SCHRODER CAPITAL FUNDS /DELAWARE/, 485BPOS, 1999-07-13

SCHRODER CAPITAL FUNDS /DELAWARE/
485BPOS, 1999-07-13

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<PAGE>

As filed with the Securities and Exchange Commission on July 13, 1999
File Nos. 2-34215 and 811-1911

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No.74

AND REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 55

SCHRODER CAPITAL FUNDS (DELAWARE)
(formerly Schroder Capital Funds, Inc.)
P.O. Box 351, Boston, MA 02101

Michael E. Gillespie, Esq.
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101

Copies to:
Timothy W. Diggins, Esq.
Ropes & Gray
One International Place,
Boston, Massachusetts 02110

Carin Muhlbaum, Esq.
Schroder Capital Management International Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019

It is proposed that this filing will become effective:
[X] immediately upon filing pursuant to Rule 485, paragraph (b)
[ ] on _________________ pursuant to Rule 485, paragraph (b)
[ ] 60 days after filing pursuant to Rule 485, paragraph (a)(1) [ ] on
_________________ pursuant to Rule 485, paragraph (a)(1)
[ ] 75 days after filing pursuant to Rule 485, paragraph (a)(2)
[ ] on _________________ pursuant to Rule 485, paragraph (a)(2)
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Title of Series Being Registered: Schroder Greater China Fund.

<PAGE>

SCHRODER CAPITAL FUNDS (DELAWARE)
PROSPECTUS

SCHRODER GREATER CHINA FUND
INVESTOR SHARES

July 13, 1999

This prospectus describes Schroder Greater China Fund, a non-diversified series
of shares of Schroder Capital Funds (Delaware). The Fund seeks long-term growth
of capital. The Fund invests primarily in common stocks and securities of
issuers domiciled or doing business in China, Hong Kong SAR, and Taiwan. The
Trust offers Investor Shares of the Fund in this prospectus.

Schroder Investment Management North America Inc. ("Schroder") manages the Fund.
You can call (800) 464-3108 to find out more about the Fund and other funds in
the Schroder family.

The prospectus explains what you should know about the Fund before you invest.
Please read it carefully.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

TABLE OF CONTENTS

<TABLE>
Page
----
<S> <C>
SUMMARY INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 2

FEES AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

RISKS AND OTHER INVESTMENT STRATEGIES. . . . . . . . . . . . . . . . . . 5

MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . 9

HOW THE FUND'S SHARES ARE PRICED . . . . . . . . . . . . . . . . . . . . 9

HOW TO BUY SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

HOW TO SELL SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

EXCHANGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

DIVIDENDS AND DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . 14

TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

YEAR 2000 DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>

<PAGE>

SUMMARY INFORMATION

This summary identifies the investment objective, principal investment
strategies, and principal risks of Schroder Greater China Fund. The Fund offers
Advisor Shares, which have lower investment minimums and higher fees and
expenses, in a separate prospectus. The Fund's investment objective may not be
changed without shareholder approval. The investment policies of the Fund may,
unless otherwise specifically stated, be changed by the Board of Trustees of
Schroder Capital Funds (Delaware) without a vote of the shareholders. It is
possible to lose money on investments in the Fund.

SCHRODER GREATER CHINA FUND

- INVESTMENT OBJECTIVE. To seek long-term growth of capital.

- PRINCIPAL INVESTMENTS. The Fund normally invests at least 65% of its
total assets in securities of companies located in China, Hong Kong SAR, and
Taiwan. Schroder will consider an issuer of securities to be located in China,
Hong Kong SAR, or Taiwan if it is organized under the laws of China, Hong Kong
SAR, or Taiwan (or any political subdivision thereof); its primary securities
trading market is in China Hong Kong SAR, or Taiwan; at least 50% of the
issuer's revenues or profits are derived from goods produced or sold,
investments made, or services performed in China, Hong Kong SAR, or Taiwan; or
at least 50% of its assets are situated in China, Hong Kong SAR, or Taiwan.

- INVESTMENT STRATEGIES. The Fund invests in a variety of equity
securities, including common and preferred stocks, securities convertible into
common and preferred stocks, and warrants to purchase common or preferred
stocks.

The Fund invests in issuers that Schroder believes offer the potential for
capital growth. In identifying candidates for investment, Schroder considers a
variety of factors, including the issuer's likelihood of above average earnings
growth, the securities' attractive relative valuation, and whether the issuer
has any proprietary advantages. In addition, Schroder takes into account the
risk of local political and/or economic instability and the liquidity of local
markets. Securities generally are sold when they reach fair valuation or when
significantly more attractive investment candidates become available.

The Fund may also do the following:

- Engage in a variety of transactions involving the use of options
and futures contracts.

- Engage in currency exchange transactions relating to Chinese and
Taiwanese currencies.

- Invest in closed-end investment companies.

- PRINCIPAL RISKS.

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<PAGE>

- INVESTMENT IN CHINA, HONG KONG SAR, AND TAIWAN. Investment in
China, Hong Kong SAR, and Taiwan entails significant risks.
China is a communist country, and there can be no assurance
that economic or market reforms that have occurred in recent
years will continue, or that they will not be scaled back.
In particular, it is possible that political instability,
including changes of leadership at various levels of
government within China or a political reaction against
capitalism, will lead to economic uncertainty or to changes
in economic or market conditions which are adverse to
investments in securities of issuers organized or doing
business in China. Additionally, relations between China and
certain other Asian nations have historically been
unfriendly and at times hostile. Increased hostility between
China and such nations would likely have an adverse impact
on the values of the Fund's investments in China.

China gained control of Hong Kong in July 1997. Changes in Hong
Kong's political, economic, or market conditions as a result of
China's control could adversely affect the values of the Fund's
investments in issuers organized or doing business in Hong Kong.

Continuing hostility between China and Taiwan, over which China
continues to claim sovereignty, may have an adverse impact on
the values of the Fund's investments in either China or Taiwan,
or make investment in either China or Taiwan impracticable or
impossible. The escalation of hostility between China and Taiwan
would likely have a significant adverse impact on the values of
the Fund's investments in both countries.

- FOREIGN SECURITIES. Investments in foreign securities entail
risks not present in domestic investments including, among other
things, risks related to political or economic instability,
currency exchange and taxation. Additionally, because the Fund
invests in foreign securities, it is subject to the risk that
foreign issuers or other foreign entities may not have
adequately prepared their computer systems to address the "Year
2000" problem, which could have an adverse impact on the foreign
securities markets generally and therefore reduce the value of
the Fund's portfolio investments.

- SMALL COMPANIES. The Fund may invest a substantial portion of
its assets in small companies (i.e., companies with market
capitalizations below $1 billion), which tend to be more
vulnerable to adverse developments than larger companies. Small
companies may have limited product lines, markets, or financial
resources, or may depend on a limited management group. Their
securities may trade infrequently and in limited volumes. As a
result, the prices of these securities may fluctuate more than
the prices of securities of larger, more widely traded
companies. Also, there may be less publicly available
information about small companies or less market interest in
their securities as compared to larger companies, and it may
take longer for the prices of the securities to reflect the full
value of their issuers' earnings potential or assets.

-3-
<PAGE>

- GEOGRAPHIC CONCENTRATION. Because the Fund's investments will be
concentrated in securities of issuers located in China, Hong
Kong SAR, and Taiwan, the Fund will be more susceptible to the
political and economic developments and market fluctuations in
those countries than if it invested in a geographically more
diversified portfolio.

- NON-DIVERSIFIED FUND. The Fund is a "non-diversified" mutual
fund, and may invest its assets in a more limited number of
issuers than may other diversified investment companies. At such
times, the Fund's risk of loss increases if the market value of
a security declines or if an issuer is not able to meet its
obligations.

- EQUITY SECURITIES. Another risk of investing in the Fund is the
risk that the value of the equity securities in the portfolio
will fall, or will not appreciate as anticipated by Schroder,
due to factors that adversely affect markets in general or
particular companies in the portfolio.

- DEBT SECURITIES. The Fund invests in debt securities, which are
subject to market risk (the fluctuation of market value in
response to changes in interest rates) and to credit risks (the
risk that the issuer may become unable or unwilling to make
timely payments of principal and interest).

FEES AND EXPENSES

THESE TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY IF YOU INVEST IN
INVESTOR SHARES OF THE FUND. THE FEES AND EXPENSES HAVE BEEN ESTIMATED BECAUSE
THE FUND HAS NOT COMPLETED A FULL FISCAL YEAR.

SHAREHOLDER FEES (paid directly from your investment):

Maximum Sales Load Imposed on Purchases None
Maximum Deferred Sales Load None
Maximum Sales Load Imposed on Reinvested Dividends None
Redemption Fee None
Exchange Fee None

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets):

<TABLE>
<S> <C>
Management Fees(1) 1.15%
Distribution (12b-1) Fees None
Other Expenses 1.09%
Total Annual Fund Operating Expenses 2.24%
Fee Waiver and/or
Expense Limitation(2) 0.24%
Net Expenses(2) 2.00%
</TABLE>

-4-
<PAGE>

- --------------------------
(1) Management Fees shown above include both investment advisory fees and fees
paid for Fund administration.
(2) The Net Expenses shown above reflect the effect of contractually imposed
expense limitations and/or fee waivers in effect through October 31, 1999
on Total Annual Fund Operating Expenses.

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in Investor Shares of the Fund for
the time periods indicated and then redeem all of your shares at the end of
those periods. The Example also assumes that your investment earns a 5% return
each year and that the Fund's Total Annual Fund Operating Expenses remain the
same as those set forth above (absent the noted Fee Waiver and/or Expense
Limitation). Your actual costs may be higher or lower. Based on these
assumptions, your costs would be*:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C>
$227 $700
</TABLE>

- --------------
*Assuming that the Fund's operating expenses remain the same as the Net Expenses
set forth above, based on the other assumptions described above, your costs
would be as follows for 1 year and 3 years, respectively: $203 and $627.

RISKS AND OTHER INVESTMENT STRATEGIES

The Fund may not achieve its objective in all circumstances. The following
provides more detail about the Fund's principal risks and the circumstances
which could adversely affect the value of the Fund's shares or its total return.
It is possible to lose money by investing in the Fund.

RISKS OF INVESTING IN THE FUND

- FOREIGN SECURITIES. There is no limit on the amount of the Fund's
assets that may be invested in foreign securities. Investments in foreign
securities entail certain risks in addition to those discussed above. There may
be a possibility of nationalization or expropriation of assets, confiscatory
taxation, political or financial instability, and diplomatic developments that
could affect the value of the Fund's investments in certain foreign countries.
Since foreign securities normally are denominated and traded in foreign
currencies, the values of the Fund's assets may be affected favorably or
unfavorably by currency exchange rates, currency exchange control regulations,
foreign withholding taxes, and restrictions or prohibitions on the repatriation
of foreign currencies. There may be less information publicly available about a
foreign issuer than about a U.S. issuer, and foreign issuers are not generally
subject to accounting, auditing, and financial reporting standards and practices
comparable to those in the United States. The securities of some foreign issuers
are less liquid and at times more volatile than securities of comparable U.S.
issuers. Foreign brokerage commissions and other fees are also generally higher
than in the United

-5-
<PAGE>

States. Foreign settlement procedures and trade regulations may involve
certain risks (such as delay in payment or delivery of securities or in the
recovery of the Fund's assets held abroad) and expenses not present in the
settlement of domestic investments.

In addition, legal remedies available to investors in certain foreign
countries may be more limited than those available to investors in the United
States or in other foreign countries. The willingness and ability of foreign
governmental entities to pay principal and interest on government securities
depends on various economic factors, including the issuer's balance of payments,
overall debt level, and cash-flow considerations related to the availability of
tax or other revenues to satisfy the issuer's obligations. If a foreign
governmental entity defaults on its obligations on the securities, the Fund may
have limited recourse available to it. The laws of some foreign countries may
limit the Fund's ability to invest in securities of certain issuers located in
those countries.

If the Fund purchases securities denominated in foreign currencies, a
change in the value of any such currency against the U.S. dollar will result in
a change in the U.S. dollar value of the Fund's assets and the Fund's income
available for distribution. In addition, although at times most of the Fund's
income may be received or realized in these currencies, the Fund will be
required to compute and distribute its income in U.S. dollars. As a result, if
the exchange rate for any such currency declines after the Fund's income has
been earned and translated into U.S. dollars but before payment to shareholders,
the Fund could be required to liquidate portfolio securities to make such
distributions. Similarly, if the Fund incurs an expense in U.S. dollars and the
exchange rate declines before the expense is paid, the Fund would have to
convert a greater amount of U.S. dollars to pay for the expense at that time
that it would have had to convert at the time the Fund incurred the expense. The
Fund may buy or sell foreign currencies and options and futures contracts on
foreign currencies for hedging purposes in connection with its foreign
investments.

Special tax considerations apply to foreign securities. In determining
whether to invest in debt securities of foreign issuers, Schroder considers the
likely impact of foreign taxes on the net yield available to the Fund and its
shareholders. Income received by the Fund from sources within foreign countries
may be reduced by withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. Any such taxes paid by the Fund will reduce its income
available for distribution to shareholders. In certain circumstances, the Fund
may be able to pass through to shareholders credits for foreign taxes paid.

- RISKS OF SMALLER CAPITALIZATION COMPANIES. The Fund may invest all or a
substantial portion of its assets in companies that are smaller and less
well-known than larger, more widely held companies. Small and mid-cap companies
may offer greater opportunities for capital appreciation than larger companies,
but may also pose certain special risks. They are more likely than larger
companies to have limited product lines, markets or financial resources, or to
depend on a small, inexperienced management group. Securities of smaller
companies may trade less frequently and in lesser volume than more widely held
securities and their values may fluctuate more sharply than other securities.
They may also trade in the over-the-counter market or on a regional exchange, or
may otherwise have limited liquidity. These securities may therefore be more
vulnerable to adverse developments than securities of larger companies and the
Fund may have difficulty establishing or closing out their securities positions
in smaller companies at prevailing market prices. Also, there may be less
publicly available information about smaller companies or less market interest
in their securities as compared to larger companies, and it may

-6-
<PAGE>

take longer for the prices of the securities to reflect the full value of
their issuer's earnings potential or assets.

- DEBT SECURITIES. The Fund may invest in debt securities, which are
subject to the risk of fluctuation of market value in response to changes in
interest rates and the risk that the issuer may default on the timely payment of
principal and interest.

OTHER INVESTMENT STRATEGIES AND TECHNIQUES

In addition to the principal investment strategies described in the Summary
Information section above, the Fund may at times use the strategies and
techniques described below, which involve certain special risks. This Prospectus
does not attempt to disclose all of the various investment techniques and types
of securities that Schroder might use in managing the Fund. As in any mutual
fund, investors must rely on the professional investment judgment and skill of
the Fund's adviser.

- FOREIGN CURRENCY EXCHANGE TRANSACTIONS. Changes in currency exchange
rates will affect the U.S. dollar value of Fund assets, including securities
denominated in foreign currencies. Exchange rates between the U.S. dollar and
other currencies fluctuate in response to forces of supply and demand in the
foreign exchange markets. These forces are affected by the international balance
of payments and other political, economic and financial conditions, which may be
difficult to predict. The Fund may engage in currency exchange transactions to
protect against unfavorable fluctuations in exchange rates.

In particular, the Fund may enter into foreign currency exchange
transactions to protect against a change in exchange rates that may occur
between the date on which the Fund contracts to trade a security and the
settlement date ("transaction hedging") or in anticipation of placing a trade
("anticipatory hedging"); to "lock in" the U.S. dollar value of interest and
dividends to be paid in a foreign currency; or to hedge against the possibility
that a foreign currency in which portfolio securities are denominated or quoted
may suffer a decline against the U.S. dollar ("position hedging").

From time to time, the Fund's currency hedging transactions may call for
the delivery of one foreign currency in exchange for another foreign currency
and may at times involve currencies in which its portfolio securities are not
then denominated ("cross hedging"). The Fund may also engage in "proxy" hedging,
whereby the Fund would seek to hedge the value of portfolio holdings denominated
in one currency by entering into an exchange contract on a second currency, the
valuation of which Schroder believes correlates to the value of the first
currency.

Schroder may buy or sell currencies in "spot" or forward transactions.
"Spot" transactions are executed contemporaneously on a cash basis at the
then-prevailing market rate. A forward currency contract is an obligation to
purchase or sell a specific currency at a future date (which may be any fixed
number of days from the date of the contract agreed upon by the parties) at a
price set at the time of the contract. Forward contracts do not eliminate
fluctuations in the underlying prices of securities and expose the Fund to the
risk that the counterparty is unable to perform.

The Fund incurs foreign exchange expenses in converting assets from one
currency to another. Although there is no limit on the amount of the Fund's
assets that may be invested in foreign currency exchange and foreign currency
forward contracts, the Fund may engage in foreign currency exchange

-7-
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transactions only to the extent necessary to effect the hedging transactions
described above. Suitable foreign currency hedging transactions may not be
available in all circumstances and there can be no assurance that the Fund
will utilize hedging transactions at any time.

- SECURITIES LOANS, REPURCHASE AGREEMENTS, AND FORWARD COMMITMENTS. The
Fund may lend portfolio securities to broker-dealers up to one-third of the
Fund's total assets. The Fund may also enter into repurchase agreements without
limit. These transactions must be fully collateralized at all times, but involve
some risk to the Fund if the other party should default on its obligation and
the Fund is delayed or prevented from recovering the collateral. The Fund may
also enter into contracts to purchase securities for a fixed price at a future
date beyond customary settlement time, which may increase its overall investment
exposure and involves a risk of loss if the value of the securities declines
prior to the settlement date.

- INVESTMENT IN OTHER INVESTMENT COMPANIES. The Fund may invest in other
investment companies or pooled vehicles, including closed-end funds, that are
advised by Schroder or its affiliates or by unaffiliated parties. When investing
in another investment company, the Fund may pay a premium above such investment
company's net asset value per share. As a shareholder in an investment company,
the Fund would bear its ratable share of the investment company's expenses,
including advisory and administrative fees, and would at the same time continue
to pay its own fees and expenses.

- DERIVATIVE INVESTMENTS. Instead of investing directly in the types of
portfolio securities described in the Summary Information, the Fund may buy or
sell a variety of "derivative" investments to gain exposure to particular
securities or markets, in connection with hedging transactions, and, to the
extent permitted by applicable law, to increase total return. These may include
options, futures, and indices, for example. Derivatives involve the risk that
they may not work as intended under all market conditions. Also, derivatives
often involve the risk that the other party to the transaction will be unable to
meet its obligations or that the Fund will be unable to close out the position
at any particular time or at an acceptable price.

- ZERO-COUPON BONDS. The Fund may invest in zero-coupon bonds. Zero-coupon
bonds are issued at a significant discount from face value and pay interest only
at maturity rather than at intervals during the life of the security.
Zero-coupon bonds allow an issuer to avoid the need to generate cash to meet
current interest payments and, as a result, may involve greater credit risks
than bonds that pay interest currently.

- PORTFOLIO TURNOVER. The length of time the Fund has held a particular
security is not generally a consideration in investment decisions. The
investment policies of the Fund may lead to frequent changes in the Fund's
investments, particularly in periods of volatile market movements. A change in
the securities held by the Fund is known as "portfolio turnover." Portfolio
turnover generally involves some expense to the Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. Such sales may increase the
amount of capital gains (and, in particular, short-term gains) realized by the
Fund, on which shareholders pay tax.

- TEMPORARY DEFENSIVE STRATEGIES. At times, Schroder may judge that
conditions in the securities markets make pursuing the Fund's basic
investment strategy inconsistent with the best interests of its shareholders.
At such times, Schroder may temporarily use alternate investment strategies
primarily designed to reduce fluctuations in the value of the Fund's assets.
In implementing these "defensive"

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<PAGE>

strategies, the Fund would invest in high-quality debt securities, cash, or
money market instruments to any extent Schroder considers consistent with
such defensive strategies. It is impossible to predict when, or for how long,
the Fund will use these alternate strategies. One risk of taking such
temporary defensive positions is that the Fund may not achieve its investment
objective.

- OTHER INVESTMENTS. The Fund may also invest in other types of securities
and utilize a variety of investment techniques and strategies that are not
described in this Prospectus. These securities and techniques may subject the
Fund to additional risks. Please see the Statement of Additional Information for
additional information about the securities and investment techniques described
in this Prospectus and about additional techniques and strategies that may be
used by the Fund.

MANAGEMENT OF THE FUND

The Trust is governed by a Board of Trustees which has retained Schroder to
manage the investments of the Fund. Subject to the control of the Trustees,
Schroder also manages the Fund's other affairs and business. Schroder has served
as investment adviser to the Fund since inception.

Schroder has been an investment manager since 1962, and currently serves as
investment adviser to the Fund and a broad range of institutional investors. As
of December 31, 1998, Schroder, together with its United Kingdom affiliate,
Schroder Investment Management North America Limited, had approximately $27.1
billion in assets under management. Schroder's address is 787 Seventh Avenue,
New York, New York 10019, and its telephone number is (212) 641-3900.

- INVESTMENT ADVISORY AND ADMINISTRATION FEES PAID BY THE FUND. The Fund
pays a monthly fee at the annual rate of 0.90% of the Fund's average daily net
assets. This fee includes amounts payable to Schroder under the Fund's
Investment Advisory Agreement with Schroder and to Schroder Fund Advisors Inc.
under the Administration Agreement with Schroder Fund Advisors Inc.

- EXPENSE LIMITATIONS AND WAIVERS. In order to limit the Fund's expenses,
Schroder is contractually obligated to reduce its compensation (and, if
necessary, to pay certain other Fund expenses) until October 31, 1999 to the
extent that the Fund's total operating expenses attributable to its Investor
Shares exceed the annual rate of 2.00%.

- PORTFOLIO MANAGERS. Schroder's investment decisions for the Fund are
generally made by an investment manager or an investment team, with the
assistance of an investment committee. The following portfolio manager has had
primary responsibility for making investment decisions for the Fund, since the
years shown below. Her recent professional experience is also shown.

PORTFOLIO MANAGER SINCE RECENT PROFESSIONAL EXPERIENCE
- ----------------- ----- ------------------------------

Heather Crighton Inception (1998) Employed as an investment
professional at Schroder since 1993.
Ms. Crighton is a director and a
Senior Vice President of Schroder.

HOW THE FUND'S SHARES ARE PRICED

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<PAGE>

The Fund calculates the net asset value of its Investor Shares by dividing
the total value of its assets attributable to its Investor Shares, less its
liabilities attributable to those shares, by the number of Investor Shares
outstanding. Shares are valued as of the close of trading on the New York Stock
Exchange (normally 4:00 p.m., Eastern time) each day the Exchange is open. The
Trust expects that days, other then weekend days, that the Exchange will not be
open are New Years Day, Martin Luther King, Jr. Day, Presidents Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day. The Fund values its portfolio securities for which market
quotations are readily available at market value. Short-term investments that
will mature in 60 days or less are stated at amortized cost, which approximates
market value. The Fund values all other securities and assets at their fair
values as determined in accordance with procedures adopted by the Board of
Trustees. All assets and liabilities of the Fund denominated in foreign
currencies are valued in U.S. dollars based on the exchange rate last quoted by
a major bank prior to the time when the net asset value of the Fund's shares is
calculated. Because certain of the securities in which the Fund may invest may
trade on days when the Fund does not price its Investor Shares, the net asset
value of the Fund's Investor Shares may change on days when shareholders will
not be able to purchase or redeem their Investor Shares. The net asset value of
the Fund's Investor Shares will generally differ from that of its Advisor
Shares, due to the variance in daily net income realized by and dividends paid
on each class of shares, and differences in the expenses of Investor Shares and
Advisor Shares.

HOW TO BUY SHARES

You may purchase Investor Shares of the Fund directly from the Trust by
completing an Account Application and sending payment by check or wire as
described below. You may obtain an Account Application from the Trust or from
State Street Bank and Trust Company, the Trust's Transfer Agent, 2 Heritage
Drive, North Quincy, Massachusetts 02171, Attn: Schroder Funds, or by calling
(800) 464-3108.

Investor Shares of the Fund are sold at their net asset value next
determined after the Trust receives your order. In order for you to receive the
Fund's next determined net asset value, the Trust must receive your order before
the close of trading on the New York Stock Exchange.

INVESTMENT MINIMUMS

The minimum investment for initial and additional purchases for the Fund is
as follows:

<TABLE>
<CAPTION>
-------------------------------------- ----------------- -------------------
Initial Additional
Investment Investments
-------------------------------------- ----------------- -------------------
<S> <C> <C>
Regular Accounts $250,000 No minimum

-------------------------------------- ----------------- -------------------
Traditional IRAs $2,000 $250

-------------------------------------- ----------------- -------------------
</TABLE>

The Trust is authorized to reject any purchase order.

You also may meet the minimum initial investment requirement based in
cumulative purchases by means of a written Statement of Intention, expressing
your intention to invest $250,000 or more in

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<PAGE>

Investor Shares of the Fund within 13 months. You may enter into a Statement
of Intention in conjunction with your initial investment in Investor Shares
by completing the appropriate section of the Account Application. Current
Fund shareholders can obtain a Statement of Intention form by contacting the
Transfer Agent. The Fund reserves the right to redeem your shares in the Fund
if, at the end of the Statement of Intention period, your account does not
have a value of at least the minimum initial investment amount.

PURCHASES BY CHECK

You may purchase shares of the Fund by mailing a check (in U.S. dollars)
payable to the Fund. Third-party checks will not be accepted.

For initial purchases, your check must be accompanied by a completed
Account Application in proper form. The Trust may request additional
documentation to evidence the authority of the person or entity making the
purchase request.

You should mail your check and your completed Account Application to:

Schroder Greater China Fund -- Investor Shares
2 Heritage Drive
North Quincy, Massachusetts 02171

Your payments should clearly indicate the shareholder's name and account number,
if applicable.

PURCHASES BY BANK WIRE/TELEPHONE

If you make your initial investment by wire, your order must be preceded by
a completed Account Application. Upon receipt of the Application, the Trust will
assign you an account number and your account will become active. Wire orders
received prior to the close of trading on the New York Stock Exchange (normally
4:00 p.m., Eastern Time) on each day the Exchange is open for trading will be
processed at the net asset value determined as of that day. Wire orders received
after that time will be processed at the net asset value determined thereafter.

Once you have an account number, you may purchase Investor Shares by
telephoning the Transfer Agent at (800) 464-3108 to give notice that you will be
sending funds by wire, and then arranging with your bank to wire funds to the
Trust. Your purchase will not be processed until the Trust has received the
wired funds.

Federal Reserve Bank wire instructions are as follows:

State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
ABA No.: 011000028
DDA No.: 9904-650-0
Attn: Mutual Funds/Control Department
FBO: (shareholder's name, Schroder Greater China Fund, account number)

-11-
<PAGE>

The wire order must specify the name of the Fund, the shares' class (i.e.,
Investor Shares), the account name and number, address, confirmation number,
amount to be wired, name of the wiring bank, and name and telephone number of
the person to be contacted in connection with the order.

In an effort to prevent unauthorized or fraudulent purchase or redemption
requests by telephone, the Transfer Agent will follow reasonable procedures to
confirm that telephone instructions are genuine. The Transfer Agent and the
Trust generally will not be liable for any losses due to unauthorized or
fraudulent purchase or redemption requests, but either or both may be liable if
they do not follow these procedures.

OTHER PURCHASE INFORMATION

Investor Shares of the Fund may be purchased for cash or in exchange for
securities held by the investor, subject to the determination by Schroder that
the securities are acceptable. (For purposes of determining whether securities
will be acceptable, Schroder will consider, among other things, whether they are
liquid securities of a type consistent with the investment objectives and
policies of the Fund and have a readily ascertainable value.) If the Fund
receives securities from an investor in exchange for shares of the Fund, the
Fund will under some circumstances have the same tax basis in the securities as
the investor had prior to the exchange (and the Fund's gain for tax purposes
would be calculated with regard to the investor's tax basis). Any gain on the
sale of those securities would be subject to distribution as capital gain to all
of the Fund's shareholders. Schroder reserves the right to reject any particular
investment. Securities accepted by Schroder will be valued in the same manner as
are the Trust's portfolio securities as of the time of the next determination of
the Fund's net asset value. All dividend, subscription, or other rights which
are reflected in the market price of accepted securities at the time of
valuation become the property of the Fund and must be delivered to the Fund upon
receipt by the investor. Investors may realize a gain or loss upon the exchange
for federal income tax purposes. Investors interested in purchases through
exchange should telephone Schroder at (800) 464-3108.

HOW TO SELL SHARES

You may sell your Investor Shares back to the Fund on any business day
by sending a letter of instruction or stock power form to the Trust, or by
calling the Transfer Agent at (800) 464-3108. The price you will receive for
your Investor Shares is the net asset value next determined after receipt of
your redemption request in good order. A redemption request is in good order if
it includes the exact name in which the shares are registered, the investor's
account number, and the number of shares or the dollar amount of shares to be
redeemed, and, for written requests, if it is signed exactly in accordance with
the registration form. If you hold your Investor Shares in certificate form, you
must submit the certificates and sign the assignment form on the back of the
certificates. Signatures must be guaranteed by a bank, broker-dealer, or certain
other financial institutions. You may redeem your Investor Shares by telephone
only if you elected the telephone redemption privilege option on your Account
Application or otherwise in writing. Shares for which certificates have been
issued may not be redeemed by telephone. The Trust may require additional
documentation from shareholders that are corporations, partnerships, agents,
fiduciaries, or surviving joint owners.

-12-
<PAGE>

The Trust will pay you for your redemptions as promptly as possible and
normally within seven days after the request for redemption is received in
writing in good order. (The Trust generally sends payment for shares the
business day after a request is received.) Under unusual circumstances, the
Trust may suspend redemptions or postpone payment for more than seven days, as
permitted by law. If you paid for your Investor Shares by check, you will not be
sent redemption proceeds until the check you used to pay for the Investor Shares
has cleared, which may take up to 15 calendar days from the purchase date.

The Fund may redeem Investor Shares in whole or in part by a distribution
in kind of portfolio securities in lieu of cash. The Fund will, however, redeem
Investor Shares solely in cash up to the lesser of $250,000 or 1% of the Fund's
net assets during any 90-day period for any one shareholder.

If, because of your redemptions, your account balance falls below a minimum
amount set by the Trustees (presently $100,000) of the Fund, the Trust may
choose to redeem your shares in the Fund and pay you for them. You will receive
at least 30 days written notice before the Trust redeems your shares, and you
may purchase additional shares at any time to avoid a redemption. The Trust may
also redeem shares if you own shares of the Fund above a maximum amount set by
the Trustees. There is currently no maximum, but the Trustees may establish one
at any time, which could apply to both present and future shareholders.

The Trust may suspend the right of redemption during any period when: (1)
trading on the New York Stock Exchange is restricted or the Exchange is closed;
(2) the Securities and Exchange Commission has by order permitted such
suspension; or (3) an emergency (as defined by rules of the SEC) exists making
disposal of portfolio investments or determination of the Fund's net asset value
not reasonably practicable.

If you request that your redemption proceeds be sent to you at an address
other than your address of record, or to another party, you must include a
signature guarantee for each such signature by an eligible signature guarantor,
such as a member firm of a national securities exchange or a commercial bank or
trust company located in the United States. If you are a resident of a foreign
country, another type of certification may be required. Please contact the
Transfer Agent for more details at (800) 464-3108. Corporations, fiduciaries,
and other types of shareholders may be required to supply additional documents
which support their authority to effect a redemption.

EXCHANGES

You can exchange your Investor Shares of the Fund for Investor Shares of
any other fund in the Schroder family of funds at any time at their respective
net asset values. The exchange would be treated as a sale of your Investor
Shares and any gain on the exchange may be subject to federal income tax. To
exchange shares, please contact your Service Organization or, if you do not have
a Service Organization, call the Trust at (800) 464-3108.

-13-
<PAGE>

DIVIDENDS AND DISTRIBUTIONS

The Fund distributes any net investment income and any net realized capital
gain at least annually. Distributions from net capital gain are made after
applying any available capital loss carryovers.

YOU CAN CHOOSE FROM FOUR DISTRIBUTION OPTIONS:

--> Reinvest all distributions in additional Investor Shares of the Fund;

--> Receive distributions from net investment income in cash while
reinvesting capital gains distributions in additional Investor Shares
of the Fund;

--> Receive distributions from net investment income in additional
Investor Shares of the Fund while receiving capital gain distributions
in cash; or

--> Receive all distributions in cash.

You can change your distribution option by notifying the Transfer Agent in
writing. If you do not select an option when you open your account, all
distributions by the Fund will be reinvested in Investor Shares of the Fund. You
will receive a statement confirming reinvestment of distributions in additional
Fund shares promptly following the period in which the reinvestment occurs.

TAXES

- TAXES ON DIVIDENDS AND DISTRIBUTIONS. The Fund intends to qualify as a
"regulated investment company" for U.S. federal income tax purposes and to meet
all other requirements that are necessary for it to be relieved of federal taxes
on income and gain it distributes to shareholders. The Fund will distribute
substantially all of its net investment income and net capital gain income on a
current basis.

For federal income tax purposes, distributions of investment income are
taxable as ordinary income. Taxes on distributions of capital gains are
determined by how long the Fund owned the investments that generated the gains,
rather than how long you have owned your shares. Distributions are taxable to
you even if they are paid from income or gains earned by the Fund before you
invested (and thus were included in the price you paid for your shares).
Distributions of gains from investments that the Fund owned for more than 12
months will be taxable as capital gains. Distributions of gains from investments
that the Fund owned for 12 months or less will be taxable as ordinary income.
Distributions are taxable whether you received them in cash or reinvested them
in additional shares of the Fund.

- TAXES WHEN YOU SELL OR EXCHANGE YOUR SHARES. Any gain resulting from the
sale or exchange of your shares in the Fund will also generally be subject to
federal income or capital gains tax, depending on your holding period.

- FOREIGN TAXES. Foreign governments may impose taxes on the Fund and its
investments, which generally would reduce the Fund's income. However, an
offsetting tax credit or deduction may be available to shareholders.

-14-
<PAGE>

The Fund, provided that it is eligible to do so, intends to elect to permit
its shareholders to take a credit (or a deduction) for the Fund's share of
foreign income taxes paid by the Fund. If the Fund does make such an election,
its shareholders would include as gross income in their U.S. federal income tax
returns both (1) distributions received from the Fund and (2) the amount that
the Fund advises is their pro rata portion of foreign income taxes paid with
respect to or withheld from dividends and interest paid to the Fund from its
foreign investments. Shareholders then would be entitled, subject to certain
limitations (including, with respect to a foreign tax credit, a holding period
requirement), to take a foreign tax credit against their U.S. federal income tax
liability for the amount of such foreign taxes or else to deduct such foreign
taxes as an itemized deduction from gross income.

- CONSULT YOUR TAX ADVISOR ABOUT OTHER POSSIBLE TAX CONSEQUENCES. This is a
summary of certain federal tax consequences of investing in the Fund. You should
consult your tax advisor for more information on your own tax situation,
including possible state and local taxes.

YEAR 2000 DISCLOSURE

The Fund receives services from its investment adviser, administrator,
subadministrator, distributor, transfer agent, custodian and other providers
which rely on the smooth functioning of their respective systems and the systems
of others to perform those services. It is generally recognized that certain
systems in use today may not perform their intended functions adequately after
the Year 1999 because of the inability of the software to distinguish the Year
2000 from the Year 1900. Schroder is taking steps that it believes are
reasonably designed to address this potential "Year 2000" problem and to obtain
satisfactory assurances that comparable steps are being taken by each of the
Fund's other major service providers. There can be no assurance, however, that
these steps will be sufficient to avoid any adverse impact on the Fund from this
problem. In addition, there can be no assurance that the Year 2000 problem will
not have an adverse impact on companies and other issuers in which the Fund
invests or on the securities markets generally, which may reduce the value of
the Fund's portfolio investments.

Additionally, because the Fund invests in foreign securities, it is subject
to the risk that foreign issuers or other foreign entities may not have
adequately prepared their computer systems to address the Year 2000 problem,
which could have an adverse impact on the foreign securities markets generally
and therefore reduce the value of the Fund's portfolio investments.

-15-
<PAGE>

<TABLE>
<CAPTION>
<S><C>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------

FUNDS AVAILABLE THROUGH SCHRODER FUND ADVISORS INC.
PLEASE CALL (800) 464-3108 FOR COMPLETE INFORMATION AND TO OBTAIN THE RELEVANT PROSPECTUS.
PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST.

SCHRODER CAPITAL FUNDS (DELAWARE) SCHRODER SERIES TRUST
SCHRODER INTERNATIONAL FUND SCHRODER LARGE CAPITALIZATION EQUITY FUND
SCHRODER EMERGING MARKETS FUND SCHRODER SMALL CAPITALIZATION VALUE FUND
SCHRODER INTERNATIONAL SMALLER COMPANIES FUND SCHRODER MIDCAP VALUE FUND
SCHRODER U.S. DIVERSIFIED GROWTH FUND SCHRODER SHORT-TERM INVESTMENT FUND
SCHRODER U.S. SMALLER COMPANIES FUND SCHRODER INVESTMENT GRADE INCOME FUND
SCHRODER MICRO CAP FUND
SCHRODER GREATER CHINA FUND

SCHRODER SERIES TRUST II
SCHRODER ALL-ASIA FUND

- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

-16-
<PAGE>

[Back Cover] [Logo]

SCHRODER CAPITAL FUNDS (DELAWARE)

SCHRODER GREATER CHINA FUND

Schroder Greater China Fund's statement of additional information (SAI) includes
additional information about the Fund. The SAI is incorporated by reference into
this prospectus, which means it is part of this prospectus for legal purposes.
The Fund's semi-annual report discusses the market conditions and investment
strategies that significantly affected the Fund's performance during the most
recent period. You may get free copies of these materials, request other
information about the Trust and the Fund, or make shareholder inquiries by
calling (800) 464-3108.

