[Logo] SCHRODERS
Schroder
Micro Cap Fund
SEMI-ANNUAL REPORT
November 30, 1998
Schroder Capital Funds (Delaware)
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SCHRODER MICRO CAP FUND
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Account Information (800) 344-8332
Fund Literature (800) 290-9826
INVESTMENT OBJECTIVE
The investment objective of the Fund is long-term capital appreciation.
INVESTMENT ADVISER
Schroder Capital Management International Inc. (the "Investment Adviser")
is a wholly owned indirect subsidiary of Schroders plc, the London Stock
Exchange listed holding company parent of an investment banking and investment
management group of companies (the "Schroder Group") that dates its origins to
1804. The investment management operations of the Schroder Group are located in
20 countries worldwide. As of June 30, 1998, the Schroder Group had over $195
billion in assets under management. As of September 30, 1998, the Investment
Adviser, together with its U.K. affiliate, Schroder Capital Management
International Ltd. had approximately $24 billion under management.
January 18, 1999
Dear Shareholder:
For most of the six months ended November 30, 1998, U.S. financial
markets proved quite resilient to economic shocks elsewhere in the world and,
towards the end of the period, to weaker corporate profits at home. While the
markets were not immune to these problems, especially in October, their
immediate impact was short-lived and, at the end of the six months, stock
markets showed positive returns. During this period, quality and liquidity were
increasingly prized and, for most of the six months, smaller cap stocks - which
are generally perceived as less liquid and more volatile than larger cap stocks
- - underperformed their larger counterparts.
The U.S. economy delivered a solid performance in the latter half of
1998, with real gross domestic product (GDP) growing by an estimated 4% in spite
of global financial turmoil. For a while, capital market activity ground to a
halt and yield spreads widened sharply, raising fears of a global recession. The
Federal Reserve responded by successively cutting interest rates, and both large
and small cap stocks rallied following this move.
Looking ahead, we anticipate that U.S. economic growth will slow in the
coming year. Corporate profits are being squeezed and corporations are beginning
to reduce costs aggressively. We believe that consumer and capital spending,
which have been the two main engines of U.S. growth in 1998, will expand far
more slowly in 1999. We are anticipating a slowdown in real GDP growth in 1999.
We expect inflation rates will remain broadly unchanged compared to those of
1998 and that corporate profits will decline during 1999, while we believe that
interest rates are likely to continue to fall.
On a brighter note, markets have been encouraged by moves by the Federal
Reserve and its global counterparts to offset pressures by lowering interest
rates. Although there are clearly challenges ahead, lower interest rates in the
U.S. would help soften the impact of weaker earnings in the domestic equity
market. Moreover, the commitment of much of corporate America to control costs
and allocate capital more efficiently is still high and we believe that there
remain many interesting investment opportunities in the small-cap area of the
market.
Thank you for your interest in the Schroder Micro Cap Fund.
Sincerely,
/s/M.J. Smith
Mark J. Smith
President
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SCHRODER MICRO CAP FUND
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MANAGEMENT DISCUSSION AND ANALYSIS (AS OF NOVEMBER 30, 1998) (UNAUDITED)
PERFORMANCE
For the six months ended November 30, 1998, the Schroder Micro Cap Fund
returned 12.45%, outperforming its benchmark, the Russell 2000 Index, which
returned -12.35%.
MARKET BACKGROUND
The U.S. equity markets experienced some volatility in the six months
ended November 30, 1998. After a strong start to the period, the markets peaked
in mid-July, then underwent a marked sell off. This correction in the U.S.
equity markets hit smaller companies particularly hard. Fears of recession,
concerns about the stability of the U.S. financial markets and continued turmoil
in the emerging markets caused a "flight to quality" as investors looked for a
relatively safe place to invest. Between July 6 and October 9, small cap
companies represented by the Russell 2000 Index fell 23.6%, while the large cap
universe represented by the S& P 500 Index fell by 9.9% over the same period.
Following the U.S. Federal Reserve's short-term interest rate cut on October 15,
both small and large cap stocks rallied, with small-cap stocks significantly
outperforming their larger counterparts.
