863,520
40,590 Teva Pharmaceutical
Industries Ltd., ADR 1,856,993
----------
9,978,937
----------
Korea, Republic of - 13.2%
Common Stock
45,440 Daewoo Securities Co. (a) 1,122,175
191,307 Kookmin Bank, GDR 2,607,718
41,600 Korea Electric Power Corp., ADR 686,400
169,970 Korea Electric Power Corp. 4,891,173
271,205 Korea Exchange Bank (a) 1,643,026
113,331 LG Chemical Ltd. (a) 1,954,865
33,000 Pohang Iron & Steel Co. Ltd. (b) 2,858,191
23,000 Pohang Iron & Steel Co. Ltd., ADR 592,250
46,000 Samsung Electro-Mechanics Co. 1,083,752
102,274 Samsung Electronics Co. (a) 7,865,496
215,900 Shinhan Bank (a) 2,379,790
31,490 SK Corp. (a) 662,410
907 SK Telecom Co. Ltd. (a) 995,149
19,040 SK Telecom Co. Ltd., ADR 264,180
Warrants
1,550 SK Telecom (a) 1,310,897
----------
30,917,472
----------
Malaysia - 0.4%
Common Stock
86,000 Resorts World Berhad (a) (b) 113,160
186,000 Tanjong plc (b) 311,312
244,000 Tenaga Nasional Berhad (b) 413,525
----------
837,997
----------
Mauritius - 0.3%
Common Stock
1,230,000 State Bank of Mauritius Ltd. (a) 716,765
----------
Mexico - 14.3%
Common Stock
165,000 Alfa SA de CV 650,911
471,931 Cemex SA de CV 2,193,724
2,059,700 Cifra SA de CV, "C"(a) 3,856,475
2 Cifra SA de CV, "V"(a) 4
271,300 Consorcio ARA SA (a) 998,319
895,000 Controladora Commercial
Mexicana SA de CV (a) 939,583
650,000 Embotelladoras Argos SA 745,692
594,100 Fomento Economico Mexican SA de CV 2,173,285
125,600 Grupo Carso SA de CV 607,628
106,000 Grupo Continental SA (a) 369,404
772,400 Grupo Financiero Banamex
Accival SA de CV (a) 1,968,673
527,194 Grupo Industrial Bimbo SA de CV 1,118,322
259,100 Grupo Industrial Saltillo SA de CV 953,425
565,500 Grupo Modelo SA de CV, "C" 1,487,234
135,000 Grupo Sanborns SA (a) 267,378
16
<PAGE>
- ------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Portfolio)
- ------------------------------------------------------------------------------
Schedule of Investments - continued
Stocks, Rights, and Warrants - continued
<TABLE>
<CAPTION>
Shares Value US$
- -------------- -------------
<S> <C>
Mexico - continued
33,900 Grupo Televisa SA, GDR (a) $ 1,389,900
151,100 Industrias Penoles SA (a) 511,040
433,900 Kimberly-Clarke de Mexico SA de CV 1,688,220
143,600 Telefonos de Mexico SA, ADR 10,877,700
54,500 Tubos de Acero de Mexico SA, ADR 602,906
-----------
33,399,823
-----------
Pakistan - 0.1%
Common Stock
6,000 Pakistan Telecommunications
Corp. (a) 228,000
-----------
Peru - 1.2%
Common Stock
866,000 Banco Continental (a) 448,848
47,400 Compania de Minas
Buenaventura SA, ADR 764,325
98,700 Telefonica del Peru SA, ADR 1,486,669
-----------
2,699,842
-----------
Philippines - 2.7%
Common Stock
3,582,000 Ayala Corp. (a) 1,295,305
2,128,012 Ayala Land, Inc. (a) 783,513
462,280 Manila Electric Co., "B" 1,762,857
80,000 Metropolitan Bank & Trust Co. 799,498
43,540 Philipine Long Distance
Telephone Co. 1,408,437
120,000 San Miguel Corp., "B" (a) 255,629
-----------
6,305,239
-----------
Poland - 1.6%
Common Stock
7,850 Bank Przemslowo-Handlowy SA 401,253
34,706 Bank Rozwoju Eksportu SA 772,832
211,360 Bydgoska Fabryka Kabli SA (a) 272,766
77,500 Elektrim Spolka Akcyjna SA 921,716
207,250 Telekomunikacja Polska SA (a) 1,284,950
-----------
3,653,517
-----------
Portugal - 1.3%
Common Stock
28,750 Banco Espirito Santo e Comercial
de Lisboa SA 691,664
13,300 Companhia de Seguros Mundial
Confianca SA (a) 375,690
19,000 Jeronimo Martins SGPS SA 626,150
19,040 Portugal Telecom SA 794,659