You may review and copy information about the Fund, including its SAI, at the
Securities and Exchange Commission's public reference room in Washington, D.C.
You may call the Commission at (800) SEC-0330 for information about the
operation of the public reference room. You may also access reports and other
information about the Trust and the Fund on the Commission's Internet site at
WWW.SEC.GOV. You may get copies of this information, with payment of a
duplication fee, by writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009. You may need to refer to the Trust's file number
under the Investment Company Act, which is 811-1911.

Schroder Capital Funds (Delaware) INVESTOR SHARES
P.O. Box 8507
Boston, MA 02266 PROSPECTUS
800-464-3108
July 12, 1999

File No. 811-1911

-17-
<PAGE>

SCHRODER CAPITAL FUNDS (DELAWARE)
PROSPECTUS

SCHRODER GREATER CHINA FUND
ADVISOR SHARES

July 13, 1999

Schroder Investment Management North America Inc. ("Schroder") manages the Fund.
You can call (800) 464-3108 to find out more about the Fund and other funds in
the Schroder family.

The prospectus explains what you should know about the Fund before you invest.
Please read it carefully.

<TABLE>
Page
----
<S> <C>
SUMMARY INFORMATION........................................................ 2

FEES AND EXPENSES.......................................................... 4

RISKS AND OTHER INVESTMENT STRATEGIES...................................... 5

MANAGEMENT OF THE FUND..................................................... 9

HOW THE FUND'S SHARES ARE PRICED........................................... 10

HOW TO BUY SHARES.......................................................... 10

HOW TO SELL SHARES......................................................... 12

ADDITIONAL INFORMATION ABOUT ADVISOR SHARES................................ 13

EXCHANGES.................................................................. 14

DIVIDENDS AND DISTRIBUTIONS................................................ 14

TAXES...................................................................... 15

YEAR 2000 DISCLOSURE....................................................... 16
</TABLE>

1
<PAGE>

SUMMARY INFORMATION

This summary identifies the investment objective, principal investment
strategies, and principal risks of Schroder Greater China Fund. The Fund offers
Investor Shares, which have higher investment minimums and lower fees and
expenses, in a separate prospectus. The Fund's investment objective may not be
changed without shareholder approval. The investment policies of the Fund may,
unless otherwise specifically stated, be changed by the Board of Trustees of
Schroder Capital Funds (Delaware) without a vote of the shareholders. It is
possible to lose money on investments in the Fund.

SCHRODER GREATER CHINA FUND

- INVESTMENT OBJECTIVE. To seek long-term growth of capital.

- PRINCIPAL INVESTMENTS. The Fund normally invests at least 65% of
its total assets in securities of companies located in China, Hong Kong SAR, and
Taiwan. Schroder will consider an issuer of securities to be located in China,
Hong Kong SAR, or Taiwan if it is organized under the laws of China, Hong Kong
SAR, or Taiwan (or any political subdivision thereof); its primary securities
trading market is in China Hong Kong SAR, or Taiwan; at least 50% of the
issuer's revenues or profits are derived from goods produced or sold,
investments made, or services performed in China, Hong Kong SAR, or Taiwan; or
at least 50% of its assets are situated in China, Hong Kong SAR, or Taiwan.

The Fund invests in issuers that Schroder believes offer the potential
for capital growth. In identifying candidates for investment, Schroder considers
a variety of factors, including the issuer's likelihood of above average
earnings growth, the securities' attractive relative valuation, and whether the
issuer has any proprietary advantages. In addition, Schroder takes into account
the risk of local political and/or economic instability and the liquidity of
local markets. Securities generally are sold when they reach fair valuation or
when significantly more attractive investment candidates become available.

The Fund may also do the following:

- Engage in a variety of transactions involving the use of
options and futures contracts.

- Engage in currency exchange transactions relating to Chinese
and Taiwanese currencies.

- Invest in closed-end investment companies.

2
<PAGE>

- PRINCIPAL RISKS.

- INVESTMENT IN CHINA, HONG KONG SAR, AND TAIWAN. Investment in
China, Hong Kong SAR, and Taiwan entails significant risks.
China is a communist country, and there can be no assurance
that economic or market reforms that have occurred in recent
years will continue, or that they will not be scaled back. In
particular, it is possible that political instability,
including changes of leadership at various levels of
government within China or a political reaction against
capitalism, will lead to economic uncertainty or to changes in
economic or market conditions which are adverse to investments
in securities of issuers organized or doing business in China.
Additionally, relations between China and certain other Asian
nations have historically been unfriendly and at times
hostile. Increased hostility between China and such nations
would likely have an adverse impact on the values of the
Fund's investments in China.

China gained control of Hong Kong in July 1997. Changes in
Hong Kong's political, economic, or market conditions as a
result of China's control could adversely affect the values of
the Fund's investments in issuers organized or doing business
in Hong Kong.

Continuing hostility between China and Taiwan, over which
China continues to claim sovereignty, may have an adverse
impact on the values of the Fund's investments in either China
or Taiwan, or make investment in either China or Taiwan
impracticable or impossible. The escalation of hostility
between China and Taiwan would likely have a significant
adverse impact on the values of the Fund's investments in both
countries.

- FOREIGN SECURITIES. Investments in foreign securities entail
risks not present in domestic investments including, among
other things, risks related to political or economic
instability, currency exchange and taxation. Additionally,
because the Fund invests in foreign securities, it is subject
to the risk that foreign issuers or other foreign entities may
not have adequately prepared their computer systems to address
the "Year 2000" problem, which could have an adverse impact on
the foreign securities markets generally and therefore reduce
the value of the Fund's portfolio investments.

- SMALL COMPANIES. The Fund may invest a substantial portion of
its assets in small companies (i.e., companies with market
capitalizations below $1 billion), which tend to be more
vulnerable to adverse developments than larger companies.
Small companies may have limited product lines, markets, or
financial resources, or may depend on a limited management
group. Their securities may trade infrequently and in limited
volumes. As a result, the prices of these securities may
fluctuate more than the prices of securities of larger, more
widely traded companies. Also, there may be less publicly
available information about small companies or less market
interest in their securities as compared to larger companies,
and it may take longer for the prices of the securities to
reflect the full value of their issuers' earnings potential or
assets.

3
<PAGE>

- GEOGRAPHIC CONCENTRATION. Because the Fund's investments will
be concentrated in securities of issuers located in China,
Hong Kong SAR, and Taiwan, the Fund will be more susceptible
to the political and economic developments and market
fluctuations in those countries than if it invested in a
geographically more diversified portfolio.

- NON-DIVERSIFIED FUND. The Fund is a "non-diversified" mutual
fund, and may invest its assets in a more limited number of
issuers than may other diversified investment companies. At
such times, the Fund's risk of loss increases if the market
value of a security declines or if an issuer is not able to
meet its obligations.

- EQUITY SECURITIES. Another risk of investing in the Fund is
the risk that the value of the equity securities in the
portfolio will fall, or will not appreciate as anticipated by
Schroder, due to factors that adversely affect markets in
general or particular companies in the portfolio.

- DEBT SECURITIES. The Fund invests in debt securities, which
are subject to market risk (the fluctuation of market value in
response to changes in interest rates) and to credit risks
(the risk that the issuer may become unable or unwilling to
make timely payments of principal and interest).

FEES AND EXPENSES

THESE TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY IF YOU INVEST IN
ADVISOR SHARES OF THE FUND. THE FEES AND EXPENSES HAVE BEEN ESTIMATED BECAUSE
THE FUND HAS NOT COMPLETED A FULL FISCAL YEAR.

SHAREHOLDER FEES (paid directly from your investment):

Maximum Sales Load Imposed on Purchases None
Maximum Deferred Sales Load None
Maximum Sales Load Imposed on Reinvested Dividends None
Redemption Fee None
Exchange Fee None

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets):

<TABLE>

<S> <C>
Management Fees(1) 1.15%
Distribution (12b-1) Fees(2) 0%
Other Expenses 1.34%
Total Annual Fund Operating Expenses 2.49%
Fee Waiver and/or
Expense Limitation(3) 0.24%
Net Expenses(3) 2.25%
</TABLE>

4
<PAGE>

- --------------------------

(1) Management Fees shown above include both investment advisory fees and fees
paid for Fund administration.
(2) The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, with respect to its Advisor
Shares. Although the Trustees have not currently authorized payments under
the Distribution Plan, payments by the Fund under its Shareholder Service
Plan, which will not exceed the annual rate of 0.25% of the Fund's average
daily net assets, will be deemed to have been made pursuant to the
Distribution Plan to the extent such payments may be considered to be
primarily intended to result in the sale of the Fund's Advisor Shares.
(3) The Net Expenses shown above reflect the effect of contractually imposed
expense limitations and/or fee waivers in effect through October 31, 1999 on
Total Annual Fund Operating Expenses.

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in Advisor Shares of the Fund for
the time periods indicated and then redeem all of your shares at the end of
those periods. The Example also assumes that your investment earns a 5% return
each year and that the Fund's Total Annual Fund Operating Expenses remain the
same as those set forth above (absent the noted Fee Waiver and/or Expense
Limitation). Your actual costs may be higher or lower.
Based on these assumptions, your costs would be*:

<TABLE>
<CAPTION>
1 Year 3 Years
------ -------
<S> <C>
$252 $776
</TABLE>

RISKS AND OTHER INVESTMENT STRATEGIES

The Fund may not achieve its objective in all circumstances. The
following provides more detail about the Fund's principal risks and the
circumstances which could adversely affect the value of the Fund's shares or its
total return. It is possible to lose money by investing in the Fund.

RISKS OF INVESTING IN THE FUND

5
<PAGE>

about a foreign issuer than about a U.S. issuer, and foreign issuers are not
generally subject to accounting, auditing, and financial reporting standards and
practices comparable to those in the United States. The securities of some
foreign issuers are less liquid and at times more volatile than securities of
comparable U.S. issuers. Foreign brokerage commissions and other fees are also
generally higher than in the United States. Foreign settlement procedures and
trade regulations may involve certain risks (such as delay in payment or
delivery of securities or in the recovery of the Fund's assets held abroad) and
expenses not present in the settlement of domestic investments.

- RISKS OF SMALLER CAPITALIZATION COMPANIES. The Fund may invest all or
a substantial portion of its assets in companies that are smaller and less
well-known than larger, more widely held companies. Small and mid-cap companies
may offer greater opportunities for capital appreciation than larger companies,
but may also pose certain special risks. They are more likely than larger
companies to have limited product lines, markets or financial resources, or to
depend on a small, inexperienced management group. Securities of smaller
companies may trade less frequently and in lesser volume than more widely held
securities and their values may fluctuate more sharply than other securities.
They may also trade in the over-the-counter market or on a regional exchange, or
may otherwise have limited liquidity. These securities may therefore be more
vulnerable to adverse developments than securities of larger companies and the
Fund may have difficulty establishing or closing out their securities positions
in smaller

6
<PAGE>

companies at prevailing market prices. Also, there may be less publicly
available information about smaller companies or less market interest in their
securities as compared to larger companies, and it may take longer for the
prices of the securities to reflect the full value of their issuer's earnings
potential or assets.

OTHER INVESTMENT STRATEGIES AND TECHNIQUES

In addition to the principal investment strategies described in the
Summary Information section above, the Fund may at times use the strategies and
techniques described below, which involve certain special risks. This Prospectus
does not attempt to disclose all of the various investment techniques and types
of securities that Schroder might use in managing the Fund. As in any mutual
fund, investors must rely on the professional investment judgment and skill of
the Fund's adviser.

From time to time, the Fund's currency hedging transactions may call
for the delivery of one foreign currency in exchange for another foreign
currency and may at times involve currencies in which its portfolio securities
are not then denominated ("cross hedging"). The Fund may also engage in "proxy"
hedging, whereby the Fund would seek to hedge the value of portfolio holdings
denominated in one currency by entering into an exchange contract on a second
currency, the valuation of which Schroder believes correlates to the value of
the first currency.

The Fund incurs foreign exchange expenses in converting assets from one
currency to another. Although there is no limit on the amount of the Fund's
assets that may be invested in foreign currency

7
<PAGE>

exchange and foreign currency forward contracts, the Fund may engage in foreign
currency exchange transactions only to the extent necessary to effect the
hedging transactions described above. Suitable foreign currency hedging
transactions may not be available in all circumstances and there can be no
assurance that the Fund will utilize hedging transactions at any time.

- INVESTMENT IN OTHER INVESTMENT COMPANIES. The Fund may invest in
other investment companies or pooled vehicles, including closed-end funds, that
are advised by Schroder or its affiliates or by unaffiliated parties. When
investing in another investment company, the Fund may pay a premium above such
investment company's net asset value per share. As a shareholder in an
investment company, the Fund would bear its ratable share of the investment
company's expenses, including advisory and administrative fees, and would at the
same time continue to pay its own fees and expenses.

- ZERO-COUPON BONDS. The Fund may invest in zero-coupon bonds.
Zero-coupon bonds are issued at a significant discount from face value and pay
interest only at maturity rather than at intervals during the life of the
security. Zero-coupon bonds allow an issuer to avoid the need to generate cash
to meet current interest payments and, as a result, may involve greater credit
risks than bonds that pay interest currently.

- TEMPORARY DEFENSIVE STRATEGIES. At times, Schroder may judge that
conditions in the securities markets make pursuing the Fund's basic investment
strategy inconsistent with the best interests of its shareholders. At such
times, Schroder may temporarily use alternate investment strategies primarily
designed to reduce fluctuations in the value of the Fund's assets. In
implementing these "defensive"

8
<PAGE>

strategies, the Fund would invest in high-quality debt securities, cash, or
money market instruments to any extent Schroder considers consistent with such
defensive strategies. It is impossible to predict when, or for how long, the
Fund will use these alternate strategies. One risk of taking such temporary
defensive positions is that the Fund may not achieve its investment objective.

- OTHER INVESTMENTS. The Fund may also invest in other types of
securities and utilize a variety of investment techniques and strategies that
are not described in this Prospectus. These securities and techniques may
subject the Fund to additional risks. Please see the Statement of Additional
Information for additional information about the securities and investment
techniques described in this Prospectus and about additional techniques and
strategies that may be used by the Fund.

MANAGEMENT OF THE FUND

The Trust is governed by a Board of Trustees which has retained
Schroder to manage the investments of the Fund. Subject to the control of the
Trustees, Schroder also manages the Fund's other affairs and business.
Schroder has served as investment adviser to the Fund since inception.

Schroder has been an investment manager since 1962, and currently
serves as investment adviser to the Fund and a broad range of institutional
investors. As of December 31, 1998, Schroder, together with its United Kingdom
affiliate, Schroder Investment Management North America Limited, had
approximately $27.1 billion in assets under management. Schroder's address is
787 Seventh Avenue, New York, New York 10019, and its telephone number is (212)
641-3900.

- INVESTMENT ADVISORY AND ADMINISTRATION FEES PAID BY THE FUND. The
Fund pays a monthly fee at the annual rate of 0.90% of the Fund's average daily
net assets. This fee includes amounts payable to Schroder under the Fund's
Investment Advisory Agreement with Schroder and to Schroder Fund Advisors Inc.
under the Administration Agreement with Schroder Fund Advisors Inc.

- EXPENSE LIMITATIONS AND WAIVERS. In order to limit the Fund's
expenses, Schroder is contractually obligated to reduce its compensation (and,
if necessary, to pay certain other Fund expenses) until October 31, 1999 to the
extent that the Fund's total operating expenses attributable to its Advisor
Shares exceed the annual rate of 2.25%.

Portfolio Manager Since Recent Professional Experience
- ----------------- ----- ------------------------------

Heather Crighton Inception (1998) Employed as an investment
professional at Schroder since 1993.
Ms. Crighton is a director and a
Senior Vice President of Schroder.

9
<PAGE>

HOW THE FUND'S SHARES ARE PRICED

The Fund calculates the net asset value of its Advisor Shares by
dividing the total value of its assets attributable to its Advisor Shares, less
its liabilities attributable to those shares, by the number of Advisor Shares
outstanding. Shares are valued as of the close of trading on the New York Stock
Exchange (normally 4:00 p.m., Eastern time) each day the Exchange is open. The
Trust expects that days, other then weekend days, that the Exchange will not be
open are New Years Day, Martin Luther King, Jr. Day, Presidents Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day. The Fund values its portfolio securities for which market
quotations are readily available at market value. Short-term investments that
will mature in 60 days or less are stated at amortized cost, which approximates
market value. The Fund values all other securities and assets at their fair
values as determined in accordance with procedures adopted by the Board of
Trustees. All assets and liabilities of the Fund denominated in foreign
currencies are valued in U.S. dollars based on the exchange rate last quoted by
a major bank prior to the time when the net asset value of the Fund's shares is
calculated. Because certain of the securities in which the Fund may invest may
trade on days when the Fund does not price its Advisor Shares, the net asset
value of the Fund's Advisor Shares may change on days when shareholders will not
be able to purchase or redeem their Advisor Shares. The net asset value of the
Fund's Advisor Shares will generally differ from that of its Investor Shares,
due to the variance in daily net income realized by and dividends paid on each
class of shares, and differences in the expenses of Advisor Shares and Investor
Shares.

HOW TO BUY SHARES

You may purchase Advisor Shares of the Fund directly from the Trust by
completing an Account Application and sending payment by check or wire as
described below. You may obtain an Account Application from the Trust or from
State Street Bank and Trust Company, the Trust's Transfer Agent, 2 Heritage
Drive, North Quincy, MA 02171, Attn: Schroder Funds, or by calling (800)
464-3108.

Advisor Shares of the Fund are sold at their net asset value next
determined after the Trust receives your order. In order for you to receive the
Fund's next determined net asset value, the Trust must receive your order before
the close of trading on the New York Stock Exchange.

INVESTMENT MINIMUMS

The minimum investment for initial and additional purchases for the
Fund is as follows:

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Initial Additional
Investment Investments
- --------------------------------------------------------------------------------
<S> <C> <C>
Regular Accounts $250,000 No minimum
- --------------------------------------------------------------------------------
Traditional IRAs $2,000 $250
- --------------------------------------------------------------------------------
</TABLE>

The Trust is authorized to reject any purchase order.

You also may meet the minimum initial investment requirement based in
cumulative purchases by means of a written Statement of Intention, expressing
your intention to invest $250,000 or more in

10
<PAGE>

Advisor Shares of the Fund within 13 months. You may enter into a Statement of
Intention in conjunction with your initial investment in Advisor Shares by
completing the appropriate section of the Account Application. Current Fund
shareholders can obtain a Statement of Intention form by contacting the Transfer
Agent. The Fund reserves the right to redeem your shares in the Fund if, at the
end of the Statement of Intention period, your account does not have a value of
at least the minimum initial investment amount.

PURCHASES BY CHECK

You may purchase shares of the Fund by mailing a check (in U.S.
dollars) payable to the Fund. Third-party checks will not be accepted.

You should mail your check and your completed Account Application to:

Schroder Greater China Fund -- Advisor Shares
2 Heritage Drive
North Quincy, Massachusetts 02171

Your payments should clearly indicate the shareholder's name and account number,
if applicable.

PURCHASES BY BANK WIRE/TELEPHONE

If you make your initial investment by wire, your order must be
preceded by a completed Account Application. Upon receipt of the Application,
the Trust will assign you an account number and your account will become active.
Wire orders received prior to the close of trading on the New York Stock
Exchange (normally 4:00 p.m., Eastern Time) on each day the Exchange is open for
trading will be processed at the net asset value determined as of that day. Wire
orders received after that time will be processed at the net asset value
determined thereafter.

Once you have an account number, you may purchase Advisor Shares by
telephoning the Transfer Agent at (800) 464-3108 to give notice that you will be
sending funds by wire, and then arranging with your bank to wire funds to the
Trust. Your purchase will not be processed until the Trust has received the
wired funds.

Federal Reserve Bank wire instructions are as follows:

11
<PAGE>

The wire order must specify the name of the Fund, the shares' class (i.e.,
Advisor Shares), the account name and number, address, confirmation number,
amount to be wired, name of the wiring bank, and name and telephone number of
the person to be contacted in connection with the order.

In an effort to prevent unauthorized or fraudulent purchase or
redemption requests by telephone, the Transfer Agent will follow reasonable
procedures to confirm that telephone instructions are genuine. The Transfer
Agent and the Trust generally will not be liable for any losses due to
unauthorized or fraudulent purchase or redemption requests, but either or both
may be liable if they do not follow these procedures.

OTHER PURCHASE INFORMATION

Advisor Shares of the Fund may be purchased for cash or in exchange for
securities held by the investor, subject to the determination by Schroder that
the securities are acceptable. (For purposes of determining whether securities
will be acceptable, Schroder will consider, among other things, whether they are
liquid securities of a type consistent with the investment objectives and
policies of the Fund and have a readily ascertainable value.) If the Fund
receives securities from an investor in exchange for shares of the Fund, the
Fund will under some circumstances have the same tax basis in the securities as
the investor had prior to the exchange (and the Fund's gain for tax purposes
would be calculated with regard to the investor's tax basis). Any gain on the
sale of those securities would be subject to distribution as capital gain to all
of the Fund's shareholders. Schroder reserves the right to reject any particular
investment. Securities accepted by Schroder will be valued in the same manner as
are the Trust's portfolio securities as of the time of the next determination of
the Fund's net asset value. All dividend, subscription, or other rights which
are reflected in the market price of accepted securities at the time of
valuation become the property of the Fund and must be delivered to the Fund upon
receipt by the investor. Investors may realize a gain or loss upon the exchange
for federal income tax purposes. Investors interested in purchases through
exchange should telephone Schroder at (800) 464-3108.

HOW TO SELL SHARES

You may sell your Advisor Shares back to the Fund on any business day
by sending a letter of instruction or stock power form to the Trust, or by
calling the Transfer Agent at (800) 464-3108.

The price you will receive for your Advisor Shares is the net asset
value next determined after receipt of your redemption request in good order. A
redemption request is in good order if it includes the exact name in which the
shares are registered, the investor's account number, and the number of shares
or the dollar amount of shares to be redeemed, and, for written requests, if it
is signed exactly in accordance with the registration form. If you hold your
Advisor Shares in certificate form, you must submit the certificates and sign
the assignment form on the back of the certificates. Signatures must be
guaranteed by a bank, broker-dealer, or certain other financial institutions.
You may redeem your Advisor Shares by telephone only if you elected the
telephone redemption privilege option on your Account Application or otherwise
in writing. Shares for which certificates have been issued may not be redeemed
by telephone. The Trust may require additional documentation from shareholders
that are corporations, partnerships, agents, fiduciaries, or surviving joint
owners.

The Trust will pay you for your redemptions as promptly as possible and
normally within seven days after the request for redemption is received in
writing in good order. (The Trust generally sends

12
<PAGE>

payment for shares the business day after a request is received.) Under unusual
circumstances, the Trust may suspend redemptions or postpone payment for more
than seven days, as permitted by law. If you paid for your Advisor Shares by
check, you will not be sent redemption proceeds until the check you used to pay
for the Advisor Shares has cleared, which may take up to 15 calendar days from
the purchase date.

The Fund may redeem Advisor Shares in whole or in part by a
distribution in kind of portfolio securities in lieu of cash. The Fund will,
however, redeem Advisor Shares solely in cash up to the lesser of $250,000 or 1%
of the Fund's net assets during any 90-day period for any one shareholder.

If, because of your redemptions, your account balance falls below a
minimum amount set by the Trustees (presently $100,000) of the Fund, the Trust
may choose to redeem your shares in the Fund and pay you for them. You will
receive at least 30 days written notice before the Trust redeems your shares,
and you may purchase additional shares at any time to avoid a redemption. The
Trust may also redeem shares if you own shares of the Fund above a maximum
amount set by the Trustees. There is currently no maximum, but the Trustees may
establish one at any time, which could apply to both present and future
shareholders.

The Trust may suspend the right of redemption during any period when:
(1) trading on the New York Stock Exchange is restricted or the Exchange is
closed; (2) the Securities and Exchange Commission has by order permitted such
suspension; or (3) an emergency (as defined by rules of the SEC) exists making
disposal of portfolio investments or determination of the Fund's net asset value
not reasonably practicable.

If you request that your redemption proceeds be sent to you at an
address other than your address of record, or to another party, you must include
a signature guarantee for each such signature by an eligible signature
guarantor, such as a member firm of a national securities exchange or a
commercial bank or trust company located in the United States. If you are a
resident of a foreign country, another type of certification may be required.
Please contact the Transfer Agent for more details at (800) 464-3108.
Corporations, fiduciaries, and other types of shareholders may be required to
supply additional documents which support their authority to effect a
redemption.

ADDITIONAL INFORMATION ABOUT ADVISOR SHARES

The Trust sells Advisor Shares of the Fund at their net asset value
without any sales charges or loads, so that the full amount of your purchase
payment is invested in the Fund. You also receive the full value of your Advisor
Shares when you sell them back to the Fund, without any deferred sales charge.
The Fund offers Investor Shares, which have higher investment minimums and lower
fees and expenses, in a separate prospectus.

SHAREHOLDER SERVICING PLAN. The Trust has adopted a Shareholder
Servicing Plan (the "Service Plan") for the Advisor Shares of the Fund. Under
the Service Plan, the Fund pays fees to Schroder Fund Advisors Inc. at an annual
rate of up to 0.25% of the average daily net assets of the Fund represented by
Advisor Shares. Schroder Fund Advisors Inc. may enter into shareholder service
agreements with Service Organizations pursuant to which the Service
Organizations provide administrative support services to their customers who are
Fund shareholders. In return for providing these support services, a Service
Organization may receive payments from Schroder Fund Advisors Inc. at a rate not
exceeding 0.25% of the average daily net assets of the Advisor Shares of each
Fund for which the Service

13
<PAGE>

Organization is the Service Organization of record. Some Service Organizations
may impose additional conditions or fees. For instance, a Service Organization
may require its clients to invest more than the minimum amounts required by the
Trust for initial or subsequent investments or may charge a direct fee for its
services. These fees would be in addition to any amounts which you pay as a
shareholder of the Fund or amounts which might be paid to the Service
Organization by Schroder Fund Advisors Inc. Please contact your Service
Organization for details. Schroder intends that payments made under the Service
Plan be used for administrative support services, and not for distribution of
the Fund's Advisor Shares.

DISTRIBUTION PLAN. The Fund has adopted a Distribution Plan which
allows the Fund to pay distribution fees for the sale and distribution of its
Advisor Shares. Under the Plan, the Fund may pay Schroder Fund Advisors Inc.
compensation in an amount limited in any fiscal year to the annual rate of 0.50%
of the Fund's average daily net assets attributable to its Advisor Shares. The
Trustees have not currently authorized payments under the Distribution Plan,
although payments by the Fund under the Shareholder Service Plan, which will not
exceed the annual rate of 0.25% of the Fund's average daily net assets, will be
deemed to have been made pursuant to the Distribution Plan to the extent such
payments may be considered to be primarily intended to result in the sale of the
Fund's Advisor Shares. To the extent that payments are made in the future under
the Plan, they would be paid out of the Fund's assets attributable to its
Advisor Shares on an ongoing basis, would increase the cost of your investment,
and may cost you more than paying other types of sales charges imposed by other
funds.

EXCHANGES

You can exchange your Advisor Shares of the Fund for Advisor Shares of
any other fund in the Schroder family of funds at any time at their respective
net asset values. The exchange would be treated as a sale of your Advisor Shares
and any gain on the exchange may be subject to federal income tax. To exchange
shares, please contact your Service Organization or, if you do not have a
Service Organization, call the Trust at (800) 464-3108.

DIVIDENDS AND DISTRIBUTIONS

The Fund distributes any net investment income and any net realized
capital gain at least annually. Distributions from net capital gain are made
after applying any available capital loss carryovers.

YOU CAN CHOOSE FROM FOUR DISTRIBUTION OPTIONS:

--> Reinvest all distributions in additional Advisor Shares of the
Fund;

--> Receive distributions from net investment income in cash while
reinvesting capital gains distributions in additional Advisor
Shares of the Fund;

--> Receive distributions from net investment income in additional
Advisor Shares of the Fund while receiving capital gain
distributions in cash; or

--> Receive all distributions in cash.

14
<PAGE>

You can change your distribution option by notifying the Transfer Agent
in writing. If you do not select an option when you open your account, all
distributions by the Fund will be reinvested in Advisor Shares of the Fund. You
will receive a statement confirming reinvestment of distributions in additional
Fund shares promptly following the period in which the reinvestment occurs.

TAXES

- TAXES ON DIVIDENDS AND DISTRIBUTIONS. The Fund intends to qualify as
a "regulated investment company" for U.S. federal income tax purposes and to
meet all other requirements that are necessary for it to be relieved of federal
taxes on income and gain it distributes to shareholders. The Fund will
distribute substantially all of its net investment income and net capital gain
income on a current basis.

- TAXES WHEN YOU SELL OR EXCHANGE YOUR SHARES. Any gain resulting from
the sale or exchange of your shares in the Fund will also generally be subject
to federal income or capital gains tax, depending on your holding period.

- FOREIGN TAXES. Foreign governments may impose taxes on the Fund and
its investments, which generally would reduce the Fund's income. However, an
offsetting tax credit or deduction may be available to shareholders.

The Fund, provided that it is eligible to do so, intends to elect to
permit its shareholders to take a credit (or a deduction) for the Fund's share
of foreign income taxes paid by the Fund. If the Fund does make such an
election, its shareholders would include as gross income in their U.S. federal
income tax returns both (1) distributions received from the Fund and (2) the
amount that the Fund advises is their pro rata portion of foreign income taxes
paid with respect to or withheld from dividends and interest paid to the Fund
from its foreign investments. Shareholders then would be entitled, subject to
certain limitations (including, with respect to a foreign tax credit, a holding
period requirement), to take a foreign tax credit against their U.S. federal
income tax liability for the amount of such foreign taxes or else to deduct such
foreign taxes as an itemized deduction from gross income.

- CONSULT YOUR TAX ADVISOR ABOUT OTHER POSSIBLE TAX CONSEQUENCES. This
is a summary of certain federal tax consequences of investing in the Fund. You
should consult your tax advisor for more information on your own tax situation,
including possible state and local taxes.

15
<PAGE>

YEAR 2000 DISCLOSURE

Additionally, because the Fund invests in foreign securities, it is
subject to the risk that foreign issuers or other foreign entities may not have
adequately prepared their computer systems to address the Year 2000 problem,
which could have an adverse impact on the foreign securities markets generally
and therefore reduce the value of the Fund's portfolio investments.

16
<PAGE>
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------

FUNDS AVAILABLE THROUGH SCHRODER FUND ADVISORS INC.
PLEASE CALL (800) 464-3108 FOR COMPLETE INFORMATION AND TO OBTAIN THE RELEVANT PROSPECTUS.
PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST.

SCHRODER SERIES TRUST II
SCHRODER ALL-ASIA FUND

- ----------------------------------------------------------------------------------------------------------
</TABLE>

17
<PAGE>

[Back Cover] [Logo]

SCHRODER CAPITAL FUNDS (DELAWARE)

SCHRODER GREATER CHINA FUND

Schroder Capital Funds (Delaware) ADVISOR SHARES
P.O. Box 8507
Boston, MA 02266 PROSPECTUS
800-464-3108
July 12, 1999

File No. 811-1911

18
<PAGE>

SCHRODER CAPITAL FUNDS (DELAWARE)

SCHRODER GREATER CHINA FUND

FORM N-1A
PART B

STATEMENT OF ADDITIONAL INFORMATION

JULY 13, 1999

This Statement of Additional Information (SAI) is not a prospectus and is
only authorized for distribution when accompanied or preceded by a Prospectus
for Schroder Greater China Fund, as amended or supplemented from time to
time. This SAI relates to the Fund's Investor Shares and Advisor Shares.
Investor Shares and Advisor Shares are offered through separate
Prospectuses, each dated [ ], 1999. This SAI contains information
which may be useful to investors but which is not included in the Prospectuses.
Investors may obtain free copies of the Prospectuses by calling the Trust
at 1-800-464-3108.

<PAGE>

TABLE OF CONTENTS

TRUST HISTORY 1

FUND CLASSIFICATION 1

CAPITALIZATION AND SHARE CLASSES 1

MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS 2

INVESTMENT RESTRICTIONS 16

TRUSTEES AND OFFICERS 17

SCHRODER AND ITS AFFILIATES 22

INVESTMENT ADVISORY AGREEMENT 22

ADMINISTRATIVE SERVICES 23

DISTRIBUTOR 24

BROKERAGE ALLOCATION AND OTHER PRACTICES 26

DETERMINATION OF NET ASSET VALUE 27

REDEMPTIONS IN KIND 29

TAXES 29

PRINCIPAL HOLDERS OF SECURITIES 31

CUSTODIAN 31

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT 31

INDEPENDENT AUDITORS 31

LEGAL COUNSEL 31

SHAREHOLDER LIABILITY 31

<PAGE>

SCHRODER CAPITAL FUNDS (DELAWARE)

STATEMENT OF ADDITIONAL INFORMATION

TRUST HISTORY

Schroder Capital Funds (Delaware) was organized as a Maryland
corporation on July 30, 1969; reorganized on February 29, 1988 as Schroder
Capital Funds, Inc.; and reorganized as a Delaware business trust organized
under the laws of the State of Delaware on January 9, 1996. The Trust's Trust
Instrument, which is governed by Delaware law, is on file with the Secretary of
State of the State of Delaware.

FUND CLASSIFICATION

The Trust currently offers shares of beneficial interest of nine series
with separate investment objectives and policies. Shares of Schroder Greater
China Fund, an open-end management investment company, are offered pursuant to
the Prospectuses and this SAI. The Fund is a "non-diversified" investment
company under the 1940 Act, and therefore may invest its assets in a more
limited number of issuers than may diversified investment companies. To the
extent the Fund invests a significant portion of its assets in the securities of
a particular issuer, it will be subject to an increased risk of loss if the
market value of the issuer's securities declines.

CAPITALIZATION AND SHARE CLASSES

The Trust has an unlimited number of shares of beneficial interest that
may, without shareholder approval, be divided into an unlimited number of series
of such shares, which, in turn, may be divided into an unlimited number of
classes of such shares. The Fund's shares are presently divided into two
classes, Investor Shares and Advisor Shares. Each class is offered through a
separate Prospectus. Unlike Investor Shares, Advisor Shares are currently
subject to shareholder service fees, so that the performance of the Fund's
Investor Shares should be more favorable than that of the Fund's Advisor Shares
over the same time period.

The Fund may suspend the sale of shares at any time and may refuse any
order to purchase shares. Under unusual circumstances, the Trust may suspend
redemption of Fund shares, or postpone redemption payments for more than seven
days, as permitted by law. If, because of your redemptions, your account balance
falls below a minimum amount set by the Trustees (presently $100,000), the Trust
may choose to redeem your shares in the Fund and pay you for them. You will
receive at least 30 days' written notice before the Trust redeems your shares,
and you may purchase additional shares at any time to avoid a redemption. The
Trust may also redeem shares if you own Fund shares above a maximum amount set
by the Trustees. There is currently no maximum, but the Trustees may establish
one at any time, which could apply to both present and future shareholders.

Shares entitle their holders to one vote per share, with fractional
shares voting proportionally; however, a separate vote will be taken by each
Fund or class of shares on matters affecting the particular Fund or class, as
determined by the Trustees. For example, a change in a fundamental investment
policy for a Fund would be voted upon only by shareholders of that Fund and a
change to a distribution plan

-1-
<PAGE>

relating to a particular class and requiring shareholder approval would be voted
upon only by shareholders of that class. Shares have noncumulative voting
rights. Although the Trust is not required to hold annual meetings of its
shareholders, shareholders have the right to call a meeting to elect or remove
Trustees or to take other actions as provided in the Trust Instrument. Shares
have no preemptive or subscription rights, and are transferable. Shares are
entitled to dividends as declared by the Trustees, and if the Fund were
liquidated, each class of shares of the Fund would receive the net assets of the
Fund attributable to the class. Because Investor and Advisor Shares are subject
to different expenses, the Fund's dividends and other distributions will
normally differ between the two classes. The Trust may suspend the sale of
shares at any time and may refuse any order to purchase shares.

MISCELLANEOUS INVESTMENTS, INVESTMENT PRACTICES AND RISKS

In addition to the principal investment strategies and the principal
risks of the Fund described in the Prospectuses, the Fund may employ other
investment practices and may be subject to additional risks which are described
below.

CERTAIN DERIVATIVE INSTRUMENTS

Derivative instruments are financial instruments whose value depends
upon, or is derived from, the value of an underlying asset, such as a security,
index or currency. As described below, the Fund may engage in a variety of
transactions involving the use of derivative instruments, including options and
futures contracts on securities and securities indices and options on futures
contracts. These transactions may be used by the Fund for hedging purposes or,
to the extent permitted by applicable law, to increase its current return. The
Fund may also engage in derivative transactions involving foreign currencies.
See "Foreign Currency Transactions."

OPTIONS

The Fund may purchase and sell covered put and call options on its
portfolio securities to enhance investment performance and to protect against
changes in market prices.

COVERED CALL OPTIONS. The Fund may write covered call options on its
securities to realize a greater current return through the receipt of premiums
than it would realize on its securities alone. Such option transactions may also
be used as a limited form of hedging against a decline in the price of
securities owned by the Fund.