PORTFOLIO REVIEW
During the past six months we maintained our discipline of investing in
growing and profitable companies at reasonable valuations. Throughout the
period, the Fund was overweight in consumer stocks, such as retailers,
restaurants and textile companies. Some of our larger holdings in the consumer
sector were FRED's, a chain of discount stores and pharmacies in the Southeast;
PJ AMERICA, a Papa John's Pizza franchisee; and DELTA WOODSIDE, a textile
manufacturer which is currently undergoing a major company restructure.
Healthcare was also a profitable area for the Fund, although we invested in
companies with niche businesses, such as EMPI and MAXXIM MEDICAL, rather than
the faster growing but more highly valued companies that investors tended to
favor. The most disappointing sector during the past six months was energy. With
oil prices declining to record low levels, it was very difficult to make money
in this area, and, at present, we are avoiding both oil drillers and producers
as we believe that it is too early to bargain hunt.
In addition to the Fund's equity holdings, in June, we invested a small
portion of the Fund's assets in puts on the Russell 2000. Given the high
volatility of micro-cap stocks in general, we thought it prudent to reduce the
risk of the Fund by hedging against a market decline. This proved a wise
decision, as profits from this position - together with a high cash position -
helped to cushion the Fund during the market's decline. It also provided cash
which we were able to invest at attractive prices when the market was at its low
levels in early October.
OUTLOOK
Looking forward, we will continue to search for companies that can grow
their earnings independently of the economic cycle. We believe that many smaller
companies offer more attractive investment opportunities than large companies
based on valuation and growth rates. Furthermore, smaller companies in the U.S.
tend to have little overseas exposure so are less likely to be affected by
turmoil in other parts of the world. With the recent series of interest rate
cuts, we are hopeful that the U.S. will avoid recession in 1999 but, given the
economic outlook and the potential impact of Year 2000 problems, the
macro-economic outlook is particularly murky. Nonetheless, the United States
continues to have an entrepreneurial economy and thus a continually growing
supply of attractive investment opportunities. Going forward, we will remain
focused on individual stock selection, concentrating on underfollowed companies
whose growth prospects are not appreciated by the market and with the potential
to offer superior earnings growth.
THE VIEWS EXPRESSED IN THIS REPORT WERE THOSE OF THE FUND'S PORTFOLIO MANAGER AS
OF NOVEMBER 30, 1998, AND MAY NOT REFLECT THE VIEWS OF THE PORTFOLIO MANAGER ON
THE DATE THIS REPORT IS FIRST PUBLISHED OR ANY TIME THEREAFTER. THESE VIEWS ARE
INTENDED TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR INVESTMENT IN
THE FUND AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD CONSULT THEIR
OWN INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT PROGRAMS.
2
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SCHRODER MICRO CAP FUND
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PORTFOLIO CHARACTERISTICS AS OF NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C>
TOP TEN HOLDINGS INVESTMENT BY INDUSTRY
SECURITY % OF NET ASSETS INDUSTRY % OF NET ASSETS
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Mesaba Holdings, Inc. 4.9 % Consumer Cyclicals 20.9 %
PJ America, Inc. Transportation/Services/Miscellaneous 15.8
4.5
Empi, Inc. Retail 10.9
4.4
Fred's, Inc. Healthcare 8.8
4.4
Buckle, Inc. Consumer Staples 5.7
4.2
Ivex Packaging Corp. Basic Materials 5.3
3.8
Wet Seal, Inc. Capital Goods/Construction 4.9
3.6
Rent-Way, Inc. Financial 4.4
3.6
Landry's Seafood Technology 4.2
Restaurants 3.2
Giant Cement Holding, Inc. Utilities 1.8
3.2
_____________ Cash & Other Net Assets 17.3
39.8 % __________
============= 100.0 %
==========
</TABLE>
3
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SCHRODER MICRO CAP FUND
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SCHEDULE OF INVESTMENTS
AS OF NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
COMMON STOCK - 82.7%
SHARES VALUE
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BASIC MATERIALS - 5.3%
Bayou Steel Corp. (a) $ 115,625
25,000
Ivex Packaging Corp. (a)
15,000 292,500
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408,125
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CAPITAL GOODS/CONSTRUCTION - 4.9%
Giant Cement Holding, Inc. (a)
10,000 240,000
Nortek, Inc. (a)
5,000 136,563
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376,563
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CONSUMER CYCLICALS - 20.9%
CEC Entertainment, Inc. (a)
100 2,963
Delta Woodside Industries
30,000 150,000
Fred's, Inc.