8,820 Semapa - Sociedade de Investimento
e Gestao SGPS SA 141,834
2,630 Telecel-Communicacaoes Pessoais SA 351,976
-----------
2,981,973
-----------
Russia - 1.4%
Common Stock
30,695 Lukoil Holding, ADR 1,138,171
252,500 Surgutneftegaz, ADR 1,930,363
58,650 Unified Energy Systems, GDR (a) 293,250
-----------
3,361,784
-----------
Shares Value US$
- -------------- ----------
Slovak Republic
Common Stock
5,876 Nafta Gbely AS (a) (b) (c) $ 46,122
----------
South Africa - 8.3%
Common Stock
163,000 ABSA Group Ltd. (a) 854,474
67,695 Anglo American Corp. of
South Africa Ltd. 3,486,585
321,721 Barlow Ltd. 1,923,683
85,000 Dorbyl Ltd. (a) 264,566
1 Edgars Stores Ltd. 4
152,708 Ellerine Holdings Ltd. 606,645
85,100 Fedsure Holdings Ltd. 772,326
640,250 First Rand Ltd. (a) 702,725
333,084 LA Retail Stores Ltd. (a) 463,803
69,000 Liberty Life Assoc. of Africa Ltd. 991,311
955,000 Malbak Ltd. (a) 547,561
782,293 Metro Cash & Carry Ltd. 653,583
211,000 Nampak Ltd. 444,167
160,800 Rembrandt Group Ltd. 1,218,313
964,781 Sanlam Ltd. (a) 943,549
267,000 Sappi Ltd. (a) 1,924,532
238,000 Sasol Ltd. 1,676,512
128,274 South African Breweries Ltd. (a) 1,056,984
153,733 South African Druggists 803,376
----------
19,334,699
----------
Taiwan - 7.7%
Common Stock
663,000 Acer, Inc. (a) 969,185
124,000 Asustek Computer, Inc. (a) 1,296,919
389,254 Bank Sinopac (a) 273,795
760,000 Cathay Life Insurance Co. 2,719,347
1,895,000 China Steel Corp. 1,506,773
899,000 Evergreen Marine Corp. (a) 1,162,961
166,000 Far Eastern Textiles Ltd. 222,863
855,000 First Commercial Bank 1,425,042
86,000 Hon Hai Precision Industries (a) 468,149
879,000 Hua Nan Commercial Bank 1,478,484
1,042,377 Nan Ya Plastics Corp. (a) 1,657,652
404,000 Siliconware Precision Industries Co. (a) 722,774
1,211,300 Taiwan Semiconductor
Manufacturing Co. (a) 4,093,353
----------
17,997,297
----------
Thailand - 2.6%
Common Stock
83,000 Advanced Info Service Public Co. Ltd. 881,125
116,000 Bangkok Bank Public Co. Ltd. (a) 346,932
482,000 Electricity Generating Public Co. Ltd. (a) 1,071,431
133,000 PTT Exploration and Production
Public Co. Ltd. (a) 1,225,578
18,000 Siam Cement Public Co. Ltd. 531,553
979,000 Telecomasia Corp. Public Co. (a) 844,104
108,000 Thai Farmers Bank Public Co. (a) 299,726
202,000 Total Access Communication
Public Co. Ltd. (a) 686,800
</TABLE>
17
<PAGE>
- ------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Portfolio)
- ------------------------------------------------------------------------------
Schedule of Investments - continued
Stocks, Rights, and Warrants - continued
Shares Value US$
- -------------- ---------
Thailand - continued
Preferred Stock
343,000 Siam Commercial Bank Public Co. Ltd. $ 242,690
----------
6,129,939
----------
Turkey - 2.6%
Common Stock
39,759,675 Akbank TAS (a) 1,269,246
44,586,480 Haci Omer Sabanci Holding AS 1,224,065
1,314,640 Migros Turk TAS (a) 1,812,982
7,916,914 Netas Northern Electric
Telekomunikasyon AS (a) 186,010
2,566,420 Vestel Elektronik Sanayi ve Ticaret AS (a) 275,277
56,025,466 Yapi ve Kredi Bankasi AS 1,344,950
----------
6,112,530
----------
Shares Value US$
- -------------- ---------
United Kingdom - 0.5%
Common Stock
153,000 Meikles Africa Ltd. (a) $ 122,400
60,060 Pliva DD, GDR 950,450
-------------
1,072,850
-------------
Zimbabwe - 0.6%
Common Stock
13,500,000 Econet Wireless Holdings (a) (c) 1,202,862
635,000 NMBZ Holdings Ltd. (a) 254,000
-------------
1,456,862
-------------