A call option gives the holder the right to purchase, and obligates the
writer to sell, a security at the exercise price at any time before the
expiration date. A call option is "covered" if the writer, at all times while
obligated as a writer, either owns the underlying securities (or comparable
securities satisfying the cover requirements of the securities exchanges), or
has the right to acquire such securities through immediate conversion of
securities.

In return for the premium received when it writes a covered call
option, the Fund gives up some or all of the opportunity to profit from an
increase in the market price of the securities covering the call option during
the life of the option. The Fund retains the risk of loss should the price of
such securities decline. If the option expires unexercised, the Fund realizes a
gain equal to the premium, which may be

-2-
<PAGE>

offset by a decline in price of the underlying security. If the option is
exercised, the Fund realizes a gain or loss equal to the difference between the
Fund's cost for the underlying security and the proceeds of the sale (exercise
price minus commissions) plus the amount of the premium.

The Fund may terminate a call option that it has written before it
expires by entering into a closing purchase transaction. The Fund may enter into
closing purchase transactions in order to free itself to sell the underlying
security or to write another call on the security, realize a profit on a
previously written call option, or protect a security from being called in an
unexpected market rise. Any profits from a closing purchase transaction may be
offset by a decline in the value of the underlying security. Conversely, because
increases in the market price of a call option will generally reflect increases
in the market price of the underlying security, any loss resulting from a
closing purchase transaction is likely to be offset in whole or in part by
unrealized appreciation of the underlying security owned by the Fund.

COVERED PUT OPTIONS. The Fund may write covered put options in order to
enhance its current return. Such options transactions may also be used as a
limited form of hedging against an increase in the price of securities that the
Fund plans to purchase. A put option gives the holder the right to sell, and
obligates the writer to buy, a security at the exercise price at any time before
the expiration date. A put option is "covered" if the writer segregates cash and
high-grade short-term debt obligations or other permissible collateral equal to
the price to be paid if the option is exercised.

In addition to the receipt of premiums and the potential gains from
terminating such options in closing purchase transactions, the Fund also
receives interest on the cash and debt securities maintained to cover the
exercise price of the option. By writing a put option, the Fund assumes the risk
that it may be required to purchase the underlying security for an exercise
price higher than its then current market value, resulting in a potential
capital loss unless the security later appreciates in value.

The Fund may terminate a put option that it has written before it
expires by a closing purchase transaction. Any loss from this transaction may be
partially or entirely offset by the premium received on the terminated option.

PURCHASING PUT AND CALL OPTIONS. The Fund may also purchase put options
to protect portfolio holdings against a decline in market value. This protection
lasts for the life of the put option because the Fund, as a holder of the
option, may sell the underlying security at the exercise price regardless of any
decline in its market price. In order for a put option to be profitable, the
market price of the underlying security must decline sufficiently below the
exercise price to cover the premium and transaction costs that the Fund must
pay. These costs will reduce any profit the Fund might have realized had it sold
the underlying security instead of buying the put option.

The Fund may purchase call options to hedge against an increase in the
price of securities that the Fund wants ultimately to buy. Such hedge protection
is provided during the life of the call option since the Fund, as holder of the
call option, is able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the premium and
transaction costs. These costs will reduce any profit the Fund might have
realized had it bought the underlying security at the time it purchased the call
option.

-3-
<PAGE>

The Fund may also purchase put and call options to enhance its current
return. The Fund may also buy and sell combinations of put and call options on
the same underlying security to earn additional income.

OPTIONS ON FOREIGN SECURITIES. The Fund may purchase and sell options
on foreign securities if in Schroder's opinion the investment characteristics of
such options, including the risks of investing in such options, are consistent
with the Fund's investment objectives. It is expected that risks related to such
options will not differ materially from risks related to options on U.S.
securities. However, position limits and other rules of foreign exchanges may
differ from those in the U.S. In addition, options markets in some countries,
many of which are relatively new, may be less liquid than comparable markets in
the U.S.

RISKS INVOLVED IN THE SALE OF OPTIONS. Options transactions involve
certain risks, including the risks that Schroder will not forecast interest rate
or market movements correctly, that the Fund may be unable at times to close out
such positions, or that hedging transactions may not accomplish their purpose
because of imperfect market correlations. The successful use of these strategies
depends on the ability of Schroder to forecast market and interest rate
movements correctly.

An exchange-listed option may be closed out only on an exchange which
provides a secondary market for an option of the same series. Although the Fund
will enter into an option position only if Schroder believes that a liquid
secondary market exists, there is no assurance that a liquid secondary market on
an exchange will exist for any particular option or at any particular time. If
no secondary market were to exist, it would be impossible to enter into a
closing transaction to close out an option position. As a result, the Fund may
be forced to continue to hold, or to purchase at a fixed price, a security on
which it has sold an option at a time when Schroder believes it is inadvisable
to do so.

Higher than anticipated trading activity or order flow or other
unforeseen events might cause The Options Clearing Corporation or an exchange to
institute special trading procedures or restrictions that might restrict the
Fund's use of options. The exchanges have established limitations on the maximum
number of calls and puts of each class that may be held or written by an
investor or group of investors acting in concert. It is possible that the Fund
and other clients of Schroder may be considered such a group. These position
limits may restrict the Fund's ability to purchase or sell options on particular
securities.

As described below, the Fund generally expects that its options
transactions will be conducted on recognized exchanges. In certain instances,
however, the Fund may purchase and sell options in the over-the-counter markets.
Options which are not traded on national securities exchanges may be closed out
only with the other party to the option transaction. For that reason, it may be
more difficult to close out over-the-counter options than exchange-traded
options. Options in the over-the-counter market may also involve the risk that
securities dealers participating in such transactions would be unable to meet
their obligations to the Fund. Furthermore, over-the-counter options are not
subject to the protection afforded purchasers of exchange-traded options by The
Options Clearing Corporation. The Fund will, however, engage in over-the-counter
options transactions only when appropriate exchange-traded options transactions
are unavailable and when, in the opinion of Schroder, the pricing mechanism and
liquidity of the over-the-counter markets are satisfactory and the participants
are responsible parties likely to meet their contractual obligations. The Fund
will treat over-the-counter options (and, in the case of options sold

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<PAGE>

by the Fund, the underlying securities held by the Fund) as illiquid investments
as required by applicable law.

Government regulations, particularly the requirements for qualification
as a "regulated investment company" under the Internal Revenue Code, may also
restrict the Trust's use of options.

FUTURES CONTRACTS

In order to hedge against the effects of adverse market changes, the
Fund may buy and sell futures contracts on U.S. Government securities and other
debt securities in which the Fund may invest, and on indices of debt securities.
In addition, the Fund may purchase and sell stock index futures to hedge against
changes in stock market prices. The Fund may also, to the extent permitted by
applicable law, buy and sell futures contracts and options on futures contracts
to increase the Fund's current return. All such futures and related options
will, as may be required by applicable law, be traded on exchanges that are
licensed and regulated by the Commodity Futures Trading Commission (the "CFTC").
Depending upon the change in the value of the underlying security or index when
the Fund enters into or terminates a futures contract, the Fund may realize a
gain or loss.

FUTURES ON DEBT SECURITIES AND RELATED OPTIONS. A futures contract on a
debt security is a binding contractual commitment which, if held to maturity,
will result in an obligation to make or accept delivery, during a particular
month, of securities having a standardized face value and rate of return. By
purchasing futures on debt securities -- assuming a "long" position -- the Fund
will legally obligate itself to accept the future delivery of the underlying
security and pay the agreed price. By selling futures on debt securities --
assuming a "short" position -- it will legally obligate itself to make the
future delivery of the security against payment of the agreed price. Open
futures positions on debt securities will be valued at the most recent
settlement price, unless that price does not, in the judgment of persons acting
at the direction of the Trustees as to the valuation of the Fund's assets,
reflect the fair value of the contract, in which case the positions will be
valued by the Trustees or such persons.

Positions taken in the futures markets are not normally held to
maturity, but are instead liquidated through offsetting transactions that may
result in a profit or a loss. While futures positions taken by the Fund will
usually be liquidated in this manner, the Fund may instead make or take delivery
of the underlying securities whenever it appears economically advantageous to
the Fund to do so. A clearing corporation associated with the exchange on which
futures are traded assumes responsibility for such closing transactions and
guarantees that the Fund's sale and purchase obligations under closed-out
positions will be performed at the termination of the contract.

Hedging by use of futures on debt securities seeks to establish more
certainly than would otherwise be possible the effective rate of return on
portfolio securities. The Fund may, for example, take a "short" position in the
futures market by selling contracts for the future delivery of debt securities
held by the Fund (or securities having characteristics similar to those held by
the Fund) in order to hedge against an anticipated rise in interest rates that
would adversely affect the value of the Fund's portfolio securities. When
hedging of this character is successful, any depreciation in the value of
portfolio securities may substantially be offset by appreciation in the value of
the futures position.

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<PAGE>

On other occasions, the Fund may take a "long" position by purchasing
futures on debt securities. This would be done, for example, when the Fund
expects to purchase particular securities when it has the necessary cash, but
expects the rate of return available in the securities markets at that time to
be less favorable than rates currently available in the futures markets. If the
anticipated rise in the price of the securities should occur (with its
concomitant reduction in yield), the increased cost to the Fund of purchasing
the securities may be offset, at least to some extent, by the rise in the value
of the futures position taken in anticipation of the subsequent securities
purchase.

Successful use by the Fund of futures contracts on debt securities is
subject to Schroder's ability to predict correctly movements in the direction of
interest rates and other factors affecting markets for debt securities. For
example, if the Fund has hedged against the possibility of an increase in
interest rates which would adversely affect the market prices of debt securities
held by it and the prices of such securities increase instead, the Fund will
lose part or all of the benefit of the increased value of its securities which
it has hedged because it will have offsetting losses in its futures positions.
In addition, in such situations, if the Fund has insufficient cash, it may have
to sell securities to meet daily maintenance margin requirements. The Fund may
have to sell securities at a time when it may be disadvantageous to do so.

The Fund may purchase and write put and call options on certain debt
futures contracts, as they become available. Such options are similar to options
on securities except that options on futures contracts give the purchaser the
right, in return for the premium paid, to assume a position in a futures
contract (a long position if the option is a call and a short position if the
option is a put) at a specified exercise price at any time during the period of
the option. As with options on securities, the holder or writer of an option may
terminate his position by selling or purchasing an option of the same series.
There is no guarantee that such closing transactions can be effected. The Fund
will be required to deposit initial margin and maintenance margin with respect
to put and call options on futures contracts written by it pursuant to brokers'
requirements, and, in addition, net option premiums received will be included as
initial margin deposits. See "Margin Payments" below. Compared to the purchase
or sale of futures contracts, the purchase of call or put options on futures
contracts involves less potential risk to the Fund because the maximum amount at
risk is the premium paid for the options plus transactions costs. However, there
may be circumstances when the purchase of call or put options on a futures
contract would result in a loss to the Fund when the purchase or sale of the
futures contracts would not, such as when there is no movement in the prices of
debt securities. The writing of a put or call option on a futures contract
involves risks similar to those risks relating to the purchase or sale of
futures contracts.

INDEX FUTURES CONTRACTS AND OPTIONS. The Fund may invest in debt index
futures contracts and stock index futures contracts, and in related options. A
debt index futures contract is a contract to buy or sell units of a specified
debt index at a specified future date at a price agreed upon when the contract
is made. A unit is the current value of the index. A stock index futures
contract is a contract to buy or sell units of a stock index at a specified
future date at a price agreed upon when the contract is made. A unit is the
current value of the stock index.

Depending on the change in the value of the index between the time when
the Fund enters into and terminates an index futures transaction, the Fund may
realize a gain or loss. The following example illustrates generally the manner
in which index futures contracts operate. The Standard & Poor's 100 Stock Index
is composed of 100 selected common stocks, most of which are listed on the New
York

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<PAGE>

Stock Exchange. The S&P 100 Index assigns relative weightings to the common
stocks included in the Index, and the Index fluctuates with changes in the
market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures contract specifies that no delivery of the actual stocks making up
the index will take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the difference between
the contract price and the actual level of the stock index at the expiration of
the contract. For example, if the Fund enters into a futures contract to buy 100
units of the S&P 100 Index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $184 on that future date, the Fund will gain
$400 (100 units x gain of $4). If the Fund enters into a futures contract to
sell 100 units of the stock index at a specified future date at a contract price
of $180 and the S&P 100 Index is at $182 on that future date, the Fund will lose
$200 (100 units x loss of $2).

The Fund may purchase or sell futures contracts with respect to any
securities indices. Positions in index futures may be closed out only on an
exchange or board of trade which provides a secondary market for such futures.

In order to hedge the Fund's investments successfully using futures
contracts and related options, the Fund must invest in futures contracts with
respect to indices or sub-indices the movements of which will, in Schroder's
judgment, have a significant correlation with movements in the prices of the
Fund's securities.

Options on index futures contracts are similar to options on securities
except that options on index futures contracts give the purchaser the right, in
return for the premium paid, to assume a position in an index futures contract
(a long position if the option is a call and a short position if the option is a
put) at a specified exercise price at any time during the period of the option.
Upon exercise of the option, the holder would assume the underlying futures
position and would receive a variation margin payment of cash or securities
approximating the increase in the value of the holder's option position. If an
option is exercised on the last trading day prior to the expiration date of the
option, the settlement will be made entirely in cash based on the difference
between the exercise price of the option and the closing level of the index on
which the futures contract is based on the expiration date. Purchasers of
options who fail to exercise their options prior to the exercise date suffer a
loss of the premium paid.

As an alternative to purchasing and selling call and put options on
index futures contracts, the Fund that may purchase and sell index futures
contracts may purchase and sell call and put options on the underlying indices
themselves to the extent that such options are traded on national securities
exchanges. Index options are similar to options on individual securities in that
the purchaser of an index option acquires the right to buy (in the case of a
call) or sell (in the case of a put), and the writer undertakes the obligation
to sell or buy (as the case may be), units of an index at a stated exercise
price during the term of the option. Instead of giving the right to take or make
actual delivery of securities, the holder of an index option has the right to
receive a cash "exercise settlement amount". This amount is equal to the amount
by which the fixed exercise price of the option exceeds (in the case of a put)
or is less than (in the case of a call) the closing value of the underlying
index on the date of the exercise, multiplied by a fixed "index multiplier".

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<PAGE>

The Fund may purchase or sell options on stock indices in order to
close out its outstanding positions in options on stock indices which it has
purchased. The Fund may also allow such options to expire unexercised.

Compared to the purchase or sale of futures contracts, the purchase of
call or put options on an index involves less potential risk to the Fund because
the maximum amount at risk is the premium paid for the options plus transactions
costs. The writing of a put or call option on an index involves risks similar to
those risks relating to the purchase or sale of index futures contracts.

The Fund may also purchase warrants, issued by banks and other
financial institutions, whose values are based on the values from time to time
of one or more securities indices.

MARGIN PAYMENTS. When the Fund purchases or sells a futures contract,
it is required to deposit with its custodian an amount of cash, U.S. Treasury
bills, or other permissible collateral equal to a small percentage of the amount
of the futures contract. This amount is known as "initial margin". The nature of
initial margin is different from that of margin in security transactions in that
it does not involve borrowing money to finance transactions. Rather, initial
margin is similar to a performance bond or good faith deposit that is returned
to the Fund upon termination of the contract, assuming the Fund satisfies its
contractual obligations.

Subsequent payments to and from the broker occur on a daily basis in a
process known as "marking to market". These payments are called "variation
margin" and are made as the value of the underlying futures contract fluctuates.
For example, when the Fund sells a futures contract and the price of the
underlying debt security rises above the delivery price, the Fund's position
declines in value. The Fund then pays the broker a variation margin payment
equal to the difference between the delivery price of the futures contract and
the market price of the securities underlying the futures contract. Conversely,
if the price of the underlying security falls below the delivery price of the
contract, the Fund's futures position increases in value. The broker then must
make a variation margin payment equal to the difference between the delivery
price of the futures contract and the market price of the securities underlying
the futures contract.

When the Fund terminates a position in a futures contract, a final
determination of variation margin is made, additional cash is paid by or to the
Fund, and the Fund realizes a loss or a gain. Such closing transactions involve
additional commission costs.

SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS

LIQUIDITY RISKS. Positions in futures contracts may be closed out only
on an exchange or board of trade which provides a secondary market for such
futures. Although the Fund intends to purchase or sell futures only on exchanges
or boards of trade where there appears to be an active secondary market, there
is no assurance that a liquid secondary market on an exchange or board of trade
will exist for any particular contract or at any particular time. If there is
not a liquid secondary market at a particular time, it may not be possible to
close a futures position at such time and, in the event of adverse price
movements, the Fund would continue to be required to make daily cash payments of
variation margin. However, in the event financial futures are used to hedge
portfolio securities, such securities will not generally be sold until the
financial futures can be terminated. In such circumstances, an increase in the
price of the portfolio securities, if any, may partially or completely offset
losses on the financial futures.

-8-
<PAGE>

In addition to the risks that apply to all options transactions, there
are several special risks relating to options on futures contracts. The ability
to establish and close out positions in such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain that
such a market will develop. Although the Fund generally will purchase only those
options for which there appears to be an active secondary market, there is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. In the event no such market exists
for particular options, it might not be possible to effect closing transactions
in such options with the result that the Fund would have to exercise the options
in order to realize any profit.

HEDGING RISKS. There are several risks in connection with the use by
the Fund of futures contracts and related options as a hedging device. One risk
arises because of the imperfect correlation between movements in the prices of
the futures contracts and options and movements in the underlying securities or
index or in the prices of the Fund's securities which are the subject of a
hedge. Schroder will, however, attempt to reduce this risk by purchasing and
selling, to the extent possible, futures contracts and related options on
securities and indices the movements of which will, in its judgment, correlate
closely with movements in the prices of the underlying securities or index and
the Fund's portfolio securities sought to be hedged.

Successful use of futures contracts and options by the Fund for hedging
purposes is also subject to Schroder's ability to predict correctly movements in
the direction of the market. It is possible that, where the Fund has purchased
puts on futures contracts to hedge its portfolio against a decline in the
market, the securities or index on which the puts are purchased may increase in
value and the value of securities held in the portfolio may decline. If this
occurred, the Fund would lose money on the puts and also experience a decline in
value in its portfolio securities. In addition, the prices of futures, for a
number of reasons, may not correlate perfectly with movements in the underlying
securities or index due to certain market distortions. First, all participants
in the futures market are subject to margin deposit requirements. Such
requirements may cause investors to close futures contracts through offsetting
transactions which could distort the normal relationship between the underlying
security or index and futures markets. Second, the margin requirements in the
futures markets are less onerous than margin requirements in the securities
markets in general, and as a result the futures markets may attract more
speculators than the securities markets do. Increased participation by
speculators in the futures markets may also cause temporary price distortions.
Due to the possibility of price distortion, even a correct forecast of general
market trends by Schroder may still not result in a successful hedging
transaction over a very short time period.

LACK OF AVAILABILITY. Because the markets for certain options and
futures contracts and other derivative instruments in which the Fund may invest
(including markets located in foreign countries) are relatively new and still
developing and may be subject to regulatory restraints, the Fund's ability to
engage in transactions using such instruments may be limited. Suitable
derivative transactions may not be available in all circumstances and there is
no assurance that the Fund will engage in such transactions at any time or from
time to time. The Fund's ability to engage in hedging transactions may also be
limited by certain regulatory and tax considerations.

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<PAGE>

OTHER RISKS. The Fund will incur brokerage fees in connection with
its futures and options transactions. In addition, while futures contracts
and options on futures will be purchased and sold to reduce certain risks,
those transactions themselves entail certain other risks. Thus, while the
Fund may benefit from the use of futures and related options, unanticipated
changes in interest rates or stock price movements may result in a poorer
overall performance for the Fund than if it had not entered into any futures
contracts or options transactions. Moreover, in the event of an imperfect
correlation between the futures position and the portfolio position which is
intended to be protected, the desired protection may not be obtained and the
Fund may be exposed to risk of loss.

FORWARD COMMITMENTS

The Fund may enter into contracts to purchase securities for a fixed
price at a future date beyond customary settlement time ("forward commitments")
if the Fund holds, and maintains until the settlement date in a segregated
account, cash or liquid securities in an amount sufficient to meet the purchase
price, or if the Fund enters into offsetting contracts for the forward sale of
other securities it owns. Forward commitments may be considered securities in
themselves, and involve a risk of loss if the value of the security to be
purchased declines prior to the settlement date, which risk is in addition to
the risk of decline in the value of the Fund's other assets. Where such
purchases are made through dealers, the Fund relies on the dealer to consummate
the sale. The dealer's failure to do so may result in the loss to the Fund of an
advantageous yield or price.

Although the Fund will generally enter into forward commitments with
the intention of acquiring securities for its portfolio or for delivery pursuant
to options contracts it has entered into, the Fund may dispose of a commitment
prior to settlement if Schroder deems it appropriate to do so. The Fund may
realize short-term profits or losses upon the sale of forward commitments.

REPURCHASE AGREEMENTS

The Fund may enter into repurchase agreements. A repurchase agreement
is a contract under which the Fund acquires a security for a relatively short
period (usually not more than one week) subject to the obligation of the seller
to repurchase and the Fund to resell such security at a fixed time and price
(representing the Fund's cost plus interest). It is the Trust's present
intention to enter into repurchase agreements only with member banks of the
Federal Reserve System and securities dealers meeting certain criteria as to
creditworthiness and financial condition established by the Trustees of the
Trust, and only with respect to obligations of the U.S. government or its
agencies or instrumentalities or other high quality short-term debt obligations.
Repurchase agreements may also be viewed as loans made by the Fund which are
collateralized by the securities subject to repurchase. Schroder will monitor
such transactions to ensure that the value of the underlying securities will be
at least equal at all times to the total amount of the repurchase obligation,
including the interest factor. If the seller defaults, the Fund could realize a
loss on the sale of the underlying security to the extent that the proceeds of
sale including accrued interest are less than the resale price provided in the
agreement including interest. In addition, if the seller should be involved in
bankruptcy or insolvency proceedings, the Fund may incur delay and costs in
selling the underlying security or may suffer a loss of principal and interest
if the Fund is treated as an unsecured creditor and required to return the
underlying collateral to the seller's estate.

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<PAGE>

WHEN-ISSUED SECURITIES

The Fund may from time to time purchase securities on a "when-issued"
basis. Debt securities are often issued on this basis. The price of such
securities, which may be expressed in yield terms, is fixed at the time a
commitment to purchase is made, but delivery and payment for the when-issued
securities take place at a later date. Normally, the settlement date occurs
within one month of the purchase. During the period between purchase and
settlement, no payment is made by the Fund and no interest accrues to the Fund.
To the extent that assets of the Fund are held in cash pending the settlement of
a purchase of securities, the Fund would earn no income. While the Fund may sell
its right to acquire when-issued securities prior to the settlement date, the
Fund intends actually to acquire such securities unless a sale prior to
settlement appears desirable for investment reasons. At the time the Fund makes
the commitment to purchase a security on a when-issued basis, it will record the
transaction and reflect the amount due and the value of the security in
determining the Fund's net asset value. The market value of the when-issued
securities may be more or less than the purchase price payable at the settlement
date. The Fund will establish a segregated account in which it will maintain
cash and U.S. government securities or other liquid securities at least equal in
value to commitments for when-issued securities. Such segregated securities
either will mature or, if necessary, be sold on or before the settlement date.

LOANS OF FUND PORTFOLIO SECURITIES

The Fund may lend its portfolio securities, provided: (1) the loan is
secured continuously by collateral consisting of U.S. government securities,
cash, or cash equivalents adjusted daily to have market value at least equal to
the current market value of the securities loaned; (2) the Fund may at any time
call the loan and regain the securities loaned; (3) the Fund will receive any
interest or dividends paid on the loaned securities; and (4) the aggregate
market value of the Fund's portfolio securities loaned will not at any time
exceed one-third of the total assets of the Fund. In addition, it is anticipated
that the Fund may share with the borrower some of the income received on the
collateral for the loan or that it will be paid a premium for the loan. Before
the Fund enters into a loan, Schroder considers all relevant facts and
circumstances, including the creditworthiness of the borrower. The risks in
lending portfolio securities, as with other extensions of credit, consist of
possible delay in recovery of the securities or possible loss of rights in the
collateral should the borrower fail financially. Although voting rights or
rights to consent with respect to the loaned securities pass to the borrower,
the Fund retains the right to call the loans at any time on reasonable notice,
and it will do so in order that the securities may be voted by the Fund if the
holders of such securities are asked to vote upon or consent to matters
materially affecting the investment. The Fund will not lend portfolio securities
to borrowers affiliated with the Fund.

FOREIGN SECURITIES

Investments in foreign securities may involve risks and considerations
different from or in addition to investments in domestic securities. There may
be less information publicly available about a foreign company than about a U.S.
company, and foreign companies are not generally subject to accounting,
auditing, and financial reporting standards and practices comparable to those in
the United States. The securities of some foreign companies are less liquid and
at times more volatile than securities of comparable U.S. companies. Foreign
brokerage commissions and other fees are also generally higher than in the
United States. Foreign settlement procedures and trade regulations may involve
certain risks (such as delay in payment or delivery of securities or in the
recovery of the Fund's assets held abroad)

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<PAGE>

and expenses not present in the settlement of domestic investments. Also,
because foreign securities are normally denominated and traded in foreign
currencies, the values of the Fund's assets may be affected favorably or
unfavorably by currency exchange rates and exchange control regulations, and the
Fund may incur costs in connection with conversion between currencies.

In addition, with respect to certain foreign countries, there is a
possibility of nationalization or expropriation of assets, imposition of
currency exchange controls, adoption of foreign governmental restrictions
affecting the payment of principal and interest, imposition of withholding or
confiscatory taxes, political or financial instability, and adverse political,
diplomatic or economic developments which could affect the values of investments
in those countries. In certain countries, legal remedies available to investors
may be more limited than those available with respect to investments in the
United States or other countries and it may be more difficult to obtain and
enforce a judgment against a foreign issuer. Also, the laws of some foreign
countries may limit the Fund's ability to invest in securities of certain
issuers located in those countries.

Special tax considerations apply to foreign securities. In determining
whether to invest in securities of foreign issuers, Schroder will consider the
likely impact of foreign taxes on the net yield available to the Fund and its
shareholders. Income received by the Fund from sources within foreign countries
may be reduced by withholding and other taxes imposed by such countries. Tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. It is impossible to determine the effective rate of
foreign tax in advance since the amount of the Fund's assets to be invested in
various countries is not known, and tax laws and their interpretations may
change from time to time and may change without advance notice. Any such taxes
paid by the Fund will reduce its net income available for distribution to
shareholders.

FOREIGN CURRENCY TRANSACTIONS

The Fund may engage in currency exchange transactions to protect
against uncertainty in the level of future foreign currency exchange rates and
to increase current return. The Fund may engage in both "transaction hedging"
and "position hedging" as described in the Prospectuses.

For transaction hedging purposes, the Fund may purchase exchange-listed
and over-the-counter call and put options on foreign currency futures contracts
and on foreign currencies. A put option on a futures contract gives the Fund the
right to assume a short position in the futures contract until expiration of the
option. A put option on currency gives the Fund the right to sell a currency at
an exercise price until the expiration of the option. A call option on a futures
contract gives the Fund the right to assume a long position in the futures
contract until the expiration of the option. A call option on currency gives the
Fund the right to purchase a currency at the exercise price until the expiration
of the option. The Fund will engage in over-the-counter transactions only when
appropriate exchange-traded transactions are unavailable and when, in Schroder's
opinion, the pricing mechanism and liquidity are satisfactory and the
participants are responsible parties likely to meet their contractual
obligations.

In connection with position hedging, the Fund may purchase put or call
options on foreign currency and foreign currency futures contracts and buy or
sell forward contracts and foreign currency futures contracts.

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<PAGE>

The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved will not
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the values of
those securities between the dates the currency exchange transactions are
entered into and the dates they mature.

It is impossible to forecast with precision the market value of the
Fund's portfolio securities at the expiration or maturity of a forward or
futures contract. Accordingly, it may be necessary for the Fund to purchase
additional foreign currency on the spot market (and bear the expense of such
purchase) if the market value of the security or securities being hedged is less
than the amount of foreign currency the Fund is obligated to deliver and if a
decision is made to sell the security or securities and make delivery of the
foreign currency. Conversely, it may be necessary to sell on the spot market
some of the foreign currency received upon the sale of the portfolio security or
securities of the Fund if the market value of such security or securities
exceeds the amount of foreign currency the Fund is obligated to deliver.

To offset some of the costs to the Fund of hedging against fluctuations
in currency exchange rates, the Fund may write covered call options on those
currencies.

Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities which the Fund owns or intends to purchase
or sell. They simply establish a rate of exchange which one can achieve at some
future point in time. Additionally, although these techniques tend to minimize
the risk of loss due to a decline in the value of the hedged currency, they tend
to limit any potential gain which might result from the increase in the value of
such currency. Also, suitable foreign currency hedging transactions may not be
available in all circumstances and there can be no assurance that the Fund will
utilize hedging transactions at any time or from time to time.

The Fund may also seek to increase its current return by purchasing and
selling foreign currency on a spot basis, and by purchasing and selling options
on foreign currencies and on foreign currency futures contracts, and by
purchasing and selling foreign currency forward contracts.

CURRENCY FORWARD AND FUTURES CONTRACTS. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract as agreed by the parties, at a price set at the time of the contract.
In the case of a cancelable forward contract, the holder has the unilateral
right to cancel the contract at maturity by paying a specified fee. The
contracts are traded in the interbank market conducted directly between currency
traders (usually large commercial banks) and their customers. A forward contract
generally has no deposit requirement, and no commissions are charged at any
stage for trades. A foreign currency futures contract is a standardized contract
for the future delivery of a specified amount of a foreign currency at a future
date at a price set at the time of the contract. Foreign currency futures
contracts traded in the United States are designed by and traded on exchanges
regulated by the CFTC, such as the New York Mercantile Exchange.

Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the maturity date
of a forward contract may be any fixed number of days from the date of the
contract agreed upon by the parties, rather than a predetermined date in a given
month. Forward contracts may be in any amounts agreed upon by the parties rather
than predetermined

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<PAGE>

amounts. Also, forward foreign exchange contracts are traded directly between
currency traders so that no intermediary is required. A forward contract
generally requires no margin or other deposit.

At the maturity of a forward or futures contract, the Fund may either
accept or make delivery of the currency specified in the contract, or at or
prior to maturity enter into a closing transaction involving the purchase or
sale of an offsetting contract. Closing transactions with respect to forward
contracts are usually effected with the currency trader who is a party to the
original forward contract. Closing transactions with respect to futures
contracts are effected on a commodities exchange; a clearing corporation
associated with the exchange assumes responsibility for closing out such
contracts.

Positions in foreign currency futures contracts and related options may
be closed out only on an exchange or board of trade which provides a secondary
market in such contracts or options. Although the Fund will normally purchase or
sell foreign currency futures contracts and related options only on exchanges or
boards of trade where there appears to be an active secondary market, there is
no assurance that a secondary market on an exchange or board of trade will exist
for any particular contract or option or at any particular time. In such event,
it may not be possible to close a futures or related option position and, in the
event of adverse price movements, the Fund would continue to be required to make
daily cash payments of variation margin on its futures positions.

FOREIGN CURRENCY OPTIONS. Options on foreign currencies operate
similarly to options on securities, and are traded primarily in the
over-the-counter market, although options on foreign currencies have recently
been listed on several exchanges. Such options will be purchased or written only
when Schroder believes that a liquid secondary market exists for such options.
There can be no assurance that a liquid secondary market will exist for a
particular option at any specific time. Options on foreign currencies are
affected by all of those factors which influence exchange rates and investments
generally.

The value of a foreign currency option is dependent upon the value of
the foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors may
be disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.

There is no systematic reporting of last sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely basis.
Available quotation information is generally representative of very large
transactions in the interbank market and thus may not reflect relatively smaller
transactions (less than $1 million) where rates may be less favorable. The
interbank market in foreign currencies is a global, around-the-clock market. To
the extent that the U.S. options markets are closed while the markets for the
underlying currencies remain open, significant price and rate movements may take
place in the underlying markets that cannot be reflected in the U.S. options
markets.

FOREIGN CURRENCY CONVERSION. Although foreign exchange dealers do not
charge a fee for currency conversion, they do realize a profit based on the
difference (the "spread") between prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to the

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<PAGE>

Fund at one rate, while offering a lesser rate of exchange should the Fund
desire to resell that currency to the dealer.

ZERO-COUPON SECURITIES

Zero-coupon securities in which the Fund may invest are debt
obligations which are generally issued at a discount and payable in full at
maturity, and which do not provide for current payments of interest prior to
maturity. Zero-coupon securities usually trade at a deep discount from their
face or par value and are subject to greater market value fluctuations from
changing interest rates than debt obligations of comparable maturities which
make current distributions of interest. As a result, the net asset value of
shares of the Fund investing in zero-coupon securities may fluctuate over a
greater range than shares of other Funds of the Trust and other mutual funds
investing in securities making current distributions of interest and having
similar maturities.

Zero-coupon securities may include U.S. Treasury bills issued directly
by the U.S. Treasury or other short-term debt obligations, and longer-term bonds
or notes and their unmatured interest coupons which have been separated by their
holder, typically a custodian bank or investment brokerage firm. A number of
securities firms and banks have stripped the interest coupons from the
underlying principal (the "corpus") of U.S. Treasury securities and resold them
in custodial receipt programs with a number of different names, including
Treasury Income Growth Receipts ("TIGRS") and Certificates of Accrual on
Treasuries ("CATS"). CATS and TIGRS are not considered U.S. government
securities. The underlying U.S. Treasury bonds and notes themselves are held in
book-entry form at the Federal Reserve Bank or, in the case of bearer securities
(I.E., unregistered securities which are owned ostensibly by the bearer or
holder thereof), in trust on behalf of the owners thereof.

In addition, the Treasury has facilitated transfers of ownership of
zero-coupon securities by accounting separately for the beneficial ownership of
particular interest coupons and corpus payments on Treasury securities through
the Federal Reserve book-entry record-keeping system. The Federal Reserve
program as established by the Treasury Department is known as "STRIPS" or
"Separate Trading of Registered Interest and Principal of Securities." Under the
STRIPS program, the Fund will be able to have its beneficial ownership of U.S.
Treasury zero-coupon securities recorded directly in the book-entry
record-keeping system in lieu of having to hold certificates or other evidences
of ownership of the underlying U.S. Treasury securities.

When debt obligations have been stripped of their unmatured interest
coupons by the holder, the stripped coupons are sold separately. The principal
or corpus is sold at a deep discount because the buyer receives only the right
to receive a future fixed payment on the security and does not receive any
rights to periodic cash interest payments. Once stripped or separated, the
corpus and coupons may be sold separately. Typically, the coupons are sold
separately or grouped with other coupons with like maturity dates and sold in
such bundled form. Purchasers of stripped obligations acquire, in effect,
discount obligations that are economically identical to the zero-coupon
securities issued directly by the obligor.

-15-
<PAGE>

TEMPORARY DEFENSIVE STRATEGIES

As described in the Prospectuses, Schroder may at times judge that
conditions in the securities markets make pursuing the Fund's basic investment
strategies inconsistent with the best interests of its shareholders and may
temporarily use alternate investment strategies primarily designed to reduce
fluctuations in the value of the Fund's assets. In implementing these
"defensive" strategies, the Fund would invest in high-quality debt securities,
cash, or money market instruments to any extent Schroder considers consistent
with such defensive strategies. It is impossible to predict when, or for how
long, the Fund will use these alternate strategies.

INVESTMENT RESTRICTIONS

The Trust has adopted the following fundamental and non-fundamental
investment restrictions for the Fund. The Fund's fundamental investment
restrictions may not be changed without the affirmative vote of a "majority of
the outstanding voting securities" of the Fund, which is defined in the 1940 Act
to mean the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares and (2) 67% or more of the shares present at a meeting if
more than 50% of the outstanding shares are represented at the meeting in person
or by proxy. The non-fundamental investment policies described in the
Prospectuses and this SAI are not fundamental and may be changed by the
Trustees, without shareholder approval.

The Fund will not:

- - Purchase any security (other than U.S. Government securities) if as a
result more than 25% of the Fund's total assets would be invested in a
single industry.

- - Acquire more than 10% of the voting securities of any issuer.

- - Act as underwriter of securities of other issuers except to the extent
that, in connection with the disposition of portfolio securities, it
may be deemed to be an underwriter under certain federal securities
laws.

- - Issue any class of securities which is senior to the Fund's shares of
beneficial interest, except as contemplated by restriction 6 below.

- - Purchase or sell real estate or interests in real estate, including
real estate mortgage loans, although it may purchase and sell
securities which are secured by real estate and securities of companies
that invest or deal in real estate limited partnership interests (for
purposes of this restriction, investments by the Fund in
mortgage-backed securities and other securities representing interests
in mortgage pools shall not constitute the purchase or sale of real
estate or interests in real estate or real estate mortgage loans.)

- - Borrow more than 33-1/3% of the value of its total assets less all
liabilities and indebtedness (other than such borrowings).

-16-
<PAGE>

- - Purchase and sell commodities or commodity contracts, except that the
Fund may purchase or sell financial futures contracts, options on
futures contracts, and futures contracts, forward contracts and options
with respect to foreign currencies, and may enter into swap
transactions.

- - Make loans, except by purchase of debt obligations in which the Fund
may invest consistent with its investment policies, by entering into
repurchase agreements, or by lending its portfolio securities.