24,025 337,850
Landry's Seafood Restaurants (a)
30,000 243,750
Monro Muffler Brake, Inc. (a)
25,000 200,000
O'Charleys, Inc. (a)
15,000 200,625
Pillowtex Corp.
4,100 138,374
PJ America, Inc. (a)
17,500 342,344
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1,615,906
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CONSUMER STAPLES - 5.7%
Golden State Vintners, Inc. (a)
20,000 222,500
Performance Food Group (a)
9,000 220,500
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443,000
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FINANCIAL - 4.4%
Duff & Phelps Credit
3,500 182,437
Sterling Bancshares, Inc.
10,000 158,750
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341,187
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HEALTHCARE - 8.8%
Cooper Companies, Inc. (a)
6,000 127,500
Empi, Inc. (a)
15,000 338,437
Maxxim Medical, Inc. (a)
8,000 218,000
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683,937
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RETAIL - 10.9%
Braun's Fashions Corp. (a)
7,500 61,874
Buckle, Inc. (a)
12,500 320,313
Musicland Stores Corp. (a)
11,000 186,313
Wet Seal, Inc. (a)
10,000 277,500
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846,000
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The accompanying notes are an integral part of the financial statements.
4
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SCHRODER MICRO CAP FUND
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SCHEDULE OF INVESTMENTS (CONCLUDED)
AS OF NOVEMBER 30, 1998 (UNAUDITED)
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SHARES VALUE
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TECHNOLOGY - 4.2%
Pomeroy Computer Resource (a) $ 183,469
9,500
ScanSource, Inc. (a)
7,500 141,563
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325,032
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TRANSPORTATION/SERVICES/MISCELLANEOUS - 15.8%
Group Maintenance America (a)
4,000 53,500
Mesaba Holdings, Inc. (a)
20,000 375,000
Pierce Leahy Corp. (a)
8,000 197,000
RemedyTemp, Inc. (a)
12,000 174,000
Rent-Way, Inc. (a)
10,000 271,250
School Specialty, Inc. (a)
8,700 146,813
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1,217,563
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UTILITIES - 1.8%
El Paso Electric Co. (a)
15,000 138,750
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Total Common Stock (cost $5,537,732)
6,396,063
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CONTRACTS
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PURCHASED PUTS - 1.8%
Russell 2000 Index Put (expiring January 1999, exercise
12,000 85,500
price $380)
Russell 2000 Index Put (expiring January 1999, exercise
4,000
price $395)
51,250
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Total Purchased Puts (cost $344,480)
136,750
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PRINCIPAL
AMOUNT
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SHORT TERM INVESTMENTS - 9.4%
$ 362,944 Dreyfus Cash Management, 5.08% (b)
362,944
Federated Prime Obligation Fund, 4.82% (b)
362,944 362,944
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Total Short Term Investments (cost $725,888)
725,888
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Total Investments - 93.9% (cost $6,608,100)
7,258,701
Other Assets Less Liabilities - 6.1% 474,546
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TOTAL NET ASSETS - 100.0% $ 7,733,247
=================
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(a) Non-income producing security.
(b) Interest rate shown is the 7-day yield as of November 30, 1998.
The accompanying notes are an integral part of the financial statements.