Total Investments - 97.3%
(cost $203,756,373) 227,162,755
Other Assets, Less Liabilities - 2.7% 6,203,433
-------------
Total Net Assets - 100.0% $ 233,366,188
=============
- ---------
(a) Non-income producing security.
(b) Valued pursuant to methodology approved by the Board of Trustees.
(c) Illiquid securities.
ADR - American Depository Receipts
GDR - Global Depository Receipts
Forward Foreign Currency Contracts
Contracts to Sell
<TABLE>
<CAPTION>
Underlying Face Unrealized
Amount of Appreciation/
Contract Date Currency Units Value (Depreciation)
------------- -------- ----- --------------- --------------
<S> <C> <C> <C> <C>
6/16/99 Brazilian Cruzeiro 3,614,070 $ 2,112,873 $ 537,126
6/22/99 Brazilian Cruzeiro 1,876,000 1,092,603 247,397
1/21/00 Hong Kong Dollar 19,223,000 2,468,221 (59,536)
----------- ----------
$ 5,673,697 $ 724,987
=========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
- --------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Portfolio)
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
April 30, 1999 (unaudited)
<TABLE>
<S> <C>
Assets:
Investments (Note 2)
Investments, at cost $ 203,756,373
Net unrealized appreciation 23,406,382
--------------------
Total Investments, at value 227,162,755
Cash 3,548,438
Foreign currency (cost $476,769) 477,935
Receivable for investments sold 2,491,390
Receivable for forward foreign currency contracts 724,987
Receivable for dividends and interest 547,438
Prepaid expenses 14,242
Organization costs, net of amortization (Note 2) 3,710
--------------------
Total Assets 234,970,895
--------------------
Liabilities:
Payable for investments purchased 1,351,273
Payable to investment adviser (Note 3) 109,177
Payable to administrator (Note 3) 9,155
Payable to subadministrator (Note 3) 18,311
Accrued expenses and other liabilities 116,791
--------------------
Total Liabilities 1,604,707
--------------------
Net Assets $ 233,366,188
====================
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
- --------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Portfolio)
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended April 30, 1999 (unaudited)
<TABLE>
<S> <C>
Investment Income:
Dividend income (net of foreign withholding taxes of $198,650) $ 2,076,587
Interest income 171,459
-----------------------
Total Investment Income 2,248,046
-----------------------
Expenses:
Investment advisory (Note 3) 975,518
Administration (Note 3) 48,777
Subadministration (Note 3) 97,552
Interest holder recordkeeping (Note 3) 6,025
Custody 239,424
Accounting (Note 3) 36,000
Audit 44,841
Legal 19,900
Trustees 10,099
Pricing Services 10,067
Amortization of organization costs (Note 2) 1,237
Miscellaneous 14,427
-----------------------
Total Expenses 1,503,867
Fees waived (Note 6) (355,955)
-----------------------
Net Expenses 1,147,912
-----------------------
Net Investment Income 1,100,134
-----------------------
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency Transactions:
Net realized loss on investments (9,140,860)
Net realized loss on foreign currency transactions (357,740)
-----------------------
Net realized loss on investments and
foreign currency transactions (9,498,600)
-----------------------
Net change in unrealized appreciation on investments 62,636,357
Net change in unrealized depreciation on
foreign currency transactions (52,985)
-----------------------
Net change in unrealized appreciation on
investments and foreign currency transactions 62,583,372