- - As a non-fundamental policy, the Fund will not invest in (i) securities
which at the time of such investment are not readily marketable; (ii)
securities restricted as to resale (excluding securities determined by
Trustees of the Trust, or the person designated by the Trustees to make
such determinations, to be readily marketable), and (iii) repurchase
agreements maturing in more than seven days, if, as a result, more than
15% of the Fund's net assets (taken at current value) would then be
invested in securities described in (i), (ii), and (iii).

-------------------

All percentage limitations on investments (other than limitations on
borrowing and illiquid securities) will apply at the time of investment and
shall not be considered violated unless an excess or deficiency occurs or exists
immediately after and as a result of such investment.

TRUSTEES AND OFFICERS

The Trustees of the Trust are responsible for the general oversight of
the Trust's business. Subject to such policies as the Trustees may determine,
Schroder furnishes a continuing investment program for each Fund and makes
investment decisions on its behalf. Subject to the control of the Trustees,
Schroder also manages the Fund's other affairs and business.

The Trustees and executive officers of the Trust and their principal
occupations during the last five years are set forth below.

(*) Nancy A. Curtin, Trustee and Chairman of the Trust. 41. 787 Seventh
Avenue, New York, New York. Managing Director, Schroder. Director, Schroder
Investment Management North America Limited. President and Director, Schroder
Fund Advisors Inc. Trustee, Schroder Capital Funds, Schroder Capital Funds II,
Schroder Series Trust and Schroder Series Trust II. Formerly, Director, Barings
Asset Management since 1993.

David N. Dinkins, Trustee. 71. 787 Seventh Avenue, New York, New York.
Trustee, Schroder Capital Funds, Schroder Capital Funds II, and Schroder Series
Trust. Professor, Columbia University School of International and Public
Affairs. Director, American Stock Exchange, Carver Federal Savings Bank,
Transderm Laboratory Corporation, and The Cosmetics Center, Inc. Formerly,
Mayor, City of New York.

-17-
<PAGE>

John I. Howell, Trustee. 82. 787 Seventh Avenue, New York, New York.
Trustee, Schroder Capital Funds, Schroder Capital Funds II, Schroder Series
Trust, and Schroder Series Trust II. Director, American International Life
Assurance Company of New York. Private consultant since 1987.

Peter S. Knight, Trustee. 48. 787 Seventh Avenue, New York, New York.
Trustee, Schroder Capital Funds, Schroder Capital Funds II, and Schroder Series
Trust. Partner, Wunder, Knight, Levine, Thelen & Forscey. Director, Comsat
Corp., Medicis Pharmaceutical Corp., and Whitman Education Group, Inc. Formerly,
Campaign Manager, Clinton/Gore '96.

Peter E. Guernsey, Trustee. 77. 787 Seventh Avenue, New York, New York.
Trustee, Schroder Capital Funds, Schroder Capital Funds II, Schroder Series
Trust, and Schroder Series Trust II. Formerly, Senior Vice President, Marsh &
McLennan, Inc.

(*) Sharon L. Haugh, Trustee. 53. 787 Seventh Avenue, New York, New
York. Director and Chairman, Schroder. Chairman and Director, Schroder Fund
Advisors Inc. Trustee, Schroder Capital Funds, Schroder Capital Funds II, and
Schroder Series Trust.

William L. Means, Trustee. 59. 787 Seventh Avenue, New York, New York.
Trustee, Schroder Series Trust II. Formerly, Chief Investment Officer, Alaska
Permanent Fund Corporation.

Clarence F. Michalis, Trustee. 77. 787 Seventh Avenue, New York, New
York. Trustee, Schroder Capital Funds, Schroder Capital Funds II, and Schroder
Series Trust. Chairman of the Board of Directors, Josiah Macy, Jr. Foundation.

Hermann C. Schwab, Trustee. 79. 787 Seventh Avenue, New York, New York.
Trustee, Schroder Capital Funds, Schroder Capital Funds II, and Schroder Series
Trust. Trustee, St. Luke's/Roosevelt Hospital Center. Formerly, consultant to
Schroder Capital Management International Inc.

Mark J. Astley, Vice President of the Trust. 37. 787 Seventh Avenue,
New York, New York. First Vice President, Schroder. Formerly, employed by
various affiliates of Schroder in various positions in the investment research
and portfolio management areas since 1987.

Robert G. Davy, Vice President of the Trust. 37. 787 Seventh Avenue,
New York, New York. Director and Executive Vice President, Schroder. Director,
Schroder Investment Management North America Limited. Formerly, employed by
various affiliates of Schroder in various positions in the investment research
and portfolio management areas since 1986.

Margaret H. Douglas-Hamilton, Vice President of the Trust. 57. 787
Seventh Avenue, New York, New York. Director, Senior Vice President and
Secretary, Schroder.

Richard R. Foulkes, Vice President of the Trust. 53. 787 Seventh
Avenue, New York, New York. Director and Deputy Chairman, Schroder. Director and
Executive Vice President of Schroder Investment Management North America Limited
since 1989.

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<PAGE>

Michael Perelstein, Vice President of the Trust. 43. 787 Seventh
Avenue, New York, New York. Director and Senior Investment Officer, Schroder.
Formerly, Managing Director of MacKay - Shields Financial Corp.

Catherine A. Mazza, Vice President of the Trust. 39. 787 Seventh
Avenue, New York, New York. Director and Senior Vice President, Schroder.
President, Schroder Fund Advisors Inc. Vice President, Schroder Capital Funds,
Schroder Capital Funds II, and Schroder Series Trust. Formerly, Vice President,
Alliance Capital Management L.P.

Alexandra Poe, Secretary and Vice President of the Trust. 38. 787
Seventh Avenue, New York, New York. First Vice President, Schroder. Senior Vice
President, Secretary, and General Counsel, Schroder Fund Advisors Inc. Vice
President and Secretary, Schroder Capital Funds, Schroder Capital Funds II, and
Schroder Series Trust. Assistant Secretary, Schroder Series Trust II. Formerly,
Attorney, Gordon Altman Butowsky Weitzen Shalov & Wein; Vice President and
Counsel, Citibank, N.A.

Jane P. Lucas, Vice President of the Trust. 38. 787 Seventh Avenue, New
York, New York. Senior Vice President, Schroder.

Fergal Cassidy, Treasurer and Principal Financial and Accounting
Officer of the Trust. 29. 787 Seventh Avenue, New York, New York. Vice President
and Controller - NY, Schroder. Treasurer and Chief Financial Officer, Schroder
Fund Advisors Inc. Assistant Treasurer, Schroder Series Trust. Formerly, Senior
Accountant, Concurrency Management Corp.

Alan Mandel, Assistant Treasurer of the Trust. 41. 787 Seventh Avenue,
New York, New York. First Vice President, Schroder. Formerly, Director of Mutual
Fund Administration for Salomon Brothers Asset Management; Chief Financial
Officer and Vice President of Mutual Capital Management.

Carin Muhlbaum, Assistant Secretary of the Trust. 36. Vice President,
Schroder. Formerly, an investment management attorney with Seward & Kissel and
prior thereto, with Gordon Altman Butowsky Weitzen Shalov & Wein.

Nicholas Rossi, Assistant Secretary of the Trust. 35. 787 Seventh
Avenue, New York, New York. Assistant Vice President, Schroder. Assistant Vice
President of Schroder Fund Advisors Inc. since March 1998. Formerly, Mutual Fund
Specialist, Wilkie Farr & Gallagher; Fund Administrator, Furman Selz LLC since
1992.

John A. Troiano, Vice President of the Trust. 38. 787 Seventh Avenue,
New York, New York. Director and Chief Executive, Schroder. Formerly, employed
by various affiliates of Schroder Capital Management International Inc. in
various positions in the investment research and portfolio management areas
since 1981.

Ira L. Unschuld, Vice President of the Trust. 33. 787 Seventh Avenue,
New York, New York. Director and Senior Vice President, Schroder.

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<PAGE>

Except as otherwise noted, the principal occupations of the Trustees
and officers for the last five years have been with the employers shown above,
although in some cases they have held different positions with such employers or
their affiliates.

TRUSTEE COMPENSATION

Trustees who are not "interested persons" (as defined in the 1940 Act)
of the Trust, Schroder, or Schroder Fund Advisors Inc. received the following
compensation for the fiscal year ended October 31, 1998:

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<PAGE>

COMPENSATION TABLE

- -------------------------------------------------------------------------
(1) (2) (3)

NAME OF AGGREGATE TOTAL COMPENSATION
TRUSTEE COMPENSATION FROM TRUST AND
FROM TRUST FUND COMPLEX PAID TO
TRUSTEES*

- -------------------------------------------------------------------------
<S> <C> <C>
David N. Dinkins $3,546 $14,250
- -------------------------------------------------------------------------
Peter E. Guernsey $3,911 $23,750
- -------------------------------------------------------------------------
John I. Howell $3,911 $25,000
- -------------------------------------------------------------------------
Peter S. Knight $3,911 $15,500
- -------------------------------------------------------------------------
William L. Means** $0 $9,500
- -------------------------------------------------------------------------
Clarence F. Michalis $3,911 $14,250
- -------------------------------------------------------------------------
Hermann C. Schwab $3,911 $14,250
- -------------------------------------------------------------------------
</TABLE>

* The Total Compensation listed in column (3) for each Trustee includes
compensation for services as a Trustee of the Trust, Schroder Capital Funds
("SCF"), Schroder Capital Funds II ("SCF II"), Schroder Series Trust ("SST"),
and Schroder Series Trust II (formerly Schroder Asian Growth Fund, Inc., "SST
II"). The Trust, SCF, SCF II, SST, and SST II are considered part of the same
"Fund Complex" for these purposes.

** Mr. Means was elected Trustee of the Trust on December 15, 1998.

As of June 15, 1999, the Trustees of the Trust as a group owned less
than 1% of the outstanding shares of each Fund.

The Trust's Trust Instrument provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust, except if it is determined in the manner specified in the Trust
Instrument that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust or that such
indemnification would relieve any officer or Trustee of any liability to the
Trust or its shareholders by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of his or her duties. The Trust, at its
expense, provides liability insurance for the benefit of its Trustees and
officers.

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<PAGE>

SCHRODER AND ITS AFFILIATES

Schroder has served as the investment adviser for the Fund since its
inception. Schroder is a wholly-owned subsidiary of Schroder U.S. Holdings Inc.,
which engages through its subsidiary firms in the investment banking, asset
management, and securities businesses. Affiliates of Schroder U.S. Holdings Inc.
(or their predecessors) have been investment managers since 1927. Schroder
itself has been an investment manager since 1962, and, together with its United
Kingdom affiliate, Schroder Investment Management North America Limited, served
as investment manager for approximately $27.1 billion as of December 31, 1998.
Schroder U.S. Holdings Inc. is an indirect, wholly-owned U.S. subsidiary of
Schroders plc, a publicly owned holding company organized under the laws of
England. Schroders plc and its affiliates engage in international merchant
banking and investment management businesses, and as of December 31, 1998, had
under management assets of approximately $195 billion.

Schroder Fund Advisors Inc., an affiliate of Schroder that serves as
the Trust's distributor, is a wholly-owned subsidiary of Schroder. Schroder is
also a wholly-owned subsidiary of Schroder U.S. Holdings Inc.

INVESTMENT ADVISORY AGREEMENT

Under an Investment Advisory Agreement between the Trust and Schroder
(the "Advisory Agreement"), Schroder, at its expense, provides the Fund with
investment advisory services and advises and assists the officers of the Trust
in taking such steps as are necessary or appropriate to carry out the decisions
of its Trustees regarding the conduct of business of the Trust and the Fund. The
fees to be paid under the Advisory Agreement are set forth in the Prospectuses.

Under the Advisory Agreement, Schroder is required to regularly provide
the Fund with investment research, advice, and supervision and furnishes
continuously investment programs consistent with the investment objective and
policies of the Fund, and determines what securities shall be purchased, what
securities shall be held or sold, and what portion of the Fund's assets shall be
held uninvested, subject always to the provisions of the Trust's Trust
Instrument and By-laws, and the provisions of the 1940 Act, and to the Fund's
investment objective, policies, and restrictions, and subject further to such
policies and instructions as the Trustees may from time to time establish.

Schroder makes available to the Trust, without additional expense to
the Trust, the services of such of its directors, officers, and employees as may
duly be elected Trustees or officers of the Trust, subject to their individual
consent to serve and to any limitations imposed by law. Schroder pays the
compensation and expenses of officers and executive employees of the Trust.
Schroder also provides investment advisory research and statistical facilities
and all clerical services relating to such research, statistical, and investment
work. Schroder pays the Trust's office rent.

Under the Advisory Agreement, the Trust is responsible for all its
other expenses, including clerical salaries not related to investment
activities; fees and expenses incurred in connection with membership in
investment company organizations; brokers' commissions; payment for portfolio
pricing services to a pricing agent, if any; legal expenses; auditing expenses;
accounting expenses; taxes and governmental fees; fees and expenses of the
transfer agent and investor servicing agent of the Trust; the cost of preparing
share certificates or any other expenses, including clerical expenses, incurred
in

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<PAGE>

connection with the issue, sale, underwriting, redemption, or repurchase of
shares; the expenses of and fees for registering or qualifying securities for
sale; the fees and expenses of the Trustees of the Trust who are not affiliated
with Schroder; the cost of preparing and distributing reports and notices to
shareholders; public and investor relations expenses; and fees and disbursements
of custodians of the Fund's assets. The Trust is also responsible for its
expenses incurred in connection with litigation, proceedings, and claims and the
legal obligation it may have to indemnify its officers and Trustees with respect
thereto.

Schroder's compensation under the Advisory Agreement may be reduced in
any year if the Fund's expenses exceed the limits on investment company expenses
imposed by any statute or regulatory authority of any jurisdiction in which
shares of the Fund are qualified for offer or sale.

The Advisory Agreement may be terminated without penalty by vote of the
Trustees, by the shareholders of the Fund, or by Schroder on 60 days' written
notice. The Advisory Agreement also terminates without payment of any penalty in
the event of its assignment. In addition, the Advisory Agreement may be amended
only by a vote of the shareholders of the Fund, and the Advisory Agreement
provides that it will continue in effect from year to year only so long as such
continuance is approved at least annually with respect to the Fund by vote of
either the Trustees or the shareholders of the Fund, and, in either case, by a
majority of the Trustees who are not "interested persons" of Schroder. In each
of the foregoing cases, the vote of the shareholders is the affirmative vote of
a "majority of the outstanding voting securities" as defined in the 1940 Act.

State Street Bank and Trust Company ("State Street") provides certain
accounting, transfer agency, and other services to the Trust. The Trust
compensates State Street on a basis approved by the Trustees.

Schroder has agreed, until October 31, 1999, to reduce the compensation
it is entitled to receive as investment adviser of the Fund to the extent that
the Fund's total operating expenses attributable to its Investor Shares exceed
an annual rate of 2.00% of the Fund's average daily net assets and to the extent
that the Fund's total operating expenses attributable to its Advisor Shares
exceed an annual rate of 2.25% of the Fund's average daily net assets.

ADMINISTRATIVE SERVICES

On behalf of the Fund, the Trust has entered into an administration
agreement with Schroder Fund Advisors Inc., under which Schroder Fund Advisors
Inc. provides management and administrative services necessary for the operation
of the Fund, including: (1) preparation of shareholder reports and
communications; (2) regulatory compliance, such as reports to and filings with
the SEC and state securities commissions; and (3) general supervision of the
operation of the Fund, including coordination of the services performed by its
investment adviser, transfer agent, custodian, independent accountants, legal
counsel and others. Schroder Fund Advisors Inc. is a wholly owned subsidiary of
Schroder and is a registered broker-dealer organized to act as administrator and
distributor of mutual funds.

For providing administrative services Schroder Fund Advisors Inc. is
entitled to receive a monthly fee at the annual rate of 0.25% of the Fund's
average daily net assets. The administration

-23-
<PAGE>

agreement is terminable with respect to the Fund without penalty, at any time,
by the Trustees upon 60 days' written notice to Schroder Fund Advisors Inc. or
by Schroder Fund Advisors Inc. upon 60 days' written notice to the Trust.

The Trust has entered into a subadministration agreement with State
Street. Under its agreement, State Street assists Schroder Fund Advisors Inc.
with certain of its responsibilities under the administration agreement,
including shareholder reporting and regulatory compliance. For providing its
services, State Street is entitled to receive a monthly fee from the Fund at the
annual rate of 0.06% of the Fund's average daily net assets. The
subadministration agreement is terminable with respect to the Fund without
penalty, at any time after the initial three-year term, by the Trust upon 60
days' written notice to State Street or by State Street upon 60 days' written
notice to the Trust. Additionally, the Trust can terminate the subadministration
agreement with respect to the Fund during the initial three-year term, upon 60
days' written notice to State Street. In the event of such termination, the
Trust would pay to State Street the difference between the fees that would have
been payable by the Fund for the period prior to such termination if the fee
schedule for the third year of the initial term had been in effect during that
period and the fees actually paid by the Fund for that period.

DISTRIBUTOR

Pursuant to a Distribution Agreement with the Trust, Schroder Fund
Advisors Inc. (the "Distributor"), 787 Seventh Avenue, New York, New York 10019,
serves as the distributor for the Trust's continually offered shares. The
Distributor pays all of its own expenses in performing its obligations under the
Distribution Agreement. The Distributor is not obligated to sell any specific
amount of shares of the Fund. Please see "Administrative Services" for ownership
information regarding the Distributor.

DISTRIBUTION PLAN FOR ADVISOR SHARES. The Fund has adopted a
Distribution Plan under Rule 12b-1 of the 1940 Act pursuant to which the Fund
may pay the Distributor compensation in an amount limited in any fiscal year to
the annual rate of 0.25% of the Fund's average daily net assets attributable to
Advisor Shares. The Trustees have not authorized any payments under the
Distribution Plan, although they may at any time authorize payments at an annual
rate of up to 0.50% of the Fund's average daily net assets attributable to
Advisor Shares. The Distribution Plan also relates to payments made pursuant to
the Trust's Shareholder Servicing Plan for Advisor Shares, to the extent such
payments may be deemed to be primarily intended to result in the sale of the
Fund's Advisor Shares. See "Shareholder Servicing Plan for Advisor Shares"
below.

The various costs and expenses that may be paid or reimbursed under the
Distribution Plan include advertising expenses, costs of printing prospectuses
and other materials to be given or sent to prospective investors, expenses of
sales employees or agents of the Distributor, including salary, commissions,
travel and related expenses in connection with the distribution of Advisor
Shares, payments to broker-dealers who advise shareholders regarding the
purchase, sale, or retention of Advisor Shares, and payments to banks, trust
companies, broker-dealers (other than the Distributor) or other financial
organizations.

The Distribution Plan may not be amended to increase materially the
amount of distribution expenses permitted thereunder without the approval of a
majority of the outstanding Advisor Shares of

-24-
<PAGE>

the Fund. Any other material amendment to the Distribution Plan must be approved
both by a majority of the Trustees and a majority of those Trustees ("Qualified
Trustees") who are not "interested persons" (as defined in the 1940 Act) of the
Trust, and who have no direct or indirect financial interest in the operation of
the Distribution Plan or in any related agreement, by vote cast in person at a
meeting called for the purpose. The Distribution Plan will continue in effect
for successive one-year periods provided each such continuance is approved by a
majority of the Trustees and the Qualified Trustees by vote cast in person at a
meeting called for the purpose. The Distribution Plan may be terminated at any
time by vote of a majority of the Qualified Trustees or by vote of a majority of
the Fund's outstanding Advisor Shares.

SHAREHOLDER SERVICING PLAN FOR ADVISOR SHARES. The Fund has also
adopted a Shareholder Servicing Plan (the "Service Plan") for its Advisor
Shares. Under the Service Plan, the Fund pays fees to the Distributor at an
annual rate of up to 0.25% of the average daily net assets of the Fund
attributable to its Advisor Shares. The Distributor may enter into shareholder
service agreements with Service Organizations pursuant to which the Service
Organizations provide administrative support services to their customers who are
Fund shareholders.

In return for providing these support services, a Service Organization
may receive payments from the Distributor at a rate not exceeding 0.25% of the
average daily net assets of the Advisor Shares of the Fund for which the Service
Organization is the Service Organization of record. These administrative
services may include, but are not limited to, the following functions:
establishing and maintaining accounts and records relating to clients of the
Service Organization; answering shareholder inquiries regarding the manner in
which purchases, exchanges, and redemptions of Advisor Shares of the Trust may
be effected and other matters pertaining to the Trust's services; providing
necessary personnel and facilities to establish and maintain shareholder
accounts and records; assisting shareholders in arranging for processing
purchase, exchange, and redemption transactions; arranging for the wiring of
funds; guaranteeing shareholder signatures in connection with redemption orders
and transfers and changes in shareholder-designated accounts; integrating
periodic statements with other customer transactions; and providing such other
related services as the shareholder may request. Some Service Organizations may
impose additional conditions or fees, such as requiring clients to invest more
than the minimum amounts required by the Trust for initial or subsequent
investments or charging a direct fee for services. Such fees would be in
addition to any amounts which might be paid to the Service Organization by the
Distributor. Please contact your Service Organization for details.

The Distribution Plan may not be amended to increase materially the
amount of distribution expenses permitted thereunder without the approval of a
majority of the outstanding Advisor Shares of the Fund. Any other material
amendment to the Distribution Plan must be approved both by a majority of the
Trustees and a majority of those Trustees ("Qualified Trustees") who are not
"interested persons" (as defined in the 1940 Act) of the Trust, and who have no
direct or indirect financial interest in the operation

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of the Distribution Plan or in any related agreement, by vote cast in person at
a meeting called for the purpose. The Distribution Plan will continue in effect
for successive one-year periods provided each such continuance is approved by a
majority of the Trustees and the Qualified Trustees by vote cast in person at a
meeting called for the purpose. The Distribution Plan may be terminated at any
time by vote of a majority of the Qualified Trustees or by vote of a majority of
the Fund's outstanding Advisor Shares.

No payments have yet been made under the Service Plan because the Fund
has no Advisor Shares outstanding.

BROKERAGE ALLOCATION AND OTHER PRACTICES

Schroder may place portfolio transactions with broker-dealers which
furnish, without cost, certain research, statistical, and quotation services of
value to Schroder and its affiliates in advising the Trust and other clients,
provided that it shall always seek best price and execution with respect to
transactions. Certain investments may be appropriate for the Trust and for other
clients advised by Schroder. Investment decisions for the Trust and other
clients are made with a view to achieving their respective investment objectives
and after consideration of such factors as their current holdings, availability
of cash for investment, and the size of their investments generally. Frequently,
a particular security may be bought or sold for only one client or in different
amounts and at different times for more than one but less than all clients.
Likewise, a particular security may be bought for one or more clients when one
or more other clients are selling the security. In addition, purchases or sales
of the same security may be made for two or more clients of Schroder on the same
day. In such event, such transactions will be allocated among the clients in a
manner believed by Schroder to be equitable to each. In some cases, this
procedure could have an adverse effect on the price or amount of the securities
purchased or sold by the Trust. Purchase and sale orders for the Trust may be
combined with those of other clients of Schroder in the interest of achieving
the most favorable net results for the Trust.

BROKERAGE AND RESEARCH SERVICES. Transactions on U.S. stock exchanges
and other agency transactions involve the payment by the Trust of negotiated
brokerage commissions. Such commissions vary among different brokers. Also, a
particular broker may charge different commissions according to such factors as
the difficulty and size of the transaction. Transactions in foreign securities
often involve the payment of fixed brokerage commissions, which are generally
higher than those in the United States, and therefore certain portfolio
transaction costs may be higher than the costs for similar transactions executed
on U.S. securities exchanges. There is generally no stated commission in the
case of securities traded in the over-the-counter markets, but the price paid by
the Trust usually includes an undisclosed dealer commission or mark-up. In
underwritten offerings, the price paid by the Trust includes a disclosed, fixed
commission or discount retained by the underwriter or dealer.

Schroder places all orders for the purchase and sale of portfolio
securities and buys and sells securities through a substantial number of brokers
and dealers. In so doing, it uses its best efforts to obtain the best price and
execution available. In seeking the best price and execution, Schroder considers
all factors it deems relevant, including price, the size of the transaction, the
nature of the market for the security, the amount of the commission, the timing
of the transaction (taking into account market prices and trends), the
reputation, experience, and financial stability of the broker-dealer involved,
and the quality of service rendered by the broker-dealer in other transactions.

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<PAGE>

It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive research, statistical, and quotation services from broker-dealers
that execute portfolio transactions for the clients of such advisers. Consistent
with this practice, Schroder receives research, statistical, and quotation
services from many broker-dealers with which it places the Trust's portfolio
transactions. These services, which in some cases may also be purchased for
cash, include such matters as general economic and security market reviews,
industry and company reviews, evaluations of securities, and recommendations as
to the purchase and sale of securities. Some of these services are of value to
Schroder and its affiliates in advising various of their clients (including the
Trust), although not all of these services are necessarily useful and of value
in managing the Fund. The investment advisory fee paid by the Fund is not
reduced because Schroder and its affiliates receive such services.

As permitted by Section 28(e) of the Securities Exchange Act of 1934,
as amended, and by the Advisory Agreement, Schroder may cause the Fund to pay a
broker that provides brokerage and research services to Schroder an amount of
disclosed commission for effecting a securities transaction for the Fund in
excess of the commission which another broker would have charged for effecting
that transaction. Schroder's authority to cause the Fund to pay any such greater
commissions is also subject to such policies as the Trustees may adopt from time
to time.

To the extent permitted by law, the Fund may engage in brokerage
transactions with Schroder & Co. Inc. ("Schroder & Co."), an affiliate of
Schroder, to effect securities transactions on the New York Stock Exchange only
or Schroder Securities Limited and its affiliates (collectively, "Schroder
Securities"), affiliates of Schroder, to effect securities transactions on
various foreign securities exchanges on which Schroder Securities has trading
privileges. Consistent with regulations under the 1940 Act, the Fund has adopted
procedures which are reasonably designed to provide that any commissions or
other remuneration the Fund pays to Schroder & Co. and Schroder Securities do
not exceed the usual and customary broker's commission. In addition, the Fund
will adhere to the rule, under the Securities Exchange Act of 1934, governing
floor trading. This rule permits the Fund to effect, but not execute, exchange
listed securities transactions with Schroder & Co. Schroder & Co. pays a portion
of the brokerage commissions it receives from the Fund to the brokers executing
the transactions. Also, due to securities law limitations, the Fund may be
required to limit purchases of securities in a public offering if Schroder & Co.
or Schroder Securities or one of their affiliates is a member of the syndicate
for that offering.

The Fund does not have any understanding or arrangement to direct any
specific portion of its brokerage to Schroder & Co. or Schroder Securities, and
will not direct brokerage to Schroder & Co. or Schroder Securities in
recognition of research services.

The Fund has paid no brokerage commissions to Schroder & Co. or
Schroder Securities since its inception.

DETERMINATION OF NET ASSET VALUE

The net asset value per share of each class of shares of the Fund is
determined daily as of the close of trading on the New York Stock Exchange
(normally 4:00 p.m., Eastern Time) on each day the Exchange is open for trading.
Any assets or liabilities initially expressed in terms of foreign currencies

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<PAGE>

are translated into U.S. dollars at the prevailing market rates as quoted by one
or more banks or dealers on the afternoon of valuation. The New York Stock
Exchange is normally closed on the following national holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving, and Christmas.

The Trustees have established procedures for the valuation of the
Fund's securities, as follows:

Equity securities listed or traded on a domestic or foreign stock
exchange for which last sales information is regularly reported are valued at
their last reported sales prices on such exchange on that day or, in the absence
of sales that day, at values based on the closing mid-market price, or, if none,
the last sales price on the preceding trading day. (Where the securities are
traded on more than one exchange, they are valued on the exchange on which the
security is primarily traded.) Unlisted securities for which over-the-counter
market quotations are readily available generally are valued at the most
recently reported mid-market prices. Securities that do not have readily
available market quotations are valued at fair value pursuant to procedures
established by the Trustees. Fixed income securities are valued based on
quotations provided by the pricing services approved by the Trustees. Money
market instruments having a remaining maturity of 60 days or less may be valued
at amortized cost unless Schroder believes another valuation is more
appropriate.

Reliable market quotations are not considered to be readily available
for long-term corporate bonds and notes, certain preferred stocks, tax-exempt
securities or certain foreign securities. These investments are stated at fair
value on the basis of valuations furnished by pricing services approved by the
Trustees, which determine valuations for normal, institutional-size trading
units of such securities using methods based on market transactions for
comparable securities and various relationships between securities which are
generally recognized by institutional traders.

If any securities held by the Fund are restricted as to resale,
Schroder will obtain a valuation based on the current bid for the restricted
security from one or more independent dealers or other parties reasonably
familiar with the facts and circumstances of the security. If Schroder is unable
to obtain a fair valuation for a restricted security from an independent dealer
or other independent party, a pricing committee (comprised of certain directors
and officers at Schroder) will determine the bid value of such security. The
valuation procedures applied in any specific instance are likely to vary from
case to case. However, consideration is generally given to the financial
position of the issuer and other fundamental analytical data relating to the
investment and to the nature of the restrictions on disposition of the
securities (including any registration expenses that might be borne by the Trust
in connection with such disposition). In addition, specific factors are also
generally considered, such as the cost of the investment, the market value of
any unrestricted securities of the same class (both at the time of purchase and
at the time of valuation), the size of the holding, the prices of any recent
transactions or offers with respect to such securities, and any available
analysts' reports regarding the issuer.

Generally, trading in certain securities (such as foreign securities)
is substantially completed each day at various times prior to the close of the
New York Stock Exchange. The values of these securities used in determining the
net asset value of the Trust's shares are computed as of such times. Also,
because of the amount of time required to collect and process trading
information as to large numbers of securities issues, the values of certain
securities (such as convertible bonds and U.S. Government Securities) are
determined based on market quotations collected earlier in the day at the latest
practicable time prior to

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<PAGE>

the close of the Exchange. Occasionally, events affecting the value of such
securities may occur between such times and the close of the Exchange which will
not be reflected in the computation of the Trust's net asset value. If events
materially affecting the value of such securities occur during such period, then
these securities will be valued at their fair value, in the manner described
above.

The proceeds received by the Fund for each issue or sale of its shares,
and all income, earnings, profits, and proceeds thereof, subject only to the
rights of creditors, will be specifically allocated to the Fund, and constitute
the underlying assets of the Fund. The underlying assets of the Fund will be
segregated on the Trust's books of account, and will be charged with the
liabilities in respect of the Fund and with a share of the general liabilities
of the Trust. The Fund's assets will be further allocated among its constituent
classes of shares on the Trust's books of account. Expenses with respect to any
two or more Funds or classes may be allocated in proportion to the net asset
values of the respective Funds or classes except where allocations of direct
expenses can otherwise be fairly made to a specific Fund or class.

REDEMPTIONS IN KIND

In consideration of the best interests of the remaining shareholders,
the Trust may pay certain redemption proceeds in whole or in part by a
distribution in kind of securities held by the Fund in lieu of cash. The Trust
will, however, redeem Investor Shares or Advisor Shares of the Fund solely in
cash up to the lesser of $250,000 or 1% of the Fund's net assets during any
90-day period for any one shareholder. The Trust does not expect to redeem
shares in kind under normal circumstances. If your shares are redeemed in kind,
you should expect to incur transaction costs upon the disposition of the
securities received in the distribution.

TAXES

The Fund intends to qualify each year and elect to be taxed as a
regulated investment company under Subchapter M of the United States Internal
Revenue Code of 1986, as amended (the "Code").

As a regulated investment company qualifying to have its tax liability
determined under Subchapter M, the Fund will not be subject to federal income
tax on any of its net investment income or net realized capital gains that are
distributed to shareholders.

In order to qualify as a "regulated investment company," the Fund must,
among other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other dispositions of stock, securities, or foreign currencies, and other income
(including gains from options, futures, or forward contracts) derived with
respect to its business of investing in such stock, securities, or currencies,
and (b) diversify its holdings so that, at the close of each quarter of its
taxable year, (i) at least 50% of the value of its total assets consists of
cash, cash items, U.S. Government Securities, and other securities limited
generally with respect to any one issuer to not more than 5% of the total assets
of the Fund and not more than 10% of the outstanding voting securities of such
issuer, and (ii) not more than 25% of the value of its assets is invested in the
securities of any issuer (other than U.S. Government Securities).

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<PAGE>

If the Fund fails to distribute in a calendar year substantially all of
its ordinary income for such year and substantially all of its capital gain net
income for the one-year period ending October 31 (or later if the Fund is
permitted so to elect and so elects), plus any retained amount from the prior
year, that Fund will be subject to a 4% excise tax on the undistributed amounts.
A dividend paid to shareholders by the Fund in January of a year generally is
deemed to have been paid by the Fund on December 31 of the preceding year, if
the dividend was declared and payable to shareholders of record on a date in
October, November, or December of that preceding year. The Fund intends
generally to make distributions sufficient to avoid imposition of the 4% excise
tax. In order to receive the favorable tax treatment accorded regulated
investment companies and their shareholders, moreover, the Fund must in general
distribute with respect to each taxable year at least 90% of the sum of its
taxable net investment income, its net tax-exempt income, and, the excess, if
any, of net short-term capital gains over net long-term capital losses for such
year.

The Fund's distributions will be taxable to you as ordinary income to
the extent derived from the Fund's investment income and net short-term gains
(that is, net gains from capital assets held for no more than one year).
Distributions designated by the Fund as deriving from net gains on capital
assets held for more than one year will be taxable to you as long-term capital
gains (generally subject to a 20% tax rate), regardless of how long you have
held the shares. Distributions will be taxable to you as described above whether
received in cash or in shares through the reinvestment of distributions. Early
in each year the Trust will notify each shareholder of the amount and tax status
of distributions paid to the shareholder by the Fund for the preceding year.

Upon the disposition of shares of the Fund (whether by sale, exchange,
or redemption), a shareholder will realize a gain or loss. Such gain or loss
will be capital gain or loss if the shares are capital assets in the
shareholder's hands, and will be long-term or short-term generally depending
upon the shareholder's holding period for the shares. Long-term capital gains
will generally be taxed at a federal income tax rate of 20%. Any loss realized
by a shareholder on a disposition of shares held by the shareholder for six
months or less will be treated as a long-term capital loss to the extent of any
distributions of capital gain dividends received by the shareholder with respect
to such shares. In general, any loss realized upon a taxable disposition of
shares will be treated as long-term capital loss if the shares have been held
for more than one year, and otherwise as short-term capital loss. With respect
to investment income and gains received by the Fund from sources outside the
United States, such income and gains may be subject to foreign taxes which are
withheld at the source. The effective rate of foreign taxes in which the Fund
will be subject depends on the specific countries in which its assets will be
invested and the extent of the assets invested in each such country and,
therefore, cannot be determined in advance.

The Fund's ability to use options, futures, and forward contracts and
other hedging techniques, and to engage in certain other transactions, may be
limited by tax considerations. The Fund's transactions in
foreign-currency-denominated debt instruments and its hedging activities will
likely produce a difference between its book income and its taxable income. This
difference may cause a portion of the Fund's distributions of book income to
constitute returns of capital for tax purposes or require the Fund to make
distributions exceeding book income in order to permit the Trust to continue to
qualify, and be taxed under Subchapter M of the Code, as a regulated investment
company. The tax consequences of certain hedging transactions have been modified
by the Taxpayer Relief Act of 1997.

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<PAGE>

Under federal income tax law, a portion of the difference between the
purchase price of zero-coupon securities in which the Fund has invested and
their face value ("original issue discount") is considered to be income to the
Fund each year, even though the Fund will not receive cash interest payments
from these securities. This original issue discount (imputed income) will
comprise a part of the net investment income of the Fund which must be
distributed to shareholders in order to maintain the qualification of the Fund
as a regulated investment company and to avoid federal income tax at the level
of the Fund.

This discussion of the federal income tax and state tax treatment of
the Trust and its shareholders is based on the law as of the date of this SAI.

PRINCIPAL HOLDERS OF SECURITIES

As of June 15, 1999, the Trustees of the Trust and, except as noted
below, the officers of the Trust, as a group owned less than 1% of the
outstanding shares of either class of each Fund of the Trust.

Schroder U.S. Holdings Inc., a Delaware corporation, owned all of the
Fund's outstanding shares as of June 15, 1999. Due to its ownership of all of
the Fund's shares, Schroder U.S. Holdings Inc. may be deemed to control the
Fund.

CUSTODIAN

State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, acts as custodian of the assets of the Fund. The
custodian's responsibilities include safeguarding and controlling the Fund's
cash and securities, handling the receipt and delivery of securities, and
collecting interest and dividends on the Fund's investments. The custodian does
not determine the investment policies of the Fund or decide which securities the
Fund will buy or sell.

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

State Street Bank and Trust Company, Two Heritage Drive, Quincy,
Massachusetts 02171, is the Fund's registrar, transfer agent and dividend
disbursing agent.

INDEPENDENT AUDITORS

PricewaterhouseCoopers LLP, the Trust's independent accountants,
provide audit services, tax return preparation services, and assistance and
consultation in connection with the Trust's various Securities and Exchange
Commission filings. Their address is One Post Office Square, Boston,
Massachusetts 02109.

LEGAL COUNSEL

Ropes & Gray, One International Place, Boston, Massachusetts
02110-2624, serves as counsel to the Trust.

SHAREHOLDER LIABILITY

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<PAGE>

Under Delaware law, shareholders could, under certain circumstances, be
held personally liable for the obligations of the Trust. However, the Trust's
Trust Instrument disclaims shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each agreement,
obligation, or instrument entered into or executed by the Trust or the Trustees.
The Trust's Trust Instrument provides for indemnification out of the Fund's
property for all loss and expense of any shareholder held personally liable for
the obligations of the Fund. Thus the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Fund would be unable to meet its obligations.