5
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SCHRODER MICRO CAP FUND
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STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998 (UNAUDITED)
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ASSETS:
Investments (Note 2):
Investments at cost $ 6,608,100
Net unrealized appreciation (depreciation)
650,601
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Total Investments at value
7,258,701
Cash
371,375
Receivable for investments sold
1,694
Receivable for Fund shares sold
115,019
Receivable for dividends and interest
4,933
Other receivables
4,846
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Total Assets
7,756,568
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LIABILITIES:
Payable to investment adviser (Note 3)
3,188
Payable to administrator (Note 3)
6,855
Payable to subadministrator (Note 3)
611
Accrued expenses and other liabilities
12,667
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Total Liabilities
23,321
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Net Assets $ 7,733,247
=======================
COMPONENTS OF NET ASSETS:
Paid-in capital
6,819,186
Accumulated net investment gain (loss)
(32,625)
Accumulated net realized gain (loss)
296,086
Net unrealized appreciation (depreciation) on investments
650,600
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Net Assets $ 7,733,247
=======================
SHARES OF BENEFICIAL INTEREST
560,767
NET ASSET VALUE, OFFERING, AND REDEMPTION PRICE PER SHARE
(NET ASSETS / SHARES OF BENEFICIAL INTEREST) $ 13.79
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
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SCHRODER MICRO CAP FUND
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STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividend income $ 9,028
Interest income
23,677
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Total Investment Income
32,705
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EXPENSES:
Investment advisory (Note 3)
40,785
Administration (Note 3)
8,157
Subadministration (Note 3)
12,500
Transfer agency (Note 3)
12,103
Custody
241
Accounting (Note 3)
23,000
Legal
1,466
Audit
10,619
Registration
10,583
Trustees
306
Miscellaneous
1,404
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Total Expenses
121,164
Fees waived (Note 5)
(55,834)
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Net Expenses
65,330
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NET INVESTMENT INCOME (LOSS)
(32,625)
-----------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments
797,608
Net change in unrealized appreciation (depreciation) on investments
59,527
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NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
857,135
-----------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 824,510
=======================
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
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SCHRODER MICRO CAP FUND
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STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<S> <C> <C> <C>
FOR THE FOR THE
SIX MONTHS ENDED PERIOD ENDED
NOVEMBER 30, MAY 31, 1998
1998 (UNAUDITED) (NOTE 1)
---------------------------------------
NET ASSETS, BEGINNING OF PERIOD $6,339,599 $ -
------------------ ------------------
OPERATIONS:
Net investment income (loss)
(32,625) (16,549)
Net realized gain (loss) on investments
797,608 651,514
Net change in unrealized appreciation (depreciation) on
investments
59,527 591,073
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Net increase (decrease) in net assets resulting from operations
824,510 1,226,038
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DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments
(1,091,087) (45,400)
------------------ ------------------
CAPITAL SHARE TRANSACTIONS:
Sale of shares
943,737 6,068,331
Reinvestment of distributions
770,634 45,400
Redemption of shares
(54,146) (954,770)
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Net increase (decrease) from capital share transactions
1,660,225 5,158,961
------------------ ------------------
Net increase (decrease) in net assets
1,393,648 6,339,599
------------------ ------------------
NET ASSETS, END OF PERIOD $ 7,733,247 $ 6,339,599
================== ==================
SHARE TRANSACTIONS:
Sale of shares
63,699 508,435
Reinvestment of distributions in shares
(3,959) 4,567
Redemption of shares
56,415 (68,390)
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Net increase (decrease) in shares 116,155 444,612
================== ==================
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
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SCHRODER MICRO CAP FUND
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FINANCIAL HIGHLIGHTS - INVESTOR SHARES
Selected per share data and ratios for a share outstanding throughout each
period:
<TABLE>
<S> <C> <C> <C>
FOR THE SIX FOR THE
MONTHS ENDED PERIOD ENDED
NOVEMBER 30, MAY 31, 1998
1998 (UNAUDITED) (NOTE 1)
---------------------- ---------------------
Net Asset Value, Beginning of Period $14.26 $10.00
---------------------- ---------------------
Investment Operations:
Net Investment Income (Loss) (0.06) (0.04)
Net Realized and Unrealized Gain (Loss) on Investments 1.82 4.50
---------------------- ---------------------
Total from Investment Operations 1.76 4.46
---------------------- ---------------------
Distributions from Net Realized Gain on (2.23) (0.20)
Investments
---------------------- ---------------------
Net Asset Value, End of Period $13.79 $14.26
====================== =====================
Total Return (a) 12.45% 45.41%
Ratio/Supplementary Data
Net Assets at End of Period (in thousands) $7,733 $6,340
Ratios to Average Net Assets:
Expenses including reimbursement/waiver of fees (b) 2.00% 2.00%
Expenses excluding reimbursement/waiver of fees (b) 3.71% 6.02%
Net investment income (loss) including reimbursement/
waiver of fees (b) (1.00)% (0.77)%
Portfolio Turnover Rate 169.80% 165.71%
</TABLE>
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(a) Total returns would have been lower had certain expenses not been limited
during the period shown (See Note 5).