-----------------------
Net Realized and Unrealized Gain on Investments
and Foreign Currency Transactions 53,084,772
-----------------------
Net Increase in Net Assets Resulting From Operations $ 54,184,906
=======================
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
- ------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Portfolio)
- ------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
Six Months Ended Year Ended
April 30, 1999 October 31, 1998
(unaudited)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Assets, Beginning of Period $ 183,532,071 $ 259,075,892
-------------------- --------------------
Operations:
Net investment income 1,100,134 3,088,029
Net realized loss on investments and
foreign currency transactions (9,498,600) (48,773,965)
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 62,583,372 (37,120,346)
-------------------- --------------------
Net increase (decrease) in net assets
resulting from operations 54,184,906 (82,806,282)
-------------------- --------------------
Transactions in Investors' Beneficial Interest (a):
Contributions 6,375,901 53,226,007
Withdrawals (10,726,690) (45,963,546)
-------------------- --------------------
Net increase (decrease) in net assets from
transactions in investors' beneficial interest (4,350,789) 7,262,461
-------------------- --------------------
Net increase (decrease) in net assets 49,834,117 (75,543,821)
-------------------- --------------------
Net Assets, End of Period $ 233,366,188 $ 183,532,071
==================== ====================
</TABLE>
- --------------------------------------------------------------
(a) Includes purchase and redemption fees (Note 7).
Financial Highlights
Portfolio performance for the following periods:
<TABLE>
<CAPTION>
For the
Six Months For the Year Ended October 31,
Ended April 30, -------------------------------------------
1999 1998 1997 1996
(unaudited)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratio to Average Net Assets:
Expenses, including reimbursement/waiver of fees 1.18% (a) 1.18% 1.22% 1.45%
Expenses, excluding reimbursement/waiver of fees 1.54% (a) 1.46% 1.43% 1.51%
Net investment income,
including reimbursement/waiver of fees 1.21% (a) 1.29% 0.69% 0.52%
Portfolio Turnover Rate 34% 67% 43% 103%
</TABLE>
- --------------------------------------------------------------
(a) Annualized.
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
- ------------------------------------------------------------------------------
Schroder Emerging Markets Fund Institutional Portfolio (Portfolio)
- ------------------------------------------------------------------------------
Notes to Financial Statements (unaudited)
Note 1. Organization
Schroder Capital Funds ("Schroder Core") was organized as a Delaware
business trust on September 7, 1995. Schroder Core, which is registered as an
open-end, management investment company under the Investment Company Act of
1940, as amended (the "Act"), currently has eight investment portfolios.
Included in this report is the Schroder Emerging Markets Fund Institutional
Portfolio (the "Portfolio"), a non-diversified portfolio that commenced
operations on November 1, 1995. Under its Trust Instrument, Schroder Core is
authorized to issue an unlimited number of interests without par value. On May
28, 1999, the Portfolio distributed all of its net assets to shareholders in
complete liquidation and ceased investment operations.