FINANCIAL STATEMENTS

The fiscal year end of the Fund is October 31. The Fund's unaudited
semi-annual financial statements are attached as Appendix A.

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<PAGE>

PART C OTHER INFORMATION

Item 23. Exhibits.

(a) Trust Instrument of Registrant Amended and Restated as of March 13, 1998
(see Note 1).

(b) Bylaws of Registrant dated September 8, 1995 (see Note 2).

(c) See the following Articles and Sections in the Trust Instrument filed as
Exhibit (a): Article II, Sections 2.03, 2.04, 2.06, 2.08, 2.09, 2.10, 2.11;
Article III, Section 3.08; Article VII; Article IX; and Article X, Section
10.03.

(d) (1) Investment Advisory Agreement between the Trust and Schroder Capital
Management International Inc. ("SCMI") dated as of September 14, 1998 with
respect to Schroder Greater China Fund and Schroder Cash Reserves Fund (see Note
1).

(2) Investment Advisory Agreement between the Trust and SCMI dated as of
January 9, 1996, with respect to Schroder U.S. Diversified Growth Fund
(see Note 2).

(3) Investment Advisory Agreement between the Trust and SCMI dated as of
January 9, 1996, with respect to Schroder U.S. Smaller Companies Fund, Schroder
Latin America Fund and International Equity Fund (see Note 3).

(4) Investment Advisory Agreement between the Trust and SCMI dated as of
March 15, 1996, with respect to Schroder International Smaller Companies Fund
and Schroder Global Asset Allocation Fund (see Note 3).

(5) Investment Advisory Agreement between the Trust and SCMI dated as of
January 9, 1996, with respect to Schroder Emerging Markets Fund Institutional
Portfolio (see Note 4).

(6) Investment Advisory Agreement between the Trust and SCMI dated as of
March 5, 1997, with respect to Schroder International Bond Fund (see Note 4).

(7) Investment Advisory Agreement between the Trust and SCMI. dated as of
March 5, 1997, with respect to Schroder Micro Cap Fund (see Note 4).

(8) Investment Advisory Agreement between the Trust and SCMI dated as of
November 26, 1996, with respect to Schroder Emerging Markets Fund (see Note 4).

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<PAGE>

(e) Distribution Agreement between the Trust and Schroder Fund Advisors Inc.
dated as of December 15, 1998, with respect to Schroder U.S. Diversified Growth
Fund, Schroder Emerging Markets Fund Institutional Portfolio, Schroder
International Fund, Schroder U.S. Smaller Companies Fund, Schroder International
Smaller Companies Fund, Schroder Emerging Markets Fund, Schroder Cash Reserves
Fund, Schroder International Bond Fund, Schroder Greater China Fund and Schroder
Micro Cap Fund (see Note 5).

(f) Not Applicable.

(g) Custodian Contract between the Trust and State Street Bank and Trust Company
dated as of May 31, 1999, is filed herewith.

(h) (1) Administration Agreement between the Trust and Schroder Fund Advisors
Inc. dated as of November 26, 1996, with respect to Schroder International Fund,
Schroder U.S. Smaller Companies Fund, Schroder Emerging Markets Fund
Institutional Portfolio, Schroder International Smaller Companies Fund, Schroder
Micro Cap Fund, Schroder Emerging Markets Fund, Schroder Cash Reserves Fund,
Schroder International Bond Fund and Schroder Greater China Fund (see Note 1).

(2) Sub-administration Agreement among Schroder Fund Advisors, Inc., the Trust,
Schroder Capital Funds, Schroder Series Trust II and State Street Bank and Trust
Company dated as of June 1, 1999, is filed herewith.

(3) Transfer Agency and Service Agreement between the Trust and State Street
Bank and Trust Company dated as of May 28, 1999, is filed herewith.

(5) Shareholder Service Plan adopted by the Trust with respect to Schroder
Greater China Fund (see Note 6).

(i) (1) Opinion and consent of Smith Katzenstein Furlow LLP as to the legality
of the securities previously registered (see Note 4).

(2) Opinion and consent of Jacobs Persinger & Parker with respect to Schroder
International Fund, Schroder U.S. Equity Fund and Schroder U.S. Smaller
Companies Fund (see Note 7).

(3) Opinion and consent of David I. Goldstein, Esq. as to the legality of the
securities being registered (see Note 8).

(j) Not Applicable.

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<PAGE>

(k) No financial statements were omitted from Item 22.

(l) Not Applicable.

(m) Distribution Plan adopted by Registrant dated as of January 9, 1996 with
respect to Advisor Shares of Schroder U.S. Smaller Companies Fund, Schroder
Latin American Fund, Schroder International Fund, Schroder Emerging Markets Fund
Institutional Portfolio, Schroder International Smaller Companies Fund, Schroder
Micro Cap Fund, Schroder Emerging Markets Fund, Schroder Cash Reserves Fund,
Schroder Greater China Fund, Schroder International Bond Fund and Schroder U.S.
Diversified Growth Fund (see Note 3).

(n) Not Applicable.

(o) Multiclass (Rule 18f-3) Plan adopted by Trust (see Note 9).

Other Exhibits:

Power of Attorney forms pursuant to which this Post-Effective Amendment is
signed.

Power of Attorney from Nancy A. Curtin, David N. Dinkins, Peter E. Guernsey,
Sharon L. Haugh, John I. Howell, Peter S. Knight, Alan Mandel, William L. Means,
Clarence F. Michalis and Hermann C. Schwab is filed herewith.

Notes:

1 Exhibit incorporated by reference as filed on Post-Effective Amendment No. 68
via EDGAR on September 30, 1998, accession number 0001004402-98-000531.

2 Exhibit incorporated by reference as filed on Post-Effective Amendment No. 61
via EDGAR on April 18, 1997, accession number 0000912057-97-013527.

3 Exhibit incorporated by reference as filed on Post-Effective Amendment No. 63
via EDGAR on July 18, 1997, accession number 001004402-97-000035.

4 Exhibit incorporated by reference as filed on Post-Effective Amendment No. 66
via EDGAR on February 27, 1998, accession number 0001004402-98-000149.

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<PAGE>

5 Exhibit incorporated by reference as filed on Post-Effective Amendment No. 70
via EDGAR on December 31, 1998, accession number 0001004402-98- 000679.

6 Exhibit incorporated by reference as filed on Post-Effective Amendment No. 67
via EDGAR on July 17, 1998, accession number 001004402-98-000399.

7 Exhibit incorporated by reference as filed on Post-Effective Amendment No. 54
via EDGAR on October 24, 1996, accession number 0000912057-96-023645.

8 Exhibit incorporated by reference as filed on Post-Effective Amendment No. 69
via EDGAR on November 30, 1998, accession number 0001004402-98-000621.

9 Exhibit incorporated by reference as filed on Post-Effective Amendment No. 65
via EDGAR on January 27, 1998, accession number 0001004402-98-000053.

10 Exhibit incorporated by reference as filed on Post-Effective Amendment No. 62
via EDGAR on June 30, 1997, accession number 0001004402-97-000030.

Item 24. Persons Controlled by Or Under Common Control with Registrant. None.

Item 25. Indemnification. Section 10.02 of the Registrant's Trust Instrument
reads as follows:

"(a) Subject to the exceptions and limitations contained in subsection 10.02(b):
"(i) every person who is, or has been, a Trustee or officer of the Trust
(hereinafter referred to as a "Covered Person") shall be indemnified by the
Trust to the fullest extent permitted by law against liability and against all
expenses reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustee or officer and against amounts
paid or incurred by him in the settlement thereof; "(ii) the words "claim,"
"action," "suit," or "proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including appeals), actual or threatened
while in office or thereafter, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.

"(b) No indemnification shall be provided hereunder to a Covered Person: "(i)
who shall have been adjudicated by a court or body before which the proceeding
was brought: (A) to be liable to the Trust or its Holders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the Covered Person's office; or (B) not to have acted
in good faith in the reasonable belief that Covered Person's action was in the
best interest

C-4
<PAGE>

of the Trust; or "(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the Trustee's or officer's office: (A) by the court
or other body approving the settlement; (B) by at least a majority of those
Trustees who are neither Interested Persons of the Trust nor are parties to the
matter based upon a review of readily available facts (as opposed to a full
trial-type inquiry); or (C) by written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to a full trial-type
inquiry); provided, however, that any Holder may, by appropriate legal
proceedings, challenge any such determination by the Trustees or by independent
counsel.

"(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not be exclusive of
or affect any other rights to which any Covered Person may now or hereafter be
entitled, shall continue as to a person who has ceased to be a Covered Person
and shall inure to the benefit of the heirs, executors and administrators of
such a person. Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than Covered Persons, and other
persons may be entitled by contract or otherwise under law.

"(d) Expenses in connection with the preparation and presentation of a defense
to any claim, action, suit or proceeding of the character described in
Subsection 10.02(a) of this Section 10.02 may be paid by the Trust or Series
from time to time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such amount will be paid
over by him to the Trust or Series if it is ultimately determined that he is not
entitled to indemnification under this Subsection 10.02; provided, however, that
either (i) such Covered Person shall have provided appropriate security for such
undertaking, (ii) the Trust is insured against losses arising out of any such
advance payments or (iii) either a majority of the Trustees who are neither
Interested Persons of the Trust nor parties to the matter, or independent legal
counsel in a written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a trial-type inquiry or full
investigation), that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Section 10.02."

Item 26. Business and Other Connections of Investment Adviser. (a) Schroder
Investment Management North America Inc. The following is a description of any
business, profession, vocation or employment of a substantial nature in which
the investment adviser of the registrant, Schroder Investment Management North
America Inc. ("SIM N.A."), and each director or officer of the investment
adviser is or has been, at any time during the past two years, engaged for his
or her own account or in the capacity of director, officer or employee. The
address of each company listed, unless otherwise noted, is 787 Seventh Avenue,
34th Floor, New York, NY 10019. Schroder Investment Management North America
Limited ("Schroder Ltd."), a United Kingdom

C-5
<PAGE>

affiliate of SIM N.A., provides investment management services to international
clients. Schroder Capital Management International Inc. ("SCMI") served as
investment adviser of the registrant prior to July 1, 1999. SCMI merged into SIM
N.A. which, effective as of July 1, 1999, became the investment adviser of the
registrant.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
NAME TITLE BUSINESS CONNECTIONS
- -------------------------------------------------------------------------------
<S> <C> <C>
David M. Salisbury Director SIM N.A.
- -------------------------------------------------------------------------------
Chief Executive, Director Schroder Ltd.*
- -------------------------------------------------------------------------------
Director Schroders plc.*
- -------------------------------------------------------------------------------
Trustee and Officer Schroder Series Trust II
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
John A. Troiano Director, Chief Executive SIM N.A.
- -------------------------------------------------------------------------------
Chief Executive, Director Schroder Ltd.*
- -------------------------------------------------------------------------------
Officer Certain open end
management investment
companies for which SIM
N.A. and/or its
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Richard R. Foulkes Director, Deputy Chairman SIM N.A.
- -------------------------------------------------------------------------------
Deputy Chairman Schroder Ltd.*
- -------------------------------------------------------------------------------
Officer Certain open end
management investment
companies for which SIM
N.A. and/or its
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Michael M. Perelstein Director, Senior SIM N.A.
Investment Officer
- -------------------------------------------------------------------------------
Senior Vice President, Schroders Ltd.*
Director
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Sharon L. Haugh Director, Chairman SIM N.A.
- -------------------------------------------------------------------------------
Director, Chairman Schroder Fund Advisors
Inc.
- -------------------------------------------------------------------------------
Director Schroder Ltd.*
- -------------------------------------------------------------------------------
Trustee Certain open end
management investment
companies for which SIM
N.A. and/or its
- -------------------------------------------------------------------------------

C-6
<PAGE>

<CAPTION>
- -------------------------------------------------------------------------------
NAME TITLE BUSINESS CONNECTIONS
- -------------------------------------------------------------------------------
<S> <C> <C>
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Gavin D. L. Ralston Managing Director SIM N.A.
- -------------------------------------------------------------------------------
Director Schroder Ltd.*
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Robert G. Davy Director, Executive Vice SIM N.A.
President
- -------------------------------------------------------------------------------
Director Schroder Ltd.*
- -------------------------------------------------------------------------------
Officer Certain open end
management investment
companies for which SIM
N.A. and/or its
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Mark J. Smith Director, Executive Vice SIM N.A.
President
- -------------------------------------------------------------------------------
Senior Vice President, Schroder Ltd.*
Director
- -------------------------------------------------------------------------------
Director, Senior Vice Schroder Fund Advisors
President Inc.
- -------------------------------------------------------------------------------
Officer Certain open end
management investment
companies for which SIM
N.A. and/or its
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Jane P. Lucas Senior Vice President SIM N.A.
- -------------------------------------------------------------------------------
Officer Certain open end
management investment
companies for which SIM
N.A. and/or its
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
David R. Robertson Group Vice President SIM N.A.
- -------------------------------------------------------------------------------
Senior Vice President Schroder Fund Advisors
Inc.
- -------------------------------------------------------------------------------
Director of Institutional Oppenheimer Funds, Inc.
- -------------------------------------------------------------------------------

C-7
<PAGE>

<CAPTION>
- -------------------------------------------------------------------------------
NAME TITLE BUSINESS CONNECTIONS
- -------------------------------------------------------------------------------
<S> <C> <C>
Business resigned 2/98
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Ellen B. Sullivan Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Catherine A. Mazza Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------
Executive Vice President, Schroder Fund Advisors
Director Inc.
- -------------------------------------------------------------------------------
Officer Certain open end
management investment
companies for which SIM
N.A. and/or its
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Heather F. Crighton Senior Vice President, SIM N.A.
Director
- -------------------------------------------------------------------------------
First Vice President, Schroder Ltd.*
Director
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Ira Unschuld Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------
Officer Certain open end
management investment
companies for which SIM
N.A. and/or its
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Paul M. Morris Director, Managing SIM N.A.
Director
- -------------------------------------------------------------------------------
Principal, Senior Weiss, Peck & Greer LLC
Portfolio Manager resigned 12/96
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Susan B. Kenneally Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------
First Vice President, Schroder Ltd.*
Director
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Nancy A. Curtin Director, Managing SIM N.A.
Director
- -------------------------------------------------------------------------------
Vice Chairman Schroder Fund Advisors
Inc.
- -------------------------------------------------------------------------------

C-8
<PAGE>

<CAPTION>
- -------------------------------------------------------------------------------
NAME TITLE BUSINESS CONNECTIONS
- -------------------------------------------------------------------------------
<S> <C> <C>
Louise Croset Director, Executive Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Tappan K. Datta Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Donald H. M. Farquharson Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
David J. Ridgway Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Johannes C. van Heusde Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Philip J. Hardy Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Guy N.B. Varney Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Reza Vishkai Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Andrew R. Barker Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
William H. Barnes Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Margaret H. Douglas- Director, Senior Vice SIM N.A.
Hamilton President, Secretary
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Thomas Melendez Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

C-9
<PAGE>

<CAPTION>
- -------------------------------------------------------------------------------
NAME TITLE BUSINESS CONNECTIONS
- -------------------------------------------------------------------------------
<S> <C> <C>
Robert C. Michele Director, Managing SIM N.A.
Director
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Connie Moak Mazur Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Nancy B. Tooke Director, Executive Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Dawn M. Vroegop Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Frances P. Selby Director, Senior Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Ash Williams Jr. Director, Executive Vice SIM N.A.
President
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Tony Ellingham Internal Audit Officer SIM N.A.
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
T. Jeremy Willoughby Compliance Officer SIM N.A.
- -------------------------------------------------------------------------------
Barbara Brooke Manning Compliance Officer, First SIM N.A.
Vice President
- -------------------------------------------------------------------------------
First Vice President Schroder Fund Advisors
- -------------------------------------------------------------------------------
Abdallah H. Nauphal Senior Vice President SIM N.A.
- -------------------------------------------------------------------------------
</TABLE>

*Schroder Ltd. and Schroders plc. are located at 31 Gresham St., London EC2V
7QA, United Kingdom.

(b) Schroder Investment Management International Ltd. The following is a
description of any business, profession, vocation or employment of a substantial
nature in which the investment subadviser of Schroder International Smaller
Companies Portfolio, Schroder Investment Management International Ltd.
("SIMIL"), and each director or officer of the investment subadviser is or has
been, at any time during the past two years, engaged for his or her own account
or in the capacity of director, officer or employee. The address of each company
listed

C-10
<PAGE>

below is set forth in the note following the table. Schroder Investment
Management North America Limited ("Schroder Ltd."), a United Kingdom affiliate
of SIM N.A., provides investment management services to international clients.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
NAME TITLE BUSINESS CONNECTIONS*
- -------------------------------------------------------------------------------
<S> <C> <C>
- -------------------------------------------------------------------------------
Hugh Westrope Bolland Director SIMIL
- -------------------------------------------------------------------------------
Director Schroders (C.I.) Limited
- -------------------------------------------------------------------------------
Director Schroder Investment
Management (Hong Kong)
- -------------------------------------------------------------------------------
Director Schroder Properties
Limited
- -------------------------------------------------------------------------------
Director Schroder Personal
Investment Management
- -------------------------------------------------------------------------------
Director, Chief Executive Schroder Investment
Officer Management Limited
- -------------------------------------------------------------------------------
Chairman Schroder Investment
Management (Australasia)
Limited
- -------------------------------------------------------------------------------
Chairman Schroder Investment
Management (UK) Limited
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Jennifer A. Bonathan Director SIMIL
- -------------------------------------------------------------------------------
First Vice President, Schroder Ltd.
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Nigel J. Burnham Director SIMIL
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Robert G. Davy Director SIMIL
- -------------------------------------------------------------------------------
Executive Vice President, SIM N.A.
Director
- -------------------------------------------------------------------------------
Director Schroder Ltd.
- -------------------------------------------------------------------------------
Officer Certain open end
management investment
companies for which SIM
N.A. and/or its
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Denis H. Clough Director SIMIL
- -------------------------------------------------------------------------------
Director Schroder Investment
- -------------------------------------------------------------------------------

C-11
<PAGE>

<CAPTION>
- -------------------------------------------------------------------------------
NAME TITLE BUSINESS CONNECTIONS*
- -------------------------------------------------------------------------------
<S> <C> <C>
Management (UK) Limited
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Richard R. Foulkes Deputy Chairman, Director SIMIL
- -------------------------------------------------------------------------------
Deputy Chairman, Director SIM N.A.
- -------------------------------------------------------------------------------
Deputy Chairman Schroder Ltd.
- -------------------------------------------------------------------------------
Officer Certain open end
management investment
companies for which SIM
N.A. and/or its
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Madeleine S. Hall Director SIMIL
- -------------------------------------------------------------------------------
Director Schroder Investment
Management (UK) Limited
- -------------------------------------------------------------------------------
Assistant Director Schroder Investment
Management Limited
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Jeremy A. Hill Chairman, Director SIMIL
- -------------------------------------------------------------------------------
Commissioner PT Schroder Investment
Management Indonesia
- -------------------------------------------------------------------------------
Chairman Schroder Investment
Management (Hong Kong)
Limited
- -------------------------------------------------------------------------------
Chairman Schroder Investment
Management (Japan)
Limited
- -------------------------------------------------------------------------------
Chairman Korea Schroder Fund
Management Limited
- -------------------------------------------------------------------------------
Director Schroder Investment
Management Limited
- -------------------------------------------------------------------------------
Director/Chairman Certain open end
management investment
companies for which SIM
N.A. and/or its
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Ian Johnson Secretary SIMIL
- -------------------------------------------------------------------------------
Assistant Secretary J. Henry Schroder & Co.,
- -------------------------------------------------------------------------------

C-12
<PAGE>

<CAPTION>
- -------------------------------------------------------------------------------
NAME TITLE BUSINESS CONNECTIONS*
- -------------------------------------------------------------------------------
<S> <C> <C>
Limited
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Jan Anthony Kingzett Director SIMIL
- -------------------------------------------------------------------------------
Deputy Chairman Schroder Investment
Management (Japan)
Limited
- -------------------------------------------------------------------------------
Chairman Schroder Investment
Trust Management Limited
- -------------------------------------------------------------------------------
Director Schroder Investment
Management (Singapore)
Limited
- -------------------------------------------------------------------------------
Director Schroder Investment
Management Limited
- -------------------------------------------------------------------------------
Director Certain open end
management investment
companies for which SIM
N.A. and/or its
affiliates provide
investment services
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Maggie Lay Wah Lee Director Schroder Investment
Management (Singapore)
Limited
- -------------------------------------------------------------------------------
Director SIMIL
- -------------------------------------------------------------------------------
Director Schroder Investment
Management Limited
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Richard A. Mountford Chief Executive Officer, SIMIL
Chief Operating Officer,
Director
- -------------------------------------------------------------------------------
Director, Deputy Chairman Schroder Investment
Management (Singapore)
Limited
- -------------------------------------------------------------------------------
Director Schroder Investment
Management (UK) Limited
- -------------------------------------------------------------------------------
Director Schroder Investment
Management Limited
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Nicola Ralston Deputy Chairman, Director SIMIL
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------

C-13
<PAGE>

<CAPTION>
- -------------------------------------------------------------------------------
NAME TITLE BUSINESS CONNECTIONS*
- -------------------------------------------------------------------------------
<S> <C> <C>
Nicola Jane Richards Director SIMIL
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Division Director Schroder Investment
Management Limited
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Christopher N. Rodgers Director SIMIL
- -------------------------------------------------------------------------------
Director Schroder Investment
Management Limited
- -------------------------------------------------------------------------------
Director Schroder Investment
Management (UK) Limited
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
David M. Salisbury Director SIMIL
- -------------------------------------------------------------------------------
Director SIM N.A.
- -------------------------------------------------------------------------------
Chief Executive, Director Schroder Ltd.
- -------------------------------------------------------------------------------
Director Schroders plc.
- -------------------------------------------------------------------------------
Trustee and Officer Schroder Series Trust II
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Daniele Serruya Director SIMIL
- -------------------------------------------------------------------------------
Assistant Director, Schroder Investment
Manager Management Limited
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Olaf N. Siedler Director SIMIL
- -------------------------------------------------------------------------------
Director Schroder Investment
Management (UK) Limited
- -------------------------------------------------------------------------------
Investment Manager Schroder Investment
Management Limited
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Hugh M. Stewart Director SIMIL
- -------------------------------------------------------------------------------
Director Schroder Investment
Management (UK) Limited
- -------------------------------------------------------------------------------
Investment Manager Schroder Investment
Management Limited
- -------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
Thomas J. Willoughby Chief Compliance Officer SIMIL
- -------------------------------------------------------------------------------
Director Schroder Unit Trust
Limited
- -------------------------------------------------------------------------------
</TABLE>

Each of Schroder Investment Management Limited, Schroder Investment Management
(UK) Limited, Schroder Investment Management (Europe), Korea Schroder Fund
Management

C-14
<PAGE>

Limited and Schroder Personal Investment Management, are located at 33 Gutter
Lane, London EC2V 8AS United Kingdom. Schroder Investment Management (Singapore)
Limited is located at #47-01 OCBC Centre, Singapore. Schroder Investment
Management (Hong Kong) Limited is located at 8 Connaight Place, Hong Kong.
Schroder Investment Management (Australasia) Limited is located at 225 George
Place, Sydney Australia. PT Schroder Investment Management Indonesia is located
at Lippo Plaza Bldg., 25 Jakarta, 12820. Schroders (C.I.) Limited is located at
St. Peter Port, Guernsey, Channel Islands, GY1 3UF. Schroder Properties Limited
is located at Senator House, 85 Queen Victoria Street, London EC4V 4EJ, United
Kingdom. Schroder Fund Advisors Inc. and SIM N.A. are located at 787 Seventh
Avenue, 34th Floor, New York, NY 10019. Schroder Ltd. and Schroders plc. are
located at 31 Gresham St., London EC2V 7QA, United Kingdom.

Item 27. Principal Underwriters.

(a) Schroder Fund Advisors Inc., the Registrant's principal underwriter, also
serves as principal underwriter for Schroder Series Trust and Schroder Series
Trust II.

(b) Following is information with respect to each officer and director of
Schroder Fund Advisors Inc., the Distributor of the shares of Schroder Emerging
Markets Fund Institutional Portfolio, Schroder International Fund, Schroder U.S.
Smaller Companies Fund, Schroder International Smaller Companies Fund, Schroder
U.S. Diversified Growth Fund, Schroder Emerging Markets Fund, Schroder Micro Cap
Fund and Schroder Greater China Fund (each, a series of the Registrant):

<TABLE>
<CAPTION>
NAME POSITION WITH UNDERWRITER POSITION WITH REGISTRANT
- -------------------------------------------------------------------------------
<S> <C> <C>
- -------------------------------------------------------------------------------
Nancy A. Curtin Vice Chairman and Director Chairman and Trustee
- -------------------------------------------------------------------------------
Catherine A. Mazza Executive Vice President Vice President
and Director
- -------------------------------------------------------------------------------
Mark J. Smith Senior Vice President and None
Director
- -------------------------------------------------------------------------------
Sharon L. Haugh Chairman and Director Trustee
- -------------------------------------------------------------------------------
Fergal Cassidy Treasurer and Chief None
Financial Officer
- -------------------------------------------------------------------------------
Alexandra Poe General Counsel, Senior President
Vice President,
Secretary and Director
- -------------------------------------------------------------------------------
Alan Mandel Senior Vice President Treasurer and Secretary
and Director
- -------------------------------------------------------------------------------

C-15
<PAGE>

<CAPTION>
NAME POSITION WITH UNDERWRITER POSITION WITH REGISTRANT
- -------------------------------------------------------------------------------
<S> <C> <C>
- -------------------------------------------------------------------------------
James Gray Senior Vice President None
- -------------------------------------------------------------------------------
David Robertson Senior Vice President None
and Director
- -------------------------------------------------------------------------------
</TABLE>

Business address for each is 787 Seventh Avenue, New York, New York 10019 except
for Nancy A. Curtin and Mark J. Smith, whose business address is 31 Gresham St.,
London EC2V 7QA, United Kingdom.

Item 28. Location of Accounts and Records The accounts, books and other
documents required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the Rules thereunder are maintained at the offices of SIM N.A.
(investment management records) and Schroder Fund Advisors Inc. (administrator
and distributor records), 787 Seventh Avenue, New York, New York 10019, except
that certain items are maintained at State Street Bank and Trust Company, 2
Avenue de Lafayette, Boston, Massachusetts 02111 and 2 Heritage Drive, N.
Quincy, Massachusetts 02171.

Item 29. Management Services. None.

Item 30. Undertakings. Registrant undertakes to furnish upon request and without
charge to each person to whom a prospectus is delivered a copy of Registrant's
latest annual report to shareholders relating to the fund to which the
prospectus relates.

C-16
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this registration statement
under rule 485(b) under the Securities Act of 1933, as amended, and has duly
caused this post-effective amendment number 74 to the Registrant's registration
statement to be signed on its behalf by the undersigned, duly authorized, in the
City of New York, and State of New York on July 12, 1999.

Schroder Capital Funds (Delaware)
By: /s/ Catherine A. Mazza
Catherine A. Mazza
Vice President

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment to the Registration Statement has been signed below by the following
persons on July 12, 1999.

Principal Executive Officer* Nancy A. Curtin, Chairman

By: /s/ Carin F. Muhlbaum
Carin F. Muhlbaum, Attorney-in-Fact*

Principal Financial Officer /s/ Alan Mandel
Alan Mandel, Treasurer

A majority of the Trustees:

* Nancy A. Curtin, Trustee
* David N. Dinkins, Trustee
* Peter E. Guernsey, Trustee
* Sharon L. Haugh, Trustee
* John I. Howell, Trustee
* Peter S. Knight, Trustee
* William L. Means, Trustee
* Clarence F. Michalis, Trustee
* Hermann C. Schwab, Trustee

By: /s/ Carin F. Muhlbaum
Carin F. Muhlbaum Attorney-in-Fact*

* Pursuant to powers of attorney filed as Other Exhibits to this registration
statement.

C-17
<PAGE>

EXHIBIT INDEX

Exhibit
Number Description
- ------ -----------
(g) Custodian Contract

(h)(2) Sub-administration Agreement

(h)(3) Transfer Agency and Service Agreement

Other Exhibits:

Power of Attorney from Nancy A. Curtin, David N.
Dinkins, Peter E. Guernsey, Sharon L. Haugh,
John I. Howell, Peter S. Knight, Alan Mandel,
William L. Means, Clarence F. Michalis and Hermann C. Schwab

<PAGE>

CUSTODIAN CONTRACT

This Contract between Schroder Capital Funds (Delaware), a business
trust organized and existing under the laws of the State of Delaware, having its
principal place of business at 787 Seventh Avenue, 34th Floor, New York, New
York 10019 (the "Fund"), and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts, 02110 (the "Custodian"),

WITNESSETH:

WHEREAS, the Fund is authorized to issue shares ("Interests") in
separate series of beneficial interests, with each such series representing
interests in a separate portfolio of securities and other assets; and

WHEREAS, the Fund currently offers shares in eight (8) series, Schroder
International Fund, Schroder Emerging Markets Fund, Schroder International
Smaller Companies Fund, Schroder U.S. Diversified Growth Fund, Schroder U.S.
Smaller Companies Fund, Schroder Micro Cap Fund, Schroder Greater China Fund,
and Schroder Emerging Markets Fund Institutional Portfolio (such series together
with each other series subsequently established by the Fund and made subject to
this Contract in accordance with Article 18, being herein referred to as
"Portfolios");

NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:

1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT

The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Fund's Trust
Instrument (as further amended or restated, the "Trust Instrument"). The Fund on
behalf of the Portfolios agrees to deliver to the Custodian all securities and
cash of the Portfolios, and all payments of income, payments of principal or
capital distributions received by it with respect to all securities owned by the
Portfolios from time to time, and the cash consideration received by it for such
new Interests in the Portfolios as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of a Portfolio held or
received by the Portfolio and not delivered to the Custodian. With respect to
uncertificated shares (the "Underlying Shares") of registered investment
companies in the same "group of investment companies" (as defined in Section
12(d)(1)(G)(ii) of the Investment Company Act of 1940, as amended, and the rules
and regulations thereunder (the "1940 Act")) as the Fund (the "Schroder Funds"),
the holding of

<PAGE>

confirmation statements that identify the Underlying Shares as being recorded in
the Custodian's name on behalf of the Portfolios will be deemed custody for
purposes hereof.

Upon receipt of "Proper Instructions" (within the meaning of Article
6), the Custodian shall on behalf of the applicable Portfolio(s) from time to
time employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Trustees of the Fund on
behalf of the applicable Portfolio(s), and provided that the Custodian shall
have no more or less responsibility or liability to the Fund on account of any
actions or omissions of any sub-custodian so employed than any such
sub-custodian has to the Custodian. The Custodian may employ as sub-custodian
for the Fund's foreign securities on behalf of the applicable Portfolio(s) the
foreign banking institutions and foreign securities depositories designated in
Schedule A and B hereto, but only in accordance with the provisions of Articles
3 and 4.

2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY
THE CUSTODIAN IN THE UNITED STATES

2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of each Portfolio all non-cash property, to be held by
it in the United States including all domestic securities owned by such
Portfolio, other than (a) securities maintained in a U.S. Securities
System as defined in Section 2.9; (b) commercial paper of an issuer for
which State Street Bank and Trust Company acts as issuing and paying
agent ("Direct Paper") which is deposited and/or maintained in the
Direct Paper System of the Custodian (the "Direct Paper System")
pursuant to Section 2.10; and (c) the Underlying Shares owned by the
Fund which are maintained pursuant to Section 2.11 in an account with
Boston Financial Data Services, Inc. or such other entity which may
from time to time act as a transfer agent for the Schroder Funds and
with respect to which the Custodian is provided with Proper
Instructions (the "Schroder Transfer Agent").

2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
domestic securities owned by a Portfolio held by the Custodian or in a
U.S. Securities System account of the Custodian or in the Custodian's
Direct Paper book entry system account ("Direct Paper System Account")
or in an account with the Schroder Transfer Agent only upon receipt of
Proper Instructions from the Fund on behalf of the applicable
Portfolio, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:

1) Upon sale of such securities for the account of the Portfolio
and receipt of payment therefor;

2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the
Portfolio;

3) In the case of a sale effected through a U.S. Securities
System, in accordance with the provisions of Section 2.9
hereof;

2
<PAGE>

4) To the depository agent in connection with tender or other
similar offers for securities held by the Portfolio;

5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
provided that, in any such case, the cash or other
consideration is to be delivered to the Custodian;

6) To the issuer thereof, or its agent, for transfer into the
name of the Portfolio or into the name of any nominee or
nominees of the Custodian or into the name or nominee name of
any agent appointed pursuant to Section 2.8 or into the name
or nominee name of any sub-custodian appointed pursuant to
Article 1, in each case to the extent permitted by Section
2.3; or for exchange for a different number of bonds,
certificates or other evidence representing the same aggregate
face amount or number of units; PROVIDED that, in any such
case, the new securities are to be delivered to the Custodian;

7) Upon the sale of such securities for the account of the
Portfolio, to the broker or its clearing agent, against a
receipt, for examination in accordance with "street delivery"
custom; PROVIDED that in any such case, the Custodian shall
have no responsibility or liability for any loss arising from
the delivery of such securities prior to receiving payment for
such securities except as may arise from the Custodian's own
negligence or willful misconduct;

8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement;
PROVIDED that, in any such case, the new securities and cash,
if any, are to be delivered to the Custodian;

9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; PROVIDED that,
in any such case, the new securities and cash, if any, are to
be delivered to the Custodian;

10) For delivery in connection with any loans of securities made
by the Portfolio, BUT ONLY against receipt of adequate
collateral as agreed upon from time to time by the Custodian
and the Fund on behalf of the Portfolio, which may be in the
form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in
connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the
Custodian, absent its negligence, misfeasance or misconduct,
will not be held liable or responsible for the delivery of
securities owned by the Portfolio prior to the receipt of such
collateral in accordance with standard market practice;

3
<PAGE>

11) For delivery as security in connection with any borrowings by
the Fund on behalf of the Portfolio requiring a pledge of
assets by the Fund on behalf of the Portfolio, BUT ONLY
against receipt of amounts borrowed;

12) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of The
National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or organizations,
regarding escrow or other similar arrangements in connection
with transactions by the Portfolio of the Fund;

13) For delivery in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the
Custodian, and a Futures Commission Merchant registered under
the Commodity Exchange Act, relating to compliance with the
rules of the Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or organizations,
regarding account deposits in connection with transactions by
a Portfolio of the Fund;

14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such Transfer
Agent or to the holders of Interests in connection with
distributions in kind, as may be described from time to time
in the currently effective prospectuses and statements of
additional information for the Fund, related to the relevant
Portfolios (together, the "Prospectus"), in satisfaction of
requests by holders of Interests for repurchase or redemption;

15) In the case of a sale processed through the Schroder Transfer
Agent of Underlying Shares, in accordance with Section 2.11
hereof; and

16) For any other proper corporate purpose, BUT ONLY upon receipt
of, in addition to Proper Instructions from the Fund on behalf
of the applicable Portfolio, a certified copy of a resolution
of the Board of Trustees or of the Executive Committee signed
by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities of the
Portfolio to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to
whom delivery of such securities shall be made.

2.3 REGISTRATION OF SECURITIES. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, UNLESS the Fund has authorized
in writing the appointment of a nominee to be used in common with other
registered investment companies or other investment pools or accounts
having the same investment adviser as the

4
<PAGE>

Portfolio, or has authorized in writing that such securities may be
registered in the name or nominee name of any agent appointed pursuant
to Section 2.8 or in the name or nominee name of any sub-custodian
appointed pursuant to Article 1. All securities accepted by the
Custodian on behalf of any Portfolio under the terms of this Contract
shall be in "street name" or other good delivery form. If, however, the
Fund directs the Custodian to maintain securities in "street name", the
Custodian shall utilize its best efforts only to timely collect income
due the Fund on such securities and to notify the Fund on a best
efforts basis only of relevant corporate actions including, without
limitation, pendency of calls, maturities, and tender or exchange
offers.

2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio
of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Contract, and shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Portfolio, other than cash maintained by
the Portfolio in a bank account established and used in accordance with
Rule 17f-3 under the 1940 Act. Funds held by the Custodian for a
Portfolio may be deposited by it to its credit as Custodian in the
Banking Department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or desirable;
PROVIDED, however, that every such bank or trust company shall be
qualified to act as a custodian under the 1940 Act and that each such
bank or trust company and the funds to be deposited with each such bank
or trust company shall on behalf of each applicable Portfolio be
approved by vote of a majority of the Board of Trustees of the Fund.
Such funds shall be deposited by the Custodian in its capacity as
Custodian and shall be withdrawable by the Custodian only in that
capacity.

2.5 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which
each Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on
the date of payment by the issuer, such securities are held by the
Custodian or its agent and shall credit such income, as collected, to
such Portfolio's custodian account. Without limiting the generality of
the foregoing, the Custodian shall detach and present for payment all
coupons and other income items requiring presentation as and when they
become due and shall collect interest when due on securities held
hereunder. Income due each Portfolio on securities loaned pursuant to
the provisions of Section 2.2 (10) shall be the responsibility of the
Fund. The Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or data
as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Portfolio is
properly entitled.