(b) Annualized.
The accompanying notes are an integral part of the financial statements.
9
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SCHRODER MICRO CAP FUND
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOVEMBER 30, 1998
NOTE 1. ORGANIZATION
Schroder Capital Funds (Delaware) (the "Trust") was organized as a
Maryland corporation on July 30, 1969; reorganized as a series company on
February 29, 1988, as Schroder Capital Funds, Inc.; and reorganized on January
9, 1996, as a Delaware business trust. The Trust, which is registered as an
open-end management investment company under the Investment Company Act of 1940
(the "Act"), currently has nine investment portfolios. Included in this report
is the Schroder Micro Cap Fund (the "Fund"), which is a diversified portfolio
that commenced operations on October 15, 1997. Under its Trust Instrument, the
Trust is authorized to issue an unlimited number of the Fund's Investor Shares
and Advisor Shares of beneficial interest without par value, which have equal
rights as to assets and voting privileges. As of November 30, 1998, only
Investor Shares had been issued.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
These financial statements are prepared in accordance with generally
accepted accounting principles, which require management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of increase and decrease in net
assets from operations during the fiscal period. Actual results could differ
from those estimates. The following represents the significant accounting
policies of the Fund:
SECURITY VALUATION
Portfolio securities listed on recognized stock exchanges are valued at
the last reported sale price on the exchange on which the securities are
principally traded. Listed securities traded on recognized stock exchanges where
last sale prices are not available are valued at the last sale price on the
preceding trading day or at the mean of the closing bid and ask ("mid-market
price"). Securities traded in over-the-counter markets, or listed securities for
which no trade is reported on the valuation date, are valued at the most recent
reported mid-market price. Short-term investments, having a maturity of 60 days
or less, are valued at amortized cost, which approximates market value. Other
securities and assets for which market quotations are not readily available are
valued at fair value as determined in good faith using methods approved by the
Trust's Board of Trustees. As of November 30, 1998, the Fund did not hold a
position in any fair valued securities.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on trade date. Dividend income
is recorded on the ex-dividend date. Interest income is recorded as earned.
Identified cost of investments sold is used to determine gain and loss for both
financial statement and federal income tax purposes.
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income and net capital gain, if any, are distributed to
shareholders at least annually and are recorded on the ex-dividend date.
Distributions are based on amounts calculated in accordance with applicable
federal income tax regulations, which may differ from generally accepted
accounting principles. These differences are due primarily to differing
treatments of income and gain on various investment securities held by the Fund,
timing differences and differing characterizations of distributions made by the
Fund.
10
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SCHRODER MICRO CAP FUND
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
FEDERAL TAXES
The Fund intends to qualify, and continue to qualify, each year as a
regulated investment company and distribute all of its taxable income. In
addition, by distributing in each calendar year substantially all of its net
investment income, capital gain and certain other amounts, if any, the Fund will
not be subject to a federal excise tax. Therefore, no federal income or excise
tax provision is required.
EXPENSE ALLOCATION
The Trust accounts separately for the assets and liabilities and
operation of each of its funds. Direct expenses are charged to the fund that
incurred them. Expenses that are directly attributable to more than one fund are
allocated among the respective funds in proportion to each fund's net assets.
Expenses that are directly attributable to a class of shares are allocated to
that class.
REPURCHASE AGREEMENTS
The Fund may invest in repurchase agreements. The Fund, through its
custodian, receives delivery of the underlying collateral, whose market value
must always equal or exceed the repurchase price. The investment adviser is
responsible for determining the value of the underlying collateral at all times.