Note 2. Significant Accounting Policies
These financial statements are prepared in accordance with generally
accepted accounting principles, which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of increase and decrease in net assets
from operations during the fiscal period. Actual amounts could differ from
those estimates.
The following represent the significant accounting policies of the
Portfolio:
Investment Valuation
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 last sale price on
the preceding trading day or at the mean of the closing bid and ask prices
("mid-market price"). Securities traded in over-the-counter markets or listed
securities for which no trade is reported on the valuation date, generally are
valued at the most recent reported mid-market price. Domestic short-term
investments having a maturity of 60 days or less, generally are valued at
amortized cost, which approximates market value. Foreign short-term
investments are valued at the current market price, then marked to market to
recognize any gain or loss on the transaction. Prices used for valuation may
be provided by independent pricing services. Other securities and assets for
which market quotations are not readily available are generally valued at fair
value as determined in good faith using methods approved by Schroder Core's
Board of Trustees. As of April 30, 1999, the Portfolio held positions in five
fair valued securities with an aggregate market value of $3,742,310,
representing 1.6% of total net assets of the Portfolio.
Security Transactions and Investment Income
Investment transactions are accounted for on the trade date. Dividend
income is recorded on the ex-dividend date except that certain dividends from
foreign securities where the ex-dividend date may have passed are recorded as
soon as the Portfolio is informed of the ex-dividend date. Dividend income is
recorded net of unrecoverable withholding tax. Interest income, including
amortization of premium or accretion of discount, is recorded as earned.
Identified cost of investments sold is used to determine realized gain and
loss for both financial statement and federal income tax purposes. Foreign
dividend and interest income amounts and realized capital gain and loss are
converted to U.S. dollar equivalents using foreign exchange rates in effect on
the date of the transactions.
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.
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Schroder Emerging Markets Fund Institutional Portfolio (Portfolio)
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Notes to Financial Statements (unaudited) (continued)
The Portfolio may enter into forward contracts to purchase or sell
foreign currencies. Risks associated with such contracts 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 contracts
are recorded daily as unrealized gain or loss; realized gain or loss includes
net gain or loss on contracts that have terminated by settlement or by the
Portfolio entering into offsetting commitments.
Repurchase Agreements
The Portfolio may invest in repurchase agreements. The Portfolio,
through its custodian, receives delivery of the underlying collateral, whose
market value must always equal or exceed the repurchase price. The investment
adviser is responsible for determining the value of the underlying collateral
at all times. In the event of default, the Portfolio may have difficulties
with the disposition of any securities held as collateral.
Expense Allocation
Schroder Core accounts separately for the assets and liabilities and
operation of each of its portfolios. Expenses that are directly attributable
to more than one portfolio are allocated among the respective portfolios in
proportion to each portfolio's net assets.
Organization Costs
Costs incurred by the Portfolio in connection with its organization are
amortized on a straight-line basis over a five-year period.
Note 3. Investment Advisory and Other Services
Investment Adviser
Schroder Capital Management International Inc. ("SCMI") is the
investment adviser. Pursuant to an Investment Advisory Agreement, SCMI is
entitled to receive an annual fee, payable monthly, of 1.00% of the average
daily net assets of the Portfolio.
SCMI has informed the Trust that it expects on or about July 1, 1999 to
be merged into Schroder Investment Management North America Inc., a newly
organized Delaware corporation. SCMI and Schroder Investment Management North
America Inc. are both wholly owned subsidiaries of Schroder U.S. Holdings,
Inc.
Administrator and Subadministrator
The administrator of the Portfolio is Schroder Fund Advisors Inc.
("Schroder Advisors"). For its services, Schroder Advisors is entitled to
receive compensation at an annual rate, payable monthly, of 0.05% of the
average daily net assets of the Portfolio. The subadministrator is Forum
Administrative Services, LLC ("FAdS"). FAdS is entitled to receive
compensation at an annual rate, payable monthly, 0.10% of the average daily
net assets of the Portfolio.