2.6 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions from the
Fund on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of a Portfolio in the following cases only:

5
<PAGE>

1) Upon the purchase of domestic securities, options, futures
contracts or options on futures contracts for the account of
the Portfolio, but only (a) against the delivery of such
securities or evidence of title to such options, futures
contracts or options on futures contracts to the Custodian (or
any bank, banking firm or trust company doing business in the
United States or abroad which is qualified under the 1940 Act
to act us custodian and has been designated by the Custodian
as its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a
U.S. Securities System, in accordance with the conditions set
forth in Section 2.9 hereof; (c) in the case of a purchase of
Underlying Shares, in accordance with the conditions set forth
in Section 2.11 hereof; (d) in the case of a purchase
involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.10; (e) in the case of
repurchase agreements entered into between the Fund on behalf
of the Portfolio and the Custodian, or another bank, or a
broker-dealer which is a member of the NASD, (i) against
delivery of the securities either in certificate form or
through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Portfolio
of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase such
securities from the Portfolio or (f) for transfer to a time
deposit account of the Fund in any bank, whether domestic or
foreign; such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank pursuant
to Proper Instructions from the Fund as defined in Article 6;

2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section
2.2 hereof;

3) For the redemption or repurchase of Interests issued by the
Portfolio as set forth in Article 5 hereof;

4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;

5) For the payment of any dividends on Interests in the
Portfolio declared pursuant to the governing documents of
the Fund;

6) For payment of the amount of dividends received in respect of
securities sold short;

7) For any other proper purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the
Portfolio, a certified copy of a resolution of the Board of
Trustees or of the Executive Committee of the Fund signed by
an officer of the Fund and certified by its Secretary or an
Assistant Secretary,

6
<PAGE>

specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or
persons to whom such payment is to be made.

2.7 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of domestic securities for the
account of a Portfolio is made by the Custodian in advance of receipt
of the securities purchased in the absence of specific written
instructions from the Fund on behalf of such Portfolio to so pay in
advance, the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by
the Custodian.

2.8 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which itself is qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions of this
Article 2 as the Custodian may from time to time direct; PROVIDED,
however, that the appointment of any such agent shall not relieve the
Custodian of its responsibilities or liabilities hereunder and the
Custodian shall be as responsible for the acts of such agent as if the
Custodian performed them itself. The Schroder Transfer Agent shall not
be deemed an agent or subcustodian of the Custodian for purposes of
this Section 2.8 or any other provision of this Contract.

2.9 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Exchange Act which acts as a securities depository,
or in the book-entry system authorized by the U.S. Department of the
Treasury and certain federal agencies (each a "U.S. Securities System")
in accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to the
following provisions:

1) The Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are
represented in an account of the Custodian in the U.S.
Securities System ("U.S. Securities System Account") which
shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for
customers;

2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a U.S. Securities System
shall identify by book-entry those securities belonging to the
Portfolio;

3) The Custodian shall pay for securities purchased for the
account of the Portfolio upon (i) receipt of advice from the
U.S. Securities System that such securities have been
transferred to the Account, and (ii) the making of an entry on
the records of the Custodian to reflect such payment and
transfer for the account of the Portfolio. The Custodian shall
transfer securities sold for the account of the Portfolio upon
(i)

7
<PAGE>

receipt of advice from the U.S. Securities System that payment
for such securities has been transferred to the Account, and
(ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the
Portfolio. Copies of all advices from the U.S. Securities
System of transfers of securities for the account of the
Portfolio shall identify the Portfolio, be maintained for the
Portfolio by the Custodian and be provided to the Fund at its
request. Upon request, the Custodian shall furnish the Fund on
behalf of the Portfolio confirmation of each transfer to or
from the account of the Portfolio in the form of a written
advice or notice and shall furnish to the Fund on behalf of
the Portfolio copies of daily transaction sheets reflecting
each day's transactions in the U.S. Securities System for the
account of the Portfolio;

4) The Custodian shall provide the Fund for the Portfolio with
any report obtained by the Custodian on the U.S. Securities
System's accounting system, internal accounting control and
procedures for safeguarding securities deposited in the U.S.
Securities System;

5) The Custodian shall have received from the Fund on behalf of
the Portfolio the initial or annual certificate, as the case
may be, required by Article 15 hereof;

6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting
from use of the U.S. Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees, or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the U.S.
Securities System; at the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with
respect to any claim against the U.S. Securities System or any
other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the
Portfolio has not been made whole for any such loss or damage.

2.10 FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. The Custodian
may deposit and/or maintain securities owned by a Portfolio in the
Direct Paper System of the Custodian subject to the following
provisions:

1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper Instructions
from the Fund on behalf of the Portfolio;

2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are represented in
an account of the Custodian in the Direct Paper System
("Direct Paper System Account") which shall not include any
assets of the Custodian other than assets held as a fiduciary,
custodian or otherwise for customers;

8
<PAGE>

3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System
shall identify by book-entry those securities belonging to the
Portfolio;

4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on the
records of the Custodian to reflect such payment and transfer
of securities to the account of the Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio upon the making of an entry on the records of the
Custodian to reflect such transfer and receipt of payment for
the account of the Portfolio;

5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the account
of the Portfolio, in the form of a written advice or notice,
of Direct Paper on the next business day following such
transfer and shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting each
day's transaction in the Direct Paper System for the account
of the Portfolio;

6) The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal accounting
control and procedures for safeguarding securities deposited
in the Direct Paper System as the Fund may reasonably request
from time to time.

2.11 DEPOSIT OF FUND ASSETS WITH THE SCHRODER TRANSFER AGENT. The Custodian
shall verify that Underlying Shares are deposited and/or maintained in
an account or accounts maintained with the Schroder Transfer Agent. The
Schroder Transfer Agent shall be deemed to be acting as if it is a
"securities depository" for purposes of Rule 17f-4 under the 1940 Act.
The Fund hereby directs the Custodian to deposit and/or maintain such
securities with the Schroder Transfer Agent, subject to the following
provisions:

1) The Custodian shall keep Underlying Shares owned by a
Portfolio with the Schroder Transfer Agent provided that such
securities are maintained in an account or accounts on the
books and records of the Schroder Transfer Agent in the name
of the Custodian as custodian for the Portfolio and the
account includes only assets held in the name of the Custodian
for its customers.

2) The records of the Custodian with respect to Underlying Shares
which are maintained with the Schroder Transfer Agent shall
identify by book-entry those Underlying Shares belonging to
each Portfolio;

3) The Custodian shall pay for Underlying Shares purchased for
the account of a Portfolio upon (i) receipt of advice from the
Portfolio's investment adviser that such Underlying Shares
have been purchased and will be transferred to the account of
the Custodian, on behalf of the Portfolio, on the books and
records of the Schroder Transfer Agent, and (ii) the making of
an entry on the records of the Custodian to

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<PAGE>

reflect such payment and transfer for the account of the
Portfolio. The Custodian shall receive confirmation from the
Schroder Transfer Agent of the purchase of such securities and
the transfer of such securities to the Custodian's account
with the Schroder Transfer Agent only after such payment is
made. The Custodian shall transfer Underlying Shares redeemed
for the account of a Portfolio (i) upon receipt of an advice
from the Portfolio's investment adviser that such securities
have been redeemed and that payment for such securities will
be transferred to the Custodian and (ii) the making of an
entry on the records of the Custodian to reflect such transfer
and payment for the account of the Portfolio. The Custodian
will receive confirmation from the Schroder Transfer Agent of
the redemption of such securities and payment therefor only
after such securities are redeemed. Copies of all advices from
the Portfolio's investment adviser of purchases and sales of
Underlying Shares for the account of the Portfolio shall
identify the Portfolio, be maintained for the Portfolio by the
Custodian, and be provided to the investment adviser at its
request. The Custodian shall promptly send to the Fund reports
it receives from the Schroder Transfer Agent on its system of
internal accounting control;

4) The Custodian shall be not be liable to the Fund or any
Portfolio for any loss or damage to the Fund or any Portfolio
resulting from maintenance of Underlying Shares with Schroder
Transfer Agent except for losses resulting directly from the
negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees.

2.12 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on
behalf of each such Portfolio, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.9 hereof, (i) in
accordance with the provisions of any agreement among the Fund on
behalf of the Portfolio, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures
commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding
escrow or other similar arrangements in connection with transactions by
the Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the
Portfolio or commodity futures contracts or options thereon purchased,
sold or written by the Portfolio, (iii) for the purpose of compliance
by the Portfolio with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies, and (iv) for
other proper corporate purposes, BUT ONLY, in the case of clause (iv),
upon receipt of, in addition to Proper Instructions from the Fund on
behalf of the applicable Portfolio, a certified copy of a resolution of
the Board of Trustees or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose

10
<PAGE>

or purposes of such segregated account and declaring such purposes to
be proper corporate purposes.

2.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to domestic securities of each Portfolio held by
it and in connection with transfers of securities.

2.14 PROXIES. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder
of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies,
without indication of the manner in which such proxies are to be voted,
and shall promptly deliver to the Portfolio such proxies, all proxy
soliciting materials and all notices relating to such securities.

2.15 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund for each Portfolio all written information (including, without
limitation, pendency of calls and maturities of domestic securities and
expirations of rights in connection therewith and notices of exercise
of call and put options written by the Fund on behalf of the Portfolio
and the maturity of futures contracts purchased or sold by the
Portfolio) received by the Custodian from issuers of the securities
being held for the Portfolio. With respect to tender or exchange offers
or any other similar transaction, the Custodian shall transmit promptly
to the Portfolio all written information received by the Custodian from
issuers of the securities whose tender or exchange is sought and from
the party (or his agents) making the tender or exchange or similar
offer. If the Portfolio desires to take action with respect to any
tender offer, exchange offer or any other similar transaction, the
Portfolio shall notify the Custodian of the action the Portfolio
desires the Custodian to take at least three business days prior to the
date on which the Custodian is to take such action.

3. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER OF THE PORTFOLIOS

3.1 DEFINITIONS. The following capitalized terms shall have the indicated
meanings:

"Country Risk" means all factors reasonably related to the systemic
risk of holding Foreign Assets in a particular country including, but
not limited to, such country's political environment; economic and
financial infrastructure (including any Mandatory Securities
Depositories operating in the country); prevailing or developing
custody and settlement practices; and laws and regulations applicable
to the safekeeping and recovery of Foreign Assets held in custody in
that country.

"Eligible Foreign Custodian" has the meaning set forth in section
(a)(1) of Rule 17f-5 under the 1940 Act, including a majority-owned
direct or indirect subsidiary of a U.S. Bank (as defined in Rule
17f-5), a bank holding company meeting the requirements of an Eligible
Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of

11
<PAGE>

the SEC), or a foreign branch of a Bank (as defined in Section 2(a)(5)
of the 1940 Act) meeting the requirements of a custodian under Section
17(f) of the 1940 Act, except that the term does not include Mandatory
Securities Depositories.

"Foreign Assets" means any of the Portfolios' investments (including
foreign currencies) for which the primary market is outside the United
States and such cash and cash equivalents as are reasonably necessary
to effect the Portfolios' transactions in such investments.

"Foreign Custody Manager" has the meaning set forth in section (a)(2)
of Rule 17f-5.

"Mandatory Securities Depository" means a foreign securities depository
or clearing agency that, either as a legal or practical matter, must be
used if the Fund, on the Portfolios' behalf, determines to place
Foreign Assets in a country outside the United States (i) because
required by law or regulation; (ii) because securities cannot be
withdrawn from such foreign securities depository or clearing agency;
or (iii) because maintaining or effecting trades in securities outside
the foreign securities depository or clearing agency is not consistent
with applicable prevailing or developing custodial or market practices.

3.2 DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER. The Fund, in
accordance with a resolution adopted by its Board of Trustees, hereby
delegates to the Custodian with respect to the Portfolios, subject to
Section (b) of Rule 17f-5, the responsibilities set forth in this
Article 3 with respect to Foreign Assets of the Portfolios held outside
the United States, and the Custodian hereby accepts such delegation, as
Foreign Custody Manager with respect to the Portfolios.

3.3 COUNTRIES COVERED. The Foreign Custody Manager shall be responsible for
performing the delegated responsibilities defined below only with
respect to the countries and custody arrangements for each such country
listed on Schedule A to this Contract, which list of countries may be
amended from time to time by the Fund with the agreement of the Foreign
Custody Manager. The Foreign Custody Manager shall list on Schedule A
the Eligible Foreign Custodians selected by the Foreign Custody Manager
to maintain the assets of the Portfolios in each such country, which
list of Eligible Foreign Custodians may be amended from time to time in
the sole discretion of the Foreign Custody Manager. Mandatory
Securities Depositories and the countries in which each is located are
listed on Schedule B to this Contract, which Schedule B may be amended
from time to time by the Foreign Custody Manager by adding or removing
Mandatory Securities Depositories. The Foreign Custody Manager will
provide to the Fund amended versions of Schedules A and B in accordance
with Section 3.7 hereof.

Upon the receipt by the Foreign Custody Manager of Proper Instructions
to open an account or to place or maintain Foreign Assets in a country
listed on Schedule A, and the fulfillment by the Fund on behalf of the
Portfolios of the applicable account opening requirements for such
country, the Foreign Custody Manager shall be deemed to have

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<PAGE>

been delegated by the Board on behalf of the Portfolios responsibility
as Foreign Custody Manager with respect to that country and to have
accepted such delegation. Following the receipt of Proper Instructions
directing the Foreign Custody Manager to close the account of a
Portfolio with the Eligible Foreign Custodian selected by the Foreign
Custody Manager in a designated country, the delegation by the Board of
Trustees on behalf of the Portfolios to the Custodian as Foreign
Custody Manager for that country shall be deemed to have been withdrawn
and the Custodian shall immediately cease to be the Foreign Custody
Manager of the Portfolios with respect to that country.

The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written
notice to the Fund. Sixty days (or such longer period as to which the
parties agree in writing) after receipt of any such notice by the Fund,
the Custodian shall have no further responsibility as Foreign Custody
Manager to the Fund with respect to the country as to which the
Custodian's acceptance of delegation is withdrawn.

3.4 SCOPE OF DELEGATED RESPONSIBILITIES.

3.4.1. SELECTION OF ELIGIBLE FOREIGN CUSTODIANS. Subject to the
provisions of this Article 3, the Portfolios' Foreign Custody
Manager may place and maintain Foreign Assets in the care of
the Eligible Foreign Custodian selected by the Foreign Custody
Manager in each country listed on Schedule A, as amended from
time to time. In performing its delegated responsibilities as
Foreign Custody Manager to place or maintain Foreign Assets
with an Eligible Foreign Custodian, the Foreign Custody
Manager shall determine that the Foreign Assets will be
subject to reasonable care, based on the standards applicable
to custodians in the relevant market, after considering all
factors relevant to the safekeeping of such assets, including,
without limitation, the factors specified in Rule 17f-5(c)(1),
as amended from time to time.

3.4.2. CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS. The Foreign
Custody Manager shall ensure that a written contract (or rules
or established practices or procedures in the case of an
Eligible Foreign Custodian that is a foreign securities
depository or clearing agency) is or are in place governing
the foreign custody arrangements with each Eligible Foreign
Custodian selected by the Foreign Custody Manager and will
determine that such contract, rules or established practices
or procedures provide reasonable care for the Portfolio's
Foreign Assets based on the standards specified in Rule
17f-5(c)(1) and that the written contract satisfies all
requirements of Rule 17f-5(c)(2), each as amended from time to
time.

3.4.3. MONITORING. In each case in which the Foreign Custody Manager
maintains Foreign Assets with an Eligible Foreign Custodian
selected by the Foreign Custody Manager, the Foreign Custody
Manager shall establish a system to monitor the
appropriateness of (i) maintaining the Foreign Assets with
such Eligible Foreign Custodian under Rule 17f-5(c)(1) and
(ii) the contract governing

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<PAGE>

the custody arrangements established by the Foreign Custody
Manager with the Eligible Foreign Custodian (or the rules or
established practices and procedures in the case of an
Eligible Foreign Custodian selected by the Foreign Custody
Manager which is a foreign securities depository or clearing
agency that is not a Mandatory Securities Depository) under
17f-5(c)(2). In the event the Foreign Custody Manager
determines that the custody arrangements with an Eligible
Foreign Custodian it has selected are no longer appropriate
or no longer meet the requirements of Rule 17f-5, the Foreign
Custody Manager shall notify the Fund's Board of Trustees in
accordance with Section 3.7 hereunder and assist the
Portfolios in withdrawing their assets from such Eligible
Foreign Custodian as soon as reasonably practicable.

3.5 GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY. For purposes of
this Article 3, the Fund's Board of Trustees, or at its delegation the
Fund's investment adviser, shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and
maintaining the Foreign Assets in each country for which the Custodian
is serving as Foreign Custody Manager of the Portfolios. The Fund, on
behalf of the Portfolios, and the Fund's Board of Trustees, or at its
delegation the funds investment adviser, shall be deemed to be
monitoring on a continuing basis such Country Risk to the extent that
they consider necessary or appropriate. The Fund and the Custodian each
expressly acknowledge that the Foreign Custody Manager shall not be
delegated any responsibilities under this Article 3 with respect to
Mandatory Securities Depositories.

3.6 STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF THE PORTFOLIOS. In
performing the responsibilities delegated to it, the Foreign Custody
Manager agrees to exercise reasonable care, prudence and diligence such
as a person having responsibility for the safekeeping of assets of
management investment companies registered under the 1940 Act would
exercise.

3.7 REPORTING REQUIREMENTS. The Foreign Custody Manager shall report the
withdrawal of the Foreign Assets from an Eligible Foreign Custodian and
the placement of such Foreign Assets with another Eligible Foreign
Custodian by providing to the Board amended Schedules A or B at the end
of the calendar quarter in which an amendment to either Schedule has
occurred or at such other times as the Board deems reasonable or
appropriate. The Foreign Custody Manager shall make written reports
notifying the Board of any other material change in the foreign custody
arrangements of the Portfolios described in this Article 3 as soon as
practicable after the occurrence of the material change.

3.8 OTHER REPRESENTATIONS WITH RESPECT TO RULE 17F-5. The Foreign Custody
Manager represents to the Fund that it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5. The Fund represents to the Custodian that
the Fund's Board of Trustees has determined that it is reasonable for
the Board to rely on the Custodian to perform the responsibilities
delegated pursuant to this Contract to the Custodian as the Foreign
Custody Manager of the Portfolios.

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<PAGE>

3.9 EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN CUSTODY
MANAGER. The Board's delegation to the Custodian as Foreign Custody
Manager of the Portfolios shall be effective as of the date of
execution of this Contract and shall remain in effect until terminated
at any time, without penalty, by written notice from the terminating
party to the non-terminating party, or upon the termination of this
Contract in accordance with its terms by either party, if earlier.
Except as expressly provided elsewhere in this Contract, termination
will become effective no less than thirty (30) days after receipt by
the non-terminating party of such notice. The provisions of Section 3.3
hereof shall govern the delegation to and termination of the Custodian
as Foreign Custody Manager of the Portfolios with respect to designated
countries.

4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS HELD
OUTSIDE OF THE UNITED STATES

4.1 DEFINITIONS. Capitalized terms in this Article 4 shall have the
following meanings:

"Foreign Securities System" means either a clearing agency or a
securities depository listed on Schedule A hereto or a Mandatory
Securities Depository listed on Schedule B hereto. Foreign Securities
Systems and U.S. Securities Systems are collectively referred to herein
as the "Securities Systems"

"Foreign Sub-Custodian" means a foreign banking institution serving as
an Eligible Foreign Custodian.

4.2 HOLDING SECURITIES. The Custodian shall identify on its books as
belonging to each Portfolio the respective foreign securities held by
each Foreign Sub-Custodian or Foreign Securities System. The Custodian
may hold foreign securities for all of its customers, including each
Portfolio, with any Foreign Sub-Custodian in an account that is
identified as belonging to the Custodian for the benefit of its
customers, PROVIDED HOWEVER, that (i) the records of the Custodian with
respect to the foreign securities of each Portfolio which are
maintained in such account shall identify those securities as belonging
to such Portfolio and (ii), to the extent permitted and customary in
the market in which the account is maintained, the Custodian shall
require that securities so held by the Foreign Sub-Custodian be held
separately from any assets of such Foreign Sub-Custodian or of other
customers of such Foreign Sub-Custodian. The books and records of the
Custodian shall at all times indicate the beneficial ownership of the
applicable Portfolio.

4.3 FOREIGN SECURITIES SYSTEMS. Foreign Assets shall be maintained in a
Foreign Securities System in a designated country only through
arrangements implemented by the Foreign Sub-Custodian in such country
pursuant to the terms of this Contract. Where possible, such
arrangements shall include entry into agreements containing the
provisions referenced in Section 3.4.2 hereof.

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<PAGE>

4.4 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.

4.4.1. DELIVERY OF FOREIGN SECURITIES. The Custodian or a Foreign
Sub-Custodian shall release and deliver foreign securities of
the Portfolios held by such Foreign Sub-Custodian, or in a
Foreign Securities System account, only upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:

(i) upon the sale of such foreign securities for the
Portfolios in accordance with commercially reasonable
market practice in the country where such foreign
securities are held or traded, including, without
limitation: (A) delivery against expectation of
receiving later payment; or (B) in the case of a sale
effected through a Foreign Securities System in
accordance with the rules governing the operation of
the Foreign Securities System;

(ii) in connection with any repurchase agreement related
to foreign securities;

(iii) to the depository agent in connection with tender or
other similar offers for foreign securities of the
Portfolios;

(iv) to the issuer thereof or its agent when such foreign
securities are called, redeemed, retired or otherwise
become payable;

(v) to the issuer thereof, or its agent, for transfer
into the name of the Custodian (or the name of the
respective Foreign Sub-Custodian or of any nominee of
the Custodian or such Foreign Sub-Custodian) or for
exchange for a different number of bonds,
certificates or other evidence representing the same
aggregate face amount or number of units;

(vi) to brokers, clearing banks or other clearing
agents for examination or trade execution in
accordance with market custom; PROVIDED that in any
such case the Foreign Sub-Custodian shall have no
responsibility or liability for any loss arising from
the delivery of such securities prior to receiving
payment for such securities except as may arise from
the Foreign Sub-Custodian's own negligence or willful
misconduct;

(vii) for exchange or conversion pursuant to any plan
of merger, consolidation, recapitalization,
reorganization or readjustment of the securities of
the issuer of such securities, or pursuant to
provisions for conversion contained in such
securities, or pursuant to any deposit agreement;

(viii) in the case of warrants, rights or similar
foreign securities, the surrender thereof in the
exercise of such warrants, rights or similar
securities or the

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<PAGE>

surrender of interim receipts or temporary securities
for definitive securities;

(ix) for delivery as security in connection with any
borrowing by a Portfolio requiring a pledge of assets
by such Portfolio;

(x) in connection with trading in options and futures
contracts, including delivery as original margin and
variation margin;

(xi) in connection with the lending of foreign securities;
and

(xii) for any other proper purpose, BUT ONLY upon receipt
of Proper Instructions specifying the foreign
securities to be delivered, setting forth the purpose
for which such delivery is to be made, declaring such
purpose to be a proper Fund purpose, and naming the
person or persons to whom delivery of such securities
shall be made.

4.4.2. PAYMENT OF PORTFOLIO MONIES. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, the Custodian shall pay out, or
direct the respective Foreign Sub-Custodian or the respective
Foreign Securities System to pay out, monies of a Portfolio in
the following cases only:

(i) upon the purchase of foreign securities for the
Portfolio, unless otherwise directed by Proper
Instructions, by (A) delivering money to the seller
thereof or to a dealer therefor (or an agent for such
seller or dealer) against expectation of receiving
later delivery of such foreign securities; or (B) in
the case of a purchase effected through a Foreign
Securities System, in accordance with the rules
governing the operation of such Foreign Securities
System;

(ii) in connection with the conversion, exchange or
surrender of foreign securities of the Portfolio;

(iii) for the payment of any expense or liability of
the Portfolio, including but not limited to the
following payments: interest, taxes, investment
advisory fees, transfer agency fees, fees under this
Contract, legal fees, accounting fees, and other
operating expenses;

(iv) for the purchase or sale of foreign exchange or
foreign exchange contracts for the Portfolio,
including transactions executed with or through the
Custodian or its Foreign Sub-Custodians;

(v) in connection with trading in options and futures
contracts, including delivery as original margin and
variation margin;

17
<PAGE>

(vi) in connection with the borrowing or lending of
foreign securities;

(vii) for payment of part or all of the dividends received
in respect of securities sold short; and

(viii) for any other proper purpose, BUT ONLY upon receipt
of Proper Instructions specifying the amount of such
payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be
a proper Fund purpose, and naming the person or
persons to whom such payment is to be made.

4.4.3. MARKET CONDITIONS. Notwithstanding any provision of this
Contract to the contrary, settlement and payment for Foreign
Assets received for the account of the Portfolios and delivery
of Foreign Assets maintained for the account of the Portfolios
may be effected in accordance with the customary established
securities trading or processing practices and procedures in
the jurisdiction or market in which the transaction occurs,
including, without limitation, delivering Foreign Assets to
the purchaser thereof or to a dealer therefor (or an agent for
such purchaser or dealer) with the expectation of receiving
later payment for such Foreign Assets from such purchaser or
dealer.

The Custodian shall provide to the Fund's Board of Trustees
the information with respect to custody and settlement
practices in countries in which the Custodian employs a
Foreign Sub-Custodian, including without limitation
information relating to Foreign Securities Systems, described
on Schedule C hereto at the time or times set forth on such
Schedule. The Custodian may revise Schedule C from time to
time, provided that no such revision shall result in the Board
of Trustees being provided with substantively less information
than had been previously provided hereunder.

4.5 REGISTRATION OF FOREIGN SECURITIES. The Portfolio's foreign securities
maintained in the custody of a Foreign Sub-Custodian or Foreign
Securities System (other than bearer securities) shall be registered in
the name of the applicable Portfolio or in the name of the Custodian or
in the name of any Foreign Sub-Custodian or in the name of any nominee
of the foregoing (provided, however, that such registration indicates
such securities as having been held for the benefit of customers, and
not, in any event, for the benefit of a Foreign Sub-Custodian, and the
Fund on behalf of such Portfolio agrees to hold any such nominee
harmless from any liability as a holder of record of such foreign
securities absent such nominee's negligence, misfeasance, bad faith or
breach of obligation. The Custodian or a Foreign Sub-Custodian shall
not be obligated to accept securities on behalf of a Portfolio under
the terms of this Contract unless the form of such securities and the
manner in which they are delivered are in accordance with reasonable
market practice.

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<PAGE>

4.6 BANK ACCOUNTS. The Custodian shall identify on its books as belonging
to the Fund cash (including cash denominated in foreign currencies)
deposited with the Custodian. Where the Custodian is unable to
maintain, or market practice does not facilitate the maintenance of,
cash on the books of the Custodian, a bank account or bank accounts
opened and maintained outside the United States on behalf of a
Portfolio with a Foreign Sub-Custodian shall be subject only to draft
or order by the Custodian or such Foreign Sub-Custodian, acting
pursuant to the terms of this Contract to hold cash received by or from
or for the account of the Portfolio.

4.7 COLLECTION OF INCOME. The Custodian shall use reasonable commercial
efforts to collect all income and other payments with respect to the
Foreign Assets held hereunder to which the Portfolios shall be entitled
and shall credit such income, as collected, to the applicable
Portfolio. In the event that extraordinary measures are required to
collect such income, the Fund and the Custodian shall consult as to
such measures and as to the compensation and expenses of the Custodian
relating to such measures.

4.8 SHAREHOLDER RIGHTS. With respect to the foreign securities held
pursuant to this Contract, the Custodian will use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder
rights, subject always to the laws, regulations and practical
constraints that may exist in the country where such securities are
issued. The Fund acknowledges that local conditions, including lack of
regulation, onerous procedural obligations, lack of notice and other
factors may have the effect of severely limiting the ability of the
Fund to exercise shareholder rights.

4.9 COMMUNICATIONS RELATING TO FOREIGN SECURITIES. The Custodian shall
transmit promptly to the Fund written information (including, without
limitation, pendency of calls and maturities of foreign securities and
expirations of rights in connection therewith) received by the
Custodian via the Foreign Sub-Custodians from issuers of the foreign
securities being held for the account of the Portfolios. With respect
to tender or exchange offers, the Custodian shall transmit promptly to
the Fund written information so received by the Custodian from issuers
of the foreign securities whose tender or exchange is sought or from
the party (or its agents) making the tender or exchange offer. Absent
the Custodian's negligence, misfeasance or misconduct, the Custodian
shall not be liable for any untimely exercise of any tender, exchange
or other right or power in connection with foreign securities or other
property of the Portfolios at any time held by it unless (i) the
Custodian or the respective Foreign Sub-Custodian is in actual
possession of such foreign securities or property and (ii) the
Custodian receives Proper Instructions with regard to the exercise of
any such right or power, and both (i) and (ii) occur at least three
business days prior to the date on which the Custodian is to take
action to exercise such right or power.

4.10 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which
the Custodian employs a Foreign Sub-Custodian shall specify, to the
extent possible in accordance with that jurisdiction's legal
nomenclature, that the Foreign Sub-Custodian will exercise reasonable
care in the performance of its duties and, to the extent possible, to
indemnify,

19
<PAGE>

and hold harmless, the Custodian and each Portfolio from and against
any loss, damage, cost, expense, liability or claim arising out of or
in connection with the Foreign Sub-Custodian's performance of such
obligations. At the Fund's election, the Portfolios shall be entitled
to be subrogated to the rights of the Custodian with respect to any
claims against a Foreign Sub-Custodian as a consequence of any such
loss, damage, cost, expense, liability or claim if and to the extent
that the Fund and any applicable Portfolios have not been made whole
for any such loss, damage, cost, expense, liability or claim.

4.11 TAX LAW. The Custodian shall be responsible to use reasonable
professional efforts to assist each Portfolio with respect to any claim
for exemption or refund under the tax law of jurisdictions in which the
Portfolio has invested. The Custodian and each Portfolio shall consult
and cooperate to facilitate the appropriate administration of tax
matters connected with the income and securities of each Portfolio to
which this Contract relates. The Custodian will be entitled to rely
without separate duty of inquiry on any representation or information
relating to tax status that it is supplied by a Portfolio.

4.12 CONFLICT. If the Custodian is delegated the responsibilities of Foreign
Custody Manager pursuant to the terms of Article 3 hereof, in the event
of any conflict between the provisions of Article 3 and 4 hereof, the
provisions of Article 3 shall prevail.

5. PAYMENTS FOR SALES, REPURCHASES, REDEMPTIONS OR WITHDRAWALS OF
INTERESTS IN THE FUND

The Custodian shall receive from the distributor, or placement agent
for the Interests or from the Transfer Agent of the Fund and deposit into the
account of the appropriate Portfolio such payments as are received for Interests
in that Portfolio issued or sold from time to time by the Fund. The Custodian
will provide timely notification to the Fund on behalf of each such Portfolio
and the Transfer Agent of any receipt by it of payments for Interests in such
Portfolio.

From such funds as may be available for the purpose but subject to the
limitations of the Trust Instrument and the Bylaws of the Fund and any
applicable votes of the Board of Trustees of the Fund pursuant thereto, the
Custodian shall, upon receipt of instructions from the Transfer Agent, make
funds available for payment to holders of Interests which have delivered to the
Transfer Agent a request for redemption, repurchase or withdrawal of all or a
portion of their Interest(s). In connection with the redemption, repurchase or
withdrawal of all or a portion of the Interest(s) in a Portfolio, the Custodian
is authorized upon receipt of instructions from the Transfer Agent to wire funds
to or through a commercial bank designated by the redeeming holders of
Interests.

6. PROPER INSTRUCTIONS

Proper Instructions as used throughout this Contract means a writing
signed or initialed by one or more person or persons as the Board of Trustees of
the Fund shall have from time to time authorized. Each such writing shall set
forth the specific transaction or type of transaction involved, including a
specific statement of the purpose for which such action is requested. Oral
instructions will be considered Proper Instructions if the Custodian reasonably
believes them to

20
<PAGE>

have been given by a person authorized to give Proper Instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing (but the failure to provide such confirmation shall not
effect the validity of an oral instruction). Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Board of Trustees and the Custodian are satisfied that
procedures are in place that afford adequate safeguards for the Portfolios'
assets. For purposes of this Section, Proper Instructions shall include
instructions received by the Custodian pursuant to any three-party agreement
which requires a segregated asset account in accordance with Section 2.12.

7. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY

The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:

1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Contract, PROVIDED that all such payments
shall be accounted for to the Fund on behalf of the Portfolio;

2) surrender securities in temporary form for securities in
definitive form;

3) endorse for collection, in the name of the Portfolio, checks,
drafts and other negotiable instruments; and

4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property
of the Portfolio except as otherwise directed by the Board of
Trustees of the Fund.

8. EVIDENCE OF AUTHORITY

The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper reasonably
believed by it to be genuine and to have been properly executed by or on behalf
of the Fund. The Custodian may receive and accept a certified copy of a vote of
the Board of Trustees of the Fund as conclusive evidence (a) of the authority of
any person to act in accordance with such vote or (b) of any determination or of
any action by the Board of Trustees pursuant to the Trust Instrument as
described in such vote, and such vote may be considered as in full force and
effect until receipt by the Custodian of written notice to the contrary.

9. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
CALCULATION OF NET ASSET VALUE AND NET INCOME

The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of Trustees of the Fund to keep
the books of account of each Portfolio and/or compute the net asset value per
Interest of the outstanding Interests in each Portfolio or, if directed in
writing to do so by the Fund on behalf of the Portfolio, shall itself keep

21
<PAGE>

such books of account and/or compute such net asset value per Interest. If so
directed, the Custodian shall also calculate daily the net income of the
Portfolio as described in the Fund's Prospectus related to such Portfolio and
shall advise the Fund and the Transfer Agent daily of the total amounts of such
net income and, if instructed in writing by an officer of the Fund to do so,
shall advise the Transfer Agent periodically of the division of such net income
among its various components. The Fund acknowledges and agrees that, with
respect to investments maintained with the Schroder Transfer Agent, the Schroder
Transfer Agent is the sole source of information on the number of Underlying
Shares held by it on behalf of a Portfolio and that the Custodian has the right
to reasonably rely on holdings information furnished by the Schroder Transfer
Agent to the Custodian in performing its duties under this Contract, including
without limitation, the duties set forth in this Article 9 and in Article 10
hereof; PROVIDED, however, that the Custodian shall be obligated to reconcile
information as to purchases and sales of Underlying Shares contained in trade
instructions and confirmations received by the Custodian and to report promptly
any discrepancies to the Schroder Transfer Agent. The calculations of the net
asset value per Interest and the daily income of each Portfolio shall be made by
the Custodian at the time or times described from time to time in the Fund's
Prospectus related to such Portfolio.

10. RECORDS

The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract in
such a manner as will meet the Fund's obligations under Section 31 of the 1940
Act, with particular attention to Rules 31a-1, 31a-2, and 31a-3 thereunder. All
such records shall be the property of the Fund and shall at all times during the
regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Fund and agents of the
Securities and Exchange Commission. The Custodian shall, at the Fund's request,
supply the Fund with a tabulation of securities owned by each Portfolio and held
by the Custodian and shall, when requested to do so by the Fund and for such
compensation as shall be agreed upon between the Fund and the Custodian, include
certificate numbers in such tabulations.

11. OPINION OF FUND'S INDEPENDENT ACCOUNTANT

The Custodian shall take all reasonable action, as the Fund on behalf
of each applicable Portfolio may from time to time request, to obtain from year
to year favorable opinions from the Fund's independent accountants with respect
to its activities hereunder including, without limitation, in connection with
the preparation of the Fund's Form N-1A, and Form N-SAR, or other annual reports
to the Securities and Exchange Commission and with respect to any other
requirements of such Commission.

12. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS

The Custodian shall provide the Fund, on behalf of each of the
Portfolios at such times as the Fund may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, futures contracts and
options on futures contracts, including securities deposited and/or maintained
in a U.S. Securities

22
<PAGE>

System, relating to the services provided by the Custodian under this Contract;
such reports shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.

13. COMPENSATION OF CUSTODIAN

The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund on behalf of each applicable Portfolio and the Custodian.

14. RESPONSIBILITY OF CUSTODIAN

So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence in carrying out
the provisions of this Contract. The Custodian shall be entitled to rely on and
may act upon advice of counsel (who may be counsel for the Fund) on all matters,
and shall be without liability for any action reasonably taken or omitted
pursuant to such advice. The Custodian shall be without liability to the Fund
and the Portfolios for any loss, liability, claim or expense to the extent that
it results from or is caused by a Country Risk.

Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or agent
of the Custodian, the Custodian shall be without liability to the Fund for any
loss, liability, claim or expense resulting from or caused by: (i) events or
circumstances beyond the reasonable control of the Custodian or any
sub-custodian or Securities System or any agent or nominee of any of the
foregoing, including, without limitation, nationalization or expropriation,
imposition of currency controls or restrictions, the interruption, suspension or
restriction of trading on or the closure of any securities market, power or
other mechanical or technological failures or interruptions, computer viruses or
communications disruptions, acts of war or terrorism, riots, revolutions, work
stoppages, natural disasters or other similar events or acts; (ii) errors by the
Fund or any investment adviser of the Fund in its instructions to the Custodian
provided such instructions have been in accordance with this Contract; (iii) the
insolvency of or acts or omissions by a Securities System; (iv) any delay or
failure of any broker, agent or intermediary, central bank or other commercially
prevalent payment or clearing system to deliver to the Custodian's sub-custodian
or agent securities purchased or in the remittance or payment made in connection
with securities sold; (v) delays or inability to perform its duties due to any
disorder in market infrastructure with respect to any particular security or
Securities System; and (vi) any provision of any present or future law or
regulation or order of the United States of

23
<PAGE>

America, or any state thereof, or any other country, or political subdivision
thereof or of any court of competent jurisdiction.