In the event of default, the Fund may have difficulties with the disposition of
any securities held as collateral.
NOTE 3. INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
The investment adviser to the Fund is Schroder Capital Management
International Inc. ("SCMI"). Pursuant to an Investment Advisory Agreement, SCMI
is entitled to receive an annual fee, payable monthly, of 1.25% of the Fund's
average daily net assets.
ADMINISTRATOR AND SUBADMINISTRATOR
The Trust, on behalf of the Fund, has entered into an Administration
Agreement with Schroder Fund Advisors Inc. ("Schroder Advisors") and a
Subadministration Agreement with Forum Administrative Services, LLC ("FAdS").
For its services, Schroder Advisors is entitled to receive an annual fee,
payable monthly, at the rate of 0.25% of the Fund's average daily net assets.
For its services, FAdS is entitled to receive an annual fee, payable monthly, of
0.10% of the Fund's average daily net assets, subject to a $25,000 minimum
annual fee, plus a $12,000 charge per class of shares above one.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
The transfer agent and dividend disbursing agent for the Fund is Forum
Shareholder Services, LLC ("FSS"). For its services, FSS is paid a fee in the
amount of $12,000 per year, plus certain other charges.
OTHER SERVICE PROVIDERS
Forum Accounting Services, LLC ("FAcS") provides fund accounting services
to the Fund. For its services, FAcS is entitled to receive an annual fee of
$36,000, plus certain other charges.
11
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SCHRODER MICRO CAP FUND
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONCLUDED)
NOTE 4. PURCHASES AND SALES OF SECURITIES
The cost of securities purchased and the proceeds from sales of
securities (excluding short-term investments) for the period ended November 30,
1998 were, $9,359,142 and $9,322,357, respectively.
For federal income tax purposes, the tax basis of investment securities
owned as of November 30, 1998, was $6,608,100 and the net unrealized
appreciation was $650,601. The aggregate gross unrealized appreciation for all
securities in which there was an excess of market value over tax cost was
$1,112,795, and the aggregate gross unrealized depreciation for all securities
in which there was an excess of tax cost over market value was $462,194.
NOTE 5. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
SCMI and Schroder Advisors have voluntarily undertaken to waive a portion
of their fees (and, if necessary, to pay certain expenses of the Fund) to the
extent that the Fund's expenses exceed 2.00% of the Fund's average daily net
assets. The expense limitations cannot be modified or withdrawn except by a
majority vote of the Trustees of the Trust who are not affiliated persons (as
defined in the Act) of the Trust. SCMI, Schroder Advisors, FAdS, FSS and FAcS
may waive voluntarily all or a portion of their fees, from time to time. For the
six months ended November 30, 1998, SCMI, FAdS, and FSS waived fees of $37,597,
$9,237 and $9,000, respectively.
NOTE 6. BENEFICIAL INTEREST
As of November 30, 1998, three affiliated shareholders were record owner,
in the aggregate, of approximately 46% of the total outstanding shares of the
Fund.
12
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TRUSTEES
David N. Dinkins
Peter E. Guernsey
Sharon L. Haugh
John I. Howell
Peter S. Knight
William L. Means
Clarence F. Michalis
Hermann C. Schwab
Mark J. Smith
INVESTMENT ADVISER
Schroder Capital Management International Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019
ADMINISTRATOR AND DISTRIBUTOR
Schroder Fund Advisors Inc.
787 Seventh Avenue, 34th Floor
New York, New York 10019
CUSTODIAN
Norwest Bank Minnesota N.A.
Sixth Street and Marquette
Minneapolis, Minnesota 55479
TRANSFER AND DIVIDEND DISBURSING AGENT
Forum Shareholder Services, LLC
Two Portland Square
Portland, Maine 04101
COUNSEL
Ropes & Gray
One International Place
Boston, Massachusettes 02110
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, Massachusetts 02109
This report is for the information of the shareholders
of the Schroder Micro Cap Fund. Its use in connection
with any offering of the Fund's shares is authorized
only in case of a concurrent or prior delivery of the
Fund's current prospectus.