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Schroder Emerging Markets Fund Institutional Portfolio (Portfolio)
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Notes to Financial Statements (unaudited) (concluded)
Other Service Providers
Forum Accounting Services, LLC ("FAcS") performs portfolio accounting
for the Portfolio and is entitled to receive compensation for those services
in the amount of $60,000 per year, plus certain other charges based upon the
number and types of portfolio transactions. FAcS also provides interest holder
recordkeeping services to the Portfolio for which it receives $12,000 per
year, plus certain other charges.
Note 4. Purchases and Sales of Securities
The cost of securities purchased and the proceeds from sales of
securities (excluding short-term investments) for the period ended April 30,
1999, aggregated $65,974,475 and $62,563,601, respectively.
Note 5. Federal Taxes
The Portfolio is not required to pay federal income taxes on its net
investment income and net capital gain as it is treated as a partnership for
federal income tax purposes. All interest, dividends, gain and loss of the
Portfolio are deemed to have been "passed through" to the interest holders in
proportion to their holdings in the Portfolio (except for gain and loss on
certain contributed securities, which for tax purposes have been allocated to
the interest holder who contributed such securities), regardless of whether
such interest, dividends or gain have been distributed by the Portfolio.
Note 6. Waiver of Fees
SCMI has voluntarily agreed to reduce its compensation for the
Portfolio's investment advisory services to 0.85% of the Portfolio's average
daily net assets. In addition, SCMI is contractually obligated to reduce its
compensation (and, if necessary, to pay certain other Portfolio expenses)
until December 31, 1999, to the extent that the Portfolio's net expenses
exceed 1.18% (based on the Portfolio's average daily net assets. SCMI waived
fees of $355,955 for the period ended April 30, 1999.
Note 7. Purchase and Redemption Fees
Purchases and redemptions of interests in the Portfolio are subject to
a transaction charge of 0.50% of the net asset value of the interests
purchased or redeemed. This charge is designed to cover the transaction costs
incurred by the Portfolio (either directly or indirectly) as a result of
purchases or redemptions of interests in the Portfolio, including brokerage
commissions in acquiring or selling portfolio securities; currency
transactions costs; interest holder recordkeeper costs; and to protect the
interests of other interest holders. These charges, which are not sales
charges, are paid to the Portfolio, not SCMI, FAdS or any other entity. The
purchase and redemption fees for the period ended April 30, 1999 were $31,453
and $53,793, respectively. The purchase and redemption fees are included in
the Statements of Changes in Net Assets contributions and withdrawal amounts,
respectively.
Note 8. Concentration of Risk
The Portfolio's investments in countries with limited or developing
capital markets may involve greater risks than investments in more developed
markets and the prices of such investments may be volatile. The consequences
of political, social or economic events in these markets may have disruptive
effects on the market prices of the Portfolio's investments.
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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
INVESTMENT ADVISER
Schroder Capital Management International Inc.
787 Seventh Avenue, 34th Floor
New York, NY 10019
ADMINISTRATOR AND DISTRIBUTOR
Schroder Fund Advisors Inc.
787 Seventh Avenue, 34th Floor
New York, NY 10019
CUSTODIAN
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
TRANSFER AND DIVIDEND DISBURSING AGENT
Boston Financial Data Services
Two Heritage Drive
North Quincy, MA 02171
(800) 464-3108
COUNSEL
Ropes & Gray
One International Place
Boston, MA 02110
This report is for the information of the shareholders of the Schroder
Emerging Markets Fund Institutional Portfolio. Its use in connection with any
offering of the Fund's shares is authorized only in case of a concurrent or
prior delivery of the Fund's current prospectus.
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[Logo] Schroders
Schroder
Emerging Markets Fund
Institutional Portfolio
SEMI-ANNUAL REPORT
APRIL 30, 1999
(Unaudited)
Schroder Capital Funds (Delaware)