The Custodian shall not be liable to the Fund for any loss resulting
from: (i) the insolvency of any Foreign Sub-Custodian (as defined in Article 4
hereof) which is not a branch or an affiliate of the Custodian; or (ii) any act
of any Foreign Sub-Custodian, except where such loss results from an error or
omission by the Foreign Sub-Custodian or the failure by the Sub-Custodian to use
reasonable care in the performance of its duties based on the standards
applicable to custodians in the relevant market, or from the fraud, willful
default or negligence (measured in accordance with the standards prevailing in
the relevant market) of such Foreign Sub-Custodian in the provision of custodial
services by it.

If the Fund on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment of money
other than cash held by the Custodian on behalf of the Fund pursuant to this
Contract or which action may, in the opinion of the Custodian, result in the
Custodian or its nominee assigned to the Fund or the Portfolio being liable for
the payment of money other than cash held by the Custodian on behalf of the Fund
pursuant to this Contract or incurring liability of some other form, the Fund on
behalf of the Portfolio, as a prerequisite to requiring the Custodian to take
such action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.

If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities other than cash or securities held by the
Custodian on behalf of the Fund pursuant to this Contract for any purpose for
the benefit of a Portfolio (including but not limited to securities settlements,
foreign exchange contracts and assumed settlement) or in the event that the
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the applicable Portfolio shall be security
therefor and should the Fund fail to repay the Custodian promptly, the Custodian
shall be entitled to utilize available cash and to dispose of such Portfolio's
assets to the extent necessary to obtain reimbursement.

In no event shall the Custodian be liable for indirect, special or
consequential damages.

15. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT

This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect, unless
expressly provided otherwise in this Contract, not sooner than thirty (30) days
after the date of such delivery or mailing; PROVIDED, however that the Custodian
shall not with respect to a Portfolio act under Section 2.9 hereof in the
absence of receipt of a certificate of the Secretary or an Assistant Secretary
that the Board of Trustees of the Fund has approved the initial use of a
particular U.S. Securities System by such Portfolio or any changes thereto, and
that the Custodian shall not with respect to a

24
<PAGE>

Portfolio act under Section 2.10 hereof in the absence of receipt of a
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has approved the initial use of the Direct Paper System by such
Portfolio or any changes thereto; PROVIDED FURTHER, however, that the Fund shall
not amend or terminate this Contract in contravention of any applicable federal
or state regulations, or any provision of the Fund's Trust Instrument, and
further provided, that the Fund on behalf of one or more of the Portfolios may
at any time by action of its Board of Trustees (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the Comptroller of
the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.

Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
reasonable costs, expenses and disbursements pursuant to this Contract.

16. SUCCESSOR CUSTODIAN

If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a U.S. Securities System or at the Schroder Transfer Agent.

If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.

In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the 1940 Act, doing business in Boston,
Massachusetts or New York, New York, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $25,000,000, all securities, funds and other properties held by
the Custodian on behalf of each applicable Portfolio and all instruments held by
the Custodian relative thereto and all other property held by it under this
Contract on behalf of each applicable Portfolio and to transfer to an account of
such successor custodian all of the securities of each such Portfolio held in
any U.S. Securities System or at the Schroder Transfer Agent. Thereafter, such
bank or trust company shall be the successor of the Custodian under this
Contract.

In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the

25
<PAGE>

Custodian shall be entitled to fair compensation for its services (at a rate not
greater than the rate of compensation in effect immediately prior to
termination) during such period as the Custodian retains possession of such
securities, funds and other properties and the provisions of this Contract
relating to the duties and obligations of the Custodian shall remain in full
force and effect.

17. INTERPRETIVE AND ADDITIONAL PROVISIONS

In connection with the operation of this Contract, the Custodian and
the Fund on behalf of each of the Portfolios, may from time to time agree on
such provisions interpretive of or in addition to the provisions of this
Contract as may in their joint opinion be consistent with the general tenor of
this Contract. Any such interpretive or additional provisions shall be in a
writing signed by both parties and shall be annexed hereto, PROVIDED that no
such interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Trust Instrument of the
Fund. No interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Contract.

18. ADDITIONAL PORTFOLIOS

In the event that the Fund establishes one or more series of Interests
in addition to Schroder International Fund, Schroder Emerging Markets Fund,
Schroder International Smaller Companies Fund, Schroder U.S. Diversified Growth
Fund, Schroder U.S. Smaller Companies Fund, Schroder Micro Cap Fund, Schroder
Greater China Fund, and Schroder Emerging Markets Fund Institutional Portfolio
with respect to which it desires to have the Custodian render services as
custodian under the terms hereof, it shall so notify the Custodian in writing,
and if the Custodian agrees in writing to provide such services, such series of
Interests shall become a Portfolio hereunder.

19. MASSACHUSETTS LAW TO APPLY

This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.

20. PRIOR CONTRACTS

This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.

21. REPRODUCTION OF DOCUMENTS

This Contract and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the

26
<PAGE>

regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

22. YEAR 2000

Custodian will take reasonable steps to ensure that its products (and
those of its third-party suppliers) reflect the available state of the art
technology to offer products that are Year 2000 compliant, including, but not
limited to, century recognition of dates, calculations that correctly compute
same century and multi- century formulas and date values, and interface values
that reflect the date issues arising between now and the next one hundred years.
If any changes are required, Custodian will make the changes to its products at
no cost to the Fund and in a commercially reasonable time frame and will require
third-party suppliers to do likewise.

23. SHAREHOLDER COMMUNICATIONS ELECTION

Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.

YES [ ] The Custodian is authorized to release the Fund's name,
address, and share positions.

NO [ X ] The Custodian is not authorized to release the Fund's name,
address, and share positions.

24. LIMITATION OF INTERESTHOLDER AND TRUSTEE LIABILITY

The Trustees and officers of the Fund and the Interest holders of the
Portfolios shall not be liable for any obligations of the Fund or of the
Portfolios under this Contract, and the Custodian agrees that, in asserting any
rights or claims under this Contract, it shall look only to the assets and
property of the Fund or the Portfolio(s) to which the Custodian's rights or
claims relate in settlement of such rights or claims, and not to the Trustees or
officers of the Fund or to the Interest holders of any Portfolio.

27
<PAGE>

IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 31st day of May, 1999.

ATTEST SCHRODER CAPITAL FUNDS (DELAWARE)

By
- --------------------------- ------------------------------
Name: Name:
Title: Title:

ATTEST STATE STREET BANK AND TRUST COMPANY

By
- --------------------------- ---------------------------------
Marc L. Parsons Ronald E. Logue
Associate Counsel Vice Chairman

<PAGE>

SUB-ADMINISTRATION AGREEMENT

Agreement dated as of June 1, 1999, among Schroder Fund
Advisors Inc. (the "Administrator"), Schroder Capital Funds, Schroder Capital
Funds (Delaware) and Schroder Series Trust II (hereinafter "The Schroder Capital
Funds Family" or the "Trusts") and State Street Bank and Trust Company, a
Massachusetts trust company (the "Bank").

WHEREAS, the Trusts are registered as open-end, management
investment companies under the Investment Company Act of 1940, as amended (the
"1940 Act");

WHEREAS, the Administrator acts as administrator to the
Trusts;

WHEREAS, the Administrator and the Trusts desire to retain the
Bank to furnish certain administrative services to the Trusts, and the Bank is
willing to furnish such services, on the terms and conditions hereinafter set
forth;

NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereto agree as follows:

1. APPOINTMENT OF BANK

The Administrator and the Trusts hereby appoint the Bank to
act as sub-administrator with respect to the Trusts for purposes of providing
certain administrative services for the period and on the terms set forth in
this Agreement. The Bank accepts such appointment and agrees to render the
services stated herein.

The Trusts will initially consist of the portfolio(s) and/or
class(es) of shares (each an "Investment Fund") listed in Schedule A to this
Agreement. In the event that any Trust establishes one or more additional
Investment Funds with respect to which the Administrator and the Trust wish to
retain the Bank to act as administrator hereunder, the Administrator and such
Trust shall notify the Bank in writing. Upon written acceptance by the Bank,
such Investment Fund shall become subject to the provisions of this Agreement to
the same extent as the existing Investment Funds, except to the extent that such
provisions (including those relating to the compensation and expenses payable by
the Trusts and their Investment Funds) may be modified with respect to each
additional Investment Fund in writing by the Administrator, the Trusts and the
Bank at the time of the addition of the Investment Fund.

2. DELIVERY OF DOCUMENTS

The Trusts will promptly deliver to the Bank copies of each of
the following documents and all future amendments and supplements, if any:

a. Each Trust's Declaration of Trust or comparable
document;

b. Each Trust's currently effective registration
statement under the Securities Act of 1933, as
amended (the "1933 Act"), where applicable, and the
1940 Act and each Trust's Prospectus(es) and
Statement(s) of Additional Information relating to
all

<PAGE>

Investment Funds and all amendments and supplements
thereto as in effect from time to time;

c. Certified copies of the resolutions of the Board of
Trustees of each Trust (the "Board") authorizing (1)
the Trust to enter into this Agreement and (2)
certain individuals on behalf of the Trust to (a)
give instructions to the Bank pursuant to this
Agreement and (b) sign checks and pay expenses on
behalf of the Trust;

d. A copy of the investment advisory agreement between
each Trust and its investment adviser, including any
sub-advisory agreement between the Trust and its
investment sub-adviser, if any; and

e. Such other certificates, documents or opinions which
the Bank may, in its reasonable discretion, deem
necessary or appropriate in the proper performance of
its duties.

3. REPRESENTATIONS AND WARRANTIES OF THE BANK

The Bank represents and warrants to the Trusts that:

a. It is a Massachusetts trust company, duly organized
and existing under the laws of The Commonwealth of
Massachusetts;

b. It has the corporate power and authority to carry on
its business in The Commonwealth of Massachusetts;

c. All requisite corporate proceedings have been taken
to authorize it to enter into and perform this
Agreement;

d. No legal or administrative proceedings have been
instituted or threatened which would impair the
Bank's ability to perform its duties and obligations
under this Agreement; and

e. Its entrance into this Agreement shall not cause a
material breach or be in material conflict with any
other agreement or obligation of the Bank or any law
or regulation applicable to it.

4. REPRESENTATIONS AND WARRANTIES OF THE TRUSTS

Each Trust represents and warrants to the Bank that:

a. With respect to Schroder Capital Funds, Schroder
Capital Funds (Delaware) and Schroder Series Trust
II, each is a business trust, duly organized,
existing and in good standing under the laws of the
State of Delaware;

2
<PAGE>

b. It has the corporate power and authority under
applicable laws and under its Declaration of Trust
and by-laws or comparable documents to enter into and
perform this Agreement;

c. All requisite proceedings have been taken to
authorize it to enter into and perform this
Agreement;

d. It is an investment company properly registered under
the 1940 Act;

e. A registration statement under the 1933 Act, where
applicable, and the 1940 Act has been filed and will
be effective and remain effective during the term of
this Agreement. Each Trust also warrants to the Bank
that as of the effective date of this Agreement, all
necessary filings under the securities laws of the
states in which the Trust offers or sells its shares
have been made;

f. No legal or administrative proceedings have been
instituted or threatened which would impair the
Trust's ability to perform its duties and obligations
under this Agreement;

g. Its entrance into this Agreement will not cause a
material breach or be in material conflict with any
other agreement or obligation of the Trust or any law
or regulation applicable to it; and

h. As of the close of business on the date of this
Agreement, the Trust is authorized to issue shares of
beneficial interest in the authorized amounts as set
forth in Schedule A to this Agreement.

5. REPRESENTATIONS AND WARRANTIES OF THE ADMINISTRATOR

The Administrator represents and warrants to the Bank that:

a. It is a corporation, duly organized, existing and in
good standing under the laws of The State of New
York;

b. It has the power and authority under New York law and
by its charter and by-laws to enter into and perform
this Agreement;

c. All requisite corporate proceedings have been taken
to authorize it to enter into and perform this
Agreement;

d. No legal or administrative proceedings have been
instituted or threatened which would impair the
Administrator's ability to perform its duties and
obligations under this Agreement; and

e. Its entrance into this Agreement shall not cause a
material breach or be in material conflict with any
other agreement or obligation of the Administrator
or any law or regulation applicable to it.

3
<PAGE>

6. ADMINISTRATION SERVICES

The Bank shall provide the following services, in each case,
subject to the control, supervision and direction of the Trusts and the
Administrator and the review and comment by each Trust's and the Administrator's
auditors and legal counsel and in accordance with procedures which may be
established from time to time among a Trust, the Administrator and the Bank:

a. Oversee the determination of each Investment Fund's
net asset value in accordance with each Investment
Fund's policy as adopted from time to time by the
Board;

b. Prepare on a timely basis each Investment Fund's
federal, state and local income tax returns for
review by the Investment Fund's independent
accountants and filing by each Investment Fund's
treasurer;

c. Review the calculation of, submit for approval by
officers of each Investment Fund and arrange for
payment of each Investment Fund's expenses;

d. Prepare on a timely basis for review and approval by
officers of each Investment Fund financial
information for each Investment Fund's semi-annual
and annual reports, proxy statements and other
communications with shareholders required or
otherwise to be sent to Investment Fund shareholders,
and arrange for the printing and dissemination of
such reports and communications to shareholders;

e. Prepare on a timely basis reports relating to the
business and affairs of each Investment Fund as may
be mutually agreed upon and not otherwise prepared by
each Investment Fund's investment advisor, custodian,
legal counsel or independent accountants;

f. Make such reports and recommendations to the Board
concerning the performance of the independent
accountants as the Board may reasonably request;

g. Make such reports and recommendations to the Board
concerning the performance and fees of each
Investment Fund's custodian and transfer and dividend
disbursing agent ("Transfer Agent") as the Board may
reasonably request or deem appropriate;

h. Oversee and review calculations of fees paid to each
Investment Fund's investment advisor, custodian and
Transfer Agent;

i. Consult with each Investment Fund's officers,
independent accountants, legal counsel, custodian and
Transfer Agent in establishing the accounting
policies of the Investment Fund;

j. Respond to, or refer to each Investment Fund's
officers or Transfer Agent, shareholder inquiries
relating to the Investment Fund;

4
<PAGE>

k. Provide periodic testing of portfolios to assist each
Investment Fund's investment advisor in complying
with Investment Fund investment limitations as may be
mutually agreed upon;

l. Blue Sky notice filing and reporting;

m. Oversee the maintenance of certain books and records
of each Trust as required under Rule 31a-1(b)(4) of
the 1940 Act;

n. Prepare on a timely basis for review by an officer or
the counsel for each Trust the Trust's periodic
financial report required to be filed with the
Securities and Exchange Commission (the "SEC") on
Form N-SAR and Form N-1A and such other reports,
forms or filings, as may be mutually agreed upon;

o. Provide periodic testing of the Investment Funds to
assist the Administrator in complying with Internal
Revenue Code mandatory qualification requirements,
the requirements of the Investment Company Act and
Trust prospectus limitations as may be mutually
agreed upon and provide on a timely basis quarterly
reports to the Trustees as to such compliance;

p. Prepare on a timely basis recommendations of
distributions to be made by each of the Investment
Funds in order to comply with the requirements
outlined in paragraph (o) above, for review by the
Investment Funds' auditors and officers;

q. Utilize the Aggregate Portfolio Allocation System to
provide partnership tax allocations;

LIMITED LEGAL SUPPORT:

r. Consult on Blue Sky matters;

s. Provide assistance with developing and maintaining
an SEC filing calendar; and

t. Process insurance renewals.

The Bank may provide additional legal services to the
Administrator and the Trusts for an additional fee as described in the Fee
Schedule. The Bank shall provide the office facilities and the personnel
required by it to perform the services contemplated herein.

The Bank will take reasonable steps to ensure that its
products (and those of its third-party suppliers) reflect the available state of
the art technology to offer products that are Year 2000 compliant, including,
but not limited to, century recognition of dates, calculations that correctly
compute same century and multi-century formulas and date values, and interface
values that reflect the date issues arising between now and the next one hundred
years. If any changes are required, the Bank will make the changes to its
products at no cost to the Administrator or the Trusts and in a commercially
reasonable time frame and will require third-party suppliers to do likewise.

5
<PAGE>

6. FEES; EXPENSES; EXPENSE REIMBURSEMENT

The Bank shall receive from each Trust such compensation for
the Bank's services provided pursuant to this Agreement as may be agreed to from
time to time in a written fee schedule approved by the parties and initially set
forth in the Fee Schedule to this Agreement. The fees are accrued daily and
billed monthly and shall be due and payable upon receipt of the invoice. Upon
the termination of this Agreement before the end of any month, the fee for the
part of the month before such termination shall be prorated according to the
proportion which such part bears to the full monthly period and shall be payable
upon the date of termination of this Agreement. In addition, each Trust shall
reimburse the Bank for its reasonable out-of-pocket costs incurred in connection
with its performance of this Agreement in respect of that Trust.

The Trusts agree promptly to reimburse the Bank for any
equipment and supplies specially ordered by or for the Trusts, or the
Administrator, through the Bank and for any other expenses not contemplated by
this Agreement that the Bank may incur on any Trust's or the Administrator's
behalf, at the Trust's or the Administrator's request or with any Trust's or the
Administrator's consent.

Each Trust will bear all expenses that are incurred in its
operation and not specifically assumed by the Bank. Expenses to be borne by the
Trusts, include, but are not limited to: organizational expenses; cost of
services of independent accountants and outside legal and tax counsel (including
such counsel's review of each Trust's registration statement, proxy materials,
federal and state tax qualification as a regulated investment company and other
reports and materials prepared by the Bank under this Agreement); cost of any
services contracted for by the Trusts directly from parties other than the Bank;
cost of trading operations and brokerage fees, commissions and transfer taxes in
connection with the purchase and sale of securities for the Trusts; investment
advisory fees; taxes, insurance premiums and other fees and expenses applicable
to each Trust's operation; costs incidental to any meetings of shareholders
including, but not limited to, legal and accounting fees, proxy filing fees and
the costs of preparation, filing (including edgarization), printing and mailing
of any proxy materials; costs incidental to Board meetings, including fees and
expenses of Board members; the salary and expenses of any officer,
director/trustee or employee of the Trusts; costs incidental to the preparation,
filing (including edgarization), printing and distribution of each Trust's
registration statements and any amendments thereto, and shareholder reports;
cost of typesetting and printing of prospectuses; cost (other than internal
costs of the Bank in its performance of its obligations under this Agreement) of
preparation and filing of each Trust's tax returns, Form N-1A and Form N-SAR,
and all notices, registrations and amendments associated with applicable federal
and state tax and securities laws; all applicable registration fees and filing
fees required under federal and state securities laws; fidelity bond and
directors' and officers' liability insurance; and cost of independent pricing
services used in computing each Trust's net asset value.

The Bank is authorized to and may employ or associate with such person
or persons as the Bank may deem desirable to assist it in performing its duties
under this Agreement; provided, however, that the compensation of such person or
persons shall be paid by the Bank and that the Bank shall be as fully
responsible to the Trusts for the acts and omissions of any such person or
persons as it is for its own acts and omissions.

6
<PAGE>

7. INSTRUCTIONS AND ADVICE

At any time, the Bank may apply to any officer of the Trusts
or the Administrator for instructions and may consult with its own outside legal
counsel or outside counsel for the Trusts or the independent accountants for the
Trusts at the expense of the Trusts, with respect to any matter arising in
connection with the services to be performed by the Bank under this Agreement.
The Bank shall not be liable, and shall be indemnified by the Trusts, for any
action taken or omitted by it in good faith in reliance upon any such
instructions or advice or upon any paper or document reasonably believed by it
to be genuine and to have been signed by the proper person or persons. The Bank
shall not be held to have notice of any change of authority of any person until
receipt of written notice thereof from the Trusts. Nothing in this paragraph
shall be construed as imposing upon the Bank any obligation to seek such
instructions or advice of counsel or independents accountants, or to act in
accordance with such advice or the Administrator when received.

8. LIMITATION OF LIABILITY AND INDEMNIFICATION

The Bank shall be responsible for the performance of only such
duties as are set forth in this Agreement and, except as otherwise provided
under Section 6, shall have no responsibility for the actions or activities of
any other party, including other service providers. The Bank shall have no
liability for any error of judgment or mistake of law or for any loss or damage
resulting from the performance or nonperformance of its duties hereunder except
to the extent caused by or resulting from the negligence or willful misconduct
of the Bank, its officers or employees. Neither party shall be liable for any
special, indirect, incidental, or consequential damages of any kind whatsoever
(including, without limitation, attorneys' fees) under any provision of this
Agreement (including this Section 8) or for any such damages arising out of any
act or failure to act hereunder. In any event, the Bank's liability under this
Agreement shall be limited to two and one half (2 1/2) times its total annual
compensation earned and fees paid hereunder during the preceding twelve months
for any liability or loss suffered by the Administrator, the Trusts or the
Investment Funds, including, but not limited to, any liability relating to
qualification of any Trust as a regulated investment company or any liability
relating to any Trust's compliance with any federal or state tax or securities
statute, regulation or ruling. If this Agreement has been in effect for less
than twelve months, all fees paid during the period that the Agreement has been
in effect plus all fees payable for the remainder of the initial twelve month
period shall be used to calculate the limitation of liability hereunder.

The Bank shall not be responsible or liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its control, including
without limitation, work stoppage, power or other mechanical failure, computer
virus, natural disaster, governmental action or communication disruption.

The Administrator and the Trusts shall indemnify and hold the
Bank harmless from all loss, cost, damage and expense, including reasonable fees
and expenses for counsel, incurred by the Bank resulting from any claim, demand,
action or suit in connection with the Bank's acceptance of this Agreement, any
action or omission by it in the performance of its duties hereunder, or as a
result of acting upon any instructions reasonably believed by it to have been
duly authorized by the Administrator and the Trusts, provided that this
indemnification shall not apply to actions or omissions of the Bank, its
officers or employees in cases of its or their own negligence or willful
misconduct.

7
<PAGE>

The Administrator and the Trusts will be entitled to
participate at their own expense in the defense, or, if it so elects, to assume
the defense of any suit which might be the subject of the indemnification
provided above. In the event the Administrator and/or the Trusts elect to assume
the defense of any suit and retain such counsel, the Bank or any other person
entitled to such indemnification, named as defendant or defendants in the suit,
may retain additional counsel but shall bear the fees and expenses of such
counsel unless the Administrator or the Trusts have specifically authorized the
retaining of such counsel.

The indemnification contained herein shall survive the
termination of this Agreement.

9. CONFIDENTIALITY

The Bank agrees that, except as otherwise required by law or
in connection with any required disclosure to a banking or other regulatory
authority, it will keep confidential the terms of this Agreement and all records
and information in its possession relating to the Trusts or their shareholders
or shareholder accounts and will not disclose the same to any person except at
the request or with the written consent of the Trusts.

10. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS

The Trusts assumes full responsibility for complying with all
securities, tax, commodities and other laws, rules and regulations applicable to
it.

In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Bank agrees that all records which it maintains for the Trusts
shall at all times remain the property of the Trusts, shall be readily
accessible during normal business hours, and shall be promptly surrendered upon
the termination of the Agreement or otherwise on written request. The Bank
further agrees that all records which it maintains for the Trusts pursuant to
Rule 31a-1 under the 1940 Act will be preserved for the periods prescribed by
Rule 31a-2 under the 1940 Act unless any such records are earlier surrendered as
provided above. Records shall be surrendered in usable machine-readable form.

11. SERVICES NOT EXCLUSIVE

The services of the Bank to the Trusts are not to be deemed
exclusive, and the Bank shall be free to render similar services to others. The
Bank shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Trusts from time to time, have no
authority to act or represent the Trusts in any way or otherwise be deemed an
agent of the Trusts.

12. TERM, TERMINATION AND AMENDMENT

This Agreement shall become effective on the date of its
execution and shall remain in full force and effect from the effective date for
an initial term of three years from the effective date and shall automatically
continue in full force and effect after such initial term unless any party
terminates this Agreement by written notice to the other parties at least sixty
(60) days prior to the expiration of the initial term. Any party may terminate
this Agreement at any time after the initial term upon at least sixty (60) days'
prior written notice to the other parties. In addition, a Trust may terminate
this Agreement without penalty as to any Investment Fund during the initial term
upon at least sixty (60) days' prior written notice to

8
<PAGE>

the other parties; provided, however, that, in the event of any such termination
(other than following material breach by the Bank of this Agreement not remedied
within 30 days or following any assignment of this Agreement by the Bank which
is not reasonably acceptable to a Trust) the Trust, on behalf of such Investment
Fund, will pay to the Bank an amount equal to the difference between (i) the
fees that would have been payable by such Investment Fund for the period prior
to such termination if the fee schedule for the third year of the initial term
had been in effect during such period and (ii) the fees actually paid by that
Investment Fund for the period. Termination of this Agreement with respect to
any given Investment Fund shall in no way affect the continued validity of this
Agreement with respect to any other Investment Fund. Upon termination of this
Agreement, the Trusts shall pay to the Bank such compensation and any
reimbursable expenses as may be due under the terms hereof as of the date of
such termination, including reasonable out-of-pocket expenses associated with
such termination. This Agreement may be modified or amended from time to time by
mutual written agreement of the parties hereto.

13. NOTICES

Any notice or other communication authorized or required by
this Agreement to be given to any party shall be in writing and deemed to have
been given when delivered in person, by overnight courier or by confirmed
facsimile, or by certified mail, return receipt requested, to the following
address (or such other address as a party may specify by written notice to the
other): If to the Administrator: Schroder Fund Advisors Inc., 787 Seventh
Avenue, 34th Floor, New York, NY 10019, Attn: Catherine A. Mazza and Alexandra
Poe, fax: 212-641-3897; if to the Trusts: c/o Schroder Capital Management
International Inc., 787 Seventh Avenue, 34th Floor, New York, NY 10019, Attn:
Alexandra Poe; fax: 212-641-3877; if to the Bank: State Street Bank and Trust
Company, 1776 Heritage Drive, AFB-4, North Quincy, Massachusetts 02171, Attn:
Fund Administration Legal Department, fax: 617-537-2578.

14. NON-ASSIGNABILITY

This Agreement shall not be assigned by any party hereto
without the prior consent in writing of the other two parties, except that the
Bank may assign this Agreement to a successor of all or a substantial portion of
its business, or to a party controlling, controlled by or under common control
with the Bank.

15. SUCCESSORS

This Agreement shall be binding on and shall inure to the
benefit of the Trusts, the Administrator and the Bank and their respective
successors and permitted assigns.

16. ENTIRE AGREEMENT

This Agreement contains the entire understanding among the
parties hereto with respect to the subject matter hereof and supersedes all
previous representations, warranties or commitments regarding the services to be
performed hereunder whether oral or in writing.

9
<PAGE>

17. WAIVER

The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.

18. LIMITATION OF LIABILITY OF TRUSTEES AND SHAREHOLDERS

Notice is hereby given that this Agreement is executed on
behalf of the Trustees of each Trust as Trustees and not individually and that
the obligations of this Agreement are not binding upon any of the Trustees or
Shareholders of any Trust individually but are binding only upon the assets and
property of the Investment Fund in question.

19. SEVERABILITY

If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance it shall nevertheless
remain applicable to all other persons and circumstances.

20. GOVERNING LAW

This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.

21. REPRODUCTION OF DOCUMENTS

This Agreement and all schedules, exhibits, attachments and
amendments hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.

22. RIGHTS AND OBLIGATIONS OF THE FUNDS SEVERAL

The parties agree that this Agreement shall constitute a
separate and discrete agreement among the Bank, the Administrator and each
Investment Fund, as if set out in a separate writing executed by the Bank, the
Administrator and a Trust on behalf of each Investment Fund alone.
Notwithstanding any other provision of this Agreement, no Investment Fund shall
have any obligation or incur any liability (including without limitation by way
of indemnification) in respect of any action, omission or course of dealing of
or in respect of, any other Investment Fund. Any reference in this Agreement to
a "Trust," the "Trusts" or an "Investment Fund" shall be construed so as to give
effect to the foregoing.

10
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.

SCHRODER CAPITAL FUNDS
SCHRODER CAPITAL FUNDS (DELAWARE)
SCHRODER SERIES TRUST II

By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------

SCHRODER FUND ADVISORS, INC.

By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------

STATE STREET BANK AND TRUST COMPANY

By:
----------------------------------
Name: Kathleen C. Cuocolo
----------------------------------
Title: Senior Vice President
----------------------------------

11
<PAGE>

SUB-ADMINISTRATION AGREEMENT

SCHEDULE A
LISTING OF INVESTMENT FUNDS AND AUTHORIZED SHARES

INVESTMENT FUND AUTHORIZED SHARES

SCHRODER SERIES TRUST II Unlimited
- - Schroder All-Asia Fund
SCHRODER CAPITAL FUNDS Unlimited
- - Schroder Global Growth Portfolio
- - Schroder Japan Portfolio
- - Schroder Asian Growth Fund Portfolio
- - Schroder EM Core Portfolio
SCHRODER CAPITAL FUNDS (DELAWARE) Unlimited
- - Schroder US Smaller Companies Fund
- - Schroder International Fund
- - Schroder International Smaller Companies Fund
- - Schroder Emerging Markets Fund Institutional
Portfolio
- - Schroder Emerging Markets Fund
- - Schroder Micro Cap Fund
- - Schroder U.S. Diversified Growth Fund
- - Schroder Greater China Fund

12
<PAGE>

SUB-ADMINISTRATION AGREEMENT
SCHRODER CAPITAL FUNDS FAMILY

SCHEDULE B
NOTICE FILING WITH
STATE SECURITIES AUTHORITIES

AT THE SPECIFIC DIRECTION OF THE TRUSTS, THE BANK WILL PREPARE REQUIRED
DOCUMENTATION AND MAKE NOTICE FILINGS IN ACCORDANCE WITH THE SECURITIES LAWS OF
EACH JURISDICTION IN WHICH TRUST SHARES ARE TO BE OFFERED OR SOLD PURSUANT TO
INSTRUCTIONS GIVEN TO THE BANK BY THE TRUSTS.

THE TRUSTS SHALL BE SOLELY RESPONSIBLE FOR THE DETERMINATION (I) OF THOSE
JURISDICTIONS IN WHICH NOTICE FILINGS ARE TO BE SUBMITTED AND (II) THE NUMBER OF
TRUST SHARES TO BE PERMITTED TO BE SOLD IN EACH SUCH JURISDICTION. IN THE EVENT
THAT THE BANK BECOMES AWARE OF (A) THE SALE OF TRUST SHARES IN A JURISDICTION IN
WHICH NO NOTICE FILING HAS BEEN MADE OR (B) THE SALE OF TRUST SHARES IN EXCESS
OF THE NUMBER OF TRUST SHARES PERMITTED TO BE SOLD IN SUCH JURISDICTION, THE
BANK SHALL REPORT SUCH INFORMATION TO THE TRUSTS, AND IT SHALL BE THE
RESPONSIBILITY OF THE TRUST IN QUESTION TO DETERMINE APPROPRIATE CORRECTIVE
ACTION AND INSTRUCT THE BANK WITH RESPECT THERETO.

The Blue Sky services provided by the Bank hereunder shall consist of the
following:

1. Filing of the Trusts' Initial Notice Filings, as directed by the Trusts;

2. Filing of the Trusts' renewals and amendments as required;

3. Filing of amendments to the Trust's registration statement where required;

4. Filing Trust sales reports where required;

5. Payment at the expense of the Trusts of all Trust Notice Filing fees;

6. Filing the Prospectuses and Statements of Additional
Information of the Trusts and any amendments or supplements
thereto where required;

7. Filing of annual reports, supplements and stickers, and proxy
statements where required; and

8. The performance of such additional services as the Bank and
the Trusts may agree upon in writing.

Unless otherwise specified in writing by the Bank, Blue Sky services by the Bank
shall not include determining the availability of exemptions under a
jurisdiction's blue sky law. Any such determination shall be made by the Trusts
or their legal counsel. In connection with the services described herein, the
Trusts shall issue in favor of the Bank a power of attorney to submit Notice
Filings on behalf of the Trust, which power of attorney shall be substantially
in the form of Exhibit I attached hereto.

13
<PAGE>

EXHIBIT I

LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, as of , 1998 that Schroder Capital Funds
with principal offices at 787 Seventh Avenue, New York, New York 10019-6016 (the
"Trust") makes, constitutes, and appoints STATE STREET BANK AND TRUST COMPANY
(the "Bank") with principal offices at 225 Franklin Street, Boston,
Massachusetts its lawful attorney-in-fact for it to do as if it were itself
acting, the following:

1. REGISTRATION OF TRUST SHARES. The power to register shares of the Trust
in each jurisdiction in which Trust's shares are offered or sold and in
connection therewith the power to prepare, execute, and deliver and
file any and all Trust applications, including without limitation,
applications to register shares, consents, including consents to
service of process, reports, including without limitation, all periodic
reports, claims for exemption, or other documents and instruments now
or hereafter required or appropriate in the judgment of the Bank in
connection with the registration of Trust shares.

2. AUTHORIZED SIGNERS. Pursuant to this Limited Power of Attorney,
individuals holding the titles of Officer, Blue Sky Manager, or Senior
Blue Sky Bank at the Bank shall have authority to act on behalf of the
Trust with respect to item 1 above.

The execution of this limited power of attorney shall be deemed coupled with an
interest and shall be revocable only upon receipt by the Bank of such
termination of authority. Nothing herein shall be construed to constitute the
appointment of the Bank as or otherwise authorize the Bank to act as an officer,
director or employee of the Trust.

IN WITNESS WHEREOF, the Trust has caused this Agreement to be executed in its
name and on its behalf by and through its duly authorized officer, as of the
date first written above.

SCHRODER CAPITAL FUNDS

By:
-------------------

Name:
-----------------

Title:
----------------

14
<PAGE>

EXHIBIT I

LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, as of , 1998 that Schroder Capital Funds
(Delaware) with principal offices at 787 Seventh Avenue, New York, New York
10019-6016 (the "Trust") makes, constitutes, and appoints STATE STREET BANK AND
TRUST COMPANY (the "Bank") with principal offices at 225 Franklin Street,
Boston, Massachusetts its lawful attorney-in-fact for it to do as if it were
itself acting, the following:

IN WITNESS WHEREOF, the Trust has caused this Agreement to be executed in its
name and on its behalf by and through its duly authorized officer, as of the
date first written above.

SCHRODER CAPITAL FUNDS (DELAWARE)

By:
-------------------

Name:
-----------------

Title:
----------------

15
<PAGE>

EXHIBIT I

LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, as of , 1998 that Schroder Series
Trust II with principal offices at 787 Seventh Avenue, New York, New York
10019-6016 (the "Trust") makes, constitutes, and appoints STATE STREET BANK AND
TRUST COMPANY (the "Bank") with principal offices at 225 Franklin Street,
Boston, Massachusetts its lawful attorney-in-fact for it to do as if it were
itself acting, the following:

IN WITNESS WHEREOF, the Trust has caused this Agreement to be executed in its
name and on its behalf by and through its duly authorized officer, as of the
date first written above.

SCHRODER SERIES TRUST II

By:
-------------------

Name:
------------------

Title:
-----------------

<PAGE>

TRANSFER AGENCY AND SERVICE AGREEMENT

between

SCHRODER CAPITAL FUNDS (DELAWARE)

and

STATE STREET BANK AND TRUST COMPANY

<PAGE>

TABLE OF CONTENTS
Page
----
1. Terms of Appointment and Duties..........................................1

2. Third Party Administrators for Defined Contribution Plans ...............4

3. Fees and Expenses........................................................5

4. Representations and Warranties of the Transfer Agent.....................6

5. Representations and Warranties of the Fund...............................6

6. Wire Transfer Operating Guidelines.......................................7

7. Data Access and Proprietary Information..................................8

8. Indemnification.........................................................10

9. Standard of Care........................................................11

10. Year 2000...............................................................12

11. Confidentiality ........................................................12

12. Covenants of the Fund and the Transfer Agent............................13

13. Termination of Agreement................................................13

14. Assignment and Third Party Beneficiaries................................14

15. Subcontractors..........................................................14

16. Miscellaneous...........................................................15

17. Additional Funds........................................................16

18. Limitations of Liability of the Trustees and Shareholders...............16

<PAGE>

TRANSFER AGENCY AND SERVICE AGREEMENT

AGREEMENT made as of the 28th day of May, 1999, by and between SCHRODER CAPITAL
FUNDS (DELAWARE), a Delaware business trust, having its principal office and
place of business at 787 Seventh Avenue, 34th Floor, New York, New York
10019-6016 (the "Fund"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company having its principal office and place of business at
225 Franklin Street, Boston, Massachusetts 02110 (the "Transfer Agent").

WHEREAS, the Fund is authorized to issue shares in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets;

WHEREAS, the Fund intends to initially offer shares in eight (8) series, such
series to be named on the attached Schedule A which may be amended by the
parties from time to time (each such series, together with all other series
subsequently established by the Fund and made subject to this Agreement in
accordance with SECTION 17, being herein referred to as a "Portfolio", and
collectively as the "Portfolios"); and

WHEREAS, the Fund on behalf of the Portfolios desires to appoint the Transfer
Agent as its transfer agent, dividend disbursing agent, custodian of certain
retirement plans and agent in connection with certain other activities, and the
Transfer Agent desires to accept such appointment.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:

l. TERMS OF APPOINTMENT AND DUTIES

1.1 TRANSFER AGENCY SERVICES. Subject to the terms and conditions set forth
in this Agreement, the Fund, on behalf of the Portfolios, hereby
employs and appoints the Transfer Agent to act as, and the Transfer
Agent agrees to act as, its transfer agent for the Fund's authorized
and issued shares of its beneficial interest, ("Shares"), dividend
disbursing agent, custodian of certain retirement plans and agent in
connection with any accumulation, open-account or similar plan provided
to the shareholders of each of the respective Portfolios of the Fund
("Shareholders") and set out in the currently effective prospectus and
statement of additional information ("prospectus") of the Fund on
behalf of the applicable Portfolio, including without limitation any
periodic investment plan or periodic withdrawal program. In accordance
with procedures established from time to time by agreement between the
Fund on behalf of each of the Portfolios, as applicable and the
Transfer Agent, the Transfer Agent agrees that it will perform the
following services:

(a) Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation thereof to the
Custodian of the Fund authorized pursuant to the Trust Instrument of
the Fund (the "Custodian");

(b) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder account;

<PAGE>

(c) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation thereof to the
Custodian;

(d) In respect to the transactions in items (a), (b) and (c) above,
the Transfer Agent shall execute transactions directly with
broker-dealers authorized by the Fund;

(e) At the appropriate time as and when it receives monies paid to it
by the Custodian with respect to any redemption, pay over or cause to
be paid over in the appropriate manner such monies as instructed by the
redeeming Shareholders;

(f) Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;

(g) Prepare and transmit payments for dividends and distributions
declared by the Fund on behalf of the applicable Portfolio;

(h) Issue replacement certificates for those certificates alleged to
have been lost, stolen or destroyed upon receipt by the Transfer Agent
of indemnification satisfactory to the Transfer Agent and protecting
the Transfer Agent and the Fund, and the Transfer Agent at its option,
may issue replacement certificates in place of mutilated stock
certificates upon presentation thereof and without such indemnity;

(i) Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing; and

(j) Record the issuance of Shares of the Fund and maintain pursuant
to SEC Rule 17Ad-10(e) a record of the total number of Shares of the
Fund which are authorized, based upon data provided to it by the Fund,
and issued and outstanding. The Transfer Agent shall also provide the
Fund on a regular basis with the total number of Shares which are
authorized and issued and outstanding and shall have no obligation,
when recording the issuance of Shares, to monitor the issuance of such
Shares or to take cognizance of any laws relating to the issue or sale
of such Shares, which functions shall be the sole responsibility of
the Fund.

1.2 ADDITIONAL SERVICES. In addition to, and neither in lieu nor in
contravention of, the services set forth in the above paragraph, the
Transfer Agent shall perform the following services:

(a) OTHER CUSTOMARY SERVICES. Perform the customary services of a
transfer agent, dividend disbursing agent, custodian of certain
retirement plans and, as relevant, agent in connection with
accumulation, open-account or similar plan (including without
limitation any periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing Shareholder
proxies, Shareholder reports and prospectuses to current Shareholders,

2
<PAGE>

withholding taxes on U.S. resident and non-resident alien accounts,
preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions
by federal authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders for all
purchases and redemptions of Shares and other confirmable transactions
in Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information.

(b) CONTROL BOOK (ALSO KNOWN AS "SUPER SHEET"). Maintain a daily
record and produce a daily report for the Fund of all transactions and
receipts and disbursements of money and securities and deliver a copy
of such report for the Fund for each business day to the Fund no later
than 9:00 AM Eastern Time, or such earlier time as the Fund may
reasonably require, on the next business day.

(c) "BLUE SKY" REPORTING. The Fund shall (i) identify to the Transfer
Agent in writing those transactions and assets to be treated as exempt
from blue sky reporting for each State; and (ii) verify the
establishment of transactions for each State on the system prior to
activation and thereafter monitor the daily activity for each State.
The responsibility of the Transfer Agent for the Fund's blue sky State
registration status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Fund and providing a
system which will enable the Fund to monitor the total number of Shares
sold in each State.

(d) NATIONAL SECURITIES CLEARING CORPORATION (THE "NSCC"). (i) Accept
and effectuate the registration and maintenance of accounts through
Networking and the purchase, redemption, transfer and exchange of
shares in such accounts through Fund/SERV (Networking and Fund/SERV
being programs operated by the NSCC on behalf of NSCC's participants,
including the Fund), in accordance with instructions transmitted to and
received by the Transfer Agent by transmission from NSCC on behalf of
broker-dealers and banks which have been established by, or in
accordance with the instructions of authorized persons, as hereinafter
defined on the dealer file maintained by the Transfer Agent; (ii) issue
instructions to Fund's banks for the settlement of transactions between
the Fund and NSCC (acting on behalf of its broker-dealer and bank
participants); (iii) provide account and transaction information from
the affected Fund's records on DST Systems, Inc. computer system TA2000
("TA2000 System") in accordance with NSCC's Networking and Fund/SERV
rules for those broker-dealers; and (iv) maintain Shareholder accounts
on TA2000 System through Networking.

(e) NEW PROCEDURES. New procedures as to who shall provide certain of
these services in Section 1 may be established in writing from time to
time by agreement between the Fund and the Transfer Agent. The Transfer
Agent may at times perform only a portion of these services and the
Fund or its agent may perform these services on the Fund's behalf.

3
<PAGE>

2. THIRD PARTY ADMINISTRATORS FOR DEFINED CONTRIBUTION PLANS

2.1 The Fund may decide to make available to certain of its customers a
qualified plan program (the "Program") pursuant to which the customers
("Employers") may adopt certain plans of deferred compensation ("Plan
or Plans") for the benefit of the individual Plan participant (the
"Plan Participant"), such Plan(s) being qualified under Section 401(a)
of the Internal Revenue Code of 1986, as amended ("Code") and
administered by third party administrators which may be plan
administrators as defined in the Employee Retirement Income Security
Act of 1974, as amended)(the "TPA(s)").

2.2 In accordance with the procedures established in the initial Schedule
2.1 entitled "Third Party Administrator Procedures", as may be amended
by the Transfer Agent and the Fund from time to time ("Schedule 2.1"),
the Transfer Agent shall:

(a) Treat Shareholder accounts established by the Plans in the name
of the Plan, a trustee of a Plan ("Plan Trustee") or a TPA, as the
case may be as omnibus accounts;

(b) Maintain omnibus accounts on its records in the name of the TPA
or its designee for the benefit of the Plan; and

2.3 Transactions identified under SECTION 2 of this Agreement shall be
deemed exception services ("Exception Services") when such
transactions:

(a) Require the Transfer Agent to use methods and procedures other
than those usually employed by the Transfer Agent to perform services
under SECTION 1 of this Agreement;

(b) Involve the provision of information to the Transfer Agent after
the commencement of the nightly processing cycle of the TA2000 System;
or

(c) Require more manual intervention by the Transfer Agent, either in
the entry of data or in the modification or amendment of reports
generated by the TA2000 System than is usually required by
non-retirement plan and pre-nightly transactions.

4
<PAGE>

3. FEES AND EXPENSES

3.1 FEE SCHEDULE. For the performance by the Transfer Agent pursuant to
this Agreement, the Fund agrees to pay the Transfer Agent an annual
maintenance fee for each Shareholder account as set forth in the
attached fee schedule ("Schedule 3.1"). Such fees and out-of-pocket
expenses and advances identified under SECTION 3.2 below may be changed
from time to time subject to mutual written agreement between the Fund
and the Transfer Agent.

3.2 OUT-OF-POCKET EXPENSES. In addition to the fee paid under SECTION 3.1
above, the Fund agrees to reimburse the Transfer Agent for reasonable
out-of-pocket expenses, including but not limited to confirmation
production, postage, forms, telephone, microfilm, microfiche, mailing
and tabulating proxies, records storage, or advances incurred by the
Transfer Agent for the items set out in Schedule 3.1 attached hereto.
In addition, any other expenses reasonably incurred by the Transfer
Agent at the request or with the consent of the Fund, will be
reimbursed by the Fund.

3.3 POSTAGE. Postage for mailing of dividends, proxies, Fund reports and
other mailings to all shareholder accounts shall be advanced to the
Transfer Agent by the Fund upon request by the Transfer Agent at least
seven (7) days prior to the mailing date of such materials.

3.4 INVOICES. The Fund agrees to pay all fees and reimbursable expenses
within thirty (30) days following the receipt of the respective billing
notice, except for any fees or expenses which are subject to good faith
dispute. In the event of such a dispute, the Fund may only withhold
that portion of the fee or expense subject to the good faith dispute.

4. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT

The Transfer Agent represents and warrants to the Fund that:

4.1 It is a trust company duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts.

4.2 It is duly qualified to carry on its business in The Commonwealth of
Massachusetts.

4.3 It is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform this Agreement.

4.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.

4.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.

5
<PAGE>

5. REPRESENTATIONS AND WARRANTIES OF THE FUND

The Fund represents and warrants to the Transfer Agent that:

5.1 It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware.

5.2 It is empowered under applicable laws and by its Trust Instrument and
By-Laws to enter into and perform this Agreement.

5.3 All corporate proceedings required by said Trust Instrument and By-Laws
have been taken to authorize it to enter into and perform this
Agreement.

5.4 It is an open-end management investment company registered under the
Investment Company Act of 1940, as amended.

5.5 A registration statement under the Securities Act of 1933, as amended
is currently effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be made,
with respect to all Shares of the Fund being offered for sale.

6. WIRE TRANSFER OPERATING GUIDELINES/ARTICLES 4A OF THE UNIFORM
COMMERCIAL CODE

6.1 The Transfer Agent is authorized to promptly debit the appropriate Fund
account(s) upon the receipt of a payment order in compliance with the
selected security procedure (the "Security Procedure") chosen for funds
transfer and in the amount of money that the Transfer Agent has been
instructed to transfer. The Transfer Agent shall execute payment orders
in compliance with the Security Procedure and with the Fund
instructions on the execution date provided that such payment order is
received by the customary deadline for processing such a request,
unless the payment order specifies a later time. All payment orders and
communications received after the customary deadline will be deemed to
have been received the next business day.

6.2 The Fund acknowledges that the Security Procedure it has designated on
the Fund Selection Form was selected by the Fund from security
procedures offered by the Transfer Agent. The Fund shall restrict
access to confidential information relating to the Security Procedure
to authorized persons as communicated to the Transfer Agent in writing.
The Fund must notify the Transfer Agent immediately if it has reason to
believe

6
<PAGE>

unauthorized persons may have obtained access to such information or of
any change in the Fund's authorized personnel. The Transfer Agent shall
verify the authenticity of all Fund instructions according to the
Security Procedure.

6.3 The Transfer Agent shall process all payment orders on the basis of the
account number contained in the payment order. In the event of a
discrepancy between any name indicated on the payment order and the
account number, the account number shall take precedence and govern.

6.4 The Transfer Agent reserves the right to decline (in the case of
clauses (a) or (c)) to process or delay (in the case of clause (b)) the
processing of a payment order which (a) is in excess of the collected
balance in the account to be charged at the time of the Transfer
Agent's receipt of such payment order; (b) if initiating such payment
order would cause the Transfer Agent, in the Transfer Agent's
reasonable judgement, to exceed any reasonable volume, aggregate
dollar, network, time, credit or similar limits which are applicable to
the Transfer Agent; or (c) if the Transfer Agent, in good faith, is
unable to satisfy itself that the transaction has been properly
authorized.

6.5 The Transfer Agent shall use reasonable efforts to act on all
authorized requests to cancel or amend payment orders received in
compliance with the Security Procedure provided that such requests are
received in a timely manner affording the Transfer Agent reasonable
opportunity to act. However, the Transfer Agent assumes no liability if
the request for amendment or cancellation cannot reasonably be
satisfied.

6.6 The Transfer Agent shall assume no responsibility for failure to detect
any erroneous payment order provided that the Transfer Agent complies
with the payment order instructions as received and the Transfer Agent
complies with the Security Procedure. The Security Procedure is
established for the purpose of authenticating payment orders only and
not for the detection of errors in payment orders.

6.7 The Transfer Agent shall assume no responsibility for lost interest
with respect to the refundable amount of any unauthorized payment
order, unless the Transfer Agent is notified of the unauthorized
payment order within thirty (30) days of notification by the Transfer
Agent of the acceptance of such payment order. In no event (including
failure to execute a payment order) shall the Transfer Agent be liable
for special, indirect or consequential damages, even if advised of the
possibility of such damages.

6.8 When the Fund initiates or receives Automated Clearing House credit and
debit entries pursuant to these guidelines and the rules of the
National Automated Clearing House Association and the New England
Clearing House Association, the Transfer Agent will act as an
Originating Depository Financial Institution and/or receiving
depository Financial Institution, as the case may be, with respect to
such entries. Credits given by the Transfer Agent with respect to an
ACH credit entry are provisional until the Transfer Agent receives
final settlement for such entry from the Federal Reserve Bank. If the

7
<PAGE>

Transfer Agent does not receive such final settlement, the Fund agrees
that the Transfer Agent shall receive a refund of the amount credited
to the Fund in connection with such entry, and the party making payment
to the Fund via such entry shall not be deemed to have paid the amount
of the entry.

6.9 Confirmation of Transfer Agent's execution of payment orders shall
ordinarily be provided within twenty four (24) hours notice of which
may be delivered through the Transfer Agent's proprietary information
systems, or by facsimile or call-back. Fund must report any objections
to the execution of an order within thirty (30) days.

7. DATA ACCESS AND PROPRIETARY INFORMATION

7.1 The Fund acknowledges that the databases, computer programs, screen
formats, report formats, interactive design techniques, and
documentation manuals furnished to the Fund by the Transfer Agent as
part of the Fund's ability to access certain Fund-related data
("Customer Data") maintained by the Transfer Agent on databases under
the control and ownership of the Transfer Agent or other third party
("Data Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively but not including any Customer
Data, "Proprietary Information") of substantial value to the Transfer
Agent or other third party. In no event shall Proprietary Information
be deemed Customer Data. The Fund agrees to treat all Proprietary
Information as proprietary to the Transfer Agent and further agrees
that it shall not divulge any Proprietary Information to any person or
organization except as may be provided hereunder. Without limiting the
foregoing, the Fund agrees for itself and its employees and agents
except as may be required pursuant to applicable law to:

(a) Use such programs and databases (i) solely on the Fund's
computers, or (ii) solely from equipment at the location agreed to
between the Fund and the Transfer Agent and (iii) solely in accordance
with the Transfer Agent's applicable user documentation agreed to by
the Fund;

(b) Refrain from copying or duplicating in any way (other than in the
normal course of performing processing on the Fund's computer(s)) the
Proprietary Information;

(c) Refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently obtained,
to inform the Transfer Agent in a timely manner of such fact and
dispose of such information in accordance with the Transfer Agent's
instructions;

(d) Refrain from causing or allowing information transmitted from the
Transfer Agent's computer to the Fund's terminal to be retransmitted to
any other computer terminal or other device except as expressly
permitted by the Transfer Agent (such permission not to be unreasonably
withheld);

8
<PAGE>

(e) Allow the Fund to have access only to those authorized
transactions as agreed to between the Fund and the Transfer Agent; and

(f) Honor all reasonable written requests made by the Transfer Agent
to protect at the Transfer Agent's expense the rights of the Transfer
Agent in Proprietary Information at common law, under federal copyright
law and under other federal or state law.

7.2 Proprietary Information shall not include all or any portion of any of
the foregoing items that: (i) are or become publicly available without
breach of this Agreement; (ii) are released for general disclosure by a
written release by the Transfer Agent; or (iii) are already in the
possession of the receiving party at the time of receipt without
obligation of confidentiality or breach of this Agreement.

7.3 The Fund acknowledges that its obligation to protect the Transfer
Agent's Proprietary Information is essential to the business interest
of the Transfer Agent and that the disclosure of such Proprietary
Information in breach of this Agreement would cause the Transfer Agent
immediate, substantial and irreparable harm, the value of which would
be extremely difficult to determine. Accordingly, the parties agree
that, in addition to any other remedies that may be available in law,
equity, or otherwise for the disclosure or use of the Proprietary
Information in breach of this Agreement, the Transfer Agent shall be
entitled to seek and obtain a temporary restraining order, injunctive
relief, or other equitable relief against the continuance of such
breach.

7.4 If the Fund notifies the Transfer Agent that any of the Data Access
Services do not operate in material compliance with the most recently
issued user documentation for such services, the Transfer Agent shall
endeavor in a timely manner to correct such failure. Organizations from
which the Transfer Agent may obtain certain data included in the Data
Access Services are solely responsible for the contents of such data
and the Fund agrees to make no claim against the Transfer Agent arising
out of the contents of such third-party data, including, but not
limited to, the accuracy thereof. DATA ACCESS SERVICES AND ALL COMPUTER
PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE
PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE TRANSFER AGENT EXPRESSLY
DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

7.5 If the transactions available to the Fund include the ability to
originate electronic instructions to the Transfer Agent in order to:
(i) effect the transfer or movement of cash or Shares; or (ii) transmit
Shareholder information or other information, then in such event the
Transfer Agent shall be entitled to rely on the validity and
authenticity of such instruction without undertaking any further
inquiry as long as such instruction is undertaken in conformity with
security procedures established by the Transfer Agent from time to time
and agreed to by the Fund.

9
<PAGE>

7.6 Each party shall take reasonable efforts to advise its employees of
their obligations pursuant to this SECTION 7. The obligations of this
Section shall survive any earlier termination of this Agreement.

8. INDEMNIFICATION

8.1 The Transfer Agent shall not be responsible for, and the Fund shall
indemnify and hold the Transfer Agent harmless from and against, any
and all losses, damages, and reasonable costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to:

(a) All actions of the Transfer Agent or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that such
actions are taken in good faith and without negligence or willful
misconduct;

(b) The Fund's lack of good faith, negligence or willful misconduct;

(c) The reliance upon, and any subsequent use of or action taken or
omitted, by the Transfer Agent, or its agents or subcontractors on: (i)
any information, records, documents, data, stock certificates or
services, which are received by the Transfer Agent or its agents or
subcontractors by machine readable input, facsimile, CRT data entry,
electronic instructions or other similar means authorized by the Fund,
and which have been prepared, maintained or performed by the Fund or
any other person or firm (other than the Transfer Agent in any respect)
on behalf of the Fund including but not limited to any previous
transfer agent or registrar; (ii) any instructions or requests of the
Fund or any of its officers; (iii) any instructions or opinions of
legal counsel reasonably acceptable to the Fund with respect to any
matter arising in connection with the services to be performed by the
Transfer Agent under this Agreement which are provided to the Transfer
Agent after consultation with such legal counsel; or (iv) any paper or
document, reasonably believed to be genuine, authentic, or signed by
the proper person or persons;

(d) The offer or sale of Shares in violation of federal or state
securities laws or regulations requiring that such Shares be registered
or in violation of any stop order or other determination or ruling by
any federal or any state agency with respect to the offer or sale of
such Shares;

(e) The negotiation and processing of any checks including without
limitation for deposit into the Fund's demand deposit account
maintained by the Transfer Agent; or

(f) Upon the Fund's request entering into any agreements required by
the National Securities Clearing Corporation (the "NSCC") for the
transmission of Fund or Shareholder data through the NSCC clearing
systems.

10
<PAGE>

8.2 In order that the indemnification provisions contained in this SECTION
8 shall apply, upon the assertion of a claim for which the Fund may be
required to indemnify the Transfer Agent, the Transfer Agent shall
promptly notify the Fund of such assertion, and shall keep the Fund
advised with respect to all developments concerning such claim. The
Fund shall have the option to participate with the Transfer Agent in
the defense of such claim or to defend against said claim in its own
name or in the name of the Transfer Agent. The Transfer Agent shall in
no case confess any claim or make any compromise in any case in which
the Fund may be required to indemnify the Transfer Agent except with
the Fund's prior written consent.

9. STANDARD OF CARE

9.1 The Transfer Agent shall at all times act in good faith and agrees to
use its best efforts to insure the accuracy of all services performed
under this Agreement, but assumes no responsibility and shall not be
liable for loss or damage due to errors unless said errors are caused
by its negligence, bad faith, or willful misconduct or that of its
employees. Between the Fund and the Transfer Agent the liability
arising under Section 4-209 of the Uniform Commercial Code will be
according to SECTION 9.1 of this Agreement.

10. YEAR 2000

The Transfer Agent will take reasonable steps to ensure that its
products (and those of its third-party suppliers) reflect the available
technology to offer products that are Year 2000 ready, including, but
not limited to, century recognition of dates, calculations that
correctly compute same century and multi century formulas and date
values, and interface values that reflect the date issues arising
between now and the next one-hundred years, and if any changes are
required, the Transfer Agent will make the changes to its products at a
price to be agreed upon by the parties, if any, and in a commercially
reasonable time frame and will require third-party suppliers to do
likewise.

11. CONFIDENTIALITY

11.1 The Transfer Agent and the Fund agree that they will not, at any time
during the term of this Agreement or after its termination, reveal,
divulge, or make known to any person, firm, corporation or other
business organization, any customers' lists, trade secrets, cost
figures and projections, profit figures and projections, or any other
secret or confidential information whatsoever, whether of the Transfer
Agent or of the Fund, used or gained by the Transfer Agent or the Fund
during performance under this Agreement. The Fund and the Transfer
Agent further covenant and agree to retain all such knowledge and
information acquired during and after the term of this Agreement
respecting such lists, trade secrets, or any secret or confidential
information whatsoever in trust for the sole benefit of the Transfer
Agent or the Fund and their successors and assigns. In the event of
breach of the foregoing by either party, the remedies provided by
SECTION 7.3 shall be available to the party whose confidential
information is disclosed. The above prohibition

11
<PAGE>

of disclosure shall not apply to the extent that the Transfer Agent
must disclose such data to its sub-contractor or Fund agent for
purposes of providing services under this Agreement.

11.2 In the event that any requests or demands are made for the inspection
of the Shareholder records of the Fund, other than request for records
of Shareholders pursuant to standard subpoenas from state or federal
government authorities (i.e., divorce and criminal actions), the
Transfer Agent will endeavor to notify the Fund and to secure
instructions from an authorized officer of the Fund as to such
inspection. The Transfer Agent expressly reserves the right, however,
to exhibit the Shareholder records to any person whenever it is advised
by counsel that it may be held liable for the failure to exhibit the
Shareholder records to such person or if required by law or court
order.

12. COVENANTS OF THE FUND AND THE TRANSFER AGENT

12.1 The Fund shall promptly furnish to the Transfer Agent the following:

(a) A certified copy of the resolution of the Board of Trustees of
the Fund authorizing the appointment of the Transfer Agent and the
execution and delivery of this Agreement; and

(b) A copy of the Trust Instrument and By-Laws of the Fund and all
amendments thereto.

12.2 The Transfer Agent hereby agrees to establish and maintain facilities
and procedures reasonably acceptable to the Fund for safekeeping of
stock certificates, check forms and facsimile signature imprinting
devices, if any; and for the preparation or use, and for keeping
account of, such certificates, forms and devices.

12.3 The Transfer Agent shall keep records relating to the services to be
performed hereunder, in the form and manner as it may reasonably deem
advisable unless otherwise agreed to by the Transfer Agent and the
Fund. To the extent required by Section 31 of the Investment Company
Act of 1940, as amended, and the Rules thereunder, the Transfer Agent
agrees that all such records prepared or maintained by the Transfer
Agent relating to the services to be performed by the Transfer Agent
hereunder are the property of the Fund and will be preserved,
maintained and made available in accordance with such Section and
Rules, and will be surrendered promptly to the Fund on and in
accordance with its request.

12
<PAGE>

13. TERMINATION OF AGREEMENT

13.1 This Agreement may be terminated by either party upon ninety (90) days
written notice to the other.

13.2 Should the Fund exercise its right to terminate, all reasonable
out-of-pocket expenses associated with the movement of records and
material will be borne by the Fund. Additionally, the Transfer Agent
reserves the right to charge for any other reasonable expenses
associated with such termination. Payment of such expenses or costs
shall be in accordance with SECTION 3.4 of this Agreement.

13.3 Upon termination of this Agreement, each party shall return to the
other party all copies of confidential or proprietary materials or
information received from such other party hereunder, other than
materials or information required to be retained by such party under
applicable laws or regulations.

14. ASSIGNMENT AND THIRD PARTY BENEFICIARIES.

14.1 Except as provided in SECTION 15.1, neither this Agreement nor any
rights or obligations hereunder may be assigned by either party without
the written consent of the other party. Any attempt to do so in
violation of this Section shall be void. Unless specifically stated to
the contrary in any written consent to an assignment, no assignment
will release or discharge the assignor from any duty or responsibility
under this Agreement.

14.2 Except as explicitly stated elsewhere in this Agreement, nothing under
this Agreement shall be construed to give any rights or benefits in
this Agreement to anyone other than the Transfer Agent and the Fund,
and the duties and responsibilities undertaken pursuant to this
Agreement shall be for the sole and exclusive benefit of the Transfer
Agent and the Fund. This Agreement shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and
assigns.

14.3 This Agreement does not constitute an agreement for a partnership or
joint venture between the Transfer Agent and the Fund. Other than as
provided in SECTION 15.1, neither party shall make any commitments with
third parties that are binding on the other party without the other
party's prior written consent.

15. SUBCONTRACTORS

15.1 The Transfer Agent may, without further consent on the part of the
Fund, subcontract for the performance hereof with (i) Boston Financial
Data Services, Inc., a Massachusetts corporation ("BFDS") which is duly
registered as a transfer agent pursuant to Section 17A(c)(2) of the
Securities Exchange Act of 1934, as amended, (ii) a BFDS subsidiary

duly registered as a transfer agent or (iii) a BFDS affiliate duly
registered as a transfer

13
<PAGE>

agent; provided, however, that the Transfer Agent shall be fully
responsible to the Fund for the acts and omissions of BFDS or its
subsidiary or affiliate as it is for its own acts and omissions.

15.2 Without derogating in any way from the limitations imposed by SECTION
14.1 above, nothing herein shall impose any duty upon the Transfer
Agent in connection with or make the Transfer Agent liable for the
actions or omissions to act of unaffiliated third parties such as by
way of example and not limitation, Airborne Services, Federal Express,
United Parcel Service, the U.S. Mails, the NSCC and telecommunication
companies, provided, if the Transfer Agent selected such company, the
Transfer Agent shall have exercised due care in selecting the same.

16. MISCELLANEOUS

16.1 AMENDMENT. This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a
resolution of the Board of Trustees of the Fund.

16.2 MASSACHUSETTS LAW TO APPLY. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of
The Commonwealth of Massachusetts.

16.3 FORCE MAJEURE. In the event either party is unable to perform its
obligations under the terms of this Agreement because of acts of God,
strikes, equipment or transmission failure or damage reasonably beyond
its control, or other causes reasonably beyond its control and not the
result of its negligence or malfeasance, such party shall not be liable
for damages to the other for any damages resulting from such failure to
perform or otherwise from such causes.

16.4 CONSEQUENTIAL DAMAGES. Neither party to this Agreement shall be liable
to the other party for consequential damages under any provision of
this Agreement or for any consequential damages arising out of any act
or failure to act hereunder.

16.5 SURVIVAL. All provisions regarding indemnification, warranty,
liability, and limits thereon, and confidentiality and/or protections
of proprietary rights and trade secrets shall survive the termination
of this Agreement.

16.6 SEVERABILITY. If any provision or provisions of this Agreement shall be
held invalid, unlawful, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be
affected or impaired.

16.7 PRIORITIES CLAUSE. In the event of any conflict, discrepancy or
ambiguity between the terms and conditions contained in this Agreement
and any Schedules or attachments hereto, the terms and conditions
contained in this Agreement shall take precedence.

14
<PAGE>

16.8 WAIVER. No waiver by either party or any breach or default of any of
the covenants or conditions herein contained and performed by the other
party shall be construed as a waiver of any succeeding breach of the
same or of any other covenant or condition.

16.9 MERGER OF AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with
respect to the subject matter hereof whether oral or written.

16.10 COUNTERPARTS. This Agreement may be executed by the parties hereto on
any number of counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.

16.11. REPRODUCTION OF DOCUMENTS. This Agreement and all schedules, exhibits,
attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties hereto each agree
that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether
or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and
that any enlargement, facsimile or further reproduction shall likewise
be admissible in evidence.

16.12 NOTICES. All notices and other communications as required or permitted
hereunder shall be in writing and sent by first class mail, postage
prepaid, addressed as follows or to such other address or addresses of
which the respective party shall have notified the other.

(a) If to State Street Bank and Trust Company, to:

State Street Bank and Trust Company
c/o Boston Financial Data Services, Inc.
Two Heritage Drive
Quincy, Massachusetts 02171
Attention: Legal Department
Facsimile: (617) 774-2287

(b) If to the Fund, to:

Schroder Capital Funds
787 Seventh Avenue
New York, New York 10019
Attention: President

17. ADDITIONAL FUNDS

In the event that the Fund establishes one or more series of Shares in
addition to the

15
<PAGE>

attached Schedule A with respect to which it desires to have the
Transfer Agent render services as transfer agent under the terms
hereof, it shall so notify the Transfer Agent in writing, and if the
Transfer Agent agrees in writing to provide such services, such series
of Shares shall become a Portfolio hereunder.

18. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS

Notice is hereby given that this instrument is executed on behalf of
the Trustees of the Trust as Trustees and not individually and that the
obligations of this instrument are not binding upon any of the Trustees
or Shareholders individually but are binding only upon the assets and
property of the Fund.

16
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.

SCHRODER CAPITAL FUNDS (DELAWARE)

BY:
-----------------------------------

ATTEST:

- --------------------------------

STATE STREET BANK AND TRUST COMPANY

BY:
-----------------------------------
Executive Vice President

ATTEST:

- --------------------------------

17
<PAGE>

SCHEDULE A

INVESTOR CLASS:

Schroder International Fund
Schroder Emerging Markets Fund
Schroder Micro Cap Fund
Schroder US Smaller Companies Fund
Schroder US Diversified Growth Fund
Schroder International Smaller Companies Fund
Schroder Emerging Markets Fund Institutional Portfolio
Schroder Greater China Fund

ADVISOR CLASS:

SCHRODER CAPITAL FUNDS STATE STREET BANK AND TRUST
(DELAWARE) COMPANY

BY:_________________________________ BY:__________________________________

18
<PAGE>

SCHEDULE 2.1

THIRD PARTY ADMINISTRATOR(S) PROCEDURES

Dated: May 28, 1999

The Fund will provide each TPA with the following instructions.

1. On each Business Day, the TPA(s) shall receive, on behalf of and as
agent of the Fund(s), Instructions (as hereinafter defined) from the
Plan. Instructions shall mean as to each Fund (i) orders by the Plan
for the purchases of Shares, and (ii) requests by the Plan for the
redemption of Shares; in each case based on the Plan's receipt of
purchase orders from and redemption requests by Participants in proper
form by the time required by the term of the Plan, but not later than
the time of day at which the net asset value of a Fund is calculated,
as described from time to time in that Fund's prospectus. Each Business
Day on which the TPA receives Instructions shall be a "Trade Date".

2. The TPA shall communicate the TPA's acceptance of such Instructions,
to the applicable Plan.

3. On the next succeeding Business Day following the Trade Date on which
it accepted Instructions for the purchase and redemption of Shares,
(TD+1), the TPA(s) shall notify the Transfer Agent of the net amount
of such purchases or redemptions, as the case may be, for each Plan.
In the case of net purchases by any Plan, the TPA shall instruct the
Trustees of such Plan to transmit the aggregate purchase price for
Shares by wire transfer to the Transfer Agent on (TD+1). In the case
of net redemptions by any Plan, the TPA shall instruct the Fund's
custodian, Fund or Transfer Agent to transmit the aggregate redemption
proceeds for Shares by wire transfer to the Trustees of such Plan on
(TD+1). The times at which such notification and transmission shall
occur on (TD+1) shall be as mutually agreed upon by each Fund, the
TPA, and the Transfer Agent.

4. The TPA shall maintain separate records for each Plan, which record
shall reflect Shares purchased and redeemed, including the date and
price for all transactions, and Share balances. The TPA shall maintain
on behalf of each Plan a single master account with the Transfer Agent
and such account shall be in the name of that Plan, the TPA, or the
nominee of either thereof as the record owner of Shares owned by such
Plan.

5. The TPA shall maintain records of all proceeds of redemptions of Shares
and all other distributions not reinvested in Shares.

6. The TPA shall prepare, and transmit to each of the Plans, periodic
account statements showing the total number of Shares owned by that
Plan as of the statement closing date, purchases and redemptions of
Shares by the Plan during the period covered by the statement, and the
dividends and other distributions paid to the Plan on Shares during the
statement period (whether paid in cash or reinvested in Shares).

<PAGE>

7. The TPA shall, at the request and expense of each Fund, transmit to the
Plans prospectuses, proxy materials, reports, and other information
provided by each Fund for delivery to its shareholders.

8. The TPA shall, at the request of each Fund, prepare and transmit to
each Fund or any agent designated by it such periodic reports covering
Shares of each Plan as each Fund shall reasonably conclude are
necessary to enable the Fund to comply with state Blue Sky
requirements.

9. The TPA shall transmit to the Plans confirmation of purchase orders and
redemption requests placed by the Plans; and

10. The TPA shall, with respect to Shares, maintain account balance
information for the Plan and daily and monthly purchase summaries
expressed in Shares and dollar amounts.

11. Plan sponsors may request, or the law may require, that prospectuses,
proxy materials, periodic reports and other materials relating to each
Fund be furnished to Participants in which event the Transfer Agent or
each Fund shall mail or cause to be mailed such materials to
Participants. With respect to any such mailing, the TPA shall, at the
request of the Transfer Agent or each Fund, provide at the TPA's
expense complete and accurate set of mailing labels with the name and
address of each Participant having an interest through the Plans in
Shares.

SCHRODER CAPITAL FUNDS STATE STREET BANK AND TRUST
(DELAWARE) COMPANY

BY:__________________________________ BY:_________________________________

<PAGE>

SCHEDULE 3.1

FEES

Dated: May 28, 1999

I. ANNUAL ACCOUNT SERVICE FEES

Daily Dividend Fund $10.50

Non-Daily Dividend Fund $ 9.50

Closed Account Fee $1.50

FUND MINIMUM (per cusip) $12,500

Fees are billable on a monthly basis at the rate of 1/12 of the annual fee.
A charge is made for an account in the month that an account opens or
closes. Account service fees are the higher of: open account charges plus
account charges or the fund minimum.

II. NSCC ADMINISTRATION FEE

There will be an annual $25,000 NSCC administration/support fee, billable
monthly

III. ACTIVITY BASED FEES

Manual New Account Set-Up $5.00 each

Manual Transactions $1.50 each

Telephone Calls $1.50 each

Correspondence $1.50 each

IV. OTHER FEES

Investor Processing $1.80 per Investor

<PAGE>

SCHEDULE 3.1

FEES
(Continued)

V. OUT-OF-POCKET EXPENSES Billed as incurred

Out-of-Pocket expenses include but are not limited to: confirmation
statements, investor statements, postage, forms, audio response, telephone,
records retention, customized programming/enhancements, federal wire,
transcripts, microfilm, microfiche, and expenses incurred at the specific
direction of the fund.

All fees are subject to a cost of living increase to take effect at the
beginning of the second year of the contract and every year thereafter.

SCHRODER CAPITAL FUNDS STATE STREET BANK AND TRUST
(DELAWARE) COMPANY

BY:_________________________________ BY:__________________________________

<PAGE>

POWER OF ATTORNEY

We, the undersigned Trustees and officers of Schroder Capital Funds
(Delaware), Schroder Capital Funds, and Schroder Series Trust (the "Trusts"),
hereby constitute and appoint Catherine A. Mazza, Alexandra Poe, Carin F.
Muhlbaum, Nancy A. Curtin, and Timothy W. Diggins as our true and lawful
attorneys, with full power to each of them individually and with full power of
substitution, to sign for us, and in each of our names and in the capacities
indicated below, any and all amendments to the Registration Statements of the
Trusts on Form N-1A, including all post-effective amendments thereto, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto each of
said attorneys full power and authority to do and perform each and every act and
thing requisite or necessary to be done in the premises, as fully to all intents
and purposes as said attorney might or could do in person, hereby ratifying and
confirming all that said attorney lawfully could do or cause to be done by
virtue hereof. In executing this Power of Attorney, each of us hereby revokes
and rescinds all powers of attorney granted prior to the date hereof in each of
our capacities as a Trustee or officer of the Trusts.

Name Capacity Date
- ---- -------- ----

/s/Nancy A. Curtin Trustee and Chairman July 12, 1999
- ----------------------- ----------------
Nancy A. Curtin

/s/David N. Dinkins Trustee July 12, 1999
- ----------------------- ----------------
David N. Dinkins

/s/John I. Howell Trustee July 12, 1999
- ----------------------- ----------------
John I. Howell

/s/Peter S. Knight Trustee July 12, 1999
- ----------------------- ----------------
Peter S. Knight

/s/Peter E. Guernset Trustee July 12, 1999
- ----------------------- ----------------
Peter E. Guernsey

/s/Sharon L. Haugh Trustee July 12, 1999
- ----------------------- ----------------
Sharon L. Haugh

/s/William L. Means Trustee July 12, 1999
- ----------------------- ----------------
William L. Means

/s/Clarence F. Michalis Trustee July 12, 1999
- ----------------------- ----------------
Clarence F. Michalis

/s/Hermann C. Schwab Trustee July 12, 1999
- ----------------------- ----------------
Hermann C. Schwab

/s/Alan Mandel Treasurer and July 12, 1999
- ----------------------- Principal Financial ----------------
Alan Mandel and Accounting Officer